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BELGIAN RETAIL MARKET - Q4 2013
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A periodic overview of the retail property market in Belgium, giving insight in key
market indicators such as take-up, development pipeline and rents, based upon recent
transaction figures.
2
/ pulse / BELGIAN RETAIL MARKET • Q4 2013
www.jll.be
MARKET OVERVIEW
The Belgian retail property market can be divided into three market segments :
high streets, shopping centres and retail warehousing. An overview of the volumes
registered on both the occupier and investment markets is detailed further in this
publication. The prime Belgian retail streets are the main shopping streets in
the Big Six : Brussels, Antwerp, Bruges, Ghent, Liège and Hasselt. Newcomers
in the Belgian high streets in 2013 include Karl Lagerfeld, Red Valentino and
Christian Louboutin. E-commerce is a growth market in Belgium, and shops
are adapting their formats to the evolving retail scene. Looking forward, new
large shopping centre projects are foreseen for delivery from mid-decade
onwards, whilst for the moment retail warehousing projects are dominating the
development scene. Rental levels are stable in prime locations and went up in
shopping centres. Vacancy in these locations remains very low.
Summary Statistics
Q4 13
Change
Q-o-Q
Y-o-Y
12 Month
outlook
CONSUMER CONFIDENCE (NBB/BNB)
-5
2
20
RETAIL SALES VOL. INDEX* - SEP2013
(EUROSTAT)
100.84
19 bps
-188 bps
TAKE-UP - CURRENT QTR (SQM)
92,600
-20%
-30%
TAKE-UP - YTD** CUMULATIVE
(SQM)
343,000
-
10%
COMPLETIONS - YTD CUMULATIVE
(SQM)
185,400
-
-10%
1,850
0%
0%
PRIME RENT € / SQ.M. PA
Investment Market >2.5MEUR
PRIME YIELD %
Q4 13
4.25
Change*
Q-o-Q
Y-o-Y
0 bps
12 Month
outlook
0 bps
*DEFLATED AND DESEASONALISED
**YTD: YEAR-TO-DATE
Source all charts : JLL Research / pulse / BELGIAN RETAIL MARKET • Q4 2013
www.jll.be
CONSUMER CONFIDENCE
The Belgian economy showed slight recovery in 2013. GDP growth was limited to
0.2% year-on-year. Confidence among Belgian firms and households is continuing
to improve very gradually, and the industrial production increased slightly in the
final quarter of 2013. These are encouraging signs that both domestic and external
demand are beginning to recover. As both measures of confidence have only
recovered to about long-term average levels, only a muted recovery is expected in
2014. Subdued Eurozone demand and a deterioration in external competitiveness
will also limit the recovery of the Belgian export. The public debt burden will also
put a brake on public spending. Unemployment is expected to stabilise in 2014,
offering support to household incomes. With weak price pressures, indexed wages
and household balance sheets strong in comparison with other European countries,
consumer spending is expected to pick up, growing 1% in 2014. According to figures
from Oxford Economics, a modest GDP growth of 0.9% year-on-year is expected in
2014, supported by the Eurozone recovery.
The consumer confidence indicator of the National Bank of Belgium stood at -5 in
December, up from -25 one year earlier, confirming the increasing trend that was
registered throughout 2013. The indicator is based on prospects relating to the
economic situation, unemployment levels, people’s savings capacity and financial
prospects. Whilst having improved throughout 2013, the indicator still remains in
negative territory.
“E-commerce is increasing
and its impact on the off-line
retail scene will rise.ˮ
WALTER GOOSSENS,
HEAD OF RETAIL AGENCY
0
-5
-10
-15
-20
Consumer Confidence (LHS)
2014-01
2013-11
2013-09
2013-07
2013-05
2013-03
2013-01
2012-11
2012-09
2012-07
2012-05
2012-03
-30
2012-01
-25
105
104
103
102
101
100
99
98
97
96
95
Gross index 2010=100
BELGIAN CONSUMER CONFIDENCE INDICATOR1
VS. WHOLESALE AND RETAIL SALES VOLUME²
Consumer confidence is rising
Points
3
Retail Sales * (RHS)
* Deflated and deseasonalised
1
2
SOURCE NBB/BNB
SOURCE EUROSTAT
Source all charts : Jones Lang LaSalle Research 4
/ pulse / BELGIAN RETAIL MARKET • Q4 2013
www.jll.be
TAKE-UP
Take-up of retail property registered in the final quarter of 2013 amounted to 93.000
m², which brings the total for 2013 at 343.000 m². That is 11% above the annual
average of the past 5 years and 10.3% above last year’s take-up level. A good takeup level in general, although the situation varies between market segments. The retail
warehousing segment performed best, and represented 58% of take-up. High streets
accounted for 31% of take-up, and shopping centres were good for only 11%. The
low level of take-up in shopping centres can be explained by the lack of available new
space in shopping centres, and the success of the existing shoppings, which entails
little shop rotation. Looking at performance levels of each quarter individually,
take-up figures in the second half year represented 60% of the take-up of the year.
