M A R K E T B E AT
BELGIUM Industrial Q2 2021 YoY Chg
12-Mo. Forecast
333 (L) 596 (SI)
Belgian economy on track to pre-crisis levels.
Take-up (YTD) (000s sq m)
The economic growth is expected to be back on track due to the success of the vaccination campaign and the relaxing of constraining measures. Economic growth is set to increase to 5.5% which means that the GDP will be around pre-crisis levels at the end of 2021 after which growth levels will stabilise to 3.3% in 2022 and 1.6% in 2023.
58 (L) 63 (SI) Prime rent, (EUR/sq m/year)
4.50 (L) 6.00 (SI)
Unemployment rate is forecasted at 5.8% this year and should peak in 2022 at around 6%. It is expected that a lot of temporarily unemployed people will resume work in the second half of 2021 or will be able to find new jobs. In some sectors there is even a shortage of workers and employers are having trouble filling in vacancies.
Prime yield (%, 3/6/9 lease) L: logistics SI: semi-industrial
Core inflation in Belgium is projected at 2.2% in 2021, 2.1% in 2022 and 1.8% in 2023. This is due to the fact companies are confronted with rising commodity prices which puts pressure on the price paid by the end consumer. Combined with the fact that consumer spending is set to increase after a record year of saving, inflation is set to rise.
ECONOMIC INDICATORS Q2 2021 YoY Chg
12-Mo. Forecast
5.5% 2021 GDP Growth
EXPECTED INFLATION UP UNTIL 2023
GDP GROWTH AND UNEMPLOYMENT RATE
5.8% 2021 Unemployment Rate
3% 10% 8%
2%
6%
2.2% Consumer Price Index
4%
2%
2% 1%
0% Source: NationalBank of Belgium, June 2021 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.
-2% 1%
-4% -6%
0%
-8%
2015 2015
2016
2017
2018
2019
2020
2021
2022
2016
2017
2018
2019
2020
2023 inflation
GDP Growth Source: NationalBank of Belgium, June 2021
Unemployment Rate Source: NationalBank of Belgium,, June2021
2021
2022
2023
M A R K E T B E AT
BELGIUM Industrial Q2 2021 Semi-industrial occupiers brush pandemic worries aside in best H1 on record. Semi-industrial take-up in Q2 soared to 332,000 sq m over 216 deals. This signals clear confidence from the broader SME/industrial occupier community regarding its near-term prospects despite the tremors felt since the pandemic hit in early 2020. The year-to-date total take-up exceeds 595,000 sq m, which means the sector has just recorded its best H1 since our records began in 2000, thanks to some 463 deals.
SEMI-INDUSTRIAL TAKE-UP PER REGION, 000s SQ M 1,200
1,000
1,000
800
800
600
600 400
400
Flanders occupiers played a bigger role than ever with as much as 68% of take-up located in the region during Q2, while Wallonia has also recorded a larger share (20%) than in past quarters. The average size of deals was 1,500 sq m, ranging from 920 sq m per deal in Brussels to as much as 3,000 sq m on the other end of the scale in Wallonia.
200
200 0 2017 Flanders Wallonia
2018
2019
0 2020 H1 2021 Brussels (incl. Brabants) Deals (RHS)
Traditionally, lettings are in the minority when it comes to semi-industrial take-up - Q2 was no exception. Almost 60% of take-up were either owner-occupier purchases or developments. Also of note in Q2 were the amount of very large deals which helped push the total upwards. Indeed, a sector which usually concerns warehouses up to 5,000 sq m in size witnessed a dozen deals exceeding 10,000 sq m, including three which ranged from 30,000- to 40,000 sq m in Wallonia and in Flanders. More details on this can be found on the final page of this report.
Average semi-industrial rents trending upwards. The prime rent has been at a stable level of EUR 63/sq m/year since 2019 and is found in Brussels where supply is rare and demand strong. No overall increase from this level is forecast. Average weighed rents are trending upwards and have increased to a level of EUR 43/sq m/year over the course of the first six months of the year.
