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Another good year in prospect for the Belgian real estate market

Following a record year for real estate in 2019, advisor CBRE has been looking at what to expect during this year. In a first report, we detail what they believe will happen in the investment and office markets.
Starting with investment, CBRE says that commercial real estate investment in Belgium approached €5 billion in 2019, with 2020 looking to be more active given the robust pipeline of due diligence and sales mandates, and the January closure of a historic deal in Brussels (Finance Tower). Capital preservation will dominate activity in 2020, as central bank commitment to low rates and loose monetary policy affects savers. In this environment, liquidity will be high, supported by a growing pool of investors. CBRE expects investment volume to significantly surpass the €5 billion level in 2020 given investor interest and the pipeline of available assets.

Mixed use
In 2020, Belgian investor attitudes will continue to warm to assets with mixed uses. CBRE sees three main drivers of this. Firstly, occupiers (mostly office) are demanding services and amenities as part of their letting requirements. Secondly, prime assets are increasingly being developed with mixed uses as a response to these demands, meaning quality investment opportunities will necessarily include these components. And thirdly, these assets offer income diversification.

CBRE reports that Brussels office take-up was boosted to more than 544,000 m² last year by grade A deals and pre-lets. Many projects scheduled for 2019 completion were pushed into 2020, though the amount available is roughly equal to a good quarter of take-up.
In the regions, Walloon markets performed very well after pent-up demand for space resulted in multiple pre-commitments. For 2020, CBRE says it expects more pre-lets and good absorption of remaining grade A facilities, as the market deals with a shortage of quality space in the face of strong demand. Office space is increasingly being adopted as a tool to attract and retain talent, and this will continue to be an important dynamic in 2020. This takes shape in the Belgian market through two primary means: mobility and services.

Mobility and accessibility, indeed, are at the top of new requirements. Clogged roads, limitations on car access to cities, along with COBRACE charges (in Brussels) will continue to impact occupiers’ location decisions. Companies are placing greater value on mobility poles in order to be more accessible to employees and clients. In Brussels, the North Station is perhaps the best example, says CBRE, where developer, investor, and occupier interest is on the rise.
Tim Harrup
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