Tishman Speyer Lands 400 MSF Government-Office Tenant in Landmark Paris Deal
- Aug 11, 2011
August 11, 2011
By Barbra Murray, Contributing Editor
Tishman Speyer has just made a huge splash in the Paris office market with the closing of the biggest lease transaction in the City of Lights. The New York City-based international real estate company signed the French Ministry of the Interior to a 400,000 square-foot lease at Lumière, the 1.4 million square-foot office property that carries the title of the largest privately owned office building in Paris.
Located at 40 Avenue des Terroirs in Paris’s Eastern business district in the 12th arrondissement, the seven-story Lumière has been part of Tishman’s portfolio since the company’s European Strategic Office Fund snapped it up from Blackstone in 2006. In addition to class A office space, the 19-year-old building features approximately 100,000 square feet of retail space, 220,000 square feet of warehousing and underground parking for 1,700 vehicles. The Ministry’s neighbors at Lumière will include the likes of banking concern ING Direct; investment and corporate bank Natixis; state railway company SNCF; and financial services group Société Générale. The government agency’s sizeable lease agreement, which includes a private auditorium and a nursery, leaves the office building–as well as Tishman’s 3.8 million square-foot Paris office portfolio — with a completely full tenant roster.
Financial terms of the lease with the Ministry have not been disclosed; however, given the current state of the Paris office market, it is unlikely that new tenants at Lumière are taking space at the discounted prices that became prevalent in many major metropolitan markets around the world during the global financial crisis. The vacancy rate was just 4.8 percent at the close of the second quarter, as per a report by DTZ Research, marking a 17 percent year-over-year decline in immediately available supply. The combination of office users coming off the sidelines and developers limiting their activity is, according to the report, “exerting an upward pressure on rental values, with the average rent for new space at €650 per square-meter per year and prime rent at €750 per square-meter per year.”