the belgian retail market - jll belgië · pdf filethe belgian retail market. 2 ......

Pulse Summer 2014Quarterly Market Update

The Belgian Retail Market

2 | pulse | BELGIAN RETAIL MARKET | SUMMER 2014 www.jll.be

*DEFLATED AND DESEASONALISED**LTM : LAST TWELVE MONTHS°YTD : YEAR-TO-DATE

Source all charts : JLL Research

The Belgian retail property market can be divided into 3 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. E-commerce is a growth market in Belgium, and shops are adapting their formats to the evolving retail landscape. 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. Vacancy in prime shopping centres and high streets remains low.

Summary Statistics Q2 14Change 12 Month

outlookQ-o-Q Y-o-Y

CONSUMER CONFIDENCE (NBB/BNB) JUNE 2014 -7 1 11

RETAIL SALES VOL. INDEX* - JUNE 2014 (EUROSTAT) 103.56 93 bps 64 bps

TAKE-UP - CURRENT QTR (SQM) 96,810 106% 10%

TAKE-UP - LTM** CUMULATIVE (SQM) 350,500 2% 1%

COMPLETIONS - YTD° CUMULATIVE (SQM) 63,116 -54% -73%

PRIME RENT € / SQ.M. PA 1,850 0% 0%

Investment Market >2.5MEUR Q2 14Change* 12 Month

outlookQ-o-Q Y-o-Y

PRIME YIELD % 4.00 0 bps -25 bps

MARKET OVERVIEW


1 SOURCE NBB/BNB2 SOURCE EUROSTAT

The GDP growth slowed down to 0.2% in Q2, after 0.4% registered in Q1. For the whole of 2014, a modest GDP growth of 1.2% is expected, and 1.3% in 2015, a slow pace to recovery. The export activity should benefit from the recovery of the Eurozone trade, although the recovery will be held back by high labour costs, and an ambitious reform package seems far away given the protracted government formation talks. As public debt remains above 100%, the exposure to borrowing costs is high. Private consumption is expected to grow 1.2% in 2014, and slightly more in 2015 on the basis of improving household finances thanks to limited job creation. Unemployment will remain high throughout 2014 at around 8.5% and will probably stay above 8% for the next 2 years.

Consumer confidence indicator published by the National Bank of Belgium decreased to -10 in July 2014. The last time that a double digit negative figure was recorded was in August 2013, announcing an upward trend that seems to be reversed in 2014. The main reasons for the decline are a combination of the negative macro-economic prospects, the unemployment figures and the anticipated restructuring measures in the distribution sector. Consumer confidence in July was still 6 bps higher than one year ago, but the gap is narrowing. The indicator is based on prospects relating to the economic situation, unemployment levels, people’s savings capacity and financial prospects. Deflated and deseasonalised retail sales in June 2014 were up on last year, but the subsequent Summer sales period in July was disappointing. This was probably due to the warm weather in the Spring, and the floods in July. Exact figures for July were not published yet at the time of writing. In June, the retail sales indicator published by Eurostat was higher than the European average, and remained in line with the retail sales indicator for Germany.

BELGIAN CONSUMER CONFIDENCE INDICATOR1 VS. WHOLESALE AND RETAIL SALES VOLUME²

Consumer confidence declined in H1 2014

* Deflated and deseasonalised


CONSUMER CONFIDENCE

9596979899100101102103104105

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Consumer Confidence (LHS) Retail Sales * (RHS)

“ E-commerce is increasing and has a major impact on the off-line retail scene and the expansion strategy of both local retailers and international brands.ˮ

WALTER GOOSSENS, HEAD OF RETAIL AGENCY


In Q2 2014, a take-up volume of 97,000 sq.m. was recorded, more than double that of the previous quarter. It was 23% above the 5-year quarterly average, and the second highest take-up recorded in a second quarter in the past five years. Take-up figures were boosted by the first letting transactions recorded for Docks Bruxsel shopping centre and by the pre-letting of Dansaert Retail Park in Groot-Bijgaarden in the periphery of Brussels. The number of transactions in the first half year, 371, was 20% above the 5-year average of 308. The retail warehousing segment registered the highest transaction volume in the first half year, 80,355 sq.m. in 98 transactions, representing 56% of the H1 volume. Shopping centres represented 20% of the take-up volume, 29,300 sq.m. in 104 transactions, whilst high streets represented 24% of take-up, 34,200 sq.m. in 169 transactions. Geographically, 61% of take-up was registered in the Flemish Region, 24% in the Walloon region, and the remaining 15% in Brussels Capital Region.

