Tech Firms To Occupy 30% Of Central Paris Workspace By 2020
Paris’ booming tech sector is driving demand for office space, notably in the 9th arrondissement, where it accounted for 21% of the total take-up last year, according to Savills. Workspace occupied by tech companies has increased by nearly 10% year-over-year. In that same period, tech takeup in the 9th arrondissement vaulted from 11% to 21%.
Savills director of European research Lydia Brissy said 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.” Big names like Google, Amazon and Apple have clustered in the 9th arrondissement, which is one of the best-connected areas in central Paris and particularly attractive for talent.
Savills France head of tenant representation Serge Vayer said that in the search for lower rents, midsized tech companies often locate in the northern or eastern part of the 9th arrondissement, which is close to, but outside of the central business district. Young startups will tend to choose co-working spaces, which are flourishing in the French capital.
This spring, France will launch the French Tech Visa 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 toward accommodating this sector, capital invested in tech startups in Paris in the first nine months of 2016 increased by 71% year-over-year, 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,” Vayer said.
Due to a shortage of sizable workspace available in the CBD, some of the larger tech companies have chosen locations outside of the 9th arrondissement, which is the case with eBay, Blablacar and Facebook, which have all located in the 2nd arrondissement.
In April, Station F, the world's biggest startup campus, will open its doors in the 13th arrondissement. Launched by Xavier Niel, this concept will welcome young startups under one roof in a gigantic office space of almost 366K SF within the former Halle Freyssinet.
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 Paris. As a result, Savills anticipates a growing demand for offices, up to 30% of demand in central Paris (in the 2nd and 9th arrondissements) by 2020.
Brissy said the Brexit outcome could lead the numerous French startups based in London to move back to the French capital, especially if the new government grants tax incentives to the UK-based firms.