M A R K E T B E AT
BELGIUM Industrial Q4 2020 YoY Chg
12-Mo. Forecast
Overview
Take-up (2020) (000s sq m)
Belgian GDP posted a 6.7% drop in 2020. In the first quarter of 2021, economic output should rebound by 2% on a quarterly basis, thereby returning rapidly to the level reached just before the second lockdown. At this point, the remaining restrictions, such as those for arts, recreation and events or, more generally, the required social distancing, will continue to weigh on activity. Source: National Bank of Belgium
58 (L) 63 (SI)
Occupier focus
943 (L) 760 (SI)
Semi-industrial demand has demonstrated resilience in 2020 a year hampered by the negative ramifications from the COVID-19 pandemic, registering crescendo levels of quarterly take-up (232,000 sq m in Q4). As a result, the year ends on a total of 760,000 sq m, the weakest level of the past five years which is only due to shrinking supply in the face of strong demand which includes a strong share of owner-occupier deals (45% of take-up in 2020). Following a colossal upsurge of logistics take-up in Q4 (437,000 sq m), 2020 (943,000 sq m) is exactly in line with five-year average figures. This is a very good result on the back of a record 2019 and the challenges in a year marked by COVID-19. E-commerce logistics played an important part as expected, with close to 25% of take-up during the year. Several large deals in Q4 played a crucial role in the strong end of year (cf. page 2).
Prime rent, (EUR/sq m/year)
4.70 (L) 6.55 (SI) Prime yield (%, 3/6/9 lease) L: logistics SI: semi-industrial
ECONOMIC INDICATORS Q4 2020 YoY Chg
-6.7% GDP Growth (2020)
-5.3%
Investment focus 12-Mo. Forecast
Substantial occupier demand and close-to-zero vacancy has triggered substantial investor demand, making 2020 a record year on this front, with EUR 629 million invested, including EUR 522 million in logistics. International investors have made a more noticeable contribution. Faced with international competition, local players continue to make creative inroads in order not to be priced out of the market. Logistics prime yields decrease further to 4.70%, with further compression awaited in 2021. However, in the current rapidly evolving market, it cannot be excluded that a Grade A asset in a prime location with a long-term lease could go sub 4.25% in 2021.
Outlook
Exports of goods and services
We expect demand to remain similar to this year, it remains to be seen whether supply with be nimble enough to cater for this. Investor appetite will continue to grow over 2021.
-5.9%
TAKE-UP, SQ M
INVESTMENT VOLUME PER TYPE, EUR M
Imports of goods and services
2,500,000
800
50
Source: National Bank of Belgium
2,000,000
600
40
1,500,000
30 400
1,000,000
20 200
500,000 0
10
0 2016
2017 Logistics
2018 Semi-industrial
2019
2020
0 2016 Logistics
2017
2018 Semi-industrial
2019
2020 # deals (RHS)