Quarterly Report • Sep 6, 2018
Quarterly Report
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• Debt ratio reduced to 49.04%.
1 As compared to December 31st, 2017. 2 As compared to results from June 30th, 2017.
| The 1st Half-Year at a Glance | 2 |
|---|---|
| The Property Portfolio | 3 |
| Interim Management Report | 4 |
| Share and Shareholding Structure | 10 |
| Consolidated Condensed Financial Statements | 12 |
|---|---|
| Statutory Auditor's Report | 25 |
| Statement of the Persons Responsible | 25 |
| Shareholder's Calendar | 26 |
The 1st half of the year was marked by good results: the RREC (Regulated Real Estate Company) continued the development of its real estate portfolio. The net result from core activities grew slightly, thanks to the full contribution of past acquisitions and the project "The Pulse" delivered in the beginning of 2018.
This semester was closed with the acquisition under conditions precedent of BE Real Estate S.A., owner of four "apart-hotel" buildings in Brussels.
With this acquisition, Home Invest Belgium confirms its desire to broaden its range of investments in tourist accommodation. Long term, this type of asset could represent 25% of its portfolio.
In May 2018, Home Invest Belgium became a member of Ecobuild, a network of Brussels' sustainable construction and renovation actors: http://www.ecobuild.brussels/en.
We kindly invite you to consult the detailed information of our achievements in the following pages.
Dominicains Grand-Place, Brussels
At June 30th, 2018, Home Invest Belgium holds a portfolio of buildings spread across 53 sites, 2 ongoing development projects and 2 development projects under study, whose total fair value is estimated at € 482.5 million.
In the balance sheet, the fair value of the operational real estate investments and development projects amounts to € 482.5 million against € 457.6 million end 2017, an increase of 5.5%.
The valuation of the portfolio is entrusted to three real estate experts: in their report dated June 30th, 2018, Cushman & Wakefield, CBRE et BNP Paribas Real Estate, in charge of valuing the entirety of the portfolio, stated that the investment value of the operational properties amounts to € 507 674 000, resulting in a fair value within the IFRS standards of € 463 041 441.
On a like for like basis, the fair value of the portfolio has increased by 5.5% during the last quarter. This evolution of the valuation is justified by taking into account references of important recent transactions in the residential market, on an institutional level.
The fair value of the operational real estate investments is € 463.0 millions as compared to € 423.1 million
six months earlier. This growth can be justified mainly by the delivery of the development project "The Pulse" at the beginning of the year.
The operational real estate investments located in the Brussels-Capital Region currently represent 65.01% of the portfolio, those in the Walloon Region 15.20%, those in the Flemish Region 9.10% and those in the Netherlands 10.69%.
The breakdown of this portfolio, calculated on the basis of the fair value of the buildings, is as follows:
Therefore, the residential part of the operational real estate investments amounts to 87.6%.
On June 27th, 2018, Home Invest Belgium concluded an agreement (under conditions precedent), to acquire the company BE REAL ESTATE S.A., owner of four "apart-hotel" buildings in Brussels, offering furnished apartment rentals with hotel services (reception, cleaning, laundry, etc.).
The first building is located in the heart of the European district, Ambiorix Square n°28, the second one is in the close vicinity of Grand-Place, Dominicains Street n°25, the third building is located on the Montgomery square, Tervuren Avenue n°149 and the last building is located in the vicinity of Madou Square and the Royal Circus, on Regent's Boulevard. With this transaction, 185 new units will be added to the portfolio of the RREC.
The properties will continue to be operated under the brand B APARTHOTELS by the company BEAPART S.A., beneficial owner of a leashold over a period of 27 years: https://b-aparthotels.com/.
The fulfilment of the conditions precedent is expected before the end of 2018.
Regent's Boulevard, Brussels
Tervuren Avenue, Woluwe-Saint-Pierre
During the course of the semester, significant progress was made in the development of the projects carried out by the RREC.
The works are currently in their final phase. The reception of the works is foreseen in November 2018. The building consists of 40 units and several commercial areas (± 1 200 m²). A nursery and a bank rented the ground floor of the building and will move in there in the near future.
