Industrial (2 2%) and Transport (6 2%) growth should outperform the Belgian GDP growth rate in 2022, providing solid fundamentals for semi-industrial and logistics real estate markets. From 2023 onwards they should decelerate at a similar rate to the UncertaintiesGDP.will
686 (L) 544 (SI) Take up(YTD) (000ssqm) 60 (L) 63 (SI) Prime rent,(EUR/sq m/year) 4.00 (L) 5.80 (SI) Prime yield (%, 3/6/9 lease) 2.2% (I) 6.2% (T) 2022 Industry (I) and Transport (T) GVA Growth 2.15% 2022 GDP Growth 8.30% 2022 Consumer Price Index ECONOMIC INDICATORS Q2 2022 12 Mo. Forecast12ForecastMo.ChgYChgYoYoYL: SI:LogisticsSemiindustrial Sources: Moody’s Analytics, BNB, Eurostat,FederalPlanning Bureau,June2022 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. GDP GROWTH, GVA GROWTH: INDUSTRY & MANUFACTURING AND TRANSPORT & COMMUNICATION (%) EXPECTED INFLATION UP UNTIL 2025 Sources: Moody’s Analytics, BNB, Eurostat,June2022Sources: Federal Planning Bureau June2022 -2.0-4.0-6.0-8.00.0 2.0 10.08.06.04.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 GDP IndustryGrowthandmanufacturing GVA Growth Transport and communication GVA Growth 0.00% 9.00%8.00%7.00%6.00%5.00%4.00%3.00%2.00%1.00% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Inflation
Industrial Q2 2022
evolutions show no signs of a short term resolution of the Ukrainian crisis. Furthermore, growing tensions between China and Taiwan could potentially have an important impact on the global economy in the medium term. With rising uncertainties, central banks across the globe have taken the decision to increase interest rates to fight inflation, with a negative effect on public debt and a potential negative output for the economy.
BELGIUM
MAR K E T B EAT
In these challenging times, GDP growth has been revised downwards and should stand at around 2.15% for 2023, and continue to decelerate (though remaining positive) up to 2025. This could potentially weigh on the unemployment rate which is still expected to decrease by the end of 2023 to reach 5% in Belgium before rising again to 5 6% by 2025
Inflation still on the rise, although decelerating recently. Inflation in Belgium climbed again in April and in May 2022 As a result, inflation is currently expected to reach a sky high 8.3% for the whole year 2022, before decelerating sharply as from 2023 to finally reach finally the ECB objective of 2% by Recent2024.political
certainly continue to shape the year 2022.
25 6560555045403530 2018 2019 2020
Stable rents before an expected increase at close of the year. Prime rents are expected to be revised upwards by the end of the year. However, they currently remain stable at EUR 63/sq m/year in Brussels’ Flemish Brabant district. In Flanders, the prime rent is EUR 51/sq m/year, and in Wallonia it is at a level of EUR 45/sq m/year.
