Interim / Quarterly Report • Sep 3, 2020
Interim / Quarterly Report
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Under embargo until 03/09/2020 5.40 pm Regulated information
The company does not have credit lines or bonds maturing in 2020 and 2021. The first coming maturity date is in 2022.
Inclusion of Home Invest Belgium's share in the BEL Mid index of Euronext Brussel
| 1. | Real Estate Portfolio 4 |
|---|---|
| 2. | Consolidated income statement5 |
| 3. | Notes to the consolidated income statement 7 |
| • | 3.1 Notes to the consolidated statement 7 |
| • | 3.2 Notes to the consolidated balance sheet 8 |
| • | 3.3 Funding structure 8 |
| 4. | Activity Report 11 |
| • | 4.1 Acquisitions11 |
| • | 4.2 Development and refurbishment projects… 11 |
| • | 4.3 Sales13 |
| • | 4.4 Rental activities13 |
| • | 4.5 Update COVID-19 13 |
| 5. | Stock Market Activity 15 |
| 6. | Outlook18 |
| 7. | Consolidated income statement during the first half of 2019 19 |
| 8. | APM - Alternative Performance Measures 39 |
| 9. | Shareholder's calendar… 42 |
On 30 June 2020, Home Invest Belgium holds a real estate portfolio1of € 636.05 million, compared to € 629.92 million on 31 December 2019, or an increase of 1.0%.
| REAL ESTATE PORTFOLIO | 30/06/2020 | 31/12/2019 |
|---|---|---|
| Fair value of investment properties | € 615.39 m | € 609.59 m |
| Investment properties available for rent | € 572.56 m | € 573.38 m |
| Development projects | € 42.83 m | € 36.22 m |
| Investments in associates and joint ventures | € 20.66 m | € 20.33 m |
| TOTAL | € 636.05 m | € 629.92 m |
The fair value of the investment properties available for rent amounts to € 572.56 million across 53 sites.
The total contractual annual rents and the estimated rental value of vacant space is € 29.20 million as of 30 June 2020.
The investment properties available for rent are valued by independent real estate experts at an average gross rental yield2of 5.1%.
Residential properties accounted for 89.2% of investment properties available for rent on 30 June 2020. On 30 June 2020, 66.2% of the investment properties available for rent are located in the Brussels Capital Region, 14.0% in the Walloon region, 10.4% in the Flemish Region and 9.4% in The Netherlands.
1 The real estate portfolio includes (i) investment properties and (ii) investments in associated companies and joint ventures equity method.
2 Gross rental yield = (contractual gross rents on a yearly basis + estimated rental value on vacant spaces) / (fair value of the investment properties available for rent).
| CONSOLIDATED KEY FIGURES | (in k €) | |
|---|---|---|
| CONSOLIDATED INCOME STATEMENT | H1 2020 | H1 2019 |
| NET RENTAL INCOME | 13 132 | 12 383 |
| OPERATIING RESULT BEFORE PORTFOLIO RESULT | 7 661 | 6 609 |
| XVI. Result on the sale investment properties | 727 | 23 |
| XVIII. Changes in fair value of investment properties | -1 484 | 33 969 |
| XIX. Other portfolio result | -192 | -6 |
| PORTFOLIO RESULT | -949 | 33 985 |
| OPERATING RESULT | 6 712 | 40 595 |
| XX. Financial income | 9 | 11 |
| XXI. Net interest charges | -2 029 | -2 500 |
| XXII. Other financial charges | -15 | -57 |
| XXIII. Changes in fair value of financial assets and liabilities | -3 615 | -6 122 |
| FINANCIAL RESULT | -5 650 | -8 668 |
| XXIV. Share in the profit of associates and joint ventures | 328 | 99 |
| TAXES | -129 | 69 |
| NET RESULT | 1 261 | 32 094 |
| Exclusion of portfolio result | + 949 | -33 985 |
| Exclusion of changes in real value of financial assets and liabilities | +3 615 | +6 122 |
| Exclusion of non-EPRA elements of the share in the result of associates and joint ventures |
+406 | +379 |
| EPRA EARNINGS31 | 6 232 | 4 610 |
| Average number of shares42 | 3 288 146 | 3 288 146 |
| NET RESULT PER SHARE | 0,38 | 9,76 |
| EPRA EARNINGS PER SHARE | 1,90 | 1,40 |
3 EPRA earnings is the net result excluding the (i) portfolio result (ii) the changes in the fair value of financial assets and liabilities and (iii) the non-EPRA elements of the share in the result of associated companies and joint ventures. This term is used in accordance with the Best Practices Recommendations of EPRA.
4 The average number of shares is calculated excluding the 11,712 shares held by the company.
| 30/06/2020 | 31/12/2019 |
|---|---|
| 306 523 | 309 618 |
| 644 201 | 639 169 |
| 51.95% | 51.41% |
| 50.61% | 50.11% |
| 30/06/2020 | 31/12/2019 |
| 3 288 146 | 3 288 146 |
| 117.50 | 114.00 |
| 93.22 | 94.16 |
| 26.0% | 21.1% |
| 96.22 | 96.00 |
| 22.1% | 18.7% |
5 The debt ratio (RREC Royal Decree) is the debt ratio calculated in accordance with RREC Royal Decree. This means that for the purposes of calculations of the debt ratio, participations in associated companies and joint ventures are processed following the proportionate consolidation method.
6 The debt ratio (IFRS) is calculated like the debt ratio (RREC Royal Decree) but based on and conciliating with a consolidated balance in accordance with IFRS where participations in joint ventures and associated companies are processed following the changes in equity.
7 The average number of shares is calculated excluding the 11, 712 shares held by the company.
8 IFRS NAV per share = Net Asset Value or Net Value per share according to IFRS.
9 EPRA NAV per share = Net Asset Value or Net Value per share following the Best Practices Recommendations of EPRA.
The net rental income rose from € 12.43 million during the first half of 2019, to € 13.13 million in the first half of 2020 (+6.1%). The increase of € 0.75 million is mainly the result of the acquisition in November 2019 of 4 aparthotels in Brussels operated by Beapart SA for 27 years, under the brand Baparthotel.
The operating result before the portfolio result increased from € 6.61 million during the first six months of 2019 to € 7.66 million during the first six months of 2020 (+ 15.9%).
The operating margin10 has increased from 53.3% during the first half of 2019 to 58.3% during the first half of 2020 due to the streamlining of the internal management platform.
During the first six months of 2020, a negative portfolio result of € -0,95 million was recorded. The result on the sale of investment properties amounted to € 0.73 million during the first half of 2020.
In addition, during the first half of 2020, Home Invest Belgium recorded a negative change in the fair value of its real estate investments amounting to € -1.48 million.
In accordance with the 'Valuation Practice Alert' published by the Royal Institute of Chartered Surveyors (RICS) on April 2nd 2020,the reports of the independent real estate experts state that they were prepared taking into account a 'material evaluation uncertainty', as determined by the RICS standards.
The other portfolio result amounts to € -0.02 million. In this item, the changes in deferred taxes are recorded.
As a result of the rearrangement of hedging instruments and the refinancing of credits in 2019, the net interest charges have decreased from € 2.50 million in the first half of 2019 to € 2.03 million in the first half of 2020. The average cost of debt11 decreased from 2.14% in the first half of 2019 to 1.51% during the first half of 2020.
The changes in the fair value of the financial assets and liabilities amounted to € -3.62 million during the first half of 2020. These changes are the consequence of a change in the fair value of the interest rate swaps.
10 Operating margin = (operating result before result portfolio) / (net rental income).
11 The average cost of debt = the interest costs including the credit margin and the cost of hedge instruments and increased by capitalized interests divided by the weighted average amount of financial debt over the period.
Taxes amounted to € -0.13 million during the first half of 2020 (compared to € +0.07 million during the first half of 2019).
The net result (group share) of Home Invest Belgium amounted to € 1.26 million during the first half of 2020, or € 0,38 per share.
After adjustment of the net result before (i) the portfolio result, (ii) the changes in the fair value of the financial assets and liabilities and (iii) non-EPRA elements of the share in the result of associates and joint ventures, EPRA earnings amount to € 6.23 million during the first half of 2020, an increase of 35.2% compared to € 4.61 million during the first half of 2019.
EPRA earnings per share increased by 35.2% from € 1,40 during the first half of 2019 to € 1,90 in the first half of 2020.
