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/ pulse  | BELGIAN LOGISTICS MARKET |

SUMMER 2015

Logistics Property in Belgium A multi-speed market in the first half of 2015 Quarterly Market Update - Pulse Summer 2015

•

Take-up of logistics space was 154,700 sq.m. in

•

Prime rents stable at € 55/m² p.a. Upward

Q2 2015, an excellent quarter after the dip in Q1,

pressure on rents for prime properties on prime

bringing the total take-up in the first half year to

locations.

226,800 sq.m., 16% below the 5-year average.

• Buoyant logistics investment market, the volume

• As development is largely dominated by non-

for the year-to-date amounts to € 194m, already

speculative projects, vacancy will remain low.

52% above the 5-year average for a full year. •

Prime yields down to 6.75% and compressing.

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/ pulse  | BELGIAN LOGISTICS MARKET |

SUMMER 2015

www.jll.be

Market overview Occupier market

Change Q-o-Q Y-o-Y*

12 Month outlook

Q1 15

Q2 15

Take-up LTM cumulative (‘000 sq.m.)

460

471

3%

-37%

Take-up current qtr (‘000 sq.m.)

72

155

114%

8%

Brussels-Antwerp

60

10

-84%

-86%

Antwerp-Ghent

3

6

88%

-

Antwerp-Limburg-Liège

0

111

-

777%

Walloon Axis

0

9

-

-62%

Other Belgium

9

19

119%

-44%

Prime Rent (sq.m. p.a.)

55

55

0%

0%

Q1 15

Q2 15

144

187

30%

128%

7%

6.75%

-25 bps

-25 bps

Investment market > €2.5m

Investment Volume YTD (MEUR)

Prime Yield

Change Q-o-Q Y-o-Y*

12 Month outlook

*Current quarter compared to same quarter last year - LTM : last 12 months - YTD : year-to-date

E313 OUTPERFORMS THIS QUARTER The highest volume in the first half year was recorded on the E313 axis, the only axis to exceed 2014 mid-year volumes (+174%), due to 2 large transactions mentioned above. All other logistics axes declined in comparison with 2014. The Antwerp-Brussels axis takes second place in H1 2015 : with a take-up volume of 70,000 sq.m. this axis performed 62% below 2014 mid-year volumes. The axis continues, however, to attract demand. Transactions recorded so far this year in Zaventem Brucargo with DHL (36,500 sq.m.) , an exceptional transaction in Brussels with the EU Commission (22,000 sq.m.) and Sports Direct let in Nivelles (14,000 sq.m.). Take-up on the AntwerpGhent axis in H1 2015 amounted to 9,350 sq.m., 54% down on H1 2014.

FIGURE 1: TAKE-UP sq.m.

1.200.000 900.000 600.000

Antwerp-Brussels

Antwerp-Ghent

E313

Walloon Axis

Other Belgium

10-yr Ave

Q2 2015

2014

2013

2012

2011

2010

2009

2008

2007

0

2006

300.000

2005

MARKET RECOVERS AFTER DIP IN Q1 Just under 155,000 sq.m. of logistics space was taken up in Q2 2015. Total take-up for the first half year reached 226,800 sq.m., 16% below the 5-year average due to the dip in Q1. The largest transactions of the year so far were registered on the E313 axis : the sale of a project of 58,000 sq.m. to Mobis Parts Europe in Beringen, and the 42,000 sq.m. build-to-suit project for Aldi in Turnhout. Economic indicators are positive, but remain modest, and it may be too soon to see a positive impact on take-up in 2015. Immediate demand remains relatively low, but with demand increasing throughout the rest of Europe, an upturn of the Belgian market could be approaching.

AVERAGE TRANSACTION SIZE ROSE 12 logistics transactions were recorded in Q2 2015, resulting in a total of 17 transactions for the first half year. That is 29% below the average of 24 transactions in the first half year for the 5-year period 2010 – 2014, and is due to the low market activity at the beginning of the year. Over the last 3 years a gradual increase in average transaction size was registered, from approx. 11,200 sq.m. in 2012 to 13,340 sq.m. in 2015 so far.

