M A R K E T B E AT
BELGIUM REGIONAL Office Q1 2022 Inflation reaches 39-year high. YoY Chg
12-Mo. Forecast
40K Take-up sq m (Q1 2022)
165
Inflation in Belgium climbs to 8.22% in the first quarter of 2022, a record since 1983. In February 2022, the Russian invasion of Ukraine pushed global energy prices sky-high. With the conflict showing no signs of ending, and EU restrictive measures against Russia, energy prices will continue to drive inflation in Belgium. Combined with the fact that consumer spending is set to increase after a record year of saving, inflation is set to rise.
Prime rent, (EUR/sq m/year)
A period of uncertainty is taking place with the crisis in Ukraine and if it continues, Belgian growth could be affected.
5.25%
Rising growth and falling unemployment rate.
Prime yield (3/6/9 lease)
The Belgian economy is forecasted to grow 2.67% in 2022. This is expected to slow down and stabilise at 2.17% for the next two years and slow down further to 1.11% in 2025. This growth is associated with an increase of the employment rate. The unemployment rate decreased to a level of 5.49% in the first quarter and should be expected to decline further and stabilise around 5.21% by the end 2022 and 4.94% in 2023. This is due to a lot of people who had been temporarily unemployed and have returned to the workforce in early 2022.
ECONOMIC INDICATORS Q1 2022 YoY Chg
12-Mo. Forecast
2.67% 2022 GDP Growth
5.49% 2022 Unemployment Rate
GDP GROWTH AND UNEMPLOYMENT RATE
INFLATION RATE 9.0%
8%
8.0%
6%
8.22% Consumer Price Index
7.0%
4%
6.0%
2%
5.0%
0% Sources: Moody’s Analytics, BNB, Eurostat, March 2022 Please note the economic data can vary significantly from one source to the other. Therefore, the figures provided should merely be used as an indication or trend.
4.0%
-2%
3.0%
-4%
2.0%
-6% 2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
1.0% 0.0%
GDP Growth
Unemployment Rate
Sources: Moody’s Analytics, BNB, Eurostat, March 2022
2016
2017
2018
2019
2020
2021
Sources: Moody’s Analytics, BNB, Eurostat, March 2022
2022
2023
2024
2025
M A R K E T B E AT
BELGIUM REGIONAL Office Q1 2022 Lowest quarterly take-up in two years in Flanders. The Flanders office market recovery noted in 2021 has not fully spilled over into 2022, as we record the lowest take-up since the outbreak of the COVID-19 pandemic in early 2020. Indeed, take-up in Flanders markets (i.e., Antwerp, Ghent, Leuven and Mechelen) totaled 34,500 sq m in Q1 – against a quarterly average of 56,000 sq m over the past five years. Antwerp occupied top spot with 17,000 sq m, followed by Ghent (13,000 sq m), where the largest deal in Q1 was signed. Mechelen registered 2,300 sq m and Leuven 2,000 sq m. The largest deal in Q1 was a 3,200 sq m by Artveldehogeschool in Alides’ The Platform (Gent Zuid district).¹ In stark contrast to the end of 2021, where nine out of the ten largest deals were linked to Grade A spaces, four out of five of the largest deals in Flanders during Q1 took place in lesser-grade buildings. No occupier type dominated proceedings in Q1, however the public sector was virtually absent. This is only expected to be an outlier compared to overall trends. Indeed, as per our Outlook 2022 for the Regional Office Market², new quality offices will continue to drive take-up in Flanders, such is the scale of demand for Grade A spaces in particular.
FLANDERS TAKE-UP PER DISTRICT, 000s SQ M
400 300 200 100 0 2018 Antwerp
2019
2020
Ghent
2021
Mechelen
Q1 2022 Leuven
FLANDERS NEW DEVELOPMENTS AND PIPELINE, 000s SQ M
200 100
Speculative pipeline required for market to thrive. A clear condition for needs to be met for demand to be met, and that is that new speculative products are regularly added to the stock (as opposed to turnkey projects only). Additionally, new developments must factor in occupiers’ ESG requirements. In absolute terms, the pipeline for the coming years is strong, particularly in Antwerp and Ghent² A highlight delivery this quarter was Intervest’s Greenhouse The Collection in Antwerp’s Singel district.
Absence of large Grade A take-up brings average Flanders rents down in Q1. The Greenhouse The Collection delivery may soon drive the Antwerp prime rent to new higher levels, however in the meantime, prime rents remain stable (EUR 165/sq m/year in Antwerp and Ghent). Average weighted rents are at EUR 124/sq m/year, a decrease on 2021, unsurprisingly given the absence of Grade A take-up among the larger deals this quarter.
0
Antwerp
Ghent
Mechelen
Leuven
Pipeline Flanders
FLANDERS RENTS, EUR/SQ M/YEAR
180 160 140 120 100
¹ See the last page of this report for a list of this quarter’s largest deals. ² For a list of speculative projects in Regional markets, see our Outlook 2022 for the Regional Office Market report.
2018 2019 Antwerp Mechelen Flanders average
2020
2021 Q1 2022 Ghent Leuven
M A R K E T B E AT
BELGIUM REGIONAL Office Q1 2022 A calm 2022 ahead for the Walloon office market.
WALLONIA TAKE-UP PER DISTRICT, 000s SQ M
Wallonia office take-up has been trending downwards for little over a year, with just under 5,000 sq m recorded in Q1, against a five-year quarterly average of 19,000 sq m. This is not unexpected, with few large deals expected to drive the market in 2022. In total, fewer than ten transactions were recorded across Charleroi, Liège and Namur. Liège recorded the largest figure among Walloon markets in Q1 with a low 2,500 sq m.