During the first half of 2020, the fair value of the investment properties (including development projects) rose by € 5.80 million from € 609.59 million on 31 December 2019 to € 615.39 million on 30 June 2020, or an increase of +1.0%.
On 17 December 2018, Home Invest Belgium realised the acquisition of 51.43% of the shares of Sunparks De Haan SA via the company De Haan Vakantiehuizen SA, of which it holds 50.00% of shares. This participation is processed into the consolidation, in accordance with the equity method.
The book value of the participation of Home Invest Belgium in De Haan Vakantiehuizen SA was € 20.66 million on 30 June 2020 (compared to € 20.33 million on 31 December 2019).
On 30 June 2020, the group's shareholder's equity stood at € 306.52 million, which is a decrease of -1.0% compared to 31 December 2019.
The IFRS NAV per share decreased by 1.0% to stand at € 93,22 on 30 June 2020 (compared to € 94,16 on 31 December 2019).
The EPRA NAV per share has risen by 0.2% to stand at € 96,22 on 30 June 2020 (compared to € 96,00 on 31 December 2019).
The debt ratio (RREC Royal Decree) amounted to 51.95% on 30 June 2020. The debt ratio (IFRS) amounts to 50.61%.
Considering a maximum permitted debt ratio of 65.00%, Home Invest Belgium still has a debt capacity of € 247.40 million, as defined by the RREC Royal Decree, in order to fund new investments.
Considering Home Invest Belgium's strategy to keep the debt ratio in the medium and long term below 55.00%, Home Invest Belgium still has a debt capacity of € 44.95 million to fund new investments.
On 30 June 2020, Home Invest Belgium had € 317.00 million in financial debts, composed of:
The weighted average remaining duration of the financial debts amounts to 4.0 years.
On 30 June 2020, Home Invest Belgium disposed of € 60.00 million of undrawn available credit lines of which:
On 30 June 2020 79.5% of financial debts (€ 252.0 million) had a fixed interest rate, using Interest Rate Swaps as hedging instruments, among other things.
The fixed interest rates have a weighted average remaining duration of 5.2 years.
The total value of the hedges at closing date was negative for an amount of € 8.08 million due to a decrease in interest rates after conclusion of the hedges.
Through its hedging policy, the board of directors wishes to protect the company against potential increases in interest rate.
Home Invest Belgium has acquired 100% of the shares of Clarestates BV, owner of a building in Brussels, on 18 May 2020.
The former office building, with an effective surface area of 4 880 m², is located rue Leon Theodor n°85-89 in Jette. The building comprises a ground floor rented to fitness company Jims, four upper floors which are currently being rented to the Secondary School of the Athenée Royal de Ganshoren and 55 underground car parks. The contractual rents represent € 400 000 on a yearly basis. The project is located in the centre of Jette (Brussels), close to the well-known place du Miroir, in a neighbourhood offering good rental potential. Once the lease agreements expire, Home Invest Belgium aims to reconvert the existing building into a residential project comprising more or less 35 residential units and a retail space on the ground floor. Home Invest Belgium plans to start the works in 2026.
The total investment (acquisition, studies, and construction work) represents ± € 11.00 million. The initial gross yield after reconversion is expected to reach around 5%.
The project "Le Mosan" in Liège has been delivered in the second quarter of 2020. The project, which was acquired in 2007, has been completely refurbished to 29 qualitative apartments in the centre of the Liège.
Works on the Brunfaut site (rue Brunfaut n°13-29 and rue Fin n°4-12 in 1080 Molenbeek-Saint-Jean) are progressing according to plan. The project is a residential complex of 93 apartments, 66 parking spaces and 1,443 m² of office space. The project is expected to be completed in the third quarter of 2020.
The project "Meyers-Hennau" (rue Meyers-Hennau n°5-17, 1020 Laeken) is comprised of 37 apartments, 11 houses and 51 parking spaces. The constructive structural works have been completed and the exterior joinery of the building is in progress with its subsequent finishing. The completion is expected in the third quarter of 2021.
The project "Marcel Thiry C2" (avenue Marcel Thiry 204 in 1200 Woluwe-Saint-Lambert) is a development project comprising 42 apartments. The structural works of the basements are in progress. The completion is expected in the first quarter of 2022.
Architects A2RC were appointed and have developed a design for a residential project. The permit will be applied for in September this year.
The project "Samberstraat" consists of the construction of 37 apartments, 1 office space, 39 parking spaces and 36 bicycle sheds.
Home Invest Belgium is planning to start the works in the fourth quarter of 2020 and expects to complete the works in the fourth quarter of 2022.
Home Invest Belgium has been delivered a permit for the total renovation of the residential part of Galerie de l'Ange in Namur (rue de la Monnaie 4-20 in 5000 Namur) (surface area 4 239 m²). Altogether, 57 units are to be refurbished.
In May 2020, Home Invest Belgium has closed the sale of a commercial property located in Haverwerf, Malines. The net selling price (after deduction of registration fees and other transfer costs) amounts to € 6.60 million, which is 7.7% higher than the latest fair value of the property.
During the first half of 2020, Home Invest Belgium has sold property for a total net amount of € 8.21 million (compared to € 11.51 million during the first six months of 2019).
A net capital gain of € 0.73 million was realised on these sales, compared to the latest fair value and a capital gain of € 1.32 million compared to the acquisition value (increased by activated investments).
The realised capital gain in relation to the purchase value (increased by the activated investments) contributes to the statutory distributable result of the company, which forms the basis for the distribution of the dividend.
Home Invest Belgium has recorded a decrease in rental activity in the second quarter of 2020. Due to the stricter measures taken by the authorities in the context of COVID-19, on-site visits were not allowed. The previously planned moves in and out could still take place and were completed successfully.
The occupancy rate12 of the investment properties available for rent amounted to 94.5%13during the first six months of 2020 (compared to 95.1% in the first half year of 2019). The occupancy rate has decreased from 95.1% in the first quarter of 2020 to 93.8% in the second quarter.
From June 2020, the commercial activities were fully restarted and Home Invest Belgium is again very active in the market. The expectations are that the occupancy rate will stabilize again at around 95% if no new additional measures against the pandemic are taken.
In the light of the COVID-19 pandemic, Home Invest Belgium has taken various measures to protect the health of its employees and its tenants and to ensure the continuity of its activities.
The employees of Home Invest Belgium have switched to working from home. Due to the investments made in the IT platform in recent years, this transition went smoothly.
Home Invest Belgium is currently evaluating the situation as follows:
12 The average occupancy rate calculated as the average percentage over a certain period of the contractual rents of the rented
spaces, in relation to the sum of the contractual rents of the rented spaces and the estimated rental value of the vacant spaces. 13 The occupancy rate is calculated excluding (i) buildings being renovated (ii) building being commercialized for the first time and (iii) buildings being sold.
Furthermore, the opinion of the board of directors of Home Invest Belgium is that the main risk factors, described on pages 6-15 of the 2019 annual financial report, remain applicable during the remaining months of the 2020 financial year.
Home Invest Belgium's shares have been listed on the Euronext Brussels continuous market since 16 June 1999 and are part of the BEL Mid Index.
On 30 June 2020, Home Invest Belgium's shares closed at € 117,50 (compared to € 99,00 on 30 June 2019).
The liquidity of the shares rose to an average of 1 563 share transactions per trading day, during the first half of 2020 (compared to 1 286 during the first half of 2019).
| 1H 2020 | 1H 2019 | |
|---|---|---|
| Share price (in €) On the last day Highest Lowest |
€ 117.50 € 118.50 € 92.00 |
€ 99.00 € 100.00 € 86.00 |
| Average | € 110.73 | € 92.63 |
| Volume Average daily volume Total volume (6 months) |
1 563 196 933 |
1 286 160 765 |
| Total number of shares on June 30th | 3 299 858 | 3 299 858 |
| Market capitalisation on June 30th | € 388 million | € 327 million |
| Free float14 | 54.4% | 53.9% |
14 Free float = [(total number of shares on the last day) - (total number of shares held by parties who have made themselves known by a transparency declaration in accordance with the Law of 2 May 2007) / [total number of shares outstanding].
The table below lists shareholders in Home Invest Belgium who hold more than 3% of the company's shares. Notifications applying to the Belgian Transparency Law (Law of 2 May 2007 regarding the disclosure of major holdings) can be found on the company's website.
