M A R K E T B E AT
BELGIUM Retail Q4 2021
481,000 sq m
-
2021 Take-up
1,550 €/sq m/y. High Street Prime Rent
4.35%
High Street Prime Yield Source: Cushman & Wakefield
BELGIAN ECONOMIC INDICATORS YoY Chg
5.8% 2021 GDP Growth
6.4% Unemployment rate
2.4% Consumer Price Index Source: Moody’s Analytics, September 2021
12-Mo. Forecast
12-Mo. Forecast
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.
Consumers’ confidence index on the decrease since October 2021. 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. 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. GDP GROWTH AND UNEMPLOYMENT RATE
CONSUMERS’ CONFIDENCE INDEX
10 %
10
8%
5
6%
0
4% 2%
-5
0%
-10
-2%
-15
-4%
-20
-6%
-25
-8% 20 15
20 16
20 17
20 18
GDP Gro wth
20 19
20 20
20 21
20 22
20 23
Un empl oymen t Ra te
20 24
-30 01-15 04-15 07-15 10-15 01-16 04-16 07-16 10-16 01-17 04-17 07-17 10-17 01-18 04-18 07-18 10-18 01-19 04-19 07-19 10-19 01-20 04-20 07-20 10-20 01-21 04-21 07-21 10-21 01-22
YoY Chg
M A R K E T B E AT
BELGIUM Retail Q4 2021 New record for the occupational retail market thanks to Out of Town Retail activity.
TAKE-UP BY QUARTER (000s sq m) 500
Despite a rapidly changing landscape, the retail occupational market records a robust end of the year with 140,000 sq m of take-up. This brings the total take-up of 2021 to a new record of 481,000 sq m.
400 300
Following the brutal stop caused by the pandemic, retailers have revised their strategy these last months and they are now implementing it with a very positive effect on the take-up. Out of Town Retail is driving activity with more than 325,000 sq m of take-up recorded in 2021 (67% of the activity), an historical level thanks to the opening of new schemes (La Parenthèse, Malinas, La Couvinoise) and the expansion of discounters, food retailers and furniture retailers. Increasing activity has also been witnessed in the High Streets and Shopping Centres, with respective 105,000 sq m and 50,000 sq m of take-up. In the Shopping Centres specifically, activity was mainly driven by Les Grands Prés, Westland and Wijnegem. Westland successfully attracted Peek & Cloppenburg and leisure activities thanks to a strong renovation. In these two segments, F&B operators are the most active despite the pandemic. This impressive rebound in activity is also visible in number of transactions, which is 25% above the least years despite the continuous growth of the online retail and changing consumers’ habits.
200 100 0 2015
2016
2017 Q1
2018 Q2
Q3
2019
2020
2021
2020
2021
Q4
TAKE-UP BY SEGMENT (000s sq m) 500 400 300 200 100
Flanders and Wallonia activity above average.
0 2015
2016 Out of Town
In 2021, Flanders recorded a strong activity (286,000 sq m of take-up), the best level since 2015 and a rise of 35% compared to 2020, thanks to the opening of recent schemes such as Malinas, a better purchasing power of the population and a better recovery of the footfall which are amongst the key factors for a retailer to open a new store. Wallonia also observed a strong rise of the activity with 143,000 sq m of take-up (+ 41% compared to 2020) thanks to strong performances in the different shopping centres of the Region namely. Activity was more stable in Brussels with around 52,000 sq m of take-up, an increase of 10% compared to 2020 and an activity in line with the past years.
2017
2018
High St reet
2019
Shopping Centre
TAKE-UP BY REGION (000s sq m) 100 % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2015
2016 2017 2018 Brussels Flanders
2019 2020 Wallonia
2021
M A R K E T B E AT
BELGIUM Retail Q4 2021
According to information collected by our partner MyTraffic, footfall across High Streets and Shopping Centres are witnessing a positive recovery since the ease of containment measures in April 2021. Shopping centres experience a stronger recovery and record a footfall level similar to pre-COVID-19 in December 2021, benefitting from year-end purchases and rainy days. In the High Streets segment, the situation is also enhancing since April 2021. Globally for Belgium, the footfall level is now 15% lower to pre-COVID, though very different situations are observed between Regions. Situation should continue to rise in the coming months.
FOOTFALL INDEX (Base = 100 in January 2020) 120 100 80 60 40 20 0 01-20 02-20 03-20 04-20 05-20 06-20 07-20 08-20 09-20 10-20 11-20 12-20 01-21 02-21 03-21 04-21 05-21 06-21 07-21 08-21 09-21 10-21 11-21 12-21
Shopping centres footfall are back to pre-COVID levles.