The deep foundations (piles) are now finalized. The earthworks are in progress. In total, the building consists of 93 apartments and 66 parking lots. Also, 1 433 m² is reserved for offices or proximity services responding to the local needs. The reception of the works is expected by the end of 2019.
Reine Astrid, Kraainem Brunfaut, Molenbeek
Project MTC2, Woluwe-Saint-Lambert Project Jourdan, Saint-Gilles
The procedure for obtaining the planning permit, for this building consisting of fifty apartments, is in progress.
On May 18th, Home Invest Belgium inaugurated the estate "The Pulse" in the presence of the communal authorities and the first tenants of the site. This project, located in the heart of the Karreveld district in Molenbeek, will revitalize and add a touch of modernism to this neighbourhood where new constructions are scarce. The first units were delivered in December 2017, the last ones in May 2018. Today, 51% of the apartments are let, i.e. 49 units.
The average occupancy rate for the first semester of this fiscal year is 89.37%, an increase compared to the first quarter (88.92%). This rate includes all properties in the portfolio, whether they are available for lease, but also those being renovated, for sale, or first rentals after the reception of the works.
The occupancy rate of the "core3 " properties remains at a very high level of 96.56%, proving that the residential rental market remains strong in the locations where the RREC is active.
"The Pulse" estate, which was delivered between December 2017 and May 2018, reached an occupancy rate of 51%. So far, 49 units have been rented.
Two of the four buildings owned in Liège are undergoing a thorough renovation, bringing them up to market standards.
The works in the Saint-Hubert 4 building have been temporarily interrupted and should resume during the 4th quarter of 2018.
The works in the Leopold building are making good progress. The building will be delivered in two phases, the first one at the end of 2018.
While the studios already renovated are experiencing great rental success, the 3rd phase of the renovations of the rest of the apartments and of the common spaces of the Scheldevleugel building in Oudenaarde will start now, in September.
Thanks to these renovations, Home Invest Belgium's portfolio is significantly "younger" than the market average, since less than 23% of the market properties have not been thoroughly renovated in the past 20 years.
The Pulse, Molenbeek
Léopold, Liège
Excluding furnished apartments (short-term) (68.4%), buildings under renovation (47.8%), buildings being sold (85.6%) and buildings that are being commercialized for the first time (68%).
Besides the Mélèzes buildings (Woluwe-Saint-Lambert), Jardins de la Cambre (Ixelles), Bosquet-Jourdan (Saint-Gilles) and Orangerie (Wetteren), which are already on sale, three new buildings are also added to the list: Erainn (Etterbeek), Baeck (Molenbeek) and Florida (Waterloo).
An amendement to the IFRS standards, implemented since the beginning of 2018, requires the sales to be registered at the time of the recording of the deed.
Previously, these sales were registered at the time of the conclusion of the preliminary sales agreement or after the fulfillment of any possible conditions precedent contained in it.
As a consequence, this year, the "effective" period of sales is shortened by ± 3 months (usual frametime between the preliminary agreement and the registration of deed). The majority of the former deeds of the last quarter concerned agreements signed in 2017 and which had thus already been registered in the distributable capital gains of 2017.
The company anticipates that, for the year 2018, the contribution of added values resulting from sales to the distributable result, will be inferior to that of 2017. This effect is temporary and limited to 2018.
Erainn, Etterbeek
Bosquet-Jourdan, Saint-Gilles
Mélèzes, Woluwe-Saint-Lambert
At the Annual Shareholders' Meeting on May 2nd, the mandates as directors of Mr. Liévin Van Overstraeten and Mrs. Sophie Lambrighs were renewed. The Board of Directors re-appointed Mr. Lievin Van Overstraeten as Chairman of the Board of Directors.
