Annual Report • Apr 3, 2020
Annual Report
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Home Invest Belgium is a listed, regulated Belgian real estate company specialised in residential property. Its portfolio includes traditional apartments, serviced apartments with common spaces, studios for students and tourist accommodations.
With a portfolio in Belgium and The Netherlands valued in excess of € 630 million, Home Invest Belgium provides its tenants with young, sustainable and quality properties along with the benefits of a professional management. One of the major competitive advantages of Home Invest Belgium is that it develops its own projects, thereby ensuring the growth of its real estate portfolio.
The company aims to offer its shareholders a return at least equal to that which they would obtain by investing directly in residential property, without all the problems of management that this involves.
Home Invest Belgium is listed on the Euronext Brussels regulated market (HOMI) and benefits from the Belgian tax status of a public regulated real estate company (RREC). Its activities are monitored by the Financial Services and Markets Authority (FSMA).
| Profile3 | |
|---|---|
| Risk factors4 | |
| Overview16 | |
| Management report22 | |
| Real estate report 36 | |
| Home Invest on the stock market54 | |
| Corporate governance statement60 | |
| Financial statements 76 | |
| Permanent document 120 | |
| Glossary131 | |
| Shareholder's calendar135 |
As a real estate investor, Home Invest Belgium operates in a constantly changing environment, which results in several potential risks. The occurrence of these risks could have an adverse effect on the company, its business, outlook, financial situation or results.
Home Invest Belgium regularly assesses the company's exposure to the below-mentioned risks within the context of its general management, its investment and divestment decisions, its funding sources and the actions that need to be taken to prevent these risks occurring and/or at least to limit their impact should they occur.
The list is based on information known whilst this report was drawn up. Consequently, there may be other unknown or unlikely risks or risks which are not included. Risks which are not assumed to have the potential to adversely impact the company have not been included as well. This list may not under any circumstances be considered as exhaustive.
| Market risks 6 |
|---|
| Risks related to the property portfolio 6 |
| Risks related to tenants and leases 8 |
| Risks related to regulations and the political situation 10 |
| Financial risks 12 |
| Risks related to the internal organisation 14 |
Risk of decline in income: A variation in the inflation may lead to a variation of the interest rates. In case of an increase of the inflation and increase of the interest rates, there is a risk that the financial costs increase faster than the increase in the rents. This could have an impact in the net results of the company.
Home Invest Belgium has taken the following measures to mitigate this type of risk:
In the event of a sudden default or departure of a major tenant, the turnover and the net result of the company could fall significantly.
Given the particularities of residential property and the type of buildings in which Home Invest Belgium has invested, the concentration risk is spread over a large number of tenants.
The portfolio comprises two tenants for which the annual rent exceeds € 1,0 million as at 31 December 2019. The most important tenants are Center Parcs Netherlands with an annual contractual Rent of € 2,9 million (10,8 % of the total contractual Rent) for a major property complex (Port Zélande) in The Netherlands, followed by Be-Apart with a total rent of € 1,7 million (6,3 % of the total contractual Rent) spread over four properties in Belgium. (We refer to the Real Estate Report for more details).
This concentration risk is also mitigated by the geographic diversification of the property portfolio.
An error in the choice of investments or developments for own account could result in a mismatch with market demand, potentially with the following negative effects: (i) an increase in rental vacancies, (ii) a fall in rental income and the sale price of the property and consequently (iii) a decline in company revenue.
This risk is mitigated by the following factors:
• each acquisition is subject to a strategic analysis, accompanied by a technical, legal, tax and accounting due diligence (audit);
A significant number of properties in the Home Invest Belgium portfolio were acquired through mergers, de-mergers or acquisition of shares acquired in real estate companies. It is possible that hidden liabilities have been transferred to the company further to these transactions which cannot be recovered from the transferor.
Home Invest Belgium has taken the usual precautions in the context of this type of transaction:
The obsolescence of the property portfolio can result in: (i) reduced commercial attractiveness on the rental and/or acquisition market, (ii) a negative impact on occupancy rates, (iii) an increase in the maintenance and renovation costs of the property portfolio, (iv) a fall in the fair value of the properties and consequently (v) a negative impact on the net result, net assets and debt ratio of the company.
Home Invest Belgium mitigates this risk through:
The company is exposed to changes in the fair value of its portfolio, as they appear in the independent quarterly valuations. A negative change in the fair value of the buildings will have an adverse effect on the company's net result, net assets and debt ratio.
This risk is mitigated by the following factors:
There is a risk that buildings may be destroyed completely or partially, by fire, natural disaster, accident, terrorist attack, etc. In this case, there is a risk of a loss of rental income and hence a fall in the net results of the company, together with a fall in the net assets of the company and a rise in its debt ratio.
The risk that properties owned entirely by the RREC are destroyed by fire, explosion or other disasters is covered by appropriate insurance policies. These insure the reconstruction value (excluding land) and the vacancy while the building is being reconstructed. The policies are concluded by the company or, for properties that are owned in co-ownership, by the various co-ownership associations.
As part of its property development activities, Home Invest Belgium is required to obtain a number of administrative permits (urban, environmental and other permits) before undertaking any development, renovation or conversion works. The processing of the permit applications by the competent administrative services can take a certain amount of time, which cannot always be controlled.
Moreover, once issued these administrative permits may sometimes be subject to appeals or objections by third parties. This can lead to delays and additional costs or even the abandoning of projects for which study costs have been incurred, which can have an adverse effect on the business and the results of Home Invest Belgium.
This risk is limited by (i) the integration into the feasibility studies of prudent time frames for obtaining permits, (ii) daily monitoring of these permit application files by the teams, and (iii) calling upon external advisers specialised in this field.
Poor management of a renovation or development project may have the following consequences: (i) an increase in the company's operating costs, (ii) a fall in the profitability of the project and (iii) a delay in the reception of the work or project and consequently a similar delay in the collection of rent for these buildings (which has a negative impact on the company's result).
The technical management of the buildings and the coordination of the renovation and development works are undertaken by specialised internal teams who monitor the quality of the various sites.
The risk of poor management is also mitigated by the following elements:
A default by or the bankruptcy of a contractor or a supplier with which the company has concluded an agreement can have an impact on the performance schedule and, in certain cases, on the budget for these works.
Home Invest Belgium mitigates this risk by (i) a rigorous selection of specialised contractors, (ii) using a variety of contractors for a site as far as possible and (iii) requesting financial guarantees.
Hundreds of new apartments are placed on the market every year. Most of these are sold to private investors who then offer them for rent. This creates a potential risk of surplus supply.
Home Invest Belgium keeps a constant eye on the balance between supply and demand on the local rental markets of its investments. This parameter is also taken into account in its investment and divestment decisions.
The entire turnover of Home Invest Belgium consists of rents generated by leasing properties to third parties (individuals, public authorities, retailers, companies, embassies and foreign delegations, retirement home operators and holiday center operators).
Delays or defaults in the payment of rent may (i) have a negative impact on results, (ii) give rise to an unexpected vacancy and (iii) lead to unforeseen costs related to the conclusion of leases on less favourable terms or even the granting of rent-free periods.
Home Invest Belgium endeavours to limit this risk by taking the following measures:
If there is any doubt about the quality of a receivable, this is provisionally treated as a loss and is recorded as such in the results.
Home Invest Belgium is exposed to the risk of loss of rent caused by the departure of tenants. This can adversely affect the results and lead to a fall in the fair value of the property, particularly in context of weak economic conditions, for the following reasons:
the search for new tenants can take some time; during this period, the charges related to unrented property are borne by the owner;
the new tenants could negotiate a lower rent or a rent-free period;
Given the very large number of tenants and bearing in mind the demographic outlook in Belgium, and the fact that housing is an essential need, the risk that vacancies may increase substantially can be considered to be low.
The company adopts a proactive commercial policy to maintain a high occupancy rate. It is able to draw on its experience to gear its offer to the market demand.
The normal duration of a lease depends mainly on the type of property rented and is usually as follows:
The lease agreements entered into by Home Invest Belgium with private individuals are on average shorter than leases for business properties. This more limited duration can consequently lead to a higher turnover than that recorded for business properties and thus higher management costs over the life of the property.
The RREC deals with this risk by (i) taking it into account in the preliminary profitability analyses and (ii) increasing the loyalty of individual tenants by providing highly qualified managers and property managers and calling upon external building management bodies or agents.
2 The breakdown of the buildings by type can be found on page 38 of the Real Estate Report.
1 This term is explained in the glossary.
The company is subject to an ever-larger number of increasingly complex laws and rules as well as to possible developments in their interpretation or application by the authorities or the courts. This is true, among other things, for the following areas: accounting, tax, environment, urban planning and government contracts.
The development of and non-compliance with the regulations exposes the company to the risk that it may be held liable or incur civil, criminal or administrative penalties, as well as the risk that permits are not granted or renewed. Such penalties could have a negative impact on the activity, the result, the profitability, the financial situation and/or the prospects of the company.
Home Invest Belgium has the necessary skills in house to ensure meticulous compliance with the regulations in force and anticipate developments in this legislation (regulatory monitoring). The advice of external consultants is also sought on a regular basis.
Since 2 September 2014, the company has been approved by the Financial Services and Markets Authority (FSMA) as a 'public regulated real estate company under Belgian law', abbreviated to 'public RREC' or 'public RREC under Belgian law'. To maintain this status, the company is subject to the provisions of the act of 12 May 2014 and the royal decree of 13 July 2014 on regulated real estate companies (the 'RREC legislation'), as amended from time to time. These contain restrictions on (among other things) its activities, the debt ratio, the appropriation of the earnings, conflicts of interest and corporate governance. Ensuring that these specific requirements are permanently met depends among other things on the ability of the company to successfully manage its assets, indebtedness and compliance with internal audit procedures. It could be that the company may not be able to meet these requirements in the event of a significant change of circumstances, financial or otherwise.
As a public RREC, Home Invest Belgium is exposed to the risk of changes in RREC legislation, the consequences of which are difficult to estimate. There is also a risk that the supervisory authority (the FSMA) may impose penalties in the event of an infringement of the applicable rules, including the loss of accreditation as a public RREC (see also point 4.2 below). Loss of accreditation as a public RREC is generally considered in the company's credit agreements to be an event that renders the loans entered into by the company payable in advance. The loss of this status would also have a negative impact on the business, results, profitability, financial position and prospects of the company. In this case, the company would also lose the advantage of the special tax system applicable to public RRECs (see point 4.3.).
The skills of the team members and compliance with strict internal control procedures enable Home Invest Belgium to successfully manage its assets and thus meet these specific requirements.
Moreover, on 8 April 2009 the company set up an Audit Committee, notwithstanding the exemption granted under article 7:99 CCA.
The company cannot overcome the risk of future changes in the legislation on RREC itself. It limits this risk by closely following the planned legislative changes locally (Belgium and the Netherlands) and by being an active member of various professional associations. An example of such is the membership of the nonprofit organisation BE-REIT Association, one of whose objectives is to defend the interests of the RREC sector.
As a residential public RREC, Home Invest Belgium's profits generated in Belgium are subject to corporate income tax but only on a reduced basis, consisting of the non-admitted expenses, abnormal or gratuitous benefits received and unjustified remunerations and commissions. Company profits generated abroad are taxable in the country where they are made according to the law applicable there and are exempt from tax in Belgium. The net profits generated by Home Invest Belgium from its property investments in the Netherlands are therefore subject to corporation tax and exempt from tax in Belgium.
As a residentialpublic RREC, Home Invest Belgium is thus subject to a particular tax system, some aspects of which present specific risks.
In the context of risk mitigation, Home Invest Belgium also takes the exit tax into account, which is due at the moment of merger by absorption of another real estate company on the latent capital gains and the tax free reserves. The exit tax is calculated in accordance with the provisions of Circular Ci.RH.423/567.729 of 23 December 2004, the interpretation or practical application of which may alter as a result of e.g. changed case-law. The 'actual value' of a property, as referred to in this circular, is calculated after deduction of registration duties or VAT. This 'actual value' differs from (and may therefore be less than) the fair value of the property as stated in the company's IFRS financial statements.
The tax rate for mergers which have taken place in 2018 is set at 12.5 %. This rate is elevated to 15 % in 2020 and onwards.
Moreover, the legislation concerning the crisis contribution have been modified as well, so that its rate is lowered from 3 % to 2 % at the beginning of tax year 2019. This contribution, however, will be abolished starting from tax year 2021 (revenue year starting on 1 January 2020 at the earliest).
The risks related to regulations include the effects of measures taken or planned by the legislator, in particular as regards taxation.
The dividends distributed since 1 January 2017 are subject to a withholding tax of 30 %.
Home Invest Belgium carefully monitors the development of the various laws on this subject and is gradually adapting to changes in the regulations.
A change in the urban planning and environmental regulations might (i) increase the costs incurred to maintain the buildings in operating condition, (ii) have an impact on the fair value of properties and therefore (iii) negatively impact on the profitability of the company.
Home Invest Belgium carefully monitors the development of the various laws on this subject and is adapting to changes in the regulations.
A change in international accounting rules (IFRS) can affect reporting, capital requirements and the use of financial products.
Home Invest Belgium manages this risk through (i) constant monitoring of developments in this area and assessment of their possible consequences and (ii) frequent discussions and contacts with the statutory auditor on this subject.
In the event of deflation or a full or partial freeze on rents imposed by the government, growth in rental income could be curbed.
The current legislation on residential leases does not provide for the possibility of establishing a rent floor in the event of a deflation.
Under the law, Home Invest Belgium's debt ratio1 may not exceed 65 %. The company risks losing its RREC2 status if it were to exceed this 65 % ratio.
The terms of the bond issue of 18 June 2014 include a maximum consolidated debt ratio of 65 %. If Home Invest Belgium violates this undertaking, each bondholder may, by sending written notification to the company, demand repayment of the nominal value of the bonds plus accrued interest (if any) on the date of payment, it being understood that this debt is immediately claimable and payable without any other formalities, unless the default has been remedied before receipt of the notification by Home Invest Belgium.
The contractual provisions of some of the company's credit facilities provide for an automatic increase in the margin of these facilities if the debt ratio crosses certain thresholds.
Home Invest Belgium has concluded credit agreements with banks which provide for a debt ratio of 60 % in some cases.
Home Invest Belgium's debt ratio (within the meaning of the Royal Decree of 13 July 2014) is stated in section 3.3 of the management report. On December 31, 2019, it amounts to 51.41 %. This section also states the additional theoretical debt capacity of Home Invest Belgium, taking into account the maximum permitted debt ratio for RRECs (65 % of the total assets) or the bank covenants (60 % of total assets). The debt ratio is monitored every quarter and its evolution is estimated during the approval procedure of each major investment project. If the consolidated debt ratio exceeds 50 %, a financial plan with an implementation schedule must be drawn up describing the measures that will be taken to prevent that ratio from going to exceed 65 % (Article 24 of the Royal Decree) decision of 13 July 2014). Home Invest Belgium submitted the financial plan to the FSMA in March 2020, after the consolidated debt ratio had exceeded the 50 % threshold. The statutory auditor has prepared a special report on the financial plan, confirming that he has verified the preparation of the plan (in particular with regard to its economic basis) and that the figures from that plan correspond to those of Home Invest Belgium's accounting.
The liquidity risk implies that, at some point, Home Invest Belgium may no longer have the necessary liquid resources and no longer obtain the necessary financing to meet its current liabilities.
There is a risk that the credit lines may not be renewed. Moreover, credit margins may be increased when the credit lines are extended upon maturity.
In addition, there is a risk of the cancellation of bilateral credit lines when financing contracts are cancelled, terminated or reviewed due to the failure to fulfil obligations ('covenants') entered into under the terms of these financing agreements.
If Home Invest Belgium does not fulfil its obligations and, more generally, fails to comply with the terms of current financing contracts, it consequently runs the risk of mandatory early repayment of these loans.
As part of the diversification of its funding sources, on 18 June 2014 Home Invest Belgium issued a bond loan with a nominal value of € 39.8 million. This has an initial duration of ten years and matures on 18 June 2024.
As part of the diversification of its funding sources, on 12 December 2019 Home Invest Belgium issued treasury notes (billets de trésorie/thesauriebewijzen) for a nominal value of € 20.0 million, with maturity dates in 2020.
It is possible that Home Invest Belgium may not be able to redeem the bonds or the treasury notes (billets de trésorie/thesauriebewijzen) at maturity. The contractual documentation for the bond issue and trhe issue of treasury notes (billets de trésorie/thesauriebewijzen) further stipulates that, in the event of a change of control of the company, bondholders or holders of treasury notes (billets de trésorie/thesauriebewijzen) can require advance repayment of the bonds issued by Home Invest Belgium.
As at 31 December 2019, Home Invest Belgium had a total of € 313.00 million in financial debts, consisting of:
1 This term is explained in the glossary.
2 Article 23 of the Royal Decree of 13 July 2014 on regulated real estate companies.
• treasury notes (billets de trésorie/thesauriebewijzen) paper for an amount of € 20.00 million. Notwithstanding the short-term nature of the outstanding commercial paper (with maturity date in 2020), the outstanding amount is fully covered by available long-term credit lines (back-up lines) with a maturity extending beyond the maturity of the treasury notes (billets de trésorie/thesauriebewijzen).
For more information on the Home Invest Belgium financing structure, please refer to the Financial Statements chapter of this report.
Bearing in mind the legal status of the RREC and given the nature of the properties in which Home Invest Belgium invests, the risk that the credit lines will not be renewed is limited.
Based on the current conditions and outlook, as far as Home Invest Belgium is aware, there are no elements that indicate that one or more of the commitments it has entered into may no longer be respected. This risk is considered to be theoretical as the company strives scrupulously to honour its obligations.
Furthermore, the liquidity risk of the RREC is limited by:
The Home Invest Belgium property portfolio consists solely of real estate located in Belgium and the Netherlands and all its lease agreements and credit lines are denominated in euros. Consequently, the company is not exposed to any currency risk.
The conclusion of a credit or hedging instrument with a financial institution creates a counterparty risk should this institution default. This risk could lead to a lack of liquidity at this financial institution or even the loss of liquid assets deposited there.
Although this risk can be considered to be slight, the possibility that one or more of Home Invest Belgium's banking counterparties may default cannot be entirely ruled out. To limit this counterparty risk, Home Invest Belgium uses different leading banks in the market
not only to spread the sources of its financing and interest rate hedging instruments up to a certain level, but also to keep a close eye on the value for money of the services provided. It should also be noted that the liquid assets available to the RREC are primarily used to reduce its debts and that Home Invest Belgium therefore never has large sums deposited on account.
Short- and long-term interest rates on (international) financial markets can fluctuate sharply. Except for the bond issue, all Home Invest Belgium's financial debt is currently at floating rates (bilateral credit lines at the EURIBOR rate). This allows Home Invest Belgium to take advantage of any favourable developments in interest rates, but implies the potential risk of increased financial costs should interest rates rise.
To cover the risk of rising interest rates, Home Invest Belgium's policy is to use interest rate hedging instruments for a portion of its debt. This prudent policy can be explained as follows: a possible rise in nominal interest rates without a corresponding increase in inflation would have the effect of driving up real interest rates. In that case, the increase in real interest rates would not be offset by the indexation of rental income. Moreover, there is always a delay between the rise in nominal interest rates and the indexation of rental income.
Any change in the interest curve affects the fair value of hedging instruments. Home Invest Belgium records negative changes in the fair value of interest rate hedging instruments if the current rates are lower than those used to calculate the IRS contracts.
These variations may lead to an increase in the financial charges and consequently impact the result, but they do not affect the cash position or the EPRA earnings.
Note 25 to the Financial Statements provides an overview of the fair value of the hedging instruments. A rise or fall in interest rates would theoretically increase or decrease the market value of the financial hedging instruments.
At the end of the 2019 financial year, the fall in interest rates observed in the past few years had had a negative impact of € 4,36 million (value that had to be paid to cancel the hedging on 31 December 2019) (cf. Note 25 to the Financial Statements).
It is difficult for shareholders to modify their position in Home Invest Belgium quickly upwards or downwards.
For the 2019 financial year, the total volume of Home Invest Belgium shares traded on the stock market amounted to 313,180, compared with 306,477 shares for the 2018 financial year.
This risk is mitigated by the following elements:
Pursuant to article 7:212 CCA and the Royal Decree of 13 July 2014, the distribution of dividends may be limited. No distribution may be made when, at the balance sheet date of the previous financial year, the net assets as shown in the annual accounts are less or, as a result of such distribution, would become less than the amount of the paid-up capital or, if this amount is higher, the capital called up, plus any reserves not available for distribution in accordance with the law or the articles of association.
This risk is mitigated by the following elements:
For further information on the calculation in the context of article 7:212 CCA and the Royal Decree of 13 July 2014 and the remaining margin, please refer to the Notes to the Financial Statements.
Failures in reporting could compromise the relevance of the information made available to the executive managers.
The company therefore applies an adequate internal and external reporting process with cascaded reviews at various levels, both internal (members of staff, management team, audit committee and Board of Directors) and external (statutory auditor).
IT is a key tool for a company like Home Invest Belgium. The loss or non-availability of data could result in (i) a disruption in commercial activity (as the company is active primarily in the apartment building sector where tenant turnover is the highest), (ii) an interruption in investment activity and/or (iii) a disruption of the internal and external reporting process.
The management of the IT systems (hardware and software), access security and data continuity have been entrusted to an external service provider based on a service agreement.
A new IT tool has been introduced in 2018 in order to further centralise data and computerise the reporting process. Moreover, several procedures and mechanisms have been put in place in order to follow up its implementation to keep information technology risks low.
The company is exposed to organisational risk to some extent in the event of the departure of certain members of the management team and key personnel. The unforeseen departure of certain staff members could have adverse consequences for the development of the company and result in additional management costs.
This risk is mitigated by the permanent monitoring of the internal organisation by the management and the Board of Directors. If Home Invest Belgium is confronted with a departure, it can outsource the function of the departing staff member and/or set in motion an emergency procedure to recruit a new staff member.
The risk exists that the outbreak of COVID-19 and the measures taken to limit the spread of the virus will have a material impact on the rental activities, the development activities and the operational functioning of the company, as well as on the market value of its real estate portfolio.
Home Invest Belgium's priority is to guarantee the employees' security. The company has taken the appropriate measures to allow the employees to work from home. IT services of the company perfectly allow the different departments of the company to work from remote locations in order to guarantee an operational continuity of the company. The company monitors the situation closely and will take appropriate actions if needed in order to limit the impact of the company.
On the date of the financial year report, COVID-19 and the measures taken to limit the spread of the virus, have a limited impact on the rental activities of the residential units within the portfolio and rent payments. At December 31st 2019, the segment of residential units represented 78.3% of the fair value of the investment properties available for lease.
The outbreak of COVID-19 and the measures taken to limit the spread of the virus will probably have an important negative impact on the profitability of tenants active in the retail, holiday parks and aparthotel segments. Several retails and two holiday parks of Home Invest Belgium are currently closed to the public. For tenants active in these segments, Home Invest Belgium has already concluded long-term lease agreements based on triple-net and index-linked rents which are independent from the tenant's profitability. A prolonged decline of the tenant's incomes in these segments will however have an impact on their ability to pay and the means allowing them to meet their lease obligations. Home Invest Belgium has already received several requests for a postponement of payments. When this is the case, the company enters into a dialogue with the tenant on a case-by-case basis in order to find an appropriate solution.
On the date of the financial year report, the building sites of the development projects have been shut down. This leads to delays in the delivery of projects and delays in the contribution of the projets to the rental incomes of the company.
The company is monitoring the situation very closely and undertakes, wherever they can, the necessary measures in order to limit the impact on the company. Without any perspective as to how the epidemic will evolve and the accompanying measures taken by the government, it is not possible to estimate the impact on the company's result. Nevertheless, the Board of Directors thinks that the impact on the company will be temporary and confirms its trust in the long-term perspectives of the company.
2019 was another good year for Home Invest Belgium. The net rental result rose by 4.7 % compared with the previous year and the fair value of the portfolio passed the level of € 630 million.
Increase of the net rental result
EPRA earnings
| Letter to shareholders 18 | |
|---|---|
| Key figures 19 | |
| Our path 20 |
The year 2019 was marked by an important growth for Home Invest Belgium. The fair value of the property portfolio grew with € 86 million to stand at € 630 million.
Home Invest Belgium's focus stays within the residential rental market. Residential real estate is by far the most important sector within the real estate market. The comprehensive approach, from investment to development, and from construction to letting, allows Home Invest Belgium to create shareholder value year after year. Moreover, this approach guarantees quality of the portfolio: half of the buildings is less than 10 years old, an excellent indicator in terms of sustainability.
The stability of the residential market does not mean that there is no opportunity for innovation. Both with respect to technology, which is at the service of the inhabitants, as with respect to new ways of living such as co-living and services apartments, new initiatives and products arise which are eagerly adopted by the letting community. Home Invest Belgium follows these tendencies carefully, and plays a pioneering role in it.
The majority of its portfolio, about 65 %, is located in the Brussels Capital Region. Not only does Brussels represent the biggest letting market of the country, the capital also actively takes part in driving megatrends such as urbanisation and demography combined with a scarce offer of quality rental properties. Besides that, Home Invest Belgium invests and develops in regions with urban areas offering sufficient property rental markets. After a long absence, Home Invest Belgium is thus present in Antwerp again, second biggest rental market in Belgium, in a district with an interesting dynamic.
In 2019, our biggest realisations were:
As at 31 December 2019, Home Invest Belgium's trading price stood at € 114.00 (compared to € 91.40 one year earlier). The liquidity of the share has increased to a daily average volume of 1,223 shares in 2019 (as opposed to 1,202 shares in 2018).
In December an interim dividend of € 3.75 gross has been paid. During the ordinary General Meeting in May, a remaining dividend of € 1.10 gross per share will be proposed, which would result in a total dividend for the financial year 2019 of € 4.85 gross per share. In doing so, Home Invest Belgium would realise a dividend increase for the 20th consecutive year!
Meanwhile the year 2020 started in a rather strange way with the outbreak of Covid-19 in China. The epidemic has now reached our country and the measures imposed by the government to slow down the spread of the virus, will have an impact on our economy. To which proportion this will be, is hard to predict at the moment of writing this letter. Companies have asked their employees to work from home as much as they can, and it is very likely that they will continue to do so after the outbreak of the virus. Our homes will also include an office function. A cozy home environment and a good Internet connection are becoming crucial nowadays. This will possibly lead to a faster evolution of new ways of living, with a flexible interpretation, collective working and relaxing areas, supported by state-of-the-art technology. Home Invest Belgium stood at the origin of these new housing forms, and is ready for the future.
We wish you to enjoy reading the report and the events occurred in 2019.
CEO and President of the Managing Director Board of Directors
Sven Janssens Liévin Van Overstraeten
Fair value of the investment properties
EPRA NAV
2001 Acquisition of the Résidence Clos Saint-Géry in Ghlin
Acquisition of the Giotto building in Brussels
Acquisition of Erainn and Voisin buildings in Brussels
Acquisition of Haverwerf in Mechelen, Les Érables in Brussels and City Gardens in Leuven
2011 Completion of the renovation of the City Gardens real estate complex in Leuven
Contribution of the Odon Warland building in Brussels
| Strategy������������������������������������������������������������������������������� 24 | |
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| Significant events during the year 2019������������� 24 | |
| Summary o f the consolidated annual accounts at 31/12/2019������������������������������������������������ 29 |
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| Other elements in the management report �����34 | |
| Social responsibility ������������������������������������������������������ 35 | |
| Corporate governance statement������������������������� 35 |
Home Invest Belgium is a Belgian listed regulated real estate company that specializes in residential property. Its portfolio includes traditional apartments and houses, service apartments and shared spaces, student studios, second homes and tourist accommodations.
As the owner of a property portfolio of € 630 million, spread over Belgium and The Netherlands, Home Invest Belgium offers young, sustainable and high-quality properties to its tenants, whom can rely on professional management. An important advantage compared to the competition is that Home Invest Belgium develops its own projects in order to ensure the growth of its property portfolio.
Home Invest Belgium aims to be and to remain innovative in the residential property segment and takes care to offer its shareholders a sustainable real estate investment with recurrent income. The
company's strategy consists mainly of investing in property in the long term.
The company endeavors to offer its shareholders a return that is at least equal to the return on a direct investment in residential property, without the cares of management.
Its main goal in the long term is to build, manage and expand a sustainable residential property portfolio. Compared to 2018, the fair value of the real estate investments stood at € 630 million as at 31st December 2019, or an increase of 15.9 %.
This growth policy offers numerous advantages:
On 4 November 2019, Home Invest Belgium has completed the acquisition of the company BE REAL ESTATE, owner of four apart-hotel buildings in the center of Brussels.
The real estate portfolio of BE REAL ESTATE comprises 4 buildings of the apart-hotel type, with a total of 185 residential units. The acquisition price of the company has been determined based on the
investment value of the property of € 36 million. Home Invest Belgium retains an amount of approximately € 6 million on the payment of the share price which will become payable over a period of 3 years, subject to the realization of certain conditions.
All buildings are located on strategic locations in Brussels. The first building is located at the heart of the European district, square Ambiorix n°28; the second is located in the vicinity of the Grand Place, rue des Dominicains n°25. A third building is located avenue de Tervueren n°149 on the Montgomery roundabout. The last building is on boulevard du Régent, close to the Madou place and the Cirque Royal.
All four buildings will be operated by the company BEAPART trough a long lease agreement (emphytéose) for a duration of 27 years under the brand name B-aparthotels (www.b-aparthotels.com).
The annual rents amount to € 1.85 million and are triple net rents unaffected by the performances of the operations1 .
1 The lessee is responsible for the costs, expenses and maintenance linked to the buildings (including important works like roofs) during the entire duration of the contract.
On 26 November 2019, Home Invest Belgium made its first steps into the Antwerp residential real estate market with the acquisition of a residential development project.
The project includes the construction of 37 apartments, 1 office space, 39 parking spots and 36 bike spaces. Meta Architecten created a contemporary and sustainable design which meets the latest requirements
of the rental market. All apartments are gathered around an inner courtyard and have a private outdoor space.
The project is located in the Samberstraat, in the "Dam" district, which is located in the North of the city and which is surrounded by "het Eilandje", "Park Spoor Noord" and the Slaughterhouse site. This district, which used to be known for its slaughterhouses, is flourishing. Both the new park "Park Spoor Noord" and the extension of "het Eilandje" contribute to a revival of this part of the city.
The transaction was achieved through the acquisition of the company DG Development, owner of the buildings which will be demolished, and the final building permit. The seller is ISTATE, a developer located in Antwerp.
Home Invest Belgium plans to start the construction works at the beginning of 2022. The total investment (acquisition, studies and construction works) represents more or less € 8 million. The expected initial gross yield will reach around 5 %, once the building will be fully operational. The acquisition has been financed with existing credit lines from the RREC.
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 spots and 1,443 m2 of office space. Techniques and inside finishings are ongoing. The project is expected to be delivered in the course of the second quarter of 2020. In addition, and in agreement with the municipality of Molenbeek, the adjacent square "Place d'Or" will also be totally refurbished. The building permit for the refurbishment of "Place d'Or" has been received in March 2020.
The structural works of the project Meyers-Hennau (Meyers-Hennau 5-17 in 1020 Brussels) are completed up to the ground floor. Completion of the project, comprising 37 apartments, 11 houses and 51 parking spots, is expected in the fourth quarter of 2020.
The building permit for the development of a building located rue Jourdan (rue Jourdan 95 in 1060 Saint-Gilles) is ongoing. Works to remove asbestos have also started recently.
The preparatory works for the Marcel Thiry C2 project (Marcel Thiry street n°204 in 1200 Woluwe-Saint-Lambert) have started at the end of 2019. Soil and land preparation works are starting in the course of the first quarter of 2020. The project comprises 42 apartments.
Home Invest Belgium has submitted an application for 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). The permit is expected to be delivered around the second quarter of 2020. Altogether, 57 units are to be refurbished.
Home Invest Belgium is currently renovating the Leopold building in Liège (rue Léopold 2-8 in 4000 Liège), in order to meet current residential market standards. The building comprises 29 apartments for a total surface area of 2,791 m2 and the works will be finished in the beginning of 2020, except for the retail spaces.
The renovation of the Scheldevleugel building in Oudenaarde (Remparden 12 in 9700 Oudenaarde) continued. The third and final phase (refurbishment of common areas and studios) is finished. The building includes 95 units and 75 garage boxes for a total surface area of 6,000 m2.
In 2019, Home Invest Belgium has sold investment properties for a total net amount of € 12.84 million (compared to € 7.76 million in 2018).
A net capital gain of € 0.12 million was realised on these sales, compared to the latest fair value and a capital gain of € 5.77 million compared to the acquisition
value (increased by capitalized expenditures). The realised capital gain in relation to the acquisition value (increased by the capitalized expenditures) contributes to the statutory distributable result of the company, which forms the basis for the distribution of the dividend.
On 31 January 2019, Mr. Jean-Luc Colson, Chief Financial Officer, has left the company. On 28 February 2019, the collaboration with Mr. Filip Van Wijnendaele, Chief Operation Officer, ended. Sven Janssens, started as the new Chief Executive Officer of the company on 3 December 2018. On 7 January 2019, Preben Bruggeman started as the new CFO.
During the 2nd half of 2019, the management team was completed with the arrival of Ingrid Quinet as Chief Legal Officer and Jan Opdecam as Head of Portfolio Management.
At the Annual General Meeting of 7 May 2019, Mr. Sven Janssens was permanently appointed as Chief Executive Officer until the Annual General Meeting of 2022.
At the Annual General Meeting of 7 May 2019, the following mandates as directors were renewed, each for a period of 4 years until the 2023 Annual General Meeting:
Additionally, at the General Annual Meeting of 7 May 2019, the following directors were appointed as independent directors, each for a period of 4 years until the 2023 Annual General Meeting:
At the 2019 Annual General Meeting, EY Bedrijfsrevisoren BV/SRL, permanently represented by Mr. Joeri Klaykens, were appointed as the company's auditor for a period of three years, until the 2022 Annual General Meeting.
On 24 September, the merger regarding the merger by takeover of NV/SA Meyers-Hennau was submitted to the clerk of the Dutch speaking court of Brussels. The Board of Directors has approved the merger which took place on 11 December 2019.
