"This weak level of new space under construction should allow the absorption of recently completed available space," said Drivers Jonas France President Christopher Armon-Jones. "However there will soon be a need for new office development to begin in order to be able to respond to occupiers' requirements from 2012 on."

Space under construction fell 20% over the six months to end-March in Paris and inner suburbs to reach 10.6 million square feet. Construction activity has halved since its September 2008 peak and now stands at its lowest level since spring 2004. This slowdown was needed to allow the absorption of nearly 9.3 million square feet of new space. But Drivers Jonas said a shortage could develop beyond 2011 if letting activity picks up. "The argument can now perhaps be made for developers, investors and bankers to start to look again at speculative development opportunities," it noted.

For the moment, lettings remain subdued, with little take-up of new or refurbished space. Of the 5.4 million square feet built between October and March, only 50% had been let by the end of March, with the remaining 2.7 million square feet added to stock. Total available office space in Ile de France climbed 14% over the six months to March to reach 9.9 million square feet of which half was located in the central business district. The market in La Défense was particularly weak. No new lettings were recorded in the Hauts-de-Seine department, which includes La Défense, in the period.