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Belgium Real Estate
Showcase 2010
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MARKET TRENDS Supply and rental prices PROJECTS Offices, retail, logistics KEY PLAYERS Real estate developers, architects, advisers BEST STRATEGIES For investment and property management
Connect to www.pro-realestate.be for news, trends, network and management best practices related to the Belgian real estate market.
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SUMMARY
07 OFFICES
08 | Olivier Bastin appointed to new post of Brussels Master Architect 10 | Brussels office market, 3 years to absorb rising vacancy 14 | Brussels offices development, forthcoming projects 21 | Antwerp market developing and strengthening position 24 | Regional real estate markets: dont forget the provinces
Eolis - rendering Assar Architects
07
31 | The Office Affordability Index shows Brussels in strong position
33 RETAIL
34 | Retail town planning in Belgium: rules for permits change 36 | High streets: the rental hit parade 37 | Shopping centres: forthcoming projects
33
Shopping and leisure centre Just Under the Sky rendering Art& Build/ Quick it
39 LOGISTICS
40 | European Distribution Report : Belgium holds its position 42 | The Belgian logistics market : multimodal benefits 44 | Regional governments put the accent on logistics
39
Logistics site KBC Real Estate- Milmort ALTIPLANarchitects
47 INVESTMENT
48 | Financing: Belgian Real Estate Certificates, rediscovering an ancestor 52 | VAT on the price of land: a reality from 2011 54 | Green buildings: a new reality, not a passing trend 57 | Mobility and the environment are the future concerns in office building
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58 | Financing : what are the banks looking for now ?
Belgium Real Estate Showcase | 2010 A special issue of Profacility quarterly magazine published by
EDITORIAL Editor in chief : Tim HARRUP tharrup@pro-realestate.be Editorial manager: Patrick BARTHOLOME pbartholome@profacility.be
Patrizia TORTOLANI, Senior Consultant, De Crombrugghe & Partners Pascal VANHUMBEECK, Consultant De Crombrugghe & Partners Jan VOET, Editor of Warehouse & Logistics Magazine Claude YVENS, Editor in chief of Warehouse & Logistics magazine. ADVERTISING & MARKETING Key Account Manager : Sigrid NAUWELAERTS snauwelaerts@pro-realestate.be Marketing : Didier VAN DEN EYNDE dvandeneynde@bimedia.be Advertising rates available on www.pro-realestate.be/advertising
PRODUCTION MMM Business Media Layout: Stphane Andry www.mmm.be Printing: Van der Poorten www.vanderpoorten.be Connect with www.pro-realestate.be for key information to optimize your real estate management: investment strategy (purchase, lease or rent), choice of the perfect location according to the company's activities, selection of the most suitable building, financing and taxation, building fit out, move, building facilities operations.
All texts are protected by copyright. All ads fall under the sole responsibility of their authors. No part of this publication may be reproduced and/or published in any form or by means of printing or photocopying, microfilm, magnetic carriers, without the prior permission of the publisher.
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Contributors Georges BINDER, Director, Buildings & Data Gerrit CALLAERTS, Real Estate Finance Director, KBC Real Estate Guibert DE CROMBRUGGHE, Managing Director, De Crombrugghe & Partners Bruno DUQUESNE, Partner CMS Debacker Didier GREGOIRE, partner at CMS DeBacker and Head of Tax practice Thomas HAUZEUR, Associate at CMS DeBacker Andr LOMBART, Partner at CMS DeBacker Tams POLSTER, Head of Consulting Europe & Middle East, DTZ
Belgium Real Estate Showcase 2010
DEBATE
The next steps
C
risis, what crisis ? Well if anybody needs to ask that, they havent been living in the real world and certainly not in the real estate world for the past couple of years. Rents are down vacancy is up, tenants are scarce, the banks are, to put it mildly, cautious The Belgian market, with Brussels as its nerve centre, has always had a reputation for stability, but like every other market, it has suffered too. The question now is, what is the way forward? To try and find some reasoning and some solutions, we turn to the experts on the ground, those who live through this new reality every day. They were able to debate the question at a recent seminar in Brussels. And in particular, we take a look at what they think about a possible moratorium on office building in the capital of Europe as a solution to current over-supply. Firstly, Nicolas Orts, Joint Managing Director of CBRE Brussels, and the person who to the surprise of many in his role as a broker first put forward the idea: We must have a transparent debate about this. Our view is that the crisis, leading to companies seeking space rationalisation, has caused a level of vacancy and subsequent pressure on prices which is not good for investment in the capital of Europe. So we recommend a moratorium in certain zones. Mathieu Sonck, Secretary General of the Brussels Inter-Environmental Agency, goes even further: A moratorium is not enough. We need to actually decrease the amount of office space. Company downsizing could double vacancy in the next five years. And as there is a lack of housing in Brussels, we would propose that developers are allowed to build a certain amount of offices if, in compensation, they also build a certain amount of residential accommodation. Serge Fautr, CEO of sicafi (real estate fund) Cofinimmo, approaches the problem from a different angle, well aware of the presence of Brussels Capital Region Minister-President Charles Picqu on the other side of the table: Lets concentrate on renovation, not new-build. And we work very hard trying to find tenants. It is up to the politicians to work just as hard to increase employment in the region this is what is needed, this is the solution. Firmly against the idea is Vincent Querton, MD of Jones Lang LaSalle Belgium: Our company is radically against a moratorium, for several reasons. We believe it would distort competition amongst the Regions, be unfair to all the various players in the real estate market, and in any case, how could it be legally framed? On the same side of the argument, for a different reason, is Eric Verbeeck, President of owners association UPSI: Construction is one of the economic drivers of our country, and putting a halt to it would be a bad thing. What does the Minister-President himself make of all this? We need to look at what the nature of the vacancy is in the various zones, which buildings are empty. And then we have to analyse what sort of buildings will be required in the future. Will they be technological, ecological, have a high capacity for future re-conversion? The decision on which buildings to build will be based on which buildings will have the best chance of commercial success. So no decision on a moratorium can be taken quickly. Other speakers evoked an auto-moratorium in other words market forces making the decision for us. And while no conclusion was reached, this would seem to be the most likely outcome
Eric Verbeeck (left) and Nicolas Orts are on opposite sides of the moratorium argument
Photos: Marie-Nolle Cruysmans/Editions & Sminaires
Serge Fautr: The politicians need to work as hard as we do
Mathieu Sonck thinks a moratorium is not enough
The Minister-President of the Brussels Capital Region, Charles Picqu: Analyse future needs
Vincent Querton: A moratorium would be unfair
Tim HARRUP , Editor I

OFFICES
I
photo G. De Kinder
n this section we take a close look at the principal office market of Brussels, its prices, its districts and its forthcoming projects. Alongside this, we talk to the newly appointed Brussels Master Architect about his role and his vision, and we
look at how overall office cost occupation is evolving and where Brussels stands. But Belgium isnt only about Brussels, and we put the spotlight on the other major regional markets. And, in this changing real estate world, we look at just what type of offices companies and associations are now looking for. The previously undisputed king of real estate sectors has been under severe pressure, so how is it coping ?
SUMMARY
08 I Olivier Bastin appointed to new post of Brussels Master Architect 10 I Brussels market: vacancy rising: current supply will take 3 years to absorb 14 I Brussels offices development, forthcoming projects 21 I Antwerp market developing and strengthening position 24 I Regional real estate markets : dont forget the provinces 31 I The Office Affordability Index shows Brussels in strong position .
rendering Jaspers-Eyers & Partners
C O M PA N Y P R O F I L E S
26 I ALTIPLAN | Architectural bureau 27 I VK ENGINEERING | Technical engineering 28 I GLOBAL | Building fitting out & workplace design 30 I ANIXTON | Real estate services & consultancy .
photo Atenor Group
OFFICES I CITYSCAPE
Brussels Master Architect: th

Brussels Region has recently appointed its own Master Architect, a role which is designed to oversee and bring a degree of harmony to the architectural procedures for projects instigated by the Region. The position is held by Olivier Bastin, who explains how he sees his work and the future of the city.
What are your priorities? Firstly, to draw up an orientation note for the end of May, destined for members of the Brussels Parliament, but which will also be distributed more widely within the public and private domains with an interest in town planning. This will serve to identify the work of the Master Architect. At the beginning, for example, the domain is limited to projects initiated by the Brussels Capital Region, but this therefore only involves 5-10% of all projects built in Brussels which is very little. The original mission has been defined in this way because Brussels already has several layers of administration in town planning terms Regional, Communal administrations, for example, which means that communal projects theoretically do not have to pass through my office. So I would like to widen our sphere of activity to this domain. In fact, the dossiers we are already handling are more varied than the strict original definition: a communal project in Forest commune, a competition for the public spaces to be established around Schuman in the European district, the construction of a factory close to the Ring at Forest/Drogenbos, the competition for the Heysel plateau development. There are already Master Architects in Flanders, but not in Wallonia how do you see this evolving? I both appreciate and work with my Flemish and Antwerp colleagues. In Wallonia, they have been working on producing quality architecture for more than 15 years, and this is a good system, particularly in the context of PPPs. All I would say is that what they do works well, and we, the Master Architects in the other Regions, are striving to help them strengthen their position. I cannot say whether this will end up by a suitable person being appointed to a role like ours within Wallonia. Is your role part of a wider strategy, mobility for example? There have to be wider and longer term strategies for the city. Though it is not our role to intervene on questions of infrastructure. The Region and City have to make their choices, and it is up to us to make these as attractive as possible. So if the City decides it needs a new railway line, or RER, it is not our job to say but that will not look very nice just there. It is our job to make sure the finished article is as pleasant, as integrated as it can possibly be into its surroundings. One of our current dossiers, as I mentioned, is a factory. I said to the minister concerned that we will have a factory that people will come from all around Europe to see! The same goes for urban necessities such as car parks they dont have to be eyesores. And if a piece of ground has to be cleaned up, de-polluted, it makes sense to involve the landscape architect from the beginning, not at the end. Because of all this, I believe the public authorities are looking on us very favourably. How do you see a major international city such as Brussels developing, from an architectural point of view? Previously, it was believed that mixed use was the way forward. But this led to planners trying to artificially force a mixed character onto every district within a city. The new thinking is for the alveolar, or cellular, city. The idea here is to provide mixed use through keeping the identities of different districts, and allowing them to work together so that there is a genuine mix, both social and functional, throughout the city. Trying to create identical mixed districts everywhere cannot work. Mixture for mixtures sake is unproductive. It is better to identify the driving forces in each district, and make the most of these. Make districts interconnect,
The advantages of Belgium

Being Belgian means taking advantage of the great diversity to be found in our country. In fact diversity is a major part of our life. You only have to look at the language situation two main languages are spoken in the major regions of Wallonia and Flanders (French and Flemish), and in Brussels you will hear both of these used freely within almost any business meeting, along with English. Not to mention all the other languages heard around the city. Belgium is like the cellular city accept the differences, make the most of them and live harmoniously with them.
he future of the city is cellular

harmonise the relationships between functions, keep the qualities of each district. I believe that the urban structure of Brussels works well, and can be a model for others. We have the advantage of not having built the peripheral ghettos to be found on the edges of some cities in neighbouring countries. An integrated city, not a collection of integrated districts, this is the aim. You have explained that your role involves public sector architecture, but that you see it potentially expanding. Does this include to the private sector? Where the private sector is concerned, it seems to that it is logical that we intervene to a degree. In a major project such as Tour & Taxis to the west of Brussels city centre (an entire city district project ed), for example, we would take part in the competition procedure for laying out the public spaces, and why not go even further, by inviting the private sector to take part in a competition for some of the buildings planned. I think the private sector would be enthusiastic about this, especially thanks to the media interest which would be generated. The competition logic exists already in the private sector. You will obviously have a major role to play in any competition process. What makes a good competition in your experience? Three things: firstly, a good programme, with clarity, and the objectives clearly and transparently explained to the architects. This means that the public authorities would often need to turn to a study bureau to produce a well defined programming study. There is acceptance of the notion of dialogue in Brussels, but this tends to make an appearance too late in the process, when 3-5% of costs have already been invested by the architects, which means the investing party is far less interested in true dialogue, being already out of pocket. Dialogue needs to start at the very outset. Secondly, good procedures. Too often, in public adjudications, it is the financial offer which counts and little else. We have to bring the notion of quality firmly into play. And at the moment there are also too many types of procedures, we need harmonisation. So we will look at what goes on at the moment, identify who does what, and then set ourselves the objective of constructing a more practical tool. Lastly, a good competition process needs a good jury process. By this, I mean that we need to get away from the perception that the jury is some sort of judicial organism, like in a law court, making a decision on whats good and whats bad. The jury is a meeting of minds, a sharing of experience, a process to make sure we end up with the best solution. You are inevitably going to be involved in the green movement in architecture. What are your thoughts on this? My thoughts are very pragmatic and direct! Only a fool would not go down the sustainable development route now, quite simply because not producing green buildings may render the final product unsaleable. And it should be remembered that by 2015 all public buildings in the Brussels Region have to be passive. The private sector is obviously going to go the same way. Tim HARRUP I
Olivier Bastin has taken enthusiastically to his role as Brussels first Master Architect
(Photo: Audrey Contesse).
OFFICES I MARKET TRENDS I
Brussels : 3 years to absorb

