Q1-2020 | Retail Marketbeat | Belgium

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M A R K E T B E AT

BELGIUM Retail Q1 2020

YoY Chg

12-Mo. Forecast

64K Take-Up sqm (YTD)

â‚Ź1,850

Economic Overview The spread of coronavirus in Europe and the containment measures imposed in Belgium should result in a severe decline in GDP growth for the first half of the year at least. Little economic data since the outbreak is available yet, so assessing the impact of the lockdown remains very challenging. Its consequences on the labour market, however, is considerable. Unemployment is expected to soar, but includes mainly economic unemployment due to the virus. Furthermore, both consumer and business confidence are down. The negative economic outlook is expected to be sharp.

Occupier Focus

Prime High Street Rent (â‚Ź/sq m/ y.)

With around 65,000 sq m of take-up recorded in Q1, the year started slowly and if the pandemic will last long, the impact on the letting market will be important. Every segment follows the same path as basically the activity stopped brutally mid-March 2020.

3.50%

The global picture hides important disparities between cities and even within a city. Even if too early to say, the COVID-19 crisis could have a bigger negative impact on the frequentation of a shopping centre while it could act as a boost for local and neighbouring shops. People will also certainly buy more online and if the experience is positive, this could lead to changing patterns in the way of shopping.

Prime High Street Yield

ECONOMIC INDICATORS Q4 2019 YoY Chg

12-Mo. Forecast

-2.14% GDP Growth (2020)

5.4% Belgium Unemployment Rate

0.6% Inflation rate in 2020

Source: Oxford Economics, Federal Planning Bureau

The rents are relatively stable in the prime locations (high streets, shopping centres and out-of-town retail) while they are increasingly under pressure in secondary locations which suffer from a decline in the footfall and the attractivity. Again, it is too early to say but the longer the crisis will last, the higher the pressure will be on the rental levels and there is little doubt that retailers will ask for huge rent reduction or even rent free period.

Investment Focus A low 100 MEUR were invested in the retail sector in Q1 2020, following a strong EUR 1bn recorded in 2019. Even prior to the crisis, investors were more and more cautious and while smaller lot-size assets (below 5 MEUR) remain very liquid, we observe a slowdown for the bigger schemes or schemes located in secondary locations. Prime yields increased in all the high streets in 2019, ending the year 2019 at 3.50% in the Rue Neuve or the Meir compared to 3.15% end-2018. No changes are observed in Q1 though the pandemic will certainly have an impact on the yields in the coming months.

BELGIUM TAKE-UP BY SECTOR (000 SQM) 500 450 400 350 300 250 200 150 100 50 0

INVESTMENT VOLUME BY QUARTER (MEUR) 2.000 1.800 1.600 1.400 1.200 1.000 800 600 400 200 0

High Street

Out of Town retail

Shopping Centre

Q1

Q2

Q3

Q4


M A R K E T B E AT

BELGIUM Retail Q1 2020 MARKET STATISTICS 2019 TAKE-UP Q1 2020

PRIME RENTS Q1 2020 (€/sq m/y.)

High streets

21,000

1,850

3.50%

Out-of-town retail

31,000

170

5.25%

Shopping centre

12,000

1,300

4.00%

SECTOR

INVESTMENT VOLUMES (MEUR)

JEAN BAHEUX Head of Retail Agency Belgium +32 478 96 08 61 jean.baheux@cushwake.com

JONATHAN DELGUSTE Head of High Street Retail +32 479 78 08 30 jonathan.delguste@cushwake.com

KENNETH VERLOO Partner - Out-of-town retail +32 478 81 08 13 kenneth.verloo@cushwake.com

KURTH MARISSENS Head of Shopping Centres +32 478 90 08 21 kurth.marissens@cushwake.com

ARNAUD DE BERGEYCK Head of Capital Markets Retail +32 475 42 32 70 arnaud.debergeyck@cushwake.com

STIJN THOMAS Partner – Capital Markets Retail +32 476 72 07 09 stijn.thomas@cushwake.com

PRIME YIELD

CÉDRIC VAN MEERBEECK Head of Research & Marketing Belgium & Luxembourg +32 477 98 11 83 cedric.vanmeerbeeck@cushwake.com

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©2019 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.