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/ pulse  | BELGIAN LOGISTICS MARKET |

SUMMER 2015

www.jll.be

FIGURE 2: COMPLETIONS AND FUTURE SUPPLY

DEVELOPMENT FOCUSES ON BUILD-TO-SUIT sq.m. 500.000

Development potential is good but developers continue to adopt a risk-adverse build-to-suit strategy. The project pipeline is dominated by non-speculative development. All logistics projects to be delivered in 2015 are non-speculative. In the first half year of 2015 107,700 sq.m. were delivered and a further 78,000 sq.m. are scheduled for delivery before year-end, bringing the development volume for 2015 to 185,000 sq.m., 44% below the 5-year average of 328,000 sq.m. As a compensation, close to 500,000 sq.m. are already scheduled as at today for completion in 2016-2017, the largest project being the tri-modal Trilogiport development in Liège. Speculative development is expected to remain extremely low in the short to medium term, and will be driven by an economic upturn.

450.000 400.000 350.000 300.000 250.000 200.000 150.000 100.000 50.000 -

Completions

2012

2013

FS Spec

2014

FS Non-Spec

2015

2016e

2017e

5-y Average

€/sqm p.a. 60 55

55

50 45 43

45 40

Q4 10

Q4 11

Q4 12

Antwerp-Brussels E313

HIGH INVESTMENT VOLUME IN 2015 SO FAR The total volume of €187 mln invested in logistics properties so far this year is 128% above the volume invested in the same period last year. In the second quarter € 43 mln were invested in 3 transactions, and in Q3 so far € 7.5 mln. were invested. The largest recent transactions include the purchase by Belgian REIT WDP of the build-to-suit for Damco in Willebroek for €24 mln at an initial yield of 7%, and the purchase of the Movianto site in Erembodegem on the Brussels-Ghent axis by Montea for € 14 mln. The buy-side in recent transactions is dominated by Belgian REITS in the larger market segments above € 10 mln and by private investors in transactions in the market segments up to € 10 mln. Local Belgian developers were omni-present on the sell-side. The demand from both local and international investors for prime well-let logistics properties remains high, and the outlook for the asset class is positive. The prime yield for logistics properties compressed 25 bps in Q2 2015, to 6.75%, and further yield compression is expected as the appetite from both local and international investors remains strong.

2011

FIGURE 3: PRIME RENTS BY AXIS

PRIME RENTS FOR LOGISTICS STABLE AT € 55/SQ.M. / Y. The prime rent for logistics property in Belgium remained stable in Q2 2015 at €55 per sq.m., the fourteenth consecutive quarter. There is constant upward pressure on rents for prime properties and locations, particularly where vacancy is extremely low. The prime rent on the Antwerp-Ghent axis and the E313 axis AntwerpLimburg-Liège.amounts to €45 per sq.m. p.a. Outside the principal logistics axes the prime rent amounts to €43 per sq.m. p.a.

2010

Q4 13

Q4 14

Q2 15

Antwerp-Ghent Walloon Axis

FIGURE 4: LOGISTICS INVESTMENT VOLUME € mln 250

227

200 150

118

135

160

187

100 50 0

29

Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q2 15 Volume MEUR

5-Y Ave

WALTER GOOSSENS, HEAD OF INDUSTRIAL AGENCY

“The recovery of the economy, the rise of e-commerce, changes in supply chains and the buoyant market in European core markets could underpin a market upturn.ˮ Source all Charts: JLL

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/ pulse  | BELGIAN LOGISTICS MARKET |