The excellent take-up level of over 110.000 m² achieved in the 3rd quarter was not
equalled in the 4th quarter, which remained 4% under the 5-y average take-up level
for the quarter. A total of 205 transactions were registered in the 4th quarter, also
slightly under the 5-y average for the same quarter (210). As the economic recovery
remains fragile, decisions are carefully considered and demand focuses on prime
locations and cost efficiency.
The cities that attracted the most retailers in 2013 were Brussels and Antwerp, the
two largest cities of the country. Together they account for 21% of the transaction
volume this year, and 37% of all transactions. Ghent, Hasselt, Roeselare and Brugge
complete the top 5 in Flanders by number of transactions. Liège remained the most
important retail city in Wallonia in 2013, with 30 transactions, followed by Verviers,
Namur, Wavre, Charleroi and Waterloo.
BIG SIX DOMINATE HIGH STREET TAKE-UP
107,300 sq.m. of take-up was registered in
the prime high streets in Belgium in 2013,in
398 transactions. The largest volumes were
registered in the Big Six : Brussels (19,000
sqm), Antwerp (20,000 sqm), Ghent (16,400
sqm), Hasselt (12,000 sqm), Brugge (3,500
sqm) and Liège (1,600 sqm). High streets
in Flanders accounted for the largest
proportion of take-up, 74%, followed by
Brussels (17.5%) and Wallonia (8.5%). The
largest transactions were registered in
Hasselt, where Galeria Inno pre-let 8,000
sqm via JLL, in Ghent where H&M pre-let
4,500 sqm in the Langemunt project, and in
Brussels, where Primark let just under 3,000
sqm in the Rue Neuve, replacing Forever 21
who withdrew from Belgian high streets.
Other regional cities such as Mechelen,
Leuven, Namur and Charleroi also attracted
retailers.
TAKE-UP BY QUARTER
H2 2013 registered high take-up
sq.m.
400.000
Q4
300.000
Q3
200.000
Q2
100.000
0
Q1
2008 2009 2010 2011 2012 2013
“The Big Six continue to
dominate the retail activity in
the Belgian high streets.»
WALTER GOOSSENS,
HEAD OF RETAIL AGENCY
Source all charts : JLL Research 5
/ pulse / BELGIAN RETAIL MARKET • Q4 2013
www.jll.be
TAKE-UP
E-COMMERCE IS A GROWTH MARKET
Belgium is a growth market for e-commerce. A total
of €3.8 billion was spent in online shops in 2013,
according to figures published by the European
E-Commerce and Distance Selling Association
EMOTA, against €3 billion in 2012. With the double
digit growth rate noted the past few years, online
shopping forms an increasing part of the retail
scene. In spite of this solid growth in the past
few years, online retail represents only 3% of the
retail spend in Belgium, so there is still margin for
growth. As a comparison, online retail represents
5.5% of total retail in The Netherlands,4.5% in
France, and 13.7% in the UK. Retailers adapt their
stores to e-commerce, so as to provide a seamless
client service, both online and in physical stores.
NEW SHOPPING CENTRES TO UNDERPIN
TAKE-UP
Take-up registered in shopping centres in 2013
amounted to 37,200 sq.m. in 164 transactions.
This volume is 13% below the 5-year average
for this market segment, whilst the number of
transactions is 5% above average. The average
size of transaction was 16% under the 5-y
average. The take-up volume suffers from lack
of available space. As both footfall and sales
figures in shopping centres remain attractive,
retailers renew leases in shopping centres, even
if this means accepting higher rental levels up to
20%, thus reducing availability. Renegotiations
in 2013 equalled the take-up volume, with just
under 35,000 sq.m. renegotiated in 2013 in 143
transactions, such as l’Esplanade in Louvain-laNeuve, Belle Ile and Galeries St-Lambert in Liège,
and Woluwe Shopping. The lease renegotiation of
Fnac in City 2 in Brussels was the largest renewal
of the year, with 5.250 sq.m. Vacancy in shopping
centres is forecast to remain very low, until the
delivery of the large new shopping centre projects
in and around Brussels. Docks Bruxsel, totalling
49,000 sq.m., is under way and will be the first of
the three larger shopping centres to be delivered,
at end 2015- beginning 2016. In the near future,
the refurbishment and extension of Shopping
1 in Genk is expected for delivery towards the
end of 2014. This shopping centre was the first
shopping centre to open in Belgium, in 1968, and
will offer 37.000 sq.m. of shopping space after
refurbishment.
