Belgian market relatively stable

Tim Harrup

Real estate advisor Colliers has reported on the state of the Belgian market at the end of the second quarter. It starts by saying that the challenging macro environment is impacting on corporate margins, causing some to delay property decisions and leading to a consideration of the cost implications in a market with limited options. 2023 started with a quite hesitant take-up in all three regions, amounting to 267,622 m² in total, which is 17% below the 5 years average for the same period. In the second quarter it stood at 136,721 m², a decrease of 8% year on year. Pre-lets and leases on new energy efficient buildings continued to dominate the larger size bands and higher rents.

Unlike Brussels and Ghent where prime rents have stayed steady, Colliers reports, Antwerp is witnessing a persistent increase in prime rents, marking the second consecutive quarter this year. This upward trend is exemplified by the recent transaction at Frankrijklei 121 (Alides), which is scheduled for refurbishment. The rent for this property has surged to €/m²/year.


Investment activity continues to be on hold in anticipation of market repricing, with Belgium witnessing a total investment volume of just under €1.1 billion, indicating a decline in activities across all sectors. Of this, €340 million was allocated to office investment deals. Notably, during the second quarter, a modest amount of €194 million was observed in office investments. During the second quarter, there was a notable absence of Core investment transactions. Buyers are cautious about making early purchases until prices are fixed, while sellers are hesitant to sell at lower prices unless they urgently require cash. In the meantime, buyers are predominantly interested in ‘opportunistic’ assets.

Due to the absence of Core transactions, estimating the yields becomes challenging. However, there is a cautious anticipation that following a slight increase triggered by the changes in the ECB interest rates, yields are likely to stabilize and undergo a gradual decline. Small transactions dominate the market, with an average size of €13 million, which is significantly lower compared to the average of €42 million observed over the past four years.


Looking more specifically at Brussels, Colliers reports that take-up volume in the second quarter remained relatively flat and did not show improvement compared to the previous quarter, despite the European Commission being a key driver of activity during this period. Prime rents have maintained stability compared to the previous quarter. Weighted average and top quartile rents are under upward pressure. Several notable developments, including Royale Belge, Science 12 and The BelliArt, were successfully completed. The vacancy rate remains stable.

The total investment volume in Brussels now stands at €289 million, with half of the transactions completed in the second quarter. Despite the prevailing circumstances, several noteworthy transactions were documented, highlighting the presence of valuable opportunities across various markets in Brussels. These notable deals include Liberty House, The Rails, The Lighthouse and The Green Square. Yields were supported by Core transactions that took place at the end of the previous quarter, namely Treesquare and Wood Hub. These transactions established prime yields at 4.30% in the Leopold District and 6.20% in the Decentralised area. Yields are expected to remain stable until the end of the year, followed by a slight decline.