The investment properties of today... and tomorrow
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CEUSTERS
| Investment & Development: Investment properties
Is residential property still the Holy Grail of investments? Or are other opportunities becoming increasingly interesting these days? How attractive are offices, retail or (semi-) industrial real estate as an investment? Will objectives shift as a new generation of investors takes over? In short, what are the most interesting investment properties of today and tomorrow? Vincent Gommers and Christophe Ide provide the answers to these and other questions. Christophe Ide, who left the notarial profession to join Ceusters’ Industrial Agency department three years ago, chairs the company’s Investment & Development team. The team unites the heads of the Retail, Offices, Industrial Agency and Valuation & Advisory departments, together with COO Axel Ceusters and CEO Ingrid Ceusters. “The growing demand for investment and development properties as well as clients/customers’ increasing need for assistance made it clear that a new dynamic and a coordinated structure was needed,” Christophe Ide explains. Vincent Gommers nods in agreement: “I don’t act as a broker myself. As the Head of the Valuation & Advisory department, I am responsible for delivering valuation reports to our clients and providing them with strategic advice in relation to their purchases or sales and the optimisation of their real estate portfolios. I support the Investment & Development department, which is headed by Christophe, with financial/tax advice and market data,” Vincent Gommers explains. “Of course, this isn’t new to the company, but historically investment and development cases were spread over different departments, whereas today they are centralised under the care of Christophe and the experienced team, so we can optimally assist our clients with all their real estate challenges, regardless of the asset class. Together with the extensive market knowledge of our colleagues, this forms a strong basis for providing sellers and investors with advice.”
How do you explain the increased demand for investment properties? Christophe Ide: “The greater demand for these properties undoubtedly ensues from the current favourable borrowing climate. Although you would think that the COVID crisis might have reduced interest in office or retail portfolios, we’re still seeing a lot of activity in these segments too. The way the market looks right now, high-quality properties can still be found in every asset class. Ceusters manages transactions within the hotel segment, for example, and we’re also active in healthcare real estate, always in line with the requirements of our clients – operators, developers and investors alike – each of whom we support based on their own needs. Moreover, subject to triple net agreements, solid returns can still be achieved in these two segments. With regards to the office market in particular, we’ve been seeing increasing interest in investment properties in and around major cities such as Brussels, Antwerp and Ghent for some time now. Analysts of the brokerage firm Barclays recently published that they consider the Brussels office market to be more resiliant to the impact of teleworking than global cities such as London and Paris. Perceptive investors therefore rightly continue to consider our capital as a stable market, which, by extension, actually also applies to the office market in the other larger cities in our country.” Vincent Gommers: “COVID is naturally confronting us with (rental) price corrections in various (sub-)markets, as well as shifts in the demands and concerns of our clients, but generally speaking, all commercial property segments still offer great opportunities for anyone looking to develop a high-performance, diversified investment portfolio.” Christophe Ide: “The pandemic has made things particularly busy on the residential side, which of course puts pressure on yields. This has undeniably led to residential investors also becoming more open to professional real estate – from retail and office to (semi-)industrial opportunities – they previously might have shown less interest in.” Vincent Gommers: “Individual apartments and typical residential investment properties (usually three to six apartments) are always sought after in the market. But as these are under constant pressure from competition from owner-occupiers on the one hand and private investors on the other hand, returns on these properties have become relatively low. That’s why investors today are looking for new opportunities, which makes commercial property an ideal addition to their portfolio.”
Vincent Gommers
Head of Valuation & Advisory at Ceusters - MRICS
With a view to improving returns, is it a good idea to diversify a portfolio these days? Vincent Gommers: “That’s precisely where our role lies: providing our clients with the best possible advice, tailored to their individual situation. How to get the best return from your property portfolio (and by extension your capital) in the longer term is a common question. The answer will be different for each investor, depending on their profile. It’s perfectly possible, for example, to strategically decide to make a nice profit from the sale of a residential property today, and then reinvest those funds in commercial real estate with a higher return. Stable, high-quality commercial real estate additionally often requires less active management. In these hectic times, not having to deal with much of that hassle is also attracting more property investors.” Christophe Ide: “We welcome both relatively modest investment portfolios of private individuals and the so-called ‘big gun’ funds. Our aim is to genuinely build a sustainable, long-term
relationship with our clients, which is embedded in the Ceusters DNA. Our international networks (Gerald Eve, SIOR, Tirca, Lee & Associates and IRELS) also allow us to assist foreign parties with their entry or expansion into the Belgian market and to assist our Belgian clients with their foreign real estate activities.” Vincent Gommers: “Regardless of the size of the investment portfolio, every client is offered expert advice from Ceusters. We’re proud of our high level of accessibility, but – just as in the financial world – we naturally also guarantee discretion, a characteristic that’s particularly appreciated by many of our clients, who include company owners, family offices and other wealthy individuals.” Christophe Ide: Investing in high-quality, rented semi-industrial/logistics real estate has the advantage that it requires limited owner maintenance and can offer certain guarantees with regard to the term of the contract, within a B2B environment… In short, it’s a reasonably ‘hassle-free’ investment.
Christophe Ide
Senior consultant at Ceusters
Vincent Gommers: “That’s right. We note that many business parks and multi-tenant SME-sites sell out quickly. These sites serve as lively hubs for local companies, but often also house the regional offices of larger service providers and multinationals. This makes them very popular with both owner-users and investors. Thanks to the different purposes they serve (storage/workshop, warehouse with offices or just offices), there’s usually also ‘something for everyone’, with different options depending on the client’s budget and wishes. These developments therefore appeal to private investors and large funds alike. In order to further unburden our clients, Ceusters can also take on the management of these assets, for owners and in co-ownership. This allows an investor to create and diversify a portfolio with our support, carefree.”
