Brussels' office and investment market

Between January and the end of March, new occupancies on the market for office space in Brussels reached 103,000 sq m. Although, when extrapolated over the year, the final balance sheet will show a lower figure than the exceptional vintage 2000, it will nonetheless certainly highlight a number of large-scale transactions.

The investment market, for its part, is moving along extremely well. Having profited from a renewal of interest amongst investors after the stock market debacle, property funds are demonstrating a particular level of activity. A review with Eric Peeters and Christian Karkan, both partners with Cushman & Wakefield Healey & Baker.

At the beginning of the year, the Brussels market saw sustained activity. From January to the end of March, new occupancies were up to 103,000 sq m (90 deals) to which were added another 30,000 sq m negotiated in April. Extrapolated over the year, these figures speak to a final take-up of something like 450,000 sq m. “Numerous large-scale transactions are to be chalked up to the private sector,” notes Eric Peeters, a partner with Cushman & Wakefield Healey & Baker. “You see, 93% of operations come from private companies; the public sector, both nationally and internationally, has not yet taken any decisions. Over the whole year, new occupancies could therefore by higher than figures contained in our current forecasts might suggest, reaching something in the region of 550,000 sq. m. One factor for this is the well-known needs of a variety of government departments. Demand from them is in the order of 150,000 sq. m. The problem is that, for the time being, very little property is being offered in the city centre. Available properties in excess of 20,000 sq. m. are extremely rare, which explains why the public authorities are holding back.”

At present, the market has a vacancy rate of something like 7%, or around 740,000 sq m, more than half of which is located in decentralised zones (the green belt round the 19 boroughs) and on the outskirts. The city-centre districts have a low availability rate, less than 3% in the Leopold Quarter. “This relative shortage is bolstering the level of rents. Prime rents amount to €250/sq m/annum in the Leopold Quarter. The majority of deals for high quality buildings settle at between €223 and €235.50/sq m/annum,” continues Eric Peeters. In the city centre, rental values also reach a level of €223/sq m/annum. On the outskirts, they are developing at between €111 and €136/sq. m./annum. There, the vacancy rate has climbed to over 19%.

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(source: Cushman Wakefield)

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