Market analysis of Belgian business center and coworking market 2013-14

The power of professional financial management
DRAFT VERSION – FOR DISCUSSION PURPOSES ONLY
fin POWER
BUSINESS CENTER MARKET IN BELGIUM
MARKET ANALYSIS 2013
BOBCA, 23 oktober 2014

I. Introduction
II. The broader ‘OFFICE MARKET’
III. The ‘BUSINESS CENTER MARKET’
I. Scale of the business centre groups
II. Business centres by city
III. Business centre by type of shareholder
IV. Ownership of buildings
IV. Financial figures of business centres in Belgium
I. Turnover (Estimated)
II. Profitability
III. Advantages of scale
V. Conclusions
INTRODUCTION

 Business centers in Belgium :
 See list in annex
 Research by a maximum of means
INTRODUCTION
“Definitions and limitations”
 Growing market  if you know new centers, please let me now.
 What is a business center ?
 Uses this as name of his business
 Including ‘bedrijvencentra’, excluding ‘innovation centers’/incubation centers
 For profit, registered company
 Serviced offices = full time reception services
 Used figures :
 Published financial data (Belgian National Bank)

II. THE OFFICE MARKET IN BELGIUM
2.1. Estimation of ‘total office market’
Brussel 13.000
Antwerpen 1.900
Gent 1.200
Liège 500
6 'centrum' cities' : 300 - 500
(Charleroi, Namur, Hasselt, Leuven, Mechelen)
15 'regioinal cities' 100 - 250
(f.ex. Kortrijk, Roeselare, Brugge, St. Niklaas, Aalst, )
Total office spaces in 'cities' : 21.250
Number : 172
Average surface : 1.708
Total surface occupied : 293.744
in % of office market : 1,38%
Number : 50
Average surface : 373
Total surface occupied : 18.640
in % of office market : 0,09%
in % of business center market : 6,35%
4
 Office-market in Belgium
 Market of ‘larger cities’ very well documented
 Own, rough estimation of market in regional cities
 Total ca. 21 Mio m², accommodation for appr. 1 Mio collaborators (employees + civil servants in
office environments)
 Decreasing market volume due to NWC (- 2-3 % / year)
 Business center market
 Definition of ‘business center : ‘
 Flexible contracts
 Including services
 Excluding ‘joint-office-buildings’ with no ‘reception’
 Total : ca. 170 business centers, appr. 300,000 m² office space.
 Accounts for appr. 1,40 % of total office space in Belgium, growing market-share.
 Co working market
 New, upcoming market
 Total of appr. 50 Coworking spaces in Belgium, totaling appr. 10,000 m² office space.
 Growth rate of market > 30-50 %, but limited examples of viable business models.
Offices (x 1,000 m²)
# Business centers (in m²)
# Co working centers
The business center market is a niche market of the ‘Office market’

II. THE OFFICE MARKET IN BELGIUM
2.2. The ‘office market’, a giant on small feet …
5
 ?? How will the occupation rate evolve the following years
 Fundamentals are ‘not good’ :
 # employees will decline from 2015-20 on (80,000 Belgians are 50 yrs, 65,000 are 10 yrs !)
 Needed office space per employee is act. 28 m², could go down to 15-20 m²
 A ‘decrease’ of the market need with 15-25 % the following 20 years can be expected.
 Actual occupation – rate is underestimated :
 Growing vacancy of offices in more and more cities
 First in Brussels/Mechelen (> 15 % actually)
 Expanding to other cities (Antwerp, Hasselt, …
 …
 And, Dutch studies indicate that ‘silent’ vacancy is higher than visual vacancy :
 ‘Measure’ vacancy – rate : 13 – 17 % in the Netherlands
 ‘Unused’ but occupied office space : 15 -22 %
  Total ‘available’ office space : 25-30 % of total office space
 A surplus of 30 – 40 % of the office space in most cities by 2030 seems a logic expectation
 This will have an effect on the rent of offices spaces, where a decrease of 30 % and more for
‘used buildings’ is not abnormal
We expect declining office-rents the following years in most of
the cities in Belgium

