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Low take-up but high investment - Cushman



Cushman & Wakefield has produced an overview of real estate activity in Brussels during the third quarter of 2017 and for the first three quarters together. Firstly, where take-up is concerned, the advisor finds that activity is down compared to 2016 with only 277,000 m² of take-up recorded since the beginning of the year (compared to 365,000 m² in 2016). In number of deals, C&W observes the fourth consecutive year-on-year decrease. However, activity will witness a strong upward movement in Q4, it goes on to say, as several significant transactions are in the pipeline and could push the take-up up to 400,000 m² by the end of the year.

Moving on to the vacancy rate, this continues to slightly decrease and stands at around 8.6%, its lowest level since 2007. Available space in qualitative office schemes continue to decrease and only 29,000 m² remains available in grade A buildings. Despite the limited activity, the competition between occupiers for the limited amount of highest quality office space available, has pushed the prime rent to 305€/m²/year, its highest level ever. Further upward moves are still expected in the coming months.

On the investment market, 2017 will be one of the best years ever as significant transactions are still in the pipeline and should contribute to boost the activity somewhere between €2-€2.5 billion with a strong competition and the arrival of newcomers on the office investment market.
Around €1.1billion has been invested in Belgium (mostly in Brussels) so far this year and significant transactions are still in the pipeline. Prime yields remain at historically low level (4.4%) and a slight compression is still expected before the end of the year. Prime yields should stabilise from 2018.

Looking forward, C&W says that 2017 should see a dynamic end of year and a flow of activity is also expected on the occupier market in 2018 and 2019 as large occupiers will have to move.
Tim Harrup
30-10-2017


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