The shopping centre market - Belgium

The global shopping center market has been facing significant challenges in recent years, with the COVID-19 pandemic exacerbating existing trends such as the rise of e-commerce and changing consumer habits, particularly in Belgium. As of 2020, Belgium experienced a 10% reduction in rented retail space and a 16% drop in the number of transactions. Shopping centers had to adapt by enhancing customer experiences with increased emphasis on leisure segments to attract visitors. Despite closures during lockdowns, the summer of 2021 saw a rebound with major shopping centers like Wijnegem, K in Kortrijk, and Grand Prés in Mons witnessing a 17% rise in visitors and a 20% boost in turnover from the previous year. The demand for shopping centers during the health crisis highlighted the importance of safety measures such as cleaning and availability of hydro-alcohol gel. Retail parks, in contrast to traditional shopping centers, quickly recovered post-lockdown with an impressive 95% of visitors returning by July 2021, as compared to January levels. Prime rents in various retail formats were affected differently, with the High Streets segment experiencing a reduction to €1,550/sqm/year expected in 2021 from the pre-crisis levels of €1,600/sqm/year. On the other hand, shopping center prime rents remained stable at around €1,150/sqm/year since March 2020. The market is also seeing a segmentation with the success of discount retailers like Action and Albert Heijn, indicating a shift in consumer preferences and the composition of retailers in shopping centers. Regulation-wise, commercial establishments over 400 sqm in Belgium are subject to authorization, with varying degrees of local authority involvement based on the size of the establishment. International firms like CBRE and national players like Willemen Real Estate, AG Real Estate, and Wereldhave Belgium are some of the key actors in this market.

Shifting Consumer Patterns and the Adaptation of Shopping Centers in Belgium

In Belgium, a shift in the shopping center market is apparent, with the rise of e-commerce imposing significant challenges that call for a strategic revamping of the traditional shopping center model. This transformation is mirrored in the changing demographics of the customer base and their preferences, where a younger and more male demographic is becoming prominent. The formidable growth of online shopping is reshaping the demand within the Belgian market, putting the existence of brick-and-mortar retail spaces through stringent tests. This is evidenced by a substantial decline in retail space rental, which plummeted by approximately 10% in 2020 compared to 2019. Furthermore, there has been a discouraging decline in the number of transactions, contracting by around 16%. Despite these challenges, the resilience of shopping centers during the pandemic era has shined through, with footfall and turnover rebounding to nearly pre-crisis levels in the summer of 2021. This is indicative of a demand that persists robustly for in-person shopping experiences, even when set against the convenience of online commerce. The demand for shopping centers now heavily factors in health and safety measures, with consumers placing high importance on regular cleaning, the availability of sanitizers, and controlled entry to shops to manage capacity. These new facets of demand underscore the necessity for shopping centers to innovate and enhance the shopping experience. Consumers are revealing a disposition towards increasing their spending in leisure-related retail segments, particularly in areas such as DIY, gardening, culture, and sports. In contrast, a more conservative approach is evident toward spending habits in segments like electronic goods and fashion. Within the Belgian shopping center market, the traditional structure is seeing a radical overhaul, as e-commerce continues to carve out significant market share, especially in the realm of fashion. This evolving market structure demands a strategic response from retailers and shopping centers alike to stay relevant and compete effectively. As for the evolution of market prices in the sector, there has been a notable impact due to the Covid-19 crisis, with variance observed across different segments. High street rents have seen a downward adjustment, while shopping center rents have maintained a degree of stability. The out-of-town retail segment stands out with stable prime rents indicating sustained market health. Switching gears towards retail parks, a specific market segment that appears to be thriving, includes both local and international players such as Redevco and De Vlier. Retail parks in Belgium have gained popularity post-lockdown, evidencing their resilience and appeal amongst consumers.

A Glimpse at the Leading Figures Shaping the Shopping Center Landscape

In the dynamic world of shopping centers, a variety of actors come into play, each bringing their unique expertise and contributions to the industry. These range from real estate consultancies with a global presence to local firms deeply ingrained in the national market.

• CBRE stands out as a giant in the international real estate consulting firm arena. With its expansive network and in-depth market intelligence, CBRE has a significant influence on market trends and investment decisions across the globe. Their comprehensive services cover every aspect of shopping center management and development, making them a go-to consultant for investors and property owners alike.
• AIMCo and Eurocommercial Properties represent the international fund and real estate management sector that have a substantial footprint in the shopping center market. These entities not only provide the capital necessary for the development and maintenance of shopping centers but also bring their strategic management capabilities to ensure these centers remain competitive and profitable in a changing retail environment.
• On the home front, Belgian national players have carved out a name for themselves with Willemen Real Estate from the Willemen Group and AG Real Estate standing tall as significant contributors to the national landscape of shopping centers. These firms leverage their local market knowledge to develop, manage, and enhance shopping destinations that cater to the specific needs of the Belgian populace.
• Wereldhave Belgium and Ceusters SCMS are also key players within Belgium, contributing to the diversity and resilience of the shopping center market. Wereldhave Belgium specializes in investing in and revitalizing existing shopping centers, breathing new life into them. Meanwhile, Ceusters SCMS brings its expertise to the table as a comprehensive commercial property management firm, ensuring the smooth operation and customer satisfaction of the shopping centers under its wing. Each player, with its distinctive approach and specialization, contributes to a multifaceted market that is as challenging as it is exciting. These firms reflect the diverse strategies and business models that coexist within the shopping center sector, ultimately aiming to meet the evolving needs of consumers and retailers in an era defined by rapid change.

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 20/12/2021

Summary and extracts

List of charts

• Breakdown of spending in global shopping centres
• Change in turnover from "other retail sale in non-specialised stores" (NAF code 47.19)
• Development of the gross turnover index in "other retail trade in non-specialised stores
• Level of importance of measures implemented at the point of purchase according to the respondents
• Evolution of take-up by place of purchase segment
• Shopping habits before the health crisis
• Trends in the use of shopping establishments after the health crisis
• E-commerce turnover
• Distribution of the market by type of commercial area
• Evolution of the average vacancy of commercial areas on a national scale
• Distribution of average high rents by retail format
• Evolution of rental prices in shopping centres
• Area occupied by type of store in retail parks of more than 10,000 m²
• The most dynamic retailers in terms of entity creation
• The most dynamic retailers in terms of area creation
• Distribution of consumer spending in shopping centres by category