Wereldhave Belgium to let more retail space but lowers profit forecast

Even though Wereldhave Belgium recorded strong results during the first six months of the year, the property lessor is lowering its profit forecast for the entire year. After all, the retail industry is not out of the woods yet.

Dynamic market

The demand for commercial space in Belgium has again increased during the first half of the year, Wereldhave states in its half-yearly report. The take-up of retail space on the Belgian market even reached its best result in ten years with 215,000 sq m. Wereldhave signed 43 lease contracts and lease renewals during this period. The average rent was 2 per cent higher than the old rent, reports Belgian newspaper Het Laatste Nieuws. New tenants include Jysk, Oil & Vinegar, Hupside and Dunkin Donuts. The occupancy rate of the retail portfolio rose to 96.2 per cent.

Despite the recovering market, the lessor confirms some trends that have been apparent for some time. The fashion industry continues to perform poorly due to the decline in sales and the desire to optimise portfolios. Their place in the shopping streets is more than ever being taken up by supermarkets, sports and hobby retailers, catering establishments and home furnishing stores.

Smaller cities are being deserted

At the same time, there is a clear shift from city centre stores to stores located along main roads and stores in covered shopping centres. The total vacancy rate remains very high, at over 11 per cent, and is mainly increasing in the centres of small cities.

Wereldhave Belgium recorded an operating profit of 18.4 million euros for the first half of the year, around one and a half million euros more than a year ago. Nevertheless, the company is lowering its profit forecast for the full year because the after-effects of the Covid crisis are still being felt in the retail sector. For the time being, fun shopping is rare, and this absence will impact the turnover of rented stores. The real estate player is already taking potential compensations into account.