Shopping Centres
Prime rental levels have all been impacted by the COVID-19 crisis. However, they seem to have now staibilised as no changes are observed compared to Q3 2021. For the High Streets segment, the COVID-19 outbreak reinforced the correction observed since 2017 with successive decreases observed. Prime rents for the High Street segment are now at 1,550 EUR/sq m/year, stable compared to Q3. According to our forecasts, stability is expected all along 2022 and prime rental levels are expected to rise gradually again as from 2023. They should stand at 1,650 EUR/sq m/year by 2024. In the Shopping Centre segment, prime rents remained stable since March 2020 at 1,150 EUR/sq m/year. Stability is expected in the coming months and a slight though continuous increase is also awaited as from mid2022. Conversely to the High Street and Shopping Centre, prime rents are more stable in the Out of Town segment. They currently stand at 160 EUR/sq m/year and are expected to remain stable all along 2022. They should also increase as from 2023, confirming the good health of the market segment as observed in take-up figures.
Source: MyTraffic.io Note: High Streets index based on 15 High Streets across Belgium; Shopping Centres Index based on 12 Shopping Centres across Belgium
PRIME RENT BY SECTOR (EUR/SQ M/YEAR) 22 50 20 00 17 50 15 00 12 50 10 00 75 0 50 0 25 0 0
25 0 23 0 21 0 19 0 17 0 15 0 13 0
20 15 20 16 20 17 20 18 20 1 Q 9 1 20 Q 2 2 Q 0 3 2 Q 0 4 2 Q 0 1 2 Q 1 2 2 Q 1 3 2 Q 1 4 21 20 22 20 23 20 24 20 25
No changes in the prime rents compared to Q3. Stability expected all along 2022.
High St reet s
Hi gh Street
Sho ppi ng Ce ntre
Out o f Town R etail
Note: High Street and Shopping Centre are to be read on the left axis, OOTR on the right-hand axis
M A R K E T B E AT
BELGIUM Retail Q4 2021 A low 496 MEUR invested in 2021. Strong pipeline expected in 2022. Conversely to the occupational market which observed record level in 2021, activity on the investment market reached a low 496 MEUR invested, despite a more active Q4. Investment volumes demonstrate the regearing of investors towards Out of Town as in contrast to High Streets. No Shopping Centres transactions have been observed this year. The Out of Town retail market is going full steam ahead, which is having a positive effect on the investment market. The presence of food retailers played as a strong catalyst for investing in this asset class. In the High Streets of the country, some significant transactions were observed in 2021, namely in the Steenstraat, the Chaussée d’Ixelles or the Schuttershofstraat.
INVESTMENT VOLUME BY SEGMENT (in MEUR) 2 500
2 000
1 500
1 000
500
0 2015
Despite these mitigated performances, we await a gradual recovery of the investment market in 2022, probably gaining force in the second part of the year.
2016 2017 2018 Out of Town High St reet
2019 2020 Shopping Centre
2021
PRIME YIELD BY SEGMENT
Prime yields stable in Q4 21. New compression awaited as from 2023.
7% 6%
They probably reached a peak in 2021 and should remain stable at these levels all along 2022. As from 2023, we forecast gradual though light compressions of the prime yields in the different market segments as a positive result of a willingness to invest in the retail market.
5% 4% 3% 2% 1% 0% -1% 20 15 20 16 20 17 20 18 20 1 Q 9 12 Q 0 2 2 Q 0 3 2 Q 0 4 20 Q 12 Q 1 2 2 Q 1 2 2 Q 1 3 2 Q 1 4 21 20 22 20 23 20 24 20 25
After several corrections these previous months, prime yields in the different sectors witnessed no changes in Q4 2021. They currently stand at 4.35% in the High Street, 4.65% in the Shopping Centres and 5.60% in the Retai Parks.
Out of Town
High St reet
Shopping Centre
10y. Bond Yields
M A R K E T B E AT
BELGIUM Retail Q4 2021 New concepts and newcomers should drive the market in 2022. Despite unprecedented context, international brands as well as local concepts are willing to expand in Belgium. In the Food & Beverage sector, new food experiences, strongly linked to clients’ willingness to share their experience on social networks will contribute to fast expansions in the coming months. We will therefore assist to a multiplication and a gourmetisation of food concepts. The Fashion segment has been severely impacted in the beginning of the COVID-19 crisis but is now witnessing a rebound in activity as some important international brands are willing to optimise and/or expand their portfolio. Benefitting especially to the Out of Town Retail market, discounters as well as DIY or Decoration and Home Furnitures retailers remain amongst the most active in the retail landscape and will continue to boost the activity. Other brands, active in the Electro & Telecom segment, namely Samsung, Hubside or Miele are also adopting a new strategy, willing to increase their visibility on some iconic locations and to focus on clients’ experience to differentiate themselves from the competition.
CEDRIC VAN MEERBEECK Head of Research & Marketing | Belgium & Luxembourg +32 2 629 02 86 / cedric.vanmeerbeeck@cushwake.com
The retail market, both on the occupational and investment side, is expected to continue its reshaping and should record robust activity all along 2022.
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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. ©2019 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.