Semi-industrial prime weighted avg semi-industrial
Wallonia
BELGIUM
Strong semi-industrial momentum – second best H1 ever recorded. Semi industrial take up in Q2 amounted to 313,000 sq m, meaning 2022 had the second most dynamic H1 in our records (544,000 sq m), only behind what was a record 2021. While Flanders leads take up with 174,000 sq m in Q2, Wallonia recorded more than double its five year average with 110,000 sq m; Brussels registered 29,000 sq m
2022
MAR K E T B EAT
The owner occupier trend remains strong, corresponding to 50% of take up in Q2. Indeed, SMEs and family owned business often find the chance to own their property appealing from a financial point of view Nevertheless, there was also a large pre let of note: Konings nv will occupy 30,000 sq m in Intervest Offices & Warehouses’ Genk Green Logistics (a semi industrial deal despite the name of the project)
Regarding Wallonia, which has already surpassed its activity in the whole of 2020 and 2021, there have been a pair of deals superior to 10,000 sq m, let alone the usual 5,000 sq m bracket in this sector Indeed, the largest deal this quarter was recorded in Hainaut: a 37,000 sq m purchase in Châtelet. In total, a dozen deals above 5,000 sq m were registered across the country in Q2
Average weighted rents are at EUR 45/sq m/year and should also increase, owing to the pressure of development costs. Brussels (incl. Brabants) Deals (RHS) 2021 H1
Industrial Q2 2022
SEMI-INDUSTRIAL TAKE-UP PER REGION, 000s SQ M SEMI-INDUSTRIAL RENTS, EUR/SQ M/YEAR 1,5001,00050008006004002000 1,000 1,6001,4001,200 2018 2019 2020 2021 H1 2022 Flanders
Mobile
Large deals across occupational sectors in Flanders and Wallonia. The high number of above-average deals was striking, with close to a dozen transactions which were superior to 20,000 sq m. In particular, the announcement by DSV of its development of a new 100,000 sq m in the port of Ghent is one for the books. The temperature controlled building will expand the capabilities of its health cluster in Ghent Staying in the health sector, Yusen Logistics will be letting 39,000 sq m from a new warehouse developed by MG Real Estate in the Namur district (Parc Crealys) for GSK’s logistics hub. The retail sector’s presence was also keenly felt thanks to Colruyt’s future development of 37,000 sq m in Lessines (Hainaut), and e-commerce specialist 3PL Bleckmann intensifying its presence in East Flanders by a further 36,000 in MG Crosswoods in Kruisem.
The fact that all the aforementioned large deals relate to warehouses which are still to be delivered is symptomatic of a cautious approach by developers as well as the issue of a shrinking available land supply. The pre let/turnkey pipeline is nevertheless very dynamic on the back of several years of healthy demand. A total of 885,000 sq m will have been delivered by the end of this year, making 2022 the most important year for logistics deliveries since 2013.
MAR K E T B EAT
Q2 ranks among top five logistics quarters of take-up on record.
Logistics prime rent due for an increase. The overall prime rent is stable at EUR 60 but should be in for an increase by the end of the year due to increased demand, higher development costs, not to mention the fact that rents still have ground to make up on before reaching the heights of Belgium’s neighbouring countries.
BELGIUM
During Q2, logistics occupier demand maintained its remarkable course which will likely make 2022 a vintage year. Indeed, close to 459,000 sq m of take-up was registered across 19 deals, bringing the H1 total to 686,000 sq m. The significance of this is important, as this quarter ranked among the top five most dynamic ever recorded in our numbers, despite a noted absence of activity in the Brussels and Brabants region (where available supply is difficult to come by), and despite the increased costs of developing new warehouses in the current inflationary context.
Despite this, the average weighted rent remains stable at EUR 45/sq m/yea, while also being due for a likely increase in the close future.
Industrial Q2 2022
A very dynamic year for new deliveries.
LOGISTICS TAKE-UP PER REGION, 000s SQ M LOGISTICS RENTS, EUR/SQ M/YEAR LOGISTICS NEW DEVELOPMENTS AND PIPELINE, SQ M 800,000600,000400,000200,0000Flanders Brussels Wallonia Pipeline 120804001,5001,0005000 2018 2019 2020 2021 H1 2022 Flanders Brussels (Incl. Brabants) Wallonia Deals (RHS) 3020100 40 706050 2018 2019 2020 2021 H1 2022 Logistics prime Mobile weighted average logistics
BELGIUM
Prime yields remain stable at 5.80% (semi industrial) and 4.00% (logistics). It should be noted that investments in logistics assets with longer term leases are increasingly becoming the norm as investors seek a degree of safety, given that warehouses are often tailored to occupiers’ requirements (as underscored by the weak number of speculative logistics developments).
Yields to increase.