SEMI-INDUSTRIAL RENTS, EUR/SQ M/YEAR 65 60 55 50 45 40 35 30 25 2017
2018
2019
2020
Semi-industrial prime Mobile weighted avg semi-industrial
H12021
M A R K E T B E AT
BELGIUM Industrial Q2 2021 Logistics activity at same level as last year thanks to dynamic Q2. Logistics activity improved dramatically in Q2, recording 282,000 sq m of take-up, the second-best quarter since the pandemic hit in 2020. This brings the total of the year at H1 to 333,000 sq m, which is in line with 2020. Polarisation of deal sizes. Since the rise of e-commerce in Belgium last year, a polarisation in logistics deal sizes has begun to take root. Indeed, whereas until recently, logistics deals would traditionally span 5,000 sq m and more, smaller deals linked to last-mile and urban logistics are gaining ground. We have recorded close to a dozen deals in this category during Q2. Simultaneously, big boxes remain popular and as crucial as ever, although finding appropriate locations in Belgium’s traditional hotspots becomes a challenge. Large deals in alternative locations. Indeed, as available land for new boxes along the highly sought-after Brussels-Antwerp axis wears thin, alternative locations alongside the E313 between Antwerp and Liège, as well as the rapidly emerging Port of Ghent (aka North Sea Port) area proved successful for larger deals in Q2. The latter is where the largest deal this quarter was recorded – a 30,000 sq m Grade A letting by Connect+ Group in a recent development by Heylen Warehouses in Evergem. Abundant and cautious pipeline. The pipeline for new schemes will add significantly to the stock by the end of 2022, with close to 1 million sq m to be delivered over this timeframe, on the back of a couple of highly dynamic years. As a reminder, developers in Belgium are cautious by nature post-GFC, this approach is underscored by the fact that 96% of the pipeline within the end of 2022 is committed, hence the immediate pipeline is a direct consequence of previous years’ activity. The challenge posed by the low level of speculative developments in the face of abundant demand has been further compounded by low and downward trending vacancy levels across most of EMEA and Belgium where the availability rate for logistics was in the region of 1.71% at the end of Q2 2021, leaving occupiers with very little choice – if any at all – when on the hunt for new spaces.
LOGISTICS TAKE-UP PER REGION, 000s SQ M 1,400 1,200 1,000 800 600 400 200 0
120 100 80 60 40 20 2017 Flanders Wallonia
2018
0 2020 H1 2021 Brussels (Incl. Brabants) Deals (RHS)
2019
LOGISTICS NEW DEVELOPMENTS AND PIPELINE, SQ M 800,000 600,000 400,000 200,000 0
Flanders
Brussels
Wallonia
Pipeline
LOGISTICS RENTS, EUR/SQ M/YEAR 70 60 50 40
Logistics prime rents forecast to increase. The prime rent is stable at EUR 58/sq m/year is currently stable, although they are set to be revised upwards for the first time in years – the direct consequence of intense occupier demand and increased construction costs. By the end of the year, we expect prime rents to reach EUR 60/sq m/year in the Brussels area and EUR 50/sq m/year in the Antwerp area (against EUR 48/sq m/year currently). Average rents follow the upward trend and are at EUR 43/sq m/year at the end of this quarter.
30 20 10 0 2017
2018
Logistics prime
2019
2020
H1 2021
Mobile weighted average logistics
M A R K E T B E AT
BELGIUM Industrial Q2 2021
700
50
600
40
500 400
30
300
20
200
10
100 0
0 2017
2018
2019
Logistics
The strength of these structural drivers promises to fuel demand for space in every market for the foreseeable future, accelerated by both business and consumer reactions to the pandemic. However, the ability to create more supply in order to plug gaps in global and regional supply chains will prove crucial. Indeed, the combination of strong demand and supply chain reconfigurations to enhance efficiencies puts a sharper focus on land availability for new development. This will be a fundamental issue that needs to be addressed for real estate to meet the future needs of the sector. The investor outlook, therefore, is continued strong capital and income returns, with the latter likely to increase in contribution as logistics land values increase, implying faster growing rents as mentioned previously. More on this report, as well as other insights are available from our Belgium Insights page.