Based on the transparency notifications received up to 30 June 2020, Home Invest Belgium's shareholder structure is as follows:
| SHAREHOLDERS15 | NUMBER OF SHARES | % OF THE CAPITAL |
|---|---|---|
| Van Overstraeten Group16 | 880 965 | 26.7% |
| AXA Belgium NV17 | 521 830 | 15.8% |
| Spouses Van Overtveldt – Henry de Frahan | 102 792 | 3.1% |
| Other shareholders | 1 794 271 | 54.4% |
| Total | 3 299 858 | 100.00% |
15 Shareholders who deposited a statement in accordance with the Law of 2 May 2007 regardingtransparency.
16 Stavos Real estate BV is 97% controlled by Burgerlijke Maatschap BMVO 2014. BMVO 2014 is 25% controlled by Stichting Administratiekantoor Stavos and 75% controlled by Burgerlijke Maatschap Van Overstraeten. Burgerlijke Maatschap Van Overstraeten is 99.9% controlled by Stichting Administratiekantoor Stavos. Stichting Administratiekantoor Stavos is controlled by Liévin, Hans, Johan en Bart Van Overstraeten. Cocky NV is 99.9% controlled by Burgerlijke Maatschap Van Overstraeten. VOP NV is 99.9% controlled by Stavos Real Estate BV. Sippelberg NV is 75% controlled by V.O.P. NV and 25% by Stichting Administratiekantoor Stavos.
17 AXA Belgium SA is 94,4% controlled by AXA Holdings Belgium SA and 5,07 controlled by AXA SA. AXA Holdings Belgium SA is 100% controlled by AXA SA. AXA SA is not a controlled entity.
The ordinary general meeting of 5 May 2020 has approved the distribution of a gross dividend of € 4,85 per share for the financial year 2019 (which is an increase of 2.1% compared to 2018). Taking into account the interim dividend of € 3,75 gross per share (coupon nr. 27) paid in December 2019, the balance of € 1,10 gross per share (coupon nr. 28) was paid on Thursday 14 May 2020.
The board of directors expects the gross dividend of the financial year 2020 to be at least equal to that of the previous financial year.
During the first half year of 2020, the operational results of Home Invest Belgium have developed positively despite of the COVID-19 pandemic.
The residential rental market continues to grow steadily in those cities where Home Invest Belgium is active, mostly thanks to:
Home Invest Belgium owns a sustainable portfolio given its young age. More than 50% of the investment properties available for rent are younger than 10 years. Given the quality and the location of the properties in predominantly large urban areas, Home Invest Belgium is well positioned to take on a leading role in the favourable trends of the residential market.
Home Invest Belgium is considering international expansion of its activities as a specialist in the residential rental market.
Against this background, the board of directors confirms its confidence in the long-term prospects of the company.
| 1H 2020 | 1H 2019 | |
|---|---|---|
| I. Rental Income | 13 175 357 | 12 429 177 |
| III. Rental-related expenses | -43 295 | -46 539 |
| NET RENTAL INCOME | 13 132 062 | 12 382 638 |
| IV. Recovery of property charges | 78 455 | 67 448 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 803 314 | 571 171 |
| VII. Charges and taxes normally payable by the tenant on let properties | -2 729 366 | -2 420 869 |
| VIII. Other incomes and expenses related to letting | 0 | 0 |
| PROPERTY RESULT | 11 284 465 | 10 600 388 |
| IX. Technical costs | -727 081 | -495 826 |
| X. Commercial costs | -257 918 | -176 718 |
| XI. Taxes and charges on unlet properties | -23 305 | -238 736 |
| XII. Property management costs | -1 052 446 | -1 512 924 |
| XIII. Other property costs | 0 | 0 |
| Property costs | -2 060 750 | -2 424 204 |
| PROPERTY OPERATING RESULT | 9 223 715 | 8 176 185 |
| XIV. General corporate expenses | -1 562 702 | -1 623 872 |
| XV. Other operating incomes and expenses | 0 | 57 000 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 7 661 012 | 6 609 312 |
| XVI. Result sale investment properties | 727 211 | 22 813 |
| XVIII. Changes in fair value of investment properties | -1 483 964 | 33 968 853 |
| XIX. Other portfolio result | -192 308 | -6 409 |
| PORTFOLIO RESULT | -949 061 | 33 985 257 |
| OPERATING RESULT | 6 711 951 | 40 594 569 |
| XX. Financial income | 8 834 | 10 833 |
| XXI. Net interest charges | -2 028 638 | -2 500 349 |
| XXII. Other financial charges | -15 154 | -57 217 |
| XXIII. Changes in fair value of financial assets and liabilities | -3 615 159 | -6 121 523 |
| FINANCIAL RESULT | -5 650 108 | -8 668 256 |
| XXIV. Share in the result of associates and joint ventures | 328 416 | 98 803 |
| PRE-TAX RESULT | 1 390 259 | 32 025 116 |
| XXV. Corporation tax | -128 958 | 69 317 |
| XXVI. Exit tax | 0 | 0 |
| Taxes | -128 958 | 69 317 |
| NET RESULT | 1 261 300 | 32 094 433 |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 1 261 300 | 32 094 433 |
| Exclusive portfolio result | +949 061 | -33 985 257 |
| Exclusive changes in the real value of the financial assets | +3 615 159 | +6 121 523 |
| Exclusive non-EPRA earnings in the share of the result of associates and joint ventures | +406 282 | +379 168 |
| EPRA EARNINGS | 6 232 803 | 4 609 867 |
| Average number of shares18 | 3 288 146 | 3 288 146 |
| NET RESULT PER SHARE | 0,38 | 9,76 |
| EPRA EARNINGS PER SHARE | 1,90 | 1,40 |
18 The average number of shares at the end of period was calculated excluding 11,712 treasury shares.
| 1H 2020 | 1H 2019 | |
|---|---|---|
| NET RESULT | 1 261 300 | 32 094 433 |
| Other elements of the global result | 0 | 0 |
| GLOBAL RESULT | 1 261 300 | 32 094 433 |
| ASSETS | 30/06/2020 | 31/12/2019 |
|---|---|---|
| I. Non-current assets | 637 953 339 | 633 429 001 |
| B. Intangible assets | 331 429 | 375 072 |
| C. Investment properties | 615 392 375 | 609 594 469 |
| D. Other tangible assets | 716 769 | 700 200 |
| E. Non-current financial assets | 522 082 | 2 096 993 |
| F. Lease receivables | 332 972 | 332 972 |
| I. Investments in associates and joint ventures | 20 657 712 | 20 329 296 |
| II. Current assets | 6 247 162 | 5 740 474 |
| C. Lease receivables | 58 215 | 58 215 |
| D. Trade receivables | 2 894 013 | 977 757 |
| E. Tax receivables and other current assets | 464 040 | 463 471 |
| F. Cash and cash equivalents | 2 310 219 | 4 200 730 |
| G. Deferred charges and accrued income | 520 675 | 40 300 |
| TOTAL ASSETS | 644 200 502 | 639 169 476 |
| SHAREHOLDER'S EQUITY | 306 522 507 | 309 617 697 |
|---|---|---|
| I. SHAREHOLDER'S EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE MOTHER COMPANY | 306 522 507 | 309 617 697 |
| A. Capital | 87 999 055 | 87 999 055 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | 192 358 952 | 152 816 933 |
| D. Net result of the financial year | 1 261 300 | 43 898 510 |
| II. MINORITY INTERESTS | 0 | 0 |
| LIABILITIES | 337 677 995 | 329 551 780 |
| I. Non-current liabilities | 297 713 182 | 281 548 083 |
| A. Provision | 0 | 0 |
| B. Non-current financial debts | 287 119 738 | 273 188 605 |
| a. Financial debts |
238 000 000 | 233 000 000 |
| b. Financial leasing |
276 600 | 276 600 |
| c. Others |
48 843 138 | 39 912 005 |
| C. Other non-current financial liabilities | 8 341 943 | 6 300 285 |
| F. Deferred taxes – liabilities | 2 251 501 | 2 059 193 |
| a. Exit Tax |
367 021 | 367 021 |
| b. Others |
1 884 480 | 1 692 172 |
| II. Current liabilities | 39 964 813 | 48 003 697 |
| B. Current financial debts | 30 651 662 | 40 609 456 |
| a. Financial debts |
20 000 000 | 20 000 000 |
| b. Financial leasing |