In Belgium, the real estate market principally involves the Brussels office market (some 61% of the market), even if, over recent years, other market segments have been gaining ground. Foreign companies appreciate the central location of Belgium between the major markets of Germany, the UK and France which, combined with the substantial developments in rapid transport links (TGV and airport), enable easy connections with these different markets.
The recent leasing of the whole of the Marquis by Fortis Holding, along with the purchase for own occupation of the Forum project (41,000 m) by the Belgian State, and of t Serclaes (17,500 m) by HUB (Hoge School Universiteit Brussels) constitute 3 major transactions which have diminished market supply.
n 2009, take-up amounted to around 430,000 m for the whole of the Brussels Capital Region, or some 20% less than in 2008. This decrease in take-up reflects a trend seen throughout Europe, with a drop in demand resulting from the slow down in the global economy. The decrease was also partially due to a reduction in take-up from the public sector. The last quarter was notable for certain large scale transactions which managed to boost recorded take-up levels despite all this. Since 2007 the market has been experiencing a general fall in rental levels, exacerbated by the recession of 2008 and 2009. Pressure on rents is a consequence of slack demand combined with increasing supply. The general sentiment of tenants is to wait, and many companies are taking advantage of the next break in their leases to renegotiate the financial conditions contained in it. Within a context of weak demand, owners have difficulty in finding tenants and are offering more interesting rental levels or other incentives to attract new takers. The future evolution of rental levels will depend on the balance between supply and demand. Taking the current high level of supply into consideration, some 2,016,000 m (of which 1,466,000 m of vacancy plus 550,000 m of projects underway, including the State Administrative Centre, and expected to be delivered in 2010 and 2011), and average take-up of 575,000 m per year recorded over the past decade, it will require
around three and a half years before current supply is absorbed. This situation perfectly reflects the current market over-supply, implying downward pressure on rents over the short and medium term. Current situation, developments and trends for each business district I Centre (Pentagon) This takes in the whole of the zone contained within the inner ring road. It constitutes the financial centre of the city and the country, through the presence of the Brussels stock exchange and the National Bank, which has taken in many other banks over time. This zone is bounded by first rate shopping streets. Going beyond the presence of Central Station around which have developed numerous large scale projects over recent years, this zone has the advantage of excellent public transport networks, which represents an overriding criterion in selecting a location, particularly for the large institutions and public administrations. The principal occupants to be found here are Belgian financial groups, ministries and private companies. As well as the good image of the district, it also possesses an excellent mix of functions and services. Before the crisis, this district represented a relatively stable market, with vacancy of under 5% and an increase in rental levels year on year. New projects to come to the market (such as the Marquis, 33,500 m) have increased supply and as a consequence vacancy levels (to over 6%), while creating
Le Marquis. (Altiplan Architects Photo G. Kinder).
Forum. Rendering Archi 2000
10
rising vacancy
downward pressure on rents. The recent leasing of the whole of the Marquis by Fortis Holding, along with the purchase for own occupation of the Forum project (41,000 m) by the Belgian State, and of t Serclaes (17,500 m) by HUB constitute 3 major transactions which have diminished market supply. The renovation of the State Administrative Centre, representing a potential of 70,000 m of offices, nevertheless risks adding to vacancy when it comes to market in a few years. In this zone rents currently stand at an average of Eur 185/m/year, with prime rents at Eur 210/m/year. I South (Midi) District This district is located around the South Station, and has greatly developed over the past ten years. These numerous developments, along with the arrival of the TGV and the complete refitting of the South Station, have turned it into an office zone in its own right. Its principal occupants are public administrations and service companies such as the Social Security Company ONSS. The South District is above all a lessors market. Supply is limited and demand more substantial. This is reflected by a very low vacancy rate (below 1%). Potential tenants for this district therefore have little negotiating room. I North District This district has become more and more frequented over the past 15 years, in particular due to the lack of sites available in Brussels. This is a modern district, located just outside the Pentagon, around the Boulevard Albert II, between the Avenue du Port and the North Station. This station provides of a good network of public transport facilities. Companies located in the North District are from various sectors, and generally have need of substantial amounts of office space. The public sector represents an important proportion. The installation of the European Commission in Covent Garden is also a first step towards the creation of a new European hub. Demand for this location is currently driven by the ambitions of the French-speaking community, with its headquarters on the other side of the canal, and by private operations of smaller scale. The marketing of new projects such as Boral (35,000 m) Zenith (30,000 m at an asking price of Eur 205/m/year), will be crucial over the coming months. As long as these new projects stay empty, rental levels will remain under pressure until the market absorbs the current supply, even though it is in this district that the landmark letting of the year was recorded, with the leasing by GDF-Suez of a project developed by Fortis Real Estate, North Light and Pole Star, 2 towers with a total surface area of 75,000 m. Vacancy levels and pressure on rents will also depend on the redevelopment of the Tour & Taxis site, which will eventually provide some 140,000 m of offices. I Leopold (European) District With almost 25% of total Brussels office stock (almost 3,485,000 m), the Leopold District represents without any doubt the most important business district of the capital, with the Schuman roundabout and the Square de Mees as its nerve centres. This district is located to the east of the city centre and is spread around the Rue de le Loi and Rue Belliard, between the Boulevard du Rgent and the Cinquantenaire Park. It has the advantage of an excellent network of public transport, with in particular the Luxembourg and Schuman railway stations, enabling immediate connections with the entire national and international network. Many metro stations and bus lines also serve the district, with their axis on the Rue de la Loi. It is essentially the European institutions which occupy this district, along with the major national ministries, and certain Belgian and foreign company headquarters. The presence of the European Parliament and Council of Ministers only serves to strengthen the attraction of the District. The installation of the European Commission in Madou Tower suggests that the European District is beginning to extend towards the North District. As with the Central district, the Leopold District, which could be considered as a stable market up to now, has seen its vacancy levels rise to above 9% in 2009, in particular due to the arrival of new projects such as The Capital (54,300 m), with a consequential
tSerclaes. Rendering Jaspers-Eyers & Partners

Belgium Real Estate Showcase 2010 11
The business districts of the Brussels Region.
downward pressure on rents. Negotiations underway between Axa Belgium and the European Commission for the letting of at least 50% of the building enable the prospect of an improvement for the district to be glimpsed. I Louise District This district is located to the south of the inner ring road, essentially along the Avenue Louise, between the Porte Louise and the Cambre woods. Access to this zone is less easy and the office buildings contained within it tend to be of older construction. Over the past few years the city has been orienting its policy towards converting office buildings into residential. This is a mixed environment which includes residential, offices, some high quality shops, hotels and restaurants. It is largely small and medium private companies which are to be found here, along with law firms and consultants, attracted amongst others by the proximity of the law courts. The advantage of this zone is that there are still small, efficient surface areas to be found. The Louise District records one of the highest vacancy levels of the central districts, with a rate of around 11.4%, even though new projects are relatively scarce. Amongst these should be mentioned, however, the Platinum, a 26,400 m building currently undergoing total renovation. The Belgian Buildings Agency (Federal Scientific Policy) has just taken up 12,700 m in this building. Along the Chausse de Charleroi, there is another large scale project underway. This is the Trio, by CBRE Investors, the redevelop-
Centre North Lopold Louise Decentralised Periphery South
Market dashboard 2009: 13,455,000 m of offices

Districts Key figures Stock (m) % of total % second hand buildings % Vacancy Prime rents Prime yields (%) Centre 2 400 000 17,8% 45,0% 6,3% 210 6,25% South 475 000 3,5% 23,5% 1,0% 195 6,80% Lopold 3 485 000 25,9% 27,3% 9,1% 265 6,00% North 1 450 000 10,8% 21,5% 6,5% 195 6,50% Louise 770 000 5,7% 52,5% 11,4% 200 7,00% Decentralised 2 875 000 21,4% 38,0% 15,5% 185 8,00% Periphery 2 000 000 14,9% 5,0% 20,9% 165 8,50%
Strong and weak points of the various districts of the Brussels Capital Region Advantageous fiscal regime Access by public transport Quality of stock Presence of facilities Presence of green areas ++ = ++ ++ + ++ -+ + ++ -++ ++ ++ = ++ = = + + ++ -+ + ++
++ Excellent I + Good I = Average I - Poor I -- Bad These figures are taken from a research carried out by De Crombrugghe & Partners. For further information an detailed report of this survey, please contact them : info@decrombrugghe-partners.be - Tel. +32 (0)2 663 43 83
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ment of a 21,800 m ensemble spread through tree independent, interconnected buildings. I Decentralised (within the Brussels Capital Region) This zone includes the other districts located within the 19 communes of Brussels. It is less homogenous and office buildings zones are concentrated along the major thoroughfares, such as the Chausse de La Hulpe, Boulevard du Souverain, Boulevard de la Plaine, Boulevard du Triomphe and Boulevard de la Woluwe. Notable international companies such as BASF, Levi Strauss etc. choose to locate here. It can be observed that the districts which are well served by public transport, such as the Chausse de La Hulpe and the Boulevard du Souverain, perform far better than those zones with a less developed public transport network, such as the Rue Colonel Bourg and Marcel Thiry, where a very high vacancy level is recorded. Within this context, converting office buildings into residential is one alternative envisaged in these more difficult districts. With a vacancy level of 15.5%, the Decentralised districts have seen the smallest rise in this domain, due largely to the low level of deliveries of new projects in 2009. Average rents stand at 105 EUR/m/year, with prime rents reaching 185 EUR/m/year. The main transaction in this zone involves the rental of 4,500 m in Solaris, the first green building in Brussels, located on the Chausse de La Hulpe. The trend towards green buildings is set to grow over the coming years, to the detriment of buildings which consume more energy. I Ring and Periphery (outside of the Brussels Capital Region) This zone, which takes in those communes alongside the Ring (Machelen, Zaventem, Waterloo etc.), has grown considerably over recent years with the development of numerous office parks. This first took place around the airport at Zaventem (Keiberg, Airway Park, Airport Business Center, Ikaros, Airport Plaza, Astra Gardens, Pegasus, Corporate Village) which is a zone in its own right, and then extended towards more distant zones such as Waterloo, Braine lAlleud, La Hulpe, Hoeilaert, etc. (Waterloo Office Park, Collines de Wavre, etc.). Accessibility by car is good, although this has been less evident over recent years, due in particular to the substantial concentration of office parks in these zones. These are generally less well served by public transport, even if there is to be observed a genuine effort to improve the network, especially around Zaventem. Occupants here are largely computer and technological companies. The major attraction is to be found in the rental levels, more competitive than the city centre, coupled with a more advantageous fiscal policy.
Guibert DE CROMBRUGGHE, Managing Director Patrizia TORTOLANI, Senior Consultant Pascal VANHUMBEECK, Consultant De Crombrugghe & Partners I
OFFICES I FORTHCOMING PROJECTS I
Brussels market: High quality

The projected increase in vacancy over the coming year or more due to speculative products coming onto a market which is suffering from a crisisinduced lack of demand, has led to developers slowing the pace of new at-risk constructions. This situation is likely to last until at least 2010, but the buildings which are coming to the market in the interim period are of high quality and are already displaying the green technical features which will become compulsory as time
Jaspers-Eyers & Partners
North Light / Pole Star

Developer: Architect: Surface area: Delivery: North District, Brussels Fortis Real Estate Jaspers-Eyers & Partners 75,000 m September 2010
North Light / Pole Star is the latest to take its place in the North District of Brussels, the so-called mini-Manhattan located close to the canal and the city centre. The letting of this project at the very end of 2009, almost a year before completion, to GDF-Suez, saved the Brussels letting market from what would have been a disastrous year.
goes on.
Rendering Archi 2000
A2RC Architects
Tour & Taxis South City Offices

Avenue Fonsny 23-30, B-1060 Brussels South City Office SA & South City Hotel SA (Atenor Group, Espace Midi (Besix Red, CFE, CIB, Soficom Development) and BPI) Architect: A2RC Architects / Jaspers-Eyers & Partners Surface area: 18,670 m2, offices Parking : 96 Delivery: November 2010 Developer:
This project is located along the Avenue Fonsny, and forms part of an extensive restructuring programme for the South Station area, which has been underway for around two decades. The building is opposite the exit from the South Station concourse. The faade is conceived in light coloured stone with parts in brick and other elements in grey-tinted thermo-lacquered aluminium. The glazing features a high degree of light transmission, acoustic and thermal insulation. The office buildings have been designed for maximum comfort for the occupants.
Developer: Architect : Surface area : Delivery:
Boulevard Du Port, 1000 Brussels Project T&T Several, by project +/ 400,000 m all functions included ongoing over several years
To refer to Tour & Taxis as a project is an understatement. Located along the canal, it is very close to the North District, and is the largest single urban redevelopment programme ever seen in the capital (on a 30 h. site). It includes restored listed buildings (the former customs buildings from the 19th century), along with the creation of offices, residential accommodation, a very large green area and the Brussels Environment building, the largest passive building in Europe.
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y products in favour
South Crystal
Developer: Architect: Surface area: Parking: Delivery: Avenue Fonsny, 1060 Brussels South Crystal A2RC Architects 6,537 m offices ; 840 m retail 34 March 2011 Developer : Architects: Surface area: Delivery:
Premium
Quai de Willebroeck, Brussels Atenor / Alco Building Ateliers Lion (Paris) et A2RC (Brussels) 80 000 m total, 30,000 m offices From 2011
Premium is a new tower development located in the North District of Brussels, across the canal from Tour & Taxis. As well as the 140 metre high tower there will be lower level villa-type constructions and a vast office complex. The whole of the project will benefit from services such as a concierge, wellness centre, and a promenade alongside the canal.
Alongside Brussels South Station (TGV, Thalys, Eurostar), South Crystal represents the first office building on the Avenue Fonsny when coming from the major boulevards. Much smaller than the other office buildings, it assumes the role as an urban relay, through its medium size, which underlines contrasts and connections: a transition between horizontal and vertical fabric taking its place alongside a neighbouring hotel of vertical structure on the corner of a street and an avenue a clear expression of a dual offices/shops programme
A2RC Architects
Atenor
rendering Jaspers-Eyers & Partners
Jacqmain 135
Boulevard Jacqmain 135, 1000 Brussels Developer: Kairos Architect : Jaspers-Eyers & Partners Surface area : 11,000 m offices, + retail and residential Parking : 78 Delivery : May 2010
Jacqmain 135 is located in the centre of Brussels, close to both the historic heart and the North District. It represents a combination of a restored building and a new construction, and will offer mixed functions of offices, residential accommodation and retail.
Connect with www.pro-realestate.be to discover office development projects and find the coordinates of their real estate developers, architects, and advisers
Media Corner
Chausse de Louvain / Avenue Lon Grosjean, 1140 Brussels Developer: Robelco Group Architects: Assar Architects / A2RC Architects Surface area: 32,972 m (4 buildings) Parking: 740 Availability: tbd
Media Corner has been designed so that a remarkable weeping willow tree will remain visible from the Chausse de Louvain, through the particularly transparent architecture. The faades of the first three buildings are composed of brick, and are of filled and empty type. Anodised aluminium has been selected for the window frames. The dynamic aspect and the sense of rhythm of the faade are achieved through several combinations of formats, including openings of two different sizes, and modulation of 135 cm. Some of the openings will be grouped together via an anodised aluminium window feature.
Dtrois
A2RC Architects
Van Volxem Astro Tower

