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Trends and outlook 2019
OFFICE MARKET
THEANTWERP
INTRODUCTION 7
THE GROWTH OF THE ANTWERP OFFICE MARKET 10
CURRENT MARKET DYNAMICS 16
THE CO-WORKING SECTOR IN ANTWERP 20
DEALING WITH DECREASING VACANCY IN A DYNAMIC MARKET 23
ANTWERP OFFICE INVESTMENT MARKET 26
CONTACTS 28
TABLE OFCONTENTS
“The city is located in the heart of one of the most concentrated urban areas in Belgium and Europe
7
CUSHMAN & WAKEFIELD
ANTWERP
TRAVEL TIMES FROM ANTWERP
BY CAR
Brussels
Ghent
Amsterdam
Rotterdam
Frankfurt
40min
45min
1h30
1h05
3h30
Antwerp International
Airport
Station Antwerpen
Centraal
Station Antwerpen Berchem
Antwerp functions as the main economic motor of the Flemish region but is also an important international business epicentre for certain industries. Antwerp is the second largest portal city in Europe, the world capital in the diamond industry and Europe’s largest petrochemical cluster. Moreover, the city has become an important fashion centre as well and is home to flagship stores and branches from all major domestic and international retailers.
The Antwerp office market benefits from a decent road network but accessibility during peak time is often problematic due to heavy traffic congestion on the city ring road and the highways connecting the city. The railway infrastructure is well-established with direct connections to almost all major Belgian cities and some neighbouring capitals. Finally, Antwerp also benefits from an inter-national airport near the centre of the city.
With more than two million square meters of office stock, Antwerp is the second largest office market in Belgium. It is important to note that the seven subdistricts forming the Antwerp office market stretch beyond the boundaries of the city of Antwerp. Most of the Antwerp district’s office stock is concentrated in the Centrum and the Singel.
The city of Antwerp is the capital of the Antwerp province and has a population of roughly 520,000 inhabitants, making it the second largest city in Belgium. The city is located in the heart of one of the most concentrated urban areas in Belgium and Europe, forming a triangle with Brussels and Ghent where most of Belgium’s econom-ic and industrial activities are lo-cated.
INTRODUCTION
8
CUSHMAN & WAKEFIELD
Q1 2019 ANTWERPALL
FLANDERS MARKETS (Antwerp included)
Stock (sq m)
Total: 2,302,000
Centre: 1,144,000
Singel: 511,000
Periphery: 647,000
4,257,000
2018 Take-up (sq m) 144,000 290,000
Five-year average (sq m) 127,000 212,000
Vacant spaces (sq m) 122,000 205,000
Vacancy rate (%) 5.3% 4.8%
Prime rents
(EUR/sq m/year)155 155
Weighted average rents
(EUR/sq m/year)115 115-135
ANTWERP OFFICE DISTRICT DASHBOARD
HAVEN
PERIFERIE NOORD
PERIFERIE OOST
SINGEL
CENTRUM
LINKEROEVER
PERIFERIE ZUID
Kappellen
BeverenSint-Gillis-Waas
Sint-Niklaas
Hamme
Temse
Bornem
Puurs
Niel
SchelleAartselaar Kontich
Lint Lier
Edegem
MortselBoechout
Hove
Du�el
Hemiksem
Antwerpen
Kruibeke
RumstBoom
Zwijndrecht
Schoten
Brasschaat
Kalmthout
Stabroek
Wijnegem
Wommelgem
Borsbeek Ranst
Schilde
Zandhoven
SINGEL
CENTRUM
MAP OF ANTWERP
OFFICE DISTRICTS
▶ ▶ ▶
50%
52%
54%
56%
58%
60%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
2018
Centre Singel Periphery Antwerp share of Flanders (RHS)
10
CUSHMAN & WAKEFIELD
The Antwerp office market is composed of three main districts:
CENTRE
Enclosed by the Eilandje in the north, the railway and the Uit-breidingstraat in the east, the Schelde in the west and the Markgravelei and the Stati-estraat in the south.