54 339 | 108 151 |
| c. Others |
10 597 323 | 20 501304 |
| D. Trade debts and other current debts | 7 674 842 | 5 367 735 |
| b. Others |
7 674 842 | 5 367 735 |
| E. Other current liabilities | 372 405 | 154 654 |
| F. Accrued charges and deferred income | 1 265 903 | 1 871 852 |
| TOTAL SHAREHOLDER'S EQUITY AND LIABILITIES | 644 200 502 | 639 169 476 |
| Capital | Capital increase expenses |
Share premium |
Legal reserve |
Reserve from The changes in Fair value of Investment properties |
|
|---|---|---|---|---|---|
| BALANCE ON 31/12/2018 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 121 307 765 |
| Allocation of net result 2018 Allocation of operational distributable result |
71 345 223 | ||||
| Changes in deferred taxes | 85 202 | ||||
| Changes in Fair Value of investment properties |
71 260 021 | ||||
| Changes in Fair Value of hedging instruments Dividends financial year 2018 (balance paid |
|||||
| in May 2019) | |||||
| Full dividend relating to financial year 2018 Interim dividend financial year 2018 |
|||||
| (paid in December 2018) | |||||
| Changes resulting from the sale of buildings | -7 234 890 | ||||
| Result of the financial year 2019 | |||||
| Dividend 2019 (interim dividend paid in December 2019) Takeover of subsidiaries |
|||||
| Merger of subsidiaries | |||||
| Other increases (decreases) | 20 335 | ||||
| BALANCE ON 31/12/2019 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 185 438 433 |
| BALANCE ON 31/12/2019 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 185 438 433 |
| Allocation of net result 2019 | 18 825 460 | ||||
| Allocation of operational distributable result Changes in deferred taxes |
124 408 | ||||
| Changes in Fair Value of investment properties |
17 830 676 | ||||
| Changes in Fair Value of hedging instruments | 870 376 | ||||
| Dividends financial year 2018 (balance paid in May 2019) |
|||||
| Full dividend relating to financial year 2019 | |||||
| Interim dividend financial year 2019 (paid in December 2019) |
|||||
| Sales of buildings first half year of financial year | |||||
| 2019 | -802 375 | ||||
| Results first half year of financial year 2019 | |||||
| Other increases (decreases) | |||||
| BALANCE ON 30/06/2020 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 203 461 518 |
| Reserve from estimated transfer costs and rights |
Reserve of the balance of changes in fair value of the authorised hedging instruments to which hedge accounting as defined in IFRS is applied (+/-) |
Reserve of the balance of changes in fair value of the authorised hedging instruments to which hedge accounting as defined in IFRS is not applied IFRS (+/-) |
Reserve for fiscal deferral |
Reserve for treasury shares |
Other | Result carried forward from previous reserves financial years |
Net result of the financial year |
Total |
|---|---|---|---|---|---|---|---|---|
| -38 457 522 | 0 | -8 053 358 | -774 669 | -686 943 | 1 259 467 | 24 960 329 | 56 447 178 | 269 003 279 |
| -11 846 385 | -1 613 701 | -256 480 | -4 469 627 | -56 447 178 | -3 288 147 | |||
| -4 469 627 | 4 469 627 | |||||||
| -256 480 | 171 278 | |||||||
| -11 846 385 | -59 413 636 | |||||||
| -1 613 701 | -1.613.701 | |||||||
| -3 288 147 | -3 288 147 | |||||||
| -15 618 695 | -15 618 695 | |||||||
| 12 330 548 | 12 330 548 | |||||||
| 1 586 739 | 5 648 151 | 0 | ||||||
| 55 489 503 | 55 489 503 | |||||||
| -11 590 933 | -11 590 933 | |||||||
| 0 | ||||||||
| 4 055 | 4 055 |
| -48 737 503 | 0 | -9 667 059 | -1 031 149 | -686 943 | 1 259 467 | 26 142 908 | 43 898 150 | 309 617 696 |
|---|---|---|---|---|---|---|---|---|
| -48 737 503 | 0 | -9 667 059 | -1 031 149 | -686 943 | 1 259 467 | 26 142 908 | 43 898 150 | 309 617 696 |
| 30 641 903 | 4 613 961 | -661 021 | -13 878 281 | -43 898 510 | -4 356 488 | |||
| -4 310 796 | 4 310 796 | 0 | ||||||
| -661 021 | 536 613 | 0 | ||||||
| 30 641 903 | -48 472 578 | 0 | ||||||
| 4 613 961 | -9 567 485 | 4 083 174 | 0 | |||||
| -4 356 515 | -4 356 515 | |||||||
| -15 947 508 | -15 947 508 | |||||||
| 11 590 993 | 11 590 993 | |||||||
| 783 748 | 18 627 | 0 | ||||||
| 1 261 300 | 1 261 300 | |||||||
| 0 | ||||||||
| -17 311 852 | 0 | -5 053 098 | -1 692 170 | -686 943 | 1 259 467 | 12 283 254 | 1 261 300 | 306 522 507 |
| 1H 2020 | 1H 2019 | |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4 200 730 | 3 239 503 |
| 1. Cash flows from operating activities | 7 282 944 | 6 707 961 |
| Result for the financial year | 1 260 300 | 32 094 433 |
| Result for the financial year before interest and taxes | 6 711 951 | 40 594 569 |
| Interests received | 8 843 | 10 833 |
| Interests paid | -2 043 783 | -2 557 566 |
| Change in fair value of financial assets and liabilities | -3 615 159 | -6 121 523 |
| Share in the result of associates and joint ventures | 328 416 | |
| Taxes | -128 958 | 69 317 |
| Adjustment of profit for non-cash transactions | 7 120 056 | -25 290 131 |
| Depreciation and impairments | 102 485 | 125 672 |
| - Depreciation and impairments on non-current assets | 102 485 | 125 672 |
| Other non-monetary elements | 4 982 622 | -27 939 724 |
| - Depreciation of previously capitalised financing costs | 19 608 | |
| - Changes in fair value of investment properties (+/-) | 1 483 963 | -33 968 853 |
| - Changes in fair value of financial non-current assets (+/-) | -328 416 | |
| - Changes in fair value of hedging instruments and other portfolio results Gain on realization of assets |
3 807 467 -727 211 |
6 029 129 -22 813 |
| - Capital gains realized on sale of non-current assets | -727 211 | -22 813 |
| Reversal of financial income and expenses | 2 034 949 | 2 546 734 |
| Changes in working capital needs | -1 098 412 | -96 341 |
| Movements in asset items: | -2 364 364 | -529 256 |
| - Current financial assets | 0 | 0 |
| - Trade receivables | -1 883 421 | 21 236 |
| - Tax receivables and other short-term assets | -568 | -176 551 |
| - Deferred charges and accrued income | -480 375 | -373 940 |
| Movements in liabilities items | 1 265 952 | 432 915 |
| - Trade debts and other current debts | 1 850 115 | 1 154 653 |
| - Other current liabilities | 217 751 | -19 789 |
| - Accrued charges and deferred income | -801 914 | -701 949 |
| 2. Cash flow from investment activities | -3 781 567 | 3 573 854 |
| Investment properties – capitalized investments | -1 794 290 | 2 366 954 |
| Investment properties – new acquisitions | -2 657 378 | 0 |
| Sales of investment properties | 8 210 093 | 11 471 815 |
| Development projects | -7 411 379 | -5 520 609 |
| Other intangible assets | 0 | 0 |
| Other tangible assets | -130 024 | -27 292 |
| Other non-current financial assets | 1 410 | 16 895 |
| 3. Cash flow from financing activities | -4 664 677 | -10 315 273 |
| Increase (+) / Decrease (-) in financial debts | 1 726 301 | -4 480 392 |
| Interest received | 8 834 | 10 833 |
| Interest paid | -2 043 322 | -2 557 566 |
| Dividend of the previous financial year | -4 356 490 | -3 288 147 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 2 310 219 | 3 206 046 |
The consolidated half-year results have been prepared in accordance with the International Financial Reporting Standards (IFRS) and with IAS 34 on "Interim financial reporting". The accounting methods and principals used to draw up these interim summary financial statements are identical to those used to prepare the annual financial statements for the financial year 2019.
