French Tech businesses reshaping office market

Last year also saw the emergence of 13 new Unicorns (startups with a value over $1billion) within the FT120 (a group of 120 French companies which stand out for their dynamism). Playing a key role in the economy and with an exponentially-growing workforce, these new leaders in technology are also becoming essential in the real estate market.

In a study dedicated to French Tech offices, Knight Frank provides a comprehensive, numerical mapping of the FT120 companies’ properties, and analyses how the health crisis and the urgent need for talent have placed these businesses at the forefront of the workspace revolution.

French Tech in the office space market

The significance of FT120 companies in the Greater Paris Region commercial market may seem rather modest: since 2012, they have leased just over 200,000 m² of office space (excluding co-working spaces), compared to an annual total of 2.2 million m² on average for all sectors combined. This figure is nevertheless considerable given the youth of the FT120 companies, 61% of which were created less than 10 years ago. This is all the more significant since these leases are, for the most part, situated in Paris. –

Inner Paris accounts for 70% of office space leased by the FT120 companies in the Greater Paris Region, with the majority being in central and eastern arrondissements of the right bank, such as BLABLACAR in the 11th arrondissement.

Inner Paris offices

The inner Paris businesses play an essential role in the Parisian office property market, leasing increasingly large areas, such as:

• 7,500 m² leased in 2021 by LEDGER at 106 rue du Temple

• 5,800 m² by VOODOO in 2021 in the recently restructured ‘Poste du Louvre’ building

Higher office rents

Their importance in the office market is also reflected in the payment of higher than average rents, which are increasing at greater speed: €692/m²/year at the end of 2021 in Paris (+ 31 % over four years), compared to €625/m²/year for all business sectors combined (+19%).

While certain Tech companies have occasionally been able to establish new market benchmarks in central and eastern Paris, they do not pay the highest rents in the capital. In contrast to sectors such as finance, luxury goods, or consultancy, the FT120 companies rarely set themselves up on the most expensive streets of the CBD, where rental values are commonly higher than €900/m²/year.

Central locations

Very attached to their Parisian address, and particularly fond of buildings with character, heritage and originality, FT120 companies most often remain in the capital when they move office. Nevertheless, some may consider relocating to the outskirts of the city once their workforce has grown considerably, given the context of increasing scarcity of large office spaces in Paris. Such examples of relocation are quite rare at the moment.

However, some companies have made this choice, such as Doctolib, the most highly valued company in the French Tech sector, which has just over 11,200 m² of office space in Levallois-Perret (92), and Believe, a former unicorn now listed on the stock exchange, which has nearly 10,000 m² of space in Saint-Ouen (93).

Changing requirements

In the next France Tech office market instalment, we will focus on the changing nature of the workplace and the different needs of a younger workforce.