www.jll.be

SUMMER 2015

LARGEST OCCUPIER MARKET TRANSACTIONS LAST 15 MONTHS

YEAR QTR

CITY

REGION LOG

ADDRESS

WAREHOUSE m²

TYPE

OCCUPIER

2015

2

Beringen

E313

IZ Ravenshout

58,000

Owner Occup

Mobis Parts Europe

2015

2

Turnhout

E313

IZ Veedijk

42,000

Owner Occup

Aldi

2015

2

Nivelles

AntwerpBrussels

IZ Nivelles Sud

14,000

Letting

Sports Direct

2015

1

Zaventem

AntwerpBrussels

Brucargo

36,500

Letting

DHL

2015

1

Brussels

AntwerpBrussels

Canal Logistics

22,000

Letting

EU Commission

2015

1

Bruges

Other

Vaartdijkstraat 5

8,800

Letting

2XL

2014

4

Willebroek

AntwerpBrussels

Zeekanaal Brussel-Schelde

35,000

Owner Occup

ODTH

2014

4

Overpelt

E313

Lieven Gevaertlaan

30,000

Owner Occup

VB Logistics

2014

4

Willebroek

AntwerpBrussels

The Bridge 3 & 4, unit 1

27,000

Letting

Damco

2014

3

Marche-enFamenne

Other Wallonia

Industrial Zoning

44,000

Owner Occup

Lidl

2014

3

Herstal

Walloon Axis

Hauts-Sarts

25,000

Pre-Letting

Skechers USA

2014

3

Tessenderlo

E313

Genebos

15,000

Owner Occup

Hyundai Heavy Industries

2014

2

Willebroek

AntwerpBrussels

Victor Dumonlaan 4

33,932

Letting

European Food Transport

2014

2

ErembodeBrussels-Ghent gem

Industriezone Zuid IV

13,000

Letting

Movianto

2014

2

Heersterveldweg 13

12,600

Letting

Bose

Tongeren

E313

Transactions in bold were advised by JLL 

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/ pulse  | BELGIAN LOGISTICS MARKET |

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SUMMER 2015

LARGEST LOGISTICS INVESTMENT TRANSACTIONS LAST 15 MONTHS Year

Qtr

City

Address/Name

WH m²

Price Yield MEUR

2015

3

Vilvoorde

Cargovil, Woluwelaan

7,700

7.5

2015

2

Willebroek

Damco site

40,000

2015

2

Erembodegem

Movianto site

2015

2

Bornem

2015

1

2015

Seller

Buyer

Type

6.5

Futurn

RVM Invest

Investment

24

7

MG Real Estate

WDP

Investment

13,000

14

7.3

Built-to-suit

Montea

Investment

Industrieweg

5,000

5

9

Globalindus

Private

Investment

Bornem

DHL campus

72,000

58

7.2

MG Real Estate

WDP

Investment

1

Zaventem

Brucargo

36,500

30.5

8.2

MG Real Estate

Montea

Investment

2015

1

Herstal

Hauts-Sarts

52,000

28.6

7.7

Vincent Logistics

Intervest O&W

Investment

2014

4

Opglabbeek

Machiels Real Estate 77,000

33

8.1

2014

4

Puurs

Schoonmansveld 28

14,000

7.9

-

Montea

Transport Gilbert De Clercq

Own Occupation

2014

3

Tessenderlo

Genebos

15,000

22

-

Developer

Hyundai Heavy Industries

Own Occupation

2014

3

Zaventem

Nippon Express

6,000

4

7.7

Cordeel

Montea

Investment

2014

3

La Louvière

Garocentre Nord

12,800

4

-

Dow Corning

ETM

Own Occupation

2014

2

Willebroek

De Hulst - Neovia

19,500

13.3

8

MG Real Estate

Montea

Investment

2014

2

Willebroek

De Hulst - Sonoco

14,000

9.6

7.5

MG Real Estate

Montea

Investment

2014

2

Ternat

TransEuropean fund (part of portfolio of 2 9,000 properties)

3.7

8.75

Patrizia

WDP

Investment

Machiels Real Intervest Offices Estate & Warehouse

Investment

Transactions in bold were advised by JLL JEAN-PHILIP VRONINKS , HEAD OF CAPITAL MARKETS

“In this buoyant markt, investment volumes would have been even higher if prime product had been available.ˮ

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/ pulse  | BELGIAN LOGISTICS MARKET |

SUMMER 2015 The Netherlands Meer

a

Se

Oostende

Airport

Turnhout

Zeebrugge

Golden triangle Antwerpen St-Niklaas

Brugge

Oostende

Main Inland Ports

Gent

Brugge

N49

Kortrijk

Gent E403

E17

Geel

Turnhout

Mechelen

E34

Antwerpen Aalst E St-Niklaas Zaventem 313 Geel Lier Leuven Boom E17

Lummen

Hasselt

Brussels

Aalst

Mechelen Wavre

E314

Lummen E314 Hasselt Genk

La Louvière

Charleroi

E42

La Louvière

France

Liège

11

Nivelles

Mons

0 E4

Mons

Tongeren

Namur

Wavre E4

E429

Charleroi

Germany

Liège

Zaventem

Brussels Nivelles

Kortrijk

Genk

Tongeren

E19

E40

Motorway

Lier 9 E1

Boom

Zeebrugge

Main Sea Ports

A12

rth

No

E42

Namur

5

E2 Neufchâteau

1

1 E4

Airport Main Seaports

Arlon

Main Inland Port

Luxembourg

Neufchateau

Motorways Main Railways

Characteristics : Main Rivers and Canals USE :

Arlon

Logistic schemes and Distribution Center

BUILDING TYPE : Minimum 5,000 sq.m., numerous loading docks (minimum 1/1000 sq.m.), minimum height of 8 m, office area