The investment strategy of Home Invest Belgium focuses on residential real estate in a broad sense of the word (apartments, holiday homes, etc.). The segmentation of the company is consequently determined by the geographical location of its buildings. Home Invest Belgium distinguishes between 4 geographical segments: The Brussels Capital Region, The Flemish Region, the Walloon Region and The Netherlands.
| 1H 2020 | Consolidated | Brussels | Flemish | Walloon | The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| total | Region | Region | Region | |||
| I. Rental income | 13 175 357 | 7 835 932 | 1 344 831 | 2 558 893 | 1 435 700 | |
| III. Rental-related expenses | -43 295 | -43 295 | ||||
| NET RENTAL INCOME | 13 132 062 | 7 835 932 | 1 344 831 | 2 558 893 | 1 435 700 | |
| IV. Recoveryproperty charges | 78 455 | 71 031 | 4 689 | 2 735 | ||
| V. Recovery of charges and taxes Normally | ||||||
| payable by the tenant on let properties (+) | ||||||
| 803 314 | 783 769 | 8 303 | 11 242 | |||
| VII. Charges and taxes | ||||||
| normally payable by the tenant | -2 729 366 | -1 940 647 | -240 088 | -548 631 | ||
| On let properties (-) | ||||||
| VIII. Other incomes and expenses related to letting (+/-) |
||||||
| PROPERTY RESULT | 11 284 465 | 6 750 085 | 1 117 735 | 2 024 239 | 1 435 700 | -43 295 |
| IX. Technical costs (-) | -727 081 | -481 526 | -111 379 | -134 176 | ||
| X. Commercial costs (-) | -257 918 | -202 281 | -12 990 | -42 647 | ||
| XI. Taxes and charges on unlet properties (-) | ||||||
| -23 305 | -7 481 | -5 482 | -10 342 | |||
| XII. Property management costs (-) | -1 052 446 | -37 437 | 0 | -11 404 | -43 434 | -960 171 |
| XIII. Other property costs (-) | ||||||
| PROPERTY COSTS | -2 060 750 | -728 725 | -129 851 | -198 569 | -43 434 | -960 171 |
| PROPERTY OPERATING COSTS | 9 223 715 | 6 021 360 | 987 884 | 1 825 670 | 1 392 266 | -1 003 466 |
| XIV. General corporate expenses (-) | ||||||
| -1 562 702 | -1 562 702 | |||||
| XV. Other operating incomes and expenses (+/-) |
0 | |||||
| OPERATING RESULT BEFORE | ||||||
| PORTFOLIO RESULT | 7 661 012 | 6 021 360 | 987 884 | 1 825 670 | 1 392 266 | -2 566 168 |
| XVI. Result sale investment properties (+/-) | ||||||
| 727 211 | 194 072 | 470 384 | 62 756 | |||
| XVIII. Variations in the fair value | ||||||
| of property investments (+/-) | -1 483 964 | -1 057 415 | 44 094 | -429 644 | -41 000 | |
| XIX. Other portfolio result | -192 308 | -192 308 | ||||
| OPERATING RESULT | 6 711 951 | 5 158 017 | 1 502 362 | 1 458 782 | 1 158 958 | -2 566 168 |
| XX. Financial income (+) | 8 834 | 8 834 | ||||
| XXI. Net interest charges (-) | -2 028 638 | -2 028 638 | ||||
| XXII. Other financial costs (-) | -15 145 | -15 145 | ||||
| XXIII. Variations in the fair value | ||||||
| of financial assets and | -3 615 159 | -3 615 159 | ||||
| liabilities (+/-) | ||||||
| FINANCIAL RESULT | -5 650 108 | 0 | 0 | 0 | -14 097 | -5 650 108 |
| XXIV. Share in the result of associated | 328 416 | 328 416 | ||||
| PRE-TAX RESULT | 1 390 259 | 5 158 017 | 1 830 778 | 1 458 782 | 1 158 958 | -8 216 276 |
| XXV. Corporate Tax (-/+) | -128 958 | -128 958 | ||||
| XXVI. Exit tax | 0 | 0 | ||||
| TAXES | -128 958 | -128 958 | ||||
| NET RESULT | 1 261 300 | 5 158 017 | 1 830 778 | 1 458 782 | 1 158 958 | -8 345 234 |
| Consolidated | Brussels | Flemish | Walloon | The | Unattributed | |
|---|---|---|---|---|---|---|
| 1H 2019 | Netherlands | |||||
| total | Region | Region | Region | |||
| I. Rental income | 12 429 177 | 7 167 708 | 1 200 767 | 2 655 143 | 1 405 559 | |
| III. Rental-related expenses | -46 539 | -29 849 | -7 000 | -9 691 | ||
| NET RENTAL INCOME | 12 382 638 | 7 137 860 | 1 193 767 | 2 645 452 | 1 405 559 | |
| IV. Recoveryproperty charges | 67 448 | 53 950 | 3 321 | 10 177 | ||
| V. Recovery of charges and taxes Normally payable by the tenant on let properties (+) |
||||||
| 571 171 | 381 464 | 64 882 | 124 825 | |||
| VII. Charges and taxes | ||||||
| normally payable by the tenant On let properties (-) |
-2 420 869 | -1 648 666 | -287 238 | -530 953 | 45 987 | |
| VIII. Other incomes and expenses | ||||||
| related to letting (+/-) | ||||||
| PROPERTY RESULT | 10 600 388 | 5 924 609 | 974 731 | 2 249 502 | 1 451 546 | |
| IX. Technical costs (-) | -495 826 | -338 347 | -42 527 | -114 952 | ||
| X. Commercial costs (-) | -176 718 | -135 166 | -23 398 | -18 153 | ||
| XI. Taxes and charges on | ||||||
| -238 736 | -181 470 | -7 994 | -15 599 | -33 674 | ||
| unlet properties (-) | ||||||
| XII. Property management costs (-) XIII. Other property costs (-) |
-1 512 924 | 99 308 | 19 441 | 73 427 | -55 040 | -1 650 059 |
| PROPERTY COSTS | -2 424 204 | -555 675 | -54 479 | -75 277 | -55 040 | -1 683 733 |
| PROPERTY OPERATING COSTS | 8 176 185 | 5 368 934 | 920 253 | 2 174 225 | 1 396 506 | -1 683 733 |
| XIV. General corporate | ||||||
| -1 623 872 | -1 623 872 | |||||
| expenses (-) | ||||||
| XV. Other operating incomes and | ||||||
| expenses (+/-) | 57 000 | 12 000 | 45 000 | |||
| OPERATING RESULT BEFORE | ||||||
| 6 609 312 | 5 380 934 | 965 253 | 2 174 225 | 1 396 506 | -3 307 606 | |
| PORTFOLIO RESULT | ||||||
| XVI. Result sale | ||||||
| Investment properties (+/-) | 22 813 | 22 813 | ||||
| XVIII. Variations in the fair value | ||||||
| 33 968 853 | 30 897 003 | 1 719 715 | 676 699 | 675 437 | ||
| of property investments (+/-) | ||||||
| XIX. Other portfolio result | -6 409 | 153 340 | -159 749 | |||
| OPERATING RESULT | 40 594 569 | 36 454 090 | 2 684 967 | 2 850 924 | 1 912 194 | -3 307 606 |
| XX. Financial income (+) | 10 833 | 10 113 | 720 | |||
| XXI. Net interest charges (-) | -2 500 349 | -2 500 349 | ||||
| XXII. Other financial costs (-) | -57 217 | -1 355 | -14 097 | -41 765 | ||
| XXIII. Variations in the fair value of financial assets and liabilities (+/-) |
-6 121 523 | -6 121 523 | ||||
| FINANCIAL RESULT | -8 668 256 | 8 758 | -14 097 | 8 662 917 | ||
| XXIV. Share in the result of associated | 98 803 | 98 803 | ||||
| PRE-TAX RESULT | 32 025 116 | 36 462 847 | 2 684 967 | 2 949 727 | 1 898 097 | -11 970 522 |
| XXV. Corporate Tax (-/+) | 69 317 | -194 974 | 264 291 | |||
| XXVI. Exit tax | 0 | 0 | ||||
| TAXES | 69 317 | -194 974 | 264 291 | |||
| NET RESULT | 32 094 433 | 36 462 847 | 2 684 967 | 2 949 727 | 1 703 123 | -11 706 231 |
The investment properties are originally booked based on their purchase price, including transaction costs and the non-deductible VAT (the "acquisition cost"). For buildings acquired through merger, demerger or contribution of business sectors, the taxes payable on the potential capital gains on the assets thus integrated are included in the cost of the assets concerned.
