M A R K E T B E AT
BELGIUM Industrial Q4 2021 YoY Chg
12-Mo. Forecast
1,075 (L) 1,400 (SI) Take-up (2021) (000s sq m)
Belgian economy performed well in 21. Stability awaited in the medium term. In the last quarter of 2021, economic growth increased to 5.8% which means that for the first time since the outbreak of the COVID-19 pandemic, the pre-crisis level of economic activity was reached and even slightly exceeded. Growth levels should stabilise to 2.2% in 2022 and 2.6% in 2023. The unemployment rate peaked at 6.4% at the end of 2021 and should decrease slowly around 5.5% in 2022 and 5.2% in 2023. It is expected that a lot of temporarily unemployed people will resume work in the early of 2022 or will be able to find new jobs.
60 (L) 63 (SI) Prime rent, (EUR/sq m/year)
Inflation on the rise in 2022. Important issues are also related to core inflation which stands at 2.4% in 2021 and is projected at 4.2% in 2022. 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.
4.00 (L) 5.80 (SI) Prime yield (%, 3/6/9 lease) L: Logistics SI: Semi-industrial
ECONOMIC INDICATORS Q4 2021 YoY Chg
5.85%
12-Mo. Forecast
After having increased sharply from May to September 2021 on the back of a successful vaccine rollout in Belgium, along with the relaxing of constraining measures surrounding COVID-19, consumer confidence index is again on the downside since October. The Belgian population is more cautious namely due to the different variants of the COVID outbreak and growing energy prices.
2021 GDP Growth
6.36%
GDP GROWTH AND UNEMPLOYMENT RATE
EXPECTED INFLATION UP UNTIL 2025
2021 Unemployment Rate 10%
4.5%
8%
4.0%
6%
2.44%
4%
Consumer Price Index
2%
Sources: Moody’s Analytics, BNB, Eurostat, January2022 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.
3.5% 3.0% 2.5%
0% -2%
2.0%
-4%
1.5%
-6%
1.0%
-8% 2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
0.5% 0.0%
GDP Growth
Unemployment Rate
Sources: Moody’s Analytics, BNB, Eurostat, January2022
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sources: Moody’s Analytics, BNB, Eurostat, January2022
M A R K E T B E AT
BELGIUM Industrial Q4 2021 The best semi-industrial year on record, despite tough circumstances. Despite ramifications from the global health crisis, semi-industrial activity soared to a new record level of takeup and number of deals recorded in 2021 with as much as 1,400,000 sq m and close to 1,100 occupier transactions. For reference, the previous best was 2019 (i.e., just before the pandemic), with 1,121,000 sq m. Much is owed to a record Q4 (553,000 sq m), with various reports of strong increases in the number of SMEs created, and employment in SMEs providing a backdrop of strong fundamentals in this segment. Demand in Flanders more than ever came to the fore with a 72% share of take-up over 2021, and a record year for the region in terms of absolute take-up (1,002,000 sq m). That is not to downplay the strong demand also noted in the wider Brussels area (its second-best year on record with 213,000 sq m), while Wallonia takeup was in line with its five-year average with 186,000 sq m.
SEMI-INDUSTRIAL TAKE-UP PER REGION, 000s SQ M 1,600 1,400 1,200 1,000 800 600 400 200 0
1,500 1,000 500 0 2017 Flanders Wallonia
2018
2019
2020
2021
Brussels (incl. Brabants) Deals (RHS)
Owner-occupier deals amounted to close to 55% of take-up in 2021, boosted by some above-average deals. Indeed, only one of the 16 deals above 10,000 sq m which took place was a letting – the rest were purchases or developments. Deals of the larger variety ensured Q4 ended the year on a high note. Three out of the six deals over 20,000 sq m took place this quarter. This in a sector which usually concerns warehouses up to 5,000 sq m in size. More details on this can be found on the final page of this report. Cost of construction increases semi-industrial rents. The prime rent has remains at a stable level of EUR 63/sq m/year since 2019 and is found in Brussels where supply is rare and demand strong. Due to this and factors such as increased construction costs, a minor increase can be expected in 2022. This increase of costs is especially reflected in the average weighed rents which have increased quite substantially in 2021 to a high of EUR 45/sq m/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
2021
M A R K E T B E AT
BELGIUM Industrial Q4 2021 A record Q4 brings logistics to its second-best year of take-up. After a shaky Q1-Q3 period where logistics demand was rather subdued, much was required in Q4, traditionally the most dynamic quarter any year in terms of take-up. In 2021, this trend was underscored in the strongest fashion with a record level of quarterly take-up – 638,000 sq m. Almost half the number of deals (43 out of 82) recorded in 2021 took place in Q4 alone. This brought the total for 2021 to 1,075,000 sq m – the second-best year in our records (behind 2019), and one which had not especially been expected to surpass 2020. Indeed, 2020 can be regarded as the year ecommerce finally made a strong imprint on the Belgian logistics landscape.
