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AUTUMN ‘16 MAGAZINE

REVIEW HIGHLIGHTS OF REALTY 2016 WWW.REALTY-BRUSSELS.COM

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TABLE OF CONTENT P. 04 RECORD YEAR FOR REALTY WITH BELGIUM IN THE SWEET SPOT OF THE PROPERTY CYCLE

P. 08 BOOGIE IN THE BENELUX. LET’S PARTY LIKE IT’S NOT 2007 P. 11

BOOMING MECHELEN PROFITS FROM TRAFFIC CONGESTION IN BRUSSELS AND ANTWERP

P. 12

A THOUSAND TREES

P. 15

MOBILITY AND REAL ESTATE: BUILDING FOR THE COMMUTERS OF THE FUTURE

P. 16

HEALTHCARE - PAST THE BOOM?

P. 19

RETAILERS AT A TURNING POINT

P. 04-05

P. 07

P. 08-09

P. 11

P. 12

P. 15

P. 16-17

P. 19

P. 20 IMPRESSIONS P. 22 FACTS & FIGURES P. 24 REALTY NIGHT

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P. 07 THE REBIRTH OF CHARLEROI REVIVING LONG LOST POTENTIAL

ABOUT REALTY 2016 RECORD YEAR FOR REALTY WITH BELGIUM IN THE SWEET SPOT OF THE PROPERTY CYCLE REALTY’s 2016 real estate trade fair set new records for attracting international investors, exhibitors and general attendees at the Tour & Taxis exhibition grounds in Brussels in late-May. Visitors focused on the greater value being offered by the Belgian market as it lags behind major centres such as London and Paris, with these cities approaching the top of the property cycle.

“REALTY 2016 was the biggest, and I think the best, show we’ve staged so far, with a more spacious layout and impressive stands. It was the ideal layout to frame the Belgian investment market at a critical time when huge global capital flows are targeting real estate generally and Europe in particular,” REALTY Exhibition Manager Gregory Olszewski said. Over 450 international investors were among the total of 6,732 real estate professionals visiting the 3,231 sqm of stand space presented by 127 exhibitors over three days.

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The consensus estimate for total real estate investment in Belgium in 2016 is around €6.4 billion, compared with €3.93 billion in 2015 and €3.02 billion in 2014. Investor interest has been particularly strong for retail, logistics and healthcare property assets. To cater for the heightened international investor interest in Belgian real estate, REALTY joined with partners CBRE, the European Public Real Estate Association (EPRA) and PropertyEU to offer a seamless one-day programme on Wednesday, May 25th on all aspects of the market and its context in the broader European picture. On the same day, the Belgian Property Federation (UPSI-BVS) presented a seminar for its members on “Cities: Innovators of Our Future Way of Living” with speakers including the Deputy Mayor of Paris, Jean Blavier and Trendwatcher Stefaan Vandist. The opening day of REALTY on Tuesday May 24th focused on “Smart Cities” one of the greatest challenges of our times. “Strong urbanisation trends across Europe are leading to fierce international competition for investment between cities. Belgium is no different in this respect,” PierreAlain Franck, Director of UPSI-

BVS, the Belgian real estate trade federation said. “We have to focus on economic clusters around the main centres: Brussels, Antwerp and Ghent to stand out at an international level. Belgium’s real estate sector is re-inventing itself, by, for example, focusing on the transformation of old office buildings into housing, sustainability and of course security -- against a background of the recent attacks in Brussels. We need Smart Cities and a robust real estate sector to have a dynamic economy.” The final day of REALTY, Thursday May 26th, traditionally turns the spotlight on trends in the Belgian retail sector. This year’s programme included a debate under the title: “Retailers at a Turning Point,” organised by the Belgian Luxembourg Council of Shopping Centres and Retail Forum Belgium. “Chinese investors made 2015 a record retail property transaction year for Belgium with their acquisitions of both Wijnegem, the biggest shopping centre in the Benelux, and Waasland near Antwerp for a total of €1.3 billion. International investors have started to move from European markets further up the property cycle, like London and Paris, to others, including Brussels,” Laurent Wille, Secretary General of the Belgium Luxembourg Council of Shopping Centres said. “Belgian retail is at a turning point and needs to invest in the shopping experience and security to retain its attraction to consumers and investors alike. The story at REALTY was all about this transition. I think it’s telling that for the first time we’re seeing retailers such as Lidl, Carrefour and Colruyt taking their own stands at REALTY as it increasingly secures its position as the most important forum for the Belgian real estate investment market,” he concluded.#

