market analysis of business center market in belgium, sept. 2013 by finpower
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Presentation to Bobca of Market Analysis of the business center market in Belgium. Based on the financial figures 2012, presentation september 2013TRANSCRIPT
The power of professional financial management
fin POWER
MARKET ANALYSIS 2012
DRAFT VERSION – FOR DISCUSSION PURPOSES ONLY
BUSINESS CENTER MARKET IN BELGIUM
BOBCA, 24 September 2013
I. Market overview ‘Business centers in Belgium ‘I. Number of business centersII. Estimation of market-shareIII. Different locationsIV. Types of Shareholders
II. Financial Figures of business centers in BelgiumI. Turnover (Estimated)II. ProfitabilityIII. Balance sheet structures
INTRODUCTION
Business centers in Belgium : See list in annex Research by a maximum of means
Growing market if you know new centers, please let me now.
What is a business center ? Uses this as name of his business Including ‘bedrijvencentra’, excluding ‘innovation centers’/incubation centers For profit, registered company Serviced offices = full time reception services
Used figures : Published financial data (Bel First & NBB)
INTRODUCTION“Definitions and limitations”
Total appr. 150 business centers in Belgium :
28 ‘BC’s’, bedrijvencentra
12 Regus
5 Multiburo
Ca. 10 ‘groups’ with 2-3 centers, the fastest
growing part of the market.
Appr. 75 ‘individual business center owners
(50%)
In 2011 : ca. 135 BC, which means an annual
growth of appr. 10 %.
P.S. April 2012 : bankruptcy of Microbizz
Listing B.C.’s is not ‘clear-cut’
No innovation/incubation-centers
No ‘co-working-spaces’
No Incubation/Innovation centers
In Belgium, we observe appr. 150 business centers of which around 50 % are stand-alone centers.
I. BUSINESS CENTERS IN BELGIUM1.1. Number of Business Centers
I. BUSINESS CENTERS IN BELGIUM1.1. Estimation of market-size
5
Office-market in Belgium
Market of ‘larger cities’ very well documented
Own, rough estimation of market in regional cities
Total ca. 21 Mio m², accommodation for appr. 1 Mio collaborators (employees + civel servants in office environments)
Decreasing market volume due to NWC (- 2-3 % / year)
Business center market
Definition of ‘business center : ‘
Flexible contracts
Including services
Excluding ‘joint-office-buildings’ with no ‘reception’
Total : ca. 150 business centers, appr. 270,000 m² office space (see list in annexe).
Accounts for appr. 1,25 % of total office space in Belgium.
Estimated market growth 2012 – 15 : ca. 10 %/year (Instant)
Co working markt
New, upcoming market
Total of appr. 30 Coworking spaces in Belgium, totalling appr. 10,000 m² office space.
Impressive growth, but mostly a lot of non-viable business models
The business center market is a small but growing market
Offices (x 1,000 m²)Brussel 13.000 Antwerpen 2.000 Gent 1.000 Liège 500 6 'centrum' cities' : 300 - 500
(Charleroi, Namur, Hasselt, Leuven, Mechelen)15 'regioinal cities' 100 - 250
(f.ex. Kortrijk, Roeselare, Brugge, St. Niklaas, Aalst, )Total office spaces in 'cities' : 21.150
# Business centers (in m²)Number : 151 Medium surface : 1.785 Total surface occupied : 269.584
in % of offi ce market : 1,27%
# Co working centersNumber : 29 Gemiddelde oppervlakte : 351 Total surface occupied : 10.190
in % of offi ce market : 0,05%in % of business center market : 3,78%
60 % of Belgium’s business centers are
located in Brussels, Antwerp en Gent
41 % located in Brussels
12 % located in Antwerp
7 % located in Gent
The biggest city of Wallonia, Liege, has only 5
business centers.
Bruges and Leuven, two active cities in
Flanders only have a single business center
each.
2/3th of all business centers in Belgium are located in the three main cities (Brussels, Antwerp and Gent)
I. BUSINESS CENTERS IN BELGIUM1.2 Business centers by location
Brussel Antwerpen Gent Luik Namen Charleroi Leuven Brugge
Steden Business centers Co-working TotaalBrussel 54 6 60 Antwerpen 16 5 21 Gent 12 4 16 Liège 5 2 7 Leuven 5 1 6 Hasselt 4 2 6 Mechelen 3 1 4 Kortrijk 4 4 Louvain La Neuve 3 1 4 Sint-Niklaas 3 3 Oostende 2 1 3 Namen 2 1 3 Charleroi 2 1 3 La Louvi!re 1 1 2 Turnhout 2 2
Business Centers are well distributed
over the different parts of cities.