ANNUAL INVESTED VOLUMES, EUR M PRIME INDUSTRIAL YIELDS 8.00%7.00%6.00%5.00%4.00%3.00% 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 Logistics Semi-industrial 504030201008006004002000 2018 2019 2020 2021 H1 2022 Logistics Semi-industrial # deals (RHS)
Industrial Q2 2022
Two significantly large deals and a handful of more regular deals meant EUR 200 million were invested in semi-industrial (EUR 122 million) and logistics (EUR 78 million) properties during Q2. This brings the total in 2022 to EUR 747 million, meaning that at the half way stage, Belgian industrial property has already recorded its best year as far as invested volumes are concerned
The top deal in Q2 was WP Carey’s purchase of Greenyard’s site in Bree in a sale & leaseback operation which will see Greenyard remain on the basis of a 20 year triple net lease. Alternative locations are also growing more popular, as underlined by Intervest Offices & Warehouses’ purchase of 15 hectares of land under concession, which includes a 73,000 sq m site under development in the Maritime Logistics Zone of Zeebrugge an area which will be looking to benefit from the recent merger between the ports of Zeebrugge and Antwerp.
Since the pandemic, interest in this asset class has increased substantially, with logistics benefitting from increased (international) occupier interest, thereby becoming much more interesting to investors, including those looking to branch out from more traditional asset classes.
2022 is already the best year in industrial investments.
MAR K E T B EAT
It is furthermore expected that prime yields should increase by the end of the year due to the inflationary context
CÉDRIC VAN MEERBEECK (L) (SI) 478,000 (L) 304,000 (SI) (L) 60 (SI) 4.00 (L) 5.80 (SI) (L) 2,405,000 (L) 3,471,000 (SI) 1,500 (L) 29,000 (SI) 6,000 (L) 52,000 (SI) 60 (L) 63 (SI) 4.00 (L) 5.80 (SI) 3.50 (L) 3,824,000 (L) 2,713,000 (SI) 200,000 (L) 110,000 (SI) 202,000 (L) 188,000 (SI) 45 (L) 52 (SI) 4.15 (L) 6.20 (SI) 3.50 (L)
to
accuracy.
Head of Research & Marketing | Belgium & Luxembourg +32 2 629 02 cedric.vanmeerbeeck@cushwake.com86 KEY INVESTMENT TRANSACTIONS Q22022 PROPERTY BUILDING TYPE MARKET OCCUPIER SIZE (SQ M) TRANSACTION TYPE DSV Kluizendok Logistics East Flanders DSV 100,000 Development Weerts Garocentre (phases I and II) Logistics Hainaut Weerts Supply Chain 70,000 Development Yusen Logistics GSK Logistics Hub Logistics Namur Yusen Logistics 39,000 Pre letting Colruyt DC Lessines 2nd phase Logistics Hainaut Colruyt 37,000 Development Avenue Paul Pastur 400 Semi industrial Hainaut Aciers Grosjean 37,000 Purchase MG Crosswoods Logistics East Flanders Bleckmann 35,000 Pre letting PROPERTY SUBMARKET BUYER / SELLER SQ M PRICE, EUR M Greenyard Bree Limburg WP Carey / Greenyard Logistics Belgium 174,000 93 Lingang Logistics Zeebrugge phase 1 West Flanders Intervest Offices & Warehouses / Lingang 73,000 78 MARKET STATISTICS REGION BUILT STOCK (SQ M) Q2 2022 TAKE UP (SQ M) H1 2022 TAKE UP (SQ M) PRIME RENT M/YEAR)(EUR/SQ PRIME YIELD (%) LT PRIME YIELD (%) Flanders 19,859,000 (L) 11,037,000 (SI) 258,000
*Renegotiations
174,000
51
3.50
Brussels (incl. Brabants)
Wallonia
L: SI:LogisticsSemiindustrial
this report
presented
KEY OCCUPIER TRANSACTIONS
PUBLICATION ©2022
Wakefield.
A CUSHMAN & WAKEFIELD RESEARCH Cushman & All rights reserved. The information within is gathered from multiple sources believed be contain or and is without as to its
Associate Director | Research Belgium +32 2 510 08 shane.oneill@cushwake.com33
MAR K E T B EAT Industrial Q2 2022 BELGIUM
not included in leasing statistics
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Q22022 cushmanwakefield.com
SHANE O’NEILL
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