THE FINAL DAY OF REALTY, THURSDAY MAY 26TH, TRADITIONALLY TURNS THE SPOTLIGHT ON TRENDS IN THE BELGIAN RETAIL SECTOR.

BLSC

Improving the past, inventing the future

SHOPPING

AWARDS

Trade Mart Brussels October 13, 2016

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info@blsc.eu • www.blsc.eu I BLSC Atomiumsquare 1, 1020 Brussels, +32 2 255 03 51

structural partners

SEMINAR

The city of Charleroi, to the south of Brussels in Wallonia, is unearthing huge potential for the regeneration of its derelict infrastructure and abandoned industrial sites after decades of neglect that have weighed on the local economy, the Smart Cities Conference at Realty heard. “Charleroi has had challenges, but it is these difficulties that can be turned to our advantage through innovation,” Paul Magnette, Prime Minister of Wallonia and city mayor said. The infrastructural basis for regeneration is well established as Charleroi has its own airport, good rail links and a developed ring road structure providing easy accessibility to the surrounding region. The city is also becoming an economic hub and centre for research and development, hosting the likes of aerospace company Sonaca, machine manufacturer Caterpillar and transport giant Alstom. Because of Charleroi’s relatively short history – it wasn’t until the end of the 19th century that it became a city – it never evolved around a traditional town centre through the ages, and as a result, benefits from a far less polarised structure than other urban centres. It is essentially a collection of villages, hamlets and small towns that form the urban tissue of Charleroi. In order to turn this to the city’s advantage, the decision was made to reorganise Charleroi into five mediumsized districts as its planners observed

that urban centres of approximately 30,000 to 40,000 inhabitants enjoyed the strongest growth rates. Redefining the urban area in such a way maximises the homogeneity and localised development of the entire municipality, ensuring that no corner is left forgotten,” Magnette said.

CHARLEROI’S EXISTING RING ROAD CONNECTS FIVE URBAN POLES, MAKING THE CITY A GREAT HUB FOR MOBILITY AND LOGISTICS. THIS MOBILITY INFRASTRUCTURE IS ONLY UTILISED FOR 70%

The central agency responsible for coordinating the architectural and urban development strategy of the city, the ‘Bouwmeester’ (literally ‘building master’) is a concept based on the Flemish Bouwmeesters of Antwerp and Ghent. Charleroi’s existing ring road connects five urban poles, making the city a great hub for mobility and logistics. This mobility infrastructure is only utilised for 70%, and the city’s metro at 75%, underpinning the logic of the urban strategy – densification instead of expansion. “Most cities need to expand around an already cluttered centre, creating a vast but radiocentric suburban sprawl. We have the luxury of densifying our current city structure homogenously,” Magnette concluded. In order to project Charleroi’s ambition and potential to the outside world, the mayor also announced that the currently disparate and sometimes negative image of the city is to be repackaged into a coherent visual message, setting Charleroi at the forefront of modernisation.#

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THE REBIRTH OF CHARLEROI REVIVING LONG LOST POTENTIAL

SEMINAR BOOGIE IN THE BENELUX. LET’S PARTY LIKE IT’S NOT 2007 The slowdown in European real estate investment market transactions this year, compared with 2015’s effervescence, has raised fears the property cycle is already peaking, but the party’s barely begun in the Benelux, speakers at the PropertyEU/EPRA Briefing at REALTY heard.