III. BUSINESS CENTERS IN BELGIUM
3.1. Number of Business Centers
 Total appr. 170 business centers in Belgium :
 28 ‘BC’s’, bedrijvencentra
 12 Regus
 5 Multiburo
 Ca. 15 ‘groups’ with 2-4 centers, the fastest growing
part of the market.
 Appr. 90 ‘individual business center owners (53 %)
 In 2011 : ca. 135 BC, which means an annual growth of
appr. 10 %/year
 Failure rate limited (< 5 % of market)
 Listing B.C.’s is not ‘clear-cut’
 No innovation/incubation-centers
 No ‘co-working-spaces’
 No Incubation/Innovation centers
In Belgium, we observe appr. 170 business centers of
which more than 50 % are stand-alone centers.

3.2 Business centers by location
 Appr. 60 % of Belgium’s business
centers are located in Brussels,
Antwerp en Gent
 40 % located in Brussels
 10 % located in Antwerp
 8 % located in Gent
 Is comparable with the importance of
the relative office market.
 The biggest city of Wallonia, Liege, has
only 5 business centers.
 Some cities, like Brugge have limited
offer of business centers.
Cities Busines Centers Co working Total
Brussel 59 12 71
Antwerpen 17 7 24
Gent 12 6 18
Liège 5 3 8
Leuven 6 1 7
Hasselt 5 2 7
Louvain La Neuve 6 1 7
Kortrijk 5 1 6
Charleroi 2 2 4
Mechelen 3 1 4
Namen 2 1 3
Turnhout 2 1 3
Nivelles 2 1 3
Oostende 2 1 3
Sint-Niklaas 3 3
(Gleeeegl ) 2 2
Total 170 50 220
2/3th of all business centers in Belgium are located in the three
main cities (Brussels, Antwerp and Gent)

3.3. Ownership – types of the Belgian business center market
 Only 12 % of the business centers belong to
international owners, mostly within an
international chain of business centers :
 Regus (12)
 Multiburo (5)
 Servcorp, Halldis, Taminiau, …
 25 % of the business centers are public of semi-public
initiatives
 Bedrijvencentra, incubators, innovation-centers,
…
 2/3th of all business centers are private initiatives
Most business centers in Belgium are ‘private’ owned, 25 % have
‘public ownership’ and only 12 % belong to international chains.

4.4. Type of business center model : ownership vs. rental/management
 35 % of the business centers own the building they are operating
 Most (> 70 %) of the public initiatives own the building they are running
 30 % of the private owners also own the business center building
 No international (experienced ?) player on the market owns his building
 We see different ‘exploitation’ formula’s in the business center market
 Renting the building, which has clearly a declining market share
 Formula’s with ‘variable’ rent prices are more and more used
 Management-contracts are actually more and more common in the ‘business
center market
 Limited long-term-risk for the managing business center
 No risk of ‘declining’ rent prices in the future
 Owner needs to fill the building …
 We see a clear transfer from exploitation - risk from the
‘manager’ to the ‘owner’ of the building.
Only 1 out of 3 business centers operates the building they own
– management contracts are increasing in importance.

IV. FINANCIAL DATA OF BUSINESS CENTER MARKET
4.1. Turnover evolution
• Turnover
– Total market turnover appr. 80 Mio €
– 1/3th is done by international players
• Own only 12 % of the business centers
– 20 % is done by the ‘semi-public-initiatives
– The private owners serve appr. 50 % of the
market.
• Growth rhythm
– From 1995 – 2005 : no substantial growth of
the market (< 2 %/yr)
– 2006-2008 : growth with more than 10 % per
year, not abnormal for this market compared
with international studies
– 2010 – 2014 : growth 2-5 %, relatively low
growth in comparison with international
growth ratio’s of 5 – 10 % for EMEA-region’s.
• To low ‘entrepreneurship’ level in Belgium ?
The Belgian business center market is lagging behind on the
international growth rates of the market of appr. 10 %/year

4.2 Operational profit (EBIT) of business centers
• The decline in turnover has halved
(!) the profitability of the market
from 4 % in 2012 to 2 % in 2013.
• The private and mainly the
international players have profitable
business models since 2008
• The (semi-)public players have never
been profitable as a segment on
operational level.
– Most of the public and semi-public
business centers do not have a profitable
business model.
The decline in turnover by center has halved the profitability of
the business center market in 2013 !