Antwerp is Flanders’ largest office market with a total stock of 2,302,000 sq m, ahead of Ghent (1,076,000 sq m), Leuven (555,000 sq m) and Mechelen (324,000 sq m). Antwerp’s office stock has grown at an average an-nual growth rate of 2% over the past 15 years. Over this period, its share in Flanders’ total stock has decreased from 59% to 54% while Ghent’s influence has grown over the period.
SINGEL
Borders either side of the Ring to the south in the Berchem area.
PERIPHERY
Is itself divided into the Haven, Linkeroever, Periferie Noord, Periferie Oost and Periferie Zuid subdistricts.
THE GROWTH OF THE ANTWERP OFFICE MARKET
ANTWERP OFFICE STOCK, SQ M (LHS) AND SHARE OF TOTAL FLANDERS STOCK (RHS)
Grade A Grade B Grade C Unknown
“DISTRIBUTION OF THE OFFICE STOCK IN THE ANTWERP DISTRICT
Antwerp is Flanders’ largest office market with a total stock of 2,302,000 sq m, ahead of Ghent, Leuven and Mechelen.”
RUBENS ONE ROOF
A7%
B18%
2,302,000 SQ M
C 75%
12
CUSHMAN & WAKEFIELD
ANTWERP LARGE RECENT OFFICE DELIVERIES
ASSET DISTRICTDELIVERY
DATE
SURFACE
(SQ M)OWNER
TENANTS/
OCCUPIERS
Provinciehuis Centre 2019 6,000Provincie
AntwerpenOwn occupation
Post X Singel2016 –
ongoing> 50,000 IRET
Locale Politie, Kuehne + Nagel, Crelan, KPMG, Coolblue, EY, Proximus,
Christelijke Mutualiteiten, …
The Link Singel 2018 27,000 BaloiseVF Europe, Sweco, Meet
District, Astrea, …
Fidea Verzekeringen
Centre 2018 7,000 Fidea Own occupation
Havenhuis Centre 2016 10,000Antwerpse
HavenbedrijfOwn occupation
Engie Centre 2015 11,000 Baloise Engie, KBC
STOCK BY BUILDING GRADE
Only 25% of the Antwerp stock (or 575,000 sq m) is not composed of Grade C buildings. This has been one of the main issues the Antwerp market has had to contend with over the past years. In-deed, demand for quality modern spaces is consis-tently strong, while corresponding supply has not been as readily available. Nevertheless, a surge of speculative projects over past years signals a rec-ognition on behalf of developers of an opportunity to push the market forward.
“...a surge of speculative projects over past years signals a recognition on behalf of developers of an opportunity to push the market forward.”
In the longer term, several locations and large-scale urban projects across the Antwerp territory will play key roles in shaping the future of the market. These include (but are not limited to-):
Blue Gate Antwerp
An important PPP which will re-convert the 63 ha Petroleum Zuid brownfield along the Schelde in the Periferie Zuid district into a pole of activity centred on sus-tainable chemical research.
Group Bouwen are in the process of turning the Linkeroever dis-trict into a creditable alternative office location. The developer has purchased the site of the for-mer Gazet van Antwerpen print-ing works which is subject to an important spatial implementa-tion plan (RUP) and authorises the development of up to 80,000 sq m of offices.
Alides and Cores are planning to jointly develop a new office project on a strategically locat-ed plot of land previously owned by bpost and Connectimmo near Berchem station.
Infrastructual project which aims to add the final missing links re-quired to complete the Antwerp Ring road. Works on the Linkeroever/Zwijndrecht junction on the left bank of the Schelde (one of five key junctions) are anticipated to start in 2019. The entire project is sched-uled to end by 2026. The Oosterweelverbindingproject is intended to improve traffic and mobility around Antwerp and could render previ-ously peripheral areas into interesting alternative economic locations such as is the case with the Linkeroever and the case of the RUP applying to Campus West. Several citizen groups are already formu-lating suggestions on how to leverage the project to develop and revitalise neighbourhoods.
