Investments in Belgian offices hit their lowest level in a decade in 2023, with only 800 million euros invested throughout the year. This trend is partly attributed to the rise in interest rates, which deterred investors.

Figures published by the consulting firm CBRE reveal that only 805 million euros worth of transactions were recorded for offices in Belgium last year, marking the weakest performance in over a decade. In comparison, investments in offices amounted to 1.3 billion euros in 2013.

Expanding the perspective to include all real estate asset classes, including the commercial, healthcare, and logistics sectors, total investments in 2023 amounted to 2.5 billion euros, well below the 8.5 billion euros from the previous year. This decline also places the year 2023 among the least performing since 2013 when investments in Belgian commercial real estate amounted to 2.2 billion euros.

Despite the absence of comparable data to that of 2022, the trend remains pessimistic. The figures for 2023 fall below the five-year average, which typically ranges between 4 and 5 billion euros in investments, according to Arnaud Smeets, Director of BeLux Capital Markets at CBRE.

The distrust towards offices is also reflected in their decreasing share of overall real estate transactions in Belgium. In 2013, offices accounted for 60% of real estate investments in the country, but this share fell to 32% a decade later.

This skepticism towards the office market has prompted investors to turn to new asset classes, such as life sciences or data centers, which offer safer cash flows in the current context. The resilience of quality offices in Brussels to attract long-term tenants underscores their continued importance as an asset class.

The low attractiveness of offices in 2023 was further exacerbated by the absence of foreign investors in the market, with many opting to wait for better visibility on the economic and financial situation amid a rapid rise in interest rates. This situation has paved the way for greater involvement of Belgian family offices and private equity funds in the national real estate market.