Morgan Stanley warns Paris office sector faces inflation‑driven rent growth offset by weakening economy and rising vacancy rates.
An expected 2026 oil‑price‑driven inflation spike could boost rent indexation in 2027‑28, but higher vacancies may neutralize revenue gains.
Most continental European firms keep average debt costs below 2%, with a forecasted 2‑basis‑point annual increase due to higher financing rates.
While bullish on property overall, Morgan Stanley rates French offices less constructively, keeping an Overweight on Colonial for top EPS growth.