At the end of the first accounting period after their initial booking, all investment properties are booked at their fair value.
The fair value is determined in two steps.
In the first step, an independent property expert carries out an evaluation of all investment properties including transfer taxes (registration fees or other transfer taxes), the so called "investment value".
The expert estimates the investment value based on two methods: the capitalization of the estimated rental value and the Discounted Cash Flow method (DCF method). The expert is allowed to use other methods for his expertise.
In the second step, in order to switch from the investment value to the fair value, the expert withholds an estimated amount of transfer taxes from the estimated investment value.
The investment value minus the estimated transfer taxes is the fair value as defined by IFRS 13.
In Belgium, the fair value is determined as follows:
When Home Invest Belgium decides to sell a building from its Belgian portfolio under a certain transaction structure, the effective transaction fees, which are expected to apply during the transaction, are deducted in order to determine the fair value, regardless of the global investment value of the building.
In the Netherlands, transaction taxes for residential real estate amount to 2%.
The fair value of the investment properties stood at € 615.39 million on 30 June 2020, which represents an increase of € 6.17 million compared to 31 December 2019.
19 The accounting treatment (2.5% transaction costs) has been clarified in a press release published by BeAMA on 8 February 2006 and confirmed in a press release from the BE-REIT Association on 10 November 2016.
The table below shows the evolution of the investment properties in the first half of 2020.
| 1H 2020 | 1H 2019 | |
|---|---|---|
| C. Investment properties, balance at the beginning of the financial year | 609 594 469 | 524 506 117 |
| a. Investment properties available for rent at the beginning of the period | 573 376 628 | 490 364 387 |
| Completion of development projects (+) | 0 | 15 045 602 |
| Acquisition of buildings (+) | 0 | 0 |
| Capitalized subsequent expenses (+) | 1 794 290 | 2 366 954 |
| Acquisition of buildings through companies (+) | 5 559 000 | 0 |
| Variations in the fair value of investment properties (+/-) | - 684 464 | 30 439 628 |
| Sales (-) | -7 482 882 | -11 449 002 |
| a. Investment properties available for rent at the end of the period | 572 562 572 | 526 767 569 |
| b. Development projects at the beginning of the period | 36 217 841 | 34 141 731 |
| Investments - developments projects | 7 411 379 | 5 520 609 |
| Development projects (+) | 0 | 0 |
| Development projects through companies (+) | ||
| Delivered development projects (-) | 0 | -15 045 602 |
| Changes in the fair value of investment properties (+/-) | - 799 418 | 3 529 226 |
| b. Development project at the end of the period | 42 829 802 | 28 145 963 |
| c. Tangible fixed assets for own use | None | None |
| d. Others | None | None |
| C. Investment properties, balance at the end of the period | 615 392 374 | 554 913 532 |
This fair value is based on the following quantitative parameters:
| Investment properties available for rent |
30/06/2020 |
|---|---|
| Rent capitalisation method | |
| Estimated rental value | Weighted average of € 134/m² (range between: € 55/m² and € 292/m²) |
| Vacancy assumptions | Average of 5 months ( range between: 0 and 18 months) |
| Capitalization rate | Average of 5.2% (range between 3.7% and 11.9%) |
| Number of m² or number of units | Average of 3 604 m² (range between: 125 m² and 14 107 m²) |
| Discounted cash flow method | |
| Estimated rental value | Weighted average of € 139m² (range between: € 118/m² and € 142/m²) |
| Vacancy Assumptions (long-term) | / |
| Number of m² or number of units | Average of 11 025m² (range between 7 091 m² and 20 488 m²) |
| Discount rate | Average of 6.2% (range between 5.90% and 6.7%) |
| Inflation | Average of 1.5% |
| Project development | 30/06/2020 |
| Rent capitalization method | |
| Estimated rental value | Weighted average of € 120/m² (range between € 113/m² and € 129/m²) |
| Vacancy assumptions (long-term) | Average of 8 months (range between: 6 and 12 months) |
| Capitalization rate | Average of 4.4% (range between 4.1% and 4.7%) |
| Number of m² or number of units | Average of 7 212 m² (range between: 3 961 and 12 724m²) |
| Non-observable input | Impact of fair value with: | ||
|---|---|---|---|
| Decrease | Increase | ||
| Estimated rental value (GHW) | Negative | Positive | |
| Vacancy Assumptions (long-term) | Negative | Positive | |
| Capitalization rate | Positive | Negative | |
| Number of m² or number of units | Negative | Positive |
Investment properties are valued on a quarterly basis by an independent and qualified property expert. The reports are drafted based on information shared by the company including the lease state, expenses and taxes borne by the lessee, rents and works to be carried out.
The property expert uses market-related parameters (discount rate, etc.) based on his judgment and professional experience. The information shared with the property expert, the parameters and the assessment model used by the property expert are checked by the management, the audit committee, and the board of directors.
If the gross rental yield of investment property available for rent were to increase by 0.25%, the fair value of investment property available for rent would decrease by € 26.75 million. If the gross rental yield of the investment property available for rent were to decrease by 0.25%, the fair value of the investment property available for rent would increase by € 29.51 million. If the estimated rental value of the investment property available for rent were to decrease by 5%, the fair value of the investment property available for rent would decrease by € 28.63 million. If the estimated rental value of the investment property available for rent were to increase by 5%, the fair value of the investment property available for rent would increase by € 28.63 million.
| Financial liabilities | 30/06/2020 | 31/12/2019 |
|---|---|---|
| Short-term liabilities within one year | 30 000 000 | 40 000 000 |
| Long-term liabilities between one and five years | 224 843 138 | 176 912 005 |
| Long-term liabilities over more than five years | 62 000 000 | 96 000 000 |
| TOTAL | 316 843 138 | 312 912 005 |
Up till 30 June 2020, Home Invest Belgium had liabilities of € 317.00 million composed of:
| Proportional consolidation | 30/06/2020 | 31/12/2019 |
|---|---|---|
| B. Long-Term Financial debts | 276 380 765 | 290 939 605 |
| B. Short-Term Financial debts | 30 651 662 | 40 609 456 |
| D. Trade debts and other short-term debts | 7 674 842 | 5 367 735 |
| E. Other short-term liabilities | 372 405 | 154 654 |
| Indebtedness as defined in art. 13 of the RECC Royal Decree | 344 779 674 | 337 071 451 |
| Total assets | 663 647 125 | 655 673 694 |
| Debt ratio (RECC Royal Decree) | 51.95% | 51.41% |
| Investment capacity to debt ratio 55% | 44 947 210 | 23 549 081 |
If the consolidated debt ratio of the public RREC and its subsidiaries amounts to more than 50% of its consolidated assets, less the authorised financial hedging instruments, the public RREC is required to draw up a financial plan with an implementation schedule, setting out the measures that will be taken to prevent the consolidated debt ratio from exceeding 65% of the consolidated assets.
A special report will be drawn up by the auditor about the financial plan, confirming that the auditor has verified the drafting of the plan, in particular its economic base, and that the figures contained in the plan correspond with those in the accounting records of the public RREC. The financial plan and the special report from the auditor will be submitted to the FSMA for information.
The general guidelines of the financial plan are included in detail in the annual and half-yearly financial reports. The annual and half-yearly reports will be sent out and justify how the financial plan was implemented during the course of the relevant period, and how the public RREC will implement the plan in the future.
On the basis of the figures up till 30 June 2020, the consolidated debt ratio (RECC Royal Decree) is 51.95%. For more information on the consolidated balance sheet up till 30 June 2020, we refer to the financial statements of the present report.
The debt ratio (RECC Royal Decree) stood at 51.95% on 30 June 2020. At the end of financial years 2018 and 2019, the debt ratio (RECC Royal Decree) stood respectively at 50.16% and 51.41%.
Currently the debt ratio (RECC Royal Decree) stands at 51,95%. Based on the current consolidated debt ratio (RREC Royal Decree), the investment potential amounts to approximately € 247.4 million, not exceeding the maximum rate of 65%. The above amounts do not take into account potential variations in the value of the real estate assets. Such potential variations may have a significant impact on the debt ratio. Based on the current equity, only a negative variation of close to € 133.2 million in the fair value of the real estate investments would
cause the maximum authorised debt of 65% to be exceeded. That would represent a drop of close to 21% in the value of the existing portfolio.