TAKE-UP
2013 underpinned by retail warehousing
400.000
sq.m.
300.000
200.000
100.000
0
2008
2009
2010
Shopping Centres
Retail Warehousing
2011
2012
2013
High Street
5-yr Ave
RETAIL WAREHOUSING TAKE-UP HIGH
Take-up in the retail warehousing segment in
2013 amounted to 198,000 sq.m., 11% above the
5-year average, and a 10% rise in comparison
with 2012. In total, 191 retail warehousing units
were let in 2013, against a 5-y average of 158.
The segment offers lower rents, and out-oftown locations with excellent access and parking
facilities, and above all, available area. The
largest transaction of the year was the letting
of 13,500 sq.m. by florist Walter Van Gastel in
Awans (Liège). Other principal transactions this
year include the letting of 7,300 sq.m. by Hubo
in Awans, the letting by Upside Concept Store of
4,700 sq.m. in Herstal, and the pre-letting of 4,300
sq.m. by Decathlon in Ghent in the former WEBA
manufactory, a national heritage building dating
of 1922. In the final quarter of 2013, Decathlon
pre-let 4,100 sq.m. in Oostende. The new store
is foreseen for opening in 2015. In 2014 so far,
Ava Papier took 1,300 sq.m. in shopping Pajot
in Sint-Pieters-Leeuw, Facq took 1,800 sq.m. in
Halle, both just outside Brussels, whilst Health
City signed the largest deal of Q1 2014 so far with
the letting of 2,000 sq.m. in Seraing, near Liège.
ART & BUILD
Docks Bruxsel
- BRUSSELS -
Source all charts : JLL Research 6
/ pulse / BELGIAN RETAIL MARKET • Q4 2013
www.jll.be
PROJECTS
LARGE
SHOPPING
CENTRE
PROJECTS ARE PROGRESSING
ART & BUILD
Docks Bruxsel
Uplace
- BRUSSELS -
RETAIL WAREHOUSING DOMINATES PROJECT
PIPELINE
A total of 185,000 sq.m. were delivered in 2013, of which
86% retail warehousing, 12% high streets and 2%
shopping centres. The annual volume was slightly above
the 5-y average of 175,000 sq.m. The top 3 delivered so
far this year were Shopping Pajot in Sint-Pieters-Leeuw
(27,600 sq.m.), a redevelopment scheme, the Parc
Commercial Les Dauphins in Mouscron (22,000 sq.m.),
a newly built mixed development, and redevelopment
scheme Crescend’Eau in Verviers (21,000 sq.m.), the
former Ardennes Outlet Center. The only delivery in 2013
in the shopping centre segment were the 3,500 sq.m.
extension of Wijnegem Shopping Centre that opened in
September. In the high street segment, the only market
activity in the Big Six was registered in Ghent, with 2
redevelopment projects delivered in the Veldstraat. In
Mechelen 6,000 sq.m. was redeveloped on the prime
retail street Bruul 95-111, of which 2,800 sq.m. was prelet to MediaMarkt.
Docks Bruxsel, with 49,000 sq.m. of retail area, will
be the first of the three large shopping centre projects
in and around Brussels to be delivered. Construction
works are under way and JLL acts as agent for the
commercialisation. Near term, the 11,000 sq.m.
extension to Shopping 1 in Genk is scheduled for delivery
end 2014, and will involve a thorough refurbishment
of the oldest Belgian shopping centre, which has an
excellent footfall of 4 million visitors per year.
- MACHELEN -
After refurbishment and extension, the
shopping centre will total 28,000 sq.m. Other
large shopping centre projects include Uplace,
in Machelen on the Brussels periphery, and
Neo, part of a mixed development on the
Heysel in Brussels. Delivery of both these
projects is scheduled after mid-decade. With
regard to Uplace, infrastructure works on the
dedicated exit of the Brussels Ring Road are
due to start in 2014.
