EPAD Says La Defense Project Still on Track

The plan suffered a blow recently when architect Jean Nouvel put a stop to plans for his 984-foot-high Signal Tower after failing to attract investors. But Chaix said the plan is still on course. "The plan drawn up in July 2006 will be completed within the next four years and the limits set for the different types of construction will be slightly exceeded," he said.

EPAD (Établissement public d'aménagement de la Défense) has already signed agreements for more than the 1.6 million square feet of new space envisaged from demolition-reconstruction projects to replace first-generation buildings. These include the Carpe Diem tower by a consortium of Aviva and Predica, the D2 tower by Sogecap, the Air2 tower by the Carlyle Group and a tower planned by Italian insurer Generali. The Carpe Diem tower, which will replace the France Télécom building, is due to be delivered at the end of 2012, with the D2 building scheduled in 2013, Generali in 2014 and Air2 in 2015. A number of current towers such as Descartes, Allianz and Europe are also due for substantial renovation.

The 2006 plan also provided for the creation of 3.2 million square feet of additional space in completely new buildings. Three projects are expected to account for virtually all of this. If Unibail-Rodamco's Phare tower goes ahead, it alone will represent 1.6 million square feet while Unibail's Majunga project and GCI-Benson Elliot's Ava project will each offer 753,000 square feet. Chaix added that the overhaul of the La Défense road system could free up additional land for a potential further 3.2 million square feet.

The renewal plan also called for one million square feet of new residential space. The Charcot development zone in Puteaux will contribute 753,000 square feet with the twin Hermitage towers, designed by Norman Foster and scheduled to be developed by the Russian company Hermitage, likely to make up the difference. The 2.7-million-square-foot Hermitage project will offer a residential, hotel and retail space on the banks of the Seine in Courbevoie.

This will all come on top of 6.9 million square feet of new space being developed to the east of La Défense, but real estate specialists are confident the market will be able to absorb the new supply. Eric Siesse of Jones Lang LaSalle told French real estate portal Business Immo: "La Défense is a sector which currently suffers from supply shortage, with only 1.6 million square feet immediately available, and a low vacancy rate of 3.9 % which keeps prime rents up at around $7 per square foot. It is also a market where there is a demand for large properties." Last year three-quarters of the 1.9 million square feet taken up were accounted for by six transactions. Siesse said 40% of office space due by 2012 has already been pre-let. Chaix also cited demand for large space from end-users such as Ernst & Young, SFR, Total and HSBC.