Paris, the City of Light. Paris, the most popular tourist destination in the world. Yet Paris is also irrefutably a business destination and proof of this was published in February in the 2010/11 issue of fDi Magazine’s “European Cities & Regions of the Future” rankings. Paris came in second place in its Top 25 list as a city offering numerous benefits for anyone looking to make foreign investments.
One of its many advantages is real estate, a major factor in the capital city’s attractiveness to investors. Paris offers a wide range of modern properties at competitive prices…
With Europe’s best commercial property selection, ahead of London1, Greater Paris has a large variety of sites for businesses, with 132 business centers and five innovation clusters located across 26 major areas: from historic Paris to the modern La Défense, to the Saclay Plateau and the areas around Paris-Charles de Gaulle airport. This has made the French capital the leading European city for locating headquarters. It is home to 8% more multinational headquarters than London and 33% more than New York2. With three million square meters of offices, 150,000 employees and 1,500 companies at La Défense, Paris is also the leading business district in Europe, ahead of The City in London.
Commercial real estate prices in Paris are very competitive compared to other major capital cities in Western Europe. Much less costly than New York or Tokyo, Paris offers “prime”3 rents which are lower than in London: €710 compared to €892 (m²/yr)4. This is probably why Paris was better able to weather the global commercial real estate market downturn in 2009. Moreover, Paris is largely outpacing major European cities in terms of transaction numbers: 425,000 m² were sold in the last quarter of 2009 versus 363,000 m² in London, 139,000 m² in Munich and 150,000 m² in Madrid4.
Consequently, global decision-makers still consider Paris as one of the most compelling cities for investment. The French capital is in third place (35%) in terms of overall image, ahead of Berlin, according to KPMG France’s latest Observatory of International Investments in Major Global Cities. This perception has also been asserted through actual investments: Paris has been ranked 4th in the world for international investments in 2008-2009, ahead of Barcelona and Madrid (7th and 8th) and has held 3rd place over the last five years. “With 4,000 companies per square kilometer, Paris remains a key business center, in spite of the global economic crisis”, according to the Paris Commercial Court Registry in its “Annual Atlas” of business conditions in France’s capital city.
Other cities in France offer excellent facilities with attractive price points. The “prime” rents in Lyon and Lille are €230 and €185, respectively, versus €420 in Frankfurt and €264 in Barcelona4. Lyon is also ranked 10th among the top 100 cities with the most competitive operating costs and 3rd among cities in Europe according to the 2010 issue of the KPMG study “Competitive Alternatives”.
1 Source: French Real Estate Market according to BNP Paribas Real Estate, 2008
2 Source: Fortune Global 500 2009
3 “Prime” rent: the highest nominal rent, not including convenience transactions, for a standard-sized product compared to the demand in the market sector, of high quality and providing the best services in the best location for a given market.
4 Source: BNP Paribas Real Estate, Europe Quarterly 2009 Q4
For more information on the costs of doing business in France, see the Wall Street Journal article Setting up Shop Can Be Simple and Satisfying.
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