How has the region of Wallonia succeeded in keeping investment in the mixed-use property sector buoyant, despite a difficult and circumspect global climate?
To a large extent, its resilience is the fruit of the Walloon government’s willingness to support investors – for example, in the form of grants – and thus taking some of the edge off risk. This is very much in line with Wallonia’s belief that the private sector needs assistance to flourish in a competitive European economy.
“The level of public grants definitely has a great deal to do with the numbers of investors that Wallonia has attracted. Other factors include the low price of greenfield [land], and easy access to the rest of Europe,” says an industry insider.
Foundations for future growth
Wallonia, Belgium’s French-speaking region, has endeavoured to carefully manage its economic development as a tool for shaking the shackles of post-industrial slump. Signs of this are evident in its cities, where flagship projects are radically improving the urban mood.
This is no less visible in Liège than in any other of Wallonia’s cities. Arguably the most remarkable development is the eye-catching Liège rail station, designed by the architect Santiago Calatrava. The station is now finished, but the grand plan extends to an urban remodelling programme that will offer three hectares of mixed business, commercial and residential development.
In fact, Liège has as good as reached capacity in terms of retail developments. As Liège resident Thibault Jaspar told fDi Magazine, the city has recently been energised by the launch of Médiacité. Previously an industrial wasteland, this massive mixed-use/retail development has created 1200 jobs and provided retail outlet opportunities for more than 120 stores. It covers some 6.5 hectares and is regarded as having transformed the fortunes of the previously deprived Longdoz neighbourhood. It is also the first development in Belgium to be given a Breeam certification – the award for projects with high green/sustainable credentials.
The changing face of Liège
Other significant projects in Liège include the creation of TriLogiPort, a waterside rail-river-road logistics hub, which takes advantage of the city’s position on the Meuse river; the renovation of the only opera house in Wallonia; and a major building project which, when completed in 2013, will provide a state-of-the-art working environment for the city’s civil servants.
“We have investment from a number of sources – lots of it from within Belgium and from neighbouring countries – the Netherlands, France and Germany, but other places also, including the UK.”
But it is not just Liège that is attracting such attention – the regions around Charleroi, the Seraing valley and Herstal are also seeing the benefits of state initiatives to encourage investment and innovation. And while city developments such as Liège rail station are grabbing the limelight, much of the engine for growth can be found in Wallonia’s science parks and logistical centres.
Wallonia boasts 130 business parks, which provide homes to 5000 companies and six science parks – all of which have made use of the Walloon government’s initiatives. They also benefit from the cluster model, the Walloon government’s economic strategy that creates synergies and connections between big industry, small businesses and universities.
Cecile Hong of Igretec (a public body devoted to improving infrastructure in the Charleroi-Sud Hanaut region of Wallonia) told fDi Magazine that the region was looking forward to the roll-out of Ecopole, a 300-hectare science park that will be “totally committed to the philosophy of sustainable development”.
Ecopole is not the only such trailblazing project in Wallonia: Ecolys in the neighbouring province of Namur is a 45-hectare science park devoted to sustainable business activities and innovations, namely sustainable building, and other sustainable industries such as the creation of energy-saving devices and transport solutions.
“We already manage 18 other science parks, but they’re almost full. The new science park should be ready in two to three years,” says Ms Hong. The intention, she says, is to introduce a 'green passport' system that will offer privileges for enterprises that meet sustainability criteria – Igretec is currently in discussions with a number of potential investors as to the thresholds of those conditions.
Accessibility is one of Wallonia’s key attractions for investors – the region has borders with the Netherlands, Germany, France and Luxembourg. Part of its plan to capitalise on its locational advantage has been the development of facilities close to or on the same site as its airports.
The past year has witnessed some positive trends on this front: for example, in January, representatives from Liège Airport announced that it had handled almost 640,000 tonnes of freight in 2010 – an increase of more than 32% over the previous year.
Logistics centres in Wallonia typically possess state-of-the-art facilities to allow the optimum treatment of some of the specialised materials they handle – the biotech/pharma sector is extremely important to the Walloon innovation economy and it requires dedicated facilities.
Liège Airport can handle exports of livestock and fresh produce – including, in 2010, more than 1200 horses, 2758 tonnes of fish and 938 tonnes of lobster. Liège Airport is also freight carrier TNT’s European hub – the company has invested €100m into the airport.
But the airport management prefers to think of it as more than a place for passing through: there’s a thriving business centre at Liège Airport, with most of the 48 offices already occupied. And the construction of a new business centre beside the passenger terminal will soon provide extra capacity.
In keeping with the spirit of the green business park, the building incorporates a number of energy-saving technologies including the use of photovoltaic cells and geothermal energy. Some 2000 square metres of office space is due to come on stream this month.
Confidence in management
Long-term investors – and property development is for the long term – choose Wallonia because they have confidence in the Walloon government's economic management. The administration is informed by a philosophy that is enshrined in the Marshall Plan: this prescribes significant public sector funding to generate competitiveness, vocational skills and research.
It is a proactive approach, and one that envisages partnership between public and private sectors. In an economic environment where risks are cautiously weighed before commitments made, the Walloon model is certainly finding favour.
The cost of this report was underwritten by the Wallonia Export & Investment Agency. Reporting and editing were carried out independently by fDi Magazine