The Belgian Retail Market

The Belgian Retail Market
Pulse Summer 2014
Quarterly Market Update
2
| pulse | BELGIAN RETAIL MARKET |
www.jll.be
SUMMER 2014
MARKET OVERVIEW
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
CONSUMER CONFIDENCE (NBB/
BNB) JUNE 2014
Q2 14
Change
Q-o-Q
Y-o-Y
-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
PRIME YIELD %
Q2 14
4.00
Change*
Q-o-Q
Y-o-Y
0 bps
12 Month
outlook
12 Month
outlook
-25 bps
*DEFLATED AND DESEASONALISED
**LTM : LAST TWELVE MONTHS
°YTD : YEAR-TO-DATE
Source all charts : JLL Research | pulse | BELGIAN RETAIL MARKET |
www.jll.be
SUMMER 2014
CONSUMER CONFIDENCE
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.
0
-5
-10
-15
-20
Consumer Confidence (LHS)
2014-07
2014-05
2014-03
2014-01
2013-11
2013-09
2013-07
2013-05
2013-03
2013-01
2012-11
2012-09
2012-07
2012-05
2012-03
-30
2012-01
-25
105
104
103
102
101
100
99
98
97
96
95
Gross index 2010=100
BELGIAN CONSUMER CONFIDENCE INDICATOR1
VS. WHOLESALE AND RETAIL SALES VOLUME²
Consumer confidence declined in H1 2014
Points
3
“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
Retail Sales * (RHS)
* Deflated and deseasonalised
1
2
SOURCE NBB/BNB
SOURCE EUROSTAT
Source all charts : JLL Research 4
| pulse | BELGIAN RETAIL MARKET |
SUMMER 2014
www.jll.be
TAKE-UP
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 SEGMENT
Retail Warehousing dominates take-up H1 2014
m²
400.000
300.000
200.000
100.000
0
2009
2010
2011
Shopping Centres
Retail Warehousing
2012
2013 H1 2014
High Street
5-yr Ave
“Prime high street locations
continue to attract
international retailers and
newcomers such as Uniqlo,
& Other Stories, Boggi and
Primark.ˮ
WALTER GOOSSENS,
HEAD OF RETAIL AGENCY
Source all charts : JLL Research 5
| pulse | BELGIAN RETAIL MARKET |
www.jll.be
SUMMER 2014
TAKE-UP
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.
TAKE-UP IN BELGIAN HIGH STREETS - H1 2014
Brussels, Antwerp and Gent form top 3
Liège
14%
Hasselt Bruges
3%
3%
Brussels
36%
Ghent
13%
Antwerp
31%
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 prelettings 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 prelettings 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.
Architect : JP Viguier
The Mall of Europe - Neo
- BRUSSELS -
Source all charts : JLL Research 6
| pulse | BELGIAN RETAIL MARKET |
SUMMER 2014
www.jll.be
PROJECTS
LARGE
SHOPPING
CENTRE
PROJECTS ARE PROGRESSING
ART & BUILD
Docks Bruxsel
Europea - Neo
- BRUSSELS -
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-
- BRUSSELS -
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.
COMPLETIONS AND FUTURE SUPPLY
Completions 2014 in line with 5-y ave
sq.m.
250.000
200.000
150.000
100.000
50.000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017
Completions
Under construction
Under permit
Design
5-y Average
Source all charts : JLL Research 7
| pulse | BELGIAN RETAIL MARKET |
SUMMER 2014
www.jll.be
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.
High Streets
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.
Shopping Centres
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.
Retail Warehousing
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 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.
PRIME RENTS
Prime rents remained stable
€/sq.m./year
€/sq.m./year
2.000
200
1.800
“Investors’ appetite
for retail remains
high throughout all
categories and market
segments.ˮ
JEAN-PHILIP VRONINKS,
HEAD OF CAPITAL MARKETS
1.850
1.750
1.500
175
175
1.600
Q4 2009Q4 2010Q4 2011Q4 2012Q4 2013Q2 2014
Shopping Centres (LHS)
Retail Warehousing (RHS)
150
High Street (LHS)
PRIME YIELDS
Retail warehousing yields compress
%
7,0
6,5
6,0
5,5
5,0
4,5
4,0
3,5
6,0
5,0
4,0
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q2 2014
Shopping Centre
High Street
Retail Warehousing
Source all charts : JLL Research 8
| pulse | BELGIAN RETAIL MARKET |
SUMMER 2014
www.jll.be
Transactions
LARGEST OCCUPIER MARKET TRANSACTIONS LAST 12 MONTHS
High Streets
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
City
Shopping Centre
Type
Sq.m.
Retailer
Shopping Centres
Year Qtr
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
Retail Warehousing
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
9
| pulse | BELGIAN RETAIL MARKET |
www.jll.be
SUMMER 2014
LARGEST RETAIL INVESTMENT TRANSACTIONS LAST 12 MONTHS
Price Yield
MEUR
%
Year
Qtr
Type*
City
Building
Seller
Buyer
2013
4
RW
Various
Cora Portfolio
85
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
Various
3 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
16.8
AG Real Estate
(certificate
Machelen
Kuurne)
Bricorama
16 est.
Private
Private
2014
1
HS
Various
Portfolio spread over
5 cities
2014
2
HS
Brussels
2 shops Bd de
Waterloo
*RW : retail warehousing
HS : high street
SC : shopping centre
6.3
OFFICE - BELGIUM
Avenue Marnixlaan, 23 b1
B – 1000 Bruxelles Brussel
T 32 (0) 2 550 25 25
F 32 (0) 2 550 26 26
Jan Van Gentstraat 1 bus 402
B – 2000 Antwerpen
T 32 (0) 3 232 39 30
F 32 (0) 3 233 76 85
www.jll.be
CONTACTS
V I N C E N T H . Q U E R TO N
INTERNATIONAL DIRECTOR CEO BENELUX
+32 (0) 2 550 25 25
[email protected]
WA LT E R G O O S S E N S
HEAD OF RETAIL BELGIUM
+32 (0)2 550 25 47
[email protected]
J E A N - P H I L I P V R O N I N K S (*)
HEAD OF CAPITAL MARKETS BELUX
+32 (0) 2 550 26 64
[email protected]
P I E R R E - PA U L V E R E L S T
HEAD OF RESEARCH BELUX
+32 (0) 2 550 25 04
[email protected]
(*) sprl / bvba
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