The outbreak of the coronavirus in early 2020 and the results of the measures taken to contain the virus, could impact our financial performance of 2020 and the measurement of certain assets and liabilities.
Based on the facts known as of today, we have currently no knowledge of financial impacts on the 2019 financial statements.
| BALANCE SHEET | 2019 | 2018 |
|---|---|---|
| Investment properties | 609 594 | 524 506 |
| Participations in associated companies and joint ventures equity method | 20 329 | 19 000 |
| Investment properties | 609 594 | 524 506 |
| Other assets | 9 246 | 7 600 |
| Participations in associated companies and joint ventures equity method | 20 329 | 19 000 |
| Total assets | 639 169 | 551 106 |
| Other assets | 9 246 | 7 600 |
| Shareholders' equity attributable to shareholders of parent company | 309 618 | 269 003 |
| Total assets | 639 169 | 551 106 |
| Shareholders' equity attributable to shareholders of parent company | 309 618 | 269 003 |
| Debt ratio (RREC Royal Decree)6 | 51.41% | 50.16% |
| Debt ratio (IFRS)7 | 50.11% | 48.90% |
| Debt ratio (RREC Royal Decree)6 | 51.41% | 50.16% |
| Debt ratio (IFRS)7 PER SHARE |
50.11% | 48.90% |
| PER SHARE | 2019 2019 |
2018 2018 |
| Number of shares at end of period8 | 3 288 146 | 3 288 146 |
| Stock price at closing date | 114.00 | 91.40 |
| Number of shares at end of period8 | 3 288 146 | 3 288 146 |
| IFRS NAV per share9 | 94.16 | 81.81 |
|---|---|---|
| Stock price at closing date | 114.00 | 91.40 |
| IFRS NAV per share9 | 94.16 | 81.81 |
| Premium compared to IFRS NAV (at closing date) | 21.1% | 11.7% |
| EPRA NAV per share10 | 96.00 | 85.06 |
| Premium compared to IFRS NAV (at closing date) | 21.1% | 11.7% |
| EPRA NAV per share10 | 96.00 | 85.06 |
| Premium compared to EPRA NAV (at closing date) | 18.7% | 7.4% |
| Premium compared to EPRA NAV (at closing date) | 18.7% | 7.4% |
6 The debt ratio (RREC Royal Decree) is the debt ratio calculated in accordance with RREC Royal Decree. This means that for the purpose of calculating the debt ratio, participations in associated companies and joint ventures are accounted for following the proportionate consolidation method.
debt ratio, participations in associated companies and joint ventures are accounted for following the proportionate consolidation method. 7 The debt ratio (IFRS) is calculated in the same manner as the debt ratio (RREC Royal Decree) but based on and conciliating with a consolidated balance sheet in accordance with IFRS where participations in joint ventures and associated companies are accounted for following the equity method.
sheet in accordance with IFRS where participations in joint ventures and associated companies are accounted for following the equity method. 8 The average number of shares is calculated excluding the 11, 712 own shares held by the company.
8 The average number of shares is calculated excluding the 11, 712 own shares held by the company. 9 IFRS NAV per share = Net Asset Value or Net Value per share according to IFRS.
9 IFRS NAV per share = Net Asset Value or Net Value per share according to IFRS. 10 EPRA NAV per share = Net Asset Value or Net Value per share following the Best Practices Recommendations of EPRA.
During 2019, the fair value of the investment properties (including development projects) rose by € 85.09 million from € 524.51 million on 31 December 2018 to € 609.59 million on 31 December 2019, or an increase of +16.2 %.
On 17 December 2018, Home Invest Belgium, via the company De Haan Vakantiehuizen NV/SA, of which it holds 50 % of shares, realised the acquisition of 51.43 % of the shares of NV/SA Sunparks De Haan. This participation is accounted for in the consolidation, in accordance with the equity method.
The book value of the participation of Home Invest Belgium in De Haan Vakantiehuizen NV/SA was € 20.33 million on 31 December 2019 (compared to € 19.00 million on 31 December 2018).
On 31 December 2019, the group's shareholder's equity stood at € 309.62 million, a rise of 15.1 % compared to 31 December 2018.
The IFRS NAV per share has risen by 15.1 % to stand at € 94.16 on 30 June 2019 (compared to € 81.81 on 31 December 2018).
The EPRA NAV per share has risen by 12.9 % to stand at € 96.00 on 30 June 2019 (compared to € 85.06 on 31 December 2018).
The debt ratio (RREC Royal Decree) amounts to 51.41 % on 31 December 2019. The debt ratio (IFRS) amounts to 50.11 %.
Considering Home Invest Belgium's strategy to keep the debt ratio in the medium and long term below 55 %, Home Invest Belgium still has a debt capacity of € 52.33 million available to fund new investments.
Taking into account a maximum permitted debt ratio of 65 %, Home Invest Belgium still has a debt capacity of € 254.62 million, as defined by the RREC Royal Decree available to fund new investments.
On 31 December 2019, Home Invest Belgium had € 313.00 million in financial debts, composed of:
The weighted average duration of the financial debts amounts to 4.4 years.
On 31 December 2019, Home Invest Belgium disposed of € 65.00 million of undrawn available credit lines of which:
On 31 December 2019, 77.6 % of financial debts (€ 243.00 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 5.6 years.
The total value of the hedges at closing date was negative for an amount of € 4.36 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.
| CONSOLIDATED KEY FIGURES | (in k €) | |
|---|---|---|
| INCOME STATEMENT | 2019 | 2018 |
| NET RENTAL INCOME | 25 122 | 23 993 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 997 | 15 456 |
| XVI. Result sale investment properties | 123 | 610 |
| XVIII. Changes in fair value of investment properties | 48 473 | 59 414 |
| XIX. Other portfolio result CONSOLIDATED KEY FIGURES |
-537 | -171 |
| PORTFOLIO RESULT | 48 059 | (in k €) 59 853 |
| OPERATING RESULT | 64 056 | 75 309 |
| INCOME STATEMENT | 2019 | 2018 |
| XX. Financial Income | 53 | 105 |
| XXI. Net Interest Charges | -4 335 | -4 672 |
| NET RENTAL INCOME | 25 122 | 23 993 |
| XXII. Other financial charges | -113 | -55 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 997 | 15 456 |
| XXIII. Changes in fair value of financial assets and liabilities | -5 412 | -1 614 |
| XVI. Result sale investment properties | 123 | 610 |
| FINANCIAL RESULT | -9 808 | -6 236 |
| XVIII. Changes in fair value of investment properties | 48 473 | 59 414 |
| XXIV. Share in the profit of associated companies and joint ventures | 1 329 | 0 |
| XIX. Other portfolio result | -537 | -171 |
| TAXES | -88 | -295 |
| PORTFOLIO RESULT | 48 059 | 59 853 |
| NET RESULT | 55 490 | 68 778 |
| OPERATING RESULT | 64 056 | 75 309 |
| Exclusion of portfolio result | -48 059 | -59 853 |
| XX. Financial Income | 53 | 105 |
| Exclusion of changes in fair value of financial assets and liabilities | +5 412 | +1 614 |
| XXI. Net Interest Charges Exclusion of non EPRA elements of the share in the result of associated XXII. Other financial charges companies and joint ventures |
-4 335 -175 -113 |
-4 672 0 -55 |
| EPRA EARNINGS3 | -5 412 | -1 614 |
| XXIII. Changes in fair value of financial assets and liabilities | 12 668 | 10 539 |
| Average number of shares4 | 3 288 146 | 3 288 146 |
| FINANCIAL RESULT | -9 808 | -6 236 |
| NET RESULT PER SHARE | 16.88 | 20.92 |
| XXIV. Share in the profit of associated companies and joint ventures | 1 329 | 0 |
| EPRA EARNINGS PER SHARE | 3.85 | 3.21 |
| TAXES | -88 | -295 |
| DISTRIBUTABLE RESULT PER SHARE5 | 5.19 | 4.28 |
| NET RESULT | 55 490 | 68 778 |
4 The average number of shares is calculated excluding the 11,712 own shares held by the company.
5 The distributable result in the sense of article 13, §1, of the RREC Royal Decree.
3 The 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 results of associated companies and joint ventures. This term is used in accordance with the Best Practices Recommendations of EPRA.
The net rental result rose from € 23.99 million during 2018, to € 25.12 million in 2019 (+ 4.7 %). The increase is mainly the result of the rental of delivered internal development projects and of investments realized in the course of 2018 that contributed for an entire financial year in 2019.
The operating result before the portfolio result increased from € 15.46 million in 2018 to € 16.00 million in 2019 (+3.5 %).
The operational margin1 decreased in 2019 compared to 2018 due to an increase in operating expenses. These are non-recurring costs concerning IT processes and streamlining of the internal management platform.
In the course of 2019, a positive portfolio result of € 48.06 million was recorded.
The result of the sale of investment properties amounted to € 0.12 million in 2019.
In addition, during 2019, Home Invest Belgium recorded a positive change in the fair value of its investment properties amounting to € 48.47 million. This change is mainly a consequence of the adjustment for the first quarter of 20192 of assumptions in the accounting of transaction costs, in order to determine the fair value of investment properties. These adjustments had a positive effect on the changes in the fair value of the investment properties of € 34.18 million. Without this effect, the changes in the fair value of the investment properties stand at € 14.29 million. For additional information on the adjustments in the accounting of transaction costs we kindly refer to Note 18 "Investment properties" from the financial statements included in this financial report.
The other portfolio result amounts to € -0.54 million. In this item, the changes in deferred taxes are recorded.
The net interest charges have decreased from € 4.67 million in 2018 to € 4.34 million in 2019. This positive evolution is the result of a decrease of the average cost of financing3 to 1.95 % in 2019 (compared to 2.20 % in 2018).
The changes in the fair value of the financial assets and liabilities amounted to € -5.41 million in 2019.
These changes are the consequence of a change in the fair value of the interest rate swaps.
Taxes amounted to € -0.09 million during 2019 (compared to –0.30 million during 2018). This positive evolution is due to a correction of corporate tax provisions which were too high for the financial years 2017 and 2018, mainly related to the company's activities in The Netherlands.
The net result (group share) of Home Invest Belgium amounted to € 55.49 million in 2019, or € 16.88 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 proportion of the result of associated companies and joint ventures, the EPRA earnings amount to € 12.67 million during 2019, an increase of 20.2 % compared to the € 10.54 million in 2018.
EPRA earnings per share increased by 20.2 % from € 3.21 during 2018 to € 3.85 in 2019.
The sale of investment properties realized in 2019 resulted in a capital gain of € 5.77 million compared to their acquisition value (increased by the capitalized expenditures). These realized capital gains contribute to the statutory distributable result which is the basis for the dividend distribution.
During 2019, the statutory distributable result increased to € 17.05 million, compared to € 14.07 million a year ago. The distributable result per share rose from € 4.28 to € 5.19 over the same period.
Operational margin = (operating result before portfolio result) / (property result).
2 See press release "Results Q1 2019" of 7 May 2019 and note 3 "Investment Properties" of the consolidated income statement in the half year financial report 2019. 3 The average funding cost = the interest costs including the margin and the cost of hedge instruments and increased by capitalized interest costs divided by the weighted average financial debt over the period in question.
4 The statutory distributable result in the sense of article 13, §1, of the RREC RD.
The risk factors are described in the Risk factors Chapter of this financial report.
Home Invest Belgium organises its financial policy so that it has permanent access to sufficient credit lines and follows the interest rate risk to which it may be exposed closely, endeavouring to minimise this risk as much as possible.
The use of financial instruments is discussed in the Financial Risks section of the Risk Factors chapter of this financial report. The following elements are included: debt ratio, liquidity risk, currency risk, risk related to a bank as a counterparty, the risk related to changes in interest rates, the risk related to changes in the fair value of the financial instruments as at 31 December 2019, the risk related to the liquidity of the share and the risk related to the distribution of the dividend.
Home Invest Belgium did not carry out any research and development activities within the meaning of Articles 3:6 and 3:32 of the Companies and Associations Code during 2019.
Mr. Eric Spiessens, independent director and chairman of the Audit Committee, has the independence and expertise in the field of accounting and auditing required by Article 3:32, point 6 of the Companies and Associations Code. He has a specific academic background in the financial field (See Corporate Governance Statement).
No own shares were bought or sold during the year 2019.
At the end of the financial year, Home Invest Belgium held 11,712 own shares.
During 2019, the main financial indicators of Home Invest Belgium have developed positively compared to the previous year.
The residential rental market continues to grow steadily in those cities where Home Invest Belgium is active, mostly thanks to:
Current trends in the housing market are dominated by rising prices and the positive impact of very low long-term interest rates.
Home Invest Belgium has a sustainable real estate portfolio given its young age. More than 50 % of its buildings are younger than 10 years. Based on this undeniable asset, and the geographical location of the buildings which are predominantly located in urban centres, Home Invest Belgium is well positioned to play a leading role in favourable market conditions.
Home Invest Belgium considers expanding its activities internationally within its positioning as the specialist in the residential rental market.
The outbreak of the coronavirus in early 2020 and the results of the measures taken to contain the virus, could impact our financial performance of 2020 and the measurement of certain assets and liabilities.
Apart from this brief overview, Home Invest Belgium will publish a separate sustainability report during the year 2020.
The responsible attitude to business of Home Invest Belgium may be seen in particular in the management of its real estate assets in operation, in its investment decisions and the choices made in the context of its development projects.
As the owner of a substantial property portfolio comprising buildings with varying ages, the company adopts a pragmatic policy aimed at the preservation of the value of its investments.
This policy of sound investments and active divestment of the portfolio is based on a detailed periodic evaluation of the portfolio.
When decisions are made concerning the acquisition of existing assets, the quality of the building that is to provide rental income over a long period will need to meet the environmental standards of the day or undergo work in the short term enabling it to achieve this performance level.
As regards development projects, the expertise of the whole team is used to design buildings which fit our longterm vision which, by definition, targets sustainability. In this respect, Home Invest Belgium considers it important to point out that sustainability goes far beyond simply the energy aspect and that factors such as the location of buildings near public transport (in the broad sense), the rational use of land, the development of green spaces, etc. are essential elements for a sustainable housing policy. Home Invest Belgium pays particular
attention to all these aspects and strives to implement them in all its projects and investment choices.
As an example of this, the redevelopment of The Pulse saw a site of office buildings transformed into a modern residential complex, with close attention paid to sustainability: the building was fitted out with solar panels and has been awarded an excellent energy performance rating.
In its buildings and projects, Home Invest Belgium does its utmost to respond as practically as possible to the changing needs of the population, for example by taking into account the reduction in the average size of households or by offering shared spaces in buildings.
The company is very aware of the fact that its mission, in the area of housing, can only be efficiently fulfilled through the daily and motivated involvement of its staff. They are without doubt its most valuable asset, enabling the company to excel in the market on which it operates.
As at 31 December 2019, the management led a team of 45 employees.
When setting up and strengthening its teams, Home Invest Belgium takes care to recruit profiles which are varied, complementary and of different ages and experience. The aim is to benefit as much as possible from this diversity while ensuring a high level of competence.
The Corporate Governance Statement (including the remuneration report and the description of the main characteristics of the control and risk management
systems) can be found in the Corporate Governance Statement chapter on pages 60 to 74 of this annual financial report.
| The company's property portfolio����������������������38 | |
|---|---|
| State of the residential market �����������������������������48 | |
| Conclusion of the real estate experts ���������������52 |
At 31 December 2019, Home Invest Belgium holds a real estate portfolio of € 629.92 million, compared to € 543.51 million on 31 December 2018, or an increase of 15.9 %.
| REAL ESTATE PORTFOLIO | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Fair value of property investments | € 609.59 m | € 524.51 m |
| Investment properties available for lease |
€ 573.38 m | € 490.36 m |
| Development projects | € 36.22 m | € 34.14 m |
| Investments in associates and joint ventures equity method |
€ 20.33 m | € 19.00 m |
| Total | € 629.92 m | € 543.51 m |
The fair value of the investment properties available for lease amounts to € 573.88 million across 53 sites.
The total annual contractual rents and the estimated rental value of vacant space is € 29.19 million as at 31 December 2019.
The investment properties available for lease are valued by independent real estate experts at an average gross rental yield of 5.1 %.
On 31 December 2019, 65.3 % of the investment properties available for lease are located in the Brussels Capital Region, 14.0 % in the Walloon region, 11.4 % in the Flemish Region and 9.4 % in The Netherlands.
Residential properties accounted for 89.1 % of the investment properties available for lease on 31 December 2019.
INVESTMENT PROPERTIES AVAILABLE FOR LEASE BY TYPE OF PROPERTY
INVESTMENT PROPERTIES AVAILABLE FOR LEASE BY GEOGRAPHICAL DISTRIBUTION
These buildings constitute the RREC's biggest real estate complex in Belgium and represent 6.4 % of the investment properties available for lease. Located in the centre of Louvain-la-Neuve, they were built in 1977 and acquired by the RREC in 2013. They include ± 23,000 m2 of rental space intended for housing, commercial use, offices and lecture halls. This complex has the particularity of standing on land owned by the university (UCL) and the RREC has a lease hold until 2026. Home Invest Belgium is bringing this to market under the brand name Louv'immo.
This is the only building complex located outside Belgium (in Ouddorp, in the Dutch province of Zeeland). It represents the RREC's largest property complex: 9.4 % of the investment property available for rent. It comprises 248 houses and 40 apartments which are part of a complex of around 700 holiday homes, surrounded by central facilities (including a subtropical swimming pool, restaurants, shops, play areas, etc.). The site as a whole is run by the Center Parcs Pierre & Vacances group on the basis of a fixed 15-year lease, at a fixed and indexed 'triple net' rent. A thorough renovation programme has been carried out over the past few years.
This is the largest residential site in the portfolio, consisting of four buildings located along boulevard Lambermont in Schaerbeek, next to the Kinetix sports centre. It was completed in 2011.
It comprises a total of 127 apartments, two municipal libraries (Dutch and French), a nursery and 108 underground parking spots. This mix of functions is the result of exemplary collaboration with the local authorities.
This asset in Flanders (Leuven) consists of 138 apartments, two shops and 92 underground parking spaces. It was fully renovated by Home Invest Belgium in 2010 and 2011.
The building houses both students and young professionals who appreciate its central location in the city. The garden was fully redeveloped in 2017.
This complex, located at 2-10 avenue du Frioul in Evere, was completed and acquired in 2005. It comprises 85 apartments and 85 underground parking places. It is particularly appreciated due to its proximity to NATO and easy accessibility.
This building comprises 38 apartments with parking places and cellars and is ideally and centrally located in avenue Livingstone in Brussels (in the heart of the European district, near the Berlaymont building). Home Invest Belgium acquired the building in 2015.
Both buildings are located in Woluwe-Saint-Lambert and were redeveloped by Home Invest Belgium, but they differ from one another in terms of their format.
The Horizon building includes 165 units and symbolizes a new way of living, with attention paid to a perfect mix of privacy for the residents (via their own apartment/ studio) and the shared areas, such as a sky lounge with a superb view, sunny roof terraces, home cinema, fitness and other communal services.
The Inside is a more traditional apartment building comprising 96 units that have a larger surface area for individual apartments/ studios compared with The Horizon, but with fewer shared spaces.
The Pulse, which consists of three apartment buildings, was received by Home Invest Belgium in May 2018 and consists of 96 residential units, an underground car park and a communal inner courtyard with a petanque area. It is located on the corner of rue de la Célidée and rue Joseph Schols in the Karreveld district.
This former office site has been converted into a modern residential complex with an excellent energy performance rating.
Brussels Capital Region
| Properties available for lease 1 | |||||
|---|---|---|---|---|---|
| N° | Name | Year of construction 2 |
Number of units |
Surface, | Occupancy rate3 |
| m2 | % | ||||
| Brussels Capital Region | |||||
| 1. | The Link4 Rue Maurice Charlent 51-53 |
2015 | 124 | 4,353 | |
| Auderghem | |||||
| 2. | Belliard 21 Rue Belliard 21 |
2013 | 6 | 278 | |
| Bruxelles | |||||
| 3. | Clos de la Pépinière | 1993 | 25 | 3,279 | |
| Rue de la Pépinière 6-14 Avenue Thérésienne 5-9 |
|||||
| Bruxelles | |||||
| 4. | La Résidence | 1994 | 17 | 1,447 | |
| Rue Joseph II Bruxelles |
|||||
| 5. | Lebeau | 1998 | 12 | 1,153 | |
| Rue Lebeau 55-57 Bruxelles |
|||||
| 6. | Livingstone | 2015 | 38 | 4,701 | |
| Avenue Livingstone | |||||
| 7. | Bruxelles Résidences du Quartier Européen |
1997 | 50 | 4,316 | |
| Rue Joseph II 82-84 - Rue Lebon 6-10 - Rue Stevin 21 | |||||
| Bruxelles | |||||
| 8. | Trone Rue Brederode 29 – Rue de la Pépinière 40 |
2015 | 16 | 1,913 | |
| Bruxelles | |||||
| 9. | Erainn | 2001 | 6 | 594 | |
| Rue des Ménapiens 29 Etterbeek |
|||||
| 10. | ArchView | 2015 | 16 | 1,961 | |
| Avenue de l'Yser 13 Etterbeek |
|||||
| 11. | Giotto | 2005 | 85 | 8,327 | |
| Avenue du Frioul 2-10 Evere |
|||||
| 12. | Belgrade | 1999 | 1 | 1,368 | |
| Rue de Belgrade 78-84 | |||||
| 13. | Forest Les Jardins de la Cambre |
1992 | 4 | 455 | |
| Avenue de l'Hippodrome 96 - Rue des Echevins 75 | |||||
| 14. | Ixelles Charles Woeste |
2015 | 92 | 5,091 | |
| Avenue Charles Woeste 296-306 | |||||
| Jette | |||||
| 15. | Odon Warland Rue Odon Warland 205 - Rue Bulins 2-4 |
2012 | 35 | 3,141 | |
| Jette | |||||
| 16. | Baeck Rue Joseph Baeck 22-46 |
2001 | 28 | 2,652 | |
| Sint-Jans-Molenbeek | |||||
| 17. | La Toque d'Argent | 1990 | 1 | 1,660 | |
| Rue Van Kalck 30-32 Molenbeek-Saint-Jean |
|||||
| 18. | Sippelberg | 2003 | 33 | 3,290 | |
| Avenue du Sippelberg 3-5 Molenbeek-Saint-Jean |
|||||
| 19. | The Pulse | 2018 | 97 | 7,874 | |
| Rue de la Célidée 29-33 Molenbeek-Saint-Jean |
|||||
| 20. | Bosquet - Jourdan | 1997 | 2 | 314 | |
| Rue Bosquet 72 - Rue Jourdan 71 | |||||
| 21. | Saint-Gilles Jourdan 85 |
2010 | 24 | 2,430 | |
| Rue Jourdan 121-125 | |||||
| Saint-Gilles | 2008 | 131 | 14,107 | ||
| 22. | Lambermont Bd du Lambermont 210-222 - Rue Desenfans 13-15 |
||||
| Schaarbeek | |||||
| 23. | Melkriek Rue du Melkriek 100 |
1998 | 1 | 2,034 | |
| Uccle | |||||
| 24. | Les Érables Avenue de Calabre 30-32 |
2001 | 24 | 2,201 | |
| Woluwe-Saint-Lambert |
Including buildings for sale.
2 Year of construction or last fundamental renovation.
3 Average occupancy rate for the year 2019. 4 The residual rights of the Link building are owned by SPRL Charlent 53 freehold while the emphyteusis is owned by Home Invest Belgium.
| Properties available for lease 1 | |||||
|---|---|---|---|---|---|
| N° | Name | Year of construction 2 |
Number of units |
Surface, m2 |
Occupancy rate3 % |
| 25. | The Horizon Avenue Ariane 4 |
2016 | 165 | 10,439 | |
| 26. | Woluwe-Saint-Lambert The Inside Avenue Marcel Thiry 202-206 |
2017 | 96 | 7,872 | |
| 27. | Woluwe-Saint-Lambert Mélopée Rue de la Mélopée 36 Molenbeek-Saint-Jean |
1961 | 1 | 220 | |
| 28. | Liberty's Place de l'Amitié 7-8 Auderghem |
2017 | 40 | 3,391 | |
| 29. | Xavier de Bue Rue Xavier de Bue 30A-34 Uccle |
1950 | 11 | 1,194 | |
| 30. | Waterloo 41 Chaussée de Waterloo 41-43 Saint-Gilles |
1950 | 11 | 1,009 | |
| 31. | Voisin Rue Montagne au Chaudron 13 Woluwe-Saint-Pierre |
1996 | 9 | 923 | |
| 32. | Navez Rue François-Joseph Navez 81-83 Schaarbeek |
1904 | 10 | 764 | |
| 33. | Montgomery Avenue de Tervueren 149 Woluwe-Saint-Pierre |
2006 | 34 | 2,193 | |
| 34. | Ambiorix Square Ambiorix 28 Bruxelles |
1995 | 64 | 3,562 | |
| 35. | Régent Boulevard du Régent 58 Bruxelles |
2011 | 47 | 2,843 | |
| 36. | Grand Place Rue de l'Ecuyer 57 Bruxelles |
2006 | 42 | 2,515 | |
| Total Brussels Capital Region | 1,398 | 115,865 | 91,1 % | ||
| Flemish Region | |||||
| 37. | City Gardens Petermannenstraat 2A-2B - Ridderstraat 112-120 Leuven |
2010 | 140 | 8,409 | |
| 38. | Haverwerf Haverwerf 1-10 Mechelen |
2002 | 4 | 3,396 | |
| 39. | Gent Zuid Woodrow Wilsonplein 4 Gent |
2000 | 18 | 2,346 | |
| 40. | Scheldevleugel Remparden 12 Oudenaarde |
1980 | 96 | 5,746 | |
| 41. | The Crow'n Koningin Astridlaan 278 Kraainem |
2019 | 45 | 4,490 | |
| Total Flemish Region | 303 | 24,387 | 82,3 % | ||
| Walloon Region | |||||
| 42. | Clos Saint-Géry Rue de Tournai 4 Ghlin |
2015 | 20 | 4,140 | |
| 43. | Quai de Compiègne Quai de Compiègne 55 Huy |
1971 | 1 | 2,479 | |
| 44. | Galerie de l'Ange (appartementen) Rue de la Monnaie 4-14 |
1995 | 57 | 2,346 | |
| Namen Galerie de l'Ange (handelszaken) Rue de la Monnaie 4-14 Namur |
2002 | 12 | 2,552 | ||
| 45. | Mont-Saint-Martin Mont Saint-Martin 1 Liège |
1988 | 6 | 335 |
1 Including buildings for sale.
2 Year of construction or last fundamental renovation.
3 Average occupancy rate for the year 2019.
| Properties available for lease 1 | |||||
|---|---|---|---|---|---|
| N° | Name | Year of construction 2 |
Number of units |
Surface, | Occupancy rate3 |
| 46. | Saint-Hubert 4 Rue Saint-Hubert 4 Liège |
1988 | 14 | m2 910 |
% |
| 47. | Saint-Hubert 51 Rue Saint-Hubert 51 Liège |
1988 | 4 | 360 | |
| 48. | Léopold Rue Léopold 2-8 Liège |
1988 | 53 | 3,080 | |
| 49. | Florida Avenue Florida 75-79 Waterloo |
1998 | 5 | 1,460 | |
| 50. | Louvain-la-Neuve CV9 Angle des Rues des Wallons et Grand Rue Louvain-la-Neuve |
1977 | 16 | 7,091 | |
| 51. | Louvain-la-Neuve CV10&18 Rues Charlemagne, Grand Rue, Rabelais, Grand Place, Agora Louvain-la-Neuve |
1977 | 176 | 16,827 | |
| 52. | Colombus Rue de l'Orjo 52-56 Jambes |
2007 | 51 | 3,740 | |
| Total Walloon Region | 415 | 45,320 | 89.4 % | ||
| The Netherlands | |||||
| 53. | Port Zélande Center Park Port Zélande Ouddorp (Nederland) |
2016 | 288 | 20,533 | |
| Total The Netherlands | 288 | 20,533 | 100.0 % | ||
| Grand total Belgium and Netherlands | 2,404 | 206,105 | 90.7 % |
| Development projects | ||||||
|---|---|---|---|---|---|---|
| N° | Name | Delivery date |
Units | Total expected investment |
||
| 54. | Marcel Thiry C2 Avenue Marcel Thiry 204 Woluwe-Saint-Lambert |
2021 | 45 | € 9 millions | ||
| 55. | Meyers-Hennau Rue Meyers-Hennau 5-17 Bruxelles |
2020 | 46 | € 12 millions | ||
| 56. | Brunfaut Rue Fin 4-12 Molenbeek-Saint-Jean |
2020 | 93 | € 21 millions | ||
| 57 | Samberstraat Samberstraat 8 Antwerpen |
2022 | 38 | € 8 millions | ||
| Total | € 50,00 millions |
| Investments properties available to let | Real value | Contractual rents on annual basis |
Contractual rents + Estimated rental value on vacant spaces |
Total estimated rental value |
|---|---|---|---|---|
| Brussels Capital Region | € 374.21 million | € 16.02 million | € 16.85 million | € 16.70 million |
| Flemish Region | € 65.17 million | € 2.79 million | € 3.28 million | € 3.25 million |
| Walloon Region | € 80.16 million | € 5.09 million | € 6.22 million | € 5.86 million |
| The Netherlands | € 53.84 million | € 2.85 million | € 2.85 million | € 2.85 million |
| Total | € 573.38 million | € 26.76 million | € 29.19 million | € 28.66 million |
1 Including buildings for sale.
2 Year of construction or last fundamental renovation.
3 Average occupancy rate for the year 2019.
Home Invest Belgium has a young property portfolio. More than 50 % of the investment properties available for lease are younger than 10 years. More than 70 % are younger than 20 years.
Most important tenants on 31 December 2019 (% contractual rents of the investment properties available for lease)
Spread per building on 31 December 2019 (% investment properties available for lease)
The portfolio has three tenants whose rent amounted to over € 0.5 million on an annual basis as at 31 December 2019. The largest tenant is Center Parcs Netherlands with an annual rent of € 2.9 million (10.6 % of the contractual rents), followed by Beapart with a total of € 1.7 million (6.3 % of the contractual rents) and the Catholic University of Louvain-la-Neuve at € 0.6 million (2.2 % of the contractual rents).
The regulations applicable to the RREC sector oblige these companies to diversify their risks. Home Invest Belgium may therefore not invest more than 20 % of its assets in a single real estate complex.
As the largest site accounts for only 9.4 % of the total portfolio of properties available for rent, diversification is assured. The ten largest sites account for 54.3 % of the total investment properties available for lease.
With its portfolio of more than 2,400 units, Home Invest Belgium had a good level of occupancy in 2019. The average occupancy rate of the investment properties available for lease, amounted to 95.4 %.
At the end of the financial year, the remaining period of the lease agreements stood at 3.2 years until the first possible lease cancellation by the tenant.
The population forecasts of the Federal Planning Bureau are based on assumptions taking into account a scenario of an unchanged social structure. They also take into account the assumptions on fertility, increased life expectancy and population ageing, as well as the migration flows observed at Belgian and European level.
On 1 January 2019, the Belgian population stood at around 11,431,000 inhabitants against 11,376,000 a year earlier, an increase of around 0.48 % in one year. The demographic growth observed in recent years is maintained, albeit at a slightly reduced rate (0.50 % per year against nearly 1 % per year observed during the period 2013 - 2016).
By 2030, the Belgian population is expected to reach 11,887,000 inhabitants, i.e. an increase of 4 %, revised slightly downwards compared with the previous demographic forecasts.
Contrary to previous forecasts, population growth is now expected to be highest in Flanders, at around 0.43 % per year between now and 2030, compared with 0.34 % in Brussels and 0.29 % in Wallonia.
In absolute terms, between 2019 and 2030:
The ageing of the population is also confirmed. It is expected to continue over the entire demographic projection period for the three regions of the country. Brussels has the youngest population in Belgium.
This demographic growth is also accompanied by changing lifestyles, which affects the number of additional households expected each year. Within Belgium, the total number of households should rise from 4,958,000 on 1 January 2019 to 5,256,000 in 2030, i.e. an increase of around 6 % over the period. In absolute values, this represents almost 300,000 additional households, and in theory as many additional dwellings.
There are relatively large differences between Brussels and the other two regions of the country:
• in Brussels, the number of households is set to rise from 551,000 to 564,000 units, i.e. a growth of 2.35 % or 0.26 % per year by 2030. However, growth will be much less sustained as from 2024.
• in Flanders and Wallonia, the changes are similar with the total number of households. Both regions should witness a growth of around 0.6 % per year until 2030. In Flanders, there should be more than 3,000,000 households by 2030, and around 1,687,000 in Wallonia.
In Brussels more specifically, the number of households should rise by 20,000 by 2030, i.e. an average increase of approximately 1,500 each year, fewer than the 4,000 homes previously thought necessary. Demographic pressure is therefore slowing down in Brussels, although pressure on prices and rents in Brussels is expected to continue in the years to come, in the context of a continuous decline of land reserves in Brussels each year.
The uncertain political climate, geopolitical tensions, and the rise of populism on a European scale are all factors that are weighing on consumer confidence and could therefore ultimately weigh on their purchasing decisions. The economic environment is also less favourable, with GDP growth forecasts still being revised downwards compared to 2018. From around 1.5 % in 2018, GDP growth is expected to hover around 1.3 % in 2019 and even fall to 1.2 % in 2020.
It should be noted, however, that European Central Bank interest rates are expected to remain at extremely low levels throughout 2020. Interest rates for new mortgages should therefore in theory remain below 2 % and probably offset the slight decline in economic growth.
Methodological note: our source of information for determining property purchase prices is the FPS Economy through its statistical platform www.statbel.fgov.be. Property price statistics are based on all property transactions leading to the payment of stamp duty. The data is obtained from the FPS Finances General Administration of Patrimonial Documents.
It is important to specify that post-2015 figures are considered provisional and may not be considered as sufficiently robust. Some significant differences can be seen in the figures obtained from the Notary Barometer and those disclosed on the FPS Economy website.
It should also be noted that the FPS Economy has chosen to present the figures in absolute values using median prices. In previous years, average prices were used. Comparisons in absolute values are therefore no
1 Source: Cushman & Wakefield.
longer relevant, so we will simply present the increases in percentage terms.
