Q1-2021 | Regional Office Marketbeat | Belgium

Page 1

M A R K E T B E AT

BELGIUM REGIONAL Office Q1 2021

YoY Chg

12-Mo. Forecast

Overview Economic growth has been severely hit in 2020 (-8%). due to higher unemployment, subdued external demand and a limited fiscal response. It should observe a strong rebound in 2021 (around 3.5%) and remain positive, though at a gradually decelerating rate up to 2023. The unemployment rate will continue to rise in 2021 as a direct consequence of the COVID-19 outbreak. As from 2022, situation is expected to improve with new job creations (close to 46,000 in 2022 and 47,000 in 2023).

81K Take-up sq m (YTD)

165

Occupier focus

Prime rent, (EUR/sq m/year)

Flanders Q1 take-up amounted to more than 62,000 sq m across 70 deals, demand was high compared to historical quarterly levels. Major movers were the higher education sector with both UGent and KU Leuven in the mix. The pandemic should continue to impact the market negatively, but the speculative pipeline is healthy for coming years and could entice certain occupiers to move to more efficient spaces. Notable projects include TheM (Intervest Office & Warehouses, 14,000 sq m) or the renovation and new buildings of Century Center’s offices by Baltisse over several phases (Pelican, Arto and Novo, more than 13,000 sq m in total) in Antwerp, or Green Court (Baltisse), Upoffiz (Upgrade Estate) or Networks Gent One and Two (Banimmo, 15,000 sq m) in Ghent. Meanwhile, Wallonia activity in Q1 was more than 18,000 sq m across only 10 deals, including - crucially - the awaited announcement of Ethias’ new headquarters in Liège (15,000 sq m). Prime rents remain stable at EUR 165/sq m/year in Antwerp joined by Ghent at this level this quarter, and EUR 160/sq m//year in Liège and Namur

5.25% Prime yield (3/6/9 lease)

ECONOMIC INDICATORS Q1 2021 YoY Chg

12-Mo. Forecast

3.5% 2021 GDP Growth

7.4% Unemployment Rate

1.7%

Investment focus More than EUR 62 million have been invested in regional office markets during Q1 – a pretty standard start to the year, dominated by own occupier activity in Flanders, and Antwerp in particular, including a purchase by KULeuven of The Edge, a project developed by Alphastone, for EUR 19 million. Prime yields remain stable at 5.25% in these specialist market.

Outlook Prime yields are forecasted to sharpen to 5.15% by the end of the year given the increased interest in these markets of late, coupled with some quality assets arriving on the market. We expect occupier demand to be subdued and prime rents to remain stable.

Consumer Price Index

TAKE-UP, SQ M

INVESTMENT VOLUME PER REGION, EUR M

400,000

800

35 30

Source: National Bank of Belgium, and Eurostat April 2021

300,000

600

25 20

200,000

400

100,000

200

0

0

15 10 5

2017

2018

Flanders regional markets

2019

2020

Q1 2021

Wallonia regional markets

0 2017 2018 2019 Flanders regional markets # deals (RHS)

2020 Q1 2021 Wallonia regional markets


M A R K E T B E AT

BELGIUM REGIONAL Office Q1 2021 MARKET STATISTICS REGION

MARKET

BUILT STOCK (SQ M)

AVAILABILITY (SQ M)

VACANCY RATE

Q1 2021 TAKE-UP

2021-2024 PIPELINE (SQ M)

PRIME RENT (EUR/SQ M/YEAR)

PRIME YIELD

Antwerp

2,232,000

224,000

10.01%

25,000

187,000

165

5.25%

Ghent

1,093,000

43,000

3.97%

21,000

91,000

165

5.25%

Leuven

561,000

n.a.

n.a.

2,600

31,000

150

6.50%

Mechelen

325,000

n.a.

n.a.

14,000

41,000

150

6.50%

Liège

506,000

14,000

1.14%

17,000

96,000

160

6.75%

Namur

517,000

30,000

5.90%

600

95,000

160

6.75%

Charleroi

453,000

14,000

3.02%

700

77,000

135

7.00%

Flanders

Wallonia

KEY OCCUPIER TRANSACTIONS Q1 2021 PROPERTY

MARKET

Rives Ardentes – Ethias Bautersemstraat 68 Technologiepark-Zwijnaarde 88 The Edge

TENANT

SIZE (SQ M)

TRANSACTION TYPE

Liège

Ethias

15,000

Pre-letting

Mechelen

SD Worx

11,000

Purchase

Ghent

Ugent

10,000

Purchase

Antwerp

KU Leuven

6,800

Purchase

Networks Ghent TWO

Ghent

Esko

5,000

Pre-letting

Forum

Ghent

Oyssemolen

2,200

Purchase

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

cushmanwakefield.com

*Renegotiations not included in leasing statistics

KEY SALES TRANSACTIONS Q1 2021 PROPERTY

SUBMARKET

SELLER / BUYER

SQ M

PRICE, EUR M

Mechelen

SD Worx / FNG Group

11,000

25

The Edge

Antwerp

KU Leuven / Alphastone

6,800

19

Prins Boudewijnlaan 23

Antwerp

License to Construct / Tribeca Capital Partners

9,700

15

Bautersemstraat 68

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.

©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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