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He pointed to a range of geopolitical concerns such as migrant flows, terrorism, Russian military muscle flexing, the Brexit poll – now a reality -- and a possible Trump presidency, as sources of nagging anxieties. “Geopolitics creates noise, not global recessions. The EU should be able to withstand one or two of these building into a crisis okay. The test will come if we face multiple events combined with macroeconomic factors, such as an emerging markets crash, a deflationary spiral or sharp moves in interest rates and currencies,” Tromp added. He said a CBRE Investor Intentions Survey showed that Central and East European countries and the Netherlands have shown the strongest growth as the most popular investment destinations for 2016, while London/UK had fallen sharply to 15% of respondents’ choices from 30% in 2015. Marcus Cieleback, Group Head of Research at Patrizia Immobilien AG noted that EU economies which had been the hardest in the financial crisis, including Ireland, Spain and Portugal, had shown the most robust “catchingup” in growth since, but also the Netherlands was performing better than its neighbours. Unsurprisingly this has attracted the attention of international real estate investors, who are allocating more capital to the Benelux generally, reflected in rising investment volumes. Independent investor and consultant, Alexandre Lamot, said in a panel session that these investors too often viewed Brussels as a monolithic market dominated by EU institutions and driven by long-lease core investments, rather than as a dynamic city in its own right.

“The upside in Brussels is not widely recognised, because the city does such a poor job of marketing itself. To me the largest untapped potential lies in its youthful and very diversified population, with 62% of people coming from outside Belgium,” he said. Thierry De Wever, Director of Investment at Quares Group agreed that the positive demographics of Brussels are widely underappreciated in a rapidly ageing Europe and underpinned his positive view on the residential market. There has been a strong trend towards the transformation of secondary offices into residential units in Brussels, but that may be slowing as office yields start to fall and rental growth feeds through into the market. Patrick Meutermans, Head of Benelux for AEW Europe, said investors could use the stable characteristics of Brussels and the more cyclical nature of the Dutch market to build a diversified portfolio. “There is huge potential in Brussels, but it is not exploited. The city’s advantage is that it is a mature, large, and very stable rental market. You can combine that with the dynamics of Amsterdam where there are companies like Booking.com and TravelBird and a lot of creativity,” Meutermans added. In a following panel organised by the European Public Real Estate Association (EPRA), Xavier Denis, COO for Belgium’s largest listed

REIT, Cofinimmo, which has a 43% exposure to healthcare real estate and 39% to offices, said he “loved boring Brussels,” where the company has been able to generate average annual unleveraged returns of 8.0% over 30 years. The Belgian listed REIT industry of 17 companies has enjoyed strong growth in recent years, with average investment returns well above Belgian direct real estate and general equities, and it also punches above its weight in Europe. EPRA Special Advisor Laurent Ternisien told the Briefing that average dividend yields for the Belgian listed REITs were about 6.56% in Q1 2016, compared with 3.94% for the EPRA Developed Europe Index. The market could also be just about to get a whole lot more interesting if the Belgian government proceeds with its plans to create a new nonlisted REIT. The structure is intended for pan-European institutional investors in direct property and aimed at establishing the country as a centre for tax-efficient fund structures to rival neighbouring Luxembourg. Laurent Carlier, Head of the Belgian REIT Association and CFO of listed office REIT Befimmo said the key element of the proposed new nonlisted REIT regime is to effectively create a new tax efficient platform for institutional investors in direct real estate, who will be able to centralise their income from their other subsidiaries across Belgium and the EU in a single vehicle with a limited life-span of 10 years. He added that it would be a unique step for Belgium in trying to increase its attractiveness as a real estate investment destination. Cofinimmo’s Denis, said although any new Belgian non-listed REIT regime might be a competitor for the quoted companies, it would be a great development for the market as a whole. 'The new structure would increase diversification and liquidity. When there is so much global demand for investment in the built environment, this is going to help by giving institutional investors more options,' he concluded.#

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“Why is everyone still worried? Are we near the top of the cycle and it’s 2007 all over again? The answer is no. Rental levels are substantially below where they should be, particularly in Continental Europe, and real estate yields over government bonds are nowhere near as low,” Jos Tromp, CBRE Head of Research for Continental Europe said.

