M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2020
YoY Chg
12-Mo. Forecast
123K Take-up sq m (YTD)
165 Prime rent, (EUR/sq m/year)
Occupier focus
5.50% Prime yield (3/6/9 lease)
ECONOMIC INDICATORS Q2 2020 YoY Chg
-8.7% GDP Growth Belgium
Overview Following the heavy economic blow caused by the coronavirus-related lockdown, indicators and surveys confirm activity is now rebounding. In particular, surging expectations in both business and consumer confidence surveys support the view that recovery is underway. Oxford Economics’ GDP growth forecast indicated that the Belgian economy will contract by 8.7% this year followed by a rebound in 2021 when a 7.1% growth is expected. However, subsequent growth (up to mid-2022) will be much more gradual as higher unemployment (forecasted at 6.6% for 2020), subdued external demand, delayed investment plans and a limited fiscal response due to the return of the political deadlock, will slow the recovery.
12-Mo. Forecast
A headline take-up figure close to 63,000 sq m in regional markets was pretty solid during a Q2 which has seen the economy marred by the consequences of the health crisis. Additionally, Wallonia (44,000 sq m) outweighed Flanders (18,000 sq m) in the take-up stakes, which is a rare occurrence. This has been underpinned by large movements in Namur (Wallonia’s administrative capital), with the very long awaited confirmation of the attribution of the Palais de Justice contract to a consortium led by AG Real Estate. The result is a 35,000 sq m pre-letting by the Belgian State. Also in Namur, Baltisse’s AXS project registered a first marquee occupier – Croix Rouge Belgique has agreed to prelet close to 5,000 sq m. Although things have been quieter in Flanders, some large transactions have also been rubberstamped, such as Afas Belgium’s 3,400 sq m purchase in Gate 7 (Antwerp) or a 1,000 sq m letting by Huawei in AA Toren (Ghent). Prime rents have remained stable: Flanders is led by Antwerp (EUR 165/sq m/year), while Wallonia is led by Liège and Namur jointly (EUR 160/sq m/year).
Investment focus Q2 saw the largest total investment volume in a year with more than EUR 88 million invested, including EUR 75 million in Flanders, largely attributable to a landmark purchase by Belfius of MG Business Center in Ghent. The prime yield remains at 5.50%, albeit we continue to monitor it closely due to strong interest in regional office markets.
6.3% Belgium Unemployment Rate
0.4%
Outlook An important decrease in the number of occupational transactions must be taken as a note of caution for what the market holds in store over the coming months. On the other hand, interest in investing in regional markets prime assets is undeterred. TAKE-UP, SQ M
INVESTMENT VOLUME PER REGION, EUR M
Belgium Consumer Price Index
400,000
400
Source: Oxford Economics
300,000
300
200,000
200
100,000
100
0 2016
2017
Flanders regional markets
2018
2019
H1 2020
Wallonia regional markets
0 2016
2017
Flanders regional markets
2018
2019
H1 2020
Wallonia regional markets
M A R K E T B E AT
BELGIUM REGIONAL Office Q2 2020 MARKET STATISTICS REGION
MARKET
BUILT STOCK (SQ M)
AVAILABILITY (SQ M)
VACANCY RATE
Q2 2020 TAKE-UP
YTD TAKE-UP (SQ M)
2020-2023 PIPELINE (SQ M)
PRIME RENT (EUR/SQ M/YEAR)
PRIME YIELD
Antwerp
2,293,000
128,000
5.60%
12,000
28,000
149,000
165
5.50%
Ghent
1,073,000
42,000
3.89%
5,000
13,000
92,000
160
5.50%
Leuven
561,000
n.a.
n.a.
300
1,600
27,000
150
6.50%
Mechelen
325,000
n.a.
n.a.
1,200
1,400
5,000
150
6.50%
Liège
495,000
1,000
3.23%
660
24,000
100,000
160
6.75%
Namur
513,000
2,700
6.00%
41,000
53,000
93,000
160
6.75%
Charleroi
442,000
2,800
2.71%
2,000
2,000
36,000
135
7.00%
Flanders
Wallonia
KEY OCCUPIER TRANSACTIONS Q2 2020 PROPERTY
MARKET
TENANT
SIZE (SQ M)
TRANSACTION TYPE
Palais de Justice Namur
Namur
Régie des Bâtiments
35,000
Pre-letting
AXS Namur
Namur
Croix Rouge de Belgique
5,000
Pre-letting
Gate 7
Antwerp
Afas Belgium
3,400
Purchase
Bexstraat 20
Antwerp
Family Justice Center
2,700
Letting
Rue Camille Hubert 1
Namur
Odontolia
1,900
Purchase
Kontichsesteenweg 42
Antwerp
DB Videoproductions
1,000
Purchase
Ghent
Huawei Technologies Belgium
1,000
Letting
AA Toren *Renegotiations not included in leasing statistics
KEY SALES TRANSACTIONS Q2 2020 PROPERTY MG Business Center Atealaan 34
SUBMARKET
SELLER / BUYER
SQ M
PRICE, EUR M
Ghent
MG Real Estate / Belfius
10,000
45
Herentals
Gencor / Intervest Offices & Warehouses
7,300
11
KEY CONSTRUCTION COMPLETIONS Q2 2020 PROPERTY En Féronstrée 54 (casco)
SUBMARKET
MAJOR TENANT
SQ M
Liège
/
11,500
OWNER / DEVELOPER LCP Développement Immobilier
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
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