This RUP (Ruimtelijke Uitvoeringsplan – a form of spatial implementation plan) is currently being drafted, having previ-ously existed as a BPA (Bijzondere Plan van Aanleg – special land-use plan). In its draft form, it outlines that the 15,000 sq m area behind the Pelikaanstraat (Center district) could see the development of up to 260,700 sq m of offices phased across five office towers among other functions including residential and hospitality.
Campus West Pelikaanstraat
Ex-Connectimmo site, SingelOosterweelverbinding
Blue Gate Antwerp
Campus West
Pelikaanstraat
Oosterweelverbinding
Ex-Connectimmo site, Singel
0
50
100
150
200
250
0
50,000
100,000
150,000
200,000
250,000
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
2018
Centre Singel Periphery # deals (RHS)
647,500 SQ M
11%
8%
8%
7%
6%5%
5%5%
45%
Belgian Administration
Finance Insurance
Consumer goods
Education
Industry
IT Telecom
Real Estate
Distribution-Logistic-Transport
Other services
“
16
CUSHMAN & WAKEFIELD
DISTRIBUTION OF TAKE-UP BY OCCUPIER TYPOLOGY, 2014-2018
ANTWERP TAKE-UP, 000S SQ M (LHS) AND NUMBER OF DEALS (RHS)
Since 2014 included, average an-nual take-up in Antwerp amounts to 127,000 sq m. This number has grown substantially over the past couple of years since dynamics have moved up a notch thanks to some large speculative projects which have entered the market and triggered large occupier moves. The average number of deals amounts to 186 per year over the same period and has also increased due to occupiers’ appetite for the aforementioned developments.
A look at the distribution of take-up over the 2014-2018 period underlines Antwerp’s main sectors of activity, although a couple of single large deals distort this view somewhat. Occupiers from the public sector, finance & insurance sectors, the industrial sector as well as logistics companies provide the bedrock of Antwerp’s office activity and have been complemented by the sectors such as ICT and the wider real estate sector over this period.
The Centre and Singel districts have been the traditional hot-spots for market activity, espe-cially in recent years - account-ing for close to 70% of take-up. These districts are the most sought-after by occupiers due to their accessibility and historic and economic relevance.
... average annual take-up in Antwerp amounts to 127,000 sq m.”
CURRENT MARKET DYNAMICS
0%
20%
40%
60%
80%
100%
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
2015
2016
2017
2018
Private sector Public sector
“Antwerp is an economic destination with an exceptional profile and history
Therefore, as a Belgian office location, Antwerp can attract occupiers thanks to characteristics which do not neces-sarily apply to nearby Brussels or Gh-ent. In addition, companies on its soil are capable of organic growth as the economy improves, as witnessed by the numerous extension deals which have taken place. Alternatively, certain companies located elsewhere open secondary locations in Antwerp to har-vest closer proximity to clients as well as their own workforce, avoiding mo-bility complications which result from commuting to Brussels for instance.
Regarding public sector demand, the Sixth State Reform (trans-fer of competences from the Federal State to the Regions) in 2014 did not result in notable shifts of workers from Brussels towards the Flemish capital. Instead it led to a consolidation of Flemish administrative bodies in Brussels. Most recent pub-lic sector moves in Antwerp have involved provincial or city administration. Notable examples include Pleegzorg Provincie Antwerp’s purchase of the 4,000 sq m Berchemse Poort, and especially the 50,000 sq m development at Post X for the local Antwerp police.
Occupiers locate in Antwerp because it is an economic desti-nation in its own right with an exceptional profile and history in terms of international trade to this day.
