AVENUE’S ANALYSIS OF THE BELGIAN COMMERCIAL REAL ESTATE MARKET IN H1 OF 2024 aND OUTLOOK FOR THE REST OF THE YEAR

Investors: A Market with Sustained Appetite and Increasing Scrutiny

The Belgian commercial real estate market has shown resilience in the first half of the year, with investor appetite remaining strong. Despite a continuation of capital and equity in the market, the dynamics have shifted. Over the last years, investors have become increasingly more discerning and critical. Gone are the days of rushed decisions where prime properties were snapped up within hours. Today, the decision-making process involves extensive calculations and thorough analyses. Environmental, Social, and Governance (ESG) certificates play a significant role in this scrutiny. Properties are now often visited multiple times, undergoing strict technical inspections, prolonging the transaction process. While this has impacted the number of transactions, the underlying appetite for investment remains robust.

Rentals: A Stricter, BUT Stable Market

The rental market mirrors the investment landscape. There is a consistent appetite and steady take-up, indicating a healthy market despite stricter requirements from all parties involved. Each aspect of a rental agreement must be impeccable, or the deal falls through. The market's dynamism is highlighted by a noticeable increase in bankruptcies within the retail sector. However, these vacancies are being filled reasonably well, demonstrating the market's resilience. Retailers are actively optimizing their operations to navigate ongoing market pressures, creating opportunities in prime locations.

Looking Ahead: Quality Demand and Interest Rate Stability

As we look to the second half of the year, Avenue anticipates a continuation of current trends. Interest rates have stabilized, decreasing the likelihood of dramatic drops. The demand for quality properties will persist, and the challenge will be in matching this demand with appropriate supply. While the reduced transaction speed appears permanent, the stabilized interest rates have injected optimism into the market, potentially giving it more oxygen as some investors adopt a wait-and-see approach.

For a personalized analysis and tailored strategy, contact the Avenue team today and let us help you navigate the Belgian commercial real estate market with confidence.