After years as runner up, Avenue takes the leading position in Out of Town retail for the first time this year. With 57,767 square meters leased, more than fifty transactions and a market share of 20.3 percent, the team confirms its position in a segment that is attracting an increasing number of investors.
This result primarily confirms the strength of the Belgian peripheral retail market. Take up is exceptionally high, and this is not a new phenomenon, as the periphery has been known for years as a stable market where rental prices rise steadily. For investors, this predictability creates confidence.
Strategy and long term vision
The success is no coincidence, but the result of a combination of proactivity, out of the box thinking, hard work and a long term vision, enabling the realization of tailored transactions for both retailers and investors.
That said, permitting processes play a major role in Out of Town retail and often span several years, making it very much a matter of sowing first and harvesting later.
Major transactions and standout deals
The reletting of former Leen Bakker properties was one of the most striking cases of the year. The strong demand for these units confirms that they are historically strong locations that remain highly lettable today. The same pattern emerged with Carpetright, where prime locations also attracted new tenants very quickly. Expansive players such as Jysk, Dreamland and Swiss Sense currently account for a significant share of this demand.
From an investment perspective, the sale of the Frunparks in Auvelais and Izegem on the one hand, and the sale of B Park in Bruges on the other, were the largest peripheral retail transactions. Such deals clearly demonstrate that investor appetite for retail real estate is far from being satisfied.
Persistent misconceptions
A frequently underestimated aspect of Out of Town retail is how stable the market truly is, which generally results in lower risk compared to other segments. Location remains important, of course, but today the quality of the sitting tenant is decisive. Daily goods are particularly sought after. Supermarkets currently achieve net yields of around five percent, while textile assets tend to move closer to six percent. Fast food concepts such as McDonald’s are popular due to very long lease agreements of up to fifty years, offering lower but highly secure returns of around 4.25 to 4.50 percent.
Expectations of retailers today
Visibility, accessibility and parking facilities remain basic requirements for retailers, but on top of that sustainability is becoming increasingly important. When given a choice, retailers more often opt for new developments that are ESG compliant, and they are willing to pay slightly higher rents for such properties.
Out of Town retail remains highly resilient in a world of e-commerce and hybrid models. Click and collect works particularly well in peripheral locations, with parking directly in front and easy accessibility. Hybrid retail concepts have firmly established their place in the market and are here to stay.
Sustainability is becoming a decisive factor, not only for new investments but also for existing portfolios. Older buildings will need to be actively renovated and upgraded to meet new standards. Those who fail to do so risk losing value and missing opportunities. ESG is no longer a buzzword, but a reality for investors and owners.
For investors and retailers, these developments mainly highlight how crucial insight, timing and the right partner have become. The peripheral retail market continues to offer opportunities, but requires a thoughtful approach and a long term vision. In this context, it remains essential to closely monitor developments and engage in dialogue with players who know the market from the inside and help shape it on a daily basis.