The company expects to reach a debt ratio (RECC Act) of 53.63% by 31 December 2020. This evolution is based on the following assumptions:
The board of directors confirms its decision to not structurally exceed the debt ratio of 55%.
According to financial plan, this limit could be exceeded in the course of the financial year 2020.
The above calculations do not take into account any potential changes in the fair value of the real estate portfolio.
Home Invest Belgium believes that its debt ratio will not exceed 65%. Consequently, no additional measure is required in light of the inherent characteristics of the real estate assets and in the expected changes in the equity. Home Invest Belgium maintains its intention to finance itself with a debt ratio below 55%. The board of directors pays close attention to the realisation (or non-realisation) of new investments and anticipates the preparation of a strengthening of the equity capital should this be necessary. Should events require the RREC's strategy to be modified, it would be done without delay; the shareholders would be informed of it.
| Summary of financial assets and liabilities at closing date | 30/06/2020 | 31/12/2019 | ||
|---|---|---|---|---|
| E. Non-current financial assets | ||||
| Financial instruments | 369 281 | 1 942 782 | ||
| Other guarantees | 152 802 | 154 211 | ||
| TOTAL | 522 082 | 2 096 993 |
The financial non-current assets are comprised of financial instruments (the positive market value of hedging instruments) and the given guarantees (a guarantee in favour of the National Social Security Office and the reserve funds deposited in multiple joint ownerships).
| I. Non-current liabilities | 30/06/2020 | 31/12/2019 |
|---|---|---|
| A. Provisions | ||
| b. Others |
0 | 0 |
| B. Non-current financial debts | ||
| a. Financial institutions |
238 000 000 | 233 000 000 |
| b. Financial leasing |
276 600 | 276 600 |
| c. Other debts |
48 843 138 | 39 912 005 |
| C. Other non-current financial liabilities | ||
| a. Hedging |
8 341 943 | 6 300 285 |
| TOTAL | 295 461 681 | 279 488 890 |
| II. Current liabilities | 30/06/2020 | 31/12/2019 | |||
|---|---|---|---|---|---|
| B. Current financial debts | |||||
| a. a. |
Financial institutions | 20 000 000 | 20 000 000 | ||
| b. | Financial leasing | 54 339 | 108 151 | ||
| c. | Others | ||||
| 501 | |||||
| - Received guarantees |
513 681 | 304 | |||
| Others - |
10 000 000 | 20 000 000 | |||
| TOTAL | 30 651 662 | 40 609 455 |
The other non-current financial debts totalling € 48.84 million concern two bond issuances (excluding costs). The bond issue in June 2014 has a capital sum equivalent to € 40.00 million and expiry date in June 2024. The second bond is issued under the EMTN program with a capital sum equivalent to € 9.00 million with expiry date in 2028.
The other long-term financial obligations amount to € 8.34 million up till 30 June 2020. This post consists out of the negative fair value of the hedging instruments. The positive fair value of the hedging instruments amounted to € 0.37 million and has been included under the non-current financial assets.
| D. Current trade debts and other debts | 30/06/2020 | 31/12/2019 |
|---|---|---|
| D. Current trade debts and other debts | ||
| b. Others | ||
| - Suppliers | 3 322 363 | 2 993 637 |
| - Tenants | 718 084 | 782 949 |
| - Tax, salary and social security payables | 3 634 394 | 1 591 149 |
| TOTAL | 7 674 842 | 5 367 735 |
The interest rate hedge instruments are exclusively of the IRS type (Interest Rate Swap). They form contracts for the conversion from variable interest rates to fixed rates. Up till 30 June 2020, the total nominal amount of the IRS hedges amounted to € 238.00 million.
The hedging instruments are not considered as cash flow hedges. Changes in the value of the hedging instruments are accounted directly in the income statement. The total value of the hedges up till 30 June 2020 was a negative sum of € -8.08 million due to a fall in interest rates after the hedges were closed. The board of directors aims that its hedge policy will provide the company with maximum protection against any interest rate increases.
| Hedge instruments at 30/06/2020 |
Type | Amount | Interest Rate | Deadline | Qualification | Fair value at 30/06/2020 |
|---|---|---|---|---|---|---|
| Belfius | IRS | 10 000 000 | 1.280% | 30/08/2026 | Transaction | -1 069 044 |
| Belfius | IRS | 10 000 000 | 1.060% | 30/08/2027 | Transaction | -1 055 760 |
| Belfius | IRS | 15 000 000 | -0.210% | 30/09/2028 | Transaction | -141 625 |
| Belfius | IRS | 21 500 000 | 0.585% | 10/11/2025 | Transaction | -1 221 200 |
| Belfius | IRS | 17 000 000 | 0.435% | 31/10/2024 | Transaction | -671 997 |
| Belfius | IRS | 8 000 000 | 0.410% | 30/10/2026 | Transaction | -428 094 |
| BNP Paribas Fortis | IRS | 25 000 000 | -0.283% | 30/09/2028 | Transaction | -128 713 |
| BNP Paribas Fortis | IRS | 21 500 000 | 0.400% | 30/11/2021 | Transaction | -70 314 |
| ING | IRS | 15 000 000 | 0.350% | 01/06/2022 | Transaction | -103 443 |
| ING | IRS | 30 000 000 | -0.331% | 25/09/2027 | Transaction | -64 249 |
| KBC | IRS | 15 000 000 | -0.196% | 30/11/2023 | Transaction | -144 609 |
| KBC | IRS | 15 000 000 | -0.465% | 30/11/2023 | Transaction | -3 320 |
| IRS type of coverage | 203 000 000 | -5 102 369 |
| Hedge instruments at 30/06/2020 with future start date |
Type | Amount Interest Rate Start date | Deadline | Qualification | Fair value at 30/06/2020 |
||
|---|---|---|---|---|---|---|---|
| ING | IRS | 15 000 000 | 2.34% | 14/11/2021 | 14/05/2024 | Transaction | -1 078 463 |
| ING | IRS | 20 000 000 | 1.90% | 14/12/2021 | 14/12/2025 | Transaction | -1 901 821 |
| Future IRS type of coverage | 35 000 000 | -2 980 283 |
IFRS 13 mentions an element in the appreciation, being the obligation to take into account the own credit risk and that of the counterparty in the calculations. The correction on the fair value following the application of the credit risk on the counterparty is being called Credit Valuation Adjustment (CVA). Quantifying the company's own credit risk is being called DVA – debt valuation adjustment. In this context, CVA and DVA have been included into the calculations at the amount of 0.11 million.
IFRS 13 applies to IFRS standards that require or permit fair value measurements or the communication of fair value information, and thus IFRS 9. IFRS 13 provides a hierarchy of fair values under 3 levels of data input (levels 1, 2 and 3).
Regarding the financial instruments, all these fair values are level 2. As Home Invest Belgium has no levels other than level 2, the company has not implemented a follow-up policy for transfers between hierarchical levels.
The valuation is determined by the banks on the basis of the current value of the estimated future cash flows. Although most of the derivative instruments used are considered to be trading instruments within the meaning of IFRS, they are only intended to hedge interest rate risk and not for speculative purposes.
Up till 30 June 2020, the following companies formed part of the consolidation scope of Home Invest Belgium:
| Name | Company number |
Country of origin | Shareholding (direct or indirect) |
|---|---|---|---|
| Home Invest Belgium NV | 0420 767 885 | Belgium | - |
| Charlent 53 Freehold BVBA | 0536 280 237 | Belgium | 100% |
| De Haan Vakantiehuizen NV | 0707 946 778 | Belgium | 50% |
| BE Real Estate NV | 0474 055 727 | Belgium | 100% |
| DG Development NV | 0676 704 266 | Belgium | 100% |
| Clarestates BV | 0887 101 820 | Belgium | 100% |
All businesses forming part of the consolidation scope are domiciled in Belgium: Woluwedal 46/11 in 1200 Brussels. The company "Clarestates BV" has been purchased on 18 May 2020. On 30 June 2020, there were no minority interests recorded.
We refer to 4.5 "Update COVID-19" of this half year report for all events after the balance date.