Brussels and Antwerp remain the leading commercial cities in Belgium, both cities registered the highest take-up volume, 22,000 sq.m. in Brussels and 12,000 sq.m. in Antwerp, in a total of 125 transactions, i.e. 33% of the total number of transactions. The combined volume of both cities was 27% higher than the 5-year average for the first half year. Ghent (including Deinze) takes the 3rd place, with 9,000 sq.m. in 18 transactions, followed by Kortrijk. In Wallonia, the highest transaction volumes were registered in the Liège area, in Mouscron and in Couillet.

The top 3 transactions in Q2 2014 were also the largest of the year to date : Colruyt group purchased 4,400 sq.m. in Antwerp, Salens Motors purchased 3,700 sq.m. in Roeselare, and a Belgian supermarket operator pre-let 2,300 sq.m. in Docks Bruxsel.

BRUSSELS AND ANTWERP REMAIN TOP 2 IN HIGH STREETS

The take-up volume registered in high streets in Q2 2014 amounted to 20,700 sq.m. in 98 transactions, 18% below that of the same quarter last year. The number of transactions was 14% lower than in the same quarter last year. The average size of transaction was 211 sq.m., 4% lower than in Q2 2013. The prime high streets of the Big Six (Brussels, Antwerp, Ghent, Liège, Brugge and Hasselt) attracted the largest volume, sq.m., and a number of newcomers: &Other Stories opened on the Toison d’Or in Brussels and the Korte Gasthuisstraat in Antwerp, and Elisabetta Franchi opened on the Schuttershofstraat in Antwerp. After the opening on the Schuttershofstraat of Red Valentino, Karl Lagerfeld and other luxury brands in 2013, the attraction of this location is confirmed by the 8 transactions registered in the year to date, for over 1,200 sq.m. Newcomers were also registered in regional cities, such as Minelli in Namur and Eden Park in Waterloo.

TAKE-UP BY SEGMENTRetail Warehousing dominates take-up H1 2014

WALTER GOOSSENS, HEAD OF RETAIL AGENCY

“ Prime high street locations continue to attract international retailers and newcomers such as Uniqlo, & Other Stories, Boggi and Primark.ˮ

TAKE-UP


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Shopping Centres High StreetRetail Warehousing 5-yr Ave


TAKE-UP


The Mall of Europe - Neo- BRUSSELS -

Brussels36%

Antwerp31%

Ghent13%

Liège14%

Hasselt3%

Bruges3%

TAKE-UP IN BELGIAN HIGH STREETS - H1 2014Brussels, Antwerp and Gent form top 3

Architect : JP Viguier

LARGEST TRANSACTIONS SCHUTTERSHOFSTRAAT SINCE 2013

Schuttershofstraat (1st fl. above 9a to 9d) 380 Van Beirendonck/ Van Saene

Schuttershofstraat 50 250 Twin-Set

Schuttershofstraat 5 200 Liu Jo

Schuttershofstraat 27 170 Atos Lombardini

Schuttershofstraat 53 155 Karl Lagerfeld

SHOPPING CENTRES : PRE-LETTINGS IN DOCKS BRUXSEL

In Q2 2014, a total take-up volume of 21,400 sq.m. was registered in shopping centres, in 69 transactions. The total volume as at end of June, sq.m., is 77% up on last year, under the impulse of Docks Bruxsel. The pre-lettings in Docks represented the highest number of transactions in the 2nd quarter, followed by Pieter Van Aelstplein in Aalst and Westland in Brussels. Shopping centres have virtually no vacancy, and the lack of available space has a downward effect on take-up. Looking at future offer, the 11,500 sq.m. extension of Shopping 1 in Genk will be delivered at the end of the year. As for larger shopping projects, Docks Bruxsel (49,000 sq.m. retail and leisure) is under construction and the list of pre-lettings is lengthening. Opening is scheduled early 2016. As for the Neo shopping centre project, the consortium formed by Unibail-Rodamco, Besix and CFE has been confirmed as winner of the redevelopment project tender, and the project has been renamed Europea. Phase 1 will offer 70,000 sq.m. shopping area, together with residential area, offices, leisure and parkings. Opening is scheduled towards the end of the decade.

LOWER DEAL SIZE IN RETAIL WAREHOUSING

In Q2 2014, a total take-up volume of 54,600 sq.m. was registered in the retail warehousing segment, bringing the total for H1 2014 to 80,350 sq.m. representing a 6% rise on the volume registered in the previous year and 2% above the average for H1 in the period 2009-2013. In 2014 so far, transactions were concentrated in Flanders (67%) and in Wallonia (33%), with no transaction registered in Brussels. This market segment benefits from the sustained interest of retailers, who are attracted by the availability of new or renewed properties, lower rents in the segment, and good access and parking facilities. The largest transactions in the first half year were 2 acquisitions : 4,400 sq.m. on the Boomsesteenweg in Wilrijk (Antwerp) was sold to Colruyt Group, and 3,700 sq.m. were purchased by Salens Motors in Roeselare. Health City let 2,000 sq.m. in Seraing (Liège) and Pretland let 1,900 sq.m. in retail park Les Dauphins in Mouscron.

