Q4-2019 | Retail Marketbeat | Belgium

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M A R K E T B E AT

BELGIUM Retail Q4 2019

YoY Chg

12-Mo. Forecast

370K Take-Up sqm (YTD)

â‚Ź1,850

Economic Overview The Belgian economy appears to have slowed at the end of 2019 and the deceleration will become more apparent in 2020. 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. Business confidence seems to have bottomed out thanks to more hopeful news on trade deals and Brexit.

Occupier Focus With around 380,000 sq m of take-up recorded in 2019, the Belgian retail sector ended the year behind the performances observed in 2018. This downward movement is observed in the different retail segments. The global picture is to be read carefully as the growing disparity between stronger centres where the owner is prepared to invest in the quality of the environment and mid-tier centres without a clear consumer value proposition is set up to to grow in the coming years. Food & Beverage activities continue their exponential growth and play as key differentiator in the attractivity of a centre. 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.

Prime High Street Rent (â‚Ź/sq m/ y.)

3.50% Prime High Street Yield

Investment Focus ECONOMIC INDICATORS Q4 2019 YoY Chg

1.3% GDP Growth (2019)

5.4% Belgium Unemployment Rate

12.5% Brussels Unemployment Rate Source: Oxford Economics

12-Mo. Forecast

Close to EUR 1bn were invested in the retail sector in 2019, a strong decrease compared to 2018 as no big shopping centre transaction was observed. Investors are 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. Activity is however very strong in the out-of-town retail segment, especially when a (super)market is part of the scheme. Prime yields increased in all the high streets in 2019, ending the year at 3.50% in the Rue Neuve or the Meir compared to 3.15% end2018. Prime yield in the shopping centre sector remain stable while prime yields compressed further to 5.25% in the retail parks compared to 5.60% at the end of 2018.

Outlook Despite the growing disruption brought by the Internet, the physical retail is not dead and is reinventing to make shopping easier and exciting, as well as making property marketing and management more efficient.

BELGIUM TAKE-UP BY SECTOR (000 SQM) 450

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

400 350 300 250 200 150 100 50 0

High Street

Out of Town retail

Shopping Centre

Main Street

Out of Town Retail

Shopping Centre


M A R K E T B E AT

BELGIUM Retail Q4 2019 MARKET STATISTICS 2019 TAKE-UP 2019

PRIME RENTS Q4 2019 (€/sq m/y.)

INVESTMENT VOLUMES (MEUR)

PRIME YIELD

High streets

133,000

1,850

457

3.50%

Out-of-town retail

185,000

1,300

471

5.25%

Shopping centre

60,000

170

67

4.00%

SECTOR

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

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.