THERE IS HUGE POTENTIAL IN BRUSSELS, BUT IT IS NOT EXPLOITED. THE CITY’S ADVANTAGE IS THAT IT IS A MATURE , LARGE , AND VERY STABLE RENTAL MARKET.

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SEMINAR BOOMING MECHELEN PROFITS FROM TRAFFIC CONGESTION IN BRUSSELS AND ANTWERP

Accessibility and infrastructure are the key reasons to choose Mechelen as a business location, but companies based there such as Cochlear, Galapagos and MundiPharma, also point to the large

local pool of young working talent that is available in a city that was picked as one of Europe’s Top 10 smaller cities in awards by the Financial Times last year. Compared with the rest of the Flanders region, Mechelen has been attracting relatively more small dynamic companies than other centres in recent years. While waiting for the mayor to arrive, Marina De Groof of DGI, real estate agent for companies around Mechelen, and Luc Feyaerts of Intervest, an investor in offices and warehouses, made a strong case for Mechelen, which has grown rapidly and escaped its legacy of industrial decline in the 1970s. The city’s ring road system is being expanded and partially placed in tunnels, while investment is also being put into a new train station, as Mechelen tries to avoid the mistakes of Brussels and facing the same problems in ten years time. There is still some way to go, as 85% of workers in Mechelen travel by car, compared with 50% in Copenhagen and 30% in Tokyo.#

ACCESSIBILITY & INFRASTRUCTURE ARE THE KEY REASONS TO CHOOSE MECHELEN AS A BUSINESS LOCATION

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Bart Somers, mayor of Mechelen, could hardly have illustrated the core message of his presentation on the city at Realty any better. He turned up 1-1/2 hours late due to heavy traffic in and around Brussels, so demonstrating why more and more companies are fleeing the overcrowded and poorly accessed Belgian capital. Mechelen, halfway between Antwerp and Brussels, is directly benefitting from the congestion and has seen a strong rise in demand for real estate, mainly offices and warehouses.

SEMINAR A THOUSAND TREES Green real estate development took on a new meaning at the Realty real estate trade fair in Brussels. Property developers will have to factor in space for city farms in their future planning to feed a global urban population that the UN expects to rise by 60% in 2040, delegates heard at a seminar organised by the Belgian Property Federation (UPSI-BVS).

“Urban agriculture isn't some pet mascot to sell a project, it's actually a key element of future real estate development,” Jean-Louis Missika, Vice-Mayor of Paris responsible for urbanism, said during a panel session. Agritecture – the complete integration of urban agriculture within city architecture – is an essential component for green and sustainable real estate development, Missika said. “In a rapidly urbanising world, food production needs to be integrated into 'densifying' cities to supply residents in a 'hyper-local manner',” futurologist Stefaan Vandist added.

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The greening of our cities has gathered momentum in recent years as developers and investors have picked up the baton from politicians and environmentalists warning about the potentially dire consequences of climate change and the need to reduce CO2 emissions. Most industry experts agree that greater effort is

By Judi Seebus, Editor in Chief PropertyEU

still needed as the built environment accounts for a staggering 60% of CO2 emissions. So far, sustainability efforts have focused on making new buildings carbon neutral through the greater use of environmentally friendly materials and measures to reduce energy consumption. Increasingly efforts are also focused on existing buildings where the real problem lies. But there is still quite a way to go given that existing properties accounts for the bulk of total stock. Moreover, viewed from the outside carbon-neutral offices, shopping centres or homes look no greener than their older and less sustainable counterparts. Sure, they may tick all the boxes that the regulators have come up with, but even if their owners were to place big signs on them saying this building is LEED or BREEAM certified, the physical environment would not feel any greener.

New vision of the future

That's why the vision of the future set out by the vice-mayor of Paris at Realty is so exciting for all urban dwellers in Europe. The fact that Paris is taking the lead in an initiative that will physically transform parts of the largest capital on the European Continent has immense ramifications. Not all that long ago farms were located very close to urban conglomerations, even some of the larger ones like Paris. In the wake of the industrial revolution, urban planners across Europe pushed the farms out further to make room for new dwellings for a huge wave of labourers who had flocked to their towns and cities to work in the nearby factories. The ongoing transition in the last decades to a services industry has simply intensified that trend.

