Investing in BelgiumIt's one of the cheaper European capitals to buy in and boasts a very stable market, so at a time when Irish investors are looking for low-risk ventures, it's no surprise that Brussels is now being eyed up.
The property market in Brussels has long benefited from the city's position as the administrative centre of the European Union. In the last two years the EU enlargement project has in particular encouraged new players to get in on the game and the Irish are to the forefront.
The office market was the first to experience a surge of interest from investors. Earlier this year Bank of Ireland Private described Brussels as an inherently stable market. Three years ago the company bought a landmark office tower, the IT Tower, in the upmarket Louise area of the city for €72 million. Across the road is another office building owned by IIB.
Interest in the residential market is now taking off. Property prices in the Belgian capital have risen by about 12 to 15 per cent in the last four years. Prior to that growth was at about 6 per cent.
Residential property is currently priced at around €2,000 to €2,500 per sq m (€21,527-€26,909 per sq ft) with property in the more exclusive districts at €3,500 to €4,500 per sq m (€37,673 to €48,438 per sq ft). The south of the city, boasting many green areas, the embassy district and the EU zone, is the most expensive area.
Rental income in the city varies considerably depending on the area and even significantly within areas. Yields for new builds are at around 5-6 per cent. Most investors buy for long-term gain.
Residential purchases in Belgium are subject to a 12.5 per cent stamp duty tax on land and 21 per cent Vat on building, working out at about 20 per cent of the total purchase price. Estate agency fees are around 3 per cent and notary fees are 0.2-0.4 per cent.
Irish developer Thornsett is selling 108 apartments in a new development, Leopold Village, at an enviable location in the heart of the EU quarter in Brussels. The scheme was launched last week by EU Internal Market Commissioner Charlie McCreevy at an off-site marketing suite and show apartment, a first for Brussels.
Apartment prices at Leopold Village will begin at €172,000 plus taxes for a 39sq m (420sq ft) apartment with terrace and rise to €1.1 million plus taxes for a three-storey four-bedroom penthouse with 200sq m (2,153sq ft) and a 50sq m (538sq ft) terrace.
The development on Rue Belliard overlooks Park Leopold, is equidistant from the European Commission and the European Parliament and right beside both the Council of Ministers' building and the building that is home to the Irish delegation to the EU.
The first 40 apartments at the €80 million scheme are for sale through the developer. Completions are due in early 2009.
Europe's first Aloft hotel will also form part of the scheme: the design for Starwood Hotels' new Aloft chain was tested on potential customers in virtual world Second Life. The trendy, urban-themed hotel will have 150 bedrooms.
The Thornsett group has five sites under development in Brussels. Thornsett's Irish and Belgian operation is headed up by Dubliner Peter McCarthy while its UK operation is controlled by Longford brothers Denis and Gerard Cunningham.
Earlier this month Thornsett launched its first Brussels scheme, Boniface Square, a boutique development of 28 apartments in the city centre Ixelles district.
Belgian architect Pierre Blondel designed the striking building and London-based Stefan Tollard is responsible for the interior design.
