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Office market: new norm and new dynamics

Only 300-400,000m² of take up is the new norm for the entire Brussels market.
Only 300-400,000m² of take up is the new norm for the entire Brussels market.

In its annual state of the market report, JLL takes a close look at the Brussels office market. There are a number of interesting factors to note, starting with fact that, in the words of CEO Jean-Philip Vroninks: “The days of 600,000 m² of take-up are over – 300-400,000 is the new norm.”

Taking up this subject and explaining what has been happening on the ground, Head of Office Agency Erik Verbruggen said that take-up this year is down by 21% compared to last year, and will finish at around 330,000 m². The State Buildings Agency (Régie des Bâtiments) has been absent from the market this year, local administrations are down by 71% at only 12% of the market, while ‘Europe’ and international organisations accounted for just 15% of it between them. This leaves Corporates with virtually three quarters of all activity (73%) and the now increasingly established co-working sector with almost a fifth (19%).

Speculative developments

Before returning to the co-working segment, a look at some of the market dynamics. JLL says that supply is currently at a 20 year low, and mainly comprises B and C grade buildings. Potential takers often cannot find a suitable solution in the CBD. There is some speculative construction coming along however, calculated as 129,000 m² in 2019 and 98,000 m² in 2020. The average over the 2014 to 2018 period has been just 34,000 m². Most speculative projects quite easily find tenants, JLL states. This is because these buildings are almost automatically of the very high standard occupiers are now looking for. Where buildings which were begun speculatively and will be finished during the next two years are concerned, JLL points to Quartz, Brederode Corner, Seven, Tweed, Möbius and Quatuor. These are all between 50% and 100% taken already. Coming later – 2021 to 2023, and currently not officially marketed, will be, among others, Silver (40,000m²), Regina Tower (24,000 m²), Multi (36,000 m²) and the total renovation of the Generali Tower (27,000 m²).

Co-working frenzy

In the period between 2012 and 2016, transactions by co-working specialists stood at around 5,000 m² per year. In 2017 it multiplied this figure by a factor of six, to 32,000 m², and in 2018 this doubled again to 62,000 m². Major active players over these past two years have been Spaces (18,000 m²), Fosbury and Sons (17,500 m²), Silversquare at Befimmo – whose name has become literally true this week with the takeover – (14,500 m²), WeWork (13,400 m² and Tribes (9,500 m²). Officenter and Welkin & Meraki add another 9,000 m² between them.
Tim Harrup

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