It continues to be a taboo term. The office. The asset hated since Covid. The asset that fed so many institutional investors for decades, and which today sticks to their fingers like Captain Haddock's plaster.
So, how is it faring? Unsurprisingly, trends in expressed demand point to a fragile tertiary market. Whether among companies logging on to the BureauxLocaux* marketplace. And among major users surveyed by the Association des directeurs immobiliers (ADI), who reiterate their desire to reduce their real estate footprint. Whether in France or the United States, we are witnessing a slow but seemingly inexorable downsizing of office space. The famous "fewer square meters, but more square meters".
The problem is that this attrition of demand is coming up against an overabundance of supply. And price regulation is no longer enough to keep customers coming back in droves.
What, then, could save the office sector's bacon?
Tertiary gentrification? Flight-to-centrality works better than flight-to-quality. Paris is an almost caricatural example of this, with prime rents soaring while everywhere else they are falling. The only limit is that not everyone will be able to afford what is becoming a luxury product.
The decline of telecommuting? The back-to-work movement, which began in the United States, is starting to spread. Société Générale's recent decision to return to a four-day face-to-face working week illustrates this desire on the part of decision-makers to redress the balance. But if the hemorrhage of telecommuting, which has emptied offices, is stopped, it's not certain that this will be enough to reverse the curve and significantly boost demand from companies.
Reinventing a model that's run out of steam? To do this, we need to move away from a static vision, based on the ratio of square meters to workstations or the number of workstations per employee, towards a dynamic, service-driven vision. We've seen the promise of coworking, and by extension of the operated office, but we're also measuring the fragility of these business models.
In the meantime, what could bring investors back to the office?
In the short term, a readjustment of values. It's a question of rebuilding a risk premium, or even an over-premium, to make this asset class attractive once again.
In the longer term, it's important to remember that offices will always be a working tool for companies. In the same way that physical retailing has remained an essential place for consumers.
A little more patience before we start bashing.