Only 1 on 3 business centers is located
in the centre of the cities
More then 40 business centers are
located in an industrial surrounding,
normally not planned for this purpose.
Airways and highways only attract a
minority of business centers
Business Center in Belgium are situated for approx. 1/3 in the Center of the cities, 1/3 in the industrial areas and 1/3 in the suburban areas
I. BUSINESS CENTERS IN BELGIUM1.3. Business center pro location
36%
25%2%
36%
1%
Center Industrial areaAirport Surroundings
II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.1. Turnover estimation pro region
• Turnover – Turnover growth in 2012 of 5
% to appr. 80 Mio €.
• Growth rhythm – From 1995 – 2005 : no
substantial growth of the market (< 2 %/yr)
– 2006-2008 : growth with more then 10 % pro year, not abnormal for this market compared with international studies
– 2010 – 2012 : growth 2-5 %, relatively low growth in comparison with international growth ratio’s of 5 – 10 % for EMEA-region’s.
II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.2. Turnover estimation pro ownership type
• Private owners own more then 50 % of the business centers
– They account for appr. 40 % of the turnover of the market, and are growing faster then other segments
• The (semi-) public ‘for profit’ owners account for appr. 25 % of the number of business centers
– But for less then 20 % of the turnover of the market – limited turnover/center
– This does not include the ‘VZW-structures’, who are not part of this study
– No growth of this segment since 2009.• International players – 20 % of the number of
centers– The international owners (mainly Regus and
Multiburo) account for nearly 40 % of the turnover of the market – larger centers.
– After a strong increase of their turnover from 2005-2009, we see a stabilization of turnover the last years.
II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.3. Operational profit (EBIT) of business centers
• The cumulative operational profits of this market where until 2006 negative.
• The private and international players are profitable from 2006 on
– 2011 : exceptional negative result of 1 start-up-center (Wetlands)
• The (semi-)public players have never been profitable as a segment on operational level.
– Losses for every centers during first years– Small profits for ‘older’ centers, mostly
not enough to cover ‘renovation-costs’ of buildings.
II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.3. Structural difference in ‘financial business models’
• Private business centers mainly own their buildings, which are financed for 2/3 through bank financing. Normal solvency of appr. 25 %
– Normal balance sheet structure
• International business centers do not own buildings, do not use many bank financing and have a negative solvency ratio
– Minimization of assets used
• Semi Public business centers own their buildings, but have mainly a capital funding, and a very limited bank financing
– No optimization of financial leverage– Use 2 x more own funds then private players, to realise ½ of
their activity (=turnover) private sector is 5 x more ‘efficient’ with their own funds …)
Private business centersFixed Assets 67.656 Own Funds 25.744 Debtors 10.550 Bank financing 47.907 Other 16.805 Creditors 5.118 Cash 6.094 Other 22.337 Total Assets 101.105 Total liabilities 101.105
International business centersFixed Assets 4.743 Own Funds -5.820 Debtors 4.094 Bank financing 4.768 Other 11.160 Creditors 3.565 Cash 4.814 Other 22.297
Total Assets 24.811 Total liabilities 24.811
Semi Public Business CentersFixed Assets 52.696 Own Funds 57.364 Debtors 2.776 Bank financing 20.166 Other 8.171 Creditors 1.938 Cash 20.464 Other 4.639 Total Assets 84.107 Total liabilities 84.107
Conclusions
• The business center market is a growing market– After an interruption in 2010-11, the turnover has grown in 2012 with 6 %– Main growth for international (8%) and private (5%) initiatives. Limited growth of
(semi-)public initiatives.• The market is covered by 3 types of owners :
– International players focus on the big cities, with an international network and they are operationally more performing, including a minimization of assets used.
– The private investors mainly own their buildings, with a normal financing structure and a ‘limited’ profitability – but a lot of them focus on the residual value of the building.
– The semi-public market players used the most own funds of the market, but do have a structural problem with ‘operational profit’ – partially due to their ‘subsidized’ business model.
(They use 5 x more equity recourses then the private sector to realize the same level of activity)