No other important events occurred after the end of the half year which had an impact on the consolidated figures
We have reviewed the accompanying interim condensed consolidated balance sheet of Home Invest Belgium NV/SA (the "Company"), and its subsidiaries (collectively referred to as "the Group") as at 30 June 2020 and the related interim condensed consolidated income statement, the statement of changes in shareholders' equity and the consolidated cash flow statement for the six-month period then ended, and explanatory notes, collectively, the "Interim Condensed Consolidated Financial Statements". These statements show a consolidated balance sheet total of € 644.201 thousand and a consolidated profit for the six-month period of € 1.261 thousand. The board of directors is responsible for the preparation and presentation of these Interim Condensed Consolidated Financial Statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting ("IAS 34") as adopted by the European Union. Our responsibility is to express a conclusion on these Interim Condensed Consolidated Financial Statements based on our review.
We conducted our review in accordance with the International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying Interim Condensed Consolidated Financial Statements are not prepared, in all material aspects, in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
Without qualifying our review opinion, we draw your attention to the disclosures of the Half-Year Financial Report with regards to the consequences on the result of the Group, of the measures taken relating to the Covid-19 virus. The continuous evolution around the Covid-19 virus, creates an important uncertainty. The impact of these developments on the Group is disclosed in the Half-Year Financial Report and more specifically described in the Chapter "Update Covid-19" regarding the risks and uncertainties for the Group as a consequence of the measures taken relating to the Covid-19 virus.
Brussels, 3 September 2020.
Ernst & Young Bedrijfsrevisoren BV/Ernst & Young Réviseurs d'Entreprises SRL Statutory auditor represented by
Joeri Klaykens* Partner * Acting on behalf of a BV/SRL
As per article 13, §2 of the Royal Decree of 14 November 2007, the board of directors of Home Invest Belgium declares that after taking all necessary actions and to the extent known:
a. the half-year summary figures drafted on the basis of the foundations for financial reporting in accordance with IFRS and IAS 34 "Interim financial reporting" as approved by the European Union give an accurate representation of the assets, the financial situation and the results of Home Invest Belgium and the companies included in the consolidation;
b. the half-year report gives an accurate account of the primary events of the first six months of the current accounting year, of their influence of the summary figures, of the main risk factors and uncertainties in relation to the remaining months of the financial year as well as the primary transactions between the associated parties and any effect on the summary figures should these transactions be of significant importance, and were not carried out under normal market conditions;
c. the details in the interim annual statement are true to the actual situation and that no details have been omitted that may alter the scope of the half yearly statement.
The consolidated half-year results were approved by the board of directors on 2 September 2020.
Home Invest Belgium has used Alternative Performance Measures (APM) within the meaning of the Guidelinesissued by the European Securities and Markets Authority (ESMA) on 5 October 2015 in its financial communication for many years. A number of these APMs are recommended by the European Public Real Estate Association, EPRA, while others were established by the sector or by Home Invest Belgium to provide the reader with a better understanding of the company's results and performances.
Performance indicators that are defined by the IFRS or by law, and indicators that are not based on items in the income statement or the balance sheet, are not considered to be APMs.
All information related to the APMs is included in this report and has been approved by the auditor.
This is the percentage of financial debt with a fixed interest rate compared to the total financial debt. The numerator corresponds to the sum of fixed-rate borrowing plus floating-rate debts after conversion into fixed-rate debts via IRS contracts in effect at the end of the financial year. The denominator corresponds to the total amount of financial debt drawn on the closing date.
A significant portion of the company's financial debts are concluded at floating rates. This APM is used to measure the risk associated with interest rate fluctuations and its potential impact on the results.
| 30/06/2020 | 31/12/2019 | |
|---|---|---|
| Fixed-rate financial debt | 49 000 000 | 40 000 000 |
| Floating-rate financial debts converted into fixed-rate debt via IRS | 203 000 000 | 188 000 000 |
| Total fixed-rate debt | 252 000 000 | 228 000 000 |
| Total floating-rate debt | 65 000 000 | 31 000 000 |
| Total debt | 317 000 000 | 259 000 000 |
| Hedging ratio | 79.50% | 88.03% |
The interest costs (including the credit margin and the cost of the hedging instruments) divided by the weighted average financial debt over the period in question. The numerator corresponds to the sum of the net interest costs included in item XXI of the income statement, after addition of the capitalized interest. The denominator corresponds to the average amount of financial debt calculated over the period.
The company is partly financed by debt. This APM is used to measure the average cost of the interests paid.
| 1H 2020 | 1H 2019 | |
|---|---|---|
| Net interest charges (heading XXI) | 2 028 632 | 2 500 349 |
| Capitalized interests | 352 607 | 282 144 |
| Total cost of financial debt | 2 381 239 | 2 782 494 |
| Weighted average amount of debt | 157 991 781 | 129 624 309 |
| Average cost of debt | 1.51% | 2.14% |
The Net Asset Value or NAV in accordance with the Best Practices and Recommendations of EPRA. It is the Net Asset Value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model.
This APM is used to calculate the Net Asset Value per share in the interest of a long-term investment property business model.
| 30/06/2020 | 30/06/2019 | |
|---|---|---|
| Net asset value (IFRS) | 306 522 507 | 297 809 565 |
| Number of shares at the end of the period (excl. own shares) | 3 288 146 | 3 288 146 |
| IFRS NAV per share | 93,22 | 90,57 |
| 30/06/2020 | 30/06/2019 | |
| Net asset value (IFRS) | 306 522 507 | 297 809 656 |
| Fair value of financial instruments | 7 972 943 | 15 788 582 |
| Deferred taxes | 1 884 480 | 1 190 899 |
| EPRA NAV | 316 379 929 | 314 789 046 |
| Number of shares at the end of the period (excl. own shares) | 3 288 146 | 3 288 146 |
| EPRA NAV per share | 96,22 | 95,73 |
The EPRA earnings is the net result (share group) excluding the (i) portfolio result, (ii) the changes in the fair value of financial assets and liabilities, and (iii) the non-EPRA elements of the share in the results of associates and joint ventures. The term is used in accordance with the Best Practices Recommendations of EPRA.
This APM measures the underlying operational result of the company, without regard to the result of the change in the value of the assets or liabilities on the portfolio, gains or losses on the sale of investment properties and the other result of the portfolio.
| 1H 2020 | 1H 2019 | |
|---|---|---|
| NET RESULT (GROUP SHAREHOLDERS) (IFRS) | 1 261 300 | 32 094 433 |
| - Excluding: results of sale of investment properties (ii) | 727 211 | -22 813 |
| - Excluding: changes in the fair value of properties (i) | 1 483 964 | -33 968 853 |
| - Excluding: other portfolio result (viii) | 192 308 | 6 409 |
| - Excluding: variations in the fair value of financial assets and liabilities (vi) - Excluding: non-EPRA elements in the share of the result of associates and |
3 615 159 | 6 121 523 |
| joint ventures (ix) | 406 282 | 379 168 |
| EPRA EARNINGS | 6 231 803 | 4 609 867 |
| Average number of shares | 3 288 146 | 3 288 146 |
| EPRA EARNINGS PER SHARE | 1,90 | 1,40 |
This alternative performance indicator measures the company's operational profitability as a percentage of rental income and is calculated by dividing the "operating result before the result on the portfolio" by "the net rental income".
This APM is used to assess the operating performance of the company.
| 1H 2020 | 1H 2019 | |
|---|---|---|
| Operating result before portfolio result | 7 661 012 | 6 609 313 |
| Net rental income | 13 132 062 | 12 382 638 |
| Operating margin | 58.3% | 53.4% |
Interim statement: results up till 30 September 2020 Friday 13 November
| 2021 | |
|---|---|
| Annual press release on the financial year 2020 | Wednesday 24 February |
| Publication of the annual financial report on the website | Friday 2 April |
| Ordinary General Meeting of the financial year 2020 | Tuesday 4 May |
| Payment of the dividend of the financial year 2020 – Ex date | Monday 10 May |
| Payment of the dividend of the financial year 2020 – Record date | Tuesday 11 May |
| Payment of the dividend of the financial year 2020 – Payment date | Wednesday 12 May |
| Interim statement: results up till 31 March 2021 | Wednesday 19 May |
| Half-year financial report: results up till 30 June 2021 | Thursday 9 September |
| Interim statement: results up till 30 September 2021 | Thursday 18 November |
Sven Janssens Chief Executive Officer Preben Bruggeman Chief Financial Officer
Tel: +32.2.740.14.51 E-mail: [email protected] www.homeinvestbelgium.be
Home Invest Belgium Boulevard de la Woluwe 46, Box 11 B – 1200 Brussels
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