4.3. Advantages of scale ?
• We have put the ‘profitability’ of a center compared with the ‘size’ of each
• There are clearly a lot of advantages of scale in the
business center market
– Commercially (website, referrals, …)
– Purchasing power, also on management-level
– Strategically and
– After a strong increase of their turnover from 2005-2009,
we see a stabilization of turnover the last years.
• But, the medium size of a business center is declining
….
center.
– Profitability = profit margin on turnover
– Size = turnover by center
• The ‘regression-line’ clearly demonstrates
– The substantial losses that a business center makes in his 1-2 starting years
(between 100 and 500 k€)
– A ‘break-even’ level of a ‘median’ center around 500 k€ turnover
– Most profitable centers have more than 600-700 k€ of turnover.

Conclusions
• The market is covered by 3 types of owners :
– International players focus on the big cities, with an international network and they are
operationally performing very well, including a minimization of assets used.
– The semi-public market players invest a lot of money in their buildings but do have a structural
problem with ‘operational profit’ – partially due to their ‘subsidized’ business model.
• (They use 5 x more equity recourses than the private sector to realize the same level of activity)
– The growth is realized by the smaller, private players in the market, who want to make a ‘bridge’
with the coworking-growth – but this could limit their profitability in the future since their scale
is mostly to small to cover the ‘fixed costs’ of a business center.
• The market has ‘new’ challenges the following years :
– The ‘business center market’ is not growing anymore
• Price decreases nearly faster than the growth of the market
• Which means that the profitability of the market comes under pressure
– Growth of the coworking market could give expansion-possibilities, but given the small scale of
these initiatives, these are not helping the profitability of the market
– The ‘challenges’ of the ‘Office-market’ can create opportunities but certainly also threats for the
business center market the following years : how will we manage the over-capacity of offices ?

