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Rents on the way up at last?

On the eve of Realty, broker JLL is reporting some positive signs in terms of renatl levels in Brussels. Signs which may, after years of speculation, finally break the € 300/m˛/year barrier once and for all.

After years of stagnation, says JLL, positive signals are emerging from the occupier market about higher rental values. In order to secure a relocation in the right building consistent with a company’s corporate image, liable to attract the right people and in keeping with intelligent use of energy resources, more and more occupiers are ready to pay the right price. The supply-side has hardly changed so far, and new projects with a strong identity and excellent green credentials are still very scarce in the best locations. At the same time as employment perspectives have improved, corporates – and administrations – are returning to the occupier market with new demands and selection criteria that have a limited corresponding offer.

Higher requirements on the demand side will inevitably lead to rising prices if supply is slow to adapt. Prime rents in Brussels overall haven’t changed for some time, but at submarket level, increases of 2-3% have been recorded. At MIPIM, it was rumoured that Facebook is to pay € 350/m˛/year in the Regent Park building at the intersection of the Pentagon and European district: this is 27% above current prime rent of Brussels. In the European district, a landlord is reported to have decided not to sign for a 3,000 m˛ lease at €285/m˛/year, 4% above current prime rent, because he was convinced he would find another, less risky, tenant at the same price. Most projects in the CBD are asking a 10-15% premium to current prime headline rent. Top quartile and weighted average rents in Brussels overall are also upward oriented.

| 15/05/2017

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