According to the latest figures available from Belgium's National Institute of Statistics (covering only the first three quarters of 2019), prices were up slightly in the various market segments across the country.
In Belgium, the average price of a single-family home grew by approximately 4.9 % versus 2016 and nearly 25 % versus 2010. In 2019, the average house price was € 215,000. (compared to € 205,000 a year earlier). The price growth of a single-family home would be 6.4 % in Brussels (against nearly 10 % in 2018). Growth would be around 2.6 % in Flanders and 5.6 % in Wallonia.
Wallonia remains the cheapest region of the country (median price for a house of around € 150,000), Brussels the most expensive (median price at € 415,000), with Flanders in between at € 240,000.
According to the FPS Economy, the average price of an apartment has increased by 5.5 % in Belgium, which is higher than the increase of average single-family home prices. Regional variations are +4.9 % in Wallonia, +5.6 % in Flanders and +7.5 % in Brussels. Median prices vary between € 150,000 in Wallonia and € 215,000 in Brussels. In Flanders, the median price reaches € 198,000.
All other property indexes (Barometers of Notaries TREVI, Eurostat House Price Index) confirm these trends in both the observed activity and price rise.
Belgium's owner–tenant ratio is approximately 72 %–28 %, broadly consistent with the European average (70 %–30 %).
The ratio is totally different in Brussels, as according to the Rental Survey published by the Brussels-Capital Region, (the last published figures date from 2018), the ownership rate would be close to 40 %. Therefore, approximately 62 % of the Brussels population rents. This is largely explained by higher purchase costs and greater numbers of expats, logically driving the population to renting. And this trend towards an increasing share of tenants is expected to continue in the coming years. Some forecasts estimate that there will be only 35 % of owners in Brussels by 2040.
According to figures from the "Observatoire des loyers", average rents (including new and secondhand properties, both single-family houses and apartments) are around € 739 / month in 2018 against € 723 / month in 20151 . It was € 601 / month in 2004.
Average rent is obviously dependent on the housing's intrinsic characteristics: size, quality, location, number of bedrooms and/or bathrooms and environmental performance. For example, the average rent is € 520 / month for a studio versus € 1,071 / month for a house.
The "Observatoire des loyers" highlights the progressive disconnection between rents and the Economic Health Index in Brussels. It appears that rents have tended to increase faster than the Economic Health Index during the analysed period, particularly from 2008 to 2013. It is interesting to note that the rise in rents has resulted solely from indexing since 2013.
Although low on first reading, the study also highlights the progressive disconnection between average rents and average household disposable income. On the basis of an index equal to 100 in 2004, the difference between average rent and income average is now over 30 points. According to the "Observatoire des loyers" figures, 50 % of tenants have incomes of less than € 2,000 / month and average disposable income is € 1,842 / month. Therefore, although Brussels is a more rental-based market given the higher purchase prices, we also see a growing disconnection in the rental supply compared to local incomes. It appears that 70 % of the poorest Brussels population has access to only 21 % of the rental housing stock (considering that households spend 25 % of their income on housing).
In its 2018 edition, the rental observatory shows that on the basis of a maximum monthly income of € 2,400 and assuming that the rent cannot exceed 30 % of the total budget, 50 % of the rental stock is accessible to the population only.
The new housing market is generating ever-more interest, from developers and buyers, both at the Belgian and Brussels Region level. In Brussels in particular, with the age of existing building stock, higher energy performance standards and strong demographic growth, there is some disinterest in so-called "secondary" housing, which is often energyintensive and more expensive to renovate, and a growing will to develop new projects.
However, it appears that the differences in prices between older and new properties are often a barrier for a population primarily formed of average-income households.
Therefore, we understand developers' ambition to build increasingly smaller dwellings in Brussels (although they remain relatively large in comparison with European practices).
With average prices of at least € 2,700 to € 3,000/ sq. m, the gap between available housing and local incomes is widening.
In the most sought-after and best located areas, average purchase prices easily reach € 3,500/sq. m. The most exclusive projects now sell at prices far exceeding € 4,000/sq. m.
1 It should be noted that the Rental Observatory is based on a survey carried out every year. In 2015, the sample was 3,000 households surveyed, in 2017 it was increased to 5,000 households. Differences may therefore appear despite the desire to cover the entire Brussels rental market.
The regionalisation of the residential rental regulation has been completed. From now on, the three regions have their own legal framework for residential rental agreements. It should be noted that (i) for rental agreements entered into before the new regional laws came into effect, (ii) rental agreements that do not fall within the scope of the regional law and (iii) some general provisions (articles 1708 to 1762bis of the Civil Code), the importance of national regulations must not be underestimated.
Each region supplies the mandatory pre-contractual information that is to be communicated at the time of rental (including estimate of the private and common charges). The basic principle that property tax may not be passed on to tenants also stands.
The rental price is freely decided between the parties. In the Brussels and Walloon region, the governments have made available indicative tables with guide rents.
The Order applies to all types of homes (including student accommodation and second homes) and not just limited to rental agreements for primary residences, but does not apply to tourist accommodation. The order is applicable to rental agreements entered into (or renewed) from 1 January 2018. The government compiled a non-restrictive list of repairs and maintenance that are defined as being chargeable to either the landlord or the tenant. The Order provides specific rules for certain types of accommodation (primary residence, student accommodation, flexible renting,…).
A rental agreement whereby a tenant established their primary residence in the rented property, will in principle be entered into for nine years and terminated as the end of this period if either party gives notice 6 months before the due date.
In absence of this notice, the rental agreement will be extended for 3 years with the same terms (under condition of indexation). Both parties are able to prematurely end the rental agreement:
• the tenant may terminate the rental agreement at any time, with 3 months' notice and (if the contract is terminated within the first 3 years) and against compensation of 3, 2, or 1 months' rent, based on whether the tenant terminated in the first, second or third year of the agreement;
In principle, the short-term rental agreement ends if either of the parties gives notice 3 months before the due date. In absence of notice being given, the agreement shall be deemed to have been entered into for a period of nine years from the date the original agreement took effect.
These short-term agreements may equally be terminated prematurely by either party (provided the duration is longer than 6 months):
The Decree is applicate to all rental agreements entered into from 1 January 2019, with respect to residences intended to be the tenant's primary residence and located within the Flemish region. This law therefore does not apply to second homes and tourist accommodation. A list of repair and maintenance work was compiled by the Flemish government, defining which party is responsible for any work to be carried out. The rental agreement will in principle be entered into for nine years and expires at the end of this period, providing the landlord gives notice 6 months prior to the due date, of the tenant does so 3 months before.
If neither party gives notice, the agreement will be extended for 3 years under the same terms (under condition of indexation). Both parties are able to prematurely terminate the agreement:
• the tenant has the right to terminate the lease agreement at any time, subject to a period of notice of three months. However, if the tenant terminates
the lease agreement during the first three-year period, the landlord is entitled to compensation. This compensation is equal to three months', two months' or one month's rent, depending on whether the lease agreement is terminated during the first, the second or the third year;
• the landlord can also prematurely terminate the agreement, with respect of a notice period and payment of compensation, depending on the reasons for the termination.
The Flemish region also offers the possibility of entering into a short-term agreement (≤ 3 years). This agreement can only be extended once under the same terms, as long as the total duration does not exceed 3 years. The shortterm rental agreement would in principle be terminated if either of the parties gives notice 3 months before the due date. In absence of notice being given, the agreement shall be deemed to have been entered into for a period of nine years from the date the original agreement took effect.
Tenants will be able to terminate these short-term contracts at any time subject to three months' notice and payment of one a half month's, one month's, or half a month's rent in compensation, depending on whether the lease agreement is terminated in the first, second or third year. The landlord may not terminate this short-term rental agreement.
The Decree is applicable to all types of residences (including student accommodation and second homes) and not just limited to rental agreements for primary residences, but does not apply to tourist accommodation.
This decree is applicable as from 1 September 2018 and its provisions are applicable immediately to the current leases (except for certain provisions which apply only to leases concluded or renewed after 1 September 2018). The government compiled a nonrestrictive list of repairs and maintenance that are defined as being chargeable to either the landlord or the tenant. The decree provides specific rules for certain types of accommodation (primary residence, student accommodation, flexible renting,…).
A rental agreement whereby a tenant established their primary residence in the rented property, will in principle be entered into for nine years and terminated as the end of this period, providing the landlord gives notice 6 months prior to the due date, of the tenant does so 3 months before. If neither party gives notice, the agreement will be extended for 3 years under the same terms (under condition of indexation).
Both parties are able to prematurely terminate the agreement:
• the tenant has the right to terminate the lease agreement at any time, subject to a period of notice of three months. However, if the tenant terminates the lease agreement during the first three-year period, the landlord is entitled to compensation. This compensation is equal to three months', two months' or one month's rent, depending on whether the lease agreement is terminated during the first, the second or the third year;
• the landlord can also prematurely terminate the agreement, with respect of a notice period and payment of compensation, depending on the reasons for the termination.
The region also offers the possibility of entering into a short-term agreement (≤ 3 years). This agreement can only be extended twice under the same terms, as long as the total duration does not exceed 3 years. The short-term rental agreement would in principle be terminated if either of the parties gives notice 3 months before the due date. In absence of notice being given, the agreement shall be deemed to have been entered into for a period of nine years from the date the original agreement took effect. Both parties are able to prematurely terminate the short-term rental agreement:
The investment properties of Home Invest Belgium located in Belgium are valued by Cushman & Wakefield and CBRE Valuation Services. The investment properties located in
The Netherlands are valued by BNP Paribas Real Estate Valuation France.
| TOTAL | BELGIUM | THE NETHERLANDS |
|---|---|---|
| € 573.38 million | € 519.54 million | € 53.84 million |
| € 36.22 million | € 36.22 million | |
| € 609.59 million | € 555.76 million | € 53.84 million |
In accordance with the legal and statutory requirements, we are pleased to provide you with our opinion of the current Investment Value of the real estate portfolio of the Belgian REIT (Real Estate Investment Trust) Home Invest Belgium as at the valuation date on 31 December 2019.
We carried out our valuations based on the capitalization of the estimated rental value method in accordance with the current IVS (International Valuation Standards) and RICS (Royal Institution of Chartered Surveyors) standards.
As is customary, our assignment has been carried out on the basis of information provided by H regarding tenancy schedules, charges and taxes borne by the landlord, works to be carried out and all other factors that could affect property values. We assume that the information provided is complete and accurate.
Our valuation reports do not in any way constitute an assessment of the structural or technical quality of the buildings or of the potential presence of harmful substances. This information is well known to Home Invest Belgium, which manages its properties in a professional way and performs technical and legal due diligence before acquiring each property.
The Investment Value is defined as the estimated amount for which a property, or space within a property, should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties have acted knowledgeably, prudently and without compulsion. The investment value includes transaction costs.
In theory, the disposal of properties is subject to a transfer tax charged by the Government and paid by the acquirer, which represent substantially all transaction costs.
For properties situated in Belgium, the amount of this tax mainly depends on the mode of transfer, the capacity in which the acquirer acts and the property's location. The first two variables, and therefore the amount of tax payable, are only known once the sale is contracted.
Based on a study from independent real estate experts dated 8 February 2006 and reviewed on 30 June 2016, the "average" transaction cost for properties is assessed at 2.5 %.
The fair value (as defined under IFRS 13 and by the BEAMA's (Belgian Asset Managers Association) press release of 8 February 2006 and reviewed on 30 June 2016) for properties over € 2,500,000 can therefore be obtained by deducting 2.5 % of "average" transaction cost from their investment value. This 2.5 % figure will be reviewed periodically and adjusted if on the institutional investment transaction market a change of at least ± 0.5 % in the effectively "average" transaction cost is observed.
For properties with an investment value under € 2,500,000 transfer taxes of 10 % (in Flemish Region) or 12.5 % (in Brussels Capital Region and Walloon Region).
Based on the previous comments, we hereby confirm that the estimated Investment Value of the real estate portfolio of Home Invest Belgium, as of 31 December 2019, amounts to € 572.78 million.
The Fair Value of the real estate portfolio of Home Invest Belgium as of 31 December 2019, corresponding to the fair value under IAS/IFRS, is estimated at € 555.76 million.
| FAIR VALUE OF INVESTMENT PROPERTIES (IN BELGIUM) |
TOTAL | CUSHMAN & WAKEFIELD |
CBRE VALUATION SERVICES |
VALUATION AT COST |
|---|---|---|---|---|
| Investment properties available for lease | € 519.54 million | € 497.93 million | € 21.62 million | |
| Development projects | € 36.22 million | € 28.65 million | € 7.57 million | |
| Total | € 555.76 million | € 526.57 million | € 21.62 million | € 7.57 million |
Emeric Inghels MRICS Partner Valuation & Advisory
Pieter Paepen MRICS1 Senior Director Valuation & Advisory Services
This letter follows your instruction with regards to the estimation of the Fair Value of a real estate portfolio composed of 241 cottages at Center Parcs Port Zélande located in Ouddorp, the Netherlands, on December 1, 2016, and the subsequent quarterly updates of this estimation, in accordance with legal and statutory requirements. To be noted that the scope of the estimation was enlarged to 248 cottages and 40 apartments following the acquisition by Home Invest Belgium of additional units in 2017.
Our work is carried out in accordance with the International Valuation Standards (IVS) and the European Evaluation Standards published by TEGoVA (The European Group of Valuers' Associations) and in compliance with the valuation standards published by RICS (Royal Institution of Chartered Surveyors).
We have carried out our assignment on the basis of the information and data provided by Home Invest Belgium relating in particular to the lease conditions, non-recoverable charges and taxes, and investments borne by the lessor.
These different elements and documents have been taken into account in the estimation of the value. We were unable to verify the data independently and we have considered them to be accurate and reliable.
We are not not qualified to undertake structural audits and therefore are unable to confirm whether the properties are free from structural defects or environmental risks; for our assignment, we have assumed that the constructions and installations are in proper operational condition and compliant with all legislative requirements.
As such, our conclusions are subject to a technical audit which only a qualified and skilled expert can conduct and comment on.
The Fair Value is defined as « the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date » (IFRS 13).
For the estimation of the Fair Value we have applied the Discounted Cash Flow method. This method consists in discounting the sum of the net rents received over the assumed holding period, added to the discounted exit value of the leased property.
Our estimate takes into account the local taxation currently applicable in the case of direct sales of real estate assets. The transfer costs are set at 2.0 %, in accordance with the locally applicable real estate transfer costs ("Overdrachtsbelasting") for residential properties, including leisure properties ("Recreatiewoningen").
The real estate portfolio was estimated based on the assumption that its current use would be maintained.
On the basis of the foregoing, we confirm that the Investment Value of the real estate portfolio comprising 248 cottages and 40 apartments at Center Parcs Port Zélande, Ouddorp, the Netherlands, estimated as at December 31, 2019, amounted to € 54.91 million.
The estimated value corresponding to the Fair Value according to IAS / IFRS standards was € 53.84 million.
Jean-Claude Dubois Chairman
1 Pieter Paepen BVBA/SPRL.
The Horizon, Sint-Lambrechts-Woluwe
54
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|---|---|
| Dividend and return���������������������������������������������������58 | |
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Home Invest Belgium shares are an attractive investment instrument for both individual and institutional investors.
Investing indirectly in residential property offers a number of advantages:
the risk of loss of income in the event of rental vacancy or payment default is spread over a large number of tenants;
investors benefit from better liquidity as regards their assets since the Home Invest Belgium shares can be traded on the stock market;
The company aims to offers its shareholders a return that is at least equal to the return generated by a direct investment in residential property.
Home Invest Belgium shares have been listed on the Euronext Brussels regulated market since 16 June 1999.
On the 31 December 2019, the price of Home Invest Belgium shares on the Euronext Brussels stood at € 114.00 (compared with a closing price of € 91.40 at the end of 2018).
The liquidity of the shares rose, with an average of 1,223 share transactions per trading day over the 2019 financial year as a whole (compared with a daily average of 1202 shares during the 2017 financial year).
1 Since 1 January 2017, the real estate pre-account has risen to 30 %. This term is explained in the glossary.
2 Gross dividend yield = (Gross dividend for the financial year)/ (Share price on the last day of trading of the financial year). This term is explained in the glossary. 3 Free Float = [(Total number of shares at the close of the financial year)- (total number of shares held by parties who made themselves known through a transparency notice in accordance with the law of 2nd May 2007)]/[Total number of shares at the close of the financial year]. This term is explained in
the glossary. 4 Velocity = (Total volume of shares traded during the financial year)/ (total number of shares.). This term is explained in the glossary.
5 Pay-out ratio= (Total gross dividend for the financial year)/statutory distributable result in the sense of art. 13, §1 of the RREC-RD). This term is explained in the glossary.
The graph below illustrates the stock market performances of the Home Invest Belgium share with that of the BEL 20 and EPRA Eurozone.
EVOLUTION OF THE SHARE PRICE AND THE GROSS DIVIDEND
Given its status, Home Invest Belgium is obliged by law to pay out at least 80 % of the sum of the adjusted result and the net capital gains on the sale of the real estate portfolio which are not exempt from the mandatory payment.
Home Invest Belgium aims to pay its shareholders a growing dividend in the long term that is at least equal to or higher than inflation.
Since 2015, the Board of Directors has adopted a dividend policy of paying an interim dividend in December and the final dividend in May.
The Board of Directors decided to distribute an interim dividend of € 3.750 gross or € 2.625 net per share (after deduction of the withholding tax of 30 % due on that date).
At the Ordinary General Meeting of Shareholders which will be held on Tuesday 5 May 2020 and which will approve the financial statements for the 2019 financial year, the distribution of the remaining dividend of € 1.10 gross per share will be presented for approval. This will bring the total dividend for the 2019 financial year to € 4.85 gross per share. The remaining dividend will be payable on 14 May 2020 upon surrender of coupon 28.
The dividend distribution of € 4.85 per share for the financial year 2019 means a rise of the dividend for the 20th consecutive year.
It should be noted that since the RREC was established, a significant proportion of the profits from each financial year has been carried forward.
After payment of the dividend for 2019, the distributable reserves at a consolidated level stand at € 10.95 million, or € 3.33 per share. This reserve is intended to keep the dividend curve stable in the future should the situation on the real estate market deteriorate.
After the withholding tax of 30 %, the net dividend will therefore amount to € 3.3950.
For more information about the tax system applicable to dividends, please refer to the chapter entitled Permanent Document.
The profitability of an investment can be measured on the basis of the immediate return that can be obtained from it and the increase in the net asset value per share that the investment can record over the long term. The sum of these two components constitutes the annual return on the investment.
In the case of a Regulated Real Estate Company, the importance of the immediate return is certainly high, but the ability to generate capital gains constitutes the true label of quality for the future.
For a shareholder who took part in the IPO or Initial Public Offering in June 1999 and reinvested all gross dividends in Home Invest Belgium shares, the IRR or Internal Rate of Return, calculated over a period of 20 years, would be 10 %.
Over the same period, the net value per share increased 170 %, which is an average of 5 % per year.
| Total return | Net value per share | Increase of net value | Gross dividend for | Total return | Total return |
|---|---|---|---|---|---|
| (€ ) | (excl. dividend) | per share | the financial year | per share1 | per share (in %)2 |
| 2019 | € 93.06 | € 12.25 | € 4.85 | € 17.10 | 21.16 % |
| 2018 | € 80.81 | € 15.58 | € 4.75 | € 20.33 | 31.17 % |
| 2017 | € 65.23 | € 0.54 | € 4.50 | € 5.04 | 7.79 % |
| 2016 | € 64.69 | € 1.34 | € 4.25 | € 5.59 | 8.82 % |
| 2015 | € 63.35 | € 0.96 | € 4.00 | € 4.96 | 7.95 % |
| 2014 | € 62.39 | € 1.79 | € 3.75 | € 5.54 | 9.14 % |
| 2013 | € 60.60 | € 5.12 | € 3.50 | € 8.62 | 15.54 % |
| 2012 | € 55.48 | € 0.90 | € 3.25 | € 4.15 | 7.60 % |
| 2011 | € 54.58 | € 2.65 | € 3.00 | € 5.65 | 10.88 % |
| 2010 | € 51.93 | € 1.42 | € 2.75 | € 4.17 | 8.26 % |
| 2009 | € 50.51 | € 0.16 | € 2.43 | € 2.59 | 5.14 % |
| 2008 | € 50.35 | -2.17 | € 2.36 | € 0.19 | 0.36 % |
| 2007 | € 52.52 | € 3.21 | € 2.30 | € 5.51 | 11.17 % |
| 2006 | € 49.31 | € 3.35 | € 2.24 | € 5.59 | 12.16 % |
| 2005 | € 45.96 | € 3.29 | € 2.19 | € 5.48 | 12.84 % |
| 2004 | € 42.67 | € 4.13 | € 2.16 | € 6.29 | 16.32 % |
| 2003 | € 38.54 | € 1.15 | € 2.13 | € 3.28 | 8.77 % |
| 2002 | € 37.39 | € 0.44 | € 2.07 | € 2.51 | 6.79 % |
| 2001 | € 36.95 | € 1.19 | € 2.02 | € 3.21 | 8.98 % |
| 2000 | € 35.76 | € 1.30 | € 1.96 | € 3.26 | 9.46 % |
| 1999 | € 34.46 |
The total return per share = ( the dividend of the financial year) + (increase in the net asset value per share).
2 Total return per share (%): (total return per share)/(net value per share at beginning of year.
The table below lists the Home Invest Belgium shareholders 1 who own more than 3 % of the shares. Notifications in the context of the legislation on transparency (Act of 2 May 2007 on the disclosure of major shareholdings) can be found on the company's website.
On the basis of the transparency declarations received until 31 December 2019, the shareholding structure of Home Invest Belgium is as follows:
| SHAREHOLDERS 1 | NUMBER OF SHARES | % OF CAPITAL |
|---|---|---|
| Van Overstraeten Group2 | 880,965 | 26.7 % |
| AXA Belgium NV/SA3 | 521,830 | 15.8 % |
| Spouses Van Overtveldt – Henry de Frahan | 102,792 | 3.1 % |
| Other shareholders | 1,794,271 | 54.4 % |
| General total | 3,299,858 | 100.00 % |
1 Shareholders who deposited a statement in accordance with the Law of 2 May 2007 regarding transparency. .
2 Stavos Real Estate BV is 97% controlled by partnership BMVO 2014. Partnership BMVO 2014 is controlled for 25% by Stichting Administratiekantoor Stavos and 75% by partnership Burgerlijke Maatschap Van Overstraeten. Partnership Burgerlijke Maatschap Van Overstraeten is 99.9% controlled by Stichting Administratiekantoor Stavos. Stichting Administratiekantoor Stavos is controlled by Liévin, Hans, Johan and Bart Van Overstraeten. Cocky NV is 99.9% controlled by partnership Burgerlijke Maatschap Van Overstraeten. V.O.P. NV is 99.9% controlled by Stavos Real Etate BV.
3 AXA Belgium NV/SA is 94.93% controlled by AXA Holdings Belgium NV/SA and 5.07% controlled by AXA NV/SA. AXA Holdings Belgium NV/SA is 100% controlled by AXA NV/SA. AXA NV/SA is not a controlled entity.
This Corporate Governance statement falls under the application of the provisions of the Belgian Corporate Governance Code 2020 ('Code 2020') and the Code on Companies and Associations (henceforth abbreviated as 'CCA'). It is an integral part of the consolidated management report.
Home Invest Belgium adopts Code 2020 as its code of reference. For Home Invest Belgium, this code is the reference within the meaning of article 3:6, §2, 1° of the CCA. Code 2020 can be found on the website of the Corporate Governance Committee: www. corporategovernancecommittee.be.
The Charter can be found on following website: www. homeinvestbelgium.be and it contains the principles of corporate governance which apply within the company.
The Appointment and Remuneration Committee approved both the new Corporate Governance Charter, based on the Code 2020 and the Remuneration Report, based on the articles of the CCA, on 17 January 2020. The Board of Directors gave its approval on 19 January 2020. The remuneration policy will be put up for final approval of the ordinary General Assembly in May 2020. In case of effective approval, the new remuneration policy will be applied to board members and executive management starting from the financial year of 2020.
Home Invest Belgium endeavours to comply with the provisions of Code 2020 as much as possible. However, there are deviations on a number of topics. In line with the 'comply or explain' principle contained in the Code, it is possible to deviate from the principles of the Code to be able to take into account certain characteristics specific to the company and its relatively small size:
Considering the Charter used in 2019 was based on Code 2009, Home Invest Belgium derogated from following principles in financial year 2019 from Code 2009:
• the assessment of the Board of Directors occurs on an ongoing basis (rather than periodically), taken
into account the frequency with which the Board of Directors meets and at the time of the renewal of the mandates (derogation from principle 4.11);
• the rules on the remuneration of members of the management team may deviate from the recommendations made in Code 2009; see 'Remuneration Report' below (derogation from principle 7.18).
In accordance with the Corporate Governance rules and the law, Home Invest Belgium has developed an internal control and risk management system, bearing in mind the scope and complexity of the company.
The Board of Directors is responsible for identifying the risks to which the company is exposed, as well as defining the financial impact of these risks and the measures that should be taken to monitor these possible risks and prevent them occurring and, should this be the case, to limit the impact of these risks.
The executive management of the company has set up internal control and risk management systems for the key processes in the company, specifically cost and expenditure management, repair and maintenance work and rent collection, within the framework provided by law. In this respect, please refer to:
| Corporate governance�����������������������������������������������61 | |
|---|---|
| Remuneration report�������������������������������������������������69 | |
| Regulations and procedures���������������������������������� 73 |
In accordance with article 17 of the Act of 12 May 2014 (as amended), the company has the following internal control functions:
Over the past year, the risk management function was undertaken by Mr. Preben Bruggeman. In this capacity, Mr. Bruggeman is responsible for monitoring the risks identified by the Board of Directors and estimating the consequences for the company as well as for determining the appropriate control measures.
The internal audit should be seen as an independent evaluation function aimed at assessing the functioning and efficiency of the internal processes of Home Invest Belgium. This evaluation may cover various areas, including the financial, operational and/or bookkeeping IT processes, as well as the quality of the procedures implemented and reporting within the company.
The internal audit function is exercised by an external service provider, Deloitte Belgium, represented by Mr. Pierre-Hugues Bonnefoy. The fees of Deloitte Belgium for the 2019 financial year amounted to € 17,491 VAT included.
This function is exercised under the supervision and responsibility of Mr. Eric Spiessens, independent director. The appointment of Mr. Spiessens in this capacity was approved by the FSMA on 23 October 2018. He has the required professional reliability and appropriate expertise.
This is an independent function within the organisation, focusing on seeking and promoting compliance by the company with the laws, regulations and rules of conduct applicable to the company and in particular the rules relating to the integrity of the activities of the company, including compliance with the rules on market abuse, bearing in mind Annex B of the Corporate Governance Code and the dealing code of Home Invest Belgium itself.
The Board of Directors has appointed Mrs. Ingrid Quinet as compliance officer for a period of three years, ending at the General Meeting of 2023. This appointment was approved by the FSMA on 20 janvier 2020. She meets the requirements in terms of professional reliability and appropriate expertise.
The internal control of Home Invest Belgium is implemented through the following actions:
The main risks are regularly identified and assessed by the Board of Directors and this is followed by publication in the relevant financial information (interim and annual report). The risks also undergo specific monitoring by the Board of Directors and ongoing monitoring by the person appointed as the internal risk manager.
On the basis of this risk analysis, measures are taken to overcome any vulnerabilities and weak points identified. For more information about the risks, see the Risk Factors chapter of this report.
A financial and operating report is drawn up every quarter, setting out the KPIs, the impact on the budget and the cashflow position.
In the first and third quarter of the financial year, interim press releases are published. A more detailed half-yearly financial report is published at the end of the second quarter. At the end of the financial year, all relevant financial information is published in the annual financial report.
The limited size of the Home Invest Belgium team contributes significantly to the smooth flow of information within the company.
Digital data are protected by a continuous back-up system on hard drive and a weekly back-up outside the company's registered office.
Please refer to the Shareholding Structure section in the Stock Market Activity chapter of this report.
The Board of Directors is composed of nine members: five non-executive directors, three executive directors and the CEO is his capacity of executive director.
In accordance with article 14 § 1, paragraph 2 of the RREC Act, members of the Board of Directors must permanently have the required professional reliability and appropriate expertise for the exercising of their function. The members of the Board of Directors must be natural persons.
The Board of Directors includes five independent directors within the meaning of article 7:87 CCA and three directors who represent shareholders. The Board of Directors is aware of article 7:86 CCA, which requires that at least one third of the members of the Board shall be of a different gender than the other members. In application of this provision, the minimum number of these members of a different gender is rounded up to the nearest whole number. Given the current composition of the Board of Directors, at least three members must be female (9/3 = 3).
The current composition of the Board of Directors complies with the gender diversity required by the aforementioned act. Notwithstanding the above, the company will undertake continuous efforts to assure future compliance.
As regards the composition of the Board of Directors, Home Invest Belgium endeavours to take account of diversity in all its aspects, including complementarity in terms of abilities, knowledge, experience and gender. The company is convinced that greater diversity of capabilities would contribute to better decision making within the Board of Directors and promote the internal dynamics in the company.
This diversity is also reflected in the composition of the Home Invest Belgium team. Please refer in this respect to the chapter Management Report on page 35.
Mr. Van Overstraeten has a law degree (KU Leuven) and a management degree (Vlerick). He has wide experience in business management in the real estate sector, both in Belgium and in Romania.
First appointed: April 2008.
Mandate ends: General Meeting of 2022.
Current director's mandates: De Haan Vakantiehuizen NV/SA, Behind The Buttons NV/SA, Burgerlijke maatschap BMVO 2014, Burgerlijke Maatschap Van Overstraeten, Stavos Luxembourg SA, Stichting Administratiekantoor Stavos, Cocky NV/SA, Sippelberg NV/SA, Immovo NV/SA, VOP NV/SA, Maatschap GWG, Peripass NV/SA, Buttons for Cleaners BVBA/SPRL.
Hélène Bostoen
Committees:
• Appointment and Remuneration Committee.
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: none.
Mr. Janssens trained as an architect (H.A.I. Sint-Lukas). He began his career as an architect and project manager. As of 2003, he focused on property management. From 2006 until 2018, he worked at Leasinvest Real Estate, first as Head of Property Management and since 2016 as Chief Operating Officer.
First appointed: 3 December 2018.
End of mandate: General Meeting of 2022.
Current director's mandates: Okimono BVBA/SPRL, UPSI NV/SA, Charlent 53 Freehold BVBA/SPRL. Committees:
• Investment Committee 1 ;
• Project Committee 1 .
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: none.
Mr. Spiessens has a degree in sociology (KU Leuven). He is also a qualified secondary school teacher and a social sciences engineer (KU Leuven). He has many years' experience in various management positions and was appointed as national secretary of Beweging.net.
First appointed: General Meeting of 2011.
End of mandate: General Meeting of 2023.
Current director's mandates: Auxipar, VEH CVBA/ SCRL, Publiglas CVBA/SCRL, Aspiravi NV/SA, Aspiravi International NV/SA, EPC CVBA/SCRL, Pronet Verzekeringen BVBA/SCRL and Sociaal Engagement CVBA-SO/SCRL-FS.
Committees:
• Audit committee;
• Appointment and Remuneration Committee.
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: Gimv NV/SA, DG Infra+ NV/SA, Livingstones CVBA/SCRL and Sint-Jozefskredietmaatschappij NV/SA.
Mr. Aurousseau holds a degree in applied economic sciences (UA) and financial analysis (ICHEC). He has extensive experience in property management and business management, particularly in the Belgian banking and insurance sector. He has acted as Chief Investment Officer (CIO) of AXA Belgium NV/SA since November 2013.
First appointed: General Meeting of 2014.
End of mandate: General Meeting of 2023.
Current director's mandates: Befimmo NV/SA.
• Audit Committee.
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: none.
Mr. Dejonckheere holds a degree in civil engineering (U Ghent) and an MBA (IEFSI-ECHEC, Lille-France). He is CEO of the listed company GIMV NV/SA, as well as a director of various companies in the GIMV group and sits as an independent director on the board of Roularta Media Group NV/SA.
He is the chairman of the Belgian Association of Listed Companies.
First appointed: General Meeting of 2011.
End of mandate: General Meeting of 2023.
Current director's mandates: GIMV NV/SA and director of various companies in the GIMV group, Roularta Media Group NV/SA, Noorderman NV/SA, Invest at Value NV/ SA, TDP NV/SA, AZ Delta VZW/ ASBL (Hospital Group), EnterNext NV/SA, Voka-VEV, EuropeanIssuers AISBL, VBO-FEB Strategic Committee and the Corporate Governance Commission, Chairman of the Belgian Association of Listed Companies.
Committees: /
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: Capman Plc, Belgian Venture Capital & Private Equity Association VZW/ASBL, Biotechfonds Vlaanderen NV/SA.
Mr. Van Overstraeten has extensive experience in the running and management of companies, especially in the field of property and software development.
First appointed: General Meeting of 2011.
End of mandate: General Meeting of 2023.
Current director's mandates: De Haan Vakantiehuizen NV/SA, Behind the Buttons NV/SA, VOP NV/SA, Immovo NV/SA, Immorobel General NV/SA, Sippelberg NV/SA, Cocky NV/SA, Stavos Luxembourg SA, Stichting Administratiekantoor Stavos NV/SA, Burgerlijke Maatschap Van Overstraeten, Burgerlijke Maatschap BMVO 2014, Cocky BVBA/SPRL and BE Real Estate NV/SA.
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: none.
Ms. Gijsbrechts holds a degree in applied economic sciences (KULeuven). She manages Confini BVBA/ SPRL and Viafin BVBA/SPRL.
1 As of 12 December 2018 2 From 10 July 2018.
Mrs. Gijsbrechts has broad experience in finance, and extended expertise in goverance and management of companies.
First appointed: General Meeting 2019.
End of mandate: General Meeting of 2023.
Current director's mandate: OKA Vlaams Brabant, Viafin BVBA/SPRL, Confini BVBA/SPRL, SADI BV/SRL.
Committees:
• Audit Committee.
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: Cas-co VZW/ASBL, Emino VZW/ASBL.
Mrs. Bostoen holds a degree in business engineering (Solvay-ULB) and an MBA (INSEAD). She has broad expertise in the development of residential real estate. Furthermore, Mrs. Bostoen is appointed as Chairman of the Developers of Residential Real Estate commission in UPSI-BVS.