| Name | Board of Directors |
Investment Committee |
Audit Committee |
Appointments and Remuneration Committee |
Projects Committee |
|---|---|---|---|---|---|
| Liévin Van Overstraeten |
Chairman, Director |
- | Member | Chairman | - |
| Eric Spiessens |
Vice-Chairman, Independent Director |
- | Chairman | Member | - |
| Sophie Lambrighs4 |
Managing Director |
Member | - | - | Member |
| Wim Aurousseau |
Director | - | Member | - | - |
| Laurence de Hemptinne |
Independent Director |
Member | - | Member | - |
| Koen Dejonckheere |
Independent Director |
- | - | - | - |
| Johan Van Overstraeten |
Director | Chairman | - | - | Chairman |
| Alain Verheulpen |
- | Member | - | - | Member |
At June 30th, 2018, the company's management was carried out by the four effective leaders, namely Mrs Sophie Lambrighs, CEO and Messrs. Jean-Luc Colson5 , CFO, Filip Van Wijnendaele6 , COO and Nicolas Vincent, CIO.
4 See page 9 "Significant post-balance sheet events".
5 Permanent representative of SPRL YLKATT.
6 Permanent representative of SPRL FVW CONSULT.
Home Invest Belgium and Sophie Lambrighs, Chief Executive Officer, have agreed, by mutual consent, to cease their collaboration, on the basis of the contractual provisions with regard to departure, as set out in the Corporate Governance Statement of the Annual Report. Her mandate as Managing Director and Effective Leader of Home Invest Belgium ended on July 10th, 2018.
Home Invest Belgium and Nicolas Vincent, have agreed, by mutual consent, to terminate their collaboration. The mandate of Mr. Vincent as Chief Investment Officer and Effective Officer of Home Invest Belgium ended on July 10th, 2018.
Until the appointment of a new CEO, the effective leadership of the company will be temporarily ensured by:
• Mr. Liévin Van Overstraeten (subject to approval by the FSMA);
• Mr. Johan Van Overstraeten (subject to approval by the FSMA).
The company's revenues derive from the leasing of its properties as well as from its regular selective divestment of a portion (± 4%) of its portfolio.
The rental market is supported by demographic growth observed in the large Belgian cities, although impacted by low inflation. The sales market is sustained by low interest rates which boosts households' borrowing capacity.
Throughout the first semester of 2018, the company continued prospecting new acquisitions, as well as its development activities, portfolio management and arbitrage activities.
The Board of Directors confirms its confidence in the continued growth of the company's results. For the current fiscal year, the Board considers that the dividend for 2018 should be at least equal to that of the previous fiscal year, unless substantial deterioration of the residential real estate market for sale and / or lease (what the Board does not expect at the date of this report) or other unforeseen events suddenly arise.
In accordance with its dividend distribution policy, Home Invest Belgium will announce the amount of the interim dividend on the date of publication of its results of the 3rd quarter of 2018 (October 25th). This amount will be paid during the month of December 2018.
This half-year financial report contains forward-looking information based on the company's plans, estimates and projections, as well as its reasonable expectations related to external events and factors.
Due to its nature, this forward-looking information involves risks and uncertainties which may result in deviations in the actual results, financial condition, performance and achievements. Given these uncertainties, the statements relating to the company's future can not be guaranteed.
The Board of Directors considers that the main risk factors listed on pages 4 to 17 of the 2017 annual financial report remain relevant for this half-year report.
The Horizon, Woluwe-Saint-Lambert
In the six-month period under review, the closing price of the Home Invest Belgium share varied between a low of € 83.20 and a high of € 93.00.
Until the end of February, the share continued its decline that began at the end of 2017, followed further by a slight recovery and a stabilization.
On the last trading day of the half-year, June 29th, 2018, the closing price was € 87.40. The average price during the semester stood at € 86.75.
CHANGE IN THE SHARE PRICE AND THE GROSS DIVIDEND
The premium between the share price (€ 87.40) and the statutory net value per share (€ 72.41) at June 30th, 2018, amounted to 20.7%.
Compared to the net value adjusted to exclude the hedges (€ 75.03), the premium amounts to 16.5%.