150
Charleroi is expected to record one of the year’s key transactions by this summer, a large pre-letting by AVIQ and FAMIWAL (both Walloon public sector bodies) in the Ohr!zons tower, a 23,000 sq m project which will be delivered in the next couple of years in the emerging Left Side Business Park district. This should be one of the last large moves involving the Walloon public sector following an overhaul of its occupational strategy these past years. Aside from the above, 2022 is expected to be a calm straightforward year in Wallonia, with no major emerging trends. Meantime, the largest deal in Wallonia during Q1 was a 1,800 sq m letting by Securex in Portes de Liège. Average deals were in the 300- 600 sq m bracket this quarter.
100 50 0 2018
2019
Liège
2020
Namur
2021
Q1 2022
Charleroi
WALLONIA NEW DEVELOPMENTS AND PIPELINE, 000s SQ M
150 100 50 0
Shift to turnkey projects expected. With a lack of large deals on the horizon, developers’ focus should shift to turnkey- rather than speculative projects for the medium term, probably until the 2024 elections when new public sector occupation strategies may emerge. As such, approximately 260,000 sq m are in the pipeline for Wallonia up to 2024. For a list of speculative projects, see our Outlook 2022 for the Regional Office Market report. A key delivery in Q1 was IRET’s 10,000 sq m Namur Crosspoint, pre-let by Walloon governmental bodies.
Liège
Namur
Charleroi
Pipeline Wallonia
WALLONIA RENTS, EUR/SQ M/YEAR
180
Liège and Namur have Wallonia’s highest rents. The highest prime rents are to be found in Liège and Namur, both EUR 160/sq m/year, while Charleroi is still at EUR 145/sq m/year, having increased earlier this year. The average weighted rent has increased to EUR 139/sq m/year, although with it is too early to speak of any trends at this stage given the small number of deals recorded so far this year.
160 140 120
100 2018
2019
Liège Charleroi
2020
2021
Q1 2022
Namur Wallonia average
M A R K E T B E AT
BELGIUM REGIONAL Office Q1 2022 Zuiderpoort deal means 2022 has strong momentum. Despite only six deals having been recorded in Belgian regional markets in Q1, 2022 has strong momentum with a total of EUR 199 million invested, twice the quarterly average. This is the result of two key investments, with Blue Colibiri’s EUR 150 million acquisition of Zuiderpoort in Ghent head and shoulders above the rest. Zuiderpoort is an interesting regional asset thanks to its size (an above-average ticket) and tenancy profile which includes the public sector as an occupier among other reasons. The second largest deal was Vastgoed Degroote’s acquisition of the Provinciehuis in the Urbis complex, also in Ghent, soon to be vacated by East Flanders public sector authorities.
ANNUAL INVESTED VOLUMES, EUR M
800
35 30 25 20 15 10 5 0
600 400 200 0 2018 Flanders
2019
2020 Wallonia
2021
Q1 2022 # deals (RHS)
We do not expect the volume recorded in Q1 to be matched for the remainder of 2022, nevertheless, other strong assets are bound to interest investors, not to mention potential large owner-occupier deals. PRIME YIELDS
7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00%
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022
Prime yields stable with a possible compression by the end of 2022. Prime yields currently remain stable – 5.25% in Flanders and 6.75% in Wallonia. Nevertheless, compressions are forecast in both regions, and could reach 5.00% in Flanders by the end of 2022, a more interesting yield compared to Brussels, likely to be of interest to specialised local investors at the very least, and international investors in the case of larger tickets becoming available.
Prime yield Flanders
Prime yield Wallonia
M A R K E T B E AT
BELGIUM REGIONAL Office Q1 2022 MARKET STATISTICS REGION
MARKET
BUILT STOCK (SQ M)
AVAILABILITY (SQ M)
VACANCY RATE
Q1 2022 TAKE-UP
Q2 2022-2025 PIPELINE (SQ M)
PRIME RENT (EUR/SQ M/YEAR)
PRIME YIELD
Antwerp
2,234,000
228,000
10.22%
17,000
166,000
165
5.25%
Ghent
1,109,000
47,000
4.39%
13,000
87,000
165
5.25%
Leuven
564,000
n.a.
n.a.
2,000
36,000
150
6.50%
Mechelen
367,000
n.a.
n.a.
2,300
13,000
150
6.50%
Liège
525,000
23,000
4.36%
2,500
96,000
160
6.75%
Namur
545,000
35,000
6.51%
2,400
86,000
160
6.75%
Charleroi
484,000
10,000
2.06%
2,000
88,000
145
7.00%
Flanders
Wallonia
KEY OCCUPIER TRANSACTIONS Q1 2022 PROPERTY
MARKET
TENANT
SIZE (SQ M)
TRANSACTION TYPE
The Platform
Ghent
Arteveldehogeschool
3,200
Letting
Helder House
Antwerp
Caluwaerts Uytterhoeven
2,400
Purchase
Ghent
Kovag
2,200
Purchase
Deinsesteenweg 114 Portes de Liège
Liège
Securex
1,800
Letting
De Arend
Antwerp
Amoda
1,800
Letting
Tirou 185
Charleroi
Forem
1,700
Letting
SHANE O’NEILL Associate Director | Research Belgium +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
*Renegotiations not included in leasing statistics
KEY SALES TRANSACTIONS Q1 2022 PROPERTY
SUBMARKET
BUYER / SELLER
SQ M
PRICE, EUR M
Zuiderpoort
Ghent
Blue Colibri / Ares Management
69,000
150
Provinciehuis
Ghent
Vastgoed Degroote / Provincie Oost-Vlaanderen
29,000
41
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.
©2022 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.