Developer: Architects: Surface area: Avenue de lAstronomie 14, 1000 Brussels Astro Tower Lease Jaspers-Eyers & Partners 48,150 m Avenue Van Volxem 366-368, 1190 Brussels Developer: CIT Blaton, JCX Immo Architect: Art & Build Architect Offices: 20,349 m (6 buildings from 2,502 m2 to 4,284 m2) Parking: 183 Delivery: 2011 +
Originally constructed in 1976, Astro Tower is located close to the Place Madou on the Brussels inner ring road. This location is between the Leopold (European) district and the North district. The building offers 31 floors at a total height of 107 metres. The renovation will feature a dual faade cladding, and the installation of wind turbines, which will significantly decrease energy consumption.
Located a few hundred metres from Brussels South Station, the philosophy behind the project is based on sustainable development. The accent has been put on the recyclable nature of the project: the construction of autonomous units, the size, the floor areas, the free height, all enable a high degree of flexibility of use and easy conversion to other uses without problem. The inside finishing has been intentionally reduced in order to favour basic, strong and recyclable materials: brick faades, wood, aluminium, steel, stone; listed buildings on the site have also been renovated.
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Hooox
Platinum Quattuor
Chausse de Wavre 1076-1124, 1160 Brussels Developer: Brustar Auderloft sa Architect: Assar Architects Surface area: 10,828 m (4 buildings) Parking: 186 Delivery: beginning immediately, in phases
The site comprises three parts, spread across 4 buildings surrounding a small square. In the interests of coherence, the architects decided upon similar sizes (3 or 4 levels above ground) and decided to use the same ranges of materials and colours: lower parts in natural stone or similar, with the treatment of the upper levels being in brick and light coloured roughcast, metallic coverings, dark window sills In order to alleviate the volumes, the upper floors are slightly set back compared to the ground floor. There is a retail element to this development.
Developer : Architect : Surface area : Delivery:
Avenue Louise 245, 1050 Brussels Burco Archi 2000 23,620 m Spring 2010
Platinum is the first major development on the Avenue Louise (Louise office district) for many years. It occupies a position midway between the Bois de la Cambre woods and the Place Louise (law courts). The Platinum has been designed to offer modern facilities and energy efficiency, and is partially pre-let to the Belgian State and a law firm.
Image supplied by Immobel
Image supplied by Burco
Yvan Glavie / Crepain Binst
Impratrice 17-19
Boulevard de lImpratrice 17-19, 1000 Brussels Developer : Befimmo Architect : Crepain Binst Architecture Surface : 14,158 m Parking: 53 Delivery: 2011
Impratrice represents the total renovation of an iconic building first constructed in 1960 and bearing the name Telex. It has been recognised by the Brussels Capital Region, receiving an award for ecological conception, low energy use and costs, and reduced CO2 emissions. Impratrice 17-19 is located between Brussels Central station and the St. Michel and Gudule Cathedral, just a stones throw from the GrandPlace. The area around the station is currently being entirely renovated.
Forum
Rue de la Croix de Fer Rue de Louvain , 1000 Brussels Developer : Immobel Architect : Archi 2000 Surface area : 55,000 m Delivery: 2010-2013
Forum occupies a block in the heart of Brussels historic centre, just behind the Belgian Parliament and Senate, close to the Royal Park and Palace, and a short distance from the GrandPlace. In early 2010 the sale of the building to the Belgian State, for its own use, was confirmed; the building is set to be delivered in phases over a 3-4 year period. It has been designed to be energy-efficient, with features such as rain-water recuperation and low luminance lighting.
White Atrium
Avenue de la Toison dOr, 1060 Brussels. Property manager: BEOS Gmbh Architect : Atliplan Architects Surface area : 9500 m Delivery: 2010
White Atrium is undergoing a total renovation, and will be equipped with the latest technological features. Most of the building is occupied by offices, but it also includes some residential accommodation and a wellness centre. Located close to the Law Courts and the Avenue Louise, White Atrium will offer extremely flexible offices set around a vast atrium.
Veridis
Avenue Herrmann-Debroux, 1160 Brussels Developer: Herpain Urbis Architects: Assar Architects Arcade Surface area: 6,561 m offices Parking: 69 Delivery: tba
Located in the green districtof Auderghem in Brussels, the Veridis office building is part of the voluntary approach of developing a new building generation with environmental, social and economic added value. The aim is to decrease the ecological footprint of the building while improving the health and the comfort aspects. Veridis, which is currently in conception phase. Spread over four floors, Veridis provides 6,561 m of above-ground office space and 110m of below-ground archives, along with 69 parking spaces. The average floor area is 1,500m. The project brings together architectural quality and comfort with technical and environmental performance.
Image supplied by Assar Architects
Altiplan Architects
Image supplied by Anixton
Realex Gateway
Developer: Architect : Surface area : Brussels Airport Brussels The Airport Company Jaspers-Eyers & Partners / A2RC 48,000 m Rue de la loi 99-105, en Rue J De Lalaing 30-34 1000 Brussels Developer : Dexia Insurance/Realex Architect : Jaspers-Eyers & Partners Surface area : 28,425 m + 10,589 m Parking: 90 Delivery: 2012 - 2013
Described as possibly the last major development in the Leopold (European) district of Brussels, this real estate development project consists of a plot located at Rue de la Loi 99105. It has been granted a planning permit which allows for substantial office space above ground and a large basement area. In addition to its high architectural quality, the building will be state of the art in terms of both technology and the environment.
Gateway is being entirely renovated, having originally been in a U shape alongside the original terminal at Brussels Airport. It will now be set around a central atrium. There will be a covered garden which will constitute a meeting area for the whole complex.
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Belair
Boulevard Pacheco, 1000 Brussels Developer: Breevast Architect: Jaspers-Eyers & Partners / Arne Quinze studio / Archi 2000 Surface area: 70,000 m offices + hotel + retail + residential Parking: 2,400 Delivery: 2012
This project represents the redevelopment of a very long building located alongside Brussels inner ring road, close to the North District and the historic city centre. Once completed it will offer not only 70,000 m of offices, but a large public area with a hotel, residential accommodation and a retail facilities.
Atlantis
Developer : Architect : Surface area : Delivery: Avenue Charles Quint, 1040 Brussels Codic DSW Architects / Cerau 24,000 m Autumn 2010
The Access and Bridge buildings, currently under construction, have been awarded BREEAM certification with the mention Very Good. These are the first buildings in Europe to be certified under the new BREEAM Europe for Offices norm. Amongst factors taken into account are construction process management, comfort, health and safety of occupants, along with energy use considerations and accessibility by public transport. Atlantis is located at the western entrance to Brussels, at the end of the motorway leading to the seaports of Zeebruges, Ostend, Calais and Dunkirk.
Image supplied by Codic
Image supplied by Montois Partners Architects
Trio
Chausse de Charleroi 110-116, 1050 Brussels Developer : CBRE Investors Architect : Jaspers - Eyers & Partners Surface area : 24,951 m Parking: 137 Delivery: August 2010
Trio offers three units ranging from around 3,000 m to over 11,000 m. It benefits from facilities styled by the developer as Five Star Services, including a concierge for taking care of the needs of its occupants in terms of the provision of outside services. Located in the Louise business district, Trio isclose to the Place Stphanie and Place Louise, and therefore benefits from good public transport connections in addition to its own 137 parking spaces.
Airport Plaza
Vuurberg Grenstraat, 1831 Diegem Developer : Robelco Investment manager : CBRE Investors Architects : Montois Partners / Laurent Willox / Maud Caubet Surface area : 36,159 m Parking: 697 Delivery: 2009-2010
A major new multi-building project at the very entrance to Brussels International Airport it is literally within walking distance Airport Plaza is the latest addition to this thriving business district. One of the advantages in terms of access, apart from the obvious, is that Brussels Airport has a direct rail link to the city centre, running every 15 minutes and with a 15 minute journey time.
Europa Eolis
Square Sainctelette, 1000 Brussels Developer: CBRE Investors Architect: Assar Architects Surface area: 8,991 m2 (office + archives) 304 m2 retail 210 m terraces Parking: 41 Delivery: August 2010
The Eolis project represents the redevelopment project of an office building located at the Square Sainctelette close to the North district of Brussels. The layout will offer optimal flexibility to choose between partitioned and open-space offices. The building meets the Brussels EPB 2011 regulations (E=75; K=34) and also complies with the International environmental label (the HQE certification).
Developer : Architect : Surface area : Delivery:
Rue de la Loi, 1000 Brussels Atenor Archi + i 30,000 m 2016
Located on the Rue de la Loi in the heart of Brussels European district, Europa forms part of a project to redesign this area, breaking up the corridor effect of the road. The architectural style of the building has to take into account the desire of the Brussels region master-plan to integrate any new construction here into its surroundings.
Assar Architects
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Atenor
Antwerp market developing and strengthening position

In Belgium, the Antwerp office market can be considered as the second largest after Brussels. It represents around 10% of total Belgian office stock, some 2,100,000 m including Mechelen. By contrast with the Brussels market, Antwerp is not really international in vocation. It revolves around regional activity, with the port as a major driver. Companies working in the secondary and tertiary sectors find it important to locate their regional or provincial headquarters here.
ntwerp has not escaped the consequences of the crisis but has been less affected than Brussels. Take-up has remained at comparable levels with previous years, reaching almost 90,000 m in 2009. It was take-up in large surface areas which suffered the most, which had few repercussions for the Antwerp market which is less dependent on this type of demand. Although rents were under pressure, they decreased by less than in Brussels. Prime rent stands at around 145 EUR /m/year and average rents at around 85 EUR /m/year. Vacancy remains high, at above 11% or almost 230,000 m. This vacancy level combined with projects set to come to the market over the next 2 years, with an estimated total surface area of 37,000 m, means that it will require 2.3 years for market supply to be absorbed, taking into account the average take-up of 100,000 m per year registered over the past 4 years. Following 2009, a year which was active in terms of deliveries onto the market, with projects such as the 26,700 m City Link and the Avenue Building, 2010 should be quieter, with the delivery of Noordster (around 15,000 m), which is entirely pre-let, and the 4,500 m of Clipper House. An economic recovery together with the low level of scheduled new
office projects may in time translate into a decrease of vacant space.
The market is geographically divided into 4 main zones: The Port (Old Port and New Port), Centre, Singel or Ring, and Periphery.
I Port Port activity, which has never stopped growing in importance is without any doubt the driver behind the Citys economic activity. Many production companies, followed by distribution companies, which will gradually become offices as the tertiary sector grows within the economy, set up over time around the port.
The landmark letting of 2009, carried out by Cofinimmo, the take-up by Mercator Assurance of 13,808 m of offices in the City Link at Berchem, with a fixed 12 year lease and a rental level announced at 125 EUR/m/year.
image supplied by Kairos
This zone represents around 15% of total stock and can be divided into two sub-zones: Q Old Port The Old Port district extends parallel to the Schelde, to the north of Antwerps main square, up to and around the Bonaparte and Willem docks. A small core of prestigious maritime companies is still to be found in this zone, a result of the port activity which was carried out here before it moved northwards with the modernisation of the Port of Antwerp. This zone benefits from a good road network which enables easy access to East Flanders via the Waasland tunnel, and to the city centre. The district is characterised by a mixed building stock, bringing together the oldest of office buildings with more modern constructions. Q New Port The New Port has mostly grown up over the past 20 years. It essentially extends along the Noorderlaan. Most buildings in this zone are in need of total renovation. Companies located in this zone, whose activities are directly connected to port activity, also benefit from access to the Netherlands via the A12 (Antwerp-Roosendaal) and A1 (Antwerp-Breda) motorways located just a few hundred metres from Noorderlaan. I City Centre This area takes in the whole of the zone contained inside the inner ring road and extends tothe edge of the port zone in the north. Three principal zones can be identified: the zone which extends to the north of the Meir: little soughtafter due to a lack of modern buildings and of visibility. the Diamond district: this zone is essentially concentrated around the Central Station where all of the diamond business (cutters and traders) is to be found. Offices here
are mostly small in size and their popularity depends on the input of natural daylight from the north, essential in this domain where light plays an overriding role. the south of the city: the office zones to be found here are mostly concentrated around the three main axes: the Leien (Amerikalei, Britselei, Frankrijklei and Italielei), Mechelsesteenweg and Plantin & Moretuslei. This part is very popular with the large administrations as well as with companies from the banking sector, most notably because of its central location, offering excellent visibility along the citys main thoroughfares and because of the well-developed infrastructure (shops, hotels, restaurants etc.), and because of the substantial amount of public car parking facilities. Finally, the public transport network is good, with Central Station enabling communication with the whole of the national and international networks. Works on the new Antwerp Central TGV terminal are complete and have improved international access to the city.
Because of the large proportion of second hand buildings, almost half of vacancy is concentrated in this area, and projects are very rare. The two projects which have already been delivered and which are still awaiting their first occupants are the Plantin & Moretus Building (9,000 m) and Copernicus (14,000 m). I Singel (Ring) This zone extends along the citys ring road and either side of the Singel and Binnensingel. Most new office projects are to be found in this area. The lack of modern large size buildings (the average is around 3,500 m) in the centre have persuaded many companies to turn to the Ring or the Periphery, which have experienced the greatest amount of development over recent years. The Ring zone does indeed offer many significant advantages in terms of location choice: the presence of large size modern buildings responding to the requirements of current users excellent links via the Ring to the various national and international motorways (Ghent to the west, Breda and Roosendaal to the north, Lige to the east and Brussels to the south) the proximity of the city centre and its infrastructure avoidance of city centre traffic problems good visibility It is in this zone that the large institutions and private occupiers are to be found, and where the landmark transaction of 2009 took place, with the take-up by Mercator Assurance of 13,808 m in
Noordster, located on Ellermanstraat in the centre of Antwerp, is one of the large real estate projects to be delivered in 2010 : 15,000 m2 already entirely pre-let to the Belgian Buildings Agency for the custom and finance public services.
Rendering supplied by Kairos Japers - Evers & Partners
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City Link, with a fixed 12 year lease and a rental level announced as 125 EUR/m/year. I Periphery The periphery, which accounts for some 30% of stock, takes in all of the communes located around Antwerp, essentially to the south and west of the city, along the 3 motorways leading to Brussels (E19 / A12), and to a lesser extent to Lige and Eindhoven (A13 / E313 and A21 / E34 respectively). Ease of access half way along the Antwerp-Brussels motorways, along with the proximity of Brussels Airport, constitute the main advantages of this zone. Many business parks have grown up here over recent years, of which some of the most noteworthy are Delta Business Park (approx. 6,000 m) located at Kontich (Satenrozen, 1) and Naviga Business Park (approx. 11,000 m) at Zwijndrecht (Nieuwe weg 1). It is also along these axes that important industrial and logistics parks have been developed. I Mechelen Mechelen can be considered as a market in its own right, with office stock estimated at some 450,000 m, mostly spread through 3 zones (the north and south industrial zones and the centre, where the buildings are principally to be found along the Ring). It is a relatively young market with office buildings present in the city centre, but it is only over the past 15 years that more specific office buildings have begun to be located alongside the industrial zones. Mechelen can be seen as offering an alternative to the mobility problems found in Brussels or Antwerp. This city has expanded greatly over the last decade and is continuing to expand. Current developments are located close to the station with the conversion of the former Belgacom building, and in the Mechelen Noord business park, with various projects by developer Uplace. These new projects risk increasing vacancy, which currently stands at around 10% in Mechelen. Conclusions There are numerous advantages to the Antwerp office market: the presence of a port, excellent national and international means of transport (particularly to the Netherlands and Germany), a well-developed logistics network, and good balance between economic sectors (industry, offices and retail).
The business districts of Antwerp
With a stock of almost 2,100,000 m (including Mechelen) the Antwerp market is the second largest office market in Belgium, representing 10 % of the Belgian market. Vacancy levels have once again exceeded 10 %and currently stand at around 11,5 %. Prime rents by zone are as follows Port : 105 EUR/m/year City centre : 145 EUR/m/year Ring : 135 EUR/m/year Periphery : 125 EUR/m/year
Despite its reduced size when compared with Brussels, and other large European cities, the Antwerp market offers sizable advantages. The new Antwerp Headquarters initiative, a public-private partnership between the city of Antwerp and the private sector, is aiming to attract enterprises and the headquarters of international companies from the Benelux through a marketing campaign. In a preliminary version of the explanatory note of the Antwerp 2012 guideline, the city estimates that 600,000 to 781,000 m of new offices will be needed over the next ten years in order to satisfy demand. Within this context, the city is planning to follow a new planning policy for new offices which will put the accent on: encouraging the development of hubs in headquarters zones (which will mainly be concentrated around Central and Berchem stations and, to the west of the city, on the other side of the Schelde)
limiting office projects of over 1,500 m in the other zones Even if this note remains ambitious, it represents the first step towards active and strategic promotion aiming to stimulate and strengthen the Antwerp office buildings market.
This article is also available in French and in Dutch versions in the library of www.pro-realestate.be All articles in this online library are classified by date. Enter this date : 10/03/2010 + English title of this article. The full article can be downloaded in PDF format from the website.
OFFICES I REGIONAL MARKET TRENDS
Dont forget the provinces