First appointed: General Meeting 2019.
End of mandate: General Meeting of 2023.
Current director's mandates: Abattoir NV/SA, Pave Gym NV/SA, Flanders)-Immo JB NV/SA, Fenixco NV/SA, FBC BVBA/SCRL, Quality Homes BVBA/SCRL, NCP NV/SA, Burgerlijke Maatschap HMFH.
Committees:
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: none.
Mrs. Denys holds a degree in law (Université Notre Dame de la Paix Namur and KULeuven) and postgraduate degrees in property studies (KULeuven) and business management (EHSAL). She is managing Director of Codabel Management Netherlands and Head of Investments at the Codabel group.
She holds extensive expertise in management and acquisition of real estate, beside business management and (legal) management.
First appointed: General Meeting 2019.
End of mandate: General Meeting of 2023.
Current director's mandates: none.
Committees:
Mandates that expired on 31 December 2019, exercised in the years 2015 to 2019: none.
During the Ordinary General Meeting of 7 May 2019 multiple existing mandates were renewed and new mandates were approved for a period of four years, specifically until the end of the next Ordinary General Meeting held in 2023:
Guillaume H. Botermans Honorary Chairman Michel Pleeck Honorary Chairman Guy Van Wymersch-Moons Honorary Chairman Xavier Mertens Honorary CEO Luc Delfosse Honorary independent director
The Board of Directors met eight times in 2019, including a number of times by conference call.
The Board of Directors acts in the corporate interest (which implies taking into account interests other than solely those of the shareholders, such as the interests of clients and users of the buildings).
Its roles include the following tasks:
Besides the general tasks set out above, in the past financial year the Board of Directors has also expressed its opinion on various dossiers, including:
The rules on the quorum and decision making are laid down in articles 17 and 18 of the company's articles of association:
Four committees have been set up within the Board of Directors which should assist and advise the Board in their specific fields.
These are purely advisory bodies and report to the Board of Directors, which retains the ultimate decision-making authority. For more details about the committees, please refer to the Corporate Governance Charter of the company, which can be consulted at any time on the website www.homeinvestbelgium.be.
Although Home Invest Belgium fulfils two of the three exclusion criteria which are laid down in article 7:99, 3 CCA and is therefore not obliged to establish an Audit Committee, the Board of Directors of the RREC has nevertheless decided to set up such a committee 1 .
The Audit Committee met four times during the past financial year and as at 31 December 2019 consisted of the following people:
Mr. Eric Spiessens has the required independence and expertise in the field of auditing and bookkeeping.
The statutory auditors of the RREC, Grant Thornton Bedrijfsrevisoren CVBA/SCRL (until the end of their mandate set on 7 May 2019) and EY Bedrijfsrevisoren BV/SRL (starting from 7 May 2019) attended all the meetings of the Audit Committee in 2019.
The main tasks of the Audit Committee are as follows:
In the 2019 financial year, the following items in particular were discussed:
• quarterly, half-yearly and annual review of the accounts and the financial reporting;
The average number of staff stood at below 250 throughout the 2019 financial year and the annual turnover for the 2019 financial year is less than € 50 million.
2 The mandate of Ms. de Hemptinne expired on the Ordinary General Meeting of 7 May 2019 3 Mrs. Gijsbrechts was appointed as director on the Ordinary General Meeting of 7 May 2019
During the past financial year, the chairman of the Audit Committee questioned the members about the working, efficiency and interaction with the Board of Directors. On the basis of his self-assessment, the Audit Committee decided that henceforth the items on the agenda that have already been discussed in detail in the Audit Committee will be presented in a more compact form to the Board of Directors, supplemented by findings, recommendations or points in need of attention from the Audit Committee.
Although Home Invest Belgium fulfils two of the three exclusion criteria laid down in article 7:100, §4 CCA, the Board of Directors has decided to establish an Appointment and Remuneration Committee whose task is to assist the Board of Directors with the composition of the Board of Directors and the executive management and its remuneration policy.
The Appointment and Remuneration Committee met two times during the past financial year and consisted of the following people:
The Appointment and Remuneration Committee is responsible in particular for:
During the 2019 financial year, the Appointment and Remuneration Committee met primarily to discuss the following points:
The Investment Committee selects, analyses and prepares the investment and divestment dossiers as well as the conversion and renovation dossiers and is responsible for following them up.
The Investment Committee met four times during the last financial year and as at 31 December 2019 consisted of the following people:
The mandate of Ms. de Hemptinne expired on the Ordinary General Meeting of 7 May 2019.
Bearing in mind the needs specific to follow up development and renovation work, the Board of Directors has set up a Project Committee. Previously, this role was fulfilled by the Board of Directors of Home Invest Belgium itself.
The Project Committee met four times in the last financial year:
The role of the Committee is to follow up and monitor the renovation and development projects in terms of scheduling, planning, budget, quality and organisation of the construction work.
During the 2019 financial year, the Committee mainly discussed the following points:
The Board of Directors is assisted by the executive management (in the sense of article 14 of the act of 12 May 2014, as amended, with regard to regulated real estate companies).
The members of the executive management team on 1 March 2020 are:
The curriculum vitae of the members of the executive management team (or their permanent representative) can be summarised as follows:
Please refer to that which is stated under Section 5.3. Brief presentation of the directors.
He joins the executive management of Home Invest Belgium since December 2018.
Mr. Bruggeman obtained a master's degree in commercial engineering and a bachelor's degree in philosophy at the University of Antwerp. He also successfully completed the three levels of the CFA Programme (Chartered Financial Analyst). He has over ten years' experience in finance and began his career at Bank Degroof. He held the position of CFO at Qrf City Retail as of 2015. He has been part of the Home Invest Belgium management team since 7 January 2019 4.
| Sven Janssens | Preben Bruggeman | |
|---|---|---|
| Number of shares held |
none | none |
| Other mandates within Home Invest Belgium |
His mandates are described above |
Manager Charlent 53 Freehold BVBA/ SPRL |
The Remuneration Report is included in the Financial Report every year. It sets out the principles of the company's remuneration policy. Any significant deviation from the remuneration policy during the financial year and any changes made to this policy are included in the report. The remuneration policy takes into account the recommendations of the Appointment and Remuneration Committee. It contains the information set out in article 3:6 CCA and takes into account the recommendations of the Belgian Corporate Governance Code (Code 2020). The General Meeting assesses the remuneration report every year.
The non-executive directors are entitled to attendance fees for meetings of the Board and of the various Committees. Moreover may they submit expense reports to the exercise of their mandates.
The Ordinary General Meeting of 7 May 2019 decided that the attendance fee should be as follows:
Members of the executive management team who attend these meetings do not receive these attendance fees.
| Director | Board of Directors |
Investment Committee |
Audit committee |
Project Committee |
Nomination and Remuneratie comittee |
Fixed annual remuneration (payable in 4 installments) |
Total |
|---|---|---|---|---|---|---|---|
| Liévin Van Overstraeten | € 14,000 | € 2,000 | € 5,000 | € 21,000 | |||
| Koen Dejonckheere | € 6,000 | € 5,000 | € 11,000 | ||||
| Eric Spiessens | € 12,000 | € 4,000 | € 1,500 | € 5,000 | € 22,500 | ||
| Johan Van Overstraeten | € 8,000 | € 4,000 | € 750 | € 5,000 | € 20,750 | ||
| Wim Aurousseau | € 6,000 | € 3,000 | € 5,000 | € 14,000 | |||
| Laurence de Hemptinne1 | € 0 | € 750 | € 750 | € 750 | N/A | € 2,250 | |
| Alain Verheulpen | N/A | N/A | N/A | N/A | |||
| Suzy Denys | € 5,000 | € 750 | € 5,000 | € 10,750 | |||
| Christel Gijsbrechts | € 5,000 | € 1,500 | € 5,000 | € 11,500 | |||
| Hélène Bostoen | € 5,000 | € 1,500 | € 1,500 | € 5,000 | € 13,000 | ||
| € 61,000 | € 7,000 | € 9,250 | € 5,250 | € 4,250 | € 40,000 | € 126,750 |
This remuneration is based on the principle of a fair basic remuneration, considering the weight of the position, the knowledge required and the size of the company, supplemented by a capped variable remuneration based on performance compared with the agreed targets.
The variable remuneration is determined according to the objectively measurable evaluation criteria agreed at the start of the year by the Board of Directors on the advice of the Appointment and Remuneration Committee. The extent to which the evaluation criteria are met is assessed by the Board of Directors on the advice of the Appointment and Remuneration Committee at the start of the following year, in the light of the financial statements for the year closed.
In the course of the 2019 fiscal year management agreements concluded with the new managing director and the new CFO. Mr. Colson left the company on 31 January 2019. On 28 February 2019, the association with Mr. Filip Van Wijnendaele was terminated by mutual agreement.
1 The mandate of Ms. de Hemptinne expired as of the General meeting of 7 May 2019.
On 12 October 2018, an agreement was concluded between Home Invest Belgium and Mr. Sven Janssens for independent cooperation. This agreement provides for an annual basic remuneration, payable in monthly instalments of € 300,000, as well as variable remuneration ranging from 0 % to 20 % of the annual basic remuneration for the year in question.
Mr. Sven Janssens is also entitled to a one-off welcome bonus of € 60,000 (excluding VAT), payment of which is spread over the 2018 and 2019 financial years.
His variable remuneration is determined based on criteria established beforehand by the Board of Directors, at the latest by 15 March every year.
Mr. Janssens' contract provides for the right to a mobile phone, portable computer, reimbursement of the subscription costs, the communication costs and the costs of the internet connection as well as costs incurred on behalf of the company.
Contractual provisions on termination and severance payment: the agreement concluded between Mr. Janssens and Home Invest Belgium stipulates that in the event of termination at the initiative of the company, it must observe a period of notice of three months during the first year of the fulfilment of the agreement, four and a half months during the second year and six months thereafter. The company has the option, if it deems fit, to replace this period of notice (in full or in part) by payment of compensation in lieu of notice, the amount of which is calculated on the basis of the initial fixed compensation, including indexation, for a period that corresponds to the period of notice or the remainder of this period of notice. These contractual provisions are in line with the Belgian Corporate Governance Code.
On 21 November 2018, Home Invest Belgium and Mr. Preben Bruggeman entered into an agreement for independent collaboration which provides a basic annual remuneration, payable monthly, and a variable remuneration from 0 % to 20 % of the basic annual remuneration for the financial year in question.
Mr. Bruggeman's contract also provides for a mobile phone, laptop computer, reimbursement of mobile contract and communication costs, the cost of an internet connection and any costs incurred on behalf of the company. He has been working for the company since 7 January 2019.
Pension scheme, additional insurances or other benefits: none.
Performance bonuses in shares, share options or other rights to acquire shares: none.
Contractual stipulations for termination and severance payment: the contract entered into by Mr. Bruggeman and Home Invest Belgium stipulates that in case of termination of the contract by the company, the company must observe a notice period of two months during the first year of the contract's execution, three months during the second year and four months from the third year. The company may, in its own discretion, partially or fully substitute this notice period by payment of severance pay, the amount of which is calculated based on the initial remuneration, including indexation, for a period equal to the notice period or the balance of the notice period given. These contractual stipulations are in line with the Belgian Corporate Governance Code.
| In € | Fixed remuneration |
Variable remuneration for fiscal year |
Severance payments |
Pension plan | Other |
|---|---|---|---|---|---|
| CEO Sven Janssens | 300,000 | 150,000 | / | / | 30,000 1 |
| Other members of executive management2 |
262,140 | 97,500 | 205,721 3 | / |
1 Entry premium.
2 The other members of the effective management are the new CFO (Mr. Preben Bruggeman) for 12 months, the former CFO (Jean-Luc Colson) for 1 month, and the former COO (Filip Van Wijnendaele) for 2 months.
3 The former COO (Filip Van Wijnendaele) was entitled to receive a severance payment.
No amendments are foreseen to be made in 2020 regarding the remuneration structure for the members of the Board of Directors and the committees.
The payment of the variable remuneration for the CEO for financial year 2020 has been made subject to objectives and qualitative and quantitative criteria set by the Board of Directors, upon recommendation of the Appointment and Remuneration committee. The
variable remuneration for the CEO will be capped at € 60,926.
Payment of the variable remuneration for senior management for the 2020 financial year depends on the objectives and the qualitative and quantitative criteria set by the Board of Directors, following recommendations made by the Appointment and Remuneration Committee. The variable remuneration for executive management will be capped at € 100,188 in 2020.
| In € | Fixed remuneration |
Maximale variable remuneration for fiscal year |
|---|---|---|
| CEO | 304,632 | 60,926 |
| Other members of senior management1 |
196,310 | 39,262 |
| Total | 500,942 | 100,188 |
The other member of the executive management is Mr. Preben Bruggeman.
From 2020 onwards, the members of the executive management will also be eligible for a long term incentive plan (LTIP) that is paid out in company shares. The amounts which can be earned in such a way are capped. Exceeding set objectives will not provide for additional bonuses.
| Manager | Capped yearly variable remuneration, payable in cash |
Capped LTIP after an evaluation period of three years, payable in cash (total after three years) |
|---|---|---|
| CEO | 20 % of the base remuneration |
200 % of cash remuneration |
| CFO | 20 % of the base remuneration |
200 % of cash remuneration |
The statutory auditor of Home Invest Belgium is appointed by the Ordinary General Meeting subject to prior approval from the FSMA. His tasks are as follows:
The Ordinary General Meeting of 7 May 2019 appointed EY Bedrijfsrevisoren BV/SRL as the statutory auditor of Home Invest Belgium, represented by Mr. Joeri Klaykens, for a period of three years.
The mandate of the statutory auditor expires after the Ordinary General Meeting to be held in 2022.
| In € - VAT excl. | 2019 | ||
|---|---|---|---|
| Remuneration of auditor for the fiscal year (stat. base) | |||
| Remuneration for executing mandate of auditor | € 33,000 | ||
| Remuneration for exceptional performance or special assignments | |||
| Other audit assignments | € 15,500 | ||
| Other assignments besides audit task | € 2,000 | ||
| TOTAL | € 50,500 |
The remuneration of the auditor for the audit of the subsidiaries amounted for the financial year 2019 to € 35,250.
The statutory auditor has reviewed this management report and confirmed that the information provided does not present any obvious inconsistencies compared with the information obtained while fulfilling his mandate.
His report is included in the report on the consolidated annual accounts in the Financial Statements chapter.
EY Bedrijfsrevisoren BV/SRL based in 1831 Diegem, De Kleetlaan 2, represented by Mr. Vincent Etienne has been appointed as statutory auditor for Sunparks De Haan.
The company has appointed two real estate experts for buildings in the portfolio located in Belgium and one for property in the portfolio located in the Netherlands. Each expert carries out the valuation on a quarterly basis, as well as each time the company makes a share issue, at the time of acquisition, contribution or sale of buildings or merger/de-merger of a real estate company or companies with the RREC or the integration of buildings into the consolidation scope of the RREC by other means.
Cushman & Wakefield (RPR/RPM Brussels: 0418.915.383), with its registered office at Avenue des Arts 56, 1000 Brussels (Belgium), represented by Mr. Emeric Inghels, acts as the company's independent real estate expert for part of the property located in Belgium. Their mandate expires on 31 December 2020. Their annual remuneration is calculated as follows:
| Surfaces to be assessed | Per assessed m2 (excl. VAT) |
|---|---|
| Tranche from 0 to 125,000 m2 | € 0.40 |
| Tranche from 125,001 to 175,000 m2 | € 0.35 |
| Tranche of more than 175,000 m2 | € 0.30 |
During the 2019 financial year, Cushman & Wakefield received fees totaling € 83,695 incl. VAT.
CBRE Valuations Services BVBA/SPRL (RPR/RPM Brussels: 0859.928.556), with its registered office at avenue Lloyd George 7, 1000 Brussels, Belgium, represented by Mr. Pieter Paepen, acts as the company's independent real estate valuation expert for the rest of the property located in Belgium. Their mandate expires on 31 December 2020. Their annual remuneration is calculated as follows:
| Surfaces to be assessed | Per assessed m2 (excl. VAT) |
|---|---|
| Tranche from 0 tot 125,000 m2 | € 0.375 |
| Tranche from 125,001 tot 175,000 m2 | € 0.325 |
| Tranche of more than 175,001 m2 | € 0.275 |
| First evaluation | € 0.5 |
During the 2019 financial year, the fees received by CBRE Valuations Services BVBA/SPRL totaled € 23,479 incl. VAT.
BNP Paribas Real Estate Hotels France, with its registered office at Quai de la Bataille de Stalingrad 167, 92867 Issy-les-Moulineaux (France) and represented by Mrs. Blandine Trotot, acts as an independent property expert for the Port Zélande property portfolio comprising 248 holiday homes and 40 apartments.
During the 2019 financial year, BNP Paribas Real Estate Hotels France received fees totaling € 7,300 excl. VAT.
BNP Paribas Fortis NV/SA ((RPR/RPM Brussels: 0403.199.702), established at Montagne du Parc 3, 1000 Brussels, is the lead bank responsible for the financial servicing of shares in Home Invest Belgium (paying dividends, subscribing to capital increases, convening General Meetings).
The remuneration of the bank is determined as follows (plus VAT):
| Dematerialised securities (VAT excl.) |
0,12 % of net value of coupons not yet payable (excl. VAT) |
|
|---|---|---|
| 2 % of net value of coupons not yet payable |
||
| Bearer securities | + € 0,10 per denomination (excl. VAT) |
In the 2019 financial year, the total remuneration of BNP Paribas Fortis amounted to € 17,908 incl. VAT.
Bank Degroof Petercam acts as the liquidity provider for Home Invest Belgium shares in order to promote the tradability of the shares. The remuneration of the liquidity provider amounts to € 24,200 excl. VAT per year.
Home Invest Belgium is subject:
If an interest of a director under property law is directly or indirectly in conflict with a decision or a transaction that falls within the areas of competence of the Board of Directors, they must inform the other members of the Board of Directors of this before the board deliberates, in application of article 7:96 CCA. The declaration and the reasons that prove this conflicting interest must be included in the minutes of the Board of Director's meeting which will have to decide. In addition, the statutory auditor must be informed, and the director concerned may not take part in the deliberations of the Board of Directors on the transactions or decisions concerned or vote on these matters. The relevant minutes are then included in the management report. The aforementioned article 7:96 CCA does, however, provide for certain exceptional cases, including in connection with habitual transactions that take place under normal market conditions and against securities that usually apply on the market for such transactions.
Article 7:97 CCA states that when a listed company considers a transaction with an associated company (barring a few exceptions), an ad-hoc committee should be set up, comprising three independent directors. This committee, assisted by an independent expert, should inform the Board of Directors of its reasoned opinion of the transaction under consideration. The Board of Directors can only take a decision once it has read this report.
The statutory auditor should also give his opinion of the faithfulness of the data in the opinion from the committee and the report from the Board of Directors. The conclusion of the committee, the extract of the minutes of the Board of Directors' meeting and the opinion of the statutory auditor are included in the management report.
Article 37 of the RREC Act (as amended from time to time) and Article 8 of the RREC Royal Decree (as amended from time to time) require public RRECs, among other things (barring certain exceptions)
to inform the FSMA in advance of any transaction which the RREC is planning to carry out with an associated company, a company with which the RREC is associated through a holding, the other shareholders of a perimeter company, the directors or members of the executive management. The company must prove that the transaction under consideration is important for it and is in line with its strategy and that this is being carried out under normal market conditions.
If the transaction concerns real estate, an independent estimator should estimate the fair value of the property, which will then serve as the minimum price at which the property can be transferred or the maximum for which it may be purchased. The RREC must inform the public when the transaction is carried out and should clarify this information in its annual financial report.
The Home Invest Belgium Corporate Governance Charter stipulates a duty of confidentiality which the directors and senior management should apply. The directors and the members of the management team may not use information received for purposes other than the exercising of their mandate. They must personally protect confidentiality and may not disclose the information under any circumstances. This personal obligation also applies for representatives of a legal entity, director or member of the management team.
If the company is on the point of concluding a transaction with a director or with a company with which they are associated which does not fall under article 7:96 CCA (for example, because it is a habitual transaction concluded under ordinary market conditions and with ordinary market guarantees), the company nevertheless deems it necessary that this director should inform the other directors of this before the deliberations of the Board of Directors and should refrain from taking part in the deliberations of the Board of Directors relating to this transaction and from taking part in the vote.
Finally, in the event of a conflict of interest involving the recognised property expert of the company in the context of an investment transaction, the company should call upon another recognised property expert for the valuation of the property in question until this property has, if appropriate, been integrated into the company's property portfolio.
The directors of Home Invest Belgium are appointed based on their relevant experience in real estate. It is therefore possible that they fulfil director's mandates in other real estate companies, so that it would not be inconceivable that a transaction may be presented to the Board of Directors in which a director could have a conflicting interest under property law to that of the company as the transaction is carried out. In that case, the rules on the prevention of conflicts of interest should be stringently applied and the director should declare this before withdrawing from the deliberation and decision-making process.
The Board of Directors has drawn up a dealing code containing rules that must be followed by the directors and senior management, its staff and appointees who wish to trade in financial instruments issued by Home Invest Belgium.
The dealing code was drawn up in accordance with the applicable regulations and provides, among other things, for:
The following information constitutes explanations about elements likely to have consequences in the event of a public takeover bid on the shares of Home Invest Belgium, as referred to article 34 of the Royal Decree of 14 November 2007:
in addition, the articles of association of Home Invest Belgium grant authorisation to the Board of Directors concerning the purchase, pledging and disposal of its own shares2;
on 31 December 2019, the share capital of Home Invest Belgium was represented by € 3,299,858 fully paid up ordinary shares3, without indication of nominal value, each representing an equal share of the capital. The shareholding structure is given in the Stock Market Activity chapter in this annual financial report;
2 Article 6.4. of the articles of association.
1 Article 6.3. of the articles of association grants Board of Directors authorisation to increase the capital to a maximum of € 88,949,294.75. This authorisation was granted for a period of five years as of the publication in the Annexes to the Belgian Official Journal of the minutes of the Extraordinary General Meeting of 13 September 2017, that is on 21 November 2017. This possibility has not yet been used, so the unused balance of the authorised capital currently stands at € 88,949,294.75.
3 Including 11,712 shares which the company owns itself.
Corporate governance statement
| Consolidated results ��������������������������������������������������78 | |
|---|---|
| Statutory annual accounts | 108 |
| EPRA-performance indicators������������������������������114 | |
| Statutory auditor's reports�������������������������������������116 | |
| Shareholder's calendar��������������������������������������������135 |
| Note | 2019 | 2018 | |
|---|---|---|---|
| I. Rental Income | 5 | 25 185 096 | 24 286 604 |
| III. Rental-related expenses | 5 | -63 129 | -294 009 |
| NET RENTAL RESULT | 25 121 967 | 23 992 595 | |
| IV. Recovery of property charges | 6 | 181 842 | 170 800 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 6 | 817 099 | 577 974 |
| VII. Charges and taxes normally payable by the tenant on let properties | 6 | -2 992 075 | -3 016 662 |
| VIII. Other incomes and expenses related to letting | 6 | 0 | -650 |
| PROPERTY RESULT | 23 128 832 | 21 724 057 | |
| IX. Technical costs | 7 | -1 150 089 | -1 099 527 |
| X. Commercial costs | 8 | -470 586 | -312 350 |
| XI. Taxes and charges on unlet properties | 9 | -212 819 | -340 659 |
| XII. Property management costs | 9 | -2 431 812 | -3 903 591 |
| XIII. Other property costs | 0 | -8 616 | |
| Proptery Costs | -4 265 306 | -5 664 743 | |
| PROPERTY OPERATING RESULT | 18 863 526 | 16 059 314 | |
| XIV. General corporate expenses | 10 | -2 876 776 | -887 977 |
| XV. Other operating incomes and expenses | 10 120 | 285 005 | |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 996 870 | 15 456 342 | |
| XVI. Result sale investment properties | 11 | 123 069 | 610 185 |
| XVIII. Changes in fair value of investment properties | 11 | 48 472 578 | 59 413 636 |
| XIX. Other portfolio result | 11 | -536 613 | -171 278 |
| PORTFOLIO RESULT | 48 059 034 | 59 852 543 | |
| OPERATING RESULT | 64 055 903 | 75 308 885 | |
| XX. Financial income | 12 | 52 814 | 105 328 |
| XXI. Net interest charges | 13 | -4 334 698 | -4 672 338 |
| XXII. Other financial charges | 14 | -113 219 | -55 202 |
| XXIII. Changes in fair value of financial assets and liabilities | 14 | -5 412 444 | -1 613 701 |
| Financial result | -9 807 547 | -6 235 914 | |
| XXIV. Share in the profit or loss of | 1 329 296 | 0 | |
| associates and joint ventures | |||
| PRE-TAX RESULT | 55 577 653 | 69 072 971 | |
| XXIV. Corporation tax | 15 | -88 152 | -295 246 |
| XXV. Exit tax | 0 | 0 | |
| TAXES | -88 152 | -295 246 | |
| NET RESULT | 55 489 501 | 68 777 725 | |
| OTHER ELEMENTS FROM THE GLOBAL RESULT | 0 | 0 | |
| GLOBAL RESULT | 55 489 501 | 68 777 725 | |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 55 489 501 | 68 777 725 | |
| Exclusive portfolio result | -48 059 034 | -59 852 543 | |
| Exclusive changes in the real value of the financial assets | 5 412 444 | 1 613 701 | |
| Exclusive non EPRA earnings in the share of the result of associates and joint ventures EPRA EARNINGS |
-174 781 12 668 130 |
0 10 538 883 |
|
| Average number of shares1 | 3 288 146 | 3 288 146 | |
| NET RESULT PER SHARE | 16.88 | 20.92 | |
| EPRA EARNINGS PER SHARE | 3.85 | 3.21 |
1 The average number of shares is calculated with exclusion of the 11 712 shares held by the company. 1 The number of shares at closing date is calculated excluding the 11,712 treasury shares held by the company.
| ASSETS | Note | 2019 | 2018 |
|---|---|---|---|
| I. Non-current assets | 633 429 002 | 544 868 654 | |
| B. Intangible assets | 16 | 375 072 | 462 356 |
| C. Investment properties | 17 | 609 594 469 | 524 506 117 |
| D. Other tangible assets | 19 | 700 200 | 353 420 |
| E. Non-current financial assets | 24 | 2 096 993 | 155 574 |
| F. Lease receivables | 20 | 332 972 | 391 187 |
| I. Participations in associated companies and joint-ventures | 21 | 20 329 296 | 19 000 000 |
| II. Current assets | 5 740 474 | 6 237 370 | |
| C. Lease receivables | 20 | 58 215 | 55 700 |
| D. Trade receivables | 22 | 977 757 | 1 036 607 |
| E. Tax receivables and other current assets | 22 | 463 471 | 1 881 629 |
| F. Cash and cash equivalents | 23 | 4 200 730 | 3 239 503 |
| G. Deferred charges and accrued income | 24 | 40 300 | 23 932 |
| TOTAL ASSETS | 639 169 476 | 551 106 024 | |
| SHAREHOLDERS' EQUITY | 309 617 696 | 269 003 279 | |
| I. SHAREHOLDERS' EQUITY | 309 617 696 | 269 003 279 | |
| A. Capital | 28 | 87 999 055 | 87 999 055 |
| B. Share premium account | 28 | 24 903 199 | 24 903 199 |
| C. Reserves | 28 | 152 816 933 | 99 653 847 |
| D. Net result of the financial year | 28 | 43 898 509 | 56 447 178 |
| II. MINORITY INTERESTS | 0 | 0 | |
| LIABILITIES | 329 551 780 | 282 102 746 | |
| I. Non-current liabilities | 281 548 083 | 274 323 432 | |
| A. Provisions | 0 | 173 625 | |
| B. Non-current financial debts | 25 | 273 188 605 | 263 284 316 |
| a. Financial Debts | 25 | 233 000 000 | 223 500 000 |
| b. Financial Leasing | 276 600 | 0 | |
| c. Others | 25 | 39 912 005 | 39 784 316 |
| C. Other non-current financial liabilities | 25 | 6 300 285 | 9 667 059 |
| F. Deferred taxes - obligations | 27 | 2 059 193 | 1 198 432 |
| a. Exit tax | 367 021 | 167 282 | |
| b. Others | 1 692 172 | 1 031 150 | |
| II. Current liabilities | 48 003 697 | 7 779 314 | |
| B. Current financial debts | 25 | 40 609 456 | 749 596 |
| a. Financial debts | 20 000 000 | ||
| b. Financial Leasing | 108 151 | 0 | |
| c. Others | 20 501 304 | 749 596 | |
| D. Trade debts and other current debts | 26 | 5 367 735 | 5 301 051 |
| b. Others | 5 367 735 | 5 301 051 | |
| E. Other current liabilities | 154 654 | 151 225 | |
| F. Accrued charges and deferred income | 24 | 1 871 852 | 1 577 442 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 639 169 476 | 551 106 024 |
| Capital | Costs of capital increase |
Share premium |
Legal reserves |
Reserves from the balance of changes in fair value of investment properties |
Reserves from estimated transfer costs and rights |
||
|---|---|---|---|---|---|---|---|
| BALANCE AT 31/12/2017 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 120 301 194 | -34 275 030 | |
| Allocation of result 2017 | 0 | 0 | 0 | 0 | 6 679 297 | -5 854 668 | |
| Allocation of operational distributable result | |||||||
| Changes in deferred taxes | |||||||
| Changes in Fair Value of investment properties | 6 679 297 | -5 854 668 | |||||
| Changes in Fair Value of hedging instruments | |||||||
| Dividends financial year 2017 (balance paid in May 2018) |
|||||||
| Paid dividend (relating to financial year 2017) | |||||||
| Paid interim dividend financial year 2017 (paid in December 2017) |
|||||||
| Changes resulting from the sale of buildings | -4 175 124 | 893 731 | |||||
| Dividend 2018 (interim dividend paid in December 2018) |
|||||||
| Result of the financial year 2018 | |||||||
| Takeover of subsidiairies | |||||||
| Merger of subsidiaries | -1 497 602 | 778 444 | |||||
| Other increases (decreases) | |||||||
| BALANCE AT 31/12/2018 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 121 307 765 | -38 457 522 | |
| BALANCE AT 31/12/2018* | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 121 307 765 | -38 457 522 | |
| Allocation of result 2018 | 0 | 0 | 0 | 0 | 71 345 223 | -11 846 385 | |
| Allocation of operational distributable result | |||||||
| Changes in deferred taxes | 85 202 | ||||||
| Changes in Fair Value of investment properties | |||||||
| Changes in Fair Value of hedging instruments | 71 260 021 | -11 846 385 | |||||
| Dividends financial year 2018 (balance paid in May 2019) |
|||||||
| Paid dividend (relating to financial year 2018) | |||||||
| Paid interim dividend financial year 2018 (paid in December 2018) |
|||||||
| Changes resulting from the sale of buildings | -7 234 890 | 1 586 739 | |||||
| Result of the financial year 2019 | |||||||
| Dividend 2019 (interim dividend paid in December 2019) |
|||||||
| Merger of subsidiaries | |||||||
| Other increases (decreases) | 20 335 | -20 335 | |||||
| BALANCE AT 31/12/2019 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 185 438 433 | -48 737 503 |
| Reserves from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS applicable) |
Reserves from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS not applicable) |
Reserves for latent taxes |
Reserves for treasury shares |
Other reserves |
Result carried forward from previous financial years |
Net result of the financial year |
Total |
|---|---|---|---|---|---|---|---|
| 0 | -9 280 017 | 0 | -686 943 | 1 259 467 | 25 379 059 | -143 685 | 215 555 079 |
| 0 | 1 226 658 | -774 669 | 0 | 0 | -3 813 555 | 143 685 | -2 393 252 |
| -3 813 555 | 3 813 555 | 0 | |||||
| -774 669 | 774 669 | 0 | |||||
| -824 629 | 0 | ||||||
| 1 226 658 | -1 226 658 | 0 | |||||
| -2 393 252 | -2 393 252 | ||||||
| -14 359 510 | -14 359 510 | ||||||
| 11 966 258 | 11 966 258 | ||||||
| 3 281 393 | 0 | ||||||
| -12 330 548 | -12 330 548 | ||||||
| 68 777 725 | 68 777 725 | ||||||
| 0 | |||||||
| 113 431 | -605 726 | ||||||
| 0 | |||||||
| 0 | -8 053 358 | -774 669 | -686 943 | 1 259 467 | 24 960 329 | 56 447 178 | 269 003 279 |
| 0 | -8 053 358 | -774 669 | -686 943 | 1 259 467 | 24 960 329 | 56 447 178 | 269 003 279 |
| 0 | -1 613 701 | -256 480 | 0 | 0 | -4 469 627 | -56 447 177 | -3 288 147 |
| -4 469 627 | 4 469 627 | 0 | |||||
| -256 480 | 171 278 | 0 | |||||
| -11 846 385 | -59 413 636 | 0 | |||||
| -1 613 701 | 1 613 701 | 0 | |||||
| -3 288 147 | -3 288 147 | ||||||
| -15 618 695 | -15 618 695 | ||||||
| 12 330 548 | 12 330 548 | ||||||
| 5 648 151 | 0 | ||||||
| 55 489 503 | 55 489 503 | ||||||
| -11 590 993 | -11 590 993 | ||||||
| 4 055 | 4 055 | ||||||
| 0 | |||||||
| 0 | -9 667 059 | -1 031 149 | -686 943 | 1 259 467 | 26 142 908 | 43 898 510 | 309 617 696 |
| 2019 | 2018 | |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3 239 504 | 7 183 786 |
| 1. Cash flow from operating activities | 14 752 332 | 10 392 703 |
| Result for the financial year | 55 489 501 | 68 777 726 |
| Result for the financial year before interest and taxes | 64 055 903 | 75 308 885 |
| Interest received | 52 814 | 105 328 |
| Interest paid | -4 447 917 | -4 727 540 |
| Change in fair value of financial assets and liabilities | -5 412 444 | -1 613 701 |
| Share in the profit of associates and joint ventures | 1 329 296 | 0 |
| Taxes | -88 152 | -295 246 |
| Adjustment of profit for non-cash transactions | -39 222 056 | -53 553 002 |
| Depreciation and impairments | 197 104 | 170 415 |
| - Depreciation and impairments on non-current assets | 197 104 | 170 415 |
| Other non-monetary elements | -43 691 194 | -57 628 657 |
| Depreciation of previously capitalised financing costs | 39 215 | 0 |
| - Changes in fair value of investment properties (+/-) | -48 472 577 | -59 413 636 |
| Changes in the fair value of financial assets | -1 329 296 | 0 |
| - Changes in fair value of financial instruments (+/-) | 5 412 443 | 1 784 979 |
| Exit tax movements | 661 022 | 0 |
| Other non-cash movements | -2 000 | 0 |
| Gain on realization of assets | -123 069 | -716 973 |
| - Capital gains realized on the sale of non-current assets | -123 069 | -716 973 |
| Recovery of expenses and financial products | 4 395 103 | 4 622 213 |
| Change in working capital needs | -1 515 112 | -4 832 021 |
| Movements in asset items: | -219 261 | 366 153 |
| - Current financial assets | -2 516 | 80 052 |
| - Trade receivables | 58 849 | 2 363 536 |
| - Tax receivables and other short-term assets | -276 880 | -2 096 235 |
| - Deferred charges and accrued income | 1 285 | 18 800 |
| Movements of liabilities items: | -1 295 851 | -5 198 174 |
| - Trade and other current debts | -606 660 | -1 989 584 |
| - Other current liabilities | 3 429 | -3 324 754 |
| - Accrued charges and deferred income | 277 208 | 116 164 |
| -Provisions | -173 625 | 0 |
| Deferred taxes - Obligations | -796 204 | 0 |
| 2. Cash flow from investment activities | -9 439 397 | -23 530 188 |
| Investment properties - capitalized investments Investment properties - new acquisitions |
-4 045 810 -5 623 904 |
-3 733 264 0 |
| Sales of investment properties | 12 837 712 | 7 760 032 |
| Development projects | -12 592 658 | -8 438 944 |
| Other intangible assets | 0 | -108 553 |
| Other tangible assets | -74 316 | -70 243 |
| Non-current financial assets | 1 363 | 0 |
| Receivables leasing | 58 215 | 0 |
| Other non-current financial assets | 0 | -18 939 216 |
| 3. Cash flow from financing activities | -4 351 709 | 9 193 203 |
| Increase (+) / decrease (-) bank debts | 25 722 561 | 28 539 215 |
| Increase (+)/ decrease (-) financial debts | -80 493 | 0 |
| Other long-term financial debts | -10 722 000 | 0 |
| Interest received | 52 814 | 105 328 |
| Interest paid | -4 445 450 | -4 727 540 |
| Dividend of the previous financial year | -3 288 147 | -2 393 252 |
| Interim dividend | -11 590 993 | -12 330 548 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD 4 200 730 3 239 504
| NOTE 1: | GENERAL INFORMATION ON THE COMPANY | 84 |
|---|---|---|
| NOTE 2: | ACCOUNTING POLICIES | 84 |
| NOTE 3: | ESTIMATES, ASSUMPTIONS AND MAIN SOURCES OF UNCERTAINTY | 90 |
| NOTE 4: | SEGMENTED INFORMATION (CONSOLIDATED) | 91 |
| NOTE 5: | EASE INCOMES AND CHARGES | 94 |
| NOTE 6: | PROPERTY REVENUES | 94 |
| NOTE 7: | TECHNICAL EXPENSES | 95 |
| NOTE 8: | COMMERCIAL EXPENSES | 95 |
| NOTE 9: | EXPENSES AND TAXES ON NON-LEASED GOODS – PROPERTY MANAGEMENT COSTS – OTHER PROPERTY COSTS |
95 |
| NOTE 10: | GENERAL COMPANY EXPENSES | 95 |
| NOTE 11: | PORTFOLIO RESULT | 96 |
| NOTE 12: | FINANCIAL INCOME | 96 |
| NOTE 13: | INTEREST EXPENSES | 96 |
| NOTE 14: | OTHER FINANCIAL EXPENSES | 97 |
| NOTE: 15: | VARIATIONS IN THE FAIR VALUE OF ASSETS AND LIABILITIES – PARTICIPATION IN THE RESULT OF COMPANIES AND JOINT VENTURES |
97 |
| NOTE 16: | TAXATION OF THE RETURNS | 97 |
| NOTE 17: | INTANGIBLE FIXED ASSETS | 97 |
| NOTE 18: | INVESTMENT PROPERTIES | 98 |
| NOTE 19: | OTHER TANGIBLE FIXED ASSETS | 100 |
| NOTE 20: | LEASING LIABILITIES | 100 |
| NOTE 21: | HOLDINGS IN ASSOCIATED COMPANIES AND JOINT VENTURES | 100 |
| NOTE 22: | LIABILITIES | 101 |
| NOTE 23: | CASH AND CASH EQUIVALENTS | 101 |
| NOTE 24: | DEFERRED ACCOUNTS | 101 |
| NOTE 25: | FINANCIAL ASSETS AND LIABILITIES | 102 |
| NOTE 26: | TRADE AND OTHER SHORT-TERM LIABILITIES | 104 |
| NOTE 27: | DEFERRED TAXES | 104 |
| NOTE 28: | CAPITAL, SHARE PREMIUMS AND RESERVES | 104 |
| NOTE 29: | DEBT RATIO | 105 |
| NOTE 30: | CONSOLIDATION SCOPE | 106 |
| NOTE 31: | TRANSACTIONS WITH ASSOCIATED PARTIES IN RELATION TO THE PROFIT AND LOSS ACCOUNT |
107 |
| NOTE 32: | OFF-BALANCE SHEET RIGHTS AND OBLIGATIONS | 107 |
| NOTE 33: | EMPLOYMENT | 107 |
| NOTE 34: | REMUNERATION AUDITOR | 107 |
| NOTE 35: | EVENTS OCCURRED AFTER THE BALANCE DATE | 107 |
Home Invest Belgium NV is a regulated real estate company. It was set up in the form of a public limited company under Belgian law. Its headquarters are located at Woluwelaan 46/11, 1200 Brussels, Belgium. The company is listed on NYSE Euronext Brussels. The consolidated financial statements comprise Home Invest Belgium and its consolidated companies, the BVBA Charlent 53 Freehold, the NV DG Development and the NV BE Real Estate.