A volume of 6,600 sqm. was registered in the high street segment in Brussels, representing 36% of the volume recorded in the Big Six in the first half year. The largest transaction was the letting of 950 sq.m. to &Other Stories on the Avenue de la Toison d’or, followed by the 660 sq.m. let by Boggi Milano, a newcomer in Brussels. The high streets in Antwerp follow in 2nd position with 5,500 sq.m. recorded in 32 transactions.


PROJECTS DELIVERED

Docks Bruxsel- BRUSSELS -

LARGE SHOPPING CENTRE PROJECTS ARE PROGRESSING

RETAIL WAREHOUSING DOMINATES PROJECT PIPELINE

In Q2 2014, 28,000 sq.m. were delivered in 6 projects. They include the Korenmarkt Complex (10,000 sq.m.) in Ghent, an in-town high street redevelopment project, the extension of the Cora Shopping Rocourt (6,000 sq.m.) in the Liège area, and the 4,150 sq.m. extension of Ninovita retail park in Ninove. Meanwhile in July a 6,800 sq.m. retail park was delivered in Tielt, and another 204,000 sq.m. are currently under construction, and will be delivered within 18 months. The total area to be delivered in 2014, 160,000 sq.m., is in line with the 5-year annual average of 175,000 sq.m. The pipeline mainly consists of retail warehousing schemes and shopping centres, majoritarilty redevelopments and extensions.

With regard to the main shopping centre projects of more than 50,000 sq.m. in and around Brussels, the first of the 3 large projects, Docks Bruxsel, is under construction, with delivery planned beginning 2016. The other 2 shopping centre projects in the Brussels area include Uplace, in Machelen on the Brussels periphery, and Neo/Europea, the redevelopment of the Heysel in Brussels. Both are planned towards the end of the decade. Other large shopping centre projects under permit include the Crystal Park in Liège (52,000 sq.m.), the extension of l’Esplanade Shopping in Louvain-la-

PROJECTS

COMPLETIONS AND FUTURE SUPPLYCompletions 2014 in line with 5-y ave

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2009 2010 2011 2012 2013 2014 2015 2016 2017

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Neuve (26,000 sq.m.), La Strada in La Louvière (38,500 sq.m.) and Rive Gauche in Charleroi (35,000 sq.m.). Delivery of these shopping centres is planned in 2 to 4 years.

ART & BUILD

Europea - Neo - BRUSSELS -


RENTAL VALUES & INVESTMENT

PRIME RENTS STABLE IN PRIME LOCATIONS

Prime rents remained stable throughout the three market segments. In secondary locations, prime rents remain under downward pressure.

The rue Neuve and the Avenue Louise in Brussels and the Meir and the Schuttershofstraat in Antwerp are the prime retail high streets in Belgium. Prime rents for these prime locations remained stable at €1,850/sq.m./year., followed by the Veldstraat in Ghent, where prime rents amount to €1,550/sq.m./year.

The Wijnegem shopping centre near Antwerp (57,500 sq.m.), currently the largest Belgian shopping centre, and the Woluwe Shopping Centre in Brussels (44,000 sq.m.) remain the prime shopping centres in Belgium showing the highest rents. Prime rents are stable at €1,600/sq.m./year.

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.

PRIME RENTSPrime rents remained stable

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Shopping Centre High Street Retail Warehousing

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PRIME YIELDSRetail warehousing yields compress

“ Investors’ appetite for retail remains high throughout all categories and market segments.ˮ

JEAN-PHILIP VRONINKS, HEAD OF CAPITAL MARKETS


PRIME YIELDS FOR HIGH STREETS DOWN TO 4%

Due to buoyant market activity, the prime yield for high streets compressed 25 base points from 4.25 to 4.00% early 2014. Yields for shopping centres and retail warehousing properties remained stable at 5.00% and 6.00% respectively. Taking into account transactions from €2.5 mln upwards, a total of € 76.5 mln was invested in retail properties in Belgium in Q2 2014, thus bringing the total for H1 2014 to €140.4 mln. That is 49% below the volume invested in the same period last year, which was an excellent year. The largest transaction in the second quarter was the acquisition by a private investor of 2 shops on the Boulevard de Waterloo in Brussels for €16 mln. The shops are let to luxury brands Tiffany and Hastings. In Antwerp 3 shops on the Schuttershofstraat that were recently let to Anne Fontaine, Atos Lombardini and Ba&Sh were sold to a private equity group at a yield of 4.1%. Retail was the second investment class in H1 2014, far behind offices and only just before industrial. The low number of deals in the shopping centre segment limits investment volumes. The average transaction size decreased year-on-year from € 16.3 mln in the first half of 2013 to €6.7 mln in H1 2014.

