A CLOSER LOOK AT THE OCCUPIER MARKET

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Thomasine Webster
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1 A CLOSER LOOK AT THE OCCUPIER MARKET 6 February 2013 Brussels CBRE I 1

2 INTRO. Recovery starts in the USA, Europe to follow by mid 2013 Large companies still very careful Wall of Equity available Real estate financing still tough Tax uncertainty CBRE I 2

3 CAPITAL MARKETS CBRE I 3

4 INVESTMENT VOLUME Property investment volume per asset class 6 bio EUR 5 bio EUR 1.7 billion of investments in 2012 in Belgium 4 bio EUR 3 bio EUR 2 bio EUR 1 bio EUR 0 bio EUR Offices (Brussels) Offices (Regions) Retail Industrial & logistics BRUSSELS OFFICE INVEST- MENT TOTALS ONLY 290 MILLION Residential Elderly homes Others Source: CBRE Research & Consulting CBRE I 4

5 INVESTOR SURVEY largest investors were questioned 4.5 billion to invest in 2013 Timing December January 2013 CBRE I 5

6 OFFICE DYNAMICS CBRE I 6

7 CORPORATES WILL FOCUS ON NEW SPACE Office take-up in Brussels ( ) Take-up per occupier type 700,000 m² 600,000 m² EU Belgium Embassies & representations Corporates (>2,000 m²) Corporates (<2,000 m²) Take-up per building grade 700,000 m² 600,000 m² New & custom-builds (Grade A) Modern (Grade B) Secondhand (Grade C) 500,000 m² 500,000 m² 400,000 m² 400,000 m² 300,000 m² 300,000 m² 200,000 m² 200,000 m² 100,000 m² 100,000 m² 0 m² 0 m² Source: CBRE Research & Consulting CBRE I 7

8 NEW SPACE IS QUICKLY DECREASING Office voids in Brussels ( ) 14% 12% 10% 8% 6% 4% Grade A (New & custom-builds) Grade B (Modern office space) Grade C (Secondhand space) BOTH new and secondhand space are decreasing. Grade B space is increasing! OVER m² RECONVERTED IN 2012 STRUCTURAL PROBLEM 2% 0% FOCUS OF DEMAND ON NEW SPACE Source: CBRE Research & Consulting CBRE I 8

9 BUT ONLY LIMITED OFFICE DEVELOPMENT Office development pipeline in Brussels 700,000 m² 600,000 m² 500,000 m² 400,000 m² 300,000 m² 200,000 m² 100,000 m² Developed Committed Speculative Not speculative 52,000 m² of office space will be speculative in 2013 WAITING FOR AN OCCUPANT 0 m² e 2014e 2015e Source: CBRE Research & Consulting CBRE I 9

10 AMBITIOUS PLANS FOR BRUSSELS REDUCING PARKING LOTS HOUSING FOR POPULATION GROWTH LOW-ENERGY BUILDINGS CBRE I 10

11 OCCUPIER SURVEY CBRE I 11

12 EMPLOYMENT IN THE FINANCIAL SECTOR... Banking and finance share of services employment in Brussels 12.00% 10.00% 8.00% 9% of the Brussels services employment base is active in the banking and finance sector 6.00% 4.00% 2.00% 0.00% London Zurich Geneva Brussels Paris Dublin Frankfurt Amsterdam Budapest Munich Warsaw Oslo Stockholm Copenhagen Vienna Milan Sofia Prague Bucharest Rome Lisbon Helsinky Madrid Berlin Istanbul Source: CBRE Research & Consulting CBRE I 12

13 ... DID NOT SUFFER TOO MUCH Banking and finance share of city employment 250,000 m² 200,000 m² 11% decrease in office use since 2007 (as a result of the finance crisis) 150,000 m² 100,000 m² 50,000 m² 0 m² BNP Paribas Fortis AXA ING Dexia/Belfius KBC AG AGF P&V Banque DeGroof Bank of New York Citibank ABN AMRO Delta Lloyd Ethias Petercam Baloise Insurance Bank Dewaay Puilaetco Commerzbank SG Private Banking Bank Delen Société Générale Bank J. Van Breda & Co Source: CBRE Research & Consulting CBRE I 13

14 CORPORATES MOVING AGAIN Corporate demand rebounced since the summer months CBRE I 14

OCCUPIER SURVEY 2013 67 large (and some smaller) companies were

15 OCCUPIER SURVEY large (and some smaller) companies were questioned 33,000 employees in total Timing December January 2013 CBRE I 15

