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

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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

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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)

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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%

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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

“

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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

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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)

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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

“

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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

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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)“

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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.

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© 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 31Shane.oneill@cushwake.com

CÉDRIC VAN MEERBEECK

Head of Research Belgium & LuxembourgPartner T: +32 2 629 02 86M: +32 477 98 11 83Cedric.vanmeerbeeck@cushwake.com

ERIC VAN DYCK

Head of Antwerp OfficeInternational Partner T: +32 3 376 05 00M: +32 475 257 902Eric.vandyck@cushwake.com

NATHAN CLAESSENS

Account Manager T: +32 3 376 05 06 M: +32 494 58 32 26Nathan.claessens@cushwake.com

RESEARCH OFFICE AGENCY

DIMITRI VLOEBERGHS

Senior Account Manager T: +32 3 376 05 00M: +32 476 77 03 76 Dimitri.vloeberghs@cushwake.com