COMPLETIONS AND FUTURE SUPPLY
Short-term dominated by retail warehousing
sq.m.
250.000
200.000
150.000
100.000
50.000
0
2009 2010 2011 2012 2013 2014 2015 2016
Completions
Under construction
Under permit
Design
5-y Average
Source all charts : JLL Research 7
/ pulse / BELGIAN RETAIL MARKET • Q4 2013
www.jll.be
RENTAL VALUES & INVESTMENT
PRIME RENTS STABLE IN PRIME LOCATIONS
RETAIL CONTINUES TO ATTRACT INVESTORS
This quarter prime rents remained stable
throughout the three market segments. In
secondary locations, prime rents remain under
downward pressure.
2013 was another excellent year for retail investment,
though the record high of 2012 was not reiterated.
Volume came in at € 646 million, down 15% yearon-year and 36% above the 5-y average of € 475
million. In Q4 2013 volume came in at € 216 million,
43% above Q3 2013, thanks to the sale to Ascencio
of the Cora portfolio for € 85 million. Dominant
buyer categories were private investors, particularly
active in the category of up to 5 million € and local
property companies. In 2013 a total of 35 transactions
were registered, against a 5-year annual average of
25. The average volume per transaction was € 18.4
million, in line with the 5-y average of € 18.5 million.
Retail remained the second asset after offices
accounting for 29% of the total volume invested in
property in Belgium. Of the total volume invested in
retail, 49% was invested in high streets, 42% in retail
warehousing and 9% in shopping centres. The prime
yield for retail warehousing compressed by 25 base
points from 6.25 to 6.00%. This is due to a liquid
market with high investment appetite, particularly for
prime products. Yields for shopping centres and high
street properties remained stable throughout 2013, at
5.00% and 4.25% respectively.
The rue Neuve in Brussels and the Meir in Antwerp
are the prime retail high streets in Belgium, with
stable prime high street rents amounting to €1,850
per sq.m. per year. In the near to medium term,
rents are expected to remain stable at this level in
both cities.
The Wijnegem shopping centre near Antwerp and
the Woluwe Shopping Centre in Brussels remain
the prime retail shopping centres in Belgium. Prime
rents in the shopping centre segment remained
stable at €1,600/sq.m./year. Rental levels rose in
shopping centres in Liège and in Mons.
Prime retail warehousing rents on the Rue de Stalle
in Drogenbos (Brussels periphery) remained stable
at €175/sq.m./year, and are forecast to remain
stable for the foreseeable future. In the prime
retail warehousing locations in Wallonia, such as
Waterloo, Liège and Charleroi, retail warehousing
rents were revised upwards in the 2nd half of 2013.
PRIME RENTS
Prime rents remained stable
“Investors’ appetite for retail remains high,
and retail remained the second largest
asset class in 2013.ˮ
€/sq.m./year
€/sq.m./year
2.000
200
1,850
175
1.750
175
1,600
JEAN-PHILIP VRONINKS,
HEAD OF CAPITAL MARKETS
1.500
Q4 Q4 Q4 Q4 Q4 Q3
2008 2009 2010 2011 2012 2013
Shopping Centres (LHS)
Retail Warehousing (RHS)
150
High Street (LHS)
PRIME YIELDS
Retail warehousing yields compress in Q3
%
7,0
6,5
6,0
5,5
5,0
4,5
4,0
6,0
5,0
4,25
Q4
Q4
Q4
Q4
Q4
Q4
2008 2009 2010 2011 2012 2013
Shopping Centre
High Street
Retail Warehousing
Source all charts : JLL Research OFFICE - BELGIUM
Avenue Marnixlaan, 23 b1
B – 1000 Bruxelles Brussel
T 32 (0) 2 550 25 25
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B – 2000 Antwerpen
T 32 (0) 3 232 39 30
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www.jll.be
CONTACTS
V I N C E N T H . Q U E R TO N
INTERNATIONAL DIRECTOR CEO BENELUX
+32 (0) 2 550 25 25
[email protected]
WA LT E R G O O S S E N S
HEAD OF RETAIL - BELGIUM
+32 (0)2 550 25 47
[email protected]
J E A N - P H I L I P V R O N I N K S (*)
HEAD OF CAPITAL MARKETS BELUX
+32 (0) 2 550 26 64
[email protected]
P I E R R E - PA U L V E R E L S T
HEAD OF RESEARCH - BELUX
+32 (0) 2 550 25 04
[email protected]
(*) sprl / bvba
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