Open space corporate real estate offices

Big Dossier: Corporate real estate, the new Bordeaux eldorado

In a rapidly growing market, which however also remains a niche market… Corporate real estate in Nouvelle-Aquitaine is perplexing… The premises, the workshop, the factory, the offices… So many professional and commercial premises intimately linked to the activity of the company. Turnover of leases according to the cessation and creation of activity; insolent inflation in some sectors; abandonment and obsolescence of some premises…

Unlike individuals, platforms are rare, practices extremely disparate; especially in terms of security deposit, suretyship and of course, fees … A lack of homogeneity a little confusing for business leaders. Leaders who need quick decision-making, economically viable, and in line with the needs of their structures…

Corporate real estate, a niche market

It is a national trend, confirmed year after year for four years now: corporate real estate is living its best hours. If the trend is upward, it should still be noted that it is mainly driven by the rehabilitation operations of the old rather than by the construction of new.

Office real estate is mainly concerned with rehabilitation. Spaces are often smaller but optimized and premises placed in strategic locations. According to the attractiveness of the rehabilitated buildings, business leaders settle in a space more expensive per m²… But smaller as soon as it is more efficient, more economical at the workplace.

As for the construction of new ones, few spaces remain available in the city center; and you often have to go to the periphery… Or in areas traditionally neglected by cities because they are unloved by the public (docks, train station, etc.). Nevertheless, with the strategic rehabilitation of some of these neighborhoods under the impetus of the related communities… New buildings are emerging. Some are even built “in white” (i.e. without pre-construction rentals or sales). A good indicator of areas where the promoter knows not to take any risks, such as the Basins in Flot or the Bordeaux Euratlantique district.

Company employee meeting
Larger spaces, perfect to receive while having space.

Constant dynamics

On the other hand, logistics real estate is less popular with communities. They are less willing to grant large land for this type of construction because it is used for storage buildings, for example, logistics requiring a lot of square meters but creating very few jobs.

The dynamics of this niche market are also attracting foreign investors (particularly from the US, UK and China). In 2016, they accounted for about 30% of the volumes invested (3 more inches than in 2015). Among the elements that justify this is Brexit. Investors’ reluctance to invest in Britain has led to a redistribution of the amounts invested in other high-potential countries. As France has fallen behind its European neighbours, and the market has been taking off in recent years, investors see strong growth potential.

Among the cities that benefit the most is Bordeaux. Now ranked the second largest city in France for corporate real estate, also attractive to Parisian investors, the Bordeaux metropolis has attracted the attention and alerts of international investors in recent years.

Responding to specific demands, there are relatively few players in this market. In Bordeaux, there are a dozen marketers and about twenty developers and builders.

“2017, an exceptional year,” according to the OIEB

2017 was an exceptional year on the desktop side. In the third quarter, there were already 130,240m2 rather than 106,000 for the whole of 2016 (66,950 m2 in the third quarter). It’s a record year. It was thought that the market would stabilize around 100,000 m2 but the office market exceeds all expectations.

This is due to the arrival of new projects: the Basins afloat, Bordeaux Euratlantique… The increase and diversification of the offer creates a certain attractiveness, including for schools. Latent relocation projects are coming to fruition: beyond the desire to transfer his premises, the entrepreneur is looking for a primarily qualitative offer (access, comfort, improvement of the quality of work…).

In response to the dynamism and attractiveness of the Bordeaux territory, some projects are launched in white, others benefit from funding. The annual report is expected in March. The final figures for 2017 will be announced ahead of 1 February 2018 in Bordeaux. This year, it’s a big coup: Bordeaux has the wind in its sails, the figures reinforce the strategy of Bordeaux Metropole, the LGV is a plus, business districts are waking up… The Sleeping Belle, it’s well and truly over!

That being said, these results do not prevent a re perspective. Indeed, some of these results are due to very large transactions that might as well have fallen a year earlier and thus spread the result over two years for example.

On February 1st, investors will arrive by the LGV in Bordeaux, before being received by Virginie Calmels, First Deputy Mayor of Bordeaux and Vice-President of Bordeaux Metropole in charge of the economy, and Stéphane Defer, head of communications for the Airbus Group in Toulouse, at the Caisse d’Epargne to take stock of the market in 2017.