A wider perspective on the Belgian office market reveals that there are more office locations than just the two largest office markets of Brussels and Antwerp. Lige, Namur and Charleroi in the southern part of Belgium and Ghent in the northern part of Belgium are enjoying a renewed interest since the decentralization trend and the traffic congestion around the main office markets.
Characteristics, development and market trends. I Liege Liege, the largest city of the Walloon region with an office stock of some 465.000 m, can be divided into two broad areas. The first area is downtown Liege, on the left bank of the Meuse; the second area is situated on the right bank. More than half of the stock is situated downtown, mainly along large avenues such as Boulevard de la Sauvenire and Boulevard dAvroy. The main occupiers are public administrations and regional and provincial governments (approx. 40 %), followed by institutions (banks and insurance companies) (approx.20 %). In the periphery, the supply of suitable buildings is virtually non-existant and concentrated in offices parks such as Zenobe Gramme and the Sart Tilmant science park. Approximately 40 % of the stock is made up of secondhand buildings. The demand for offices of good quality is large in Liege but there is a serious lack of new development to meet the needs of current occupiers. Several developments are currently under consideration to solve this imbalance between supply and demand. Amongst these are the Alleur Offices Park (7.500 m of office space), the Airport Business Park (13.200 m of office space) and the Val Benoit site (previously a university campus of 8 ha now dedicated to technologies and economic activity, with a development potential of 40.000 m space). The plans of the local authority to create some 100.000 m of new office space around the Guillemins Station will also create a new impulse for the market and help bridge the gap in high-quality office space. In 2009, low regional demand for office space and, as a result, the downward pressures on rents, reflects current economic uncertainty. Cost cutting and efficient space occupation are the new focuses of corporate users. Despite this morose climate, take-up figures were relatively high in 2009 in Liege (55.800 m), thanks to an exceptional deal carried out by the Belgian Buildings Agency to let 52.700 m in a development located at Rue du Paradis 1. Despite the numerous advantages of the city (new TGV station, Liege Airport, central location and good motorway accessibility), average rents in Liege remain very reasonable compared with Brussels, varying between 100 EUR/m/year and120 EUR/m/year for new and prime space and between 80 and 95 EUR/m/year for second-hand buildings. I Namur With a total office stock of 365.000 m, Namur represents the third largest Walloon city in terms of office market. As the capital of Wallonia, its real estate market has grown over recent years thanks to the installation of administrations and ministries of the Walloon Region, which are its principal occupants with a share of some 57 % (200.000 m) of the total stock. Most of the office space is concentrated in the municipality of Jambes (to the south of Namur). In contrast with other Walloon cities such as Liege and Charleroi, the Namur office park is relatively new, most of the buildings having been constructed in the last 15 years. Because of this, the office market registers low availability levels in comparison to other regional cities like Charleroi, Liege or Antwerp. The most important developments are the Namur office park comprising a total of 10 buildings
The Paradis Tower designed by the architects Jaspers-Eyers & Partners in cooperation with Greisch Architects, forms part of the continuing urban revitalisation of the Guillemins district in Lige. The new Guillemins station and the Mdiacit shopping centre, both inaugurated in 2009, are key development projects aiming to create a link from the station to the Boverie park and Mdiacit via a bridge across the Meuse. This tower, 26 floors in height, should see light of day in mid 2013, and will be the highest tower in Lige. The project is being developed by Fedimmo, a subsidiary of Befimmo, which manages a portfolio of buildings leased to the Belgian State.
photo Jaspers-Eyers & Partners
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with an area of 35.000 m and a new development by Immobel on the Boulevard Melot (opposite the station). Take-up activity remained relatively low in 2009, totalling around 7.000 m, which is in line with previous years. Average rents in the Namur area stand at 125 EUR/m/year in prime locations and between 95 and 100 EUR/m/year in second-hand buildings. I Charleroi Charleroi, whose greatest asset is its airport, can be considered as the second largest city in Wallonia with a total office stock of 380.000 m. The office market is concentrated along the main avenues such as Boulevard Tirou and Boulevard Audent where the principal occupiers are institutions (banks and insurance companies) and public administrations. These sectors represent the most important occupiers in the city with shares of some 40 % for public administrations and some 30 % for banks and insurance companies. Around 50 % of the office park is old and needs to be renovated, which explains the low rents registered in the market. The average rent for quality offices varies between 90 and 110 EUR/m/year and between 50 and 75 EUR/m/year for second-hand offices. Recent buildings are mainly located in the Aeropole, a business park close to BrusselsSouth (Charleroi) Airport and representing 96 ha and around 105 businesses, 3 research & development centres and a university research centre. The most important industrial activities include biotechnology, scientific research and call centres. The investment market is almost non-existent in Charleroi, as it can mainly be considered as an owner-occupier market.
I Ghent The Ghent office market represents a stock of 1,34 million m. The market can be divided into four districts: the centre, the northern region, the eastern region and the southern region. The centre represents some 58 % of the stock. The southern district accounts for 25% of which one third is in recent buildings. The eastern district only represents 12% of the total stock, half of this being attributed to the new buildings of the Zuiderpoort, completed in 2004. Supply increases at an average of 35.000 m a year, which remains moderate since it represents less than 3 % of total supply. Taking into account current planned office projects, stock is likely to rise by more than 310.000 m during the next decade. This represents a stock increase of more than 20%. The current low vacancy figure of around 4.2% for offices could rise if the market does not absorb this extra office capacity. Within this context it is important that take up keeps pace with new supply. Otherwise top rents, which are already lower than in some other Flemish cities, could come under pressure too. Up to now the low levels of rents (top rents vary around 135 EUR/m/year and medium rents around 109 EUR/m/year) lead to a very restricted negotiation margin for lessors or developers, and help explain the rarity of new developments in Ghent. These future developments risk generating downward pressure on the already low rental values. Nevertheless, these plans will be phased over a period of more than 10 years, implying a volume of building remaining in line with the yearly average. In 2009, the take up was slightly higher than 2008, totaling 42.900 m, which is also higher than the average take-up figures (35.000 m).
The centre accounted for the highest share of take-up. Local and regional companies currently dominate the office market, but this is likely to change in the future. The past two years has seen an increasing number of companies coming from the Brussels region or from abroad and choosing Ghent for their new headquarters. One of the reasons can be found in the absence of traffic congestion. But the city is also investing huge amounts in new projects and in marketing campaigns to attract more regional and national companies. With one of the biggest projects (The Loop with a potential development of 552.500 m of which 155.000 m of offices) it is clearly focusing on international companies. The strengths of Ghent are the presence of the university, industry and the port. The marketing plan of the city defines three headquarter zones. These are the redevelopment of the area around Gent-Sint-Pieters station where a total development of 82.000 m is planned along the Fabiolalaan. In the first phase 50.000 m will be developed beside the train station. The second and third zones are The Loop (155.000 m of office space including the MG Tower) and the Artevelde stadium (10.000 m of office space). Both of these out of town areas are focusing on integrating different functions: leisure, retail, exhibitions, work and residential. Alongside The Loop should be noted the construction of the MG Tower, a project of the Group de Paepe situated at the St-Denijs-Westrem exit from the E40. This 24 floor high tower offering 23.500 m of office space will be completed for mid 2012.
Dashboard of 2009 market trends

Key figures Brussels Antwerp Inhabitants 1 100 000 490 000 Office stock 13 455 000 2 100 000 Vacancy rate 11% 12% Prime rent 265 137 Strengths and weaknesses Localisation ++ ++ Infrastructure ++ ++ Quality of the office stock + = Qualified personnel ++ ++ Main Belgian cities Lige Namur 194 000 109 000 465 000 365 000 4% 120 125 ++ ++ = = = = ++ = Charleroi Ghent 202 000 244 000 380 000 1 340 000 4,2% 110 135 + + = = +
++ Excellent I + Good I = Average I - Poor I -- Bad
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OFFICES I DTZ AFFORDABILITY INDEX I
Brussels in strong position

In calculating the costs to European companies of the office space they use, it is now possible to look at overall costs. The notion of Total Cost of Ownership has been current in the vehicle fleet sector for some years. The DTZ Office Affordability Index applies a similar approach to property costs. We take a look at some of the findings and speak to one of its authors.
Space use One of the factors driving down overall occupancy costs in Belgium is the steady reduction of space allocation per desk that is still high in comparison to other European Countries, and as all charges are calculated on a square metre basis, costs are automatically lower. According to DTZ, however, there is still room for further optimisation in this area. On average, European services sector companies in capital cities allocate 16% of their total turnover on office occupancy costs. But there are large discrepancies, with Madrid, where added value is lower, standing at 30%, and Brussels, with high added value and low rental costs, well below average at 10.7%. However, points out Tams Polster, DTZ Head of Consulting Europe & Middle East, this doesnt mean that companies use office costs as a reason for moving from one place to another. They are located where their business needs them to be. I believe that in the location decision process, the office cost represents a mere 5-10%. In general, very he latest edition of the DTZ Office Affordability Index makes good reading for Belgium. The countrys capital, Brussels, is amongst the lowest cost cities in Europe where total office costs are concerned (see inset). The Index includes not only the headline rental cost, but other outgoings such as maintenance charges, utility costs, office taxes and certain consumables. The Index also takes in the notion of turnover or added value, using the calculation office affordability = occupancy cost per desk divided by average turnover (or added value) per employee.
high office cost areas such as Paris or London have a very high added value per employee, so the office cost is still affordable. Nevertheless, when office costs in a particular location rise above a certain percentage of turnover, this causes a problem and leads to a market correction. In Brussels, I think this figure would be about 20%. Future trend Economic considerations meant that in 2009 headline rental levels stabilised or decreased. In Brussels, there was one deal at the magic 300 EUR threshold, but the real prime rent is about 265 EUR. DTZ believes this may slip to 250 EUR in 2010. Company layoffs in Belgium, despite hitting the headlines, have been somewhat slow to come, partly because of the high cost and complexity of shedding staff. And the effect on real estate comes later, as companies take the decision to realign their space needs with their new employment levels: Generally, companies which may see their staff levels shrink by 20%, will look for 35% less space, observes Tams Polster. So their total office portfolio occupancy cost is actually set to decrease further. In line with the increasing success of part time working the number of desks per full time employee equivalent is increasing and flexi-desking becomes a necessary means of avoiding rapid occupancy cost inflation while enhancing flexibility. Currently, due to inefficient workplace management, Belgian companies have around 1.1 to 1.3 desks per employee, but the trend is moving towards 1.0. In London as a comparison, the trend is moving toward 0.8 desks per employee. Tim HARRUP I
Tams Polster: Companies which may see their staff levels shrink by 20%, will look for 35% less space
Brussels at low end of costs

Occupancy costs per workstation/added value
RETAIL
O
1
ne of the winners in a sluggish real estate market in 2009 has been retail. This is where some of the smart money is now going. The legislation in this area is different from that for offices, and there are some new rules
on the way, with new factors to take into account, so we give you an insight into the major elements to look out for. We highlight some of the (currently rather scarce) new projects, and we take a look at rental prices in a number of different cities. This might come as a surprise to those of you who automatically thought the most expensive retail location in Belgium must obviously be in Brussels, the capital of Europe
SUMMARY
34 I Retail town planning in Belgium : modification of the criteria for granting socio-economic permits 36 I High streets the rental hit parade 37 I Shopping centres: forthcoming projects .
R E TA I L I B E L G I A N L E G I S L AT I O N I
Retail town planning: rules for

