M A R K E T B E AT

BELGIUM REGIONAL Office Q3 2020

YoY Chg

12-Mo. Forecast

Overview Economic data suggest that the post-lockdown rebound had been slightly stronger than expected earlier this year. GDP was revised up slightly to -7.8% in 2020, up from -8.7% previously estimated. The economy is expected to rebound in 2021 with an economic growth of 5.6%, with risks and uncertainties on the downside. Concerns about unemployment, however, remain high, putting pressure on consumer spending. Furthermore, total output and employment are not expected to return to pre-crisis levels before 2022. The unemployment rate, expected at 6.1% by the end of 2020, is forecasted to increase to 6.9% in 2021. CPI is expected to remain low at 0.8 in 2020 and 1.9 for 2021.

172K Take-up sq m (YTD)

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

Occupier focus

5.50%

As far as take-up was concerned, Q3 was one of the regional markets’ least memorable quarters in past years with a total of 50,000 sq m – 44,000 sq m in Flanders and 6,000 sq m in Wallonia. Nevertheless a handful of notable occupier deals were recorded – all in Flanders, led by Colruyt Group’s own occupation purchase of the former Thomas Cook offices in Ghent - a deal that is symbolic in terms of some of the economy’s winners and losers of recent times (a food retailer as the former and a travel agent the latter in this case). As far as prime rents are concerned, stability is the name of the game with levels of EUR 165/sq m/year recorded in Antwerp, followed by a level of EUR 160/sq m/year several areas of both Flanders (Ghent) and Wallonia (Liège, Namur)

Prime yield (3/6/9 lease)

ECONOMIC INDICATORS Q3 2020

Investment focus YoY Chg

-8.7% GDP Growth Belgium

6.1%

12-Mo. Forecast

Q3 saw the largest total transacted volume in over a decade in regional markets, with EUR 371 million, bringing the total for 2020 after three quarters to EUR 463 million. Some long awaited deals involving prime assets have been confirmed, namely the purchase by AG Real Estate of several buildings at Post X in Antwerp (+- EUR 275 million), as well as Union Investment’s acquisition of the Diamond in Ghent. The latter deal proves specific types of assets in regional markets can attract interest from international players.

Outlook

Belgium Unemployment Rate

Several pieces of evidence point toward a further expected compression of the prime yield to 5.25% by the end of 2020 after which no further changes are forecasted in the near-term. Prime rents are not expected to increase beyond EUR 165/sq m/year overall within the next 12 months.

0.8%

TAKE-UP, SQ M

Belgium Consumer Price Index Source: Oxford Economics

INVESTMENT VOLUME PER REGION, EUR M

400,000 300,000 200,000 100,000

600

30

500

25

400

20

300

15

200

10

100

5

0

0 2016

2017

Flanders regional markets

2018

2019

Q1-Q3 2020

Wallonia regional markets

0 2016

2017

Flanders regional markets # deals (RHS)

2018

2019

Q1-Q3 2020

Wallonia regional markets

M A R K E T B E AT

BELGIUM REGIONAL Office Q3 2020 MARKET STATISTICS REGION

MARKET

BUILT STOCK (SQ M)

AVAILABILITY (SQ M)

VACANCY RATE

Q3 2020 TAKE-UP

YTD TAKE-UP (SQ M)

2020-2023 PIPELINE (SQ M)

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD

Antwerp

2,289,000

147,000

6.43%

23,000

50,000

145,000

165

5.50%

Ghent

1,084,000

41,000

3.81%

14,000

27,000

90,000

160

5.50%

Leuven

561,000

n.a.

n.a.

4,977

6,600

30,000

150

6.50%

Mechelen

325,000

n.a.

n.a.

1,300

2,700

24,000

150

6.50%

Liège

505,000

19,500

3.86%

4,700

53,000

94,000

160

6.75%

Namur

517,000

30,000

5.72%

500

42,000

89,000

160

6.75%

Charleroi

440,000

12,000

2.65%

1,000

3,200

2,000

135

7.00%

Flanders

Wallonia

KEY OCCUPIER TRANSACTIONS Q3 2020 PROPERTY ex-Thomas Cook HQ

MARKET

TENANT

SIZE (SQ M)

TRANSACTION TYPE

Ghent

Colruyt Group

9,700

Purchase

Delancier 1

Antwerp

KBC

6,400

Letting

Nokia Building

Antwerp

Infrabel

4,100

Letting Pre-letting

Dijle Delta

Leuven

EASI

3,500

De Veldekens

Antwerp

Amadeus

1,800

Letting

Kontichsesteenweg 90

Antwerp

Ariane Holding

1,700

Purchase

Liège

CHR Citadelle

1,500

Letting

4ème Avenue 56 *Renegotiations not included in leasing statistics

KEY SALES TRANSACTIONS Q3 2020 PROPERTY Post X Diamond

SUBMARKET

SELLER / BUYER

SQ M

PRICE, EUR M

Antwerp

AG Real Estate / IRET

61,000

+- 275

Ghent

Union Investment / Global Estate Group

17,000

65

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.

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