The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union. In accordance with article 11 of the Royal Decree of 13 July 2014 with regard to the bookkeeping, annual financial statements and consolidated financial statements of real estate SIR, Home Invest Belgium has made use of the option to draw up its annual financial statements in accordance with IFRS standards.
The company drew up its opening IFRS balance sheet on 1 January 2006 (date of transition to IFRS). In accordance with IFRS 1 - First-time adoption of IFRS, the company decided not to restate acquisitions made prior to the IFRS transition date, in accordance with IFRS 3 - Business combinations.
The financial statements are presented in euros, unless stated otherwise. They are prepared on a historical cost basis, with the exception of investment properties and certain financial instruments, which are assessed at their fair value. The accounting policies have been applied consistently for the financial years presented.
The consolidated annual financial statements include the annual accounts of Home Invest Belgium and its consolidated companies.
Control exists when Home Invest Belgium holds, directly or indirectly, the power over the entity; is exposed or has rights to variable returns as a result of its involvement in that entity; has the ability to use its power over the entity to influence the amount of such returns.
The annual accounts of the consolidated companies which Home Invest Belgium controls are fully consolidated from the date of acquisition until the date of control.
The accounts of the consolidated companies are prepared for the same accounting year as that of Home Invest Belgium, except for the company BE Real Estate SA/NV whose accounting year ends on June 30th. Uniform IFRS valuation rules are applied to the subsidiaries concerned. All intra-group transactions, as well as unrealised intra-group profits and losses on transactions between group companies, are eliminated. Unrealised losses are eliminated unless the loss is extraordinary.
A joint venture is a collective settlement in which parties, which perform a joint audit, are entitled to the net assets of the settlement. The consolidated operating accounts include the share of the Group in the accounts of the joint ventures in accordance with the equity method. This share is calculated from the start date to the end date of the joint audit. The annual accounts of the jointly audited entities comprise the same accounting period as that of the Company.
Goodwill is the positive difference between the price of the business combination and the group's share in the fair value of the acquired assets and liabilities of the acquired subsidiary, at the time of takeover. The price of the business combination consists of the acquisition price plus all directly attributable transaction costs.
Negative goodwill (badwill) is the negative difference between the price of the business combination and the group's share in the fair value of the acquired assets, and liabilities of the acquired subsidiary, at the time of takeover. This negative goodwill is immediately included in the acquirer's income statement.
The IFRS 3 - Business Combinations - governs the accounting treatment of Goodwill or Badwill and also refers to IAS 36 - Depreciation of assets - concerning the depreciation test to be carried out each year.
Intangible assets with durability are initially valued at their cost. After initial recognition, they are valued at their cost reduced by accumulated amortisation and any impairment losses.
Intangible assets are amortised on a straight-line basis, based on a best estimate of their duration of use. The duration of use and amortization method of intangible assets are reviewed at least at the end of every financial year.
Investment properties in operation are investments in real estate assets held for long-term rent and/or to increase capital. Investment properties are initially recognised at cost, including transfer rights and non-deductible VAT (the "acquisition value"). Where buildings are acquired through mergers, demergers and contribution of a business segment, the taxes owed on the potential capital gains of the assets integrated in this way are included in the cost of the assets in question.
At the end of the first accounting period after their initial recognition, investment properties are valued at fair value. The determination of the fair value happens in two steps.
In the first step, an independent external real estate expert quarterly values the property portfolio, including costs, registration duty and fees (i.e. in terms of their "investment" value).
The expert values properties on the basis of two methods: capitalisation of their estimated rental value and the Discounted Cash Flow valuation method (DCF-method). The expert can decide to use one or the other method to value the real estate properties.
In the second step, in order to move from investment value to fair value, the expert keeps an estimated amount for the fees related to the transfer of the property from the estimated value of the real estate investment.
The investment value deducted by the fees related to the transfer of the property equals the fair value following the meaning of IFRS 13.
The fair value is calculated in Belgium as following:
For properties in the portfolio which are located in Belgium, the RREC reduces the investment value determined by the expert by 2.5%1 less, if their investment value exceeds € 2 500 000.
If the investment value of these other buildings is less than this amount of € 2 500 000, the full registration duties will be deducted from the valuation amount in accordance with the applicable regional regulations:
When Home Invest Belgium decides to dispose of a building from the Belgian portfolio under a specific transaction structure, the actual fees related to the transfer expected to apply to the transaction are deducted for the determination of the fair value, regardless of the global investment value off the building. The tax related to the transfer of residential property amounts to 2% in the Netherlands.
Any gain or loss resulting from a change in fair value is recognised in the results statement under "XVIII. Changes in Fair Value of Investment Properties» in line «A. Positive Changes in Fair Value of Investment Properties" or "B. Negative Changes in Fair Value of Investment Properties".
As regards changes in fees and charges, they are included under the heading "XVIII. Changes in the fair value of investment properties" in lines "C. Positive changes in estimated costs and transfer taxes involved in the hypothetical disposal of investment properties" or "D. Negative changes in estimated costs and transfer taxes Intervening in the hypothetical disposal of investment property".
The appropriation shall then be made in the own equity under heading C. Reserves – "b. Reserve of the balance of changes in the fair value of properties" and "c. Reserve for the estimated costs and transfer duties involved in the hypothetical disposal of investment properties (-)".
Building works which are the owner's responsibility are recognised in the financial statements in three different ways, depending on the type of work in question:
1 The accounting treatment (transfer duties of 2.5%) was published on 8 February 2006 on the BEAMA website and confirmed in a press release from BE-REIT Association (the professional association for Belgian RRECs) on 10 November 2016. 1The accounting treatment (transfer duties of 2.5%) was published on 8 February 2006 on the BEAMA website and confirmed in a press release from BE-REIT Association (the professional association for Belgian RRECs) on 10 November 2016.
The buildings where the costs are to be capitalised are identified according to the preceding criteria at the budget preparation stage.
The costs that can potentially be capitalized relate to materials, contracting works, technical studies, fees (architects, engineers, project management), VAT, taxes, internal costs and interest charges during the construction period.
At the moment of the sale of a real estate property, the gross sale price, minus the expenses related to the conclusion of these sales, is recognised in the income statement under the item XVI.A. Net sales of investment properties, while the cancellation of the latest fair value recorded for the asset in question, can be found (negative) under the item XVI.B. Book value of sold properties.
The realised gain distributable to the shareholder is accounted for as the difference between the net sales price (minus the marketing costs) and the historical acquisition value, increased with later investments. Given that the capital gain realized in relation to the last fair value is already recognized in the income statement, it is necessary to cancel further the unrealized gains and transfer taxes previously recognized in the "balance of changes in the fair value of real estate properties" by reclassification in the allocation of profit or loss in distributable capital gains. This last operation is carried out the same year as the sale of the real estate asset.
These amounts are fully included in the Calculation Scheme for the amount referred to in Article 13 §1, paragraph 1 of the Law of 16 June 2014 and published below.
Real estate that is built or developed for future use as investment property is included under the 'Project developments' subheading and assessed at their Fair Value in accordance with IAS 40.
After their initial entry, the projects are assessed at Fair Value if the following criteria are met:
The Fair Value is based on the assessment of the Property Expert (according to the standard methods and assumptions) and takes into account the expenses to be incurred during the overall completion of the project.
If the above conditions are not met, the project will remain valued at cost price. The cost price comprises all the costs related directly to the project development and any ensuing investment expenditures which are qualified as acquisition expenses (materials, contract works, technical studies, architect's fees, consultants, project management, legal advisors; insurance, VAT, taxes and allowable internal expenses).
If the duration of a project exceeds one year, the interest expenses that are directly attributed to the project development are also entered as assets as part of the cost price of the project development at an interest rate that reflects the average interest expense of Home Invest Belgium.
At the moment the works are completed the buildings are transferred from the 'Project development' heading to the 'Investment properties available to lease' heading.
Transaction fees related to acquisitions for commissions paid to real estate agents, fees to advisors and attributable internal costs are processed as follows:
Other tangible assets are recorded at cost less accumulate depreciation and any impairment losses. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset. The useful life and form of depreciation are reviewed at least at each year end.
The useful life is as follows for each asset category:
Letting expenses related to the letting of investment properties like commissions paid to real estate agents, marketing expenses and attributable internal costs are processed as follows:
Commercial claims are valued at transaction price on initial entry, if they do not comprise a significant finance component, as is the case for all such claims of Home Invest Belgium. Other financial assets are initially valued at Fair Value plus, in the case of a financial asset that is not valued at Fair Value through the profit and loss account, transaction costs that can be directly attributed to the acquisition of the financial asset.
A financial asset is classified as current if the terms of the anticipated cash flows are less than a year.
All financial assets included will then be assessed at amortised cost or Fair Value, according to IFRS 9. More specifically:
In the case of instruments listed on an active market, the Fair Value conforms to the market price (level 1). In the case of instruments not listed on an active market, the Fair Value is set using valuation techniques, including recent transactions between relevant, well-informed and independent parties willing to enter a transaction or transactions with instruments which are largely similar (level 2); or using discounted cash flow analyses, including assumptions which are largely consistent with observable market data (level 3). In some situations, the cost of an equity instrument can form a suitable estimate of the Fair Value. This may be the case if there is not sufficient recent information available in order to determine the Fair Value or if there is a wide range of possible valuations at Fair Value and the cost represents the best estimate of the Fair Value within that range.
The impairment loss of a financial asset that is valued at amortised cost is calculated on the basis of the anticipated loss model. The respective risks of a default are used as weighing factors in representing the weighted average.
For commercial claims and financial lease claims which do not comprise a considerable financial component (i.e. almost all commercial claims), the provision for losses is valued at an amount equal to the expected credit losses during the term. These are the anticipated credit losses arising from any defaults throughout the expected lifespan of these claims, on the basis of a provision matrix that takes into account historical information on defaults, adapted for future information.
Impairment losses are included in the consolidated profit and loss account, with the exception of debt instruments included at Fair Value in other elements of the overall result. In that case, the provision is accounted for in other elements of the overall result.
Financial liabilities are booked at amortised cost.
A derivative financial instrument is a financial instrument or other contract that comes under the scope of IFRS 9 and possesses the following three characteristics:
Home Invest Belgium uses financial derivatives to cover its exposure to the risk of interest rate changes in the context of the financing of its activities. Derivative financial instruments are initially assessed at Fair Value at the moment of entering the derivative contract and are revalued following initial entry at Fair Value at the end of each balancing period.
An investment property is considered as held for sale if it can be sold immediately and entirely (block sale) in its present state and such a sale is highly likely.
An investment property held for sale is valued in the same way as any other investment property.
The sale (unit by unit) of a building takes place over a number of years. Taking into account that the property expert values a property as a whole (and not unit by unit), this means that its entry under this heading is random and can mislead the reader in relation to the applicable strategy. Therefore, Home Invest Belgium has decided that these sales will not be entered under the heading of investment properties in ownership intended for sale from the 2017 fiscal year.
'Cash and Cash equivalents' consists of cash and current accounts. Cash equivalents are short term and highly liquid investments, which can be easily convertible into a known cash amount, have a maturity of no more than three months, and present no major risk of change in value.
These items are recognised in the balance sheet at nominal value or cost.
Ordinary shares are recognised in shareholders' equity. Costs directly linked to the issue of new shares or options are recognized in shareholders' equity, net of tax, as a deduction from the amount collected. Treasury shares repurchased are presented at purchase price and deducted from shareholders' equity.
A sale or cancellation of repurchased shares does not affect the income statement; gains and losses on treasury shares are recognised directly in shareholders' equity.
Dividends are recognised as liabilities only when approved by the General Meeting of shareholders. Any interim dividend is recorded as a liability as soon as the Board of Directors has taken the decision to proceed to pay such a dividend.
A provision is recognised in the balance sheet when:
Taxes on the earnings for the period consist of both current taxes and deferred taxes. These are recognised in the income statement except where they relate to items recognised directly in shareholders' equity, in which case they too are recognized in shareholders' equity.
Current taxes are the taxes payable on the taxable income of the past year as well as any adjustment to taxes paid (or recoverable) relating to past years. These taxes are calculated at the tax rate applicable at the closing date.
Deferred taxes are calculated using the liability method on temporary differences between the tax basis of an asset or liability and its accounting value as stated in the financial statements. The variation of the deferred tax is entered under the heading XIX Other portfolio accounts. These taxes are determined according to the tax rates expected at the time the asset will be realised or the obligation ends.
Deferred tax receivables are recognised for deductible temporary differences and on recoverable tax credits carried forward and tax losses, to the extent that it is probable that taxable profits will exist in the near future with which to use the tax benefit. The accounting value of deferred tax receivables is reviewed at every balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to absorb all or part of the deferred taxes.
Deferred tax debts and receivables are defined using the tax rates expected to apply in the years during which these temporary differences will be realised or settled, based on tax rates in effect or confirmed on the balance sheet date.
Exit tax is the tax on the capital gain resulting from the merger of a non-SIR company with a SIR. When a company without Sicafi status enters into the group's consolidation scope for the first time, a provision for exit tax is recorded.
Rental income from simple rental contracts is recorded as income on a straight-line basis over the life of the rental contract. Rent-free periods and other benefits granted to customers are recorded on a straight-line basis over the first firm rental period. Termination indemnities are recorded in full at the time of their invoicing under the item I.E. Rental Income.
The gain or loss on the sale of an investment property represents the difference between the sales income, net of transaction costs, and the latest fair value of the sold property on 31 December of the past financial year. That result is presented in item XVI "Income from sale of investment properties" of the income statement.
In the calculation scheme of article 13, para. 1, subpar. 1 of the Royal Decree of 13 July 2014, the distributable result comprises the item "± Capital gains or losses realised on property during the financial year (capital gains or losses compared with the acquisition value plus by capitalised investment expenses)", which thus allows the initial acquisition value to be taken into account.
The Home Invest Belgium financial report is created in accordance with IFRS as approved within the European Union and in accordance with the requirements of the Regulated Real Estate Company Act and the Royal Decree of 13 July 2014. These standards comprise all new and revised standards and interpretations published by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC") and approved by the European Union ("EU"), insofar as they apply to the activities of Home Invest Belgium.
The Group has, throughout the current fiscal year, applied IFRS 16 Leases for the first time. IFRS 16 sets out the principles for the recognition, valuation, presentation and disclosure of leases and requires lessees to account for all leases, under one model, in the balance sheet. On the commencement date of a lease, a lessee recognises an obligation to make lease payments and an asset that represents the right to use the underlying asset during the lease term. Lessees are obliged to separately recognise the interest on the lease obligation and the depreciation on the right of use. Lessees are also required to revalue the lease liability when certain events occur. Typically, the lessee will recognize the amount of the revaluation of the lease liability as an adjustment to the right of use.
In the application of IFRS 16, the Group has recognised a Right of Use and a Lease Commitment amounting to € 492 K. The discount rate used was 1.30%.
The impact of the use of IFRS 16 on the consolidated results is limited. Concerning the period which ended on 31 Dcember 2019:
Several other changes and interpretations will apply for the first time in 2019, but will not impact the Group's consolidated financial statements. The Group has not early adopted standards, interpretations and amendments that have been published but which are not yet applicable:
The new and amended standards and interpretations that were issued but not yet applicable on the date of publication of the Group's financial statements are set out below. The Group intends to apply these standards and interpretations when appropriate.
In view of the activities of Home Invest Belgium, it is not expected that the entry into force of the other new standards will have a material impact on the consolidated financial statements of Home Invest Belgium.
The value of the investment properties of Home Invest Belgium is assessed quarterly by property experts. This valuation is intended to establish the market value of a building on a particular date in function of the evolution of the market and the features of the buildings in question. Every year, parallel to the work of the property experts, Home Invest Belgium carries out its own assessment of its portfolio from the perspective of its continuous exploitation by its own teams.
The investment properties are entered in the consolidated accounts of the Group at the Fair Value set by the property experts.
It is possible that the property expert's reports, which include the main findings and conclusions of this Financial Statement, are based on hypotheses which may later prove to be incorrect or not up to date. As a result, the Fair Value may vary from the value that Home Invest Belgium can realise in the case of the sale of the property. Possible disparities between independent assessments and the Fair Value of property belonging to the portfolio of Home Invest Belgium may result in actual unfavourable effects on the activities, financial situation and/or results of Home Invest Belgium, and therefore also, as a result, on the effective returns.
If a new property expert is appointed, there is also a risk that this expert assesses the property portfolio of Home Invest Belgium on a different basis which may result in significant deviations from the assessment of the property portfolio by the current property expert. Such disparities in valuation may result in actual unfavourable effects on the activities, financial situation and/or results of Home Invest Belgium, and therefore also, as a result, on the effective returns.
The Fair Value of the hedge instruments is the estimated sum of the payments Home Invest Belgium must make or receive in order to complete its positions on balance date, taking into account the interest curve at the time, creditworthiness of the counterparties and any applicable option value. The Fair Value of hedge instruments is estimated quarterly by the issuing financial body. An overview can be found in "Note 25: Financial Assets and Liabilities" in the financial statement.
In the scope of a heritage acquisition through the acquisition of shares in companies, Home Invest Belgium works on the basis of the ownership percentage of the shares and the authority of the directors to determine whether Home Invest Belgium has overall control, joint control or a significant influence on investments.
If an acquisition meets the definition of a company merger as defined in IFRS 3, Home Invest Belgium revalues the acquired assets and obligations at their Fair Value. The Fair Value of the acquired property heritage is set on the basis of the value defined by the property experts.
Home Invest Belgium has an investment strategy which focuses on residential real estate in the broad sense of the word (apartments, holiday homes, etc.). Its investment strategy is therefore largely determined by the geographical location of the buildings. Home Invest Belgium distinguishes between 4 geographical segments: The Brussels Region, the Flemish Region and the Walloon Region and the Netherlands.
| 2019 | Consolidated total |
Brussels-Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| I. Rental Income | 25 185 096 | 14 642 834 | 2 498 579 | 5 214 102 | 2 829 580 | 0 |
| III. Rental-related expenses | -63 129 | -41 086 | -7 141 | -14 902 | 0 | 0 |
| NET RENTAL RESULT | 25 121 967 | 14 601 748 | 2 491 439 | 5 199 200 | 2 829 580 | 0 |
| IV. Recovery of property charges | 181 842 | 149 993 | 7 719 | 24 130 | 0 | 0 |
| V. Recovery of charges and taxes normally payable by the tenant |
817 099 | 400 375 | 92 731 | 163 524 | 160 469 | 0 |
| on let properties VII. Charges and taxes normally payable by the tenant on let properties |
-2 992 075 | -1 956 541 | -233 962 | -641 104 | -160 469 | 0 |
| VIII. Other incomes and expenses related to letting |
0 | 0 | 0 | 0 | 0 | 0 |
| PROPERTY RESULT | 23 128 832 | 13 195 574 | 2 357 926 | 4 745 751 | 2 829 581 | 0 |
| IX. Technical costs | -1 150 089 | -738 534 | -139 346 | -272 209 | 0 | 0 |
| X. Commercial costs | -470 586 | -336 871 | -57 959 | -75 755 | 0 | 0 |
| XI. Taxes and charges on unlet properties |
-212 819 | -234 045 | 7 928 | 13 298 | 0 | 0 |
| XII. Property management costs | -2 431 812 | 0 | 0 | 0 | 0 | -2 431 812 |
| XIII. Other property costs | 0 | 0 | 0 | 0 | 0 | 0 |
| PROPERTY COSTS | -4 265 306 | -1 309 451 | -189 378 | -334 666 | 0 | -2 431 812 |
| PROPERTY OPERATING RESULT | 18 863 526 | 11 886 124 | 2 168 549 | 4 411 085 | 2 829 581 | -2 431 811 |
| XIV. General corporate expenses | -2 876 776 | 0 | 0 | 0 | 0 | -2 876 776 |
| XV. Other operating incomes and expenses |
10 120 | 0 | 0 | 0 | 0 | 10 120 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
15 996 870 | 11 886 124 | 2 168 549 | 4 411 085 | 2 829 581 | -5 298 468 |
| XVI. Result sale investment properties |
123 069 | 89 601 | 33 469 | 0 | 0 | 0 |
| XVIII. Changes in fair value of investment properties |
48 472 577 | 41 466 456 | 1 677 188 | 2 775 933 | 2 553 000 | 0 |
| XIX. Other portfolio result | -536 613 | 0 | 0 | 0 | 0 | -536 613 |
| OPERATING RESULT | 64 055 903 | 53 442 180 | 3 879 205 | 7 187 018 | 5 382 581 | -5 835 081 |
| XX. Financial income | 52 814 | 0 | 0 | 0 | 0 | 52 814 |
| XXI. Net interest charges | -4 334 695 | 0 | 0 | 0 | 0 | -4 334 695 |
| XXII. Other financial charges | -113 216 | 0 | 0 | 0 | 0 | -113 216 |
| XXIII. Changes in fair value of financial assets and liabilities |
-5 412 444 | 0 | 0 | 0 | 0 | -5 412 444 |
| FINANCIAL RESULT | -9 807 541 | 0 | 0 | 0 | 0 | -9 807 541 |
| XXIV. Share in the profit or loss of associates and joint ventures |
1 329 296 | 0 | 0 | 0 | 0 | 1 329 296 |
| PRE-TAX RESULT | 55 577 658 | 53 442 180 | 3 879 205 | 7 187 018 | 5 382 581 | -14 313 326 |
| XXIV. Corporation tax | -88 152 | 0 | 0 | 0 | 0 | -88 152 |
| XXV. Exit tax | 0 | 0 | 0 | 0 | 0 | 0 |
| TAXES | -88 152 | 0 | 0 | 0 | 0 | -88 152 |
| 3 879 205 | 7 187 018 | 5 382 581 |
| 2019 | Consolidated total |
Brussels-Capital Region |
Flemish Region |
Walloon Region |
Netherlands | Unattributed |
|---|---|---|---|---|---|---|
| Investment properties in operation | 573 376 628 | 374 212 618 | 65 173 282 | 80 155 729 | 53 835 000 | 0 |
| Investment properties - Development projects |
36 217 841 | 33 985 646 | 2 232 195 | 0 | 0 | 0 |
| Other assets | 29 575 007 | 0 | 0 | 0 | 0 | 29 575 007 |
| TOTAL ASSETS | 639 169 476 | 408 198 264 | 67 405 477 | 80 155 729 | 53 835 000 | 29 575 007 |
| Percentage by sector | 100,00% | 63,86% | 10,55% | 12,54% | 8,42% | 4,63% |
| 0 | 0 | 0 | 0 | 0 | 0 | |
| Shareholders' equity | 309 617 696 | 0 | 0 | 0 | 0 | 309 617 696 |
| Liabilities | 329 551 780 | 0 | 0 | 0 | 0 | 329 551 780 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
639 169 476 | 0 | 0 | 0 | 0 | 639 169 476 |
| 2018 | Consolidated total |
Brussels-Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| I. Rental Income | 24 286 604 | 14 101 789 | 2 159 888 | 5 249 101 | 2 775 827 | 0 |
| III. Rental-related expenses | -294 009 | -204 302 | -26 152 | -63 555 | 0 | 0 |
| NET RENTAL RESULT | 23 992 595 | 13 897 486 | 2 133 737 | 5 185 545 | 2 775 827 | 0 |
| IV. Recovery of property charges | 170 800 | 153 403 | 11 057 | 6 340 | 0 | 0 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties |
577 974 | 152 189 | 32 672 | 353 121 | 39 992 | 0 |
| VII. Charges and taxes normally payable by the tenant on let properties |
-3 016 662 | -2 126 770 | -212 958 | -636 466 | -40 468 | 0 |
| VIII. Other incomes and expenses related to letting |
-650 | -650 | 0 | 0 | 0 | 0 |
| PROPERTY RESULT | 21 724 057 | 12 075 657 | 1 964 508 | 4 908 540 | 2 775 352 | 0 |
| IX. Technical costs | -1 099 527 | -774 694 | -85 302 | -239 531 | 0 | 0 |
| X. Commercial costs | -312 350 | -203 648 | -80 987 | -27 715 | 0 | 0 |
| XI. Taxes and charges on unlet properties |
-340 659 | -235 071 | -37 535 | -68 053 | 0 | 0 |
| XII. Property management costs | -3 903 591 | 0 | 0 | 0 | 0 | -3 903 591 |
| XIII. Other property costs | -8 616 | -3 306 | 0 | -5 310 | 0 | 0 |
| PROPERTY COSTS | -5 664 743 | -1 216 720 | -203 824 | -340 609 | 0 | -3 903 591 |
| PROPERTY OPERATING RESULT | 16 059 314 | 10 858 937 | 1 760 684 | 4 567 931 | 2 775 352 | -3 903 591 |
| XIV. General corporate expenses | -887 977 | 0 | 0 | 0 | 0 | -887 977 |
| XV. Other operating incomes and expenses |
285 005 | 0 | 0 | 0 | 0 | 285 005 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
15 456 342 | 10 858 937 | 1 760 684 | 4 567 931 | 2 775 352 | -4 506 562 |
| XVI. Result sale investment properties | 610 185 | 612 605 | -2 420 | 0 | 0 | 0 |
| XVIII. Changes in fair value of investment properties |
59 413 636 | 43 103 157 | 8 785 851 | 5 306 755 | 2 217 873 | 0 |
| XIX. Other portfolio result | -171 278 | 85 203 | 0 | 0 | -256 481 | 0 |
| OPERATING RESULT | 75 308 885 | 54 659 902 | 10 544 115 | 9 874 686 | 4 736 744 | -4 506 562 |
| XX. Financial income | 105 328 | 12 762 | 0 | 0 | 0 | 92 565 |
| XXI. Net interest charges | -4 672 338 | 0 | 0 | 0 | 0 | -4 672 338 |
| XXII. Other financial charges | -55 202 | 0 | 0 | 0 | 0 | -55 202 |
| XXIII. Changes in fair value of financial assets and liabilities |
-1 613 701 | 0 | 0 | 0 | 0 | -1 613 701 |
| FINANCIAL RESULT | -6 235 914 | 12 762 | 0 | 0 | 0 | -6 248 676 |
| XXIV. Share in the profit or loss of associates and joint ventures |
0 | 0 | 0 | 0 | 0 | 0 |
| PRE-TAX RESULT | 69 072 971 | 54 672 664 | 10 544 115 | 9 874 686 | 4 736 744 | -10 755 238 |
| XXIV. Corporation tax | -295 246 | 0 | 0 | 0 | 0 | -295 246 |
| XXV. Exit tax | 0 | 0 | 0 | 0 | 0 | 0 |
| TAXES | -295 246 | 0 | 0 | 0 | -295 246 | |
| NET RESULT | 68 777 725 | 54 672 664 | 10 544 115 | 9 874 686 | 4 736 744 | -11 050 484 |
The other tangible fixed assets are described in. note 19. The intangible fixed assets are described in note 17.
| 2018 | Consolidated total |
Brussels-Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| Investment properties in operation | 423 105 968 | 267 496 665 | 39 375 322 | 67 130 060 | 49 103 922 | 0 |
| Investment properties - Development projects |
34 758 954 | 27 972 018 | 6 786 935 | 0 | 0 | 0 |
| Other assets | 12 424 899 | 0 | 0 | 0 | 0 | 11 842 260 |
| TOTAL ASSETS | 470 289 820 | 296 051 322 | 46 162 257 | 67 130 060 | 49 103 922 | 11 842 260 |
| Percentage by sector | 100,00% | 62,95% | 9,82% | 14,27% | 10,44% | 2,52% |
| Shareholders' equity | 215 555 079 | 0 | 0 | 0 | 0 | 215 555 079 |
| Liabilities | 254 734 741 | 0 | 0 | 0 | 0 | 254 734 741 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
470 289 820 | 0 | 0 | 0 | 0 | 470 289 820 |
| I. Rental income | 25 185 096 | 24 286 604 |
|---|---|---|
| A. Rent | 25 106 702 | 24 220 605 |
| C. Rent-free periods | -66 665 | -77 714 |
| E. Early lease termination indemnities | 145 059 | 143 714 |
| III. Rental-related expenses | -63 129 | -294 009 |
| A. Rent payable on leased premises | 0 | -104 550 |
| B. Impairments on trade receivables | -88 596 | -228 723 |
| C. Reversal of impairments on trade receivables | 25 468 | 39 264 |
| NET RENTAL INCOME | 25 121 967 | 23 992 595 |
The increase in the net lease revenue is largely due to the purchase of new buildings and the completion of projects under development.
| 2 019 | 2 018 | |
|---|---|---|
| NET RENTAL INCOME | 25 121 967 | 23 992 595 |
| IV. Recovery of property charges | 181 842 | 170 800 |
| A. Indemnities received for tenant damage | 181 842 | 170 800 |
| V. Recovery of charges and taxes normally paid by the tenant on let properties | 817 099 | 577 974 |
| A. Re-invoicing of rental-related charges paid by the owner | 83 112 | 79 442 |
| B. Re-invoicing of property and other taxes on let properties | 733 987 | 498 532 |
| VII. Rental-related charges and taxes normally paid by the tenant on let properties | -2 992 075 | -3 016 662 |
| A. Rental charges incurred by the owner | -490 265 | -532 893 |
| B. Property and other taxes on leased buildings | -2 501 811 | -2 483 769 |
| VIII. Other rental income and expenses | 0 | -650 |
| TOTAL | -1 993 134 | -2 268 538 |
| PROPERTY RESULT | 23 128 832 | 21 724 057 |
The calculation of the lease costs relates largely to the insurance premiums associated with the 'waiver of recourse' included in most building fire insurance policies and certain expenses relating to the supply of telephone lines.