In late 2009, the Belgian legislature transposed in extremis the European Directive prohibiting economic tests as criteria for granting permits for commercial establishments. The ongoing institutional negotiations on the transfer of the competences to the regions will now have to come to an agreement.
he retail community of commercial real estate and retail had an eventful end of 2009. The Act of 13 August 2004 on the permits for commercial establishments, the so-called Ikea Act, was at the heart of all debates. The institutional negotiations concerning the regionalisation of this federal law generated a first shock wave. The second shock wave came from the uncertainties created by the federal legislature in the transposition of Directive 2006/123/CE of the European Parliament and the Council of 12 December 2006 on services in the internal market called the Services Directive.
Andr Lombart is partner at CMS DeBacker. He specializes in retail business, acting for both domestic and foreign retail chains.
Previous system As a reminder, after 30 years under the system arising from the Act of 1975, which some called the Padlock Act, the legislator established through the Ikea Act a simplified scheme, which requires the issuance by the municipal authorities of a socio-economic permit for commercial net areas larger than 400 sqm, with an advisory opinion of the national socio-economic committee for net commercial areas larger than 1000 m2. An appeal is pending before the Interministerial Committee for Distribution, and could also be brought before the Council of State and/or courts. Within the first two years of its application, the Act, described as liberal, enabled more than 700,000 m2 of commercial areas to be settled. Until late 2009, the socio-economic permits were issued according to the following four criteria : 1. spatial location of the commercial site; 2. consumer interest; 3. effect of the project on employment; 4. impact of the project on existing businesses. The fourth criterion was, in practice, the most important one in the decision making process by the competent authorities. To secure the permit, the applicant had to demonstrate that there would be no destabilising effects on the commercial areas and the complementarity between the small and large retailers. The general opinion, however, held that linking the granting of the permit to such a criterion was contrary to the Services
Directive, which prohibits the use of an economic needs test in the granting of an individual permit. New system in force from 28 December 2009 I What is the new system? The transposition deadline of the Services Directive was due to expire on 28 December 2009. What would have happened after this deadline? The federal legislature had to respond to allay the concerns of some professionals who feared a legal vacuum that would generate uncertainties and undermine any decision to invest in a commercial project. It did so, in extremis, by enacting the Act of 22 December 2009, which adapts certain legislations to Directive 2006/123/CE of the European Parliament and the Council of 12 December 2006 on services in the internal market (the Services Directive). Article 18 of the Act, which came into force on 28 December 2009, amended three of the four criteria for issuing the socio-economic permits. Commercial establishments may now be authorised according to the following four criteria : 1. spatial location of the commercial site; 2. consumer protection (rather than consumer interest); 3. compliance with social and employment law (rather than the effect on employment);
Thomas Hauzeur is associate at CMS DeBacker. He specializes in town planning.
34
r permits change
The shopping and leisure centre Just Under the Sky almost 42,000 m - is set to open in the spring of 2013 alongside the canal in Brussels, near the Van Praet bridge, on the 4 hectare former Godin factory site.
Rendering Art & Build Architect / Quick it
4. protection of the urban environment (rather than the impact on existing businesses). I What to think about it? These criteria are applicable to permit applications submitted before 28 December 2009 for which no decision has yet been issued. They should in principle be specified by a Royal Order, which should be published promptly. Meanwhile, the difference between the criteria required in 2004 and those in force since 2009 is not obvious. Indeed, while the first criterion remains identical, the formulations of the second and third criteria differ slightly. In the absence of specifications in the preparatory work, their scope will only be assessed under the terms of the Royal Decree, which should specify their boundaries. However, it seems that the second and third criteria only aim at obtaining the commitment of the applicant to comply with consumer protection law, social law and employment law. The relevance of such criteria seems very relative since it is obvious that the operator of a commercial establishment must respect the above-mentioned laws. The main change lies in the substitution of the fourth criterion relating to the impact of the project on existing businesses with an evaluation on the protection of the urban environment.
A priori, one might question the difference with the first criterion on the spatial location. Nevertheless, it is well known, that in practice this first criterion focuses on an evaluation of the project in terms of mobility. Hence, the boundary, remains thin, especially since the Act does not define what protection of the urban environment means. This wording seems inspired by the Services Directive, which provides that the prohibition of economic tests as a prerequisite for the grant of authorisation should cover economic tests as such, but not requirements which are objectively justified by overriding reasons relating to the public interest, such as the protection of the urban environment, social policy or public health. As a reminder, the Directive prohibits the case-by-case economic test in relation to the economic planning objectives. This prohibition shall not concern planning requirements which do not pursue economic aims but serve overriding reasons relating to the public interest. As such, the protection of the urban environment is likely to justify the implementation of an authorisation scheme and other restrictions on freedom of establishment. There are still questions surrounding this concept since the Directive does not define it any further. At most, it is stated that this concept includes town and country planning. This finding can, however, entail problems under the rules of distribution of compe-
tences between the federal state and the regions, given that the latter possess competences related to environmental protection and town and country planning, subject to certain exceptions. The federal Act is thereby somewhat weakened. If some intend to challenge the way the Services Directive has been implemented into Belgian law through the Ikea Act, they could rely on the vertical direct effect of this Directive in an appeal against a decision granting or refusing a socio-economic permit before the courts. The vertical direct effect of a directive allows, however, only protest against public authorities. The Directive could thus not be invoked in proceedings between private companies. In any event, the response of the federal legislature is seen as a temporary solution to deal with the most urgent matters, before the transfer of competences to the regions takes place. Andr LOMBART
Partner at CMS DeBacker Thomas HAUZEUR Associate at CMS DeBacker I

R E TA I L I H I G H S T R E E T S I
Antwerps Meir leads the way

Belgium has relatively few out of town shopping centres compared to other European countries, the result of a desire to protect the city and town centre retail landscape. Traditional high streets therefore remain important both in social and economic terms. We take the pulse of the current situation where rents are concerned.
he top retail high street in Belgium in terms of rental values is no longer to be found in the capital, Brussels, but in the countrys second city, Antwerp. What are the other characteristics which define the retail landscape in the country? The evolution of prime retail rents in Belgium between 2007 and 2009 reveals a somewhat mixed bag, as certain towns and cities see their attractiveness for reasons which have little or nothing to do with retail itself rise or fall.
The Meir in Antwerp is Belgiums most expensive retail location
Rental levels
City Antwerp Brussels Gent Bruges Hasselt Lige Namur Leuven Ostend Knokke Mechelen Mons Turnhout Kortrijk Street Meir Rue Neuve Veldstraat Steenstraat Hoogstraat Vinave dIle Rues de Fer/de lAnge Bondgenootenlaan Kapellestraat Kustlaan Bruul GrandRue Gasthuisstraat Lange Steenstraat EUR/m/ year 2009 1.700 1.600 1.200 1.100 1.100 1.000 1.000 800 800 700 600 600 550 500 400
Roeselaere Ooststraat
For typical 200 m unit with a 7 metre frontage (figures with thanks to CBRE Brussels).
This table illustrates the types of rental levels attracted by the major high streets in some of Belgiums most important cities. It shows the (logical) wide gap between the stars such as Brussels and Antwerp, and the provinces. It should also be noted that the next best locations in the largest cities (Avenue Louise, Brussels, Huidvetterstraat, Antwerp) have traditionally attracted rents around 25% lower than the main streets, which makes them still more expensive than most other locations within the country.
Prime rents Dislodging Brussels Rue Neuve from top spot over this period is Antwerps Meir, an elegantly curving street running from close to the citys Central Station right down to the historic centre of this major port city (Europes second port), some 550 metres. As the chart shows, rental levels on the Meir currently stand at 1.700 EUR/m/year, with Brussels Rue Neuve at 1.600 EUR. In 2007, the respective figures were 1.300 EUR and 1.500 EUR. This may be seen in the light of the Rue Neuve suffering some well-publicised security problems, while the Meir has witnessed a normal rental evolution. The locations showing the next largest rental values are the countrys third largest city Lige along with Gent and Hasselt, the largest towns in Western and Eastern Flanders, world heritage site Bruges and Wallonian capital Namur, rents in all of these major towns being relatively similar. Variations Not all rental evolutions have been positive over the past two years, however. Kustlaan,
the fashionable shopping street in the countrys most fashionable coastal resort, Knokke, has seen rents fall back from 850 EUR to 700 EUR. This may be partially due to the resolutely top of the range character of the merchandise on offer during these recessionary times, and may also be a reflection of the fact that the largest town on the coast Ostend some 35 km away, is very much on the up and has recently seen the refurbished Culture Palace shopping gallery added to its shopping heart. Yet going the other way is, for example, Mechelen, whose rents have risen from 425 EUR in 2007 (barely changed from 5 years earlier), to 600 EUR now. Mechelen is strategically located on the main motorway between Brussels and Antwerp, and as such has seen substantial growth as a centre for business parks over the past few years. Settled In the majority of Belgian towns, which are of considerably smaller size, and where the retail centres have remained largely unchanged for many years, rental values have also remained more settled. Towns in the table such as Roeselaere and Turnhout, provincial in nature and size, have seen little movement in prime rental values over the past two years. Tim HARRUP I
36
R E TA I L I F O R T H C O M I N G P R O J E C T S I
Shopping centres
The opening of Mdiacit in Lige was the most notable retail event of 2009 in Belgium, but there are few large retail developments set to open in the coming years. Three major developments will are on the way, however, are located in Brussels and Kortrijk in the west of the country close to other smaller projects are all programmed for 2010 2011.
image supplied by Forum Invest
Kortrijk 34,000 m Union Investment Real Estate GmbH Architect: Robbrecht & Daem Opening : 2010
A basement, ground floor and two upper floors make up this ambitious project to redevelop part of the centre of Kortrijk. There is also a residential aspect to this development. Mediamarkt, Casa, H&M and Zara are amongst the tenants. K in Kortrijk was bought by its current owners prior to opening.
K in Kortrijk
Brussels 14,472 m ING REDH, Immobilire de la Toison dOr Architects : Chapman Taylor /Jaspers Eyers & Partners Opening: 2010
This redevelopment of an existing centre in one of Brussels main shopping districts (Avenue Louise Toison dOr Chausse dIxelles) will be immediately visible with its new anchor tenant Fnac, whose other Brussels store occupies the whole of the top floor of city centre gallery City 2. Other retailers of note include Tommy Hilfiger and Olivier Dachkin. The UGC cinema will occupy part of the space.
Galeries de la Toison dOr
the French border. A number of
La Grand Poste
Other centres set to open in 2010-2011.

I Retail Park Ninove 13,500 m Redevco I Huy, Shopping Mosan 10,600 m CCH I Retail Park Ternat 14,000 m Redevco I Chtelineau Retail Park 20,000 m, Bouygues Immobilier Belgium I Retail Park Eupen 7,000 m GL Group I Retail Park Florennes 4,000 m GL Group I Nivelles, Frun Park Le Panier Vert 14,000 m De Vlier Retail Development I Tournai, Les Bastions 10,000 m Wereldhave I Verviers, Au Fil de lEau 29,500 m Foruminvest I Namur, Lopold 16,000 m Foruminvest
Rue de la Rgence, Lige 8,000 m Invest& Corporate Architect : ATLIPLAN architects Opening: 2011
renderings : Art & Build Architect / Quick-it
Just Under the Sky

Brussels 42,000 m Equilis sa Architect : Opening : Art & Build 2013
This 6-building, 2-level complex gets its name from the lightweight transparent roofing which is a main feature. Located in the north of Brussels alongside the canal, it has been designed to be environmentally friendly, and to provide shopping and leisure activities representing a lifestyle. It is designed in the manner of a district whose squares and thoroughfares are surrounded by buildings. It will accommodate large, specialised retailers.
rendering Altiplan Architects
La Grand Poste de Lige, originally inaugurated in 1901, today constitutes the heart of the North Cathedral district in Lige. A 4,000 m retail complex over two levels will be created, complemented by a 125-room hotel constructed on the former car park of La Poste. The retail complex will bring out the high heritage qualities of the building. The hall which housed the postal counters will be converted into a retail hall, emphasising the three naves with their iron and steel structure along with the glazed area above. Additionally, the vaulted basement levels will be dedicated to cafs and restaurants as well as food shops.
LOGISTICS
London to the Low Countries via France and Germany to the north of Italy. This location brings many challenges with it. In the north, just as in the south of Belgium, the public authorities are putting the emphasis on logistics activities, promoting in particular multimodal transport solutions and developing Economy Activity Parks along the main multimodal hubs. Flanders has a long-standing tradition of logistics activities that goes back centuries at the North Sea harbours. The good hinterland connections ensure that logistics
ALTIPLAN architects
he Belgian logistics market still lies in the middle of Europes industrial heartland. It is located firmly in the centre of the well-known blue banana, the highest concentration of economic activities in the world that stretches from
zones are now increasingly being developed away from the harbours, closer to the end user. The Marshall plan drawn up to prepare and adapt the Walloon economy for the future with logistics activities forms an important supporting element. Wallonias strategic location, good multimodal transport solutions, availability of plots of land and sites at more than reasonable real estate prices, will be the boosters for further development of logistics activities.
De Paepe group
SUMMARY
40 I European Distribution report 2009: Belgium holds its position 42 I The Belgian logistics market : multimodal benefits 44 I In the north, just as in the south, the public authorities are putting the emphasis on logistics activities
ALTIPLAN architects
LOGISTICS I EUROPEAN DISTRIBUTION REPORT I
Belgium holds its position

The third edition of the European Distribution Report published by Cushman & Wakefield makes good reading for Belgium. Both the country as a whole and its regions and provinces remain in a leading position in terms of attractiveness for new logistics projects. But will this still be the case in 2020?
(source : Cushman & Wakefield)
Claude Yvens Editor in Chief of Warehouse & Logistics Magazine
his is the third time real estate advisor Cushman & Wakefield has published its survey showing the most attractive locations for logistics activities. In 2004, at the request of the Flemish Institute for Logistics, the company refined its classification to take account of different regions, a move which showed that the province of Limbourg headed the list. Two years later (2006), the survey revealed same again for the Limbourg and Antwerp provinces, but the neighbouring regions of Lige and Hainaut in Belgium, and Nord/Pas de Calais and Alsace in France, were making up ground.
accessibility to markets (including Central Europe), 29% availability of labour (including degree of qualification), 9% logistics know-how, language skills, 3%. The 2009 edition of the survey confirms the attractiveness of Belgium. Where the regions are concerned, Logistics in Wallonia sponsored the refined analysis, and the province of Lige unseated Limbourg at the top of the list. The (minimal) difference between the two provinces focused around infrastructure questions (particularly railways) and accessibility to the principal European markets. One of the criteria involves the number of inhabitants and the overall purchasing power available within 3 hours by road. Lige and Dutch Limbourg are the only regions in the Benelux to challenge the German regions in this respect. By contrast, the regions close to the sea lose here what they gain in accessibility to maritime freight. The other advantages of the Belgian regions remain the same as in 2004 and 2006, starting with excellent access to the major
Lige is number one The classification is based on a number of criteria, weighted in accordance with the their importance for investment decision-makers working with Cushman & Wakefield : cost (location of depots, purchase of sites, labour), 21% of the total transport systems (efficiency of the various modes, congestion), 29%
40
Only in the Blue Banana

It should nevertheless be noted that this listing only takes account of regions situated in the Blue Banana, this zone within Europe where most logistics activities are located. Some regions have not been included, such as Aquitaine in France, and a large part of the north of Italy, whereas the regions surrounding major hubs such as Hamburg, Prague and Berlin, are limited to the immediate proximity of these cities. At a Belgian level, we are more concerned, however, with competition between the border regions of France, the Netherlands and Germany.
Principal results (out of 61 regions)

