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Retail activity - some surprises

Westland continues to be attractive to retail investors.
Westland continues to be attractive to retail investors.

Alongside its report into the Flanders office market over the first half of this covid-affected year, real estate advisor CBRE has analysed the situation for retail real estate across the whole of Belgium. The first observation comes perhaps as something of a surprise. Retail take-up amounted to 180,580 m through the first half of 2020, representing one of the highest numbers of the last decade. The breakdown among the three main retail formats is consistent with activity in recent years. High streets accounted for 66,320 m of take-up, out-of-town 88,516 m, and shopping centres 25,630 m. But as covid 19 did not really hit the market until the end of the first quarter, there are substantial differences to be seen between the two quarters. CBRE notes that 2020 got off to a very good start with larger deals and high take up of almost 120,000 m over the first quarter. As a result of the lockdown starting from mid-March, second quarter numbers were severely downgraded.

CBRE goes on to point out that while an active market through such a turbulent economic situation is remarkable, there are some good explanations for this. Overall, letting activity for supermarkets was very high, accounting for over 25,000 m of take up. Albert Heijn opened seven stores all over Flanders, especially to increase their market presence in smaller cities such as Maldegem, Roeselaere and Dendermonde. Lidl enhanced their presence in the Belgian market with two additional supermarkets in Mechelen and Diksmuide, accounting for a total occupation of 4,500 m. Dutch food retailer Jumbo continued their Belgian expansion with two additional stores.


Other sectors proving strong despite the health crisis are various home and household retailers, DIY stores and furniture store retailers. As was the case the previous year, discount retailer Action continues its expansion, having leased over 5,000 m in five locations in Belgium. Low budget furniture retailer Jysk occupied 3,500 m in three stores in Lokeren, Bertrix and Gosselies. The largest single store letting was for DIY retailer Gedimat, which took up 4,300 m in Liege.
In addition to this, certain sports retailers claimed some of the largest deals of the year so far, opening several large stores all over Belgium. One of the top deals includes Intersport, leasing over 5,000 m in Westland shopping and Stella Fietsen opening a large store of 4,300 m in Shopping Park Olen. Finally, letting activity for fashion retailers decreased significantly, especially in the second quarter, registering only half of the deals with a take up of 4,000m, compared to 15,000 m in the same period last year.


The first half of 2020 closed with a relatively low retail investment volume of 251 million, achieving the lowest quarterly result since 2014. Within the covid-19 context, most retail transactions were put on hold or postponed, with institutional investors opting for a wait-and-see attitude. Nevertheless, 2020 has already recorded some relatively large deals, including the sale of 12,000 m in the Westland shopping centre for 40 million and two large high street transactions; the sale of Portfolio A-project, a high street retail portfolio sold to Leoville Properties and the acquisition of 7 retail units in Quai aux Briques in Brussels by Prowinko, these deals being worth 26 and 17 million respectively. In terms of real estate investment volume as at the end of end June, retail investments accounted for only 9 % of the total volume. This represents a significant decrease compared to the same period in 2019, where retail accounted for 24 % of the total investment volume.

CBRE concludes its analysis of investment by saying that although there are still a few large transactions expected to close in the coming weeks, the uncertain climate and deterioration in credit access conditions has further strengthened the cautious approach of investors towards this asset class. However, an increasing number of investors are looking to acquire food related units.
Tim Harrup
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