Yearly overview of the evolution of the Belgian coworking and business center market by Finpower (Koen Batsleer)

1. The power of professional financial management
fin POWER
From business and coworking-centers to ‘service offices’
A fast evolving market with growth expectations
SERVICED OFFICE MARKET IN BELGIUM
Key financial figures
B.W.A. Conference, September 2017

2. I. Introduction & situation within ‘Office market’
II. History and evolution of # flexible workspaces
III. The business centre market : actual situation
IV. Key financials of the business centres in Belgium
V. Conclusions
INTRODUCTION

3.  Business & coworking-centers in Belgium :
 See list in annex
 What is a business or coworking-center ?
 Uses this as name of his business (business center or coworking-space or both)
 Business center : full-time reception available – cfr. VAT-regulation for business centers
 Coworking-center : focus on ‘community’, community manager, no full time reception necessary
 Serviced offices = full time reception services or community-manager
 Used figures :
 Published financial data (Belgian National Bank)
INTRODUCTION
“Definitions and limitations”

4. Offices (x 1,000 m²)
Brussel 12 675
Antwerpen 2 100
Gent 1 500
4 other 'office' - cities 400 - 500
(Luik, Mechelen, Leuven, Naemen)
15 'regional cities' 150 - 350
(f.ex. Kortrijk, Roeselare, Brugge, St. Niklaas, Aalst, )
Total office spaces in 'cities' : 23 597
# Business centres (in m²)
Number : 209
Average surface : 1 920
Total surface occupied : 401 241
in % of office market : 1,70%
# Co working centers
Number : 108
Average surface : 715
Total surface occupied : 77 223
in % of office market : 0,33%
in % of business center market : 19,25%
Total serviced office surface: 478 464
% oppervlakte 'serviced offices' 2,03%
INTRODUCTION
Situating within the total ‘OFFICE MARKET’
4
 Office-market in Belgium
 Market of ‘larger cities’ very well documented
 Estimate of regional cities and total market in collaboration with CBRE.
 Total ca. 24 Mio m², accommodation for > 1 Mio collaborators (employees + civil servants in office
environments)
 Stable market with appr. 24 Mio office space
 Business center market
 Definition of ‘business center : ‘
 Flexible contracts, Including services
 Excluding ‘joint-office-buildings’ with no ‘reception’
 Total : ca. 209 business centers, appr. 400,000 m² office space.
 Accounts for appr. 1,7 % of total office space in Belgium, growing market-share.
 Co working market
 New, upcoming market
 Total of appr. 189 Coworking spaces in Belgium, totaling appr. 78,000 m² office space.
 Growth rate of market > 30-50 %, but still limited examples of viable business
models.
The business and coworking-market covers
appr. 2 % of the total office market in Belgium.

5. INTRODUCTION
Situating within the total ‘OFFICE MARKET’
5The office market is shifting towards the ‘serviced offices’
Serviced Office market
Flexible contracts (month/year/…)
Focus on services and community
Office market
‘long term contracts’
No flexibility
Limited services (facilities)
 Limited ‘new constructions’ < 2 % of
market
 Decreasing demand due to NWOW
Coworking market
< monthly ‘memberships’
Flexible, focus on ‘community’
Limited but increasing services
 Market growth > 50 %/year
Business centre market
Flexible ‘yearly’ contracts
Flexible, focus on ‘services’
Limited but increasing community
 Market growth 10-20 %/year
Decreasing
market ?
Increasing market

6. II. HISTORY
“A market with a rich history”
• First boom of business centre until
1985-95
• Then, 95-2005 : more failures then
start-ups in our market until …
• 2005-6 : start of the ‘New Way of
Working’
• From then, we see an acceleration of
the growth of locations from 5-10 %
(2005-2010) to 10-20% actually
– In 2016-17 we see a 25% growth in the
number of ‘service office’-locations in
Belgium !
• Actually, the market has grown to
more then 300 flexible workspace
locations in Belgium – double of the
number 5 years ago.