Province 1. Lige 2. Limburg 3. Hainaut 4. Namur 5. Nord/Pas de Calais 6. Luxembourg 7. Antwerp 8. East Flanders 9. Alsace 10. Brabant Wallon 11. Brussels 13. Cologne 14. Dsseldorf 19. Ile de France 20. West Flanders 21. Picardy 23. Flanders Brabant 26. Limburg 37. North Brabant 42. South Holland 43. North Holland 44. Utrecht Country B B B B F B B B F B B D D F B F B NL NL NL NL NL Score 2009 2.16 2.18 2.20 2.56 2.69 2.80 2.89 2.92 2.96 3.04 3.05 3.15 3.15 3.37 3.37 3.42 2.59 3.82 4.36 4.51 4.71 4.85 Score 2020 2.9 2.9 2.8 3.5 3.1 3.7 3.5 3.5 3.4 3.5 3.5 3.3 3.2 4.2 3.8 3.6 3.5 3.9 4.4 4.4 5.0 4.9 Position 2020 3 2 1 13 4 19 12 15 7 16 14 6 5 28 21 18 9 22 35 34 45 44
European consumer markets, and very good integration into existing transport networks. The importance of the multi-modal connections to the major ports should be emphasised here, along with the importance of the large infrastructure projects underway or planned (the third lock at Labnaye, Trilogiport at Lige, connection by the SeineNord canal for Hainaut, the Oosterweel link for Antwerp and the Ijzeren Rhine for the Limbourg province). The quality and productivity of labour is the second major advantage, both where logistics skills and language knowledge are concerned. And finally, in the domain of costs it is once again seen that there is a clear competitive advantage for the Belgian provinces. With the exception of Brabant Flamand, rental costs for well-located companies do not exceed 50 EUR/m, whereas prices in the Dutch regions are at or above 50 EUR/m, except for Venlo which is at 50 EUR/m. By 2020 A simulation calculated for the year 2020, however, suggests that Lige will lose its first
place to Hainaut province, due to a lack of new sites destined for logistics. According to Cushman & Wakefield, Hainaut will also have the benefit of better access to southern markets once the junction between the Seine and the north of Europe by inland waterways becomes a reality. The two Walloon provinces would obtain a better score if they improved their results in logistics training, an area in which Brussels and the Flanders, along with the Netherlands, get better scores. The province of Limbourg is set to retain its second place, with the Nord/Pas de Calais remaining comfortably stable and the German regions of Cologne and Dsseldorf, well located in terms of the growing markets of Central Europe, making good progress. It may seem astonishing not to find the Belgian provinces of Antwerp and Gent figuring in this list, nor the principal logistics areas of the Netherlands. The province of West Flanders makes up two places, however (from 10 to 8), and is hard on the heels of Antwerp, but the Dutch regions are substantially hampered by the average price and availability of sites, the availability of labour
and road congestion. Dutch Limbourg (Venlo), only comes 23rd out of 61, in front of the Eindhoven region (31st), and South Holland/Rotterdam (37th). And it would seem to be the case that the large infrastructure projects undertaken, amongst others, to the south of Amsterdam, will not lead to the Dutch regions climbing up the provisional list for 2020. And finally, the predictions for 2020 take into account a new shift in the logistics centre of gravity towards Eastern Europe, banking on a scenario which would see the countries of Central Europe reaching the same level of activity and wealth as Portugal in 2016.
Claude YVENS I Editor in Chief of Warehouse & Logistics Magazine

For further details and analysis, refer to the Cushman & Wakefield 2009 European Distribution Report which can be downloaded on www.pro-realestate.be/library on the page 10-03-2010 Logistics| Belgium holds its position. On the same web page, this article is also available in French and Dutch.
LOGISTICS I DEVELOPMENT HOTSPOTS I
Multimodal benefits
The Belgian logistics market still lies in the middle of Europes industrial heartland. It is seated firmly in the centre of the wellknown blue banana, the highest concentration of economic activities in the world that stretches from London to the Low Countries and via France and Germany to the north of Italy. This location brings many challenges with it.
Trilogiport in Lige offers excellent trimodal possibilities, acting as an Extended Gateway for the North Sea harbours.
Jan Voet, Editor of Warehouse & Logistics Magazine
ne of the challenges has to do with the ever-increasing congestion, which is a result of Belgiums excellent geographical location. Almost all EastWest and North-South traffic corridors in Europe go around or through Belgium, making it an outstanding transit country. As roadbased freight traffic still accounts for the majority (more than 85%) of international transport, this has led to a significant increase in the volume of traffic on the Belgian motorways. However, the Belgian Government and in particular Belgian entrepreneurs are increasingly thinking in terms of multimodal solutions. It is not only increasing congestion that plays a role here, but also a fundamental shift for the future. All studies are pointing in the same direction in that they see the economic growth translating into a very strong increase in freight traffic. As this increase can not be absorbed by heavy goods vehicles alone, other modes will also have to make a structural contribution to solving future transport demands. It is here that Belgium is able to lay a number of important cards on the table. The first on the Continent The first railway line on the European Continent was constructed in 1833 between Brussels and Antwerp. At the time, Belgium was very much following in the footsteps of Great Britain, with both countries acting as pioneers in the development of the railway. The fast pace of 19th century industrialisation in Belgium meant that a very dense railway network was essential. Even today, Belgium has the densest railway network in the world. All Belgian harbours have railway connections literally right up to the quays, so
that goods can be unloaded from the ships straight on to railway wagons. The Belgian harbours are another multimodal asset. Antwerp plays a starring role here with its traditionally strong orientation towards multimodal applications. The other Belgian harbours of Ghent, Ostend and Zeebrugge have excellent hinterland connections via the motorways, the railway and also through inland waterways. Multimodal terminals With the River Scheldt, the River Meuse and the various canals, inland waterways can offer a real alternative to road and rail transportation. No less than three multimodal terminals will be brought into use on the AntwerpLige axis running between Antwerp and the Ruhr area in the period from 2011 to 2013. The first of these terminals will be in Grobbendonk, close to the E34 and the E313 motorways. The terminal lies strategically outside the Antwerp ring road, where there are major congestion problems. There will be entrepts at the terminal as the operator, DP World, wants to be able to offer a complete package of services. There will also be a fast shuttle to the harbour of Antwerp, calling at the terminal several times a day and also taking care of in and outbound transport. The next terminal is WCT in Meerhout, which is located approximately half way between Antwerp and Lige, specialising mainly in container shipping. Trilogiport, near Lige, is a new development. This will be a very modern terminal, complete with warehousing and with a strong multimodal emphasis. Trilogiport links up to the Albert canal (which runs from Antwerp to Lige), the Meuse and the motorway intersection in
42
Lige. It is also situated close to the Lige cargo airport. Another important initiative is the redevelopment of the brownfield sites in the Brussels canal zone, where the emphasis is also being placed on multimodal solutions. There is also the Mouscron Lille Dry Port further to the south in Wallonia, which is a railway hub developed to help support the logistics activities in and around the Lille centre of economic growth. Garocentre in La Louvrire is a multimodal intersection where inland shipping, rail and road transportation come together. With other multimodal platforms in Charleroi, the Central Ardennes and Athus (in the province of Luxembourg), it is evident that the whole region of Wallonia is covered. The harbours and the Antwerp Albert Canal in Flanders cover the majority of the region. Multimodal solutions are also becoming increasingly important in Limburg, the most easterly of the Flemish provinces. A cross-
border partnership has also been set up with Netherlands province of Limburg enabling the demands and requirements of various logistics activities and companies to be addressed in a flexible way. Creating added value The Belgian harbours have always had a strong tradition of multimodal solutions with their railway and inland shipping connections. Seaports such as Ostend and Zeebrugge are also able to make use of regular short-sea connections to marketable (and less marketable) European destinations. The harbour of Antwerp has the Scheldt-Rhine Canal, which enables inland barges to sail to the Ruhr area as well as to Rotterdam harbour in a fast and reliable way. An additional advantage of multimodal solutions that should not be underestimated is the high level of education of employees in Belgian logistics companies. The focus for
companies active in the Belgian logistics sector has gone far beyond just moving pallets and shifting boxes. Creating added value is a tradition for Belgian logistics companies, both in the harbours and in the hinterland. There are many opportunities available for training professional personnel. The longterm unemployed can retrain to become logistics labourers or workers in Flanders and Wallonia. These training programmes are able to boast a huge number of enthusiastic candidates. A large number of temping agencies have also started up their own training institutes, where those who are interested can learn about being an employee in the logistics sector. This helps to meet the quickly growing demand in the market.
Jan VOET I Editor of Warehouse & Logistics Magazine
LOGISTICS I MARKET & TRENDS
Regional governments put th

Both of Belgiums two major regions Flanders and Wallonia have realised the major advantages the country has to offer for logistics services providers. These include skilled personnel and government sponsored training courses, land and rental prices and the availability of sites not to mention Belgiums renowned multi-lingual character all of which complement a geographical location at the heart of Europes most densely populated consumer zone.
Flanders: a logistics heavyweight Flanders has a long-standing tradition of logistics activities that goes back centuries at the North Sea harbours. The good hinterland connections ensure that logistics zones are now increasingly being developed away from the harbours, closer to the end user. This effect is further compounded in Flanders through governmental support. The Flemish Government has resolutely opted for logistics as one of the future areas of economic growth in Flanders. This is very much a natural choice due to the number of advantages that Flanders has at its disposal, including the four Flemish seaports, the dense road and motorway network, the railway network, the canals and the inland waterway terminals, and especially the highly skilled personnel and the companies that have such extensive logistics experience. The strategy for supporting logistics is an integral part of the Flemish coalition agreement and known as VIA (Vlaanderen In Actie Flanders In Action). The Flemish Government relies on the VIL (Vlaams Instituut voor Logistiek Flanders Institute for Logistics), which is a think-tank that scrutinizes the logistics streams and processes and makes recommendations for improve44
ments. Best practices are published as examples for other players in the logistics market. The highly-skilled personnel form an additional asset. The majority of Flemish workers are able to speak a second language (usually English or French). In Flanders, the longterm unemployed who wish to do so are able to retrain to become logistics workers. The government does this through its unemployment benefit system, whilst temping agencies have also developed high-quality training courses for a whole variety of logistics jobs. The employment market in Flanders will still be able to offer sufficient possibilities for the foreseeable future to enable logistics activities to grow. Highest level of activity in Belgium It was evident during the economic crisis of 2009 that the Flemish Governments approach is paying off. Although the economy experienced some major blows, Flanders continued to do relatively well. The logistics real estate market shrank by only 5.3% compared to the years preceding the economic crisis which were peak years. Compared to Brussels and Wallonia, Flanders continues to do well. This can be seen in the so-called "Golden logistics triangle" which lies between Antwerp, Brussels and Ghent. The best sites are between the A12 and the E19 motor-
he accent on logistics
Stock, take-up and rental prices
Flanders Stock (m2) Antwerp Mechelen Scheldeland Kempen Limburg East Flanders West Flanders Wallonia Stock (m2) Lige Hainaut Namur Ardennes 1,437,000 1,499,000 90 290 Take-up (m2) Q42009 8,405 2,718 3 1,8 Rent EUR/m2/year Warehousing Logistics 45 35 36 32 40 n.a. 40 30
Source: DTZ Property Times Belgium Industrial Q4 2009.
6,944,000 2,056,000 1,575,000 1,310,000 1,939,000 1,622,000 1,069,000
Take-up (m2) Q42009 11,273 26,132 49,274 15,441 44,679 4,168 0
Rent EUR/m2/year Warehousing Logistics 50 50 48 56 45 47 48
52 41 43 40 35 40 35
The full report is available at www.pro-realestate.be/library on the page introducing this article. It can easily be found: either via the date they were put on line (10 March 2010) articles are classified by date or by instigating a search using the title of this article in the sites search window
ways, with the Brussels-Willebroek canal and the railway connections between Antwerp and Brussels close by. This region has a high concentration of companies involved in logistics activities for the pharmaceutical sector, and it is very much a logistics hotspot for the Low Countries. Thanks to the central location within the blue banana, the dense road network and the good accessibility, all studies indicate that this is still the place to be. This will also remain the case for the foreseeable future, largely because of the expected infrastructure improvements and the further expansion of Zaventem-Brucargo as a cargo airport. Many logistics activities are also found closer to Antwerp in the areas next to the E313 (Antwerp Hasselt - Lige) and the E34 (Antwerp - Venlo). The corridor to the Ruhr area (heading towards Lige) is particularly popular with logistics service providers. A lot of development is currently going on in areas within Limburg, along both sides of the E313 and the E314. There is also much development taking place in the harbour of Antwerp within the new harbour sites on the left bank of the River Scheldt. This is as a result of the Deurganckdok development, which will serve as a hub for container shipment. These sites are very close to the golden triangle. As significant investments are currently being
planned for the road network around Antwerp, it is expected that these sites will see a sharp increase in interest in the near future. This is evident from the logistics companies within the harbour of Antwerp who did not lose any time in being the first to invest. The jackpot in East Flanders is traditionally held to be the Ghent canal zone (GhentTerneuzen). Sites are also being developed on the axis between Ghent and Zeebrugge, which will also make use of the E34 between Antwerp and the harbour of Zeebrugge. West Flanders is the province that has the most distinct maritime access thanks to the harbours of Ostend and Zeebrugge. Several large new companies are currently being established in the Zeebrugge harbour hinterland. The same is also occurring in Ostend, which is increasingly shedding its past as a ferry port and attracting more diverse activities. West Flanders is also making the most of the strong growth that has been experienced in the north of France over the past few years. The upgrading of Lille as a metropolis has led to a significant increase in the demand for logistics services in this area. This is being felt in Mouscron as well as Kortrijk, which is situated very close to Lille. Ypres and Roeselare are also benefiting from the growth in northern France.
Stable prices Although there are fewer available sites in Flanders than in Wallonia, the Flemish market for industrial real estate enjoys stable and relatively low prices, particularly when compared to Belgiums neighbouring countries. The prices are logically highest in the harbour of Antwerp, which is still an important centre of logistics growth. The same prices are also charged within the golden triangle. Taking the locations, accessibility and the other assets into consideration, it would be fair to say that Flanders offers real value for money. Wallonia: Excellent location, low prices, smart investment opportunities Wallonia is trying hard to play a more important role in the logistics sector. These efforts complement a number of important assets that this French-speaking region of Belgium has to offer. The good location and more than reasonable real estate prices are just a few of these benefits. The situation in Wallonia means that there are a large number of well-trained and motivated workers within the employment market. The Walloon Government is making the most of the opportunities available in the
LOGISTICS I MARKET & TRENDS
region. A Marshall plan was drawn up to prepare and adapt the Walloon economy for the future with logistics activities forming an important supporting element. On top of this, the government takes a very positive line with investors who wish to develop logistics activities in Wallonia. There are numerous studies carried by renowned consulting firms which shed light on Wallonia's assets. The availability and prices of logistics real estate are naturally deciding factors in the decisions taken by logistics service providers. There are also opportunities offered by the very dense motorway infrastructure. The railway network is also one of the densest in the world. Wallonia has excellent connections with both the hinterland as well as with the North Sea harbours. The Albert canal plays a particularly important role, as do the good connections to the German Ruhr area, the north of France and The Netherlands. Luxembourg is also very close by and Lige has been developed into an important hub for air cargo. These developments are a direct result of the efforts made by the Walloon Government, political authorities, the local inter-municipal associations and also by companies. The development of the logistics sector is considered to be a spearhead in the economic development of Wallonia. This growth has largely
been made possible through the availability of plots of land and sites, providing sufficient space for new developments. Continued growth The important centres of growth in Wallonia are mainly found in the region surrounding Lige, where transactions have continued despite the economic crisis. Other important areas of development include Courcelles and Nivelles. The Neufchteau region has also received much interest from logistics service providers and investors. These areas are firmly positioned within the heart of the so-called "blue banana", the highest concentration of economic activities in the world. They are also connected to each other via the E42 motorway, which offers an easy and reliable connection without any congestion problems. Furthermore, the most important European centres are within a short distance of a Walloon EDC (European Distribution Centre). The Walloon industrial real estate sector also experienced growth in 2009, with a notable improvement being booked in the fourth quarter. The first signs of economic revival were mainly felt in the area surrounding Lige. However, the figures for 2009 are still below those for the 2004-2008 period when the Walloon industrial real estate sector expe-
rienced significant growth. The major transactions in 2009 were in and around Lige, with the purchase of a 3,500 m2 warehouse in Loncin and a rental contract of 2,500 m2 in Alleur. This contrasts sharply with the 33,000 m2 that is normally traded in the Walloon region. Industrial real estate in Wallonia presents a good opportunity for investment due to its excellent location and good accessibility. This has also been evident over the past few months as the prices have barely come under any pressure. The rental price was 38 EUR per square metre in 2008, compared to an average of 35 EUR at the lowest point of the economic crisis. A number of projects were also completed in 2009. Both land and warehouses are also in good supply in 2010 within this ideally located region. The development of the Trilogiport terminal near Lige will free up approximately 100 hectares of land, specifically developed for logistics activities and with an emphasis on multimodal applications. Trilogiport will be fully equipped to ensure that goods and storage can be handled quickly.
Jan Voet I Editor of Warehouse & Logistics Magazine
Wallonia, land of logistics

