MARKETBEAT
Q1
2024
MARKETBEAT
BELGIUM / Regional Office Q1 2024
YoY 12-Mo.
A tale of growth and challenges
59K Chg Forecast
Take-up
(000s sq m)
Belgium's economic story in early 2024 is one of cautious optimism. While the scars of the past few years
remain, the Belgium economy is experiencing a slow and steady climb. Growth forecasts predict a moderate
expansion of 1.4% for GDP in 2024 and 1.8% in 2025. However, there is a higher-than-anticipated public
debt deficit in Belgium. While high inflation allowed for a reduction of the government debt ratio in 2022, at
unchanged policy, government debt would increase over the next decade, reaching about 120% of GDP by
2030.
YoY 12-Mo.
190€ Chg Forecast Inflation has become a prominent worry, exceeding the European Central Bank's (ECB) target of 2%. Early
2024 saw inflation hovering around 2.8%, and forecasts predict it could remain above 2.5% for all of 2024.
Prime rent
(EUR/sq m/year)
The ECB is closely monitoring the inflation situation. While the bank kept rates unchanged in September
2023, some analysts believe a rate cut could be on the horizon later in 2024 – though likely more gradual
than initially anticipated by financial markets – if inflation shows signs of persisting above target. This would
be a delicate balancing act for the ECB, aiming to control inflation without stifling the fragile economic
recovery.
YoY 12-Mo.
6.60% Chg Forecast The job market also present a mixed picture. Unemployment, currently hovering around 6.2%, is expected to
Prime yield tick upwards in the coming months. The notable rise in bankruptcies, alongside reduced employment due to
(%, 3/6/9 lease)
stricter financing terms and an uncertain economic landscape, is projected to contribute to an increase in the
unemployment rate in the coming years.
The ongoing war in Ukraine adds another layer of complexity. This geopolitical crisis disrupts global supply
chains and economic activity, impacting Belgium's heavily trade-reliant economy. Additionally, the pace of the
global recovery will significantly influence Belgium's own economic trajectory.
Economic Indicators
Q1 2024
YoY 12-Mo.
Chg Forecast
GDP Growth and unemployment rate Inflation rate
1.36%
2024 GDP Growth
10%
8%
9%
6.21% 6%
4%
8%
2024 Unemployment Rate 7%
2% 6%
2.26% 0%
-2%
5%
4%
2024 Consumer Price
Index -4% 3%
-6% 2%
20 18 20 19 20 20 20 21 20 22 20 23 20 24 20 25 1%
Sources: Moody’s Analytics, BNB, Eurostat, Federal Planning Bureau, March 0%
GDP Gro wth Un empl oymen t Ra te
2024 2018 2019 2020 2021 2022 2023 2024 2025
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.
MARKETBEAT
BELGIUM / Regional Office Q1 2024
Low take-up on a national level Flanders take-up per district (000s sq m)
For the first quarter of the year, the level of take-up has been lower than the five-year 250
average in the Belgian office market. The Brussels market has witnessed the lowest take- 200
up since 2020, where it as below 50,000 sq m. The Regional office market witnessed a
150
higher take-up (58,698 sq m) in Q1 2024 compared to 2023 (35,829 sq m), which results in
an increase of more than 60%. 100
50
-
Flanders witnesses a strong first quarter 20 19 20 20 20 21 20 22 20 23 Q1 24
In the Flemish part of Belgium, the take-up has been resilient compared to other regions. Antwe rp Ghen t Le uven Mech ele n
The take-up for Q1 2024 stands at 54,540 sq m in Flanders. Scrutinising the Flemish cities,
Antwerp marks out with its highest take-up in Q1 since more than fifteen years.
The Antwerp market, which remains robust, hosted the five largest transactions of the Flanders pipeline (000s sq m)
quarter. Particularly noteworthy is the acquisition of Pelican by the Christian mutual society
(CSC-ACV) for its own occupancy, alongside Deloitte’s confirmation of leasing 4,700 sq m 120
in Arto. 100
80
60
A promising pipeline 40
20
Following a year marked by significant deliveries, the upcoming two years are poised to
-
bring forth an abundance of new projects, with over 170,000 sq m anticipated across the 20 23 20 24 20 25 20 26
Flemish markets by the conclusion of 2025.
