Why investors love the bureaucrats of Brussels
www.business24-7.ae, 21st August 2009Around 780 Members of the European Parliament took their seats when the new Parliament in Brussels gathered last month – about 15 per cent of them for the first time.
Most enjoy more generous expenses than those which attracted such opprobrium at Westminster, but add in the 20,000 or so ‘eurocrats’ who are there to look after the MEPs, squadrons of foreign delegations and thousands of lobbyists from all over the Continent, it would be easy to expect good, steady demand for short-term rented accommodation from a large, transient population.
That is largely why British niche housing developer Thornsett Group identified the Belgian capital for development back in 2005, and has so far started work on three projects.
It believed then that investors would like the idea of an asset steadily rising in value at the far end of the Eurostar rail-line from St Pancras International station in the heart of London.
With the British Government now talking about replacing budget airlines services with much-improved rail services into Europe, Brussels may offer added potential – over the medium term – to investors.
Thornsett Group’s Leopold Village project, practically next-door to the European Commission and Parliament buildings, includes 108 studios, one, two, three and four-bedroom apartments alongside a Starwood hotel and retail space for restaurant, bars and upmarket shops.
The Eurostar rail terminal is a 10-minute cab ride away.
"Brussels property is a natural choice for investors looking for a good rental opportunity," says Eoghan Quinn of Thornsett Belgium.
"The typical lease period is a minimum three years, then six years and up to nine years. Rental contracts are consumer index-linked, which protects against rising interest rates, and there is no tax payable on private residential rental income."
Studios start at €175,000 (Dh908,000), one-bedroom flats from around €210,000 and two-bedroom units from €295,000. Average property sizes are about 10-15 per cent bigger than those in England.
Quinn says investors are likely to be attracted by the very stable housing market in Belgium, where high levels of stamp duty helped to avoid a British-style "boom and bust".
Although global prices may have fallen slightly in 2009, the Knight Frank Global Index indicated that Belgium’s rose by 2.7 per cent in the year to March 31, 2009. In Western Europe, only Switzerland beat that, with a 5.6 per cent rise.
Buyers in Belgium put down a 25 per cent deposit, and leading banks including ING offer a more reliable source of mortgage finance than you are likely to find in Britain.
Monthly rentals range from €750 for a studio to €1,500 for larger flats. This may be the sort of scheme where investors try to park their money safely, in the hope of steady capital gain.
"There hasn’t been a huge slump, or any real slump at all, in the Belgian property market. We see solid, continuous growth in property values – no drama and not much excitement," Quinn says.
"If you want continuous, steady growth, Brussels is probably the place to find it."
Of course, buyers should be confident of being able to meet monthly mortgage repayments, even during void periods. And it might help if the idea of living in Brussels attracts them in the long-term, when they no longer want to bother with tenants.
Other Thornsett projects in Brussels include Boniface Square (28 apartments around a central courtyard at Porte de Namur) and Woluwe Park, opposite the park in Woluwe St Pierre with 16 spacious two and three-bedroom luxury apartments.