Are you interested in warehouse rental in Belgium? Here are some facts to keep in mind. The main reason is the high demand for storage capacity. Another reason is the Expenses associated with this type of rental. And, of course, there’s also the VAT issue. As a logistics professional, you may want to consider VAT-free rentals. If so, it’s important to know which regulations apply to warehouse rentals in Belgium. And, of course, you’ll need to know whether your logistics partner is VAT-exempt.
Demand for storage capacity
In recent years, the Belgian logistics industry has grown substantially, with the construction of 600,000 new square meters of warehouse space planned for this year alone. With demand for warehouse space growing rapidly, rents are starting to increase for the first time in years. Prime warehouse space in Brussels is already fetching 55 euros per square meter, a record high for the city. The demand for warehouse space will only increase with the growing e-commerce market and the COVID-19 pandemic.
For years, the Netherlands have dominated the market for large warehouses in Belgium, but in recent years, e-commerce is booming, generating demand for more storage space. Moreover, a recent study found that Belgian warehouse take-up has exceeded the level of two million square meters – more than 8% higher than in the previous year. In Flanders, a new logistics hub, called Heylen Warehouses, will be built in the Port of Ghent. Another two-story distribution center is planned for the capital city of Brussels.
Expenses associated with warehouse rental in Belgium
The Belgian logistics market is growing at a rapid pace and there will be about 600,000 new square meters of warehouses built this year alone. These warehouses will be larger, more diverse, and more expensive than ever. However, the cost of warehouse rental is increasing in the country and is likely to rise again, possibly bringing headline rents to a record high of 55 euros per square meter by 2020. Demand for storage remains strong, despite the COVID-19 pandemic and is expected to continue to increase in the future due to the rise in e-commerce.
Expenses associated with Belgium warehouse rental can be claimed if they are incurred to increase or maintain taxable income. However, the expenses must be properly documented. In Belgium, you can also deduct depreciation of a fixed asset as long as the depreciation is carried out during the taxable period. Belgian tax law accepts two methods for depreciating a fixed asset, the double-declining balance method and the straight-line method. In Belgium, annual depreciation cannot exceed 40 percent of acquisition value.
Legal possibilities to make your lease subject to VAT
There are legal possibilities to make your Belgium warehouse lease subject to the VAT. While Belgian real estate leases until now have been tax-exempt, now the Federal Government has made the real estate sector more competitive by allowing warehouse leases to be subject to the VAT. This new system will apply to all commercial lettings starting from 1 October 2018.
VAT can be applied in several ways, and the most important is letting the lessor know the difference. A VAT-neutral warehouse lease should also be subject to the same conditions as a rental contract. If the lease is for more than one year, the tenant should pay the full rental price to avoid VAT-inclusion. In addition, landlords must ensure that the terms of the rental agreement are legally binding.
There are specific conditions to make your Belgium warehouse lease subject to VAT. Real estate transactions in Belgium are generally VAT-exempt, but if the building is a “new” building, the landlord may be liable for VAT. The standard applicable VAT rate is 21%. The Belgian VAT Code allows certain exceptions to this rule. If you are leasing a new warehouse, however, you can choose to make it subject to VAT.
Availability of logistics real estate in Belgium
The Belgian logistics market is booming, with more than 600,000 square meters of new warehouse space expected to be constructed this year alone. As demand for storage space grows, warehouses are becoming larger, more sophisticated and more diverse. Despite this boom, the country is facing a lack of available space, with vacancy rates hovering at around one percent. As a result, tenants are paying record prices for available space. Moreover, Belgian developers are cautious, with only 30% of their stock being built speculatively. Meanwhile, there are 4.5 million square metres of build-to-suit schemes.
The main logistic real estate brokers in Belgium include the real estate group CEUSTERS. It is estimated that over 85% of Belgium’s population is employed by international companies. However, in a country where wages are low, logistical real estate is still a good option for companies that require space. Several multinationals, including Amazon, Google and eBay, are currently locating in Belgium. Furthermore, the country’s comparatively low land prices make Belgium a good place to start a business.