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M A R K E T B E AT

BELGIUM REGIONAL Office Q2 2020

YoY Chg

12-Mo. Forecast

123K Take-up sq m (YTD)

165 Prime rent, (EUR/sq m/year)

Occupier focus

5.50% Prime yield (3/6/9 lease)

ECONOMIC INDICATORS Q2 2020 YoY Chg

-8.7% GDP Growth Belgium

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.

12-Mo. Forecast

A headline take-up figure close to 63,000 sq m in regional markets was pretty solid during a Q2 which has seen the economy marred by the consequences of the health crisis. Additionally, Wallonia (44,000 sq m) outweighed Flanders (18,000 sq m) in the take-up stakes, which is a rare occurrence. This has been underpinned by large movements in Namur (Wallonia’s administrative capital), with the very long awaited confirmation of the attribution of the Palais de Justice contract to a consortium led by AG Real Estate. The result is a 35,000 sq m pre-letting by the Belgian State. Also in Namur, Baltisse’s AXS project registered a first marquee occupier – Croix Rouge Belgique has agreed to prelet close to 5,000 sq m. Although things have been quieter in Flanders, some large transactions have also been rubberstamped, such as Afas Belgium’s 3,400 sq m purchase in Gate 7 (Antwerp) or a 1,000 sq m letting by Huawei in AA Toren (Ghent). Prime rents have remained stable: Flanders is led by Antwerp (EUR 165/sq m/year), while Wallonia is led by Liège and Namur jointly (EUR 160/sq m/year).

Investment focus Q2 saw the largest total investment volume in a year with more than EUR 88 million invested, including EUR 75 million in Flanders, largely attributable to a landmark purchase by Belfius of MG Business Center in Ghent. The prime yield remains at 5.50%, albeit we continue to monitor it closely due to strong interest in regional office markets.

6.3% Belgium Unemployment Rate

0.4%

Outlook An important decrease in the number of occupational transactions must be taken as a note of caution for what the market holds in store over the coming months. On the other hand, interest in investing in regional markets prime assets is undeterred. TAKE-UP, SQ M

INVESTMENT VOLUME PER REGION, EUR M

Belgium Consumer Price Index

400,000

400

Source: Oxford Economics

300,000

300

200,000

200

100,000

100

0 2016

2017

Flanders regional markets

2018

2019

H1 2020

Wallonia regional markets

0 2016

2017

Flanders regional markets

2018

2019

H1 2020

Wallonia regional markets


M A R K E T B E AT

BELGIUM REGIONAL Office Q2 2020 MARKET STATISTICS REGION

MARKET

BUILT STOCK (SQ M)

AVAILABILITY (SQ M)

VACANCY RATE

Q2 2020 TAKE-UP

YTD TAKE-UP (SQ M)

2020-2023 PIPELINE (SQ M)

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD

Antwerp

2,293,000

128,000

5.60%

12,000

28,000

149,000

165

5.50%

Ghent

1,073,000

42,000

3.89%

5,000

13,000

92,000

160

5.50%

Leuven

561,000

n.a.

n.a.

300

1,600

27,000

150

6.50%

Mechelen

325,000

n.a.

n.a.

1,200

1,400

5,000

150

6.50%

Liège

495,000

1,000

3.23%

660

24,000

100,000

160

6.75%

Namur

513,000

2,700

6.00%

41,000

53,000

93,000

160

6.75%

Charleroi

442,000

2,800

2.71%

2,000

2,000

36,000

135

7.00%

Flanders

Wallonia

KEY OCCUPIER TRANSACTIONS Q2 2020 PROPERTY

MARKET

TENANT

SIZE (SQ M)

TRANSACTION TYPE

Palais de Justice Namur

Namur

Régie des Bâtiments

35,000

Pre-letting

AXS Namur

Namur

Croix Rouge de Belgique

5,000

Pre-letting

Gate 7

Antwerp

Afas Belgium

3,400

Purchase

Bexstraat 20

Antwerp

Family Justice Center

2,700

Letting

Rue Camille Hubert 1

Namur

Odontolia

1,900

Purchase

Kontichsesteenweg 42

Antwerp

DB Videoproductions

1,000

Purchase

Ghent

Huawei Technologies Belgium

1,000

Letting

AA Toren *Renegotiations not included in leasing statistics

KEY SALES TRANSACTIONS Q2 2020 PROPERTY MG Business Center Atealaan 34

SUBMARKET

SELLER / BUYER

SQ M

PRICE, EUR M

Ghent

MG Real Estate / Belfius

10,000

45

Herentals

Gencor / Intervest Offices & Warehouses

7,300

11

KEY CONSTRUCTION COMPLETIONS Q2 2020 PROPERTY En Féronstrée 54 (casco)

SUBMARKET

MAJOR TENANT

SQ M

Liège

/

11,500

OWNER / DEVELOPER LCP Développement Immobilier

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

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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.

©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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