Investment activity increased four-fold in Brussels during Q309 compared to Q209, according to Savills. Foreign buyers, in particular German funds, re-entered the market but domestic investors still held majority share.
The international real estate advisor recorded 142 million transactions in the past quarter in Brussels including Real I.S's purchase of Ernst & Young HQ from Segro for around 35 million, and IVG's purchase of Estuary Properties N.V the owner of the multi-let building on Rue Idalie 9-13 in the EU district for below 15 million. Despite the figure representing a 62% decrease year on year, the quarter was exceptionally active. Foreign purchasers represented 23% buyers, having been inactive in the previous quarter, with French buyers accounting for 2.5% market share, Dutch representing 7.7% and German funds at 10.3%.
CBD prime yields currently stand at 6.75% for 3/6 year leases and at 6.0% for 9+ year leases. Savills predicts a lack of prime assets could see yield compression for top tier prime assets at sub 6%.
Sheelam Chadha, head of research for Savills Belux, says: "Although some key deals this quarter should re-ignite confidence in the investment market, the lack of prime assets could see some keen players competing, which could even cause some yield compression in the top-tier market. However, overall market conditions will not improve much more until 2010."
Despite a small flurry of activity in the investment market, Savills reports that office take-up declined by 51% compared to Q308 with 52,916 m² (569,601 ft²) leased, and an overall decline of 51% when comparing the first three quarters of 2009 to 2008. Vacancy rates have risen to 11.5% due to weak demand, and prime rents were down 5.45% compared to H109 at 260/m²/year, nevertheless Savills says some tenants are still finding difficulty securing high quality space in key locations.