Q4-2019 | Regional Office Marketbeat | Belgium

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M A R K E T B E AT

BELGIUM REGIONAL Office Q4 2019

YoY Chg

12-Mo. Forecast

Overview According to Oxford Economics, the Belgian economy appears to have slowed in Q4. The deceleration will become more apparent in 2020 as external headwinds take their toll on exports and investment. GDP growth is expected to slow to 1.2% in 2020, from 1.3% in 2019, but the risks are on the downside. Household purchasing power will keep growing while the unemployment rate, despite rising slightly, will remain low.

326K Take-up sq m (YTD)

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

Occupier focus A solid - albeit not highlight - Q4 registered a take-up volume of 87,000 sq m across regional markets – 66,000 sq m in Flanders and 21,000 sq m in Wallonia. The coworking sector was the most dynamic occupier type in Q4 with several forays into the Antwerp and Ghent office markets, while in Wallonia, education and public sector occupiers’ positive influence was keenly felt. Total take-up in 2019 for regional markets was a very strong 327,000 sq m (the second best year so far this century) with 223,000 sq m in Flanders (-24% YoY) and 104,000 sq m in Wallonia (+64% YoY). Of particular note were dynamic levels activity recorded for the year in Ghent, Liège and Charleroi. Prime rental levels in Antwerp and Ghent increased to EUR 160/sq m/year, a level already recorded the year previous in Namur (Wallonia). An increase to a level of EUR 165/sq m/year is forecasted for the Antwerp office market in 2020.

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

ECONOMIC INDICATORS Q4 2019

Investment focus

GDP Growth (2019)

2019 was the second best year of the decade in terms of recorded investment volumes across regional markets. Indeed the total reached EUR 369 million - EUR 327 in Flanders and EUR 42 million in Wallonia (a decade best). Q4 was nevertheless somewhat more subdued with EUR 27 million recorded in total, led by a EUR 15 million acquisition by Belgian REIT WEB in the Liège office market. Renewed investor interest in regional markets, particularly in Flanders, led to a prime yield which has sharpened to 5.50% (-65 bps YoY).

5.4%

Outlook

YoY Chg

1.3%

Belgium Unemployment Rate

1.5%

12-Mo. Forecast

A good deal of projects will arrive onto the market over the coming two- to three years, several of which are launched speculatively – particularly in Ghent and Antwerp; this should attract demanding private sector occupiers. Investment opportunities for prime locations are somewhat limited although the forecast on yields remains stable. 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

0 2015

2016

Flanders regional markets

2017

2018

2019

Wallonia regional markets

2015

2016

Flanders regional markets

2017

2018

2019

Wallonia regional markets


M A R K E T B E AT

BELGIUM REGIONAL Office Q4 2019 MARKET STATISTICS REGION

MARKET

BUILT STOCK (SQ M)

AVAILABILITY (SQ M)

VACANCY RATE

Q4 2019 TAKE-UP

YTD TAKE-UP (SQ M)

2020-2022 PIPELINE (SQ M)

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD

Antwerp

2,301,000

149,000

6.46%

40,000

125,000

161,000

160

5.50%

Ghent

1,084,000

53,000

4.85%

14,000

60,000

85,000

160

5.50%

Leuven

561,000

n.a.

n.a.

1,600

12,000

27,000

150

6.75%

Mechelen

325,000

n.a.

n.a.

10,000

26,000

29,000

150

7.00%

Liège

459,000

16,000

3.55%

12,000

53,000

124,000

155

6.75%

Namur

519,000

30,000

5.76%

0

21,000

90,000

160

n.a.

Charleroi

440,000

2,500

0.54%

9,000

30,000

34,000

135

n.a.

Flanders

Wallonia

KEY OCCUPIER TRANSACTIONS Q4 2019 PROPERTY Kortrijksesteenweg 302 Fanuc – Old Road Business Park HEC new campus

MARKET

TENANT

SIZE (SQ M)

TRANSACTION TYPE Pre-letting

Ghent

Fosbury & Sons

7,000

Mechelen

Fanuc

5,200

Purchase

Liège

HEC Liège

3,700

Development

Post X

Antwerp

ABN Amro

3,345

Letting

Lange Klarenstraat 19 *Renegotiations not included in leasing statistics

Antwerp

Fosbury & Sons

3,214

Letting

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

cushmanwakefield.com

KEY SALES TRANSACTIONS Q4 2019 PROPERTY Business Park Alleur Fanuc – Old Road Business Park

SUBMARKET

SELLER / BUYER

SQ M

PRICE, EUR M

Liège

WEB / Hobeco

4,720

15

Mechelen

Fanuc / Resolve

5,200

10

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.

KEY CONSTRUCTION COMPLETIONS YTD 2019 PROPERTY DPG Media Belgium head office

SUBMARKET

MAJOR TENANT

SQ M

Antwerp

DPG

23,000

OWNER / DEVELOPER DPG Media

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