ANTWERP TAKE-UP, ANNUAL SHARE OF PUBLIC AND PRIVATE SECTORS
0
100
200
300
400
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
(f)20
2020
21
Prime rent Average weighted rentPrime Brussels
19
CUSHMAN & WAKEFIELD
YEAR ASSET DISTRICTSURFACE
(SQ M)TENANT / OCCUPIER
TRANSACTION
2017 Post X Singel 50,000 Lokale Politie Antwerpen
Development
2018 Meir 127 Centre 33,000 Karel De Grote
HogeschoolPurchase
2017De Persgroep
new Belgian head office
Centre 8,000 De Persgroep Development
2008 Noordster Centre 15,500 FOD Financien
/ DouanePre-letting
2017Argenta head
office extensionCentre +/- 15,000 Argenta Development
2010 Copernicus Centre 14,080 VDAB Letting
2011 Mercator Building Singel 14,000 Provincie
AntwerpenLetting
2009 City Link Singel 13,808 Mercator Letting
2012 Engie Centre 11,000 Engie Letting
2012 Havenhuis Centre 10,000 Antwerp Port
AuthorityLetting
2010Winthertur Build-
ingSingel 8,742 AGSOA Purchase
2018 The Link Singel 7,705 VF Europe Letting
2016 Fidea Antwerp Centre 7,000 Fidea Development
ANTWERP LARGE RECENT OFFICE TRANSACTIONS
The Antwerp prime rent has been at a stable level of EUR 155/sq m/year since 2017 and is found in modern spaces in both the Centre and Singel districts. This level is forecasted to in-crease to as much as EUR 160/sq m/year in the next few years at competition for available Grade A spaces heats up.
Average rents are traditionally fairly stable and are currently at EUR 115/sq m/year.
ANTWERP PRIME RENTS AND AVERAGE RENTS (EUR/SQ M/YEAR)
20
CUSHMAN & WAKEFIELD
OPERATORLOCATIONS
(CURRENT AND UPCOMING)
Fosbury & Sons 2
Interoffices 1
IWG (Regus and Spaces) 6 (Regus) | 1 (Spaces)
Meet District 1
Multiburo 1
Mundo a 1
Officenter 1
COWORKING TAKE-UP IN ANTWERP (SQ M)
Office spaces occupied by the coworking sector in Antwerp amount to more than 1.16% of the total stock, a figure in line with major European cities of 1% to 2%.
Operators’ preferred lo-cations are the Centre and Singel district, i.e. well-connected locations, including by public trans-port in many cases.
The co-working trend’s increasing influence on the office sector also applies to Antwerp. Indeed, take-up by co-working operators in-creased more than twofold in 2016 with a total of more than 4,000 sq m mainly attributed to Spaces in Post X. This number increased sub-stantially again in 2017 when close to 10,000 sq m were recorded across four separate transac-tions. After a break in 2018, activity resumed strongly in 2019 thanks to Antwerp’s very own Fosbury & Sons who are expanding their pres-ence having committed to take 10,000 sq m in the Montevideo project on Kattendijkdok..
THE CO-WORKING SECTOR IN ANTWERP
20120
2,000
Centrum Singel Periphery
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 2016 2017 2018 2019YTD
The vacancy rate on the Antwerp market has been decreasing at a dizzying pace
“
23
CUSHMAN & WAKEFIELD
There are currently 122,500 sq m of available office spac-es on the market. An overwhelming share of this vacan-cy (77%) is attributable to Grade C spaces, including as much as 63,000 sq m corresponding to 1,000+ sq m floorplates. Such floor sizes require finding more elusive occupiers looking for large spaces in older buildings. Among the 28,000 sq m of Grade A- and B spaces avail-able on the market (23% of the total vacancy), 20,000 sq m corresponds to 1,000+ sq m floorplates.
Based on the marked preference for Grade A spaces over the past five years (33% of take-up), it is therefore fair to assume that available Grade A- and B spaces should fill up without too much difficulty.
The vacancy rate on the Antwerp market has been decreasing at a dizzying pace since its latest peak in 2017 (9.92%).
This peak marked a turning point where specula-tively delivered projects began absorbing demand. Indeed, over the 2016-2018 period, as much as 133,000 sq m of stock has been added to the mar-ket, including 109,000 sq m of projects which were launched speculatively – a very notable change in mentality in a Belgian environment which has al-ways been prone to caution (i.e. turnkey develop-ments), especially post GFC.
