Semi-industrial market performance outstrips logistics

Tim Harrup

Real estate advisor JLL has analysed the performance of the semi-industrial and logistics markets in Belgium over the first half of 2021. This reveals a considerable upturn in interest for semi-industrial property, with logistics recording increased rents and yields which have compressed to the levels normally seen in the office segment.

Transaction volume in the first half year of 2021 was underpinned by buoyant demand for semi-industrial properties. Total take-up volume in Belgium for semi-industrial and logistics properties combined amounted to 1,022,000 m², 20% above the level recorded in the first six months of 2020. Semi-industrial take-up volume amounted to an exceptional 635,000 m² as at the end of June 2021, 37% above 2020 volumes and 26% above the 5-year average for the first half of the year. In comparison with last year, more transactions were registered in the Vlaams-Brabant, Antwerp, Liège and West Flanders provinces.

During the first six months of 2021, 387,000 m² of logistics space was let or sold, in line with the 2020 volume. The number of logistics transactions – 33 – is 27% above the 5-year average, whilst the transaction size is 12% lower than over the past 5 years. The highest logistics take-up volumes were registered on the E313 axis whilst the highest number of transactions was recorded on the Antwerp-Brussels axis. Vacancy inched even slightly lower, to 1.05% on the main Antwerp-Brussels axis. The prime yield for logistics properties reflects the huge interest from investors for the sector. It compressed to 4.00%, which is 65 bps lower than one year ago. The prime yield for semi industrial properties amounts to 5.50%, down from 6.00% 12 months ago. The downward trend for yields is likely to persist.

Turning to investment, the total figure for the first half of the year was 129 million Euros, around half of the figure for 2020 and two thirds of the five year average. Average deal size was substantially down on last year and on the five year average, at 8.6 million Euros, against 21.1 million and 13.8 million respectively. Buyer origin shows that three quarters are Belgian, whereas in the same two reference periods it has been half.