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M A R K E T B E AT

BELGIUM Industrial Q2 2020 YoY Chg

12-Mo. Forecast

343 (L) 329 (SI) Take-up (YTD) (000s sq m)

58 (L) 63 (SI)

Occupier focus

Prime rent, (EUR/sq m/year)

Semi-industrial activity Increased marginally in Q2 to record take-up at 171,000 sq m, a tribute to the sector’s resilience amid the COVID19 sanitary crisis. Furthermore, logistics activity has come leaps and bounds since the slow start recorded in Q1. Q2 indicates as much as 268,000 sq m. Brussels, Wallonia and Flanders all registered dynamic demand. Several large deals took place, led by the development of 60,000 sq m in additional spaces for Jost at Trilogiport (Liège, Wallonia). All eyes are on logistics as it is one of the few CRE sectors expected to profit from the pandemic thanks to an explosion in e-commerce.

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

ECONOMIC INDICATORS Q2 2020 YoY Chg

-8.7% GDP Growth (2020)

-10%

Overview Following the heavy economic blow caused by the coronavirus-related lockdown, indicators and surveys confirm activity is now rebounding. In particular, surging expectations in both business and consumer confidence surveys support the view that recovery is underway. Oxford Economics’ GDP growth forecast indicated that the Belgian economy will contract by 8.7% this year followed by a rebound in 2021 when a 7.1% growth is expected. However, subsequent growth (up to mid-2022) will be much more gradual as higher unemployment (forecasted at 6.6% for 2020), subdued external demand, delayed investment plans and a limited fiscal response due to the return of the political deadlock, will slow the recovery.

Investment focus 12-Mo. Forecast

A strong resilient occupier market will be welcomed as music to investors’ ears. However, demand had already been surging thus far, as indicated by two large portfolio deals, which helped drive Q2 investments to total of EUR 225 million. Indeed, Prologis purchased a multiregion portfolio from AG Real Estate for more than EUR 120 million, the largest logistics transaction in over a decade. In addition, CBREGI has proceeded to purchase two prime developments from MG Real Estate at De Hulst in Willebroek for EUR 75 million.

Outlook Often considered a niche segment, it is fair to expect competition for industrial assets to grow, driving values up. Sale & leaseback operations may add extra assets to the market, freeing up crucial liquidity for occupiers.

GVA growth Manufacturing, transportation & storage

-7.6% Industrial production (2020) Source: Oxford Economics

INVESTMENT VOLUME PER TYPE, EUR M

TAKE-UP, SQ M 2,500,000

500

35

2,000,000

400

1,500,000

300

20

1,000,000

200

15

500,000

100

0

0

30 25

10

2016

2017 Logistics

2018 Semi-industrial

2019

H1 2020

5 0 2016

2017 Logistics

2018 Semi-industrial

2019

H1 2020 # deals (RHS)


M A R K E T B E AT

BELGIUM Industrial Q2 2020 MARKET STATISTICS

REGION

BUILT STOCK (SQ M)

Q2 2020 TAKE-UP (SQ M)

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD (%)

Flanders

19,034,000 (L) 9,090,000 (SI)

165,000 (L) 95,000 (SI)

48 (L) 60 (SI)

5.00 (L) 6.80 (SI)

Brussels (incl. Brabants)

2,267,000 (L) 3,064,000 (SI)

35,000 (L) 119,000 (SI)

58 (L) 63 (SI)

5.00 (L) 6.80 (SI)

Wallonia

3,420,000 (L) 2,315,000 (SI)

67,000 (L) 42,000 (SI)

45 (L) 45 (SI)

5.30 (L) 7.20 (SI)

L: logistics SI: semi-industrial

KEY OCCUPIER TRANSACTIONS Q2 2020 PROPERTY

BUILDING TYPE

MARKET

TENANT

SIZE (SQ M)

TRANSACTION TYPE

Genk Logistics

Logistics

Limburg

Eddie Stobart Belgium

48,000

Letting

De Hulst – Eutraco phases I and II

Logistics

Mechelen-Willebroek

Eutraco

60,000

Pre-letting

Industrieweg 19

Semi-industrial

Kempen

Engebo

24,000

Purchase

The Bridge Logistics

Logistics

Mechelen-Willebroek

Maersk Belgium

17,000

Letting

Weg Naar Zwartberg 231

Logistics

Limburg

Brouwerij Martens

9,000

Letting

*Renegotiations not included in leasing statistics

KEY INVESTMENT TRANSACTIONS Q2 2020 PROPERTY

SUBMARKET

BUYER / SELLER

SQ M

PRICE, EUR M

Portfolio (6 buildings)

Multi-regional

Prologis / AG Real Estate

145,000

> 120

Mechelen-Willebroek

CBRE GI / MG Real Estate

68,000

75

Antwerp

Private / Willy Depage

4,000

7

De Hulst – Eutraco, PostNL Halfstraat 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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