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Investment Market Update Belgium Q2 2016

The full report

  • Belgian investment markets remain very dynamic since the start of the year, with more than EUR 1.9bn already invested. This represents a 20% increase compared to H1 2015.
  • The office and healthcare sectors continue to progress at full speed while the retail sector witnessed a slow start to the year, mainly due to the absence of shopping centre transactions. Significant deals are awaited in the coming months in the office and retail sectors. As a result, the high EUR 4.3bn recorded in 2015 should be reached and might even be overtaken this year.
  • Foreign actors dominate the investment market, mainly coming from Germany and Asia since the start of 2016. Foreign investors represent 50% of the total invested volumes and their share even reach 73% in the office sector.
  • Further yield compressions have been observed globally. Prime yields reached new thresholds in the retail and the office sectors, respectively at 3.5% in the high street retail and 3.75% for the long-term secured office assets.
  • Further yield compressions are still expected in the office sector where the prime office yield for 3/6/9 year leases is still decreasing. Coming from 6% in 2014, it currently stands at 5% and further compressions below this 5% level are expected
  • in the coming months.
  • Even if important uncertainties remained linked to the recent Brexit, the impact could be positive for the Belgian investment market as foreign investors, previously massively attracted by London, could invest in Continental Europe in the coming months. Though positive, this impact should be limited as other Tier 1 cities such as Paris, Frankfurt, Berlin and Luxembourg are on investors’ radar.