The lease charges payable by the owner concern all charges on buildings where the rent paid by lessees includes all services and charges.
In the residential sector, property tax is paid by the lessee for all lease agreements in relation to main place of residence. The passing on of the property tax and other taxes is therefore mainly concerned with commercial properties or offices.
| 2 019 | 2 018 | |
|---|---|---|
| IX. Technical costs | ||
| A. Recurring technical costs | -1 219 812 | -1 049 789 |
| 1. Repairs | -1 040 448 | -910 440 |
| 3. Insurance premiums | -179 364 | -139 349 |
| B. Non-recurring technical costs | 69 722 | -49 739 |
| 1. Major repairs (companies, architects, engineering,) | 89 983 | -53 911 |
| 2. Indemnification by insurers | -20 261 | 4 172 |
| TOTAL | -1 150 089 | -1 099 527 |
In the scope of the annual budget forecast, Home Invest Belgium has a specific policy for the maintenance and renovation of each of its buildings in order that they meet the requirements of the lease market as well as possible. The technical expenses include the maintenance costs, renovation costs and insurance premiums charged to the owner. Technical expenses arise mostly after the departure of lessees or in the case of essential repairs during the tenancy.
| 2 019 | 2 018 | |
|---|---|---|
| X. Commercial costs | ||
| A. Agency and experts' fees | -366 818 | -232 740 |
| B. Publicity | -50 039 | -118 906 |
| C. Lawyers' fees, legal costs | -53 728 | 39 296 |
| TOTAL | -470 586 | -312 350 |
The commercial expenses comprise the commissions paid to real estate agents for new lease contracts, the shared cost of site inventory, and the fees for legal advisors appointed in the scope of strict management of the leasing of the portfolio.
| 2 019 | 2 018 | |
|---|---|---|
| XI. Taxes and charges on un-let properties | -212 819 | -340 659 |
| XII. Property management costs | -2 431 812 | -3 903 591 |
| A. External property mananagement fees | -255 674 | -384 320 |
| B. (Internal) property management costs | -2 176 137 | -3 519 270 |
| XIII. Other property costs | 0 | -8 616 |
| TOTAL | -2 644 631 | -4 252 866 |
| PROPERTY CHARGES | -4 265 306 | -5 664 743 |
| PROPERTY OPERATING RESULT | 18 863 526 | 16 059 314 |
In 2019 the expenses of the various committees and management were included into section XIV general expenses for an amount of € 1.3 million. In 2018, these expenses were included into section XII property management costs.
The property management costs comprise, amongst others, employee costs. For employees with a fixed contrat, Home Invest Belgium has concluded a group insurance contract with a defined contribution plan with an external insurance company. The company makes contributions to this fund which is independent of the company. Contributions to the insurance plan are financed through the company and the employees.
| 2 019 | 2 018 | |
|---|---|---|
| PROPERTY OPERATING RESULT | 18 863 526 | 16 059 314 |
| XIV. General corporate expenses | -2 876 776 | -887 977 |
| XV. Other operating income and costs | 10 120 | 285 005 |
| TOTAL | -2 866 657 | -602 972 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 996 870 | 15 456 342 |
In 2019 the expenses of the various committees and management were included into section XIV general expenses for an amount of € 1.3 million. In 2018, these expenses were included into section XII property management costs.
| 2 019 | 2 018 | |
|---|---|---|
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 996 870 | 15 456 342 |
| XVI. Result on sale of investment properties | 123 069 | 610 185 |
| A. Net sales of properties (sales price – selling costs) | 12 837 712 | 7 760 032 |
| B. Accounting values of the properties sold | -12 714 643 | -7 149 847 |
| XVIII. Changes in fair value of investment properties | 48 472 578 | 59 413 636 |
| A. Positive changes in the fair value of investment properties | 25 598 051 | 71 978 068 |
| B. Negative changes in the fair value of investment properties | -10 411 264 | -718 047 |
| C. Positive changes in the estimated transfer costs and rights intervening in case of hypothetical alienation of investment property |
34 012 388 | 65 986 |
| D. Negative changes in the estimated transfer costs and rights intervening in case of hypothetical alienation of investment property |
-726 597 | -11 912 371 |
| XIX. Other portfolio result (+/-) | -536 613 | -171 278 |
| TOTAL PORTFOLIO RESULT | 48 059 034 | 59 852 543 |
| OPERATING RESULT | 64 055 903 | 75 308 885 |
The returns from the sale of investment properties come from the sale of buildings. A further explanation of the sales and profits is included in the "Management Report" section.
The returns from the sale of investment properties are entered as the difference between the sale price minus costs incurred in completing the sales (heading XVI.A.) and the last Fair Value of that building (heading XVI.B.).
In accordance with article 27 §1 - 1° of the Royal Decree of 13 July 2014, as described in the notes to the statutory financial statement, the profits realised on property during the fiscal year are distributable, calculated in comparison with the acquisition value augmented with the activated investment expenditure. On 31 December 2019 the realised distributable profit was € 5 771 220 (compared to purchase value) while the realised profit compared to the latest Fair Value was € 123 069.
The other portfolio result is € -0.6 million. This entry includes the variations in deferred taxes.
| 2 019 | 2 018 | |
|---|---|---|
| XX. Financial income | ||
| A. Interest and dividends received | 531 | 39 997 |
| B. Leasing and similar payments | 52 283 | 65 331 |
| TOTAL | 52 814 | 105 328 |
The interests and dividends gained are exclusively the interest coming from short-term deposits of the surplus of liquidity. The payments for financial leasing concern the leasings as described in note 20.
| 2 019 | 2 018 |
|---|---|
| XXI. Net interest charges | |
| A. Nominal interest on borrowings -2 994 114 |
-2 956 876 |
| C. Income from allowed hedges -1 334 668 |
-1 715 462 |
| 2. Allowed hedges to which hedge accounting as defined by IFRS is not applied -1 334 668 |
-1 715 462 |
| E. Autres charges d'intérêts -5 916 |
0 |
| TOTAL -4 334 698 |
-4 672 338 |
| 2 019 | 2 018 | |
|---|---|---|
| XXII. Other financial charges | -113 219 | -55 202 |
| A. Bank charges and other fees | -113 219 | -52 596 |
| B. Realised loss on sale of financial assets |
0 | 0 |
| D. Other | 0 | -2 606 |
| XXIII. Changes in fair value of financial assets and liabilities | -5 412 444 | -1 613 701 |
| A. Allowed hedges | 0 | 0 |
| 2. Allowed hedges to which hedge accounting as defined by IFRS is not applied | -5 412 444 | -1 613 701 |
| TOTAL | -5 525 663 | -1 668 903 |
| FINANCIAL RESULT | -9 807 547 | -6 235 914 |
| XXIV. Share in the result of associates and joint ventures | 1 329 296 | 0 |
| PRE-TAX RESULT | 55 577 653 | 69 072 971 |
| 2019 | 2018 | |
|---|---|---|
| XXIII. Changes in fair value of financial assets and liabilities | -5 412 444 | -1 613 701 |
| A. Allowed hedges | 0 | 0 |
| 2. Allowed hedges to which hedge accounting as defined by IFRS is not applied | -5 412 444 | -1 613 701 |
| TOTAL | -5 412 444 | -1 613 701 |
| FINANCIAL RESULT | -9 807 547 | -6 235 914 |
| XXIV. Share in the result of associates and joint ventures | 1 329 296 | 0 |
| PRE-TAX RESULT | 55 577 653 | 69 072 971 |
The variation of the Fair Value of the financial assets concerns the hedge instruments that are considered inefficient since the implementation of IFRS 9 and are therefore entered in the profit and loss account. This expense or product is purely latent, on the assumption that the regulated real estate company or banks do not commit to a premature levelling of these products and is omitted from the calculation of the distributable returns.
| 2 019 | 2 018 | |
|---|---|---|
| PRE-TAX RESULT | 55 577 653 | 69 072 971 |
| XXIV. Income tax | -88 152 | -295 246 |
| XXV. Exit tax | 0 | 0 |
| TAXES | -88 152 | -295 246 |
| NET RESULT | 55 489 501 | 68 777 725 |
As a public BE-REIT, Home Invest Belgium benefits from a special fiscal regime. Only fringe benefits, exceptional and gratitious advantages as well as some specific costs are subject to corporate income tax in Belgium. The taxable result coming from activities in The Netherlands is taxed in the Netherlands at the rate from corporate income tax in The Netherlands.
| 2019 | 2018 | |
|---|---|---|
| Intangible assets, beginning of the financial year | 462 356 | 416 024 |
| 1. Gross value | 567 485 | 458 932 |
| 2. Accumulated amortization (-) | -105 129 | -42 908 |
| Investments | 0 | 108 553 |
| Amortizations (-) | -87 284 | -62 221 |
| Intangible assets, end of the financial year | 375 072 | 462 356 |
| 1. Gross value | 567 485 | 567 485 |
| 2. Accumulated amortization (-) | -192 413 | -105 129 |
The intangible assets relate to the Axxerion software. This is written down over 6 years from its implementation in 2018. Depreciations are entered under heading XII "Property management expenses" in the profit and loss account.
| 2019 | 2018 | |
|---|---|---|
| C. Investment properties, balance at the beginning of the financial year | 524 506 117 | 457 864 921 |
| a. Investment properties | 490 364 387 | 423 105 968 |
| Completion of development projects (+) | 14 718 671 | 17 533 331 |
| Acquisition of buildings (+) | 0 | 0 |
| Capitalized subsequent expenses (+) | 4 045 810 | 3 733 264 |
| Changes in the fair value of the investment properties (+) | 30 198 667 | -719 157 |
| Acquisition of buildings through companies (+) | 46 763 735 | 56 170 828 |
| Sales (-) | -12 714 643 | -7 149 847 |
| Transfers to development projects | 0 | -2 310 000 |
| Investment properties available for rent, balance at the end of financial year | 573 376 627 | 490 364 387 |
| b. Development projects | 34 141 731 | 34 758 953 |
| Investments – development projects | 12 592 658 | 8 438 944 |
| Transfer investment properties in operation | 0 | 2 310 000 |
| Delivered development projects | -14 718 671 | -17 533 331 |
| Changes in the fair value of the investment properties (+) | 1 709 158 | 3 242 808 |
| Acquisition of buildings through companies (+) | 2 492 966 | 2 924 356 |
| b. Development projects, balance at the beginning of financial year | 36 217 841 | 34 141 731 |
| c. Properties for own use | None | None |
| d. Others | None | None |
| C. Investment properties, closing balance at the end of the financial year | 609 594 468 | 524 506 117 |
IFRS 13 is applicable to the IFRS standards that require or permit those assessments at Fair Value or the communication of information on the Fair Value, and therefore IAS 40 investment properties. IFRS 13 provides a hierarchy of Fair Values under 3 levels of data input (levels 1, 2 and 3).
As shown in the table above, the Fair Value of the investment properties including project developments is € 524 506 117 on 31 December 2018. These Fair Values are at level 3. As Home Invest Belgium has no levels other than 3 the company has not rolled out a follow-up policy for transfers between hierarchical levels.
In 2019, Home Invest Belgium recorded positive changes in the fair value of its investment properties for a total amount of € 48.47 million (of which € 46.76 million for investment properties available for rent and € 1.71 million for development projects). These changes are mainly due to the adjustments, in 2019, in the assumptions in the treatment of transaction costs used to determine the fair value of investment properties. These adjustments had a positive effect on changes in the fair value of the investment properties for an amount of € 34.18 million.
Specifically, when determining transaction costs (as a section of the determination of the fair value of investment properties), the category of residential and mixed-use buildings, whose structure and concept are suitable for sale in separate units, were no longer used.
Hence, the fair value of investment properties is determined as follows:
This adjustment is justified due to several considerations.
First of all, it is unusual for an RREC to have a third category for (iii) buildings whose structure and design are suitable for sale in separate units, alongside the two commonly used categories of (i) buildings worth more than € 2.5 million and (ii) buildings worth less than € 2.5 million.
Moreover, the residential sector is evolving in an increasingly professional and institutionalized international context. In Belgium, recent amendments have led to the possibility of new structures, like non-listed regulated real estate companies (GVBF) and for RRECs to hold participations (of more than 25% instead of 50% previously) in other companies (such as an institutional RREC). Through these legal amendments, the authorities aim to encourage the pooling of investors into professional company structures. Such structures offer new possibilities to sell buildings for Home Invest Belgium, in addition to selling piece by piece. The effective registration fees that will apply on the sale of real estate investments will depend on the chosen transaction structure.
Against this backdrop, Home Invest Belgium's strategy has evolved, so as not to limit itself to individual unit sales. When a building is sold, it will be decided at that specific moment which specific sales structure will most maximize the value for Home Invest Belgium's shareholders. Therefore, it is not possible to know from now the applicable amount of transaction costs and it is therefore recommended to apply the average percentage for the sector of 2.5% on buildings with an investment value of more than € 2.5 million, and the full registration fees of 10% (Flemish Region) and 12.5% (Brussels-Capital Region and Walloon Region) on buildings with an investment value of less than € 2.5 million.
The fair value is based on the following quantitative parameters:
| Investment properties available for rent | 31-12-19 |
|---|---|
| Rent capitalization method | |
| Estimated rental value | Weighted average of € 134 €/m² (range between € 55/m² and € 282/m²) |
| Long-term vacancy Assumptions | Average of 5 months (range between 0 and 18 months) |
| Capitalization rate | Average of 5.3% (range between 3.7% and 13.3%) |
| Amount of m² or number of units | Average of 3 525 m² (range between 125 m² and 14 107 m²) |
| Discounted cash flow methode | |
| Estimated rental value €/m² | Weighted average of € 126m² (range between € 61m² and € 149 /m²) |
| Long-term vacancy assumptions | / |
| Amount of m² or number of units | Average of 7 680m² (range between 3 224m² and 20 488m²) |
| Discount rate | Average of 5.5% (range between 4.8% en 6.7%) |
| Inflation | Average of 1.7% (range between 1.7% and 1.8%) |
| Development projects | Properties that lend themselves to retail |
| Rent capitalization method | |
| Estimated rental value €/m² | Weighted average of € 118/m² (range between € 113/m² and |
| Capitalization rate | Average of 4.4% (range between 4.1% and 4.7%) |
|---|---|
| Amount of m² or number of units | Average of 7 212m² (range between 3 961m² and 12 724m²) |
| Sensitivity analysis for the fair values of Level 3 |
€ 129 /m²)
Long-term vacancy assumptions Average of 8 months (average between 6 and 12 months)
Non observable input Impact on fair value with
| Decrease | Increase | |
|---|---|---|
| Estimated rental value (ERV) | Negative | Positive |
| Long-term vacancy assumptions | Negative | Positive |
| Capitalization rate | Positive | Negative |
| Amount of m² or number of units | Negative | Positive |
An increase or decrease in the estimated lease value and/or rents achieved can potentially cause the Fair Value to rise or fall. An increase or decrease in the update rate and/or capitalisation rate can potentially cause the Fair Value to rise or fall. These rates are set by the conditions on the financial and property market.
The investment properties are valued quarterly by an independent and qualified property expert. These reports are drafted on the basis of information shared by the company regarding the lease state, expenses and taxes borne by the lessee, rents, works to be carried out etc. This information is retrieved from the database of the company's information system and is part of the administrative organisation and internal audit of the company.
The property expert uses parameters which are connected to the market (update rate etc.) and based on his judgement 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.
| 2019 | 2018 | |
|---|---|---|
| Other tangible assets, opening balance at the beginning of the period | 353 420 | 391 371 |
| Investments | 74 315 | 70 243 |
| Initial recognition of "Right of use asset" in accordance with IFRS 16 | 491 508 | 0 |
| Depreciations ( - ) | -219 043 | -108 194 |
| Other tangible assets, closing balance at the end of the period | 700 200 | 353 420 |
| 1. Gross value | 1 226 026 | 660 203 |
| 2. Accumulated depreciation (-) | -525 826 | -306 783 |
| D. Other tangible assets | 2019 | 2018 |
a. Tangible assets for own use 700 200 353 420
The other tangible fixed assets relate exclusively to fixed operating assets. The increase in tangible fixed assets is solely due to the recognition of the right of use associated with the application of IFRS 16.
| 2019 | 2018 | |
|---|---|---|
| Receivables after 5 years | 72 604 | 142 160 |
| Receivables after one year and within 5 years | 260 368 | 249 027 |
| Receivables within one year | 58 215 | 55 700 |
| TOTAL | 391 187 | 446 887 |
The leasing liabilities concern the buildings on Belgradostraat in Forest/Vorst.
A brief outline of the Belgrado contract:
| 2019 | 2018 | ||||||
|---|---|---|---|---|---|---|---|
| < 1 year |
1 year < > 5 years | > 5 years |
< 1 year |
1 year < > 5 years | > 5 years |
||
| Present value of future minimum lease payments |
58 215 | 260 368 | 72 604 | 55 700 | 249 027 | 142 160 | |
| Unearned finance income | 17 677 | 43 163 | 3 279 | 20 183 | 54 415 | 9 696 | |
| Total | 75 892 | 303 531 | 75 883 | 75 883 | 303 442 | 151 856 |
| Trade receivables | 2019 | 2018 |
|---|---|---|
| Tenants | 1 702 549 | 1 684 473 |
| Other | -742 357 | -654 212 |
| Realized sales | 17 565 | 6 346 |
| TOTAL | 977 757 | 1 036 607 |
The commercial liabilities comprise the rental incomes yet to be received from the lessees. These should be paid in advance.
| E. Tax receivables and other current assets | 2019 | 2018 |
|---|---|---|
| a. Tax receivables | 441 931 | 187 220 |
| c. Others | 21 540 | 1 694 410 |
| TOTAL | 463 471 | 1 881 629 |
The decrease in the other current assets relates mainly to the advance payment of € 1675 000 (paid in 2018) for the acquisition of the company BE Real Estate NV/SA. On November 4th 2019, Home Invest Belgium completed the acquisition of four buildings of the apart-hotels type. The advance has been used against payment of a part of the share price.
| 2019 | 2018 | |
|---|---|---|
| Cash equivalents | 4 200 730 | 3 239 503 |
| TOTAL | 4 200 730 | 3 239 503 |
| 2019 | 2018 | |
|---|---|---|
| Accrued, not due property income | 21 889 | 6 728 |
| Prepaid property charges | 59 680 | 139 480 |
| Other | -41 269 | -122 276 |
| TOTAL ASSETS | 40 300 | 23 932 |
| Property income received in advance | 862 769 | 379 081 |
| Interest and other accrued charges, not due | 1 007 054 | 1 198 191 |
| Other | 2 029 | 169 |
| TOTAL LIABILITIES | 1 871 852 | 1 577 442 |
The lapsed, not expired interests and other expenses represent on one side the drawdowns from the current credit lines and hedge instruments of which the interest is payable at the end of the drawdown period, and on the other the interest payable at the end date of the bond issue.
| NOTE 25 : FINANCIAL ASSETS AND LIABILITIES | ||
|---|---|---|
| E. Non-current financial assets | 2019 | 2018 |
| Financial instruments | 1 942 782 | 0 |
| Other guarantees | 154 211 | 155 574 |
| TOTAL | 2 096 993 | 155 574 |
The other financial assets represent a guarantee in favour of the National Social Security Office and the reserve funds deposited in multiple joint ownerships.
| I. Non-current liabilities | 2019 | 2018 |
|---|---|---|
| A. Provisions |
||
| b. Others | 0 | 173 625 |
| B. Non-current financial debts | ||
| a. Financial institutions | 233 000 000 | 223 500 000 |
| b. Financial leasing | 276 600 | |
| c. Other debts | 39 912 005 | 39 784 316 |
| C. Other non-current financial liabilities | ||
| a. Hedging | 6 300 285 | 9 667 059 |
| TOTAL | 279 488 890 | 273 125 000 |
| II. Current liabilities | 2019 | 2018 |
| B. Current financial debts | ||
| a. Financial institutions | 20 000 000 | 0 |
| b. Financial leasing | 108 151 | 0 |
| c. Others | ||
| Received rent guarantees | 501 304 | 581 798 |
| Others | 20 000 000 | 167 798 |
| TOTAL | 40 609 455 | 749 596 |
The other loans totalling € 39 912 005 comply with the bond issue (excluding costs) published in June 2014. The capital sum is equivalent to € 40 000 000 and the expiry date is 18 June 2024.
The long-term financial obligations relate to the IRS as explained below. Their negative Fair Value is at € 6 300 285 at the end of the fiscal year. The positive fair value of the hedge instruments amounted to € 1 942 782 EUR and has been included under the non-current financial assets. The hedge instruments are considered as cash flow hedges in the sense of IFRS 9.
The other short-term financial obligations for an amount of € 20 million refer to short term outstanding treasury notes (commercial papers).
| D. Current trade debts and other debts | 2019 | 2018 |
|---|---|---|
| b. Others | ||
| Suppliers | 2 993 637 | 2 426 316 |
| Tenants | 782 949 | 791 590 |
| Tax, salary and social security payables | 1 591 149 | 2 083 145 |
| TOTAL | 5 367 735 | 5 301 051 |
The figures given in the table below relate to the financial liabilities:
| 2019 | 2018 | |
|---|---|---|
| Current financial debt payable wihtin one year | 40 000 000 | 0 |
| Non-current financial debt payable between 1 to 5 years | 176 912 005 | 140 000 000 |
| Non-current financial debt at payable after 5 years | 96 000 000 | 123 284 316 |
| TOTAL | 312 912 005 | 263 284 316 |
On 31 December 2019, Home Invest Belgium had € 312.91 million in financial liabilities consisting of:
The table below shows the credit lines per financial body. None of the contracted lines will expire in 2019. The weighted average remaining duration of the financial liabilities is 4.6 years. Home Invest Belgium had on 31 December 2019 65.0 million in unused lines of credit available. All bank lines are set at variable interest rates.
| Financial debts | Confirmed creditlines | Amount drawn |
|---|---|---|
| Bank debts | 318 000 000 | 253 000 000 |
| Belfius | 106 500 000 | 86 500 000 |
| KBC Bank | 65 000 000 | 58 000 000 |
| ING | 60 000 000 | 52 000 000 |
| BNP Paribas Fortis | 46 500 000 | 46 500 000 |
| Degroof | 10 000 000 | 10 000 000 |
| Caisse d'Epargne Hauts de France | 30 000 000 | 0 |
| Bond issue | 40 000 000 | 40 000 000 |
| Issue of 18/06/2014 | 40 000 000 | 40 000 000 |
| TOTAL | 358 000 000 | 293 000 000 |
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. On 31 December 2018 the total nominal amount of the IRS hedges was € 188 million, as the table below shows.
In the course of 2019, Home Invest Belgium has concluded several hedge instruments and has ended various existing instruments prematurely. As for the existing instruments which were ended, Home Invest Belgium paid a cash amount of € 10.72 million.
No instrument comes under the administrative accounting and is included as cash flow hedge under the IFRS 9 standard. The total value of the hedges at closing date was a negative sum of € 4.36 million due to a drop in the interest rates after the hedges were closed. The fixed interest rates have a weighted average remaining term of 5.6 years. The board of directors hopes its hedge policy will provide the company with maximum protection against any interest increases.
| Hedge instruments 31/12/2019 | Type | Amount | Interest Rate | Deadline | Qualification | Fair value 31/12/2018 |
|---|---|---|---|---|---|---|
| BELFIUS | IRS | 10 000 000 | 1,28% | 30-08-2026 | Transaction | -927 422 |
| BELFIUS | IRS | 10 000 000 | 1,06% | 30-08-2027 | Transaction | -841 089 |
| BELFIUS | IRS | 15 000 000 | -0,21% | 30-09-2028 | Transaction | 366 144 |
| BELFIUS | IRS | 21 500 000 | 0,59% | 10-11-2025 | Transaction | -951 447 |
| BELFIUS | IRS | 17 000 000 | 0,44% | 31-10-2024 | Transaction | -530 622 |
| BELFIUS | IRS | 8 000 000 | 0,41% | 31-10-2026 | Transaction | -277 590 |
| BNP | IRS | 25 000 000 | -0,28% | 30-09-2028 | Transaction | 772 541 |
| BNP | IRS | 21 500 000 | 0,40% | 30-11-2021 | Transaction | -173 213 |
| ING | IRS | 15 000 000 | 0,35% | 1-06-2022 | Transaction | -125 470 |
| ING | IRS | 30 000 000 | -0,33% | 25-09-2027 | Transaction | 730 641 |
| KBC | IRS | 15 000 000 | -0,20% | 30-11-2023 | Transaction | 121 931 |
| KBC | IRS | 15 000 000 | -0,47% | 30-11-2023 | Transaction | -39 709 |
| IRS type of coverage | 188 000 000 | 5.6 years | -1 875 305 |
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 counterpatty is being called counterparty's credit risk (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.
The cautious hedge policy used by Home Invest Belgium has enabled an average interest rate of 1.95% for the fiscal year, including bank margin and hedge costs, compared with 2.20% for the last fiscal year. The average interest rate was calculated after converting the variable interest rates on lines of credit into fixed rates via interest swaps (IRS), account taken of the cautious financial structuring of the debt in combination with a moderate burden of debt, Home Investment Belgium has limited exposure to the interest rate fluctuations in the market.
In accordance with IFRS 9, the negative Fair Value of the financial instruments was settled on 31 December 2019 with the liabilities under the heading I.C. "Other non-current financial liabilities" for a total sum of € 5 309 556.
The credit lines are included in the Long-term and Short-term Financial Liabilities entry. The financial liabilities are entered at their write-down value which corresponds to their Fair Value.
IFRS 13 applies to IFRS standards that require or permit fair value measurements or the communication of fair value information, and therefore IAS 39. IFRS 13 provides a hierarchy of fair values under 3 levels of data input (levels 1, 2 and 3).
As far as the financial instruments are concerned, all of these Fair Values are level 2. As Home Invest Belgium has no levels other than 2, the company has not rolled out a follow-up policy for transfers between hierarchical levels.
The valuation is set by the banks on the basis of the current value of the estimated future cash flows. Although the most common derivative instruments are considered trading instruments under the IFRS standards, they are only intended for the hedging of risk concerning interest rate fluctuations and not for speculative purposes.
| TRADE DEBTS AND OTHER CURRENT DEBTS | 2019 | 2018 |
|---|---|---|
| Suppliers | 2 993 637 | 2 426 316 |
| Tenants | 782 949 | 791 590 |
| Tax, salary and social security payables | 1 591 149 | 2 083 145 |
| TOTAL | 5 367 735 | 5 301 051 |
| OTHER CURRENT LIABILITIES | 2019 | 2018 |
|---|---|---|
| Dividends | 48 291 | 47 526 |
| Other | 106 362 | 103 699 |
| TOTAL | 154 653 | 151 225 |
The dividends relate exclusively to old dividends that were not yet claimed by the shareholders.
| F. Deferred taxes | 2019 | 2018 |
|---|---|---|
| a. Exit tax | 367 021 | 167 282 |
| b. Other | 1 692 172 | 1 031 150 |
| TOTAL | 2 059 193 | 1 198 432 |
As of 31 December 2019 the total under the heading I.F. Deferred taxes was € 2.06 million. This sum relates primarily to the deferred taxes of Port Zélande (€ 1.69 million).
| SHAREHOLDERS' EQUITY | 2019 | 2018 |
|---|---|---|
| A.Capital | ||
| a. Capital | 88 949 295 | 88 949 295 |
| b. Capital increase expenses | -950 240 | -950 240 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C.Reserves | ||
| a. Legal reserve (+) | 98 778 | 98 778 |
| b. Reserve from the balance of changes in fair value of investment properties (+/-) | 185 438 434 | 121 307 765 |
| c. Reserve from estimated transfer mutation rights resulting from hypothetical disposal of investment properties (-) |
-48 737 503 | -38 457 522 |
| d. Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is applied (+/-) |
0 | 0 |
| e. Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is not applied (+/-) |
-9 667 059 | -8 053 358 |
| h. Reserve for treasury shares (-) | -686 943 | -686 943 |
| -1 031 150 | 0 | |
| 0 | 0 | |
| m. Other reserves (+/-) | 1 259 467 | 1 259 467 |
| n. Result carried forward from previous financial years (+/-) | 26 142 909 | 24 185 659 |
| D. Net result of the financial year | 43 898 509 | 56 447 178 |
| TOTAL EQUITY | 309 617 696 | 269 003 279 |
| Date | Evolution of company capital | Nature of the operation | Issue price | Number of shares |
|---|---|---|---|---|
| Total on 31/12/2010 | 71 639 409 | 2 828 542 | ||
| 31-01-2011 | 122 709 | Partial demerger of SA Masada | 59.72 | 102 792 |
| 23-12-2011 | 5 585 | Mixed demerger of SA Urbis | 60.3 | 6 318 |
| 23-12-2011 | 2 633 519 | Partial demerger of SA VOP | 62.91 | 118 491 |
| Total on 31/12/2011 | 74 401 222 | 3 056 143 | ||
| Total on 31/12/2012 | 74 401 222 | 3 056 143 | ||
| Total on 31/12/2013 | 74 401 222 | 3 056 143 | ||
| 11-06-2014 | 2 548 073 | Contribution in kind by AXA Belgium | 79.85 | 104 666 |
| Total on 31/12/2014 | 76 949 295 | 3 160 809 | ||
| Total on 31/12/2015 | 76 949 295 | 3 160 809 | ||
| Total on 31/12/2016 | 76 949 295 | 3 160 809 | ||
| 13-09-2017 | 12 000 000 | Partial demerger of SA VOP | 28,67 | 139 049 |
| Total on 31/12/2017 | 88 949 295 | 3 299 858 | ||
| Total on 31/12/2018 | 88 949 295 | 3 299 858 | ||
| Total on 31/12/2019 | 88 949 295 | 3 299 858 |
On 31 December 2019 , 11 712 Home Invest Belgium shares were retained by the company.
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 FSAM 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.
The general guideline for the financial plan are included into the annual and semi-annual year reports in a detailed manner. In these reports, the company describes and justifies how the financial plan has been executed over a relevant period of time and how the BE-REIT foresees to execute the plan in the future.
On the basis of the figures as at 31/12/2019, the consolidated debt ratio is 51.41%. For more information on the consolidated balance sheet as at 31/12/2019, we refer to the financial statements of the present annual report.
The debt ratio stood at 51.41% on December 31st 2019. At the end of financial years 2017 and 2018, the debt ratio stood respectively at 51.80% and 50.16%.
Currently the debt ratio stands at 51.41%. Based on the current consolidated debt ratio (RREC Royal Decree), the investment potential amounts to approximately € 254.6 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 € 100 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 22 % in the value of the existing portfolio.
The company expects to reach a debt ratio of 52.55% at 31 December 2020.
The board of directors confirms its decision to not structurally exceed the debt ratio of 55%.
According to the realised 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 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.
| Name | Company nr. | Country of origin | Direct or indirect shareholding | Annual accouts dd. |
|---|---|---|---|---|
| In 2019 | ||||
| Home Invest Belgium NV | 0420.767.885 | Belgium | - | 31-12-2019 |
| Charlent 53 Freehold Bvba | 0536.280.237 | Belgium | 100% | 31-12-2019 |
| De Haan Vakantiehuizen NV | 0707.946.778 | Belgium | 50% | 31-12-2019 |
| Be Real Estate NV | 0474.055.727 | Belgium | 100% | 30-06-2020 |
| DG Develoment NV | 0676.704.266 | Belgium | 100% | 31-12-2019 |
| In 2018 | ||||
| Home Invest Belgium NV | 0420.767.885 | Belgium | - | 31-12-2019 |
| Charlent 53 Freehold Bvba | 0536.280.237 | Belgium | 100% | 31-12-2019 |
| De Haan Vakantiehuizen NV | 0707.946.778 | Belgium | 50% | 31-12-2019 |
| Immobilière Meyers-Hennau NV | 0454.216.257 | Belgium | 100% | 31-12-2019 |
All businesses forming part of the consolidation scope are domiciled in Belgium: Woluwedal 46/11, 1200 Brussels. The company "Immobilière Meyers-Hennau" was merged with Home Invest Belgium in December 2019. The company BE Real Estate NV/SA was purchased on 4 November 2019. As of 31 December 2018 there are no minority interests.
