Q1-2020 | Industrial Marketbeat | Belgium

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M A R K E T B E AT

BELGIUM Industrial Q1 2020 QoQ Chg

12-Mo. Forecast

75 (L) 151 (SI) Take-up (YTD) (000s sq m)

Overview The spread of coronavirus in Europe and the containment measures imposed in Belgium should result in a severe decline in GDP growth for the first half of the year. Little economic data since the outbreak is available yet, so assessing the impact of the lockdown remains very challenging. Its consequences on the labour market, however, is considerable. Unemployment is expected to soar, but includes mainly economic unemployment due to the virus. Furthermore, both consumer and business confidence are down. The negative economic outlook is expected to be sharp but short.

58 (L) 63 (SI)

Occupier focus

Prime rent, (EUR/sq m/year)

Semi-industrial activity was logically at a very subdued level in Q1 2020 (151,000 sq m), on the back of a record quarter at the end of 2019. A particularly slow start to the year with 75,000 sq m in logistics take-up comes in stark – albeit – unsurprising contrast with one of the best ever quarters recorded in Q4 2019 (446,000 sq m). Almost 60% of take-up was directed towards Flanders with Brussels and Wallonia equally sharing the rest. No particularly large deals took place – the largest was an 18,000 sq m letting in Willebroek. As a result, the average size of deals dropped to 6,300 sq m.

5.00 (L) 6.80 (SI) Prime yield (%, 3/6/9 lease) L: logistics SI: semi-industrial

Investment focus

ECONOMIC INDICATORS Q1 2020 YoY Chg

-2.14% GDP Growth (2020)

-7.36%

12-Mo. Forecast

A handful of semi-industrial investments took place to total EUR 37 million in Q1, including a EUR 13 million purchase for a reconversion by Jeni in Antwerp. Only two logistics transactions were recorded in Q1, including only one with a communicated price - EUR 5 million. As is the case with the occupier market, it is reasonable to expect growth in demand for logistics assets, particularly from international players in the current climate.

Outlook The short-term outlook is as bleak for semi-industrial and logistics as for other sectors, mainly on the occupier front. H2 will be a crucial time with all eyes on the market expecting the first signs of a strong post-COVID-19 rebound. Investment-wise, demand will remain strong, especially for well-located assets linked to key sectors such as e-commerce and medical supplies.

GVA growth Manufacturing, transportation & storage

-0.6%

INVESTMENT VOLUME PER TYPE, EUR M

TAKE-UP, SQ M 2,500,000

500

2,000,000

400

1,500,000

300

1,000,000

200

500,000

100

Industrial production Source: Oxford Economics

35 30 25 20 15 10 5 0

0

0 2016

2017 Logistics

2018 Semi-industrial

2019

Q1 2020

2016

2017 Logistics

2018 Semi-industrial

2019

Q1 2020 # deals (RHS)


M A R K E T B E AT

BELGIUM Industrial Q4 2019 MARKET STATISTICS

REGION

BUILT STOCK (SQ M)

Q1 2020 TAKE-UP (SQ M)

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD (%)

Flanders

18,902,000 (L) 8,911,000 (SI)

44,000 (L) 95,000 (SI)

48 (L) 57 (SI)

5.00 (L) 6.80 (SI)

Brussels (incl. Brabants)

2,270,000 (L) 3,066,000 (SI)

17,000 (L) 35,000 (SI)

58 (L) 63 (SI)

5.00 (L) 6.80 (SI)

Wallonia

3,440,000 (L) 2,290,000 (SI)

14,000 (L) 20,000 (SI)

45 (L) 45 (SI)

6.00 (L) 7.50 (SI)

L: logistics SI: semi-industrial

KEY OCCUPIER TRANSACTIONS Q1 2020 PROPERTY

BUILDING TYPE

Prologis Industrial Park

Logistics

Avenue Centrale Z.I. 9004

Logistics

Willy Naessens Alu Oudenaarde

Semi-industrial

Frame 21 bis Distrilog Geel extension

MARKET

TENANT

SIZE (SQ M)

TRANSACTION TYPE

Mechelen-Willebroek

Euro Pools

18,000

Letting

Hainaut

Univercells

12,000

Purchase

East Flanders

Willy Naessens Alu

10,000

Development

Logistics

Kempen

Remy Automotive Europe

9,000

Letting

Logistics

Kempen

Distrilog

8,000

Pre-letting

*Renegotiations not included in leasing statistics

KEY INVESTMENT TRANSACTIONS Q1 2020 PROPERTY Struik Foods site Canopea (Parc Jaurdinia) (project) Pharma Belgium DC

SUBMARKET

BUYER / SELLER

SQ M

PRICE, EUR M

Antwerp

Jeni / Familie Van Drie

35,000

13

Walloon Brabat

BVI.BE / AXA REIM

40,000

10

Hainaut

WEB / Boucquillon

4,600

5

SHANE O’NEILL Senior Research Analyst +32 2 510 08 33 shane.oneill@cushwake.com CÉDRIC VAN MEERBEECK Head of Research & Marketing | Belgium & Luxembourg +32 2 629 02 86 cedric.vanmeerbeeck@cushwake.com A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

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