Vacancy currently stands at 5.32% as new projects have been quick to absorb demand, attesting to the level of demand for Grade A spaces (203,000 sq m, or 33% of take-up over the 2014-2018 pe-riod). This represents the lowest vacancy level in more than 15 years and warrants a closer look at what type of spaces are currently left available.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Vacancy rate Antwerp
Reconverting into another function
such as residential. There has
been a noted trend for such
reconversions in Antwerp over
the past few years.
Renovating into Grade A spaces.
Such outcomes could be
especially envisaged in highly
accessible locations.
Leaving as is.
o Propose market-defying
rental levels.
o In the case of large floorplate
owners: bet on a lack of
alternatives for occupiers
searching for such spaces.
Astute owners of older spaces are left with various scenarios to pursue to deal with their vacancy, including:
VACANCY RATE
DEALING WITH DECREASINGVACANCY IN A DYNAMIC MARKET
0
2
4
6
8
10
010,00020,00030,00040,00050,00060,00070,00080,000
2019 2020 2021 Unknowndate
Speculative / Awaiting tenants Committed # projects (RHS)
“ ANTWERP NEW OFFICE PROJECTS PIPELINE
DISTRIBUTION OF VACANT SPACES BY BUILDING GRADE
Owners of vacant spaces will also be keeping a keen eye on the development pipeline over the coming years.
Indeed, the pipeline (projects currently under construction or for which permits have been delivered) is composed of potentially 172,000 sq m over the next five+ years. As things stand, 51% of this pipeline amounts to turnkey projects. In ad-dition, question marks hang over the number of phases which will actually be delivered over this period in certain projects. Indeed, it is often the case that projects with permits ini-tially planned to be developed speculatively are revised to await a critical mass of pre-lettings before constructions are launched.
122,500 SQ M
Grade C77%
Grade B15%
Grade A8%
The pipeline is composed of potentially 172,000 sq m over the next five years.”
ASSET DISTRICTSURFACE
(SQ M)DELIVERY
YEARCOMMITTED/
TURNKEYOWNER/
DEVELOPER
1 Post X Building 8 Singel 8,000 2019 N IRET
2 Post X Politie Singel 50,000 2019 Y IRET
3 De Persgroep Centre 23,000 2020 Y De Persgroep
45
Blue_App + BlueChem
Periferie Zuid
8,000 2020 N
Univesiteit Antwerpen, AG Vespa, Bopro, DEC, Essenscia, PMV, POM
Antwerpen, Stad Antwerpen, VITO
6Argenta head
office extensionCentre 15,000 2021 Y Argenta
7Campus West (8 buildings)
Linkeroever 46,000 TBD TBD Group Bouwen
7
12
3
45
6
25
CUSHMAN & WAKEFIELD
ANTWERP LARGE OFFICE PROJECTS
0%
20%
40%
60%
80%
100%
2014 2015 2016 2017 2018 Q1 2019
Belgium China Other
0
2
4
6
8
10
12
0
50
100
150
200
2014 2015 2016 2017 2018 Q1 2019
Volumes # deals (RHS)“
26
CUSHMAN & WAKEFIELD
As mentioned above, Antwerp is a market over-whelmingly dominated by Belgian players. These mostly amount to private developers in the case of smaller assets which are destined to be recon-verted or refurbished, and institutional investors or Belgian REITs in the case of larger transactions. Owner occupiers constitute a third smaller cate-gory of players on the Antwerp investment market – this was the case of a Chinese owner-occupier in the Eilandje in 2016.
ANTWERP ANNUAL INVESTED VOLUMES, EUR M
ANTWERP SHARE OF INVESTED VOLUMES PER NATIONALITY
ANTWERP OFFICE INVESTMENT MARKET
Nevertheless, there has been an increase in mo-mentum in the past couple of years, with larger landmark deals carried out such as Leasinvest’s purchase of Hangar 26 – 27 for EUR 22.6 million at the end of 2018, as well as Baloise’s acquisition of The Link for EUR 89 million in early 2019.
