BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Gauthier Callens, Linklaters
1. General 1.1 Main Sources of Law
related decree of 9 November 2016 on the Belgian SREIF (Specialised Real Estate Investment Fund); and • the Code of Economic Law. 1.2 Main Market Trends and Deals In 2023, the Belgian real estate market faced challenges from ongoing macro-economic issues and geopolitical tensions, including the Ukraine conflict, high inflation, and volatile con - struction materials costs. These factors, com - bined with higher interest rates, contributed to reduce investment activity and a notable decline in real estate (M&A) transactions and stimulate a conservative climate as borrowing costs rose and financing entities exercised increased cau - tion in lending and the structuring of securities associated with the financing of real estate oper - ations. The following economic factors are also to note. • Signs of recovery – despite the slowdown, there are early signs of recovery as evidenced by stabilised, higher-level rents and a reduced vacancy rate in the Belgian office and retail real estate sectors in Q4 2023. • Fundraising trends – real estate-related fund - raising has declined, reaching a ten-year low in 2023, but a modest recovery is expected, likely driven by large investment funds. The real estate market is currently facing a challenging economic environment. The sec - tor’s inherent resilience, coupled with strategic adaptation by investors (with an increased focus on ESG and sustainability needs), may lead to significant recovery and growth in the forthcom - ing periods. With respect to major deals, some remarkable transactions occurred in 2023, such as:
In general, the primary sources of law in Belgium are legislation, case law, doctrine, and customs. However, it should be highlighted that for real estate specifically, the below considerations are to be taken into account. Belgian real estate law operates under a dual framework: it is governed at the federal level by the Civil Code, which is currently undergoing recodification, and at the regional level, where legislative powers can enact laws. In the area of civil law, the Civil Code governs, notably, property rights (Book 3), contractual obligations (Book 5), and general tenancy agree - ments. Retail leases are mainly regulated by the Retail Lease Act of 30 April 1951 and regional decrees. Finally, residential leases are also regu - lated at the regional level. Public real estate law, encompassing zon - ing, planning, and environmental legislation, is essentially governed by regional and local authorities. Taxation powers in real estate law are shared between the federal state (matters with respect to the Income Tax Code and VAT Code) and the regions (notably transfer tax matters). Other legal sources impact real estate legal practice and transactions such as: • the Code of Companies and Associations; • the law of 12 May 2014, on Belgian Real Estate Investment Trusts (B-REITs); • the Code of Companies and Association; • the law of 19 April 2014 on alternative invest - ment funds and their managers, and the
60
CHAMBERS.COM
Powered by FlippingBook