Zone Port de Lige Location Meuse/Albert canal Space + Available space 366 ha+ -115 ha + 87 ha -14,3 ha + 7,5 ha 40 ha + 27 ha 40 ha + 11 ha in 2011 107 ha + 17 ha 127 ha + 10 ha 92 ha + 123 ha 142.26 ha + 103 ha 33 ha + 14 ha 450 ha + 13 ha 100 ha +190 ha in 2012 205 ha + 4 ha 80 ha + 50 ha Accessibility + modes E42 E25 E313 E40 road, rail E42 E19 Canal Du Centre, road, rail, barge E42 E40 road, air E17 A17 road, rail E42 E19 road, rail, barge N59 E42 road E411 road, rail, air E42 road E40 road E42 road E25, N4 road E40 E42 and E313 road E42 E420 road E42 E40 road, rail, air E411 E25 road, rail Management Port Autonome de Lige IDEA Liege Airport SA DPLMI Port Autonome de Charleroi IGRETEC Idelux IDETA Spi+ Spi+ Idelux Spi+ IGRETEC Spi+ Idelux
Garocentre La Louvire La Louvire Liege Airport Dry Port Mouscron-Lille Charleroi Dry Port Thuin-Lobbes Athus PED Tournai Ouest II Eupen Villers-le-Bouillet Bastogne II Hauts-Sarts Milmort Courcelles Liege Logistics Ardenne Logistics Bierset Mouscron Charleroi ring road Charleroi ring road E411 E42 A17 Welkenraedt Between Lige and Namur Bastogne Hauts-Sarts 10 km from Charleroi Grce-Hollogne Province of Luxembourg
Additional information about these logistics real estate zones can be found in the panorama of the Set up your Logistics in Wallonia brochure with the modes (rail, barge, road, air) and on site services available summarised for each zone. This document can be downloaded at www.pro-realestate.be/library on the page introducing this article. It can easily be found: either via the date they were put on line (10 March 2010) articles are classified by date or by instigating a search using the title of this article in the sites search window
The Set up your Logistics in Wallonia brochure was put together in March 2009 in partnership with the Walloon Export Agency (AWEX) and the Logistics in Wallonia competence centre. This brochure contains the most important logistics real estate zones along with the most important logistics players in Wallonia. No fewer than 200 logistics zones were included when the brochure was published. The most important zones for development are highlighted in this frame, together with information about the available space and the management.
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INVESTMENT
o longer is an investment decision simply a matter of working out where the biggest returns are likely to come from. In the world of today, would-be investors need to take so many more factors into account.
Firstly, the rules on VAT and land are set to change next year (and it isnt going to be cheaper); then there is the question of growing legislation in the area of environmental friendliness, mobility plans, energy certification. We ask the tax experts, analyse the legislation, and talk to the Brussels Environment Minister. And you may be very interested to hear what one of the leading banks thinks in this crisis-hit period. How do they make a decision on what is good and what is not? Read on.
SUMMARY
48 I Financing : Belgian Real Estate Certificates, rediscovering an ancestor 52 I VAT on the price of land: a reality from 2011 54 I Green buildings : a new reality, not a passing trend 57 I Evelyne Huytebroeck, Brussels Environment Minister Mobility and the environment are the future concerns in office building 58 I Financing : what are the banks looking for now ? .
C O M PA N Y P R O F I L E
51 I ING BELGIUM | Real estate development & Investment management
INVESTMENT I FINANCING I
Belgian Real Estate Certificate

The changing economic environment encourages the financial engineering industry to develop innovative products but solutions may lie in revamping good old fashioned methods. The Belgian Real Estate Certificate is one of them.
Back to basics This expression has been used many times by those who, in recent months, have tried to predict the progress of real estate markets that have been severely shaken by excessively complex and hyper-leveraged transactions. On the securitization front, certain recent transactions in the Belgian market may support this prognosis. In the summer of 2009, a Belgian property group listed on the Brussels Stock Exchange announced the sale of an office building to a buyer that financed the acquisition by way of an issue of so-called Belgian Real Estate Certificates (certificats immobiliers/vastgoedcertificaat) or BRECs, which were bought by private and institutional clients of an established Belgian bank. Earlier this year, a similar scheme was put in place by the same bank for a building owned by a Belgian REIT. Other comparable structures have also been set up by other players. Going back many years BRECs belong to the class of asset-backed securities. They date back to the 1960s. At the time, they were devised for the purpose of financing the development of shopping malls and other large real estate projects. BRECs experienced renewed success in the middle of the 1980s when new generation BRECs were issued, featuring heavily in the daily trading on the Brussels Stock Exchange. From then on, BRECs became a genuinely liquid real estate investment. Still well known in the minds of market professionals are the Rond Point Schuman and the multi-building Metropolitan Buildings BREC issues the latter launched in the aftermath of the financial meltdown of October 1987 sponsored by Petercam, the defunct public savings bank CGER/ALSK and AG Insurance. BRECs had however progressively lost popularity as Belgium was an early champion of the REIT concept. It passed new legislation at the end of 1995 creating the so-called SICAFI (Royal Decree of 10 April 1995 as amended several times thereafter and for the last time on 21 June 2006). Compared with the SICAFI, the BREC is in fact a more stable form of real estate investment: it is intrinsically linked to one or more buildings selected at the outset and there is no chance of sub48
sequently selling them and purchasing others. With a BREC, there is no likelihood of seizing new opportunities in the market: the sale of the building(s) concerned automatically triggers the reimbursement of the BREC holders. SICAFIs have the considerable advantage of risk diversification as they must hold a portfolio of assets and may not at any time hold any single asset with a value exceeding 20% of the total value of their portfolio. In addition, their very existence is not linked to the individual life cycle of the assets in their portfolio. A SICAFI may sell its assets and reinvest in other assets on a continuing basis. Arbitrage is thus possible and indeed frequent in practice. In terms of liquidity, a SICAFI offers the added advantage of a much larger market capitalization. With the introduction of the SICAFI, Belgium has switched from the phase of the single asset securitization to the phase of securitization of large floating property portfolios. It would, however, seem that in the current uncertain economic environment, with the additional factor of fairly low interest rates, a BREC could be an attractive type of investment with, among other attractions, its indexed annual coupon for those who find bricks attractive but are seeking a solution to the intrinsic illiquidity of real estate in
Bruno Duquesne is partner at CMS DeBacker and Head of Corporate Real Estate practice. He specializes in real estate investment and financing, acting for both domestic and foreign institutions.
general. In view of this development, it would be interesting to summarize the principal economic, legal and tax aspects of BRECs.
es : rediscovering an ancestor
share, neither is it a bond. BRECs are subscribed by way of either private or public issues. They are transferred without any specific formal process. Publicly issued BRECs are sold through the stock exchange. The taxes and costs associated with the sale of a property do not therefore apply to the sale of a BREC. If anything, only the fees, taxes and costs charged on the occasion of the sale of a listed security will apply. Economic aspects BRECs do not give their holders any direct right over the underlying asset. However, from an economic viewpoint, the holder of a BREC is in the same position as the owner of a rented property. Indeed, the value of the coupon is directly linked to the indexed rental income generated by the property. As far as the repayment of the BREC is concerned, it is directly linked to the capital gain/loss made upon the sale of the property. It should, however, be noted that, unlike a property owner, the BREC holder is not directly involved in the management of the property, including the letting and the sale thereof; the whole project is managed by specialized firms. Taxation Issues of BRECs are structured in such a way that the BREC issuing entity which is the legal owner of the property, does in principle not pay any corporate income tax. The annual coupon paid to the investor comprises two tranches. The first one is treated from a tax perspective as a capital reimbursement. This reimbursement is not subject to tax, as far as the BREC holder is concerned. Only the second tranche is regarded as taxable revenue. For private individuals, the tax will be limited to a withholding tax of 15%. Upon the sale of the property, the sales price, including the capital gains (if any), will be allocated to the BREC holders as a special coupon. Tax will apply only to the part of the coupon that exceeds the BREC holders investment that has not yet been repaid through the annual coupons. For private individuals, the tax will be limited to a withholding tax of 15%. Governance In the past, certain BREC issues suffered from a lack of alignment of the sponsors and the BREC holders interests and this has resulted in BRECs losing value as a result of poor management, rental vacancy and lack of strategy. If BRECs are to regain a more permanent place in the market, this issue should be resolved. One possibility is that the sponsor himself subscribes part of the BREC issue. In the cases mentioned above, the seller remained on board by himself taking a significant minority interest in the BREC issue and/or providing a rental guarantee. An alternative financing method for businesses? In the current credit crunch environment, BRECs could be an alternative (re)financing method for companies, to be considered alongside other methods such as sale & lease-back. The choice will depend mainly on the type of investors the company is talking to. Typically, from a tax perspective, BRECs will be more suitable if the investors are private investors ready to invest directly as individuals. Finally, it should be noted that from an exit perspective, the sale of the property is not the only alternative. In order to minimize transaction costs, more particularly the transfer tax on property sales, the potential buyer could buy the BRECs at market value and gain control of the corporate vehicle that owns the property. Proceeding in this way would maintain debt at the level of the company and this could facilitate the financing of the transaction in terms of financial assistance constraints (C. Soc., art. 629).
Bruno DUQUESNE Partner at CMS DeBacker I
Legal aspects According to the law of 1st April 2007 on public tender offers, BRECs are debt securities entitling their holders to the revenues and sales income of one or more of the properties concerned. Thus, a BREC is not a
I N V E S T M E N T I TA X AT I O N I
VAT on the price of land: a rea

With effect from 1 January 2011, the delivery of a new building and the underlying land will be subject to VAT if the sale of the building is itself subject to VAT. In this case, the sale of the land will be exempt from registration duty.
Current situation The principle enshrined in Article 44 paragraph 3 (1) of the VAT Code is that deliveries of assets that are real estate by nature are exempt, with the corollary that they are subject to registration duty. However, by way of exception to the exemption provided in Article 44 paragraph 3 of the Code, deliveries of buildings, as well as the constitution, disposal or retrocessions of proprietary rights in such buildings, are taxable if the corresponding agreements are executed by 31 December of the second year following the year in which the first occupation or use of these buildings took place under conditions of liability to tax for the person carrying out the transaction. In order to benefit from the VAT regime, these transactions must take place before this deadline. Moreover, in accordance with Article 30 of the VAT Code, if a taxpayer sells a building with application of VAT, at the same time as the plot on which the building is erected, for a single price, the tax is calculated on an amount obtained by deducting the fair market value of the plot at the date of sale from the price and stipulated charges, taking into account the condition of this plot prior to the commencement of works. This means that in this situation the portion of the price corresponding to the value of the plot is subject to registration duty (at the rate of 10% or 12.5% depending on the region) whereas the rest of the price is subject to VAT (without it being possible for this outstanding amount to be less than the normal value of the building sold). European case law According to a case of 8 June 2000 (case C-400/98 - Breitsohl) in relation to the interpretation of Article 4 paragraph 3 a) of the sixth directive (currently Article 12 paragraph 1 a) of EC Directive 2006/112/CE), the European Court of Justice held that the option for taxation exercised on the delivery of buildings and the corresponding plot of land, must relate inseparably to the buildings and corresponding plot. This consequence of this case is that it is no longer possible to sell a building under the VAT regime and the corresponding plot under the registration duty regime.
52
Belgian law then had to align itself with the European requirements and these are the circumstances in which the VAT Code was brought into compliance by the Act providing a framework for the governments programme of 23 December 2009. Modifications as of 1 January 2011 Following the modifications to the VAT Code made by the aforesaid law, there are several different scenarios: Either the delivery of the new building and the corresponding plot is carried out by a professional developer, i.e., a person who buys, constructs or has new buildings constructed on a regular basis in this case, the entire transaction is automatically subject to VAT. Or, the delivery of the new building and the corresponding plot is carried out by an ordinary taxpayer who is not a professional developer. In this case, if this taxpayer wishes the transaction to be subject to VAT, he must indicate this by opting for the VAT regime this option being exercised in an inseparable manner with respect to the building and the corresponding plot. Or, the delivery of the new building and the corresponding plot is carried out by an occasional taxpayer (in particular individuals who are not taxpayers). In this case, if this taxpayer wishes the transaction to be subject to VAT, he must indicate this by opting for the VAT regime this option being exercised in an inseparable manner with respect to the building and the corresponding plot. Consequences of these modifications Subjecting the sale of the plot of land to VAT can be advantageous for the developer in certain circumstances. If the transaction relating to the plot is subject to VAT, the entire VAT amount borne upstream in relation to the plot (for example VAT on the cost of decontamination) can be recovered. If VAT on the cost of decontamination is deductible, the tax will no longer constitute a cost for the developer and will enable the margin to be increased, thus decreasing the sale price. This modification may, however, have unexpected consequences on registration duty:
Didier Grgoire is partner at CMS DeBacker and Head of Tax practice. He has particular expertise in real estate tax law
ality from 2011