7.  Total appr. 300 “serviced office locations” in Belgium :
 28 ‘BC’s’, Bedrijvencentra
 17 BC + 9 CW centers for Regus
 6 ‘groups’ with 4-9 centers
 20 operators with 2-3 centers
 appr. 186 operators with only 1 location, appr. 60 %
of the market
 In 2011 : ca. 135 BC, which means an medium annual
growth of appr. 12 %/year
 Failure rate limited aprr. 3 % of the centers, but higher
then real-estate market (appr. 1 %)
 C.W. market is clearly growing faster
 Growth from 71 tot 108 locations in 2015 (+50 %)
 Differentiation between ‘business centers’ becomes
unclear (only VAT-regulation is relatively clearcut)
In Belgium, we have an increasingly fragmented market, where
only 40% of the centers is operated by a ‘group’.
III. BUSINESS CENTERS IN BELGIUM
3.1. Operators of business and coworking-centers

8.  The medium penetration of the
serviced office market is appr. 2
% in Belgium
 Brussels is with 1,4 %
substantially ‘lower’ penetrated,
Antwerp is at 2 % and Gent has
with 3 % a ‘high’ penetrations
 Hasselt, Louvain-La-Neuve,
Turnhout, Genk and Ieper have
a more then 5 % market
penetration of serviced offices
 Brugge Mechelen en Namen are
cities were the penetration of
serviced offices is only appr. 1
%, half of the Belgium average.
The ‘local’ situation in the different cities is clearly very different.
III. BUSINESS CENTERS IN BELGIUM
3.2 Business centers by location
Aantal
BC/CW
m²
oppervlakte m² kantoren
BC/CW
oppervlakte
Brussel 126 182907 12675000 1,44%
Gent 32 59669 1500000 3,98%
Antwerpen 29 43989 2100000 2,09%
Liège 15 17300 500000 3,46%
Hasselt 10 16770 275000 6,10%
Leuven 9 13139 450000 2,92%
Louvain La Neuve 6 12500 150000 8,33%
Kortrijk 6 7390 350000 2,11%
Charleroi 5 6223 200000 3,11%
Brugge 4 2450 200000 1,23%
Sint-Niklaas 4 4320 100000 4,32%
Mechelen 4 4410 470000 0,94%
Tournai 3 2200 100000 2,20%
Genk 3 8060 100000 8,06%
Turnhout 3 5850 100000 5,85%
Ieper 3 3540 50000 7,08%
Aalst 3 3850 150000 2,57%
Namen 3 4630 400000 1,16%
Total 18cities : 399197 19620000 2,03%
Estimation of total market : 77473 23597110 2,03%
0,00%
1,00%
2,00%
3,00%
4,00%
5,00%
6,00%
7,00%
8,00%
9,00%
0
20
40
60
80
100
120
140
% BC/CWpro cityin Belgium
BC/CW oppervlakte Aantal BC/CW
Sources: CBRE, Finpower

9. IV. FINANCIAL DATA OF BUSINESS CENTER MARKET
4.1. Turnover evolution
• Turnover
– Total market turnover appr. 100 Mio €
– The market is equally divided between three
types of owners
• International players (Regus, Multiburo, …)
• Public, semi-public and associations
• Private, Belgian operators
• Growth rhythm
– Our figures demonstrates clearly the
‘conjunctural’ growth
– After a ‘stable’ period 2012-2014, we see
actually a fast growth of our market
– A 20% growth of the turnover in our market
is very good, but still lower then the growth
of the number of centers
• But, from 2011-2016, the number of centers has
doubled, where the turnover has only grown with
30 % !
The Belgian business center market is – with some delay – also
experiencing growth rates of 15-20 % actually.