In order to show the dynamism of the new districts, they will be invited to go around the city by bus… Before being received at the Cité du Vin by Alain Juppé, Mayor of Bordeaux; to discuss developments with customers and local users. It must be said that the figures for Bordeaux corporate real estate are particularly expected. Among the other distinguished guests of this event, Jean Dumesnil and Pierre Goguet, President of the CCI France; but also André Delpont, in charge of the economic development of the CUB between 2006 and 2010; then the new Euratlantique district between 2011 and 2016.

The Objective of the Observatory is to have as much encrypted data as possible in order to establish a complete synthesis of the market. It currently has 74 members, a record number of memberships since its inception, which shows a certain effervescence. An effervescence that tends to continue in 2018, with additional requests suggesting an increase in the number of members to about 80.

Open Space Offices Work
Open-spaces promote exchanges in offices.

At present, significant transactions have already taken place, figures signed for existing building or to be delivered: Crédit Agricole (12,000m2), Fayat (5000m2 on Euratlantique), Dalkia (2500m2), CDiscount (35 In addition to the current premises, Suez (1900m2), Cultura (7000m2 in Mérignac next to Decathlon), Pichet (2500m2 in expansion of its headquarters). And the settlements don’t just focus on the Euratlantic or Flot Basin. Many people think that the market is controlled by Euratlantique, or Mérignac remains the most important, it is a safe value, strategic location around the airport, point of connection between Bordeaux and the rest of the world.

The creation of the real estate offer most often leads, on its own, to the development of the subsequent market. A notable example would be the market around St. John’s Station. With the space available but also the desire to develop this district by modernizing it, it was rather easy to follow companies and major accounts such as Orange, EDF, the Savings Bank, or Fayat, the Trust Company, Pôle Emploi and Allianz which leaves the Mériadeck district.

A new role to play for major developers such as Vinci Constructions in this new district. They are also targeting these large accounts because the stock of square meters is limited in the neighborhoods. While projects take time, between two and three years of construction, developers generally do not see a tertiary park project launched where companies only want small areas. They want to attract customers with greater space needs.

“Does Magnetic Bordeaux magnetize that much?”

“There are currently a lot of discussions from national or international companies going on for a facility in Bordeaux. In this territory, employment is particularly sought after. The target is 100,000 jobs by 2030. The primary will is to attract skills because the city has to offer jobs, which today we are struggling to do. The bet will be successful when these companies are truly there and this must be verified by significant transactions.

Each year, the last semester or even quarter is generally quite strong. This year, in the first half of the year, 77,000 square metres have been signed, three quarters of the usual annual market. On corporate real estate, Bordeaux is a market at 90,000 sqm or 100,000 sqm. Next year’s goal is to make at least 100,000m2. 239 transactions were recorded in the first 3 quarters (at the rate of one transaction per day). Before, it was 150 to 200 annual transactions. In 2017, it’s really a volume and a number of transactions never reached.

Today, the light is on neighborhoods like the Basins afloat, the Euratlantic district, Mérignac, but it is impossible to hide Pessac, Bègles, Villenave d’Ornon, and the Right Bank. To the west, that is, Le Haillan, Mérignac, Pessac, it is a bottomless pit to Saint John of Illac. In the South-West, Bègles, Villenave d’Ornon are also doing well.

There is a much smaller area on the right bank and it is much more focused on warehouses, small activities, which are seduced by the attractiveness of the land and the proximity to the ring road. The west derives much more investment and settlements because it is closer to the Arcachon Basin, the airport, traffic and access lanes. These are attractive parameters for employees and business leaders who have less hesitation to come.

Currently, the only area that could disappear is the Flot Basin because once this area is built, the project is completed. Bordeaux Euratlantique, on the other hand, requires 15 years of work on 400,000 square metres. By the end of 2018, the completion in the office (excluding trade) will be carried out at 15%.

As to whether companies will continue to move to Bordeaux, it is not possible to say, but one indicator can help to establish hypotheses: indeed, many retirees come to settle in Bordeaux. They are usually the first to move because they are able to make a decision quickly when a company needs more decision time.

The office is the flagship market because it gives a trend that the activity and warehouse premises reflect less (this is a secondary market on the trend explanation of the market). However, it also has the wind in its sails (283,000 m2 in the third quarter of 2017 compared to 184,000 in 2016).

