French Office Market Reaches Cyclical Low and Opens New Opportunities for Flex Operators
France’s regional office markets entered a new phase in 2025, characterised by lower transaction volumes, rising vacancy and more selective occupier demand. According to French real estate consultancy Arthur Loyd’s recent report, the office market is adapting to a slower economic environment, while flexible workspace operators increasingly focus on high-quality assets in the country’s strongest regional cities.
According to the report, total office take-up reached 3.1 million sqm across France in 2025, including approximately 1.5 million sqm in regional markets. This represents an 8% decline compared with 2024 and marks one of the weakest years for office demand in the past decade.
Arthur Loyd expects 2026 to represent the low point of the current market cycle, with national demand forecast between 2.6 million and 3.2 million sqm. Transaction activity is expected to recover gradually during 2027 and 2028, supported by improving economic conditions.
Despite the slowdown, France’s seven largest regional office markets – Lyon, Lille, Marseille-Aix, Toulouse, Bordeaux, Nantes and Montpellier – continue to outperform the national average. Over the past 30 years, these metropolitan areas have recorded population growth of around 25%, while employment has increased by 47% since 1997, reinforcing their role as long-term business centres.
The report highlights a significant change in occupier priorities. Rather than seeking office space in traditional business districts, companies increasingly favour mixed-use neighbourhoods that combine workplaces with retail, housing, restaurants and public transport. Environmental performance, outdoor amenities and operational flexibility have become key decision factors.
The report suggests the current market environment creates opportunities for flexible workspace operators. Across the 28 regional office markets analysed, available office stock increased by 12% year-on-year to almost 3.5 million sqm, while second-hand buildings accounted for 57% of all commercialised office space. New office supply is decreasing or stable, while second-hand stock is rising (+18%). According to Arthur Loyd, these assets present opportunities for repositioning through refurbishment, capital investment and flexible management models.
Occupiers are also increasingly seeking ready-to-use office solutions that reduce upfront capital expenditure while providing high-quality technical specifications and energy-efficient buildings. As companies delay long-term real estate decisions amid economic uncertainty, serviced offices and managed workspaces offer greater operational flexibility.
Arthur Loyd concludes that market polarisation will remain the defining trend for 2026. Well-located, energy-efficient buildings in central mixed-use districts are expected to continue attracting occupiers, while ageing and peripheral office stock will increasingly require repositioning or redevelopment. For flexible workspace operators, the report points to continued opportunities in the country’s largest regional metropolitan areas, particularly through the conversion of existing buildings into high-quality managed office environments.
Founded in 1987, Arthur Loyd is one of France’s largest independent commercial real estate consultancies. The company operates a nationwide network of more than 80 offices and advises occupiers, investors, developers and landlords across office, industrial, logistics, retail, investment and corporate real estate markets.
Cevan Torossian, Partner & Director of Research at Arthur Loyd, spoke at Coworking Europe 2017 in Dublin.
Pic Source: Stock Photo (Marseilles)