10. IV. FINANCIAL DATA OF BUSINESS CENTER MARKET
4.2 Operational profit (EBIT) of business centers
• The sum of the operational profit of all centers in our
market had decreased from 5-7 % in 2011-13 to 3-4
% in 2014-15. In 2016 we see that it has decreased to
zero, mainly due to the ‘start-up-costs’ of new
centers.
• Excluding the start-up-costs of the several new
entrants and openings of our market, we can
calculate that the profitability of the ‘mature’ centers
remains stable between 3-5 % - a ‘low but stable
level’
• In 2016, we see that 40 % of the operators have
realized an operational loss
– Mostly due to the start-up-period of 2-3 years which an operator needs
before he reaches a ‘normal’ operational level
– But, these losses will be a big challenge of a lot of newcomers in our market.
The profitability of our market remains a challenge, mainly due
to the high start-up-costs in the first years of a center.

11. Conclusions
• The business and coworking market are ‘integrating’ more and more towards a service-
office market
– Business Center groups are ‘incorporating’ the coworking ‘community’-concept, coworking-operators are
elaborating their services.
• The number of ‘service office centers’ has increased to more then 300 in 2016, an
exponential growth of nearly 25 %.
– This means that the market-share of the serviced office marketis market has increased in 2016 1,6 to 2,0 %
of the total office market in Belgium.
– Still lagging behind the levels in the U.K. and the Netherlands (> 3-5%)
• The turnover of our market has increased with 20 % in 2016 to more then 100 Mio €
turnover
– The profitability of our market is decreasing, but mainly due to the high start-up losses that new centers
generate – the ‘fundamental’ profitability of mature centers remains in the low 3-5 % range.

12. Annexes
1. List of business centres and coworking
places inventoried for this study
2. Advantages of scale in our market
3. Different ‘business models’ pro segment

