Flanders office market performing well

OFFICES
Tim Harrup

Having recently reported on the state of the Walloon office market, it is now the turn of Flanders to come under the spotlight. Real estate advisor Cushman & Wakefield has produced a report analyzing the performance of the Flanders office market during the first quarter of 2023.

Cushman & Wakefield starts by saying that Flanders has witnessed a strong first quarter in 2023. Take-up has been resilient compared to other regions. The take-up for the quarter stands at 50,440 m. Taking a closer look at individual cities, Ghent has been characterized by fewer transactions (18) but witnessed its highest take-up since more than ten years. The notable transaction in the Regional office market is indeed in Ghent the renewal of Zuiderpoort with its 20,575 m to its new tenant, the State Buildings Agency (Rgie des Btiments). In Antwerp, 4,585 m were taken up by Trescal in the Nijverheidsstraat.

Prime and average rents increase in Flanders, C&W goes on to say. Prime rents have followed the trend of the overall Brussels office market and have thus not increased in the first quarter of 2023. The prime rent for Flanders remains at 170/m/year (compared, for example, to Wallonia at 160/sm/year). Fast-forwarding to the end of 2023, C&W expects to see prime rents increase due to the demand for high-quality offices. The Weighted Average Rent has increased to 133/m /year in Flanders. On a city level, Ghent has seen the greatest impact due to its stronger occupier market. It witnessed an increase from 137/m/year in 2022 to 144/m/year in the first quarter of 2023.

The pipeline in Flanders remains strong, with new deliveries in the first quarter of 2023 standing at 11,000 m. These new deliveries are Zuidpoort G in Mechelen for 6,200 m and Arto in Antwerp for 4,800 m. Together with the strong take-up, the market seems favorable for 2023. In the following quarters in 2023, 78,000 m is expected to be delivered. In Ghent, 47,200 m is in the pipeline. This consists for example of 18,000 m in Upoffiz, 9,500 m for the Vlaams Instituut van Biotechnologie and 5,000 m in Keizerpoort. In Antwerp, Montevideo will be delivered and provide 10,195 m of office space. Between 2024 and 2030, 275,000 m of office space is expected to be delivered, of which 129,400 m in Antwerp and 43,300 m in Ghent. Mechelen and Leuven together will see 101,900 m of new office space. Some notable deliveries are Bioscience Toren (27,000 m) in Leuven and MALT (17,900 m).