The Catella report says some occupiers have been delaying decisions to take new space in the expectation that rents will fall, but it implies that they may be disappointed. With an historically low vacancy rate of about 2.9%--up from 2.1% earlier in 2001--and with relatively little new development under way, rents are likely to remain stable, the agent forecasts.
Catella puts prime office rents in the CBD at £838 per sq m per annum ($71 per sf per annum), falling to around £640 per sq m ($55 per sf) in La Défense; £518 per sq m ($44 per sf) on the Rive Gauche and £343 per sq m ($29 per sf) in emerging markets like St Denis.
This resilient occupational market is attracting string interest from investors, and according to Catella a record £11.25 billion ($10 billion) was invested in French real estate during the first ten months of 2001. This compares with £9.13 ($8.3 billion)--itself a record--during the whole of 2000.
And foreign investors account for 74% of all activity, up from 45% in 2000. North American players invested £5.2 billion ($4.7 billion) in the ten months to October 2001, against £1.35 billion ($1.2 billion) in the whole of 2000. Equally, German investors increased their commitment from £1.9 billion ($1.72 billion) in 2000 to £2.2 billion ($2 billion) up to October 2001.
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