M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2022 Inflation still on the rise, although decelerating recently. 12-Mo. Forecast
YoY Chg
95K
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 2024.
Take-up sq m (H1 2022)
Recent political 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.
165 Prime rent, (EUR/sq m/year)
5.25%
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.
Prime yield (3/6/9 lease)
Uncertainties will certainly continue to shape the year 2022.
ECONOMIC INDICATORS Q2 2022 YoY Chg
12-Mo. Forecast
2.15% 2022 GDP Growth
5.35% 2022 Unemployment Rate
GDP GROWTH AND UNEMPLOYMENT RATE 10%
INFLATION RATE 9.00% 8.00%
8.30% Consumer Price Index
7.00%
5%
6.00% 5.00%
0%
4.00% Sources: Moody’s Analytics, BNB, Eurostat, 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.
3.00%
-5%
2.00% 1.00%
-10% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 GDP Growth Unemployment rate Sources: Moody’s Analytics, BNB, Eurostat, FederalPlanningBureau, June 2022
0.00% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sources: Moody’s Analytics, BNB, Eurostat, FederalPlanningBureau, June 2022
M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2022 Flanders’ best quarter of take-up in more than a year Following its lowest quarter of take-up since the pandemic in Q1, Flanders now records its most dynamic quarter since early 2021 with more than 46,000 sq m across more than 60 deals. The total take-up in Flanders at the half-year mark is 81,000 sq m. In Q2, Antwerp, Ghent and Mechelen all recorded between 10,000- and 20,000 sq m, led by Antwerp with more than 19,000 sq m. Each of these three districts recorded one of the top three deals this quarter, led by Domo Investment Group’s announced development of its new 6,700 sq m headquarters in the Polytoren in Ghent. The top deal in Antwerp was a 5,800 sq m purchase by iO of the space previously occupied by coworking operator, Fosbury & Sons in the WATT tower, while Pleegzorg Provincie Antwerpen purchased the 5,300 sq m Rumbold in Mechelen.
Close to 50% of take-up took place in Grade A buildings. Indeed, new quality offices will continue to drive take-up in Flanders, such is the scale of demand for Grade A spaces.
FLANDERS TAKE-UP PER DISTRICT, 000s SQ M
400 300 200 100
0 2018 Antwerp
2019
2020
Ghent
2021
Mechelen
H1 2022 Leuven
FLANDERS NEW DEVELOPMENTS AND PIPELINE, 000s SQ M
200
2022 a key year for new deliveries. So far, 45,000 sq m of much sought-after new spaces have been delivered this year, including close to 15,000 sq m in Mechelen and Leuven. Furthermore, as much as 124,000 should be delivered in H2, meaning 2022 will be a landmark year for new deliveries. Key Q2 deliveries include Green Court in Ghent (7,000 sq m), Hendrik & Co in Mechelen (4,500 sq m), and Bio-Incubator 4 (also 4,500 sq m), part of the Arenberg Accelerator scheme in Leuven. Many key deliveries will take place in Antwerp and Ghent in H2, including the first phases of the refurbishment of Century Center (Antwerp) and Upoffiz (Ghent).
100 0
Antwerp
Ghent
Mechelen
Leuven
Stable prime rents ahead of likely increase by the end of the year.
FLANDERS RENTS, EUR/SQ M/YEAR
Prime rents remain stable (EUR 165/sq m/year in Antwerp and Ghent), ahead of a likely increase by the end of the year with the arrival of new developments and the high-inflation context where increased costs will be transferred to occupiers to an extent.
180
Pipeline Flanders
160 140
Average weighted rents increase to EUR 132/sq m/year for H1 thanks to the weight of Grade A deals in Q2.
120 100 2018 2019 Antwerp Mechelen Flanders average
2020
2021 H1 2022 Ghent Leuven
M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2022 A quiet year so far in Wallonia, in line with forecasts. Despite having recorded its best quarter of take-up (9,500 sq m) in a year, Q2 activity remained subdued in Wallonia, against its 19,000 sq m five-year average. This brings total take-up in Walloon markets to 14,000 sq m in H1 2022, thus in line with our forecast of a calm year for the region. On a positive note, no markets trended downwards this quarter, with Namur even recording its best quarter in 18 months, leading Walloon take-up with 5,000 sq m. This was mainly thanks to a 4,000 sq m own-occupation purchase by educational institution Haute École Albert Jacquard of a building from ING in the city centre.
WALLONIA TAKE-UP PER DISTRICT, 000s SQ M
150 100 50 0 2018
Liège
One other deal over 1,000 sq m was recorded, a 1,200 sq m purchase by BHT in Liège.
