Brussels Offce Review 2nd quarter 2009

The occupier market is in the doldrums and “the present situation is clearly exceptional in its gravity and we can only hope that the market will get back on its feet in the next 6 to 9 months” (Pierre Badot, DTZ Director). Take-up during the first half of the year reached its lowest point of the decade and was equivalent to the level of activity reached in an average quarter! As a result, vacancy increased to reach the highest level seen since 1979, at 11.01%. Nevertheless, development activity continues - 167,000 sq m of new space has already been delivered to the and a further 180,000 sq m of space is expected to come on line before the end of the year. As such, the vacancy ratio may very well climb up to as much as 13%!

One cannot seek comfort in investment volumes, which remain extremely low, with only €400 million invested in Belgium in any type of property during the first six months of 2009 (compared to €2.9 billion in 2008). When zooming in on the Brussels office market, the figure is only €30 million (compared to 827 million in 2008)! The expectancy gap between buyers and sellers is far from gone and deals are still taking several months to close. It is difficult to predict where yields will stop rising, but if stocks are always six months ahead, the recent rally on world markets may be a sign that the bottom is near. Net inflows of €698 million into German open-ended funds in May is another comforting sign. In every crisis there is the seed for renewal and this one is no different - with many opportunities emerging in the market due to ongoing repricing, one has but to extend an arm and grab them…

source : DTZ