For many years, the Brussels office market has represented a ‘safe haven’ for international and local investors. The stable values and long term tenants, such as those related to the European Commission, provide a predictable income for institutional investors.
Jones Lang LaSalle has recently advised on the largest purchase transaction in Brussels since 2003, amounting to approximately USD 398.18 million (EUR 300 million), helping investors from two different countries—one, a regular visitor to this market, and one who is making a first move to acquire Phase I of the Belair project. The two investors— one, a major Chinese investor, and the other, Hannover Leasing of Germany—now own a total of 860,000 sq ft (79,896.61 sqm), the majority of which is an office of 700,000 sq ft (65,032.13 sqm), with around 150,000 sq ft (13,935.46 sqm) of archive and multifunctional space.
Partially renovated, partial new built, Belair is certainly a ‘stable’ investment, with the Belgian Federal Police having already signed an 18-year lease with previous owners Breevast (60%) and Immobel (40%) for the total space. The vendors Breevast and Immobel, two of Belgium’s most important developers, have been working together to redevelop the complex since 2003.
This transaction is an example of cross-border capital entering the market in Continental Europe, and demonstrates that Asian investors seeking higher yields are prepared to geographically diversify their real estate portfolio, at the same time, maintain their focus on prime locations, core product and institutional-quality tenants.
Matthew Richards, Director of International Capital Group, EMEA commented: “Since the beginning of the economic downturn, London has received a disproportionate share of Asian capital inflows. However, as core assets in London become scarcer, we expect to see an increased focus on prime locations in mainland Europe, where net investment was up 36% in 2012, supported by an 80% increase from the Asia Pacific.”
Richards continued: “Asian investors are starting to compete with other active crossborder investors by working with partners and establishing joint venture arrangements to match equity with local and regional expertise. By embarking on a joint purchase with Hannover Leasing, this new market entrant was able to make its debut in mainland Europe with the benefit of its partner’s leading local asset management capabilities.”
“As Asian investors continue to move up the risk curve—bolstered by trusted local partners—and expand their portfolios beyond the traditional investment hubs of London and Paris in search of greater yield, we expect this trend to gather pace throughout 2013 and beyond.”