Office construction continues despite declining demand

France's office market is facing a paradox: while new office towers are still being built, demand for office space is declining and the number of empty offices is rising. This trend is most visible in major cities, particularly in Île-de-France, where the share of vacant office spaces is growing each year.

New office projects are underway

Despite the drop in demand, several large office developments are still in progress. For example, the "Tour Triangle" in Paris will add 70,000 square meters of office space and 20,000 square meters of services starting in 2027 near Porte de Versailles. In Toulouse, the "Tour Occitanie," a 40-floor skyscraper, is set for completion in 2029 near Matabiau train station.

Existing office spaces remain unsold

Some of the largest office buildings are already completed but remain unsold. In La Défense, TotalEnergies has moved into its new headquarters, The Link, a 242-meter tower that is now the tallest in France. Its previous headquarters, Coupole and Michelet, are for sale but have not found buyers. In Lyon, the "Tour des Lyonnais" or "Tour M2" is under construction, with the developer claiming to have secured interest in at least half of its office space.

Decline in office demand

The drop in office demand is linked to the rise of remote work and a shrinking workforce, as well as a weak economic climate that has slowed business transactions. The tertiary sector, which includes office spaces, is said to have reached its peak, according to an industry expert with BFM Business. The number of available office spaces has hit a record high, with over 10 million square meters of free office space in France.

Vacancy rates are rising

The number of empty offices is increasing across France. In Lyon, 8.9% of office spaces are vacant, while in Rennes, it is 8.4%. In Île-de-France, the vacancy rate has surpassed 10%. This trend is expected to continue, with projections suggesting that Île-de-France could have over 10 million square meters of available office space in the next five to ten years.

Investors still see potential

Despite the oversupply, some investors believe that certain business districts can still absorb new office space. In Part-Dieu, for instance, officials estimate that about 20,000 square meters of new office space are consumed annually. However, the pace of new construction has slowed significantly, with a 54% drop in starts since 2022. This means fewer large buildings will be delivered in the late 2020s.

Office projects are concentrated in key areas

New office developments are mostly located in well-connected business districts, while peri-urban areas with poor transport links are seeing rising vacancy rates. In Part-Dieu, the available office space has doubled in four years, from 347,000 to 700,000 square meters. Local governments are also taking notice, as these projects can provide a significant source of tax revenue.

Limited potential to convert offices to housing

Only 20 to 25% of vacant office spaces can be converted into housing, according to a 2025 report by private actors. The rest cannot be repurposed due to structural limitations, requiring demolition and rebuilding. This makes the economic case for conversion complex, and many local authorities remain cautious about losing tax revenue from office spaces.

Investors are diversifying their portfolios

As the office market faces uncertainty, more investors are looking to diversify their real estate holdings. Some are shifting towards hotels, managed residences, and data centers, which are seen as more stable or profitable in the current economic climate. This shift reflects growing skepticism about the long-term viability of traditional office spaces.