(i) Each region has taken attractive fiscal measures to attract and retain taxpayers in their territory by setting up a system of rebates or reduction of registration duty on the acquisition of a principal residence. These measures have become totally obsolete in the case of the acquisition of a new dwelling with respect to VAT. (ii) Certain types of individuals estate agents enjoy a favourable regime with respect to the acquisition of real estate. These individuals enjoy a reduced rate of registration duties (5% or 8% depending on the region) when they purchase real estate. This advantage is maintained on condition that the asset is sold on under the registration duty regime at the ordinary rate (10% or 12.5%) by 31 December of the tenth year following the date of purchase. If it is not resold under these conditions, the ordinary duty on the acquisition shall be payable without the duty paid initially being deductible. Consequently, where an estate agent who is not a professional developer develops a plot of land acquired under the favourable regime, he will have to make a choice either selling the building and the corresponding plot under the VAT regime (and consequently paying registration duty at the ordinary rate on the price of the plot) or selling the building and the corresponding plot under the registration duty regime (and consequently not being able to deduct VAT from the cost of construction). If the estate agent is also a professional developer with respect to VAT, he has no choice to make he must sell under the VAT regime and will therefore have to pay registration duty at the ordinary rate which was applicable at the time the plot of land was purchased. These modifications will take effect by 1 January 2011 at the latest in order to enable regional legislative bodies to adapt their legislation and avoid double taxation (VAT and registration duty) on plots of land. This period should also be used to introduce a transitory regime for estate agents who often have substantial land banks.
Didier GRGOIRE Partner at CMS DeBacker I
This article is also available in French and in Dutch versions in the library of www.pro-realestate.be. All articles in this online library are classified by date. Enter this date : 10/03/2010 + English title of this article. The full article can be downloaded in PDF format from the website.
INVESTMENT I GREEN BUILDINGS I
A new reality, not a passing t

The impact of the notion of green onto the real estate market has changed substantially since it first made an appearance just a few years ago. It is no longer a matter of choice for a developer as to whether he constructs a green building or not, but a matter of commercial and legislative necessity. We take a look at the current state of the Green Wave where real estate is concerned
ne of the stated wishes of the real estate industry is to have a harmonised certification system. The most-quoted system is BREEAM (Building Research Establishment Environmental Assessment Method), a system which takes into account all aspects of a construction from production of materials to occupier comfort. In Belgium, the Valideo system already integrates other systems including BREEAM and is in line with Belgian and European legislation. We take a closer look at this. Valideo takes at least 16 factors into consideration when evaluating the green credentials of a building. No longer is it just a matter of consuming a little less energy, emitting a little less CO2. The overriding factors begin at the construction phase, move through the use and management of the building, and consider the social value of the construction (see inset). In other words, a building is taken for what it really is: an edifice made for human beings to work in, and an artificial addition to the landscape, an addition which, more than simply not constituting a nuisance, actually becomes a benefit. The regulatory framework in Brussels The Brussels Region remains the most soughtafter by developers, because this is where the overwhelming majority of companies and organisations wish to be. Legislation in this, the most built-up region of the country, is therefore not only likely to be stronger than in other regions, but may also serve as a lead for the rest of Belgium. The Brussels Government has announced that it is to reinforce energy requirements for all new buildings, applying the passive norm (E 50) and then by 2015 the very low energy standard. Action is also to be taken in the domain of the management and de-pollution of polluted ground, and a project for validation of sites requiring cleansing will be established, to be paid for by the fees levied for granting a ground condition report. However, assistance will be given where the persons called upon to evaluate the state of pollution of the site were not originally responsible for its pollution. Legislation The Brussels Capital Region has established legislation relative to the energy performance
(c) Patrick Blanc
Green facades : plants for Belliard 14,
of newly constructed or renovated buildings. First entering into force in 2008, this legislation is called PEB (Energy performance of Buildings), and covers elements including: the location of the building with respect to climatic parameters, exposure to the sun, impact on neighbouring buildings, thermal insulation, technical equipment, energy production, interior climate The legislation covers all newly constructed buildings, and buildings of over 1,000 m to be totally renovated. Specific energy levels are set in terms of overall energy performance (E index) and overall thermal insulation (K index). Additionally, thermal resistance and transmission indices (R and U) form part of the evaluation, and ventilation is taken into account. A PEB proposal has to accompany every request for a planning or environmental permit, for all new-build or renovation projects. Transactions Legislation is also in place where existing buildings are brought to the market, whether to be sold, leased, let or be the subject of a transfer of rights. Buildings have to be accompanied by an energy performance certificate, which clearly indicates to the potential taker,
54
trend
(c) Assar Architects photo Yvan Glavie
solar panels for Solaris.
the energy performance levels and the reference values used, thus enabling a comparison with other buildings to be made. CO2 emission levels have to be included. And finally, sanctions are imposed for failure to respect these requirements. Wallonia The Wallonian government has also established a plan to cover several years, and which will see sustainable construction imposed on the Region. Priority is to be given to cleaning old industrial sites and re-using them, pursuing a policy of reconstructing the city within the city, and exploiting the full potential of areas which are already builtup, particularly those with good access. To achieve this, the environmental cost and impact of new constructions residential or for economic activities will be taken into account amongst others. Alongside this, norms for the energy performance of renovated or new buildings will be strengthened, and support given for ecological projects in both categories. In concrete terms, all new buildings will have to conform to the very low energy norm by 2014, and to the passive or equivalent norm by 2017.
The commercial impact Of fundamental importance to property developers is the impact on the bottom line. Does conformity with all of this new legislation (and further legislation doubtless to come), lead to a reduction in margins? A simple concrete example is that according to calculations carried out by DTZ, the costs of investing in insulation to the level of K=45 are recovered in barely three years. However, the experts tend to approach this subject from the opposite point of view: what is the cost of not going green? Speaking at a recent conference in Brussels, Cushman & Wakefield director Pierre Colette outlined the commercial reality of the current state of the market: Cost cutting measures are likely to be a primary driver of the market; declining employment implies a decrease of occupational demand. And quoted by the DTZ survey Does Green Pay?, Henri Legrand of Fidentia Real Estate investments says: I believe traditional buildings will experience an intrinsic capital loss because of the implementation of green certificates and will also meet a higher rental void. Other economic effects will also take on more importance. For example, DTZ also observe that
staff turnover in a green (comfortable) building, can reduce by a factor of 10%, with the direct financial benefit for the company that this implies. Evolution Although it may currently be impossible to make any single meaningful statement to summarise the impact of the green wave on real estate, one thing is clear: this domain, relatively new as it is, is evolving rapidly. Not too many years ago, there were no ecology/green political parties, but now they are present everywhere, and have an increasing influence on national policies. Green legislation for transport is now a reality, and green legislation for buildings (which emit more CO2 than road transport) is also firmly here to stay. The cost impact is a subject for discussion and disagreement, but as for any other new reality in any other economic domain, the market will find its own balance; the new costs (or new cost benefits, depending on which side of the argument you prefer), will be absorbed, and will themselves become the new reality. And, probably, sooner rather than later Tim HARRUP I
I N V E S T M E N T I G R E E N L E G I S L AT I O N I
Evelyne Huytebroeck, Brussels Environment Minister
Mobility and environment

The influence of the green movement in politics cannot be more pertinently illustrated than through the fact that the Brussels Minister for the Environment and Energy, Evelyne Huytebroeck, is a member of the Green, or Ecolo, party. Her views on the future direction Brussels should take in terms of office construction, are therefore of direct importance to the sector.
What is your view on where office buildings should be located? E.H. It is ideal to locate offices around public transport facilities such as railway stations. This limits the number of journeys by car, which is fundamentally important. Does this mean that the question of mobility is intrinsic in selecting an office location, and how do you ensure companies take this into account? E.H. One of the major conditions for an office location is the question of mobility. We work on mobility plans with companies, in fact we oblige them to produce personnel movement plans. These include for example car sharing and public transport. And for the past 4 years we have been operating Friday Bike Day with companies. At first there were just 4 companies, now there are around 100, and they are continuously increasing the number of their personnel who take part. Is there more legislation on the way in terms of energy consumption? E.H. During this year, the Brussels Government will make energy audits compulsory for all buildings of over 3,500 m and which are not used for residential purposes. There is already a great deal of legislation in this area E.H. Yes, and this is why we wish to launch a major process to produce a global environmental code, because we realise that over the past 15 or 20 years there has been a multiplication of legislation and of obligations placed on building owners: de-pollution, mobility, energy requirements An overall view on the existing legislation is required, more integrated and bringing coherence to urban and environmental matters. Are the public authorities setting an example? E.H. All public buildings have been obliged to be passive since 2009, and from 2015 private buildings will have to be the same. We will strengthen legislation in this area. We are setting an example with the building to be constructed for our own administration, and which will be located in Tour & Taxis. This will be a building of very high architectural quality, extend to around 16,000 m, and quite simply be the greenest building in the world! How will you ensure coherence in this field? E.H. We were instrumental in appointing a Master Architect for Brussels, as we wish to assist in the process of making sure there is someone who can act as a guarantor of coherence within architecture in the Region. We have a number of very large projects on the horizon (T&T, Schaerbeek Formation, Heyzel) and in every case we want an overall vision of how these will be handled. We are aiming for sustainable buildings in sustainable districts. There has been much talk of a moratorium in office building. E.H. The office market is currently saturated, and the idea of a moratorium has been put forward by some of the important private players in the market. The crisis which the sector is experiencing should be an opportunity for it to reinvent itself and to establish practices which will enable it to meet challenges such as climate change and sustainable development. This could in particular be by diversifying and re-balancing the city functions to bring more of a mix and more life into administrative districts.
Evelyne Huytebroeck believes the idea of a moratorium comes from the private sector.
Tim HARRUP I
INVESTMENT I BANKERS VIEW I
What the banks look for

The major banks have been very much in the news over recent months. They have been accused of many things, from causing the world-wide crisis to failing to help economies recover from it through carrying out one of their fundamental tasks lending to business. What is the situation now, if a developer or investor needs money for a real estate project?
espite everything that has happened, financing real estate remains part of the overall real estate market, and unless an investor has mountains of cash, he will still need to go to a finance house to raise money for new projects.One of the banks national and foreign investors will turn to in Belgium is KBC Real Estate. The views of Real Estate Finance Director Gerrit Callaerts and the head of the Belux division Marc Van Acoleyen, are therefore pertinent in this respect. Shift Firstly, it has become quite clear over recent times that there has been a shift in domain. The office sector, traditionally the leading investment and development sector, has been comparatively inactive over recent times. Retail, on the other hand, has been gaining in importance over the past 18 months. Investors have been looking to put their money here because it is seen as a sector where rents are on an slightly upwards or flat trend, whereas in the office sector, rents are still sliding. This is not of concern to KBC: Offices are already very well represented in our portfolio, so a shift towards retail has the effect of balancing our portfolio to some degree, explains Marc Van Acoleyen. He is quick to point out however, that every real estate finance proposition is looked at on a case by case basis, and that the sector in which the project finds itself is not a determining factor. It is also a market reality that finance is only an annex, investors and developers set the trend by deciding where they want to put their money. If investors decide that markets previously considered to be secondary are now the place to be, finance houses will automatically follow. Business case The determining factor in deciding whether to back a project or not is the business case that accompanies it. And many factors play their part here, as Gerrit Callaerts points out: Looking for rental income is one part of the picture. Alongside this we examine the quality of the building, the quality of the tenant (if there is one) and the quality of the rental contract he has signed. We are looking to see if the rental level being paid is in line with what would be expected in the location in question. And talking of location, we also want to judge whether the building will be easy to sell or re-
let later. Another central factor within any business case is the actual structure of the deal. Is the investor planning to buy the entire asset, or to buy some shares in a company set up for this deal. And depending on the structure, the finance house will want to know what the fiscal implications may be, and how these affect the clients profitability and cash-flow forecasts. New clients In all business sectors, the potential supplier needs to be as certain as possible that his investment (whether supplying goods or services on credit, or putting up the money) is safe. However good the business case may be, the bank needs to ask itself one simple question before providing the money even if my client receives his rental payments, am I sure he will pay me?. So what does a new client need to do to convince a finance house to back him? Marc Van Acoleyen: First of all, of course, we have to make sure we fully understand the essentials of the proposed deal. Is the client in this for the long term, with rental income as a cornerstone, or is he looking to build and sell quickly which may be more difficult during the recession. We are looking for hands-on management, and for genuine real estate expertise. We will also be making enquiries into the clients own capital base to make sure everything is in order. The future The real estate market may be showing signs of stabilisation, but this should be seen in the light of the very distressed state it has been in. As Gerrit Callaerts puts it: Many of the elements which have always been present in the market are no longer there. Fundamentals such as the willingness of investors to do deals, and of finance houses to re-finance these are no longer to be taken for granted, and it will need some time for the situation to correct itself. The financial markets had already started to evolve before the crisis, with agreements such as Basel II, for example, placing new constraints on how banks and others can act. I would say that we are more driven towards risk quantification, and to have clients adequately pay for the degree of risk in a deal. This trend is likely to continue, and can be seen as a correction which is moving in a good direction for all concerned. Tim HARRUP I
Longer view
The profile of the typical investor is changing. They are taking a longer view. Previously, there were many deals where the investors intention was to get in and out in 3 to 5 years maximum. This is now less common. One of the effects of the crisis is that finance houses are looking to do more business with their core clients, where there is a track record, and where the lender understands what the client is trying to achieve. However, emphasises Marc Van Acoleyen, we are always open to new clients and new business. It is the individual business case which counts, and we make our decisions based on specific business plans provided by the client.
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