Regional office markets (chiefly represented by Antwerp) are perceived as something of a spe-cialty market as far as investments are concerned. Foreign investors rarely invest in office buildings outside of Brussels due to factors such as small availability of assets, weak market rotation and lack of direct understanding of local dynamics. They can however be involved when large tickets become available.
Over the 2014-2018 period, an average of five deals per year were recorded for an average volume of EUR 84 million per year. For the sake of compar-ison, Brussels has recorded an average invested volume of EUR 1.52 billion over the same period.
Antwerp also differs by the nature of its invest-ments, where purchasers often acquire low-er-grade buildings, to renovate them, and most often to reconvert them into residential buildings.
Antwerp is the most expensive regional market in terms of prime assets
5.40%5.60%5.80%6.00%6.20%6.40%6.60%6.80%7.00%7.20%
Q1
2014
Q2
20
14Q
3 2
014
Q4
20
14Q
1 20
15Q
2 2
015
Q3
20
15Q
4 2
015
Q1
2016
Q2
20
16Q
3 2
016
Q4
20
16Q
1 20
17Q
2 2
017
Q3
20
17Q
4 2
017
Q1
2018
Q2
20
18Q
3 2
018
Q4
20
18Q
1 20
19
Flanders Antwerp
As a result of the market being mostly con-fined to local capital, pressure on yields is far lesser than in larger cities which consistent-ly attract foreign investors such as Brussels. However, Antwerp is the most expensive re-gional market in terms of prime assets with a prime yield having undergone successive compressions resulting in its current level of 6.00%. We do not forecast any further imme-diate compressions to this level.
ANTWERP AND FLANDERS PRIME OFFICE YIELDS
ANTWERP OFFICE INVESTMENT MARKET
In using the data contained in this report, the following should be noted:
• The data series has been prepared based on information which has been collected through our own Research, Capital Markets and Agency teams as well as material available to us from public and other external sources. In respect of all external information, the sources are believed to be reliable (unless stated) and have been used in good faith. However, Cushman & Wakefield has not verified such information and cannot accept responsibility for their accuracy and completeness, nor for any undisclosed matters that would affect the conclusions we have drawn. Nonetheless, in interpreting the information used, we have had to rely on the validity and accuracy of the data and information sources available to us.
• We have taken every possible care in the collation of this data series. The data is believed to be correct at the time of reporting but may be subject to change during the life of the project and beyond and as new information becomes available. We reserve the right to change data without prior notice in the light of revised market opinion and evidence.
• In accordance with standard practice, we would confirm that the information is confidential to the parties to whom it is ad-dressed, for their sole use, and for the stated purposes only. No responsibility is accepted to any third party in respect of the whole or any part of its contents. Neither the whole, nor any part of this project or data series, nor any reference thereto, may be included in any document, circular or statement without our written approval of the form and context in which it appears. It may not be reproduced by any means (electronic or otherwise) without prior written consent from Cushman & Wakefield.
ABOUT CUSHMAN & WAKEFIELDCushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, the firm had revenue of $8.2 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.be or follow @CushWakeBelgium on Twitter.
© 2019 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.cushmanwakefield.be
SHANE O’NEILL
Senior Research Analyst, Regional offices and Industrial markets T: +32 2 510 08 33M: +32 473 26 68 [email protected]
CÉDRIC VAN MEERBEECK
Head of Research Belgium & LuxembourgPartner T: +32 2 629 02 86M: +32 477 98 11 [email protected]
ERIC VAN DYCK
Head of Antwerp OfficeInternational Partner T: +32 3 376 05 00M: +32 475 257 [email protected]
NATHAN CLAESSENS
Account Manager T: +32 3 376 05 06 M: +32 494 58 32 [email protected]
RESEARCH OFFICE AGENCY
DIMITRI VLOEBERGHS
Senior Account Manager T: +32 3 376 05 00M: +32 476 77 03 76 [email protected]