13. BC/CW Locatie Naam BC/CW Locatie Naam BC/CW Locatie Naam
CW Brussel 26 Cowork BC Knokke Bedrijvencentrum 't Walletje BC Brussel Centre d'entreprises IBW Monnet
BC Torhout 3 Koningen Bedrijvencentrum BC Tienen Bedrijvencentrum Tienen CW Louvain La Neuve/WverCercle Du Lac
BC Geel 4Wings BC Tongeren Bedrijvencentrum Tongeren BC Brussel Chambre d'affaire CCI France Belgique
BC Aalst Aalst City Center BC Brussel Bedrijvencentrum Vilvoorde BC Liège Chammurly Center
BC Aalter Aalters Bedrijvencentrum BC Oudenaarde Bedrijvencentrum Vlaamse Ardennen BC Brussel Chester & fields
BC Brussel Access Business Center Ixelles BC Sint-Niklaas Bedrijvencentrum Waasland BC Kontich Clubhouse Coworking
BC Brussel Access Business Center Jette BC Brussel Bedrijvencentrum Zaventem BC Genk C-Mine Crib
CW Antwerpen Acospace BC Brussel Bedrijvencentrum Zennevalei BC Antwerpen Co Buro
BC Brussel Acte BC Brussel Belgium Business center CW Mons Co nnexion - coworking
BC Brussel Action Group SPRL BC Antwerpen Benelux Business Center BC Brussel Co.Station Brussels
BC Gent Adequat BC Leuven Bio Incubator Leuven BC Gent Co.station Gent
BC Brussel Agence 86 'creative business center' BC Brussel Bisschofsheim business center BC Hasselt Corda Campus
BC Brussel Alnair Business Center BC Brussel Bizzcenter BC Hasselt Corda Incubator
CW Gent Ampla House BC Kortrijk Bizz-Init BC Brussel Coworking Business Center Brussels
BC Antwerpen Antwerp Berchem Central Station CW Brussel Black & White CW Hasselt Coworking Hasselt
BC Antwerpen Antwerp Business House BC Brussel Bloomz Offices BC Brussel Coworking Les Galeries
BC Antwerpen Antwerp Business Suites BC Brussel BLSI BC Namen Coworking Namur
CW Antwerpen Antwerp Central Station BC Antwerpen Bluepoint Antwerpen BC Tielt Creatielt
BC Antwerpen Antwerp City Center BC Brussel Bluepoint Brussels CW Liège Cristal Hub Coworking
BC Sint-Niklaas Astrid Business Center Sint-Niklaas BC Liège Bluepoint Liège BC Brussel Crystal Palace
BC Brussel Ateliersdes Tanneurs CW Brussel Bon Jour Bruxelles BC Brussel Dansaert
CW Brussel Atlantic CoWorking BC Brussel BPS Ad Hoc BC Roeselare De Botaniek
BC Liège Aurys Center CW Brugge Brugge Station CW Boortmeerbeek De Droplet
BC Louvain La Neuve/WverAxisparc business center CW Brussel Brussel Central Station BC Leuven de Hoorn
CW Brussel Bar D'Office Brussel (Voka) CW Brussel Brussel Luxemburg Station BC Brugge De Huyskamer
CW Leuven Bar D'Office Leuven BC Brussel Brussels Airport Corporate Village CW Antwerpen De Wolkammerij
CW Brussel Bartleby Coworking Brussels BC Brussel Brussels City Center CW Brussel Diegem Grensstraat
CW Brussel BBC - Belgian Business Center BC Brussel Brussels Groot Bijgaarden CW Gent Dokwerkers
BC Gent BC Ajuinlei 1 (Growth Fase) BC Brussel Brussels IT Tower CW Antwerpen Dots Coworking
BC Marche Bcenter CW Brussel Brussels South Station BC Gent Easy Office Center
BC Nivelles BCS Group BC Brussel Brussels Village BC Brussel EEBIC Business Center
BC Aalst Bedrijvencentrum Aalst BC Brussel Brussles EU Schuman BC Brussel EIMBusiness Center
BC Beringen Bedrijvencentrum Beringen CW Brussel Bureau Partagé BC Louvain La Neuve/WverEinstein Business Center
BC Gent De Punt CW Charleroi BureauFlex Business Center BC Tournai ESCO Expace Coworking
BC Antwerpen Bedrijvencentrum De Winkelhaak BC La Louviére Buro Business du Centre BC Brussel Espace Moselle
BC Dendermonde Bedrijvencentrum Dendermonde BC Namen Burogest Bouge BC Brussel Espace Pesce
BC Genk Bedrijvencentrum Genk BC Namen Burogest Office Park BC Charleroi Espace Services Entreprises
BC GeraardsbergenBedrijvencentrum Geraardsbergen CW Antwerpen Burooz BC Charleroi Espace Trésignies
BC Hasselt Bedrijvencentrum Hasselt BC Brussel Burotel 367 BC Brussel Espace Y
BC Ieper Bedrijvencentrum Ieper CW Liège Business Center Leuven De Vunt BC Brussel EU Business Centre
BC Duffel Bedrijvencentrum Itterbeek BC Waver Business Center Wavre Nord BC Brussel Euclides
BC Zelzate Bedrijvencentrum Kanaalzone BC Kortrijk Business Centrum Kortrijk Pottelberg BC Liège Euregio Business Center Liège
BC Leuven Bedrijvencentrum Leuven BC Willebroek Business centrum Rivium BC Brussel Factory Forty
BC Maasmechelen Bedrijvencentrum Maasmechelen CW Brussel Buzzy Nest BC Dienze Filad Ondernemingscentrum
BC Maldegem Bedrijvencentrum Meetjesland BC Liège CAP Business Center BC Brussel Firma
BC Overpelt Bedrijvencentrum Overpelt CW Nivelles Capinnove BC Gent Floating Desk Coworking
BC Brugge Bedrijvencentrum Regio Brugge BC Brussel CE Molenbeek BC Antwerpen Fosbury & Sons
BC Kortrijk Bedrijvencentrum Regio Kortrijk BC Brussel CE Molenbeek BC Antwerpen Fountain business park
BC Mechelen Bedrijvencentrum Regio Mechelen BC Brussel CE Molenbeek BC Herentals Frame 21
BC Oostende Bedrijvencentrum Regio Oostende BC Louvain La Neuve/WverCEI Louvain BC Tournai Futur Orcq
BC Waregem Bedrijvencentrum Regio Waregem CW Liège Centre Beuken BC Mouscron Futur X
BC Roeselare Bedrijvencentrum Roeselare BC Liège Centre d'affaires Rogier BC Gent Ghent Port Side
BC St Truiden Bedrijvencentrum Sint Truiden BC Brussel Centre d'Entreprises de Saint-Gilles BC Melle Graphic Hall