Logistics
Semi-industrial
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Cushman & Wakefield’s recently published 2021 Global Logistics Outlook report addresses which current real estate drivers are likely to create strategic real estate requirements in the near- to medium-term. Key drivers include Technology, Labour and ESG, e-commerce growth, connectivity through infrastructure and Outsourcing logistics.
# deals (RHS)
8.00% 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00%
Q2 2017
Outlook
H1 2021
PRIME INDUSTRIAL YIELDS
Q1 2017
Constant pressure on logistics yields. As a result of the supply and demand imbalance, logistics prime yields – currently at 4.50% – are forecast to compress further to 4.25% by the end of the year, with a more severe correction not out of the question. The long-term prime yield for Belgian logistics is currently 4.25% but would follow the same trend. The semi-industrial prime yield is currently 6.00% and is also expected to sharpen within the year end.
2020
Semi-industrial
Q4 2018
Thus, there is some ground to be made up for the market to be in line with previous years’ total volumes. This is not for lack of demand however, as would-be investors (including many new names (domestic and otherwise) to the Belgian logistics market) are enthusiastic and abundant. The crux of the matter is that so few products are for sale.
ANNUAL INVESTED VOLUMES, EUR M
Q3 2018
Investment demand is strong despite a lack of available products. More than EUR 49 million were invested in industrial property during Q2, bringing the H1 total to EUR 95 million across 15 deals. After and uncharacteristic absence in Q1, logistics investments are back in the fold, totaling EUR 43.5 million, while some EUR 5.5 million were invested in light warehousing.
M A R K E T B E AT
BELGIUM Industrial Q2 2021 MARKET STATISTICS
REGION
BUILT STOCK (SQ M)
Q2 2021 TAKE-UP (SQ M)
PRIME RENT (EUR/SQ M/YEAR)
PRIME YIELD (%)
LT PRIME YIELD (%)
Flanders
19,165,000 (L) 9,824,000 (SI)
226,000 (L) 225,000 (SI)
48 (L) 63 (SI)
4.50 (L) 6.00 (SI)
4.25 (L)
Brussels (incl. Brabants)
2,398,000 (L) 3,221,000 (SI)
47,000 (L) 40,000 (SI)
58 (L) 57 (SI)
4.50 (L) 6.00 (SI)
4.25 (L)
Wallonia
3,573,000 (L) 2,473,000 (SI)
9,000 (L) 66,000 (SI)
43 (L) 45 (SI)
4.60 (L) 6.40 (SI)
4.40 (L)
L: logistics SI: semi-industrial
KEY OCCUPIER TRANSACTIONS Q2 2021 PROPERTY
BUILDING TYPE
ex-site Roger Vanden Berghe
Semi-industrial
ex-Milcobel
Semi-industrial
Ghent Logistics Campus Hyundailaan 6 Genk Green Logistics
MARKET
TENANT
SIZE (SQ M)
TRANSACTION TYPE
West Flanders
Private
40,000
Purchase
Antwerp
Gosselin
33,500
Purchase
Logistics
East Flanders
Connect+ Group
30,000
Letting
Logistics
Limburg
Konings
28,000
Pre-letting
Logistics
Limburg
Eddie Stobart
22,000
Pre-letting
*Renegotiations not included in leasing statistics
KEY INVESTMENT TRANSACTIONS Q2 2021 PROPERTY Coca-Cola DC ex-Brantano DC Dockx Terbekehofdreef Avenue de Vilvorde 140 Avenue Zénobe Gramme 31
SUBMARKET
BUYER / SELLER
SQ M
PRICE, EUR M
Limburg
Futurn / MC Capital
19,000
15
Scheldeland
Private / Private
19,000
10
Antwerp
Prologis / Dockx
12,000
10
Brussels
Montea / DSV
20,000
7
Walloon Brabant
Private / Private
1,400
3
SHANE O’NEILL Senior Research Analyst +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 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION ©2021 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.
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