Investment levels in Belgium increased by up to 205% in the fourth quarter of 2009 compared with the previous quarter, totalling EUR 430.6 mln, according to a report published by property advisor Savills.
Investment levels in Belgium increased by up to 205% in the fourth quarter of 2009 compared with the previous quarter, totalling EUR 430.6 mln, according to a report published by property advisor Savills.
The jump in investment volumes was mirrored by increasing competition for assets. The average number of potential buyers rose to five per asset in the latter part of 2009 compared to one buyer per asset at year-end 2008. Increasing demand has pushed yields for nine-year leases down from 6% at the end of the third quarter of 2009 to 5.8% today.
The research indicates that investment activity in Brussels during the second half of 2009 was substantially up on the first part of the year by 391%. However, compared year-on-year investment levels fell 71% from 2008 to EUR 363 mln.
While Q3 marked a re-emergence of international investment funds looking to purchase prime product, there was an overall decline in activity relating to a lack of long-let product and unwillingness of owners to sell at above-average yields.
Leases between three and six years have seen yields stagnant at 6.5-6.75%, Savills says investors perceive these assets to be more risky due to a remaining lack of confidence in short-term rental markets.
In the CBD overall take up was down 37% compared to 2008 with public bodies, who usually account for 65% take up, representing only 16% of the market.
In terms of rents, activity in the outer CBD of Brussels remained strong with prime rents in the decentralised district increasing by 3.8% to EUR 190 m2/year during 2009. However, prime Brussels CBD rents were quite weak with an average drop of -6.3% whilst top quartile rents fell -1%.