This also applies to 160,000 sqm in the office as of 31 December. The goal was to reach 100,000 and keep them on for a long period of time.”

The office market to be linked to employment requirements

Just as a company that would experience a meteoric rise and must ensure that it can keep pace, Bordeaux must be able to control its economic growth. All factors must be taken into account and evolve together as much as possible so as not to reach a breaking point.

The level of stock of offices in Bordeaux is declining. The one-year visibility allows the available area to be defined at 131,821 square metres. This creates some tension in the market, with prices continuing for 2018. In the Bordeaux periphery, outside the Flot and Euratlantic basins, there is almost no new construction for offices. Even in Mérignac, yet at the heart of the tertiary dynamism, no more than 2,500 m2 of new offices next year and on the office side rehabilitate, the market is in a tense flow: what has been renovated is already sold.

An economic and social issue

The 2018 trend is almost identical for activity premises. However, the weight of own accounts is much greater than in the office market, with 13 such transactions for a total of 114,880 square metres traded. For logistics, nothing happens in Bordeaux itself. The market, dominated by the South/South-West sectors, with 128,560 m², West (56,580 m2) and Right Bank (46,300 m2).

Company real estate offices
The choice of an office is essential to the proper development of the company.

According to the OIEB, employment could be a hindrance to this. Indeed, when an office is relocated, employees and their families come to settle in the city… And it is necessary for them to find a job nearby. A phenomenon that does not always succeed; because Parisians whose spouse cannot find a new job in Bordeaux do not hesitate to return to their city of origin.

This is a definite challenge for Bordeaux Métropole, which is trying to overcome these difficulties, which are still exceptional, but nevertheless present. The issue of private housing is also central, as it is necessary to live on site. The city’s economic attractiveness has significantly increased the price of housing.

The growth of corporate real estate goes hand in hand with the city’s policy on the economy and job creation. By 2030, the city aims to create 100,000 jobs, or 7,000 a year. If the figures revealed by Virginie Calmels in mid-December 2016 were enthusiastic with 7,900 new positions, we must now ensure that we can maintain growth.

Rising settlements that should boost employment

In 2017, new locations promise a large number of jobs at three years. Examples include Cap Gemini, Poly Shpa, Uniqlo, Medicapole Partnaire, Almage, Dassault Falcon Services, EKINO, Imakumo, Creative Aquitaine, Solidanim, Zodiac Nautic, announcing between 40 and 150 jobs per company(1).

Within the Bassins à Flot, entities such as OVH, CDiscount, or Betclic, occupy thousands of m2… While Quai 8.2 of Bordeaux Euratlantique welcomes Allianz, the Halle Bocca invites AG2R… Despite everything, Mérignac still surpasses these new districts with the delivery scheduled for the end of 2018 of a Cultura building. 7000 m² of offices to accommodate all the services of the brand.

In terms of logistics, Lidl’s operation in Cestas is not insignificant either: 43,000 sqm. Combined with the city’s ambitions, the diversified offer of corporate real estate encourages companies to set up shop in Bordeaux or in neighbouring cities.

In order to sustain job creation, the city is setting up operations to attract craftsmen, TPE, SMEs and PMI (such as the AIRE project call), in addition to large companies, groups and institutions (Bordeaux Euratlantique, Bordeaux Aeroparc or Inno’Campus).

https://www.invest-in-bordeaux.fr/implantation-dentreprises-bordeaux-metropole-toujours-plus-attractive/

The attractiveness of corporate rentals, Colliers International

Colliers International is 16,000 people worldwide; United Kingdom, Germany, Northern Europe, Canada, USA, Australia, Asia Pacific. The structuring of Colliers International in France is recent, first in Paris and then in the region (Lyon, Toulouse, Nancy, Lille, Bordeaux). Colliers Bordeaux, opened three years ago by Eric Guillemin and Cédric Chaignaud, focuses on three major activities in commercial real estate. Rental, sale and investment. They have accompanied some large national customers during their installation in Bordeaux; (Carrefour or Johanes Boubée, wine merchant, subsidiary of the Carrefour group). Colliers International takes care of properties of at least 50m2 for rent, new or old. A market where competition is not very important, and where agents have a good relationship.

