Tech firms to occupy 30% of Central Paris* workspace by 2020, says Savills

According to international real estate advisor Savills, the booming tech sector in Paris is fuelling demand for office space, notably in the ninth arrondissement, where it accounted for 21% of the total take-up last year.  

Savills has reported that workspace take-up by the tech sector in Paris and the Western Crescent last year increased by nearly 10% yoy.  During the same period, the share of tech take-up in the ninth arrondissement went from 11% to 21%, and demand is being fuelled by both large digital companies and young start-ups.

Lydia Brissy, Director of European Research at Savills comments: “Demand from tech occupiers for workspace in Paris has been rising over the past three years, since the government initiated a campaign to promote France as a new “Digital Republic”. The big names like Google, Twitter and Apple, have clustered in the ninth arrondissement, which is one of the best connected areas in central Paris and particularly attractive for talent, which is a driving factor for this sector.”  

Due to a shortage of sizeable workspace available in the CBD, some of the larger tech companies have chosen locations outside of the ninth arrondissement, which is the case with Ebay, Blablacar and Facebook, who have all located in the second arrondissement. Serge Vayer, Head of Tenant Representation, Savills France, comments: “In the search for lower rents, medium sized tech companies often locate in the northern or eastern part of the ninth arrondissement, which is close to, but outside of the CBD. Young start-ups will tend to choose co-working spaces, which are flourishing in the French capital.”  

In spring this year France will launch the French Tech Visa with the aim to attract international talent from the tech sector and facilitate their arrival in France, whether they are entrepreneurs, employees or investors. As a result of the city mobilising towards accommodating this sector, capital invested in tech start-ups in Paris in the first nine months of 2016 increased by 71% yoy, and in the past three years the volume of venture capital raised has tripled.  “Government initiatives in France and the city’s commitment to embracing the digital era are driving demand for workspace in Paris, which in turn is triggering the development of more peripheral clusters,” adds Serge Vayer. In April, for example, Station F, the world's biggest start-up campus will open its doors in the 13th arrondissement. Launched by Xavier Niel, this innovative concept will welcome young start-ups under one roof in a gigantic office space of almost 34,000 sq m within the former Halle Freyssinet of Paris. Facebook recently decision to move in 80 employees and 15 start-ups.  

According to data from Oxford Economics, in 2025 the tech sector could represent 13% of all employment in the Paris region and thus dethrone the retail sector, historically the largest employer in Ile-de-France. As a result, Savills anticipates a growing demand for offices, up to 30% of demand in central Paris (in the second and ninth arrondissements) by 2020. Savills acknowledges that the major and imminent risk hanging over Paris’s bright future as a global tech hub is the uncertainty around the outcome of the French presidential elections in May. “On a more positive note,” says Brissy, “the Brexit outcome could lead the numerous French start-ups based in London to move back to the French capital, especially if the new government grants tax incentives to the UK based firms.”