__MAIN_TEXT__
feature-image

Page 1

M A R K E T B E AT

BELGIUM Retail Q2 2020 YoY Chg

12-Mo. Forecast

ECONOMY: Rebound expected after strong economic blow 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. The Belgian economy will contract by 8.7% this year followed by a rebound in 2021 where a 7.1% GDP growth is expected. However, subsequent growth will be much more gradual as factors such as higher unemployment (forecasted at 6.6% for 2020) will slow the recovery.

140,000sq m H1 2020 take-up

1,700 €/sq m/y. High Street Prime Rent

LETTING MARKET: Activity on the downside in H1

3.75%

The COVID-19 crisis accelerate the reshaping previously observed in the retail sector. The growing shift towards the online retail and the lockdown observed during most of the second quarter led to a 15% decrease of the activity (both in number of deals and surfaces) in H1 2020 where 140,000 sq m of take-up was recorded. Main streets and shopping centres suffered more than the outof-town retail though encouraging signs are currently observed with footfalls on the upward (despite remaining between 20% and 30% lower than last year).

High Street Prime Yield Source: Cushman & Wakefield

BELGIAN ECONOMIC INDICATORS Q2 2020 YoY Chg

12-Mo. Forecast

-8.7% GDP Growth

One of the key trends observed during this unprecedented period is the increasing frequentation of neighbouring shops for ethical and environmental considerations but also to promote the local economy. A slight correction of the prime rents has been observed almost everywhere in Belgium over the last quarter, even if already felt before the sanitary crisis. As observed in the take-up figures, high streets and shopping centres are more impacted than the out-oftown retail where prime rents remain more stable, though observing a slight decrease. Further corrections are expected in the coming months as the market has still to adapt to this new reality. TAKE-UP (in 000s SQ M)

6.3% Unemployment rate

INVESTMENT (MEUR, LHS) AND PRIME YIELDS (%, RHS)

2.500 €

500

2.000 €

400

0.4% Consumer Price Index (% change) Source: Oxford Economics, Eurostat, Federal Planning Bureau

7,0% 6,5% 6,0% 5,5% 5,0% 4,5% 4,0% 3,5% 3,0% 2,5%

450

350

1.500 €

300 250

1.000 €

200 150

500 €

100 50

0€

0

2010 High Street

Out of Town retail

Shopping Centre

2012

2014

Investment volumes Out of Town Retail

2016

2018

H1 20

High street Shopping Centre


M A R K E T B E AT

BELGIUM Retail Q2 2020 INVESTMENT MARKET: Reshaping of the retail landscape pushes prime yields on the upward Around 300 MEUR of investment volumes are recorded so far this year, a downward movement compared to the same period last year. Most of the deals were already initiated prior to the sanitary crisis and it could be more difficult to create new deals in this current context. As a result, investment volumes should be down compared to previous years. Due to less attractive financial conditions, prime yields observed a slight correction with a 25 bps increase on average with the exception of out-of-town where they remain stable. As a result, they now stand at 3.75% in the best high streets of the country and at 4.25% in the prime shopping centres. In the out-of-town segment, prime yields currently stand at 5.25%. Further changes should be recorded before the end of the year. Financial institutions will probably request more equity and a strong business case. Vacant unit and/or bigger volume will be more difficult to finance. Mixed-use products, convenience stores and smaller volumes will be the most sought-after by investors though yields could also observe a slight correction in the coming months.

CEDRIC VAN MEERBEECK Head of Research & Marketing | Belgium & Luxembourg +32 2 629 02 86 / cedric.vanmeerbeeck@cushwake.com

MARKET STATISTICS SUBMARKET

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD (%)

HIGH STREET

1,700

3.75%

160

5.25%

1,150

4.25%

OUT OF TOWN RETAIL SHOPPING CENTRE

cushmanwakefield.com

A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, the firm had revenue of $8.2 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. Š2019 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.

Profile for Cushman & Wakefield Belgium

Q2-2020 | Retail Marketbeat | Belgium  

Retail Market Snapshot is a brief summary of the Retail sector in key cities, providing comment on recent trends as well as market data and...

Q2-2020 | Retail Marketbeat | Belgium  

Retail Market Snapshot is a brief summary of the Retail sector in key cities, providing comment on recent trends as well as market data and...