Calm delivery pipeline ahead of dynamic 2023. The delivery pipeline for the second half of 2022 in Wallonia is similarly under average, with close to 15,000 sq m of mainly turnkey or pre-let projects announced. So far, though, 45,000 sq m have already been delivered this year, a close amount to the total for the whole of 2021. Key developments have included Befimmo’s Paradis Express in Liège, and IRET’s Namur Crosspoint in Namur during Q1.
2019
2020
Namur
2021
H1 2022
Charleroi
WALLONIA NEW DEVELOPMENTS AND PIPELINE, 000s SQ M
200 150 100 50 0
In contrast, 2023 will be a dynamic year which will see as much as 146,000 sq m of new projects delivered including a healthy number of speculative deliveries, mainly in Liège. These will include Liège Airport’s Tour Escale.
Liège
Namur
Charleroi
Average rents decrease under presssure of Grade C take-up.
WALLONIA RENTS, EUR/SQ M/YEAR
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.
180
The average weighted rent decreases to EUR 132/sq m/year with Grade C deals corresponding to close to half the current take-up this year.
140
Pipeline Wallonia
160
120 100 2018
2019
Liège Charleroi
2020
2021
H1 2022
Namur Wallonia average
M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2022
The main investment this quarter was the EUR 13 million acquisition by Kadans Science Partner of the Intarsia building in Leuven’s Arenberg science park. The life sciences sector remains highly sought after in the wake of the global pandemic, although complex to get a foothold in.
ANNUAL INVESTED VOLUMES, EUR M
800 600 400 200 0 2018 2019 Flanders
In Namur, Haute École Albert Jacquard purchased ING’s former offices on Rue Godefroid in an ownoccupation deal for some EUR 4 million. Inflation could make assets in regional markets attractive. In the current high inflation context, there appears to be more willing sellers than buyers generally. However, attractive prime yields in regional markets offer a potentially interesting spread compared to Brussels.
Currently at 5.25% (Flanders), and 6.75% (Wallonia), we revise our previous yield forecast and now expect a broad 25 bps increase across regional markets by the year end, also owing to the current inflationary context.
35 30 25 20 15 10 5 0 2020 Wallonia
2021
H1 2022 # deals (RHS)
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 Q2 2022
Investments led by a life sciences purchase in Leuven. Another six deals have been recorded across regional markets in Q2, including several for which the acquisition price was not disclosed. The total recorded investment volume in Q2 was EUR 17 million, bringing the current total in 2022 to EUR 216 million on the back of a very strong Q1.
Prime yield Flanders
Prime yield Wallonia
M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2022 MARKET STATISTICS REGION
MARKET
BUILT STOCK (SQ M)
AVAILABILITY (SQ M)
VACANCY RATE
Q2 2022 TAKE-UP
H1 2022 TAKE-UP
H2 2022-2025 PIPELINE (SQ M)
PRIME RENT (EUR/SQ M/YEAR)
PRIME YIELD
Antwerp
2,230,000
231,000
10.38%
19,000
37,000
172,000
165
5.25%
Ghent
1,116,000
49,000
4.40%
17,000
30,000
86,000
165
5.25%
Leuven
585,000
n.a.
n.a.
300
2,300
35,000
153
6.50%
Mechelen
367,000
n.a.
n.a.
10,000
21,000
14,000
155
6.50%
Liège
546,000
25,000
4.62%
2,600
5,100
90,000
160
6.75%
Namur
545,000
34,000
6.30%
5,000
5,400
86,000
160
6.75%
Charleroi
495,000
10,000
2.02%
2,000
3,900
88,000
145
7.00%
Flanders
Wallonia
KEY OCCUPIER TRANSACTIONS Q2 2022 PROPERTY Polytoren
MARKET
TENANT
SIZE (SQ M)
TRANSACTION TYPE
Ghent
Domo Investment Group
7,000
Development
Antwerp
iO
6,000
Purchase
Mechelen
Pleegzorg Provincie Antwerpen
5,000
Purchase
Godefroid 54
Namur
Haute École Albert Jacquard
4,000
Purchase
Blue Towers
Ghent
Hudson
3,300
Letting
Antwerp
ZNA
2,000
Letting
WATT Rumbold
Vanbreda Building
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 Q2 2022 PROPERTY
Intarsia-gebouw Godefroid 54
SUBMARKET
BUYER / SELLER
SQ M
PRICE, EUR M
Leuven
Kadans Science Partner / Van Roey Vastgoed
5,560
13
Namur
Haute École Albert Jacquard / ING
4,000
4
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