Belgium property yields 6.6% growth in 2005

Commercial property in Belgium provided average returns to investors of 6.6% in 2005, according to the first report on the country by the Investment Property database (IPD). The office sector, which represents 80% of the database value, returned 6.2%.

IPD, a London-based organisation that provides independent market indices and portfolio benchmarks to the property industry globally, said that income return of 6% in Belgium was consistent with the region whereas capital growth of 0.2% was 'limited'.

'Different situations can be observed in the Brussels market, with total return decreasing as we move away from the city centre. For instance, Brussels Central Business District (CBD) return is 8.9% whereas the figure for Brussels periphery is 2.5%, reflected by a deterioration of vacancy rates,' IPD said in a statement. The figure for capital growth were negative in Brussels decentralized (-2.9%) and periphery (-3.5%).

IPD said its Belgium index also shows a measurement of irrecoverable costs that rank between France and the Netherlands. The best performing sector was Industrial with a total return of 13.1%, followed by Retail at 7.6%.

'The launch of such an index in Belgium completes IPD's European coverage. It meets Belgian and international players’ expectations regarding analysis tools for real estate investment and contributes to a greater transparency, ' said Stephanie Galiege, managing director of IPD in Belgium.

The IPD Belgium index is compiled from the performance of 20 professionally-run portfolios that are managed by 14 institutional investors and cover some 4.7 bn of commercial properties.

For more information, go to www.ipdglobal.com