14. BC Oostende Greenbridge incubatiecentrum en wetenschapsparkBC Brussel MC Square CW Brussel Servcorp Schuman
CW Arlon Greenlab Coworking BC Mechelen MC Square Mechelen BC Gent ShareSpace
BC Houthalen Greenville Cleantech Campus CW Brussel Mce Conference & Business Centre BC Brussel Silver Square Europe
BC Antwerpen HAVN - Buzzispace BC Gent MeetDistrict Gent BC Brussel Silver Square Louise
BC Sint-Niklaas Heptagon business center CW Brussel Moka Workspaces CW Brussel Silver Square Stephanie
CW Antwerpen Het Bolwerk / Bar d'Office (Fort 5) CW Brussel Molengeek CW Hasselt Smartspaces
CW Brussel Hive5 CW Gent MP Center BC Brussel Smartwork
BC Boom Hoek 76 BC Antwerpen Multiburo Antwerpen Centraal Station CW Brussel Smartwork
CW Aalst Hopmarkt 50 BC Brussel Multiburo Brussels Airport CW Liège Smartwork
CW Antwerpen House of APE BC Brussel Multiburo Louise BC Brussel Sncube.be
BC Hasselt Huis Vanstraelen BC Brussel Multiburo Quartier Européen BC Gent Socrates Bedrijvencentrum
BC Gent Huize Minne BC Diest Office 21 BC Turnhout SPK - Bar D'office
BC Leuven I & I Leuven BC Brussel Office services Brussels BC Tournai Spring Box
BC Gent IBBT-Incubator CW gent Officebox BC Turnhout Square Point Business Center
BC Gent I-Cubes BC Leuven Officener Leuven CW Brussel Squaris Business Center
CW Melle Idee Kids BC Antwerpen Officenter Antwerpen/A12 BC Harelbeke Stede 51
BC Gent Idola Business Center BC Brussel Officenter Brussel BC Gent Studio Massis
BC Ieper Idola Business Center BC Hasselt Officenter Hasselt CW Gent Studio Novis
CW Gent Ihub BC Geel Officenter Immo Geel BC Antwerpen Studio Start
BC Brussel IICB Business Incubator Offices BC Turnhout Officenter Turnhout BC Charleroi Switch Coworking Charleroi
BC Mouscron Impact Centre Européen d'affaires et de servicesCW Mechelen Ondernemershuis/Bar d'Office BC Antwerpen Talentarena
BC Leuven In volle Vaart CW Ieper Ondernemingscentrum Ieper CW Gent Talentarena
CW Genk IncubaThor Waterschei BC Gent Oneoffice BC Antwerpen Telenet Idealabs - The Squad
BC Gent Incubatie en Innovatiecentrum Ugent CW Brussel Onspace CW Brussel Ternat Office Center
CW Antwerpen Indian Caps BC Louvain La Neuve/WverOptimalis Business Center BC La Louvière the cowork Factory
BC Brussel Innovatie en incubatiecentrum Brussel BC Brussel Orega Leopold BC Brussel The Crescent Business Center Brussels
BC Wommelgem Interoffices Antwerp East BC Brussel Orega Sablon Tower BC Gent The Crescent Ghent
BC Brussel Interoffices Brussels Airport BC Kortrijk Parkoffice BC Brussel the Library
BC Brussel Interoffices Brussels Brussels BC Gent Parkoffice CW Brussel The Mug
CW Antwerpen K85 CW Brussel Parksite BC Aarschot The Office (coworking Aarschot)
BC Hasselt Kaai 16 BC Gent Planet Systems BVBA CW Brussel The Office Operators
CW Antwerpen KBC Start it Antwerpen BC Brussel Primmobel(Brussels Office Factory) CW Kortrijk The Studio's
CW Brussel KBC Start it Brussel BC Brussel Quartier Latin CW Brussel Timesmore Headquarter
