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What do investors think about the office real estate market?


We have been navigating our way through an unprecedented health crisis for several months now, which has considerably impacted many sectors. The office real estate market hasn’t proved an exception to this rule. What is the real impact of Covid-19 on office real estate investment activity? Can office real estate investment continue to advance?

Has there been a downturn in investment activity?

To understand more about the positioning of various market players, BNP Paribas Real Estate conducted carried out a study in May 2020 with 131 investors and/or office real estate owners, from the family office to the asset managers of investment funds, promoters and even private investors. The investment scope of the participants is large, 49% investing in Paris and the Paris region, 39% investing elsewhere in France and 9% choosing investment opportunities in Europe the rest of the world (3%). So, what insights can they give us about the office real estate market in the face of the health crisis?

Since May, European employees have been gradually making their way back to the office in unexpected circumstances, dealing with social distancing and health measures put in place to stem the spread of the virus. What does this mean for the office real estate market? Has investment activity been directly impacted by Covid-19? 69% of the investors surveyed acknowledge that there has been a downturn in their activity. Simon Rubinsohn, Chief Economist of RICS outlines, “Covid-19 has triggered a significant erosion in confidence in the global office real estate market. The most concerning thing for investors and for landlords is the lack of visibility regarding the lasting impact of this pandemic, on companies and the economy in general.”1


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When will the office real estate market return to normal?

47% of those surveyed predict a period of more than 12 months from the end of the crisis before the  rental real estate market goes back to normal. While those surveyed seem split between a period of “6-12 months” and “more than 12 months” in terms of the investment real estate market. 

Furthermore, 93% of participants think that the rate of return will be impacted. As Magali Marton, MRICS, Head of Research France for RICS explains, “The French office real estate market and the other markets, are entering into a period of turbulence as the health crisis which has merged into an economic one, weakens entire sectors of the economy. Recovery will be long and could bring about structural changes which real estate professionals will have to deal with, while also managing an economic emergency.”

What intentions will occupiers have at the end of the crisis? The main points which came up during the survey conducted by BNP Paribas Real Estate are: making the main conditions of leases more flexible, postponing real estate projects and renegotiating leases. What remains to be seen is whether the next few months will confirm these trends.


This recent study was conducted by the BNP Paribas Real Estate teams with a sample of 131 investors and/or office building owners, clients or prospects, from the 12th to the 26th of May 2020. The interviews were carried out using a questionnaire. The most represented investor category is private investors (22%), followed by family office (18%), asset and fund managers (18%), investments funds OPCI and closed funds (12%), insurance companies and banks (11%), promoters (11%) the SCPI, OPCI public and open-end funds (8%) and the sovereign funds (1%). These investors roll out their investment strategies throughout the world.