But with urbanisation set to spread further as a means of meeting the needs of several billion more people in the next two decades, urban leaders are revisiting the original structure of our physical environment and have come up with some very interesting ideas. During his presentation, Missika pointed to the Reinventing Paris initiative, a crowd sourcing competition aimed at developing sites within and around the city, while incorporating 30 hectares of urban agriculture into many of the 22 projects. One of the most ambitious Reinventing Paris projects is Mille Arbres (A thousand trees), where an actual forest will be grown in suspension above the city’s northern ring road, nestling a hyper green commercial building – i.e. that meets all the official sustainability criteria -

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THE FACT THAT PARIS IS TAKING THE LEAD IN AN INITIATIVE THAT WILL PHYSICALLY TRANSFORM PARTS OF THE LARGEST CAPITAL ON THE EUROPEAN CONTINENT HAS IMMENSE RAMIFICATIONS.

atop of which a residential village full of greenery will be constructed. This 'bridge' of urban vegetation physically and symbolically connects the centre of the city and its rural suburbs. Within the forest an urban farm will produce food for the restaurants housed within the complex itself. As the hunt for real estate has intensified in recent years, investment in alternative assets has become the new mantra for return-hungry institutional investors who are having a hard time amid a prolonged period of record low interest rates. Mille Arbres not only sets down a marker that the Paris of the future could be the city of a thousand farms. It also provides a vision of a new sub-sector with the potential of becoming another – thriving – asset class.#

SECO, SERVICES FOR RESIDENTIAL PROJECTS

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For 3 consecutive years now, SECO has exhibited at Realty. What started as an experiment has now grown into a high value tool in terms of networking and communication. Realty offers another opportunity to exchange information, understand the broader market, listen to our clients’ requirements and find answers for them. As a technical advisory service for construction and real estate, we have a diverse range of clients and services. If you’re a developer, you are looking to stand out via a quality product. We can help you enhance the technical quality level of your project thanks to technical inspection, tailored to the complexity of your building. Did you know that our inspection program for residential developments gives you access to the SECO quality label “Technical inspection”? By displaying this SECO label on your building and using it in your communication, you can show your customers how serious you are about quality and that you are offering them high-quality real estate property, controlled by the professionals from SECO!

transactions (technical due diligence) gives you a good insight into capital and operational expenditures, while “Technical opinion” service helps you to bring your investment up to the expected technical level at a reasonable cost, through value engineering (analysis of variants, alternative solutions, etc.). The optional IDI (tienjarige verzekering, assurance décennale) is the formal guarantee of quality and the recognised answer for reducing construction risks.

If you’re a contractor, we can support you in your quality program by providing advice, audits, etc., or even by setting up a complete quality system. Discover how our inspection and certification specialists can support you, with full independence. If you’re an architect, the functionality you want to incorporate in your project can be strongly impacted by fire safety regulations, while the expectations of owners regarding energy consumption and comfort levels sometimes conflict with each other and with the creative concepts you wish to develop.

Technical inspection

If you are an investor or broker, you want to be sure that your transactions and your investments in new projects represent “value for money”. You can rely on our technical expertise to provide this confidence. Our support in

Our technical experts can guide you in these matters and put their expertise in fire safety, technical installations, joinery and curtain walling at your disposal in order to avoid conflicts and optimise your design.

