Century-Old Companies Seek Hip Offices in Paris Tech Hubby and
Tech district now home to GE; Renault-Nissan debates location
French capital close to cost of London, NY, San Francisco
The race for office space in Paris’s tech district is driving up prices, with interest from industrial mainstays such as Renault-Nissan and General Electric Co. likely to fuel rent hikes as they look to position staff within the entrepreneurial area.
GE hosted European reporters in its facilities there last week, during an inaugural hackathon, for a guided tour of the company’s new digital center, located in Le Sentier, home to the French offices of Google, Facebook Inc. and homegrown unicorn Blablacar. And Renault-Nissan is planning to hire 300 tech experts this year, basing some in the Paris area, and is currently debating whether the creative heart of the city is right for its new hires.
“We want to give recruits a cool space to work in, where there are lots of startups and fresh, young, hip ideas,” Ogi Redzic, in charge of connected vehicles and mobility services for the carmaker alliance, said in an interview. “Cars are a sexy industry but I also want to make sure the developers we bring in get the type of environment they’d expect.”
In short, industrial companies are discovering prime real-estate is key to luring developers, data scientists and cloud specialists away from Silicon Valley. It comes at a cost though: rents alone have increased 25 percent in the past six years in Paris’s tech district -- specifically, the 1st, 2nd and 9th districts of the city, north of the Louvre in a former garment-making district -- according to a September report by real estate consultancy Knight Frank.
A 56 square-meter office in Le Sentier, the heart of the Parisian tech district, costs about $57,426 per year. That’s about $9,200 less than in London’s tech startup capital Shoreditch and about $4,000 less than Mid-Market, San Francisco. That’s not just rent -- it includes fees like service costs, internet infrastructure and an agent’s commission. But it’s almost triple Amsterdam’s rates.
“There’s lots of competition for tech talent, so companies seeking these candidates are rolling out the red carpet, and office location is part of that seduction,” said Cyril Robert, head of research for the French market at Knight Frank. “Some non-tech companies are also going where innovation is, and they want in on the creative culture and curiosity that exudes from startups.”
The ideal office is central, easily accessible by foot or public transport, and close to where potential candidates live -- for techies that’s usually hip and lively neighborhoods -- allowing employees to step out to run an errand or get home easily when they work late, Robert said. Companies in return can bank on more hours spent at the office, easier access for customers and partners, and of course top talent that’ll maybe settle for a lower salary to get prime location, he said.
Being close to a few hip bars doesn’t hurt either. “Nightlife is also a must: Our employees go to the nearby bar on Friday nights,” Vincent Champain, manager of GE’s digital center in Paris, said in an interview on-site.
Some 30 years ago, Le Sentier was still a buzzing garment manufacturing district, but when French textile factories closed down, the area was mostly deserted office space. The startup boom began in the late-1990s after high-speed fibre optic networks were deployed in the area, benefiting from the proximity of Paris’s financial district, its stock exchange and banks.
Le Sentier occupies a central position in the picturesque capital, a 10-minute walk from the famous Louvre gallery and most key tourist spots, though remains more of a hip destination for entrepreneurial locals than a trap for foreigners. It’s packed with bars and its cocktail lounges and pubs light up with activity in the evenings, especially on Fridays.
The neighborhood is a mix of large streets busy with traffic, and small streets open only to pedestrians, such as rue Montorgueil and rue Montmartre, where typical French cafes alternate with hipster bars with names like Cafe Noir and Experimental Cocktail Club. Not far from away, Le Cafe du Croissant is a historical landmark, where politician Jean Jaures was murdered during a dinner in July 1914.
GE inaugurated a research and development center in Le Sentier earlier this year. A 19th century Haussmannian-style building that used to be the headquarters of a bank is now coder-central for GE.
Facebook moved its teams to the area from the more bourgeois 17th arrondissement, to make it more accessible for partners -- including entrepreneurs -- to walk into its offices and exchange ideas. With Criteo SA and ride-sharing startup Blablacar as its immediate neighbors -- they’re in the same modern building -- its Parisian artificial intelligence lab is in the midst of the startup ecosystem. Google’s offices, as well as ride-hailing startup Chauffeur-Prive’s, are a few walking minutes away.
GE picked Le Sentier so it could be “at the heart of Paris’ Silicon Valley,” with its startups, talent pools, software companies and incubators, Corinne de Bilbao, Chief Executive Officer of GE France, said in a phone interview. The 250 data scientists, developers and engineers who will be recruited from across Europe by the end of 2018 will be among the 1,000 jobs GE plans to create in France as part of a promise made to the government last year, when it purchased Alstom SA’s energy business. “France has very good engineering schools and its community of data scientists and developers is renowned internationally,” de Bilbao said, adding that the company had a long-running industrial footprint in the country.
Naturally there are debates about whether dishing out a budget to get some of the city center spotlight is worth it. For Renault-Nissan, the alternative is a nearby suburb, but others may look further to cheaper European cities like Dublin or Amsterdam, even as Paris tries to poach investments from the U.K. amid its exit from the European Union.