According to Savills some 79% of investment into new office stock in the area in 2012 was for High Environment Quality (HEQ) certified stock, for which the share of forward funding amounted to 73%.
This represents a significant rise in the share of forward funding for HQE investments compared with 54% in 2011 and 33% in 2010, which the firms says reflects a growing investor confidence and demand for sustainable office product in France.
‘While the HQE label currently does not have an impact on a property’s rental level, HQE offices are very attractive to investors. They are quickly let, benefit from a higher occupation level and attract well known office users with good covenants who are prepared to commit to long lease terms,’ said Marie-Josée Lopes, head of research at Savills France.
The international real estate advisor notes that in the French office market, where traditional lease lengths are three, six and nine years, where nine year lease terms have break options every three years, HQE offices tend to attract longer leases than non-certified buildings.
For example, in 2012 nine year fixed leases represented 47% of lettings in HQE buildings compared with the overall French office market, in which nine year fixed leases represented 17% of lettings in the same period. Significant tenants that have opted to take HQE certified space in recent months include Thales, Rexel and Lafarge.
According to Savills research across France there are 369 HQE certified office buildings comprising approximately 4,816,700 square meters of space. The firm calculates that 80% of HQE certified office space in France is located in Ile de France where 10% of all office stock is now certified.
With an additional five million square meters of registered office space due to be delivered to the market over the next three years, the firm expects this share to double to 20% by 2016.
‘The majority of office space currently in the process of being certified is concentrated in the Hauts de Seine, Paris and the Seine Saint Denis areas of Ile de France as well as La Defense, which is becoming the major green hub of the region,’ said Lydia Brissy, European research director at Savills.
‘Most of the multi certified schemes, where assets have HQE as well as LEED or BREAM certifications, are already concentrated here and with a further 700,000 square meters of HQE offices due to be delivered by 2016. This will provide the French market with new investment opportunities for buyers seeking secure, future proof investments,’ she added.
