The move to telecommuting working from home, boosted by Covid lockdowns, could lead to a 14% drop in demand for offices in Paris over the next 10 years.
A study also predicts falls, albeit smaller, in other areas.
The number of jobs required could drop by more than a quarter (27%) if companies switch to two working days from home per week, said the Institut de l’Epargne Immobilière et Foncière (IEIF). The demand for office space would then fall by 14%, she calculates.
The difference between the two numbers is due to companies reorganizing their offices for more meeting space, common design studios and lounges during the three days employees come to work.
Unions and employers have tried to change the statutes governing employment contracts to take this into account, with several sectors already convinced that two days of homework will be the norm.
The IEIF report said: “Over the past 10 years there has been more and more homework, but before the closures, it is estimated that two-thirds was done informally. The legal recognition of working from home means that it is much more structured and that it will have more impact on the commercial real estate market.
IEIF Director General Christian de Kerangal said The connection everything showed that the drop in surface areas outside Paris, with the exception of Lyon, would be less.
“Data from Apple and Google on where people used their phones after the first lockdown, for example, showed that fewer people stayed at home in the regions than in Paris.
“In Paris, the average worker takes 45 minutes to get to work (in the region is less) so there is more incentive to avoid going to work in Paris than elsewhere.
Mr de Kerangal said he believes location will be the key factor in determining the future of office buildings, as those near transport and services are always likely to be in high demand.
“The office buildings of the second crown (the outskirts of Paris) built in the 60s, 70s and 80s will probably be the hardest hit.
According to the institute, the deflationary impact on the office market is likely to take time, both for companies to decide how much space they need and because of the length of commercial leases, which can last nine years. Knight Frank real estate agents, which are active in renting and selling office space, released a report on office rentals in 2020, which showed the market to be stable.
David Bourla, chief economist and head of research at the firm, said: “Businesses are busy dealing with the effects of the pandemic and have not looked for new offices. There was a slight upturn in the first quarter of 2021, in central Paris and the La Défense business district, but I think it will only be in the second half of the year, when there will be more people vaccinated, that we will have a good idea of what will happen.
The main immediate effect of the crisis was a transfer of bargaining power from landlords to tenants, he said.
“So far, prices haven’t come down, but companies are able to get better facilities, like more free months at the start of contracts, or better services like access to canteens, than they weren’t before. ”
Mr Bourla said more office space would likely be turned into apartments, especially in cities west of Paris, but he expected office rental to remain the norm. “There is a corporate culture in France that is against working from home at the moment, especially compared to the UK and Germany.
“But housing prices around Paris are so high, and a law passed in 2008 allowing conversions is having an effect, that I expect to see more commercial buildings geared towards housing.
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