With the exception of the remuneration of the Delegated Director (see Management Report – heading Corporate Governance Statement), there are no transactions whatsoever with associated parties in the sense of IAS 24. The table below shows the salaries of the directors and effective managers.
| Name | Short term benefits in 2019 | Short term benefits in 2018 |
|---|---|---|
| VAN OVERSTRAETEN Liévin | 81 000 | 29 250 |
| SPIESSENS Eric | 22 500 | 23 750 |
| DEJONCKHEERE Koen | 11 000 | 11 000 |
| VAN OVERSTRAETEN Johan | 110 750 | 21 500 |
| AUROUSSEAU Wim | 14 000 | 11 750 |
| DE HEMPTINNE Laurence | 2 250 | 16 500 |
| DENYS Suzy | 10 750 | 0 |
| GIJSBRECHTS Christel | 11 500 | 0 |
| BOSTOEN Hélène | 13 000 | 0 |
| JANSSENS Sven | 480 000 | 85 000 |
| LAMBRIGHS Sophie | 0 | 288 832 |
| Other effective leaders | 565 361 | 500 667 |
| Total | 1 322 111 | 988 249 |
| Number of employees at the closing date of the period | 2019 | 2018 |
|---|---|---|
| Employees | 36 | 38 |
| Management | 5 | 3 |
| TOTAL | 41 | 41 |
| In € - VAT excl. | 2019 |
|---|---|
| Remuneration of the Auditor for the fiscal year (stat. base) | |
| Remuneration for executing mandate of Auditor | 33 000 |
| Remuneration for exceptional performance or special assignments | |
| Other audit assignments | 15 500 |
| Other assignments besides audit task | 2 000 |
| TOTAL | 50 500 |
The outbreak of the coronavirus in early 2020 and the results of the measures taken to contain the virus, could impact our financial performance of 2020 and the measurement of certain assets and liabilities. Accordingly, we may thus possibly need to record material adjustments in our accounts during 2020.
| INCOME STATEMENT | 2019 | 2018 |
|---|---|---|
| INCOME STATEMENT | 2019 | 2018 |
| I. Rental Income | 24 918 816 | 24 282 604 |
| I. Rental Income | 24 918 816 | 24 282 604 |
| II. Rental-related expenses | -63 129 | -294 009 |
| II. Rental-related expenses | -63 129 | -294 009 |
| NET RENTAL RESULT | 24 855 687 | 23 988 595 |
| NET RENTAL RESULT | 24 855 687 | 23 988 595 |
| IV. Recovery of property charges | 181 842 | 170 800 |
| IV. Recovery of property charges | 181 842 | 170 800 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 817 099 | 577 974 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 817 099 | 577 974 |
| VII. Charges and taxes normally payable by the tenant on let properties | -2 992 075 | -3 011 989 |
| VII. Charges and taxes normally payable by the tenant on let properties | -2 992 075 | -3 011 989 |
| VIII. Other incomes and expenses related to letting | 0 | -650 |
| VIII. Other incomes and expenses related to letting | 0 | -650 |
| PROPERTY RESULT | 22 862 553 | 21 724 730 |
| PROPERTY RESULT | 22 862 553 | 21 724 730 |
| IX. Technical costs | -1 150 089 | -1 099 527 |
| IX. Technical costs | -1 150 089 | -1 099 527 |
| X. Commercial costs | -470 586 | -312 350 |
| X. Commercial costs | -470 586 | -312 350 |
| XI. Taxes and charges on unlet properties | -212 819 | -340 659 |
| XI. Taxes and charges on unlet properties | -212 819 | -340 659 |
| XII. Property management costs | -2 431 812 | -3 904 728 |
| XII. Property management costs | -2 431 812 | -3 904 728 |
| XIII. Other property costs | 0 | -8 616 |
| XIII. Other property costs | 0 | -8 616 |
| PROPERTY COSTS | -4 265 306 | -5 665 881 |
| PROPERTY COSTS | -4 265 306 | -5 665 881 |
| PROPERTY OPERATING RESULT | 18 597 247 | 16 058 850 |
| PROPERTY OPERATING RESULT | 18 597 247 | 16 058 850 |
| XIV. General corporate expenses | -2 869 558 | -881 858 |
| XIV. General corporate expenses | -2 869 558 | -881 858 |
| XV. Other operating incomes and expenses | 10 120 | 285 005 |
| XV. Other operating incomes and expenses | 10 120 | 285 005 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 737 808 | 15 461 997 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 15 737 808 | 15 461 997 |
| XVI. Result sale investment properties | 123 069 | 610 185 |
| XVI. Result sale investment properties | 123 069 | 610 185 |
| XVIII. Changes in fair value of investment properties | 43 625 015 | 58 420 274 |
| XVIII. Changes in fair value of investment properties | 43 625 015 | 58 420 274 |
| XIX. Other portfolio result | -536 613 | -171 278 |
| XIX. Other portfolio result | -536 613 | -171 278 |
| PORTFOLIO RESULT | 43 211 471 | 58 859 181 |
| PORTFOLIO RESULT | 43 211 471 | 58 859 181 |
| OPERATING RESULT | 58 949 280 | 74 321 177 |
| OPERATING RESULT | 58 949 280 | 74 321 177 |
| XX. Financial income | 191 570 | 119 458 |
| XX. Financial income | 191 570 | 119 458 |
| XXI. Net interest charges | -4 318 971 | -4 672 338 |
| XXI. Net interest charges | -4 318 971 | -4 672 338 |
| XXII. Other financial charges | -112 035 | -55 017 |
| XXII. Other financial charges | -112 035 | -55 017 |
| XXIII. Changes in fair value of financial assets and liabilities | -5 412 444 | -1 613 701 |
| XXIII. Changes in fair value of financial assets and liabilities | -5 412 444 | -1 613 701 |
| FINANCIAL RESULT | -9 651 880 | -6 221 598 |
| FINANCIAL RESULT | -9 651 880 | -6 221 598 |
| PRE-TAX RESULT | 49 297 400 | 68 099 579 |
| PRE-TAX RESULT | 49 297 400 | 68 099 579 |
| XXIV. Corporation tax | -50 349 | -295 072 |
| XXIV. Corporation tax | -50 349 | -295 072 |
| TAXES TAXES |
-295 072 -295 072 |
|
| NET RESULT | 49 247 051 | 67 804 508 |
| NET RESULT | 49 247 051 | 67 804 508 |
| OTHER ELEMENTS OF THE GLOBAL RESULT | 0 | 0 |
| OTHER ELEMENTS OF THE GLOBAL RESULT | 0 | 0 |
| GLOBAL RESULT | 49 247 051 | 67 804 508 |
| GLOBAL RESULT | 49 247 051 | 67 804 508 |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 49 247 051 | 67 804 508 |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 49 247 051 | 67 804 508 |
1 The statutory annual accounts of home invest Belgium have been established in accordance with the IFRS since 1 January 2005. They are presented in an abbreviated version in accordance with article 105 of the company code. The detailed statutory accounts will be deposited to the National Bank consecutively to the holding of the ordinary general meeting. They are also available on request at the company's head office. 1 The statutory annual accounts of home invest Belgium have been established in accordance with the IFRS since 1 January 2005. They are presented in an abbreviated version in accordance with article 105 of the company code. The detailed statutory accounts will be deposited to the National Bank consecutively to the holding of the ordinary general meeting. They are also available on request at the company's head office.
| BALANCE SHEET | |||||
|---|---|---|---|---|---|
| --------------- | -- | -- | -- | -- | -- |
| ASSETS | 2019 | 2018 |
|---|---|---|
| I. Non-current assets | 601 912 925 | 542 910 605 |
| B. Intangible assets | 375 072 | 462 356 |
| C. Investment properties | 572 054 957 | 520 666 645 |
| D. Other tangible assets | 700 200 | 353 420 |
| E. Non-current financial assets | 28 449 725 | 21 036 996 |
| F. Lease receivables | 332 972 | 391 187 |
| II. Current assets | 30 531 878 | 7 367 457 |
| C. Lease receivables | 58 215 | 55 700 |
| D. Trade receivables | 719 920 | 1 036 607 |
| E. Tax receivables and other current assets | 25 916 005 | 3 068 695 |
| F. Cash and cash equivalents | 3 815 090 | 3 189 735 |
| G. Deferred charges and accrued income | 22 647 | 16 721 |
| TOTAL ASSETS | 632 444 802 | 550 278 062 |
| SHAREHOLDERS' EQUITY | ||
|---|---|---|
| A. Capital | 87 999 055 | 87 999 055 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | 153 188 111 | 100 087 184 |
| D. Net result of the financial year | 37 656 060 | 55 473 960 |
| SHAREHOLDERS' EQUITY | 303 746 425 | 268 463 398 |
| LIABILITIES | ||
| I. Non-current liabilities | 281 234 608 | 274 149 807 |
| B. Non-current financial debts | 273 100 130 | 263 284 316 |
| a. Financial institutions | 233 000 000 | 223 500 000 |
| b. Financial leasing | 276 600 | 0 |
| c. Others | 39 823 530 | 39 784 316 |
| C. Other non-current financial liabilities | 6 300 285 | 9 667 059 |
| F. Deferred taxes | 1 834 193 | 1 198 432 |
| a. Exit tax | 142 021 | 167 282 |
| b. Others | 1 692 172 | 1 031 150 |
| II. Current liabilities | 47 463 770 | 7 664 856 |
| B. Current financial debts | 40 683 456 | 657 798 |
| a. Financial institutions | 20 000 000 | 0 |
| b. Financial leasing | 108 151 | 0 |
| c. Others | 20 575 304 | 0 |
| D. Trade debts and other current debts | 4 847 506 | 5 283 042 |
| b. Others | 4 847 506 | 5 283 042 |
| E. Other current liabilities | 154 654 | 151 225 |
| F. Accrued charges and deferred income | 1 778 154 | 1 572 792 |
| LIABILITIES | 328 698 377 | 281 814 663 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 632 444 802 | 550 278 062 |
| Capital | Costs of capital increase |
Share premium |
Legal reserves |
Reserves from the balance of changes in fair value of investment properties |
Reserves from estimated transfer costs and rights |
||
|---|---|---|---|---|---|---|---|
| BALANCE AT 31/12/2017 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 120 164 015 | -34 275 030 | |
| Allocation of result 2017 | 0 | 0 | 0 | 0 | 5 497 698 | -5 076 223 | |
| Allocation of operational distributable result | |||||||
| Changes in deferred taxes | |||||||
| Changes in Fair Value of investment properties | 5 497 698 | -5 076 223 | |||||
| Changes in Fair Value of hedging instruments | |||||||
| Dividends financial year 2017 (balance paid in May 2018) |
|||||||
| Paid dividend (relating to financial year 2017) | |||||||
| Paid interim dividend financial year 2017 (paid in December 2017) |
|||||||
| Changes resulting from the sale of buildings | -4 175 124 | 893 731 | |||||
| Dividend 2018 (interim dividend paid in December 2018) |
|||||||
| Result of the financial year 2018 | |||||||
| Other increases (decreases) | |||||||
| BALANCE AT 31/12/2018 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 121 486 589 | -38 457 522 | |
| BALANCE AT 31/12/2018 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 121 486 589 | -38 457 522 | |
| Allocation of result 2018 | 0 | 0 | 0 | 0 | 69 871 927 | -11 366 451 | |
| Allocation of operational distributable result | 0 | 0 | 0 | ||||
| Changes in deferred taxes | 85 202 | ||||||
| Changes in Fair Value of investment properties | 69 786 725 | -11 366 451 | |||||
| Changes in Fair Value of hedging instruments | |||||||
| Dividends financial year 2018 (balance paid in May 2019) |
|||||||
| Paid dividend (relating to financial year 2018) | |||||||
| Paid interim dividend financial year 2018 (paid in December 2018) |
|||||||
| Changes resulting from the sale of buildings | -7 234 890 | 1 586 739 | |||||
| Result of the financial year 2019 | |||||||
| Merger of subsidiaries | 1 395 050 | -479 934 | |||||
| Dividend 2019 (interim dividend paid in December 2019) |
|||||||
| Other increases (decreases) | 20 335 | -20 335 | |||||
| BALANCE AT 31/12/2019 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 185 539 011 | -48 737 503 |
| Reserves from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS applicable) |
Reserves from the balance of changes in fair hedgesreserve for treasury shares (IFRS not applicable) |
Reserves value of for latent taxes |
Reserves for treasury shares |
Other reserves |
Result carried forward from previous financial years |
Net result of the financial year |
Total |
|---|---|---|---|---|---|---|---|
| 0 -9 280 017 |
0 -686 943 |
1 781 255 | 24 998 216 | -501 856 | 215 200 674 | ||
| 0 | 1 226 658 -774 669 |
0 | 0 | -3 768 572 | 501 856 | -2 393 252 | |
| -3 768 572 | 3 768 572 | 0 | |||||
| -774 669 | 774 669 | 0 | |||||
| -421 475 | 0 | ||||||
| 1 226 658 | -1 226 658 | 0 | |||||
| -2 393 252 | -2 393 252 | ||||||
| -14 359 510 | -14 359 510 | ||||||
| 11 966 258 | 11 966 258 | ||||||
| 3 281 393 | 0 | ||||||
| -12 330 548 | -12 330 548 | ||||||
| 67 804 508 | 67 804 508 | ||||||
| 182 016 | 182 016 | ||||||
| 0 -8 053 358 |
-774 669 | -686 943 | 1 781 255 | 24 693 054 | 55 473 960 | 268 463 398 | |
| 0 -8 053 358 |
-774 669 | -686 943 | 1 781 255 | 24 693 054 | 55 473 960 | 268 463 398 | |
| 0 -1 613 701 |
-256 480 | 0 | 0 | -4 449 484 | -55 473 958 | -3 288 147 | |
| 0 | 0 | 0 0 |
0 | -4 449 484 | 4 449 484 | 0 | |
| -256 480 | 0 | 0 | 0 | 171 278 | 0 | ||
| -58 420 274 | 0 | ||||||
| -1 613 701 | 1 613 701 | 0 | |||||
| -3 288 147 | -3 288 147 | ||||||
| -15 618 695 | -15 618 695 | ||||||
| 12 330 548 | 12 330 548 | ||||||
| 5 648 151 | 0 | ||||||
| 49 247 051 | 49 247 051 | ||||||
| 915 116 | |||||||
| -11 590 993 | -11 590 993 | ||||||
| 0 | |||||||
| 0 -9 667 059 |
-1 031 149 | -686 943 | 1 781 255 | 25 891 721 | 37 656 060 | 303 746 425 |
| SHAREHOLDERS' EQUITY | 2019 | 2018 |
|---|---|---|
| A. Capital | ||
| a. Capital | 88 949 295 | 88 949 295 |
| b. Capital increase expenses | -950 240 | -950 240 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | ||
| a. Legal reserve (+) | 98 778 | 98 778 |
| b. Reserve from the balance of changes in fair value of investment properties (+/-) |
185 539 011 | 121 486 589 |
| c. Reserve from estimated transfer costs and rights resulting from hypothetical disposal of investment properties (-) |
-48 737 503 | -38 457 522 |
| d. Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is applied (+/-) |
0 | 0 |
| e. Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is not applied (+/-) |
-9 667 059 | -8 053 358 |
| h. Reserve for treasury shares (-) | -686 943 | -686 943 |
| m. Other reserves (+/-) | 1 781 255 | 1 781 255 |
| n. Result carried forward from previous financial years (+/-) | 25 891 721 | 23 918 385 |
| D. Net result of the financial year | 37 656 060 | 55 473 960 |
| TOTAL EQUITY | 303 746 425 | 268 463 398 |
| Appropriation and withdrawals | 2019 | 2018 |
|---|---|---|
| A. Net result | 49 247 051 | 67 804 508 |
| B. Transfer to/from reserves (-/+) | -33 299 542 | -52 185 813 |
| 1. Transfer to/from reserves of the balance (positive or negative) of changes in fair value of investment properties (-/+) |
||
| - financial year | -12 169 032 | -69 786 725 |
| - realization of real estate | 5 648 151 | 2 707 284 |
| 2. Transfer to/from reserves of estimated transfer rights and costs resulting from hypothetical disposal of investment properties (-/+) |
-31 580 392 | 11 366 451 |
| 5. Transfer to/from reserves for the balance of the changes in the fair value of allowed hedging instruments which are not submitted to hedge accounting as defined by IFRS (-) |
||
| accounting year | -5 309 556 | 1 613 701 |
| 8. Tranfer to/from reserves of deferred taxes related to real estate located abroad (-/+) | 661 022 | 171 278 |
| 11. Transfer to/from result from previous financial years carried forward (-/+) | 9 450 265 | 1 742 198 |
| C. Remuneration of capital according to art.13, § 1, lid 1 | -13 641 670 | -11 252 765 |
| D. Remuneration of capital – other than C | -2 305 839 | -4 365 930 |
| Scheme for calculation of result according to art. 13, § 1 | 2019 | 2018 |
|---|---|---|
| Corrected result (A) | ||
| Net result | 49 247 051 | 67 804 508 |
| + Afschrijvingen | 306 328 | 170 414 |
| + Impairments | 88 596 | 228 723 |
| - Impairment reversals | -25 468 | -39 264 |
| +/- Other non monetary items | 5 412 444 | 1 784 979 |
| +/- Result on sale of property | -123 069 | -610 185 |
| +/- Changes in fair value of property | -43 625 015 | -58 420 274 |
| Corrected result (A) | 11 280 867 | 10 918 901 |
| Net capital gains on the sale of property not exempt from distribution (B) | ||
| +/- Capital gains and losses on property realized during the financial year (capital gains or losses compared with the acquisition value plus capitalised investment expenses) |
5 771 221 | 3 317 469 |
| = Net capital gains on the sale of property not exempt from distribution (B) | 5 771 221 | 3 317 469 |
| TOTAL (A + B) | 17 052 087 | 14 236 370 |
| 80% according to art. 13, §1 | 13 641 670 | 11 389 096 |
| Net reduction in debt | ||
| Minimum distribution required by art. 13. | 13 641 670 | 11 389 096 |
In accordance with Art. 7:212 of the Companies and Associations Code, after payment of the intended dividend, net asset shall not be less than the amount of the recognised capital, increased all reserves that do not allow the law or the statutes to divide. The margin remaining after distribution is € 10.9 million.
| Net statutory assets after distribution of the dividend: | 300 129 463 | |
|---|---|---|
| Method of calculation of the amount referred to in art 13 § 1er al. 6 | ||
| Paid-up capital or, if greater, called-up capital (+) | 87 999 055 | |
| Share premiums not available pursuant to the articles of association (+) | 24 903 199 | |
| Reserve from the positive balance from changes in the fair value of real estate assets (+) | 197 708 044 | |
| Reserve for transfer rights and costs estimated to arise on the hypothetical disposal of investment properties (-) |
-17 157 111 | |
| Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is not applied (+/-) |
-4 357 504 | |
| Legal reserve (+) | 98 778 | |
| Non distributable equity according to article 617 of the Companies Code | 289 194 461 | |
| Difference: | 10 935 002 |
EPRA, the European Public Real Estate Association, is a non-profit organization which represents listed real estate companies in Europe. EPRA represents € 430 billion of real estate properties. EPRA publishes recommendations in order to determine the most important performance indicators for listed real estate companies. The publication of these data is not mandatory according to the public BE-REIT legislation.
| Table | EPRA - performance measures |
Definitions EPRA | 31-12-19 | 31-12-18 | |
|---|---|---|---|---|---|
| 1 | EPRA - Earnings | Earnings from operational activities. | (EUR / share) | 3.85 | 3.21 |
| 2 | EPRA - NAV | 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. |
(EUR / share) | 96.00 | 85.06 |
| 3 | EPRA - NNNAV | EPRA NAV adjusted to include the fair values of financial instruments, debt and deferred taxes. |
(EUR / share) | 94.16 | 81.81 |
| 4 | EPRA - NIY | Annualised rental income based on the cash rents passing at the balance sheet date, less non recoverable property operating expenses, divided by the market value of the property, increased with estimated purchasers costs. |
3.53% | 3.20% | |
| EPRA - Topped-up NIY | The EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents). |
3.53% | 3.20% | ||
| 5 | EPRA - Vacancy Rate | Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio. |
8.50% | 9.31% | |
| EPRA cost ratio (including direct vacancy costs) |
Administrative & operating costs (including costs of direct vacancy) divided by gross rental income. |
25.96% | 18.52% | ||
| 6 | EPRA cost ratio (excluding direct vacancy costs) |
Administrative & operating costs (excluding costs of direct vacancy) divided by gross rental income. |
25.16% | 17.15% |
| 31-12-19 | 31-12-18 | ||
|---|---|---|---|
| IFRS Earnings (group shareholders) | 55 489 501 | 68 777 725 | |
| (i) | Changes in the value of investment properties | -48 472 578 | -59 413 636 |
| (ii) | Profit or losses on the disposal of investment properties | -123 069 | -610 185 |
| (vi) | Changes in fair value of financial instruments | 5 412 444 | 1 613 701 |
| (viii) | Deferred taxes in respect of EPRA adjustments | 536 613 | 171 278 |
| (ix) | EPRA adjustments related to joint ventures | -174 781 | 0 |
| EPRA earnings | 12 668 130 | 10 538 883 | |
| Weighted average number of shares | 3 288 146 | 3 288 146 |
EPRA earnings per share (in EUR) 3.85 3.21
| 31-12-19 | 31-12-18 | ||
|---|---|---|---|
| IFRS NAV (group shareholders) | 309 617 696 | 269 003 279 | |
| (iv) | Fair value of financial instruments | 4 357 504 | 9 667 059 |
| (v.a) | Deferred taxes | 1 692 172 | 1 031 150 |
| EPRA NAV | 315 667 372 | 279 701 488 | |
| Number of shares | 3 288 146 | 3 288 146 | |
| EPRA NAV per share (in EUR) | 96.00 | 85.06 |
| 31-12-19 | 31-12-18 | ||
|---|---|---|---|
| EPRA NAV | 315 667 372 | 279 701 488 | |
| (i) | Fair value of financial instruments | -4 357 504 | -9 667 059 |
| (ii) | Revaluation in the fair value of fundings with fixed rate | 0 | 0 |
| (iii) | Deferred taxes | -1 692 172 | -1 031 150 |
| Minority interests related to deferred taxes | |||
| EPRA NNNAV | 309 617 696 | 269 003 279 | |
| Number of shares | 3 288 146 | 3 288 146 | |
| EPRA NNNAV per share (in EUR) | 94.16 | 81.81 |
| In thousands Euros | 31-12-19 | 31-12-18 |
|---|---|---|
| Investment properties | 609 594 469 | 524 506 117 |
| Assets held for sale | 0 | 0 |
| Development projects | -36 217 841 | -34 141 731 |
| Estimated transaction costs hypothetical disposal of investment properties | 17 379 372 | 47 226 613 |
| Investment value of property portfolio available for rent | 590 756 000 | 537 591 000 |
| Annualised gross rental incomes | 26 756 027 | 24 871 152 |
| Property costs | -5 891 622 | -7 691 925 |
| Annualised net rental incomes | 20 864 405 | 17 179 227 |
| Notional rent expiration of rent free periods | 0 | 0 |
| Topped-up net annualised rent | 20 864 405 | 17 179 227 |
| EPRA NIY | 3.53% | 3.20% |
| EPRA "topped-up" NIY | 3.53% | 3.20% |
| 31-12-19 | 31-12-18 | |
|---|---|---|
| Estimated rental value of vacant space | 2 436 606 | 2 484 644 |
| Estimated rental value of whole portfolio | 28 660 232 | 26 677 031 |
| EPRA Vacancy rate | 8.50% | 9.31% |
| In thousands Euros | 31-12-19 | 31-12-18 | |
|---|---|---|---|
| Include: | |||
| I. | operating expense line per IFRS income statement | 7 142 083 | 6 552 720 |
| IV. | other operating income/recharges intended to cover overhead expenses less any related profit |
0 | 0 |
| Exclude (if part of above): | |||
| VI. | Investment properties depreciation | -197 104 | -170 415 |
| EPRA costs (including direct vacancy costs) | 6 944 979 | 6 382 305 | |
| IX. | Direct vacancy costs | -212 819 | -340 659 |
| EPRA cosrs (excludind direct vacancy costs) | 6 732 160 | 6 041 646 | |
| X. | Gross rental income less ground rent costs | 26 756 027 | 24 871 152 |
| Gross rental income | 26 756 027 | 24 871 152 | |
| EPRA cost ratio (including direct vacancy costs) | 25.96% | 25.66% | |
| EPRA cost ratio (excluding direct vacancy costs) | 25.16% | 24.29% |
As required by law and the Company's by-laws, we report to you as statutory auditor of Home Invest Belgium nv (the "Company") and its subsidiaries (together the "Group"). This report includes our opinion on the consolidated balance sheet as at 31 December 2019, the consolidated results, the consolidated statement of changes in shareholders'equity and the cash flow statement for the year ended 31 December 2019 and the disclosures (all elements together the "Consolidated Financial Statements") and includes as well our report on other legal and regulatory requirements. These two reports are considered as one report and are inseparable.
We have been appointed as statutory auditor by the shareholders meeting of 7 May 2019, in accordance with the proposition by the Board of Directors following recommendation of the Audit Committee. Our mandate expires at the shareholders meeting that will deliberate on the annual accounts for the year ending 31 December 2021. We performed the audit of the Consolidated Financial Statements of the Group during one year.
We have audited the Consolidated Financial Statements of Home Invest Belgium NV/SA, which consists of the consolidated balance sheet as at 31 December 2019, the consolidated results, the consolidated statement of changes in shareholders'equity and the cash flow statement for the year ended 31 December 2019 and the disclosures, which show a consolidated balance sheet total of € 639,169 thousand and of which the consolidated income statement shows a profit for the year of € 55,490 thousand.
In our opinion the Consolidated Financial Statements of the Group give a true and fair view of the consolidated net equity and financial position as at 31 December 2019, as well as its consolidated results and its consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards as adopted by the European Union ("IFRS") and with applicable legal and regulatory requirements in Belgium.
We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the "Our responsibilities for the audit of the consolidated financial statements" section of our report.
We have complied with all ethical requirements that are relevant to our audit of the Consolidated Financial Statements in Belgium, including those with respect of independence.
We have obtained from the Board of Directors and the officials of the Company the explanations and information necessary for the performance of our audit and we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the current reporting period.
These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole and in forming our opinion thereon, and consequently we do not provide a separate opinion on these matters.
Investment property represents 95% of the assets of the Group. As at 31 December 2019, the investment properties on the assets of the balance sheet amount to € 609,594 thousand.
In accordance with the accounting policies and IAS 40 standard "Investment property", investment property is valued at fair value, and the changes in the fair value of investment property are recognized in the income statement. The fair value of investment properties belongs to the level 3 of the fair value hierarchy defined within the IFRS 13 standard "Fair Value Measurement", some parameters used for valuation purposes being based on unobservable data (discount rate, future occupancy rate, …). The audit risk appears in the valuation of these investment properties.
The Group uses interest rate swaps (IRS) to hedge the interest rate risk on the variable rate debts. The measurement of the derivatives at fair value is an important source of volatility of the result. As a matter of fact, in accordance with IFRS 9 "Financial Instruments: Recognition and Measurement", these derivatives are valued at fair value (considered to belong to the level 2 of the fair value hierarchy defined by IFRS 13 "Fair Value Measurement"). The changes in fair value are recognized in the income statements. The audit risk appears in the valuation of these derivatives.
The Group uses external experts to make an estimate of the fair value of its buildings. We have assessed the valuation reports of the external experts (with the support of our internal experts).
More precisely, we have:
Finally, we have assessed the appropriateness of the information on the fair value of the investment properties disclosed in note 18 of the Consolidated Financial Statements.
We have compared the fair values of the derivatives with the values communicated by the counterparties and the credit risk adjustments. We have assessed the most important assumptions and the calculations.
Finally, we have assessed the appropriateness of the information on the financial instruments disclosed in note 25 of the Consolidated Financial Statements.
The Board of Directors is responsible for the preparation of the Consolidated Financial Statements that give a true and fair view in accordance with IFRS and with applicable legal and regulatory requirements in Belgium. This responsibility involves implementing internal controls relevant to the preparation of the Consolidated Financial Statements that give a true and fair view and that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the Consolidated Financial Statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, and provide, if applicable, information on matters impacting going concern, The Board of Directors should prepare the financial statements using the going concern basis of accounting, unless the Board of Directors either intends to liquidate the Company or to cease business operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements are free from material misstatement, whether due to fraud or error, to express an opinion on these Consolidated Financial Statements based on our audit. Reasonable assurance is a high level of assurance, but not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements.
As part of an audit, in accordance with ISAs, we exercise professional judgment and we maintain professional skepticism throughout the audit. We also perform the following tasks:
Obtaining insight in the system of internal controls that are relevant for the audit and with the objective to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control;
Evaluating the selected and applied accounting policies, and evaluating the reasonability of the accounting estimates and related disclosures made by the Board of Directors as well as the underlying information given by the Board of Directors;
We communicate with the Audit Committee within the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the audits of the subsidiaries. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities.
We provide the Audit Committee within the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee within the Board of Directors, we determine those matters that were of most significance in the audit of the Consolidated Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our report, unless the law or regulations prohibit this.
The Board of Directors is responsible for the preparation and the content of the Board of Director's report on the Consolidated Financial Statements and other information included in the annual report.
In the context of our mandate and in accordance with the additional standard to the ISAs applicable in Belgium, it is our responsibility to verify, in all material respects, the Board of Directors' report on the Consolidated Financial Statements, and other information included in the annual report, and to report on any matters.
In our opinion, after carrying out specific procedures on the Board of Director's report, the Board of Director's report on the Consolidated Financial Statements is consistent with the Consolidated Financial Statements and has been prepared in accordance with article 3:32 of the Companies and Associations Code (former article 119 of the Companies Code).
In the context of our audit of the Consolidated Financial Statements, we are also responsible to consider whether, based on the information that we became aware of during the performance of our audit, the Board of Director's report on the and other information included in the annual report, being:
• Alternative performance measures p. 131-132 contain any material inconsistencies or contains information that is inaccurate or otherwise misleading. In light of the work performed, there are no material inconsistencies to be reported. In addition, we do not provide reasonable assurance regarding the Board of Directors' report and other information included in the annual report.
Our auditor's office has not performed any services that are not compatible with the audit of the Consolidated Financial Statements and has remained independent of the Company and the Group during the course of our mandate.
The fees for additional services that are compatible with the audit of the Consolidated Financial Statements intended by article 3:65 of the Companies and Associations Code have been correctly disclosed and detailed in the disclosures to the Consolidated Financial Statements.
• This report is consistent with our supplementary declaration to the Audit Committee as specified in article 11 of the regulation (EU) nr. 537/2014.