Colliers specializes primarily in office transactions, and operates on both new and second-hand premises. The sale of new is quite important, since each year, up to 40,000 m² of new is built in Bordeaux. Dealing with these two types of premises gives them significant visibility and the ability to have an overview of the market, both for themselves and for their customers.

To better understand the springs of this sector, Bordeaux Business met Cédric Chaignaud and Eric Guillemin of Colliers International Bordeaux.

“Colliers International chose to open a Bordeaux office three years ago thanks to the city’s growing reputation nationally and internationally. The city has become very attractive for companies, especially for banks, insurance and IT services. Skilled jobs, developed means of transport and good territorial network, now represent an interesting proximity to Paris.

The LGV has allowed the creation of new neighbourhoods, the development of new areas. A new centrality emerges thanks to these new districts. It extends from the Bassins à Flot to the Train Station, and no longer just the Golden Triangle.

Indeed, the growth of Bordeaux is an ideal opportunity for developers and investors. The majority of business done is rentals, at 80%. Rentals also apply to large groups. Companies prefer to keep funds for the business than to buy premises, which they sell with this in mind. This is easily explained, because renting offers greater flexibility, especially for economic, development, recruitment, space, displacement, or transfer issues.

Corporate real estate is very different from real estate: there is no speculative aspect. It’s a working tool so companies need stability. Another notable advantage is that corporate real estate does not suffer from large price fluctuations.

Buyers are long-term investors, mainly institutional investors such as banks, SCPIs or the insurance industry, for example. These investors are primarily aimed at stability, profitability, but not speculation. They note that house prices are indeed rising, but overall this increase remains reasonable.” III – Logistics market also on the rise

Meeting work team company
The new offices have more meeting space.

Different arguments play in Bordeaux’s favour for the installation of companies and their development. Strategically, Bordeaux enjoys a particularly dynamic economic economy, and is well ranked in advanced technologies (aeronautics and space, health and biotechnology, digital…). In this sense, it attracts the attention of companies specializing in these areas in particular. By extension, the installation of such companies attracts the interest of other professions, such as specialized law firms or private concierges.

Efficient transportation system, university of excellence… Attractiveness factors

In view of this economic development, Bordeaux has been able to address priorities and rely on a generally efficient transport network, facilitating local and international travel (tram, bus, train station, airport).

At the same time, quality education and training have taken hold. The University of Bordeaux is ranked among the few Universities of Excellence. Every year, the universities, schools and institutes come out of qualified profiles in engineering, research, business, and popular with companies.

All of these factors have together contributed to the international reputation of the city both for its economy and its living environment (best city to live since the PwC study of 2015, best European destination 2015, the most attractive city for French employees three years in a row (2014, 2015, 2016) according to the Great Place to Work Institute…).

Proof of Bordeaux’s attractiveness to large companies, the investments of companies for their Bordeaux location are also substantial and testify to the potential of the territory and the sustainability of economic growth in Gironde and New Aquitaine in general. Thus, Dassault would have spent 15 million euros on its Bordeaux space, Thalès, 200 Million euros, Herakles, 80 Million euros, Getrag, 130 Million euros… Other companies such as Castel, Michelin, or Corep have also not skimped on the means.

Commercial spaces are also witnessing the situation and are developing throughout the Gironde. In the Bordeaux metropolitan area, Ginko Bordeaux Lac has invested 22,000 square metres, the Retail Park in Pessac occupies 5,700 square metres and the Leclerc du Pian Médoc has 15,500 square metres.(

On the Arcachon Basin, Les Oceanides at the Teste de Buch, and Leclerc in Arès also benefit from very large areas. Other commercial projects are taking place in upper Gironde, in the South Gironde, in the Libournais and the Médoc.

To get a more precise view of the specific logistics market in particular, Bordeaux Business met Hervé Denudt, Aquitaine development director, and Christophe Dubail, deputy general manager of the GSE Group, a global contractor in corporate real estate.

The key in hand for the logistics market, GSE Group

GSE, who has been based in Bordeaux since spring 2017, had previously been working from Toulouse. They decided to reinvest Bordeaux. The GSE Group currently has a turnover of 400 million euros, and employs 400 people in twelve agencies around the world, mainly located in Europe, except one, present on Chinese territory. The group has an engineering division with a design office, but also the GSE Region, represented by the twelve agencies. In each are development managers, a technical director as well as a purchasing manager but also business engineers and a director of production.

