The Papillon can adapt very well to a apartment living, or general to close indoor conditions. Provided a 30 minute brisk walk out side in a park, and/or a good play with a ball tossed through a couple of your rooms, hallway, etc, your Papi will maintain a healthy physical condition.
All in all, the Papillon does love the outdoors, and when the opportunity given, he may chase all kinds of critters, like squirrels, birds, bunnies......don't forget, they are a Spaniel Breed, and Spaniels are hunting dogs.