Key Takeaways
- Belgium entered 2025 with modest economic growth expectations; GDP is projected to grow by just 0.44% this year, with downside risks from potential U.S. tariffs.
- Inflation remains elevated at 3.6% (HICP), above the Eurozone average, with strong price increases in housing, utilities, and hospitality.
- Interest rates fluctuated, but two ECB rate cuts in Q1 2025 have eased financing costs for floating-rate debt.
- Office: Brussels office take-up dropped to an all-time low in Q1 2025, with just over 40,000 sq m leased; vacancy rose to 8.57% and prime rents remained stable at €390/sq m/year.
- Industrial: Industrial and logistics take-up reached 302,400 sq m (+25% YoY), driven by large-scale transactions; prime logistics rents rose to €70/sq m/year in Brussels and Flanders, and €60/sq m/year in Liège.
- Retail: Retail take-up slowed to 67,300 sq m, with declines in both high street and out-of-town segments, but shopping centres showed a 7% QoQ increase in take-up; prime high street and out-of-town rents held firm, while shopping centre rents corrected by 5%.
- Investment volumes surged in retail (€706 million) and industrial (€525 million), while office investment remained subdued (€107 million), with prime yields stable across all sectors.
Economic Context
Belgium’s economy started 2025 with subdued growth expectations, as GDP is forecast to rise by only 0.44% (Moody’s Analytics). Inflation remains high at 3.6% (HICP), outpacing the Eurozone average, with persistent cost pressures in energy and construction. Unemployment stands at 5.9%. Interest rates have fluctuated, but two ECB rate cuts in Q1 2025 have eased variable-rate borrowing costs. Overall sentiment is cautious, with macroeconomic uncertainty and geopolitical risks—particularly U.S. trade tariffs—posing downside risks.
Demand Overview
Office: Leasing activity in Brussels offices hit a historic low in Q1 2025, with take-up at just over 40,000 sq m—down 45% from the five-year average. The absence of large public sector deals and subdued private sector demand led to slow decision-making and stalled leasing momentum. The largest transaction was IWG’s 6,024 sq m pre-letting at Pegasus Park (Periphery). Other notable deals included Devos Bevernage (2,850 sq m) and Sopra Steria (2,000 sq m), both in the Periphery.
Industrial: The industrial and logistics sector saw robust demand, with 302,400 sq m taken up in 90 transactions (+25% YoY). Fewer deals but larger average size characterized the quarter. Key transactions included Logent’s 48,989 sq m subletting at MG Big Bear (Ghent, in partnership with Volvo Cars) and Nolmans Retail Group’s acquisition of the 46,650 sq m LCP site in Genk.
Retail: Retail take-up reached 67,300 sq m across 182 deals, a slower start than Q1 2024, especially in out-of-town retail (take-up halved YoY). High street leasing also declined by over 25% QoQ, while shopping centres saw a 7% QoQ increase in take-up, indicating renewed retailer interest in curated, high-traffic environments. Notable leases included Xandres (480 sq m, Av. Louise 37), JJXX (856 sq m, Waasland Shopping), and TEDi (1,021 sq m, Winkelpark XXL).
Vacancy Trends
Office vacancy in Brussels rose to 8.57% in Q1 2025, up 10 basis points QoQ, with increases across all districts. The Decentralised (12.33%) and Periphery (15.42%) submarkets saw the highest vacancy, while Leopold (3.45%) and Midi (2.77%) remained tight. New speculative deliveries, such as the Luxia project, contributed to the rising vacancy. Sublease space and partially let new developments are keeping total availability elevated. Industrial and retail vacancy rates were not specifically detailed, but robust demand in logistics suggests limited availability for prime assets.
Rent Trends
Prime office rents in Brussels remained stable at €390/sq m/year, with average rents continuing a slow upward trend due to flight-to-quality. In industrial, prime logistics rents increased to €70/sq m/year in Brussels and Flanders, and €60/sq m/year in Liège, reflecting higher construction costs and alignment with neighboring markets. Retail prime rents held steady for high street (€1,700/sq m/year) and out-of-town (€185/sq m/year), while shopping centre rents corrected downward by 5% to €1,330/sq m/year. Landlord concessions were not specifically mentioned.
Construction & Supply Pipeline
The Brussels office development pipeline remains dense, with 633,000 sq m under construction and several speculative projects nearing delivery, notably in the Centre and Leopold districts. Many new completions are only partially let, adding pressure to vacancy rates. In industrial and logistics, new supply is being absorbed by large-scale occupier demand, with strategic developments such as WLP X – Cargo City West (Bierset) and continued investor interest in core assets. Retail construction activity was not specifically highlighted, but supply remains limited in core locations, supporting rent stability.