Technical inspection and guidance  Technical due diligence  Maintenance audits and monitoring  Commissioning  Studies related to energy performance and comfort  Fire protection  Periodic inspections – quality systems  Sustainability assessments  Guidance on sustainability programmes  Technical audits scrl SECO cvba, Rue d’Arlon - Aarlenstraat 53 – B-1040 Brussel, sales@seco.be, +32 (0) 2 238 22 11, www.groupseco.com 14

Property developers need to factor in the increasing demands for alternative mobility in Belgian real estate. As companies gear up to adopt a greener image and attract younger talent, mobility packages are becoming a new part of remuneration packages, and companies are changing the way they design and locate their offices, the International Faculty Management Institute session at Realty heard. Gregory Jacobs, Compensation and Benefits manager at telco Proximus explained that benefits in the form of a car are outdated: “We want to make our packages more fluid so employees can exchange these for things that will actually benefit them most….“Using public transport can therefore be a greener option that offers more comfort, but only if the commute is acceptable. This is why all our offices are located next to train stations.” By creating an internal marketplace where cash, time and benefits can be exchanged more freely, Proximus has been able to reduce the number of car commuters and also the number of covered kilometres per driver from 29,000 in 2011, to 25,000 in 2015. “This has significantly reduced

indirect costs such as insurance and maintenance,” Jacobs added. In a city like Brussels with heavy traffic and expensive parking, commuting by car may no longer seem the most logical option, but thousands of Belgians still get behind the wheel as a matter of habit. So employers are beginning to conclude that they need to initiate behavioural change instead. Carl Vranken of Flander’s facility services, responsible for the construction of a new Meander office building due to house 2,500 Flemish civil servants, explained that while currently about 400 of these commute by car, only 155 parking spots will be available.

IN 2016, BELGIUM WILL SEE A TRIPLING OR QUADRUPLING OF THE REGISTRATIONS OF ELECTRIC VEHICLES

“We need to change these habits, and do so by rethinking the connections that employees use to and from the train station -- offering bicycle packages for commuters and having office bicycles ready for anyone to use if they’re going to a meeting,” he said. Furthermore, city cycling services such as Blue Bike and Villo will be available at the site to ensure maximum flexibility. Car commutes to work are falling and those still driving are increasingly using electric vehicles. In 2016, Belgium will see a tripling or quadrupling of the registrations of electric vehicles, Steven Leeten of Rexel, a French electrical supplies manufacturer, said. “We see a surge in Belgium due to strong financial incentives including subsidies, road tax and registration tax relief, and as a company, tax deductions of 120% for a full electric vehicle. In addition, electric cars are much more cost efficient in use he added. For the real estate sector, this means taking into account a new set of infrastructure and facilities such as charging stations, Leeten said. “We see a real trend from nice to have, to need to have. Some hotels, for instance, are missing bookings because they have no charging facilities,” he concluded.#

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SEMINAR MOBILITY AND REAL ESTATE: BUILDING FOR THE COMMUTERS OF THE FUTURE

SEMINAR HEALTHCARE - PAST THE BOOM?

It is taking more time to fill new healthcare real estate and the existing offerings are at risk of becoming rapidly outdated, since elderly people nowadays want more luxurious and made-tomeasure housing, a specialist session focused on the market at Realty heard.

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Introductory speaker Johan de Muynck, CEO at Zorgbedrijf Antwerpen, noted that the pace of change in healthcare had accelerated as more and more private investors have entered the market. “In 2015, we invested €200 million in healthcare, of which €60 million was borrowed capital. I really like third parties investing in healthcare and healthcare real estate, but it was very difficult to convince Belgian authorities of this. The government doesn’t understand that you have to invest first to get better healthcare -- they only look at the costs. There is no real urgency to invest in healthcare from the governments’ side, but there is a lot of capital from external investors waiting to be invested,” de Muynck said. “People now looking at the higher vacancy rates for care homes and base their strategy on that, but that vacancy is only short-term. We are going into a period of five-to-10 years in which less care is needed, but after that there will be a huge demand due to the ageing population and so we have to anticipate that now. We have to build facilities for every budget and more and more people also want to grow old at home,” he added. Dominiek Beelen, CFO at Senior Living Group, noted that waiting lists for care and cure are always relative: “Someone who is on the list for an elderly home in one town, could well be on three other lists as well. The