Bui lt Antwe rp Ghen t Le uven Mech ele n
Despite numerous projects in progress, Antwerp may confront an office space scarcity. The
City of Antwerp has identified an inadequacy in the current office space supply to cater to
escalating demand. Consequently, the city plans to accelerate energy-efficient renovations
of existing offices and bolster the advancement of new projects. Flanders rents (EUR/sq m/year)
€ 200
Prime rents on the rise across all markets € 180
During this quarter, prime rents surged across the primary Flemish markets. Ghent and € 160
Leuven experienced a 5€/sq m/year increase, while Antwerp and Mechelen witnessed a € 140
10€/sq m/year rise. € 120
Currently, prime rents are at 190€/sq m/year for Antwerp, 175€/sq m/year for Ghent, and € 100
170€/sq m/year and 160€/sq m/year for Mechelen and Leuven, respectively. 20 19 20 20 20 21 20 22 20 23 Q1 24
Antwe rp Ghen t Le uven
Mech ele n Flan ders avg .
MARKETBEAT
BELGIUM / Regional Office Q1 2024
Liège, the driving force Wallonia take-up per district (000s sq m)
2024 begins much like 2023 ended, with very little activity in the Wallonia occupational 140
market. Only four deals have been recorded in the first quarter of the year, totaling just over 120
4,000 sq m, marking the worst first quarter since 2008, with only Q1 2023 being worse. 100
80
In the early part of the year, activity was primarily centered on the Liège market, with all 60
reported transactions taking place there, although it's worth noting that the overall activity 40
might be slightly higher due to undisclosed smaller transactions. 20
-
Clearly, the public sector, a muted player in Q1, will dictate whether the Walloon office 20 19 20 20 20 21 20 22 20 23 Q1 24
market experiences a good year or otherwise. It has enjoyed a colossal 55% share of take- Li ège Na mur Ch arle roi
up over the 2020-2023 period, corresponding to more than 40,000 sq m per year, against
34,500 for private sector occupiers.
Wallonia pipeline (000s sq m)
A productive year for deliveries
Similar to 2023, 2024 is poised to be a bustling year for the delivery of new office projects 160
140
in the Walloon markets. 120
100
The year has kicked off on a positive note with the completion of the Palais de Justice in 80
Namur. This new 32,500 sq m building has been successfully delivered, representing a 60
triumph for the public-private partnership, as the SPF Justice has signed an 18-year lease 40
20
with a potential purchase option. -
20 23 20 24 20 25 20 26 20 27
Bui lt Li ège Na mur Ch arle roi
Divergences among markets
The upward trajectory of rents evident nationwide was also apparent in Wallonia this
quarter. Liège saw a fresh prime rent of 165€/sq m/year, marking a €5 increase from the
stable prime rent since 2020. Monument secured a lease of 2,200 sq m in ILOT at this new Wallonia rents (EUR/sq m/year)
record rental level. € 170
In the remaining two markets, prime rents remained stagnant due to the absence of € 160
recorded transactions. € 150
€ 140
Undoubtedly, prime rents are poised for further escalation in the forthcoming years. € 130
€ 120
€ 110
€ 100
20 19 20 20 20 21 20 22 20 23 Q1 24
Li ège Na mur Ch arle roi Wall oni a avg.
MARKETBEAT
BELGIUM / Regional Office Q1 2024
Finally, prime yields stabilise Prime yields
For the first time since June 2022, prime yields have remained stable throughout this 8.0%
quarter, mainly attributed to the European Central Bank's decision to keep rates steady 7.5%
since September 2023.
7.0%
In Flanders, Antwerp and Ghent prime yields are at 6.60%, while Mechelen and Leuven 6.5%
stand at 7.35%. In Wallonia, Liège and Namur have a prime yield of 7.60%, and Charleroi's
6.0%
prime yield is slightly higher at 7.80%.