1.600

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Shopping Centres (LHS) High Street (LHS)Retail Warehousing (RHS)

High Streets

Shopping Centres

Retail Warehousing


LARGEST OCCUPIER MARKET TRANSACTIONS LAST 12 MONTHS

Transactions

Year Qtr City Address Type Sq.m. Retailer

2013 3 Awans Rue Defrêne 107 Pre-let 13,479 Walter Van Gastel

2013 3 Awans Rue Defrêne 107 Pre-let 7,302 Hubo

2014 2 Antwerp Boomsesteenweg Sale 4,400 Colruyt Group

2013 4 Oostende Torhoutsesteenweg 699 Pre-let 4,148 Decathlon

2014 2 Hooglede Brugsesteenweg 131 Sale 3,756 Salens Motors

Transactions in bold were advised by JLL

Year Qtr City Address Type Sq.m. Retailer

2013 3 Hasselt Kon. Albertstraat 46-48-50 Pre-let 8,000 Galeria Inno

2013 4 Brussels Rue Neuve 15 Letting 2,909 Primark

2013 3 Antwerp Frankrijklei 64 Letting 1,961 Donum

2014 2 Liège Rue de la Cathédrale 86 Letting 1,950 JBC

2013 4 Antwerp Meir 37-39 Letting 1,500 Bershka

2014 2 Ghent Veldstraat 67-69 Letting 1,300 Mango

High Streets

Year Qtr City Shopping Centre Type Sq.m. Retailer

2014 2 Brussels Docks Bruxsel Pre-let 2,300 Food retailer

2014 2 Brussels Docks Bruxsel Pre-let 2,200 Fashion retailer

2013 3 Wijnegem Wijnegem Shopping (Extension) Letting 2,082 AS Adventure

2014 2 Brussels Westland Letting 1,700 Zara

2013 3 Wijnegem Wijnegem Shopping (Extension) Letting 1,387 Esprit

2014 2 Brussels Docks Bruxsel Letting 1,200 Shoes retailer

Shopping Centres

Retail Warehousing


LARGEST RETAIL INVESTMENT TRANSACTIONS LAST 12 MONTHS

Year Qtr Type* City Building Price MEUR

Yield % Seller Buyer

2013 4 RW Various Cora Portfolio 85 6.3 Cora Ascencio

2013 3 RW Various Portfolio 7 Retail warehouses 45 Redevco Provestel

2013 3 SC Antwerp Century Center 40 O'Mahony Quares

2013 3 HS Brugge Zilverpand + 4 shops 35 Aberdeen Bermaso

2013 4 RW Various3 retail warehouses:

Bree, Rocourt, Marche en Famenne

28 Redevco Belgium Pertinea Fund I

2013 4 HS Various Various properties in Flanders 25 Bermaso Various Private

2013 4 RW Various 20 units 23.2 6.4 Private Retail Estates

2013 4 HS Leuven Fnac 20 5 Family Klene Groupe Hibert

2014 1 HS Various Portfolio spread over 5 cities 16.8

AG Real Estate (certificate Machelen Kuurne)

Bricorama

2014 2 HS Brussels 2 shops Bd de Waterloo 16 est. Private Private

*RW : retail warehousing HS : high street SC : shopping centre

Avenue Marnixlaan, 23 b1B – 1000 Bruxelles BrusselT 32 (0) 2 550 25 25F 32 (0) 2 550 26 26

Jan Van Gentstraat 1 bus 402B – 2000 AntwerpenT 32 (0) 3 232 39 30F 32 (0) 3 233 76 85

VINCENT H. QUERTONINTERNATIONAL DIRECTOR - CEO BENELUX+32 (0) 2 550 25 25Vincent [email protected] l l .com

WALTER GOOSSENSHEAD OF RETAIL -BELGIUM+32 (0)2 550 25 [email protected] l l .com

JEAN-PHILIP VRONINKS (*)HEAD OF CAPITAL MARKETS - BELUX+32 (0) 2 550 26 64Jean-Phi l ip [email protected] l l .com

PIERRE-PAUL VERELSTHEAD OF RESEARCH -BELUX+32 (0) 2 550 25 04Pierre-Paul .Verels t@eu. j l l .com

(*) spr l / bvba

www.jll.be

COPYRIGHT © JONES LANG LASALLE IP, INC. 2014. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of JLL. It is based on material that we believe to be re-liable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.

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the belgian retail market - jll belgië · pdf filethe belgian retail market. 2 ......

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