fact is that it takes twice the time now to fill up a new care centre than it did a year ago. We have to market these homes and people don’t want to be in a classic elderly home anymore. They’re not only choosing for a nice building, they also want atmosphere and experience. That means less big elderly homes, more private apartments. We have to invest now to have sufficient supply in five years. It takes time to get building permits and construct new facilities. From 2020, we need capacity and that’s why we also need external investors to finance this.” When asked for the biggest trends in healthcare related to real estate, the panellists commented: Els Pauwels at Armonea: “Legislation has really changed in Belgium and that has had a huge effect on the healthcare real estate market. It is less government-driven and the market will have to take the lead. The old-fashioned elderly homes are past their sell-buy dates and need to be refurbished. The apartment you live in before the final stage can’t be simply small flats with care services attached as baby boomers want a real house with some care attached to it. Care homes are heavily subsidised in Belgium and that distorts the signals from the market.” Hilde Bosmans, healthcare consultant at Lindbergh Consult: “The government always financed healthcare real estate but that is now changing. Their money tap is closed leaving room for the market to enter. And that’s a good thing: why would we want a government to invest in real estate if that money can also go to better care?” Christine De Cafmeyer, Manager Social Profit & Local Authorities, KBC Bank: “There will be huge changes in the way people want to spend their retirement and a big consolidation amongst care givers, which will change the sector…Property prices in

the sector do not reflect real market levels, because costs were always subsidised. With the government moving back, prices will also go up.” Danny Stas, lawyer at Laga: “We see a huge market for people that want to invest in healthcare real estate, wealthy individuals, but also bigger institutions. They agree on relatively modest levels of return on investment, because they are in it for the long term.” Johan de Muynck, CEO Zorgbedrijf Antwerpen: “I don’t trust people that lend out money and don’t say anything about when they want it back…. Also, I want to build myself, but I don’t have the same fiscal instruments as the builders and investors. I have checked whether we could build some buildings ourselves, but developers in Belgium are way cheaper because of fiscal advantages. Let’s work on more equality.” The question posed to the panel was: Belgian healthcare developers are building the wrong offerings, since people don’t want small service flats or bigger care homes? Hilde Bosmans: “The current generation of senior citizens are really attached to their own home and see it as punishment to be in an elderly home. The generations approaching retirement are members of the consumption society and want a luxury offering that doesn’t have to be their own property. So they want high quality rental. A lot of private investors buy rental senior apartments as an investment, but no one wants to rent those tiny places. That will have to change.” Jorden Goossenaerts, Conix RDBM Architects: “As architects, more and more we design buildings that can be used for different functions. People still think of a building too much as a hospital, care centre, or school. We invest in flexible structures that can therefore be used for much longer periods than single-focus buildings.#

THE GENERATIONS APPROACHING RETIREMENT ARE MEMBERS OF THE CONSUMPTION SOCIETY AND WANT A LUXURY OFFERING THAT DOESN’T HAVE TO BE THEIR OWN PROPERTY.

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THINK. RETHINK. ASK. ANSWER. DISCUSS. DISCOVER. CREATE. COLLABORATE. MIX. MINGLE. spryg.com

SEMINAR

ONLINE IS BECOMING MORE AND MORE IMPORTANT AND OMNICHANNELS ARE THE FUTURE.

E-commerce is having a huge effect on retailers and therefore on retail real estate. Retailers that don’t keep up with shoppers’ desires for experience and convenience are doomed speakers at the retail session concluded. Retailers told the audience they have to innovate in order to survive. Annick van Overstraeten, General Manager Lunch Garden: “We operate 74 restaurants in high traffic locations with an average surface area of 1,000 sqm. In 2009 we were almost bankrupt. We were prehistoric: the restaurants were dirty and outdated. Private equity acquired us and now we have a new concept with a focus on quality. We did a refurbishment of all restaurants and there was a big focus on marketing and a loyalty programme which brought in a lot of additional business. In the future, we want to expand into Luxembourg, launch breakfasts, a traiteur service and other new offerings such as food trucks. We also want to go into the