“GSE intervenes on different types of constructions. These can be GIP, large areas from 12,000 m2 (between 6 and 8 million euros). In the regions, the economic fabric is particularly made up of SMEs and SMIs, with needs in logistics, offices, tertiary production … This market is larger and represents 7 billion euros per year. It covers areas of less than 12,000 square metres. For example, GSE worked for France Boissons and designed the Billi Bordeaux Illico terminal; the low-cost annex of Mérignac airport. Large projects with strong potential for the city’s economy.

GSE provides turnkey buildings, and works from design to completion, committing to both quality and timelines. Some of its teams come from local authorities, which allows them to listen to the market and are responsive.

Thanks to its research, GSE offers its own products. For example, for logistics buildings from 3000 m², the group has developed Modulog. High-performance materials especially from an energy point of view, 20% better than what can be found on the market, for the same price. For buildings in the tertiary sector, the group has also developed another product, Cédodia.

Their motivation is to satisfy end-users (tenants or landlords) but also landlords and investors according to their interests. Among some of their most original projects, the construction of an insect refinery in the Jura, as well as Idea Park, village of entrepreneurs with premises of 75 to 360 m2. This project, although carried out by investors (but the spaces) was intended to sell itself to craftsmen.

GSE has chosen to relocate to Bordeaux, after leaving the Gironde for a few years, because consumption has resumed for 2 years. The good indicators to follow are those of packaging and paper because all sectors need it: if the packaging goes wrong, it is because everything goes wrong. If production resumes, it is because the activity starts again. To study variations in production, the group does not hesitate to follow warehouses and industry.

In Gironde, the demographics have been increasing enormously over the last 30 years, but there are no jobs for everyone. There are indeed more jobs than before, but it is still not enough to absorb the strong population growth, particularly marked in recent months. Bordeaux is today a springboard thanks to its international influence through the LGV, but also the wine or aeronautics that forge the reputation of the city. A springboard on which the Group had to take off.

Buildings glass panes
The new offices are designed to be more environmentally friendly.

The relative decline in purchasing for increased real estate flexibility

Rent or purchase, accessibility of premises, reputation and standing, surface, the needs of companies in terms of premises are unique to each. In the middle of the urban jungle, it is not easy for the entrepreneur to know from the start what his needs are. And even if he knew what he needed, is there an offer available in a crowded market? Do we need an individual room or can we settle for a coworking?

If renting matters when setting up a business, the question of buying one’s own premises often arises as the company grows and sees development prospects. Despite having confidence in the success of the company and its sustainability, traditional financing players are regularly more cautious and many business leaders feel constrained in their development.

Financing the purchase of corporate real estate, a difficult bet

The view of Vincent Legranger, ofALG Crédits Pro, a brokerage firm specializing in professional financing, is a subsidiary of the ALF Finance Group which also owns ALG Crédits and Crédit Conseil de France; mérignac, Andernos, Pau and Paris.

“While the brokerage market in particular real estate financing in France represents 30% of financing in 2017 and should reach 50% by 2020 (like the rest of Europe)… That of professional financing is still in its infancy. Indeed, while the individual has clearly understood the value of going through a broker, who gives him a saving of time, better conditions and more support, there are too few company executives who make these steps. Simply because the manager most often has a good relationship with their bank advisor and thinks that he will be able to support him in his development.

Unfortunately, disappointment is often at the rendezvous. Partners only send their client’s files if the latter has a refusal by the banks. Unfortunately, the broker is still not seen as a preferred partner.

At a time when fundraising is on the rise for startups; it is increasingly difficult for SME managers to acquire their professional real estate or to develop their business through bank debt. This is partly due to a poor presentation of the project and a lack of knowledge of the expectations of the banking sector. Because, indeed, the banking vision differs from the entrepreneurial vision. A bank assesses its risk on existing (balance sheets, seniority, profitability,…) and the guarantee in case of default. On the other hand, an entrepreneur sees further and thinks about development. In addition, banks have different intervention policies. Some no longer finance certain markets or others have very high requirements in terms of guarantees.”

