According to the last Belgium market report from Savills, strong demand from domestic and international investors for well-let, prime assets is expected continue to in 2013 as prime yields remain attractive at 5.75% for shopping centres and circa 5.35% for long-leased office buildings.
According to the last Belgium market report from Savills, strong demand from domestic and international investors for well-let, prime assets is expected continue to in 2013 as prime yields remain attractive at 5.75% for shopping centres and circa 5.35% for long-leased office buildings. In addition, the international real estate advisor notes that the Belgian investment market recorded a 38% increase in 2012 compared to 2011 with a total volume of €2.01 billion.
Gregory Martin, managing director of Savills Belgium, comments: “We expect investors to increase their allocation towards Belgium as yields are still attractive when compared with those observed in other markets. During 2012, we saw a particular increase in exposure to the retail and residential markets where volumes more than doubled.”
Savills reports that, while the Belgian investment market is dominated by local purchasers accounting for 71%, it emphasises that UK and German investors were also active and, in fact, the largest investment deal in Belgium during 2012 was the purchase by Abu Dhabi Investment Authority of the Zuiderpoort in Ghent for €110 million.
When assessing the Brussels office market specifically, Savills found that take-up in 2012 reached 348,000 sq m, which is higher than the 325,000 sq m recorded in 2011. Corporate companies continued to dominate accounting for 74% of take-up followed by E.U. administrators with 20%. The research shows that headline prime rents have recorded a slight increase in Brussels’ core CBD at €300 per sq m/per year and the city’s average rent has also seen a 1% rise to €155 per sq m/per year - both are expected to remain stable in 2013. However, the gap between prime and secondary locations in Brussels continues to widen.
Jérémy Lecomte, head of research in Savills Belgium, says: “A low level of completions in 2012, combined with stable occupier demand has resulted in some upward pressure on rents in Brussels and a decrease in the vacancy rate, which currently stands at 8.3%.”