Annexe
List of business centre and coworking
places inventoried for this study

Locatie Naam Locatie Naam Locatie Naam
BC Geel 4Wings BC Mechelen Bedrijvencentrum Regio Mechelen C Fosses La VilleBusiness One
BC Aalter Aalters Bedrijvencentrum BC Oostende Bedrijvencentrum Regio Oostende BC Brussel Business People Services
BC Lier Accentis business center BC Waregem Bedrijvencentrum Regio Waregem BC Liège CAP Business Center
BC Egezée Accortise Pactech Business Center BC Roeselare Bedrijvencentrum Roeselare C Nivelles Capinnove
C Antwerpen Acospace BC St Truiden Bedrijvencentrum Sint Truiden BC Louvain La NeCuEvIe Louvain
BC Brussel Acte BC Tienen Bedrijvencentrum Tienen BC Brussel Centre d'Entreprises de Saint-Gilles
BC Gent Adequat BC Tongeren Bedrijvencentrum Tongeren BC Liège Centres d'Affaires Afinis
BC Brussel Agence 86 'creative business center' BC Veurne Bedrijvencentrum Veurne BC Louvain La NeCuevercle Du Lac
BC Gent Ajuinlei 1 Business Center - Growth Phase BC Brussel Bedrijvencentrum Vilvoorde BC Brussel Chambre d'affaire CFCI
BC Brussel Alnair Business Center BC Oudenaarde Bedrijvencentrum Vlaamse Ardennen C Kontich Clubhouse Coworking
BC Louvain La NeAulvteernative Business Center BC Sint-Niklaas Bedrijvencentrum Waasland BC Genk C-Mine Crib
BC Antwerpen Antwerp Business Center BC Brussel Bedrijvencentrum Zaventem C Mons Co nnexion - coworking
BC Antwerpen Antwerp Business House BC Brussel Bedrijvencentrum Zennevalei C Brussel Coworking Business Center Brussels
BC Sint-Niklaas Astrid Business Center Sint-Niklaas BC Brussel Belgium Business center C Hasselt Coworking Hasselt
BC Brussel Ateac Business Center BC Antwerpen Benelux Business Center C Namen Coworking Namur
BC Brussel Ateliersdes Tanneurs C Brussel Beta Group Coworking C Liège Cristal Hub Coworking
BC Louvain La NeAuxviesparc business center BC Brussel BG3 BC Leuven de Hoorn
C Brussel Bar Buro BC Leuven Bio Incubator Leuven C Brugge De Huyskamer
C Brussel Bar D'Office Brussel (Voka) BC Brussel Bisschofsheim business center BC Antwerpen De Wolkammerij
C Leuven Bar D'Office Leuven BC Brussel Bizzcenter BC Brussel Diegem Grensstraat
C Oostende Bar D'Office Oostende BC Kortrijk Bizz-Init BC Brussel Double Digit Zaventem
BC Nivelles BCS Group BC Brussel BLSI BC Gent Easy Office Center
BC Aalst Bedrijvencentrum Aalst BC Antwerpen BNO 'The factory' BC Brussel EEBIC Business Center
BC Beringen Bedrijvencentrum Beringen BC Brussel BPS Ad Hoc BC Louvain La NeEuivnestein Business Center
BC Gent Bedrijvencentrum De Punt BC Brussel Brussels Airport Corporate Village C Brussel Enclume&Co
BC Antwerpen Bedrijvencentrum De Winkelhaak BC Brussel Brussels Village C Tournai ESCO Expace Coworking
BC DendermondeBedrijvencentrum Dendermonde C Sint-Truiden Bur O Bar BC Brussel Espace Moselle
BC Genk Bedrijvencentrum Genk BC La Louvi!re Buro Business du Centre BC Brussel EU Business Centre
BC GeraardsbergBeendrijvencentrum Geraardsbergen BC Namen Burogest Bouge BC Liège Euregio Business Center Liège
BC Hasselt Bedrijvencentrum Hasselt BC Namen Burogest Office Park C Brussel Factory Forty
BC Ieper Bedrijvencentrum Ieper C Antwerpen Burooz BC Dienze Filad Ondernemingscentrum
BC Zelzate Bedrijvencentrum Kanaalzone BC Brussel Burotel BC Brussel Flagey Digital
BC Leuven Bedrijvencentrum Leuven BC Brussel Burotel 367 C Gent Floating Desk Coworking
BC Maasmechelen Bedrijvencentrum Maasmechelen BC Brussel Burotel Congres BC Antwerpen Fountain business park
BC Malle bedrijvencentrum Malle BC Antwerpen Business Center Amerikalei BC Herentals Frame 21
BC Maldegem Bedrijvencentrum Meetjesland BC Charleroi Business Center Charleroi BC Tournai Futur Orcq
BC Overpelt Bedrijvencentrum Overpelt BC Nivelles Business center services BC Mouscron Futur X
BC Brugge Bedrijvencentrum Regio Brugge BC Waver Business Center Wavre Nord BC Oostende Greenbridge incubatiecentrum en wetenschapspark
BC Kortrijk Bedrijvencentrum Regio Kortrijk BC Kortrijk Business Centrum Kortrijk Pottelberg BC Houthalen Greenville Cleantech Campus
BC Willebroek Business centrum Rivium BC Sint-Niklaas Heptagon business center