Between flexibility and brand positioning, rethink corporate real estate

The choice of premises is not independent of the company’s strategy. Indeed, geographical positioning can be indicative of the clientele you want to reach. Moving to a business district in the city centre or near a train station does not send the same message. Similarly, the façade of the building, as well as the interior layout and decoration… Also say a lot about the company’s positioning.

Desks relaxation area sofa
Creating a relaxation area enhances the well-being of employees.

“At the beginning of the activity, it is difficult to project on its real needs in terms of premises… Area, location, prestige, cost… All variables matter. The address is very important. Especially since you never know exactly what decides a customer to join you.

Thinking about the team, of course, the local must allow everyone to work in good conditions. … Tout as much as to receive his customers well. However, at the beginning of the activity, it is difficult to make the right management choices, which are not necessarily the choices that reflect the brand. Sometimes we cannot anticipate everything, such as the quality of the internet connection, which is paramount in our activity.

Be reasonable while remaining flexible, and understand what space we need. If, for example, the coworking system may seem ideal, it does not adapts not for all. In our case, the team is very dynamic, lively… We work in open space and would certainly annoy other customers. Another advantage of being “at home” is to be able to bring our mascot freely!

The flexibility of the premises also allows us to be present in Arcachon, Bordeaux and Paris to date; which would obviously not have been possible in purchase from the first years.”

Alexandra ZS, Leader

Depending on the activity, accessibility and parking can also be important criteria. If the premises are intended to receive prospects regularly, the fact of being able to access them as easily by car as by public transport is a key factor. On the other hand,a logistics warehouse can more readily be on the outskirts, close to motorways for deliveries for example.

The criteria to be taken into account when choosing premises, whether for purchase or rental, are therefore relatively complex and should not be taken lightly. At the same time, finding the pearl in a dynamic zone, especially on Bordeaux, is regularly part of the fighter’s journey.

Corporate real estate, a choice accompanied by a professional

Commercial real estate is an essential aspect of the life of a company regardless of its field of activity. Find larger offices, better located to be in the heart of your business area… Topical issues and essential for the development of its activity. In order to be better advised and supported in its efforts, the company turns to experts to find the most suitable property.

Specialists such as Tourny Meyer Bordeaux are positioning themselves in this segment so central to Bordeaux. Commercial real estate experts help them find the most suitable property to buy or rent. They even provide advice on building real estate for the company. The metropolis is known for attracting businesses, driven by an interesting dynamism.

To meet this ever-increasing demand, real estate agencies for companies are diversifying their offers. Offers that adapt to each profile, each need. Indeed, not all companies are attracted to the same type of product. The area, the cost, the capacity of reception are criteria as important as the location. A knowledge of the field that local agencies master perfectly for their clients. Customers attentive to the premises, also on the environmental dimension.

To conclude on Bordeaux real estate…

Yes, the Sleeping Beauty has woken up, and it’s not about to stop… According to real estate experts, this awakening is not just a start, and moreover controlled. Indeed, even if the metropolis did not know this level of dynamism of commercial real estate… It is only the result of a fundamental work that has just had these first effects. The agglomeration has always been successful in terms of attractiveness.

Aerial view Bordeaux
Bordeaux attracts real estate investors.

And companies are very attentive to this factor… They understand that it may also be in their interest to continue to develop for those present; And to settle down for those who watched, from afar, this magnificent show. Investors such as banks, insurance companies, scpies, etc. always carry out their actions in a millimetered manner in a goal of reduced risk to nothing.

Indeed, investors are present in numbers, and consistently, in terms of the amounts committed. Knowing that transport followed the same path in parallel. The LGV is operational, the tramway continues its deployment, the airport continues its development and the ring road is currently changing. Instead, universities have a reputation for excellence. All that remains is to secure employment. In any case, the objectives are there; 7000 jobs/year until 2030 to maintain this level of magnetism. For now, that looks pretty promising.

Sources:

1 “Business establishment: Bordeaux Metropolis ever more attractive,” Invest In Bordeaux, 24 March 2017
2 “Entrepreneurs Territory,” Invest In Bordeaux
³ “Key figures of trade in Gironde 2017. Presentation of the commercial offer and its evolution in Gironde”, CCI Bordeaux Gironde

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