Our team of local Research experts give you the lowdown on all the latest Belgian commercial real estate market trends and outlook.
Cushman & Wakefield’s MarketBeat series leverages compelling in-house datasets and market-leading knowledge to provide all the latest coverage and analysis of activity across Belgium’s office, retail and industrial real estate sectors. Every quarter our MarketBeat reports dissect the occupier and investment markets, delivering insight into supply, demand and pricing trends at market and submarket levels.
ECONOMIC OVERVIEW
2022 was an unusual year from every point of view. The economy has been severely hit with inflation at highest levels since decades, sky-high energy prices and rising interest rates to try to fight running consumer price index.
Economic conditions have suffered throughout the year 2022 in the aftermath of the conflict in Ukraine. While GDP held up well last year, price pressures have reached a high and a recession is looming. As a result, GDP growth is expected to stand around 0.5% in 2023 according to the National Bank of Belgium. The Belgian economic outlook is thus mitigated for this year while public debt could continue to deepen if any adjustments is taken by the authorities. Successive interest rates hikes also weigh on the public debt.
Brussels Office
OCCUPIER FOCUS
Occupational market activity slowed further in Q1 2023, with total take-up of 70,000 sq m. This represents a 10% decline compared to Q1 2022.
INVESTMENT FOCUS
After a record year, boosted by “big tickets”, for the investment market despite turbulent market conditions, the market is stalling in the start of 2023. This quarter, nine transactions, totalling 128 MEUR, have been recorded, making it the Q1 with the lowest invested volume since 2014.
OUTLOOK
The European Central Bank (ECB) increased again its interest rates to combat inflation, as previously announced. However, the recent financial market turmoil, triggered by the collapse of three midsize banks in the US and Credit Suisse in Europe, has added uncertainty to the path ahead.
DOWNLOADRegional Office
OCCUPIER FOCUS
For the first quarter of 2023, the level of take-up has been lower than the five-year average in the Belgian office market. The Brussels market has witnessed the lowest take-up since 2020, where it as below 50,000 sq m.
INVESTMENT FOCUS
With the economic uncertainty, investors are still holding on to their wait-and-see approach. For the first quarter of 2023, no notable transactions were recorded in the Regional office markets.
OUTLOOK
Between 2024 and 2030, 275,000 sq m of office space is expected to be delivered, of which 129,400 sq m in Antwerp and 43,300 sq m in Ghent. In 2023, close to 120,000 sq m should be delivered in Wallonia.
Retail
LETTING MARKET
Q1 letting activity decreased for the first time since 2017 with 80,000 sq m recorded since the start of the year 2023.
INVESTMENT MARKET
In Q1 2023, 234 MEUR were invested on the retail market. This represents a slight 5% contraction compared to Q1 2022. Close to 30 transactions were recorded, also a slight decline compared to same period last year.
OUTLOOK
No changes to prime yields levels have been observed this quarter compared to the end of 2022. Yields are still around 4.75% in the High Streets, around 5% in the Shopping Centres and 5.8% for Out-of-Town locations.
Industrial
INDUSTRIAL FOCUS
The first quarter of 2023 has shown a strong level of take-up (296,000 sq m) compared to the previous five years. The start of 2023 has surpassed the five-year average with nearly 7.5%.
LOGISTICS FOCUS
The logistics market has known is second slowest year in terms of take-up these past five years. A remarkably low take-up (34,250 sq m) has been recorded in Belgium, of which 33,800 sq m in Flanders.
INVESTMENT FOCUS
The first quarter of 2023 has started with the slowest pace in a decade (€33 MEUR invested), following a strong 2022 in which more than 750 MEUR (excluding the development of Montea-Cordeel in Vilvoorde) was invested in the semi-industrial and logistic markets.
OUTLOOK
Next to the challenging financial difficulties, the semi-industrial and logistic markets are vulnerable to the continuing lack of supply and rising construction prices. The latter has caused several developers to delay their projects, decreasing market liquidity.