Locatie Naam Locatie Naam Locatie Naam
C Antwerpen Het Bolwerk / Bar d'Office (Fort 5) C Gent Oneoffice BC Mechelen T - Offices
BC Hasselt Huis Vanstraelen BC Bierges Optimalis Business Center BC Antwerpen Talentarena
BC Gent Huize Minne BC Brussel Oriona Group Cinquantenaire C La Louvi!re the cowork Factory
BC Leuven I & I Leuven BC Brussel Oriona Group Louiza BC Gent The Crescent Ghent
BC Gent IBBT-Incubator BC Brussel Oriona Group Schumann BC Brussel The Crescent Riverside
C Gent Icubes BC Brussel Paepsem Business Center C Brussel The Flex
BC Gent I-Cubes BC Gent Parkoffice BC Brussel The Hub Brussel
C Gent Ihub BC Kortrijk Parkoffice C Brussel the Library
BC Estaimpuis Impact Centre Européen d'affaires et de services BC Brussel Plug &Work C Brussel The Loft
BC Leuven In volle Vaart BC Antwerpen Q4 Central Park Building C Brussel The Mug
BC Gent Incubatie en Innovatiecentrum Ugent BC Charleroi Quadrature Business center C Kortrijk The Studio's
BC Brussel Innovatie en incubatiecentrum Brussel BC Brussel Quartier Latin C Ronse TIO3 Textiles Open Innovation Centre
C Antwerpen K85 BC Eupen Quartum Business Center C Brussel Transforma
BC Hasselt Kaai 16 BC Brussel Regus Airport Meeting Center BC Kortrijk Twelve
BC Geel Kempens Bedrijvencentrum BC Braine lalleudRegus Braine Lalleud BC Antwerpen Universitair bedrijvencentrum
C Liège La Forge BC Brussel Regus Brussels South Station BC Brussel VIP Offices Headquarter
C Louvain La NeLuavuevain Coworking Space BC Brussel Regus Brussels West Basilix BC Hasselt Wetenschapspark Limburg
C Tubize Le Centre d'Entreprises Chapagne Landas BC Brussel Regus EU Parliament/Leopold BC Louvain La NeWuveetlands Business Center
C Antwerpen Level 9 BC Gent Regus Gent Zuiderpoort BC Brussel Workspaces
BC Liège Liège business center BC Brussel Regus Midi BC Antwerpen WTC business center
BC Liège Liège Spatiopôle BC Brussel Regus Park Atrium C Charleroi Wup Coworking
C Gent Like Birds BC Brussel Regus Pegasus C Hasselt Zelfies
C Gent Loft169 BC Antwerpen Regus Rubens BC Zellik Zellik.biz
BC Gent Maaltecenter BC Brussel Regus Schuman
BC Brussel MC Square BC Brussel Regus Stephanie Square
BC Mechelen MC Square Mechelen C Liège Rogier Espace Coworking
BC Antwerpen Multiburo Antwerpen Centraal Station BC Brussel Science14 Atrium
BC Brussel Multiburo Brussels Airport BC Brussel Seed Factory
BC Brussel Multiburo Louise BC Brussel Servcorp Bastion Tower
BC Brussel Multiburo Quartier Européen BC Brussel Servcorp Schuman
BC Antwerpen NOA Bedrijvencentrum Nood Oost Antwerpen BC Antwerpen Silver Square
BC Diest Office 21 BC Brussel Silver Square
BC Brussel Office services Brussels BC Brussel Sint Annacenter
BC Leuven Officener Leuven C Antwerpen Social Media Club Kube8
BC Hasselt Officenter BC Brussel Solaris Business Center
BC Antwerpen Officenter A12 C Turnhout SPK - Bar D'office
BC Turnhout Officenter Turnhout BC Turnhout Square Point Business Center
C Mechelen Ondernemershuis/Bar d'Office C Brussel Studio 28
C Ieper Ondernemingscentrum Ieper/ Bar D'Office C Antwerpen Swenst
C Charleroi Switch Coworking Charleroi
BC Antwerpen T - Offices

Market analysis of Belgian business center and coworking market 2013-14

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Market analysis of Belgian business center and coworking market 2013-14

Similar to Market analysis of Belgian business center and coworking market 2013-14 (20)

Recently uploaded

Recently uploaded (20)

Market analysis of Belgian business center and coworking market 2013-14