M A R K E T B E AT
BELGIUM REGIONAL Office Q4 2021 Belgian economy performed well in 21. Stability awaited in the medium term. YoY Chg
12-Mo. Forecast
241K Take-up sq m (2021)
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.
165 Prime rent, (EUR/sq m/year)
5.25%
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.
Prime yield (3/6/9 lease)
ECONOMIC INDICATORS Q4 2021 YoY Chg
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.
12-Mo. Forecast
5.85% 2021 GDP Growth
6.36% 2021 Unemployment Rate
2.44% Consumer Price Index
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. GDP GROWTH AND UNEMPLOYMENT RATE
EVOLUTION RATE OF EMPLOYMENT BY SECTOR
10%
4.5%
8%
4.0%
6%
3.5%
4%
3.0%
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.
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 REGIONAL Office Q4 2021 Record year for Ghent marks beginning of the recovery for Flanders regional markets.
FLANDERS TAKE-UP PER DISTRICT, 000s SQ M
Having ended the year with a standard Q4 in terms of office activity with 43,000 sq m of take-up, it is fair to say that 2021 marked the beginning of the recovery for Flanders offices with a total of 192,000 sq m in take-up on the back of a complicated 2020.
400
The recovery was keenly felt in Antwerp (96,000 sq m in 2021), Flanders’ main market, while Ghent has registered a record year for take-up with 69,000 sq m. The year in Flanders started with a bang in Q1 – its best quarter this year, thanks to several large deals. The deals became more numerous quarter by quarter, albeit also smaller in size on average, to the extent that no deals above 2,000 sq m were noted in Q4, with the largest being a 1,700 sq m letting by a fitness company in an office building in Antwerp’s Singel district (more details on the final page of this report).
200
Strikingly, out of the ten largest deals recorded this year (totaling 64,000 sq m), nine were linked to Grade A spaces, mostly in pre-letting scenarios. This demonstrated occupiers’ enthusiasm for large, quality spaces (even if less large than the occupier’s previous premises), as they are often well though out in terms of layout, ventilation etc. – i.e., crucial components of the post-COVID workplace. Additionally, the public sector as an occupier was almost totally absent from the take-up. The year’s largest deal was the purchase for own occupation by SD Worx of FNG’s previous headquarters in Mechelen (11,000 sq m), followed closely by UGent’s purchase of 10,000 sq m in Technologiepark Zwijnaarde – both took place in Q1.
Healthy pipeline can make the recovery sustainable in Flanders. The above transactions are another reminder of the constant high demand for large well-located Grade A spaces in Flanders. This explains the increased pipeline of buildings which will be added to the stock over the next couple of years, many of these spaces already have found their future occupiers, but a healthy number of available spaces can ensure market turnover in the medium term.
300
100 0 2017
Antwerp
2018
2019
Ghent
2020
Mechelen
2021
Leuven
FLANDERS NEW DEVELOPMENTS AND PIPELINE, 000s SQ M
200 150 100
50 0
Antwerp
Ghent
Mechelen
Leuven
Pipeline Flanders
FLANDERS RENTS, EUR/SQ M/YEAR
180 160
Prime rents remain stable in Flanders in last quarter of 2021 The most expensive prime rents in Flanders are found in Antwerp and Ghent, both level on EUR 165/sq m/year. This may increase slightly in 2022 in the context of strong demand for qualitative spaces. Indeed, the developers of certain projects under development are considering going well beyond current prime rental levels. Average weighed rents return to pre-pandemic levels (EUR 129/sq m/year) further pushing the return to normality narrative in Flanders.
140 120 100 2017 2018 Antwerp Mechelen Flanders average
2019
2020 Ghent Leuven
2021
M A R K E T B E AT
BELGIUM REGIONAL Office Q4 2021 Wallonia activity relatively restrained in 2021. Overall take-up for Wallonia in Q4 amounted to 6,000 sq m, bringing the year-end total in 2021 to a relatively low 50,000 sq m (against an annual average of 76,000 sq m). From the outset, we had noted that 2021 would not be expected to be as buoyant as 2020 in terms of overall take-up, since regional public sector bodies had carried out most of their large moves before 2021. Nevertheless, Charleroi enjoyed a positive year as expected (18,000 sq m) while Liège improved on a difficult 2020 with 26,000 sq m. Namur on the other hand witnessed its least dynamic year since 2013, after a record 2020. The standout transaction in 2021 (overall for Wallonia and Flanders) was Ethias’ pre-letting of their future headquarters (15,000 sq m) in the Rives Ardentes mixed-use project, followed by a 10,000 sq m development by Vinci Energies Belgium in the Aéropole area of Charleroi. More broadly, particularly in Namur and Charleroi, there is positive momentum around large-scale projects within the city. In Charleroi, the Left Side Business Park and the regeneration of the surroundings, including around Charleroi-Sud station will continue to create demand, while Namur has been undergoing significant public works, best embodied by the recently redeveloped Grognon esplanade, an outdoor area symbolically located at the confluence of the Sambre and the Meuse, not to mention the future courts of justice and the numerous projects surrounding Namur train station.