hospital business, by taking over hospital restaurants and finally, we are planning more home delivery outlets and 20 new openings in Belgium and Luxembourg.” Nick de Maeyer, Real Estate Manager BeLux C&A: “We have 1,500 stores with 37,000 employees in 21 countries, including Belgium and Luxembourg where we have 831 shops, but the brand is facing challenges. Young people like H&M and Zara, and are less interested in C&A, which means we have to make the brand future proof, but without abandoning our traditional values. That’s tricky when Click & Collect, order in store and online ecommerce are the trends for retail now. We want to improve our image as 1.5% of our turnover is now online and that is way too low, so we’re missing the boat. A key problem we need to tackle is that our staff have targets to sell in their shops and therefore don’t transfer clients online enough….” “The main focus of our real estate investment strategy is consolidation. Smaller shops are going to close or be integrated into bigger retail parks as we want to have bigger spaces and smaller numbers of stores. The

average size of our shops today is 1,000 sqm. We stock the smaller ones with basic clothing and everything above 1,000 sqm will be filled with fashion. As smaller towns are becoming less and less popular as retail destinations we want to be in the peripheries -- in retail parks and big shopping centres. In secondary shopping centres there is frequently too much vacancy nowadays and this turns people away.” Filip de Bois, Portfolio Director Redevco Retail Belgium: “Online is becoming more and more important and omnichannels are the future. To be on a good location is key, but there are still some rents in Belgium based on turnover. That will have to change because construction and securing good locations is not getting cheaper while online retail is growing, which means how do you measure the turnover of a specific physical store? Maybe the shopper is attracted by an item in a store in Belgium, but the online sale is booked in Germany. In this extremely competitive environment it becomes even more important for real estate investors to work closely together with retailers.”#

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RETAILERS AT A TURNING POINT

IMPRESSIONS THE MECCA OF THE BELGIAN REAL ESTATE SCENE, A MUST FOR EVERYONE INVOLVED IN REAL ESTATE

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FOR US REALTY IS THE PERFECT PLATFORM TO SHOW THE MARKET THAT LIDL IS NOT JUST A GROCERY CHAIN BUT A PROPERTY DEVELOPER AS WELL

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VISITORS

6638

REALTY 2016 FACTS & FIGURES

2015

2016

2010

2011

5305

3415

2009

4815

3056

31+34+48+53+63+60+66+67 2012

129

TRENDLINE IN SQUARE METERS

2840m2

2009

2010

2011

2012

2013

2910m2

2014

300 INTERNATIONAL INVESTORS 32% 24% 19% 6,5% 3% 15,5%

LUXEMBOURG THE NETHERLANDS FRANCE GERMANY GREAT-BRITAIN OTHER 22

127

128

126

122

113

102

42+51+57+61+63+64+65+63

— REALTY REVIEW —

EXHIBITORS

3390m2

2015

2016

PERFORMANCE REPORT

76+24+P 89+11+P 74+26+P 98+2+P 7,66

88,7

74,3

GENERAL IMPRESSION

REALTY MET OR EXCEEDED EXPECTATIONS

EXHIBITORS INTEND TO PARTICIPATE NEXT EDITION

PARTICIPANTS INTENDED TO VISIT NEXT EDITION

PERFORMANCE REPORT FROM EXHIBITORS (/10)

76+24+P 74+26+P 67+33+P 79+21+P 8,09

7,4

6,7

7,88

GENERAL IMPRESSION

VISITOR QUALITY

VISITOR QUANTITY

LAY-OUT IMPRESSION

16+12+10874326P

VISITOR PROFILE

MEDIA, PRESS & OTHER 8%

BUSINESS SERVICES 21%

PARTNERS & FEDERATION 3% OCCUPANTS 5% PUBLIC AUTHORITY 7%

DEVELOPER 15%

ARCHITECT & PLANNER 13%

INVESTOR 10% CONSTRUCTION COMPANY 9%

BROKER 9%

— REALTY REVIEW —

/10

EXCLUSIVE REALTY NIGHT IMPRESSIONS THE PLACE TO BE FOR THE REAL ESTATE SECTOR, BOTH FOR MEETING CLIENTS AND ESTABLISHING NEW CONTACTS

— REALTY REVIEW —