Wallonia registered record annual take-up in 2019: a whopping 104,000 sq m. This was the main takeaway from our H2 2019 MarketBeat Wallonia Office Market report.
Liège was Wallonia’s main office destination in 2019. Therefore, with the help of our local expert, Stéphane Moermans, Head of our Wallonia Office at Cushman & Wakefield, we look at the reasons behind the important surge of activity in Liège.
CHART:WALLONIA TAKE-UP BY DISTRICT, SQ M
Several key factors have propelled Liège to a fantastic 2019.
PUBLIC SECTOR
Chief among these was the public sector’s weight – by no means a novelty in the economic capital of Wallonia. What has changed however is the sheer scale to which this was the case in 2019. A few figures tell us a lot about this recent phenomenon:
◆ 23,000 sq m of take-up accounted for by the public sector in 2019.
That’s almost 45% of the Liège total in 2019.
◆ A median size of 3,400 sq m per transaction, against a Liège median of 1,700.
◆ This across six transactions (22 deals in total took place in Liège in 2019).
It signals that this was by no means a freak incident, but rather, the product of an elaborate strategy, particularly in terms of the regional government’s involvement.
"In collaboration with our Global Occupier Services department, we have been able to assist the SPW (Walloon regional government) in defining and rationalising its location strategy and finding the destinations that best suit its needs. By the same token, the FWB (French Community) followed this reasoning to move and centralise its support services for education close to the Guillemins station."
Stéphane Moermans, Head of Wallonia office at Cushman & Wakefield
VACANCY RATE
Lack of quality products and risk-taking by owners/developers on the market have long been a gripe of office occupiers in Liège. Indeed, many occupiers have long been willing to move into new offices. Only to be faced with the difficult task of identifying a suitable place to relocate – especially where large occupiers are concerned. An appropriate indicator of this challenging trend is the vacancy rate. It has decreased alarmingly fast from approximately 10% in 2015 to 4.09% in 2018, then 3.55% in 2019.
CHART: LIEGE OFFICE VACANCY RATE
"It is commonly acknowledged that a dynamic market requires a vacancy rate of 5% in order to enable healthy occupier rotation, while enabling a constant refresh of the supply. Liège is obviously in a challenging situation in this regard. Even more so when taking only Grade A spaces into account where vacancy is even lower."
Stéphane Moermans, Head of Wallonia office at Cushman & Wakefield
The ideal scenario for Liège would be a higher vacancy than the current 3.55% (thanks to speculative deliveries preferably) and strong demand from the private sector (less sedentary than the public sector).
Certainly, the market is on the right track in this regard with a strong speculative pipeline meaning attractive new products for occupiers to move in to in the next few years.