5.5%
Despite positive forecasts, central bankers exercise caution given the uncertain geopolitical 5.0%
climate and the potential resurgence of inflation, particularly with core inflation persisting. 20 19 20 20 20 21 20 22 20 23 Q1 24
As a result, while central bank interest rates are anticipated to decrease in 2024, the Flan ders Wall oni a
decrease is likely to be gradual compared to market expectations. Similarly, prime yields
are also predicted to decrease by the end of the year.
Annual investment volumes (MEUR)
Resilient regional investment market 70 0 12
60 0
Amidst the challenging economic landscape, the regional investment market remains 50 0
10
appealing to investors, evidenced by the closure of three transactions totalling €29 million 40 0
8
6
across various regional office markets in the first quarter of 2024. This volume mirrors 30 0
4
investments made during the corresponding periods of 2021 and 2020. 20 0
10 0 2
Numerous ongoing mandates suggest promising prospects for more advantageous 0 0
transactions in the coming months. A significant instance is the ongoing sale of the 20 19 20 20 20 21 20 22 20 23 Q1 24
Intervest portfolio, with Gateway House being sold this quarter to Antonissen Development Flan ders Wall oni a # of dea ls
Group for 16 MEUR.
Interest rates: Switzerland cuts, Japan hikes
In March 2024, central banks implemented contrasting monetary policies, with Switzerland
cutting rates while Japan raised them for the first time in 17 years. The Swiss National
Bank reduced rates to address currency appreciation after successfully managing inflation.
Conversely, the Bank of Japan aimed to tackle rising inflation after years of stagnation.
As for Belgium and the European Central Bank (ECB), they are expected to adopt a
cautious stance, monitoring inflation closely without an immediate need for rate
adjustments. Belgium, as a Eurozone member, would likely align with the ECB's approach.
While rising inflation could prompt rate hikes later in 2024, economic uncertainties make
rate cuts unlikely in the near term.
MARKETBEAT
BELGIUM / Regional Office Q1 2024
Market Statistics
Q1 2024 UNDER
STOCK AVAILABILITY TAKE-UP YTD PRIME RENT
REGION MARKET VACANCY RATE TAKE-UP CONSTRUCTION PRIME YIELD
(SQ M) (SQ M) (SQ M) (€/sq m/year)
(SQ M) (SQ M)
Antwerp 2,383,036 119,264 5.00% 40,478 40,478 44,372 190 6.60%
Ghent 1,115,547 36,116 3.24% 5,218 5,218 62,049 175 6.60%
Flanders
Leuven 574,830 22,896 3.98% 1,544 1,544 55,900 160 7.35%
Mechelen 288,176 n.a. n.a. 3,299 3,299 31,300 170 7.35%
Liège 591,803 12,448 2.10% 4,158 4,158 20,000 165 7.60%
Wallonia Namur 584,250 10,909 1.87% - - 22,110 160 7.60%
Charleroi 499,380 24,226 3.85% - - 58,000 145 7.85%
Key Lease Transactions Q1 2024
PROPERTY MARKET TENANT SQ M TYPE
Pelican Antwerp CSC-ACV 7,850 Purchase
Montevideo Antwerp We are one World – Tomorrowland 6,750 Purchase
Van De Wervestraat 61 Antwerp Private 5,563 Purchase
Arto Antwerp Deloitte 4,711 Letting
Greenhouse Collection Antwerp Niko 2,300 Letting
Key Investment Transactions Q1 2024
PROPERTY MARKET BUYER / SELLER VOLUME (MEUR) YIELD
Gateway House Antwerp Antonissen / Intervest 16 -
Louvrex 95 Liège Ardent RE / Nethys 11.40 -
Place Xavier Neujean 37 Liège ACE Invest / BPI Real Estate 1.6 -
Benjamin DEVIE
Senior Research Analyst | Belgium & Luxembourg
+32 492 11 35 10
[email protected] Maximilien MANDART
Head of Occupier Services | Belgium
+32 476 24 08 02
[email protected]
Michael DESPIEGELAERE
Head of Capital Markets | Belgium & Luxembourg
+32 476 82 08 59
[email protected]
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