WALLONIA TAKE-UP PER DISTRICT, 000s SQ M
125 100 75 50 25
0 2017
2018
Liège
2019 Namur
2020
2021
Charleroi
WALLONIA NEW DEVELOPMENTS AND PIPELINE, 000s SQ M
200 150 100 50 0
Substantial Walloon pipeline should prove enticing to occupiers. Like in Flanders, a critical amount of new Grade A spaces can entice occupiers to leave older offices behind in favour of more efficient offices. The pipeline for the coming years is substantial, with 288,000 sq m to be added to the stock by 2024, including a good number on a speculative basis, such as the Rivage (17,000 sq m) and Oh!rizons (23,000 sq m) buildings in Left Side Business Park in Charleroi or the office buildings around the Standard de Liège stadium (more than 10,000 sq m) in Liège.
Liège
Charleroi
Pipeline Wallonia
WALLONIA RENTS, EUR/SQ M/YEAR
180 160
Highest Walloon prime rents in both Liège and Namur.
140
The highest prime rents are to be found in Liège and Namur, both EUR 160/sq m/year, while Charleroi is at EUR 145/sq m/year, having increased earlier this year.
120
Wallonia’s average weighted rent is EUR 135/sq m/year – a substantial decrease on the previous two years on the back of weakened demand, particularly for average-sized spaces.
Namur
100 2017
2018
Liège Charleroi
2019
2020
2021
Namur Wallonia average
M A R K E T B E AT
BELGIUM REGIONAL Office Q4 2021 A high investment volume in regional market to round of the year. The year ended on a very positive note with EUR 148 million invested in regional office markets during Q4, including EUR 133 million in Flanders (against an average of EUR 93 million per quarter over the past five years). Investments in Q4 were mostly focused on Antwerp, including the largest, a EUR 25 million purchase of De Veldekens by Swiss Life Asset Managers. A confidential deal also took place in Liège and concerned a prime asset; however, no details have been disclosed. No other investments in Wallonia took place in Q4. Many developments are nearing completion and are likely to interest prospective investors - especially files with a high occupation profile. Indeed, demand on this front is not lacking.
ANNUAL INVESTED VOLUMES, EUR M
700 600 500 400 300 200 100 0
35 30 25 20 15 10 5 0 2017
2018
2019
Wallonia regional markets # deals (RHS)
2020
2021
Flanders regional markets
PRIME YIELDS
7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00%
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
Prime yields stable – for now. Although prime yields remain stable – 5.25% in Flanders and 6.75% in Wallonia, compressions to a level closer to 5.15% at the very least are foreseen next year in Antwerp and Ghent due to aforementioned strong appetite as well as some prime assets which will come to the market in the next couple of years.
Prime yield Flanders
Prime yield Wallonia
M A R K E T B E AT
BELGIUM REGIONAL Office Q4 2021 MARKET STATISTICS REGION
MARKET
BUILT STOCK (SQ M)
AVAILABILITY (SQ M)
VACANCY RATE
Q4 2021 TAKE-UP
2021 TAKE-UP (SQ M)
2022-2024 PIPELINE (SQ M)
PRIME RENT (EUR/SQ M/YEAR)
PRIME YIELD
Antwerp
2,207,000
239,000
10.81%
22,000
96,000
187,000
165
5.25%
Ghent
1,100,000
45,000
4.07%
16,000
69,000
87,000
165
5.25%
Leuven
564,000
n.a.
n.a.
2,200
8,000
36,000
150
6.50%
Mechelen
367,000
n.a.
n.a.
2,800
19,000
13,000
150
6.50%
Liège
516,000
26,000
5.13%
2,300
26,000
97,000
160
6.75%
Namur
528,000
39,000
7.30%
2,000
5,500
85,000
160
6.75%
Charleroi
474,000
11,000
2.25%
1,800
18,000
105,000
145
7.00%
Flanders
Wallonia
KEY OCCUPIER TRANSACTIONS Q4 2021 PROPERTY
MARKET
Singel Building
TENANT
SIZE (SQ M)
TRANSACTION TYPE
Antwerp
Ifitness
1,700
Letting
Neosky
Liège
ASD Liège-Huy-Waremme
1,500
Letting
Ottergemsesteenweg 415
Ghent
Lalemant
1,100
Letting
Dorp in de Stad
Antwerp
WantMore
1,100
Purchase
Audent 14
Charleroi
Duchêne
1,100
Letting
Namur
Accent Group
1,00
Letting
Aquilis A
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 Q4 2021 PROPERTY
SUBMARKET
BUYER / SELLER
SQ M
PRICE, EUR M
De Veldekens, Blok A
Antwerp
Swiss Life Asset Managers / AG Real Estate
9,600
25
Prins Boudewijnlaan 41-43
Antwerp
Brody / Cofinimmo
12,000
20
North Trade Building
Antwerp
DES, TOF Real Estate / Cores Development
13,000
20
Garden Square
Antwerp
Brody / Cofinimmo
7,500
12
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.
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