CW Antwerpen KBC Start it Gent BC Eupen Quartum Business Center CW Ronse TIO3 Textiles Open Innovation Centre
CW Hasselt KBC Start it Hasselt CW Brussel Re:creative CW Brussel Topos Burotel
CW Kortrijk KBC Start it Kortrijk BC Antwerpen RE:flex Berchem CW Brussel Topos Congres
CW Leuven KBC Start it Leuven CW Mechelen RE:flex Mechelen CW Brussel Topos Louise
CW Liège La Forge BC Brussel Regus Airport Diegem BC Brussel Topos Montgomery
BC Brussel La Lustrerie BC Brussel Regus Airport Meeting Center BC Brussel Topos Schuman
BC Brussel La Vallée BC Braine lalleud Regus Braine Lalleud BC Brussel Transforma
BC Brussel La Venture Coworking BC Brussel Regus Brussels South Station BC Brussel Tribes Brussel
BC Tubize Le Centre d'Entreprises Chapagne Landas BC Brussel Regus Brussels West Basilix BC Antwerpen UBIS
BC Brussel Le Manoir des offices BC Brussel Regus Central Stattion CW Brussel Village Partenaire
CW Brussel Le Phare du Kanaal BC Brussel Regus EU Commision CW Tielt Vlaemynck Business Center
CW Leuven Leuven Station BC Brussel Regus EU Parliament CW Brussel W46
CW Liège L'Iddup Atrium BC Gent Regus Gent Zuiderpoort BC Brussel W715
BC Liège Liège Airport Business Park BC Louvain La Neuve/WverRegus Louvain-La-Neuve BC Hasselt Wetenschapspark Limburg
BC Liège Liège business center CW Sint-Niklaas Regus Sint Nklaas Station CW Brussel Wip-Work in Progress
CW Liège Liège Guillemains BC Brussel Regus Waterloo Office Park CW Brussel Workspaces
CW Gent Like Birds BC Brussel Science14 Brussels BC Antwerpen WTC business center
BC La Louvière LME (Business Innovation Center La Louvière) BC Brussel Season Immo Espace Berthelot CW Charleroi Wup Coworking
CW Gent Loft169 BC Brussel Season Immo Espace Saint-Denis BC Brussel Zakencentrum Vilvoorde
BC Gent Maaltecenter BC Brussel Seed Factory BC Brussel Zellik.biz
BC Brussel M-Brussels Village BC Brussel Servcorp Bastion Tower BC

15. Annex 2 : Advantages of scale in our market
• 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 ‘best practices’
• But, the medium turnover of a business center
is declining ….
– And, we have not included the coworking-centers in this
comparison …
• We have put the ‘profitability’ of a center compared with the ‘size’ of each
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
– Above 600-700 k€ turnover, most of the business centers are profitable.

16. Annex 3 : Different financial models in our market
• Asset – efficiency of ‘International market’ is very high – no investment in ‘own’ buildings
– Private and public sector operators mostly have invested in the building
• Financial leverage of public sector very limited (cash > loan volume)
The ‘international’ operators focus optimizing their financial
leverage with ‘renting’ their buildings, the private (partially) and
public sector (mainly) focus on owning the real-estate.
Turn-
over
Fixed
Assets
Assets/
Turnover
Own
Funds
Own
Funds/
Assets
Own
funds/
Turnover
International 26.295 5.480 0,2 -8.223 -1,5 -0,3
Private 45.944 132.465 2,9 63.353 0,5 1,4
Semi-public 25.241 112.922 4,5 107.489 1,0 4,3