The Paris effect: why this Tech City has a certain je ne sais quoi

Recently ranked as one of the top Tech Megacities in Savills Tech Cities 2021 report, it is clear that in recent years Paris has become one of the most attractive cities in Europe for tech occupiers.

In the last few decades the beating heart of France has carved a place for itself as one of the go-to European cities from an occupational point of view. Companies wanting to make the most of its prominent position on the continent have flocked here, none more so than technology companies looking to tap into its rich sources of talent and high-calibre business environment.

As such, Paris has very much embraced its appeal as a leading technology hub. Back in 2017, President Macron pledged to make France a 'start-up nation', ploughing €7 billion into the technology sector to support the digital economy, and its success has been well-documented. The creation of Station F in the 13th Arrondissement of the city, a 34,000 sq m ecosystem of entrepreneurs, has been welcomed with open arms for tech start-ups and businesses in the early stages of their journey.

Alongside this, the city has seen the emergence of 'Silicon Sentier' - an area in the centre of Paris (2nd, 9th and 10th arrondissements) which has become increasingly popular with technology companies looking to base themselves amongst like-minded people. Consequently, the area has become a destination in its own right (think Shoreditch in London or Williamsburg in New York) with many a retailer and restaurant following in the footsteps of occupiers, including Leboncoin and BlaBlaCar that recently decided to move slightly further east of Paris.

With a drastic increase in the number of flexible workspaces across Paris, as well as government grants, tax incentives and subsidies, it's clear the environment for supporting the tech sector is at its prime. So what's next for Paris and its appeal on its journey as a Tech Megacity?

Despite the impact of Covid-19 translating into a reduced volume of transactions and increasing number of disposals feeding the 'Grey Space' market, the vacancy rate in Paris is still extremely low at 3.5 per cent for Paris (City) and 2.6 per cent for Paris CBD.

Looking to next year, we believe that the Paris (City) market will become more balanced between tenants and landlords, with a trend of rents stabilising. With its world-class universities and business schools such as HEC or the INSEAD, ranked third in the world for its MBA, alongside the city's prowess in terms of its business environment, it's clear Paris will carry on attracting and fostering talent, continuing to boast that certain je ne sais quoi so many other cities envy.

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Contact Serge Vayer

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