Brussels, 3 April 2020
EY Réviseurs d'Entreprises BV/SRL Statutory auditor represented by
Joeri Klaykens* Partner
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| Coordinated articles of association - excerpts������122 |
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| The RREC and its tax system�������������������������������128 |
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| Glossary of alternative performance |
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| Name | Home Invest Belgium, public regulated real estate company (RREC) |
|---|---|
| Registered office | The registered office of the company is established at Boulevard de la Woluwe 46/11, 1200 Woluwe-Saint-Lambert. |
| Business number | The company is listed in the register of legal entities (RPM/RPR) in Brussels under number 0420.767.885. |
| Incorporation, legal form and notification |
The company was established on 4 July 1980 under the name 'Philadelphia', further to a deed drawn up by notary Daniel Pauporté in Brussels (published in the annexes to the Belgian official journal on 12 July 1980 under number 1435-3). The articles of association have been amended on several occasions and most recently further to the record drawn up by notary Louis-Philippe Marcelis on 13 September 2017 (published in the annexes to the Belgian official journal on 21 November 2017, under number 0161972). The company was recognised as a real estate investment fund by the Commission for Banking, Finance and Insurance (CBFA), now the Authority for Financial Services and Markets (FSMA) in 1999. On 2 September 2014, the company was recognised as an RREC by the FSMA. The company appeals publicly to the savings system in accordance with Article 439 of the Companies Code. |
| Term | The company was established for an indefinite period. |
| Purpose | Please refer to Article 3 of the articles of association, as indicated below under 'coordinated articles of association – excerpts'. |
| Modification of the purpose | The company can only make changes to its purpose that are in accordance with its articles of association and in line with the laws and regulations applicable to Regulated Real Estate Companies. |
| Financial year | The company financial year begins on 1 January and ends on 31 December every year. |
| Places where the documents accessible to the public can be consulted |
• The deed of incorporation and articles of association of the company can be consulted at the Registrar's office of the French-speaking Commercial Court of Brussels and are also available on the company's website www.homeinvestbelgium.be. • The statutory and consolidated annual financial statements and additional reports are filed with the National Bank of Belgium in accordance with legal requirements and can be consulted at the Registrar's office of the Commercial Court of Brussels. • The decisions taken with regard to the appointment and revocation of the members of the Board of Directors are published in the annexes to the Belgian official journal. • The convening notices to the General Meetings are published in the annexes to the Belgian official journal and in two financial daily newspapers that are distributed nationally. The convening notices and all relevant documents are also available on the website www.homeinvestbelgium.be. • All press releases and other financial information published by Home Invest Belgium can also be consulted on the website. Anyone interested can register free of charge on the website www.homeinvestbelgium.be in order to receive the press releases and mandatory financial information by e-mail. |
| Telephone number | +32 2 740 14 50 |
| Website | www.homeinvestbelgium.be |
| Issued share capital | As at 31 December 2018, the share capital stood at € 88,949,294.75. It is represented by 3,299,858 shares without indication of nominal value. The capital is fully paid-up. |
|---|---|
| Authorised capital | The Board of Directors is authorised to increase the share capital, on one or more occasions, to the sum of € 88,949,294.75. Under the same conditions, the Board of Directors is authorised to issue convertible bonds or subscription rights. This authorisation was conferred for a period of five years as of 21 November 2017. These capital increases can be effected by subscriptions in cash, contributions in kind or via the incorporation of reserves or issue premiums. As at 31 December 2018, the balance of the authorised capital amounted to € 88,949,294.75. |
The complete coordinated articles of association of Home Invest Belgium NV/SA can be consulted at the Registrar's office of the French-speaking Enterprise Court of Brussels, at the company's registered office and on the website www.homeinvestbelgium.be. The references to the old Code of Companies will be adjusted in 2020 with the planned status changes into the new Code of Companies and Associations.
| Purpose (Article 3 of the articles of association) |
3.1. . The sole purpose of the company is: (a) to make available buildings to users, directly or through a company in which it holds a stake in accordance with the provisions of the RREC regulations, and (b) within the limits set by RREC regulations, to own the real estate referred to in Article 2, 5°, i to x of the RREC Act. Real estate shall be understood to mean: i. buildings as defined in Articles 517 ff. of the Civil Code and real rights exercised on buildings, to the exclusion of real estate for forestry, agriculture or mining; ii. shares with voting rights issued by real estate companies, exclusively or jointly controlled by the company; iii. option rights on real estate; iv. shares in public regulated real estate companies or institutional regulated real estate companies, provided that in the latter case, the company has joint or exclusive control thereof; v. the rights deriving from contracts leasing one or more properties to the RREC or conferring similar rights of use; vi. shares in public real estate investment funds; vii. units in foreign undertakings for collective investment in real estate as registered on the list referred to in Article 260 of the act of 19 April 2014; viii. units in undertakings for collective investment in real estate established in another Member State of the European Economic Area that are not included on the list referred to in Article 260 of the act of 19 April 2014, insofar as they are subject to similar supervision as that applicable to the public real estate investment fund; ix. shares issued by companies (i) with a legal personality; (ii) falling under the law of another Member State of the European Economic Area; (iii) whose shares are admitted to trading on a regulated market and/or which are subject to prudential supervision; (iv) whose primary activity is the acquisition or construction of buildings to be made available to users, or direct or indirect holdings in companies whose purpose is similar; and (v) which are exempt from income tax on the profits derived from the activities referred to under (iv) above, subject to compliance with various constraints, relating at least to the legal obligation to distribute part of their earnings to their shareholders (Real Estate Investment Trusts, or REITs); x. real estate certificates, as referred to in Article 5, § 4 of the act of 16 June 2006. In the framework of the provision of real estate, the company may in particular undertake all activities related to the building, conversion, renovation, development, acquisition, sale, management and operation of real estate. |
|---|---|
| 3.2. On a temporary or ancillary basis, the company may invest in securities that do not constitute real estate within the meaning of the RREC regulations. These investments will be made in compliance with the risk management policy adopted by the company and will be diversified in order to ensure an adequate risk spread. The company may also hold unallocated liquid assets in any currency, in the form of current or term deposits or any money market instruments that may be easily mobilised. It can also carry out transactions on authorised hedging instruments, intended exclusively to cover exposure to interest rate and currency exchange risks in the context of the financing and management of the company's real estate and to the exclusion of any speculative transactions. |
|
| 3.3. The company may rent or let one or more buildings itself under a finance lease agreement. The finance lease activity with a purchase option relating to buildings can only be carried out as a secondary activity unless the properties in question are intended for public purposes including social housing and education (in which case the activity may be exercised as the company's primary activity). |
|
| 3.4. The company may take an interest, by merger or otherwise, in any businesses, undertakings or companies with a similar or related company purpose and which are conducive to the development of its business and, in general, carry out all operations that are directly or indirectly related to its purpose and all acts deemed necessary or useful for the achievement of its purpose. The company is required to perform all its activities and operations in accordance with the provisions of and within the limits set by the RREC regulations and any other applicable legislation. |
| Prohibitions (Article 4 of the articles of association) |
The company may not: a. act as a real estate developer within the meaning of the RREC regulations with the exception of occasional transactions; b. participate in an underwriting or guarantee syndicate; c. lend financial instruments, with the exception of loans under the conditions and in accordance with the provisions of the Royal Decree of 7 March 2006; d. acquire financial instruments issued by a company or private association which has been declared bankrupt, which has entered into a mutual agreement with its creditors, which is the subject of a judicial reorganisation procedure, which has obtained a suspension of payments or which has been the subject of similar measures in a foreign country. |
|---|---|
| Authorised capital (Article 6.3. of the articles of association) |
The Board of Directors is expressly authorised to increase the share capital on one or more occasions up to a maximum amount of eighty-eight million, nine hundred and forty-nine thousand, two hundred and ninety four euros and seventy-five cents (€ 88,949,294.75) on the dates and in accordance with terms which it shall set, in accordance with Article 603 of the Companies Code. Under the same conditions, the Board of Directors is authorised to issue convertible bonds or subscription rights. This authorisation is granted for a period of five years as of the publication in the annexes to the Belgian official journal of the minutes of Extraordinary General Meeting held on 13 September 2017. In any case, within the framework of this authorisation, the share capital may never be increased to more than eighty eight million, nine hundred and forty-nine thousand, two hundred and ninety-four euros and seventy-five cents (€ 88,949,294.75). Whenever the share capital is increased, the Board of Directors will set the price, any issue premium and the issue conditions of the new shares, unless the General Meeting decides on this itself. The preferential subscription right of shareholders can either be limited or abolished in accordance with Article 6.5. of the articles of association. Capital increases decided in this way by the Board of Directors may be undertaken by subscription in cash or by contributions in kind or by the incorporation of reserves or issue premiums, with or without the creation of new securities, or through the distribution of an optional dividend, in each case with due respect for the legal provisions; such capital increases may lead to the issuing of voting or non-voting shares. If the capital increases decided on pursuant to this authorisation include an issue premium, the amount of this premium, after the charging of any expenses, will be placed in an unavailable account named 'issued premium'. Like the capital, this will constitute the guarantee in respect of third parties and may be reduced or abolished only by a decision of the General Meeting ruling under the conditions regarding quorum and majorities required for a capital reduction, unless it is incorporated into the capital. |
| Acquisition, acceptance as a pledge and disposal |
The company may acquire its own shares by purchase or accept them as a pledge under conditions laid down by law. |
| of own shares (Article 6.4. of the articles of association) |
By decision of the extraordinary General Meeting of shareholders of 3 May 2016, the Board of Directors is authorised: • in the context of Articles 620 ff. of the Companies Code, on behalf of the company, to acquire, accept as a pledge and dispose of the company's own shares at a unit price of not less than sixty-five per cent (65 %) of the closing market price on the day prior to the date of the transaction (acquisition, disposal or acceptance as a pledge) and may not be more than one hundred and thirty-five percent (135 %) of the closing market price on the day prior to the date of the transaction (acquisition, disposal or acceptance as a pledge) for a period of five years as of the publication in the annexes to the Belgian official journal of the minutes of the extraordinary General Meeting of shareholders of the company of 3 May 2016, bearing in mind that at no time may the company hold more than twenty per cent (20 %) of the total number of shares issued; • to acquire, accept as a pledge and dispose of its own shares on behalf of the company without the need for an additional prior decision from the General Meeting of shareholders of the company, where such acquisition, acceptance as a pledge or disposal is necessary in order to avoid serious and imminent danger to the company. This authorisation is granted for a period of three years as of the publication in the annexes to the Belgian official journal of the minutes of extraordinary General Meeting held on 3 May 2016. In the context of these authorisations, the company is authorised to dispose of shares acquired by the company, on or off the stock market, under conditions set by the Board of Directors, without the prior authorisation of the General Meeting of shareholders of the company. |
Capital increase (Article 6.5. - 6.7. of the articles of association)
In the event of a capital increase by cash contribution and without prejudice to the application of Articles 592 to 599 of the Companies Code and the RREC regulations, the preferential subscription rights of existing shareholders may not be abolished or limited unless an irreducible allocation right is granted to them when new shares are allocated. This irreducible allocation right meets the following conditions under the RREC regulations:
Issuing shares in return for a contribution in kind is only possible in application of Articles 601 and 602 of the Companies Code.
In accordance with the RREC regulations, in the event of a capital increase in a subsidiary with the status of a listed institutional RREC by means of a contribution in cash at a price that is 10 % or more lower than the lowest value of (a) a net asset value per share dating back no more than four months before the date of the start of the issue or (b) the average closing price of the thirty calendar days prior to date of the start of the issue, the Board of Directors draws up a report explaining the economic justification for the discount applied, the financial consequences of the transaction for the shareholders and the interest of the capital increase under consideration. This report and the valuation criteria and methods applied are commented on by the statutory auditor in a separate report. To calculate the prices of the contribution, it is possible to deduct from the amount mentioned in the previous paragraph an amount that corresponds to the portion of the undistributed gross dividends to which the holders of the new shares would potentially not be entitled, provided that the Board of Directors specifically justifies the amount of the accumulated dividends to be deducted and explains the financial conditions of the transaction in its annual financial report. If the subsidiary in question is not a listed company, the discount referred to in paragraph 1 is calculated only on the basis of a net asset value per share dating back no more than four months; all the other obligations apply.
This article does not apply to capital increases fully subscribed by the company or its subsidiaries, whose capital is directly or indirectly held entirely by the company.
The company can reduce its capital in compliance with the applicable legal provisions.
| Shares (Article 7.1. of the articles of association) |
The shares are registered or dematerialised. They are all fully paid up and without indication of nominal value. The company may issue dematerialised shares by capital increase or by exchange of existing registered shares. Each shareholder can, at his own expense, request an exchange into registered or dematerialised shares. The company may create several categories of shares. The registered shares are listed in the shareholders' register held at the company's registered office. Ownership of these shares is proven exclusively by registration in the shareholders' register. Any transfer of these shares takes effect only after registration of the transfer of these shares in the shareholders' register, dated and signed by the transferor and the transferee or their proxies, or after having fulfilled the formalities required by law for the transfer of the claims. Nominative registration certificates will be issued to the shareholders. The shares are indivisible and the company recognises a single owner per security. If several people have rights with regard to the same share, the exercising of these rights will be suspended until a single person has been appointed as the owner of the security in respect of the company. |
|---|---|
| Other securities (Article 7.2. of the articles of association) |
With the exception of profit-sharing certificates and similar securities, and subject to the specific legal provisions on this matter, in particular those resulting from the RREC regulations, the company can issue securities referred to in Article 460 of the Companies Code. |
| Declaration of transparency (Article 8 of the articles of association) |
The company's shares must be admitted for trading on a Belgian regulated market in accordance with the RREC regulations. In accordance with the provisions of the act of 2 May 2007 on the public disclosure of major holdings in issuers whose shares are admitted for trading on a regulated market and containing various provisions and in accordance with the RREC regulations, any legal or natural person acquiring shares or other securities conferring voting rights, whether or not they represent capital, is required to inform the company and the FSMA of the percentage and the number of existing voting rights it holds each time the voting rights attached to these securities reach either three per cent (3 %), or five per cent (5 %) or a multiple of five per cent of the total number of voting rights existing at this time or at the time when circumstances arise that render such disclosure mandatory. The declaration is also mandatory in the event of the transfer of securities when, as a result of this transfer, the number of voting rights falls below the thresholds referred to in sub-paragraph two. |
| Composition of the Board of Directors (Article 9 of the articles of association) |
The company is governed by a Board consisting of at least three (3) and no more than nine (9) directors, who may or may not be shareholders and who are appointed by the General Meeting of shareholders, in principle for a period of four years; the duration of the mandate may never exceed six years. Their mandate may be revoked at any time. The General Meeting must appoint at least three independent directors to the Board of Directors. An independent director is understood to be a director who meets the criteria set out in Article 526ter of the Companies Code. Should one or more director's positions become vacant, the remaining directors are entitled to fill the vacancy until the next General Meeting, which will make the definitive appointment. This right becomes an obligation whenever the number of directors actually in office no longer reaches the statutory minimum. Without prejudice to the transitional provisions, the directors are exclusively natural persons; they must fulfil the conditions of reliability and expertise laid down in the RREC regulations and cannot fall under the application of the prohibitions laid down in the RREC regulations. The appointment of directors is subject to the prior approval of the Financial Services and Markets Authority (FSMA). |
| Senior management (Article 12 of the articles of association) |
Without prejudice to the transitional rules, the actual management of the company is entrusted to at least two natural persons. The members of the management team must fulfil the requirements of reliability and expertise laid down in the RREC regulations and cannot fall within the application of the prohibitions laid down in the RREC regulations. The appointment of executive managers is subject to the prior approval of the Financial Services and Markets Authority (FSMA). |
| Representation of the company (Article 13 of the articles of association) |
The company is validly represented judicially and extra-judicially, including for deeds requiring the intervention of a public official or a notary public, either by two directors acting jointly or, in the context of day-to-day management, by a person mandated for this purpose or, where an executive committee exists and within the limits of the powers conferred upon this executive committee, by two members of this committee acting jointly. The company is also validly represented by special representatives acting within the framework of their mission. The company may be represented abroad by any individual who has been expressly appointed by the Board of Directors for this purpose. Copies or extracts of the minutes of the General Meetings of shareholders and of meetings of the Board of Directors, including extracts intended for publication in the annexes to the Belgian official journal, are validly signed either by one director or by a person charged with the day-to-day management or who has been expressly mandated by the Board of Directors. |
| General meeting (Article 23 of the articles of association) |
A General Meeting, known as the 'Annual Meeting' is held every year on the first Tuesday of May at 3.00 pm. If this date coincides with a public holiday, the Annual Meeting will take place on the next working day at the same time. An extraordinary General Meeting may be convened every time this is required in the interests of the company. These General Meetings may be convened by the Board of Directors or by the statutory auditor(s) and must be convened when requested by shareholders representing one fifth of the company's capital. General meetings are held at the registered office of the company or in any other place indicated in the letter convening the meeting or in any other way. |
| Convening and means of deliberation (Article 24 of the articles of association) |
General meetings and extraordinary General Meetings are convened by means of an announcement published just once in the Belgian official journal at least thirty days before the meeting. With the exception of annual General Meetings, which are held at the place, date and time indicated in the articles of association and the agenda of which is limited to the customary subjects, the notice convening the meeting must also be published thirty days prior to the meeting in a national newspaper and on the company website. Where a second convening notice is required, and insofar as the date of the second meeting has been indicated in the first convening notice, the deadline for convening this second meeting is reduced to seventeen days before the General Meeting. The convening notice contains the agenda of the meeting and the proposed resolutions. Registered shareholders will receive convening notices by recorded delivery or, if expressly so requested in writing, by ordinary post, thirty days before the meeting. One or more shareholders jointly representing at least 3 % of the share capital of the company can, in accordance with Article 533ter of the Companies Code, request that an item be added to the agenda of the meeting and put forward proposals for decisions with regard to items included on or to be added to the agenda. A shareholder attending or represented at the meeting is deemed to have been validly convened. Moreover, a shareholder may, before or after the General Meeting that he did not attend, waive the possibility of invoking the absence or irregularity of the convening notice. To be admitted to the meeting and cast their vote, shareholders must register their shares no later than midnight (Belgian time) on the fourteenth day prior to the General Meeting (hereinafter the 'registration date'), either by their inclusion in the share register or by their inclusion in the accounts of an approved account holder or a clearing body, irrespective of the number of shares held by the shareholder on the day of the General Meeting. The owners of dematerialised shares wishing to take part in the meeting must provide a certificate issued by their financial intermediary or approved account holder, stating the number of dematerialised shares registered in the shareholder's name in its accounts on the registration date and for which the shareholder has declared that he wishes to take part in the General Meeting. This certificate must be filed at the registered office of the company or the establishments indicated in the convening notices at the latest on the sixth day prior to the date of the meeting. Owners of registered shares express their wish to participate in the meeting to the company within the same term, by ordinary post, fax or e-mail. The company ensures that a register is kept at its registered office listing all the shareholders who have come forward, giving their name, their address or registered office, the number of shares in their possession on the registration date and with which they have stated that they wish to participate in the meeting, together with the relevant supporting documents. |
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| Voting by proxy – Voting by correspondence (Article 25 of the articles of association) |
Any shareholder may arrange to be represented at a General Meeting by an authorised representative, who may or may not be a shareholder. Proxies must be sent to the company in writing at the latest six days before the meeting; this notification can also be provided electronically, within the same term, by e-mail sent to the address given in the convening notice. |
| Joint owners, holders of usufruct rights and bare owners, secured creditors and pledgees must be represented respectively by one and the same person. |
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| The company can provide for the possibility to vote in writing or electronically, by means of forms and following a procedure that it has established; in any case, any vote cast in this manner must reach the company no later than six days before the meeting. |
|
| Number of votes – Abstention (Article 29 of the articles of association) |
One share entitles the holder to one vote. |
| Dissolution – Liquidation (Article 39 of the articles of association) |
If the company is dissolved, for whatever reason or at whatever time, one or more liquidators appointed by the General Meeting or, in the absence of such appointment, the directors in office at the time, acting together, will be charged with the liquidation. The liquidator(s) only take(s) up office after confirmation of their appointment by the commercial court. |
| In the absence of other provisions in the deed of appointment, the persons charged with the liquidation of the company enjoy the widest possible powers to this end, in accordance with the Companies Code. |
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| The shareholders' meeting determines the mode of liquidation and the remuneration of the liquidator(s). | |
| The liquidation is concluded in accordance with the provisions of the Companies Code. |
This annual financial report contains financial forecasts that are based on estimates and projections of the company and on its reasonable expectations. By their very nature, these estimates relate to future events and uncertainties that could cause the results, financial position, performance and current achievements to differ from the results, financial position, performance and achievements expressed or implicitly communicated by these forecasts. In view of these uncertain factors, the forward-looking statements do not comprise any guarantee.
The Board of Directors and the executive management of Home Invest Belgium NV/SA are responsible for the information provided in this annual financial report. They declare that to the best of their knowledge:
The third-party information published in this annual financial report, such as the real estate expert's report and the auditor's report, have been included with their consent. The Board of Directors and the executive management of Home Invest Belgium declare that third-party information has been faithfully reproduced in this annual financial report and, insofar as the RREC is aware and able to assure on the basis of the data published by these third parties, no fact has been omitted that would render the information reproduced inaccurate or misleading.
The annual financial reports from 2001 onwards (which include the consolidated financial statements, with an abridged version of the statutory financial statements and the complete consolidated financial statements, the management report, the statutory auditor's report and the real estate expert's report) as well as the half-yearly reports, can be consulted on the company website.
The historical financial information is included by referral in this annual financial report.
Strategy or data on government, economic, budgetary, monetary or political policy lines or factors that could have a significant impact, whether directly or indirectly, on the activities of Home Invest Belgium
Please refer here to the chapter entitled Risk Factors.
The Board of Directors of Home Invest Belgium declares that to the best of its knowledge:
During the financial period under review, no transaction was effected which entails an impact of more than
25 % on one of the company's activity indicators within the meaning of paragraphs 91 and 92 of the CESR's recommendation on the implementation of European Commission Directive No 809/2004 on prospectuses. The publication of pro forma financial information is therefore not required.
Apart from the events occurring since the close of the financial year that are commented on in the chapter entitled Management Report, no significant changes have taken place in the financial or commercial situation of Home Invest Belgium.
The information provided below is based on the tax legislation and practices in force at the time of drafting of this annual report. It is therefore subject to modification in the future, including with retroactive effect, and is purely informative.
All shareholders and potential investors are invited to enquire of their own advisers about the tax implications in Belgium and aboard of acquiring, owning and disposing of shares in Home Invest Belgium, as well as collecting dividends and proceeds from shares in the company.
Home Invest Belgium has been recognised by the FSMA as a 'public regulated real estate company under Belgian law', abbreviated to 'public RREC' under Belgian law, since 2 September 2014. Prior to this, it fell under the tax system applicable to real estate investment funds.
In its capacity as a public RREC, the company (both individually and on a consolidated basis) is subject to the RREC legislation and is under the control of the FSMA.
The main characteristics of a public RREC are as follows:
as capital remuneration, the company must pay out a sum equivalent to at least the positive difference;
between the following amounts:
Home Invest Belgium NV/SA holds 50 % of the shares in De Haan Vakantiehuizen, a company that has been granted the status of a specialised real estate investment fund. The remaining 50 % are held by Belfius Insurance (25 %), Tinc (12.5 %) and DG Infra Yield (12.5 %). A specialised real estate investment fund is subject to the programme law of 3 August 2016 and the Royal Decree of 9 November 2016 on specialised real estate investment funds.
The main characteristics of a specialised real estate investment fund are as follows:
Home Invest Belgium also holds 100 % of the shares in BE Real Estate NV/SA, a limited liability company that has also obtained the status of specialized real estate investment fund.
As an RREC, the company benefits from a specific tax system. The RREC is not subject to corporate taxation in Belgium (except on rejected expenses and exceptional or gratuitous advantages), insofar as at least 80 % of the net profit is paid out in the form of dividends. This exemption applies to Home Invest Belgium. It does not apply to her perimeter companies, unless they have the status of an REIF or institutional RREC.
Companies (other than RRECs or specialised real estate investment funds) which are taken over by the companies are liable to a specific tax (exit tax) of 12.5 % (plus a crisis contribution of 2 %) on their latent capital gains and exempt reserves. This percentage will be increased to 15 % as of the 2021 fiscal year.
The exit tax is calculated in accordance with the provisions of circular Ci.RH.423/567.729 of 23 December 2004, the interpretation or practical application of which may alter at any time. The 'actual fiscal value' as referred to in this circular is calculated after deduction of the registration duties or VAT and can vary from the fair value of the real estate portfolio as indicated in the balance sheet of the public RREC in accordance with IFRS 13.
Profits of foreign origin may be taxed in the country in which they arise in accordance with the law applicable in that country and are exempt from tax in Belgium.
The net profit that Home Invest Belgium generated in 2018 via its investment properties in the Netherlands is therefore liable to corporation tax of 25 % (and 20 % on the first € 200,000) in the Netherlands and is exempt from tax in Belgium. Over the next few years, corporate tax in the Netherlands is set to be gradually lowered to 20.50 % (and 15 % on the first € 200,000) by 2021.
| Withholding tax | Since 1 January 2017, dividends distributed by the company have been subject to a withholding tax of 30 %, subject to the derogations provided for by law. |
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| Belgian natural persons | Belgian natural persons who have acquired shares in the context of the management of their private assets and are liable to personal income tax are subject to the withholding tax referred to above on the dividends distributed by Home Invest Belgium. For Belgian natural persons who may allocate their shares to their professional activity, the dividends received will be included in their professional income and be taxable at the usual personal income tax rate, which means that the withholding tax can be offset. |
| Belgian legal entities | For taxpayers liable to tax on legal entities, the dividends distributed by Home Invest Belgium are subject to the withholding tax mentioned above. |
| Belgian companies and foreign companies with a permanent establishment in Belgium |
The dividends distributed are subject to the withholding tax mentioned above. Belgian companies and foreign companies with a permanent establishment in Belgium are taxed on dividends distributed by Home Invest Belgium at the corporation tax rate, without applying the 'definitively taxed income' system, subject to the proportionate share of dividends relating to foreign real estate income and dividends received and capital gains on shares realised in accordance with Article 203, §1, 2bis and §2, al. 2 of the Income Tax Code applicable to dividends distributed from 1 July 2016. The dividend will therefore be taxable in accordance with the corporation tax system or the non-residents tax at the rate of 29.58 % (the base rate of 29 % plus the additional 2 % crisis contribution). As of 2020, the basic rate of 29 % will be lowered to 25 % as the additional crisis contribution is dropped. Under certain conditions, a reduced rate may be applicable. The withholding tax levied at the source can be offset in the tax declaration and any surplus can therefore potentially be reclaimed. |
| Non-resident natural persons and foreign companies without a permanent establishment in Belgium |
For non-residents, the dividends distributed by Home Invest Belgium are subject to a withholding tax which may, at the request of the shareholder, be reduced or declared exempt on the basis of international tax treaties preventing double taxation or in accordance with the conditions provided for by Belgian law. |
| Belgian natural persons | In Belgium, capital gains made by a natural person from the sale of shares as part of the normal management of their private assets are not taxable, while capital losses are not tax deductible. Belgian natural persons may, however, be subject to a tax of 33 %, plus the additional municipal tax, the rate of which depends on the municipality of residence, if the capital gains in question are deemed to be made outside the normal management of private assets. Capital gains made by a natural person on Home Invest Belgium shares will therefore usually be exempt as being part of the normal management of private assets. Capital gains are subject to tax at 16.5 %, plus the additional municipal tax in the municipality of residence, if the shares are sold to a company that does not have its registered office, main place of business or head office in a Member State of the European Economic Area and the selling shareholder has, over the past five years, owned over 25 % of the rights in the company whose shares are being sold. Belgian natural persons allocating their shares to the exercising of their professional activity are taxed on the capital gains they make on the sale of these shares at the ordinary progressive rates of personal income tax, or at 16.5 % if the shares have been held for more than five years. |
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| Belgian legal entities | Capital gains made on the sale of Home Invest Belgium shares by Belgian legal entities that are liable to the tax on legal entities are, in principle, not taxable in Belgium. Capital losses suffered on the shares are not tax deductible. |
| Belgian companies and foreign companies with a permanent establishment in Belgium |
Capital gains made by a Belgian company on Home Invest Belgium shares or by foreign company on Home Invest Belgium shares allocated to its permanent establishment in Belgium are fully taxable in Belgium at the normal corporation tax rate. Capital losses (noted or suffered) are not tax deductible. |
| Non-resident natural persons or foreign companies without a permanent establishment in Belgium |
Capital gains made by non-residents, whether natural persons or companies, on the sale of Home Invest Belgium shares (with the exception of shares allocated by a foreign company to a permanent establishment in Belgium) are not, in principle, taxable in Belgium. As an exception, a non-resident natural person may be liable to tax on capital gains made on a family holding of at least 25 % when the shares are sold to a company established outside the European Economic Area. Capital losses are not tax deductible in Belgium. |
Subscriptions to new shares (primary market) are not subject to the tax on stock market transactions.
However, the buying and selling and any other acquisition or disposal for valuable consideration in Belgium, via a 'professional intermediary', of existing shares (secondary market) are subject to a tax on stock market transactions currently amounting to 0.12 % of the transaction price. The amount of the tax on stock market transactions is limited to € 1,300 per transaction and per party at the moment.
The following persons are exempt from the tax on stock market transactions in all circumstances:
The acquisition value is the value agreed between the parties on the basis of which the transaction is carried out. If transfer duties were paid, these are included in the acquisition value.
The occupancy rate is the average percentage of contractual rents generated by the occupied properties over a given period, plus the rental guarantees on the unoccupied properties, compared with the total in rents of the occupied properties and the estimated rental value of the unoccupied properties.
This is the occupancy rate for the total real estate investments available for rental, excluding (i) buildings undergoing renovation, (ii) buildings being commercialised for the first time, (iii) buildings being sold and (iv) furnished apartments being let for the short term.
(Gross dividend for the financial year)/ (Share price on the last day of trading of the financial year).
(Contractual annual gross rents + estimated rental value of vacant spaces)/ (fair value of the real estate investments available for rental).
The year in which the property was built or last underwent major renovation.
Net Asset Value or net value per share according to EPRA best practices.
This is the net result (group share) excluding the portfolio result and the variations in fair value of financial assets and liabilities. This term is used in accordance with EPRA Best Practices Recommendations.
Coupon detachment date.
Companies that request recognition as RRECs or that merger with an RREC are liable to a specific tax known as the exit tax.
[(Total number of shares at the close of the financial year)- (total number of shares held by parties who made themselves known through a transparency notice in accordance with the law of 2 May 2007)]/[Total number of shares at the close of the financial year].
The estimated rental value (ERV) is the rental value which, in the view of the real estate expert, corresponds to a market rent.
The Royal Decree of 13 July 2014 implementing the Act of 12 May 2014 on regulated real estate companies, as amended by the act of 22 October 2017 and the Royal Decree of 23 April 2018.
Net Asset Value or net value per share according to IFRS.
The International Financial Reporting Standards (IFRS) are a set of accounting principles and valuation rules drawn up by the International Accounting Standards Board, which serve to facilitate international comparison between European listed companies. European listed companies have to apply these standards in their consolidated accounts from the financial year that begins after 1 January 2005. Belgian RRECs also have to apply these standards in their statutory accounts as of the financial year that starts on 1 January 2007.
Interest Rate Swap is an agreement between two parties to exchange interest rates for a pre-determined period of time. IRS is often used to cover exposure to the risk of interest rate hikes: in this case, a floating rate is converted into a fixed rate.
The investment value is determined by the real estate expert as the most probable value that can be obtained on the date of the valuation under normal selling conditions, between willing and well-informed parties, without deducting transfer duties, previously referred to as 'deed in hand'.
The transfer of ownership of real property is in principle liable to transfer duties. The amount depends on the geographic location of the property, the transfer method and the capacity of the buyer.
The actual rate of taxation of the transfer duty can fluctuate between 0% and 12.5%.
The main possible methods of transferring real property and the related duties are as follows:
Equity divided by the number of shares in circulation (after deduction of own shares).
Total volume of shares traded during the financial year divided by the total number of shares.
(Total gross dividend for the financial year)/statutory distributable result in the sense of art. 13, §1 of the RREC-RD).
The set date on which a shareholder must hold securities in order to be entitled to payment of the dividend in proportion to the securities that he owns on this date.
The fair value is equal to the investment value (see above for the definition), after deduction of transfer costs, calculated as follows:
The shareholder's return is equal to the dividend of the financial year plus the increase in the net asset value during the financial year.
Medium- or long-term credit that can be drawn in the form of one or more advances, which may or may not be renewable in the short term. The interest rate is set for short periods and is variable. In this way, mediumor long-term investments can be financed at a floating short-term interest rate, which is more advantageous.
This is the level of debt as calculated in accordance with the RREC-RD. This means that for the calculation of the level of debt, participations in associated companies and joint ventures are processed according to proportionate consolidation.
This level of debt is calculated in the same way as the level of debt (RREC-RD), but based on and reconcilable with the consolidated balance in accordance with IFRS, in which participations in associated companies and joint ventures are processed through changes in equity.
This consists of (i) the real estate investments and (ii) the participations in associated companies and joint ventures change in equity.
A treasury note ('commercial paper') is a not covered debt instrument issued on the internal money markets by public institutions, financial institutions or companies (known as the issuer) and submitted to Belgian law. In Belgium, the issue of treasury notes is regulated by the Law of 22 July 1991 on treasury notes and certificates of deposit and the Royal Decree of 14 October 1991 dealing with treasury notes and certificates of deposit.
1 This 2.5% results from an analysis (at the request of BEAMA (Belgian Asset Managers Association)) by the independent real estate experts of a large number of transactions on the market and is an average percentage of costs actually paid for transactions This percentage was published on 8 February 2006 on the BEAMA website and confirmed in a notification from Be-Reit Association (the professional association for Belgian RRECs) on 10 November 2016.
Home Invest Belgium has used Alternative Performance Measures (APM) within the meaning of the Guidelines issued 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 fixedrate debts via IRS contracts in for 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.
| (in € k) | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Fixed-rate financial debt | 40,000 | 40,000 |
| Floating rate debt converted into fixed-rate debt via IRS | 203,000 | 180,000 |
| Total fixed-rate debt | 243,000 | 220,000 |
| Total floating-rate debt | 70,000 | 43,500 |
| Total debt | 313,000 | 263,500 |
| Hedging ratio | 77.64 % | 83.49 % |
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 adjusted to take account of the capitalised interest costs included in the assets. The denominator corresponds to the average financial debt calculated over the period in question.
The company is partly financed by debt. This APM is used to measure the average cost of the interest paid.
| (in € k) | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Net interest charges (heading XXI) | 4,335 | 4,672 |
| Capitalised interest costs | 895 | 497 |
| Total cost of financial debt | 5,230 | 5,169 |
| Weighted average debt | 268,367 | 235,015 |
| Average cost of financing | 1.95 % | 2.20 % |
The Net Asset Value or NAV in accordance with the Best Practices and Recommandations 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 longterm investment property business model.
| (in € k) | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Net Asset Value (IFRS) | 309,618 | 269,003 |
| Number of shares at the end of the period (excl. own shares) | 3,288,146 | 3,288,146 |
| IFRS NAV per share (in €) | 94.16 | 81.81 |
| (in € k) | 31/12/2019 | 31/12/2018 |
| Net Asset Value (IFRS) | 309,618 | 269,003 |
| Fair value of financial instruments | 4,358 | 9,667 |
| Deferred taxes | 1,692 | 1,031 |
| EPRA NAV per share | 315,667 | 279,701 |
| Number of shares at the end of the period (excl. own shares) | 3,288,146 | 3,288,146 |
| EPRA NAV per share (in €) | 96.00 | 85.06 |
The 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 proportion share in the results of associated companies and joint ventures.
The term is used in accordance with the Best Practices Recommendations of EPRA.
This APM measures the profitability of the company, without regard to the result of the change in the value of the assets or liabilities on the portfolio and gains or losses on the sale of investment properties and the other result of the portfolio and without regard to the arbitration of the portfolio.
| 2018 | |
|---|---|
| 55,490 | 68,778 |
| -123 | -610 |
| -48,473 | -59,414 |
| 537 | 171 |
| 5,412 | 1,614 |
| 175 | |
| 12,668 | 10,539 |
| 3,288,146 | 3,288,146 |
| 3.85 | 3.21 |
| 2019 |
This alternative performance indicator measures the company's operational profitability as a percentage of rental income and is calculated by dividing the "operating profit before the result on the portfolio" by "the real estate result".
This APM is used to assess the operating performance of the company.
| (in € k) | 2019 | 2018 |
|---|---|---|
| Operating result before portfolio result | 15,997 | 15,456 |
| Property result | 23,129 | 21,724 |
| Operating margin | 69.16 % | 71.15 % |
| 2020 | |
|---|---|
| Annual press release on the financial year 2019 | Thursday 20 February 2020 |
| Publication of the annual financial report on the website | Friday 3 April 2020 |
| Ordinary General Meeting of the financial year 2019 | Tuesday 5 May 2020 |
| Payment of the dividend of the financial year 2019 – Ex date | Tuesday 12 May 2020 |
| Payment of the dividend of the financial year 2019 – Record date | Wednesday 13 May 2020 |
| Payment of the dividend of the financial year 2019 - Payment date | Thursday 14 May 2020 |
| Interim statement: results on 31 March 2020 | Tuesday 19 May 2020 |
| Half-year financial report: results on 30 June 2020 | Thursday 3 September 2020 |
| Interim statement: results on 30 September 2020 | Friday 13 November 2020 |
| 2021 | |
| Annual press release on the financial year 2020 | Thursday 18 February 2021 |
| Publication of the annual financial report on the website | Friday 2 April 2021 |
| Ordinary General Meeting of the financial year 2020 | Tuesday 4 May 2021 |
| Interim statement: results on 31 March 2021 | Tuesday 18 May 2021 |
| Half-year financial report: results on 30 June 2021 | Thursday 2 September 2021 |
| Interim statement: results on 30 September 2021 | Friday 12 November 2021 |
As Home Invest Belgium has opted for Dutch as its official language, the annual financial report in Dutch is the sole official version.
The French and English versions are translations produced under the responsibility of Home Invest Belgium.
Contact: [email protected]
Design: Chris Communications
Photo credit: Yvan Glavie
RREC residential public under Belgian law Boulevard de la Woluwe 46, box 11 B -1200 Brussels T +32 2 740 14 50 [email protected] www.homeinvestbelgium.be RPM: 0420.767.885. ISIN BE 003760742
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