16 REDUCING PROPERTY COSTS? CBRE OCCUPIER SURVEY 2013 Property cost reduction in last 3 years? 58% 46% of companies renegotiated rents in last 3 years YES 42% NO 46% RENT RENEGOTIATION 28% SPACE REDUCTION 18% MOVE TO A CHEAPER LOCATION 12% ENERGY SAVINGS 0% OTHERS Source: CBRE Research & Consulting CBRE I 16

17 CHANGES IN EMPLOYMENT? CBRE OCCUPIER SURVEY 2013 Expected changes in company employment? Actual in 2012 Expected in % 57% 29% of companies hope to increase employment in % 21% 23% 3% 11% 6% 3% -10% -5% 0% 5% 10% 6% % CHANGE IN EMPLOYMENT Source: CBRE Research & Consulting CBRE I 17

18 NET ABSORPTION IN 2013? Evolution of net absorption 200,000 m² 150,000 m² 4th year of negative absorption in the Brussels office market 100,000 m² 50,000 m² 0 m² -50,000 m² -100,000 m² -150,000 m² CBRE I 18

m² 50 m² 40 m² 30 m² HISTORICAL MANSIONS

employee Office space per desk FLEXDESK &

employment increased substantially in the

19 TOWARDS A NEW WAY OF WORKING... Evolution of office space per employee 60 m² 50 m² 40 m² 30 m² HISTORICAL MANSIONS OPEN SPACE & MODERN OFFICES Office space per employee Office space per desk FLEXDESK & HOMEWORKING Please note that service employment increased substantially in the same time frame. The Brussels office stock grew from 4 million m² in 1950 to 13 million m² in m² 10 m² 0 m² FLATSCREENS ICLOUD & SMARTPHONES Source: CBRE Research & Consulting CBRE I 19

20 TOWARDS A MODERN WORKPLACE... CBRE OCCUPIER SURVEY 2013 On the road? Working from home? Flex-desk? 46% 80% 69% 37% % OF EMPLOYEES 0-25% % 15% % 0% % OF EMPLOYEES 0-25% 6% % 12% % TYPE OF OFFICE FIX DESK 22% FLEX DESK 9% BOTH LARGE PART OF STAFF SPENDS 50% OF TIME OUT OF THE OFFICE WORKING FROM HOME IS NOT YET ALLOWED IN MOST COMPANIES 1 OFFICE UNIT PER PERSON REMAINS THE OVERALL TREND Source: CBRE Research & Consulting CBRE I 20

2 Location Location Location 3.4 3.2 3.0 3.0 2.

21 SATISFACTION IN CURRENT BUILDING(S)? CBRE OCCUPIER SURVEY 2013 Rank your headquarters Location Location Location LOCATION ACCESSIBILITY SPACE EFFICIENCY PRESTIGE RECENT TECHNOLOGIES RENTAL COST ENEGRY EFFICIENCY Source: CBRE Research & Consulting CBRE I 21

22 Vacant (> 5,000 m²) CBRE I 22

23 70,000 m² + 10,000 m² Let to the Federal Police Developed by Breevast/Immobel December 2013 CBRE I 23

24 Over 50,000 m² in total 29,288 m² of offices Redeveloped by Allfin 2014/2015 CBRE I 24

25 9,679 m² of offices Redeveloped by AXA Belgium February 2015 CBRE I 25

26 11,013 m² of offices Redeveloped by Immobel September 2013 CBRE I 26

27 COMPETITION FROM REGIONAL CITIES? Office dynamics in regional cities 27,800 m² 299,209 m² BATTLE FOR NATIONAL HEADQUARTERS 119,938 m² 19,128 m² 86,856 m² 27,523 m² 41,349 m² OFFICE STOCK TAKE-UP ,080 m² 304,498 m² of office take-up in regional cities in 2012 Source: CBRE Research & Consulting CBRE I 27

SPAIN COMMERCIAL REAL ESTATE. CBRE Spain. 21 st October, 2014 CLIENT LOGO. CB Richard Ellis Page 1

SPAIN COMMERCIAL REAL ESTATE. CBRE Spain. 21 st October, 2014 CLIENT LOGO. CB Richard Ellis Page 1 SPAIN COMMERCIAL REAL ESTATE CBRE Spain 21 st October, 2014 CB Richard Ellis Page 1 CLIENT LOGO Southern Europe Investment Briefing PATRICIO PALOMAR MURILLO Head of Research & Investment Strategy T +34