Before looking ahead to 2025, let's take a few minutes to take stock of the commercial real estate market in 2024.
The first statistics are in. They are not surprising, and show a sector shaken by bad news: dissolution, geopolitical tensions, slowing economic activity, interest rates still high despite the first cuts initiated by central banks...
A real estate market dented in some places, leaden in others, but also resilient in certain pockets. The first of these, office space, the main real estate allocation of institutional investors, shows a double face.
Take-up is down overall in the Paris Region, falling by 11% year-on-year and remaining more than 20% below the ten-year average, according to ImmoStat. This confirms both the slowdown in demand and the rationalization undertaken by companies.
And yet, with 1.75 million sq.m marketed in Paris Region, the office rental market is holding up, proving that it exists for those who may have been too quick to dismiss this asset class. What's more, it's picking up again in some areas that were thought to have been lost. Take La Défense, for example, where take-up has risen by a surprising 60%, and even by 14% on average over the last ten years. The combination of quality supply, new or restructured buildings with good public transport links, and adjusted or even sacrificed rents, goes a long way to explaining this rebound. The question is whether this remains profitable for investors.
And given their lack of appetite for office space, this is a legitimate question. For the first time, logistics has overtaken office space in terms of investment volume, in a market that remained famished, with only €12 billion worth of assets traded.
What can we expect from 2025 in this context? Not much, say the brokers themselves. The gloomy outlook for the eurozone economy, the inability to reach a consensus on a budget in France, persistent geopolitical tensions and the unknowns surrounding Trump continue to dampen the spirits of real estate investors.
Even though the global cycle of falling interest rates has begun. Even though bond yields are set to fall. Even though stock markets are considered expensive (especially in the US). In short, even though allocating to real estate will regain all its attractiveness.
On paper, 2025 could be a point of entry or return for institutional investors in real estate. It will be interesting to follow the evolution of the real estate sector. For if there is to be a rebound, it will begin with the stock market.