LOGISTICS TAKE-UP PER REGION, 000s SQ M 1,500
120
1,000
70
500
20
0
Large deals and where to find them. Close to a dozen transactions over 20,000 sq m were noted in Q4, including a mammoth 150,000 sq m development by H. Essers in Lommel (Limburg), one of the largest recorded over this past decade. The top ten largest deals recorded in 2021 were all recorded in East Flanders (with the North Sea Port area doing particularly well), Limburg and Liège. It is in these types locations that we expect larger developments to continue to take place, with little land on this scale available on the Brussels-Antwerp axis. Cautious approach central to development strategies… More than 500,000 sq m will be added to the stock in 2022, with 589,000 sq m having been delivered in 2021, on the back of three particularly dynamic years in terms of demand. More than 75% of the pipeline in 2022 is composed of pre-let or turnkey projects, with a cautious approach still central to most developers’ strategy. This is further underlined by the number of projects with no announced delivery date (totaling 498,000 sq m), many of which await a committed occupier before launching construction works. … and resulting in low vacancy. Resulting from the contrast between high demand and restrained development strategies, the availability rate for logistics in Belgium is at 1.23% at the end of Q4 2021, leaving occupiers with very little choice – if any at all – when on the hunt for existing new spaces.
2017 Flanders Wallonia
2018
-30 2020 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 80
Logistics prime rent increases for the first time in years. In 2021, the prime rent has increased for the first time since 2015 to EUR 60/sq m/year, on the back of established strong demand, and increasing costs. This has been the case across all three industrial regions, and further marginal increases are expected in 2022. Average rents follow this upward trend and end 2021 on EUR 44/sq m/year.
60 40 20 0 2017
2018
Logistics prime
2019
2020
2021
Mobile weighted average logistics
M A R K E T B E AT
BELGIUM Industrial Q4 2021 Largest-ever logistics investment ensures year ends well. Approximately EUR 255 million were invested in semi-industrial and logistics property during Q4, bringing the total for 2021 to EUR 436 million across more than 30 deals. The largest logistics investment ever recorded in Belgium took place in Q4 - the EUR 180 million acquisition of Ghent Logistics Campus by CBREIM from Heylen Warehouses, materialising international investors’ mentioned interest in this asset class at an unprecedented scale. Demand in this asset class remains very strong, however there is little to chew on, with many owners sitting on their assets. Elsewhere, MARK (ex-Meyer Bergman), acquired a 20,000 sq m shed in Flemish Brabant for a new pan-European fund directed at last-mile logistics for EUR 17.5 million. EUR 57.5 million worth of semi-industrial warehouses were purchased in Q4, including a pair of sale & leaseback transactions, not the most common occurrence in this asset class, as well as a EUR 30 million purchase by Baltisse to acquire Aartselaar Business Estate (Antwerp district) from CBREIM.
ANNUAL INVESTED VOLUMES, EUR M 800
50 40
600
30
400 20 200
10
0
0 2017 Logistics
2018
2019
2020
Semi-industrial
2021 # deals (RHS)
PRIME INDUSTRIAL YIELDS 8.00% 7.00% 6.00% 5.00% 4.00% 3.00%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 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
Yields continue to sharpen. As a result of the supply and demand imbalance, logistics prime yields have continued to sharpen throughout 2021, ending at a level of 4.00%, with further compressions expected in 2022 and 2023. The long-term prime yield for Belgian logistics is currently 3.50% and will follow the same trend. The semi-industrial prime yield is currently 5.80% and could also continue to sharpen due to demand and elevated construction costs.
Logistics
Semi-industrial
M A R K E T B E AT
BELGIUM Industrial Q4 2021 MARKET STATISTICS REGION
BUILT STOCK (SQ M)
Q4 2021 TAKE-UP (SQ M)
2021 TAKE-UP (SQ M)
PRIME RENT (EUR/SQ M/YEAR)
PRIME YIELD (%)
LT PRIME YIELD (%)
Flanders
19,578,000 (L) 10,520,000 (SI)
526,000 (L) 416,000 (SI)
833,000 (L) 1,002,000 (SI)
51 (L) 63 (SI)
4.00 (L) 5.80 (SI)
3.50 (L)
Brussels (incl. Brabants)
2,407,000 (L) 3,352,000 (SI)
47,000 (L) 93,000 (SI)
98,000 (L) 213,000 (SI)
60 (L) 60 (SI)
4.00 (L) 5.80 (SI)
3.50 (L)
Wallonia
3,788,000 (L) 2,573,000 (SI)
66,000 (L) 44,000 (SI)
143,000 (L) 186,000 (SI)
45 (L) 52 (SI)
4.15 (L) 6.20 (SI)
3.50 (L)
L: Logistics SI: Semi-industrial
KEY OCCUPIER TRANSACTIONS Q4 2021 PROPERTY
BUILDING TYPE
MARKET
TENANT
SIZE (SQ M)
TRANSACTION TYPE
H. Essers Seveso site - Kristalpark 3 MG New Docks
Logistics
Limburg
H. Essers
150,000
Development
Logistics
East Flanders
Eutraco
70,000
Pre-letting
ex-Balmatt site (Hexaport)
Semi-industrial
East Flanders
ABOG
29,000
Purchase
Europarklaan
Logistics
Limburg
Harley Davidson
26,000
Letting
Garden Trade International, Kieleberg
Logistics
Limburg
Garden Trade International
25,000
Development
*Renegotiations not included in leasing statistics
KEY INVESTMENT TRANSACTIONS Q4 2021 PROPERTY
SUBMARKET
BUYER / SELLER
SQ M
PRICE, EUR M
Ghent Logistics Campus
East Flanders
CBREIM / Heylen Warehouses
176,000
180
Antwerp
Baltisse / CBREIM
31,000
30
Flemish Brabant
MARK / Sentipharm
20,000
17.50
Aartselaar Business Estate Leuvensesteenweg 242 Langerbruggestraat
East Flanders
ABOG / Hexagon
29,000
11
Publiganda warehouse
East Flanders
Montea / Expologic
8,000
7.50
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 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.
cushmanwakefield.com