Scheldevleugel, Oudenaarde
According to the transparency declarations issued by shareholders exceeding the statutory threshold of 3% of the company's share capital, on June 30th, 2018, the shareholding structure of the company is as follows:
| Shareholders | Number of shares | In % of the capital |
|---|---|---|
| Van Overstraeten Group7, 8 | 880 965 | 26.70% |
| AXA Belgium SA7, 9 | 537 830 | 16.30% |
| Mr. Antoon Van Overstraeten7 | 121 916 | 3.69% |
| Van Overtveldt – Henry de Frahan spouses7 | 102 792 | 3.12% |
| Other shareholders | 1 656 355 | 50.19% |
| Overall total | 3 299 858 | 100.00% |
7 Shareholders who deposited a statement in accordance with the law of May 2nd, 2007 regarding transparency.
8 Stavos Luxemburg SA is 97% controlled by Burgerlijke Maatschap BMVO 2014. BMVO 2014 is 25% controlled by Stichting Administratiekantoor Stavos and 75% controlled by Burgerlijke Maatschap Van Overstraeten. Burgerlijke Maatschap Van Overstraeten is 99.9% controlled by Stichting Administratiekantoor Stavos. Stichting Administratiekantoor Stavos is controlled by Liévin, Hans, Johan en Bart Van Overstraeten. Cocky NV is 99.9% controlled by Burgerlijke Maatschap Van Overstraeten. VOP NV is 99.9% controlled by Stavos Luxemburg SA.
9 AXA Belgium is a subsidiary of AXA Holdings Belgium which is itself a subsidiary of AXA NV.
The Board of Directors met on September 5th, 2018 to prepare the consolidated half-year financial statements, as at June 30th, 2018.
The accounting policies and calculation methods used in the interim financial statements, as recorded in this half-year financial report, are identical to those used for the preparation of the annual financial statements of December 31st, 2017, except for the information which is described here below.
This half-year report applies the IAS 34 standard, prescribing both the minimum content of this interim financial report and the accounting and valuation principles to apply.
Given the company's activity, the figures presented are neither seasonal nor cyclical in nature.
Finally, the percentages quoted have been calculated on the basis of unrounded figures from the profit and loss account or from the balance sheet, and may therefore differ from those calculated on the basis of the rounded figures communicated in the following pages.
Since the company has not applied, even in anticipation, any new standards or any new amendments to those standards, there is no impact on the financial statements under review.
Reminder: an amendment to the IFRS standards, implemented since the beginning of 2018, has an impact on the sales accounting period. The share of the added-value resulting from sales to the distributable result will therefore be less important than in 2017.
This effect is temporary and limited to 2018.
Galerie de l'Ange, Namur
The Inside, Woluwe-Saint-Lambert
Haverwerf, Mechelen
| 30/06/2018 | 30/06/2017 | |
|---|---|---|
| I. Rental Income | 12 108 196 | 10 959 995 |
| III. Rental-related expenses | -183 239 | -64 804 |
| NET RENTAL RESULT | 11 924 957 | 10 895 191 |
| IV. Recovery of property charges | 36 873 | 48 161 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 633 722 | 515 016 |
| VII. Charges and taxes normally payable by the tenant on let properties | -2 838 756 | -2 297 645 |
| VIII. Other incomes and expenses related to letting | -650 | -30 000 |
| PROPERTY RESULT | 9 756 145 | 9 130 724 |
| IX. Technical costs | -624 526 | -638 641 |
| X. Commercial costs | -71 715 | -137 330 |
| XI. Taxes and charges on unlet properties | -115 447 | -132 844 |
| XII. Property management costs | -1 869 349 | -1 694 223 |
| XIII. Other property costs | -9 008 | 16 703 |
| PROPERTY COSTS | -2 690 044 | -2 586 335 |
| PROPERTY OPERATING RESULT | 7 066 101 | 6 544 388 |
| XIV. General corporate expenses | -368 757 | -357 108 |
| XV. Other operating incomes and expenses | 0 | -70 213 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 6 697 344 | 6 117 067 |
| XVI. Result sale investment properties | 11 928 | -147 104 |
| XVIII. Changes in fair value of investment properties | 21 422 816 | 2 949 834 |
| XIX. Other portfolio result | -291 553 | 0 |
| OPERATING RESULT | 27 840 535 | 8 919 797 |
| XX. Financial income | 20 051 | 35 206 |
| XXI. Net interest charges | -2 185 581 | -1 764 613 |
| XXII. Other financial charges | -28 920 | -25 564 |
| XXIII. Changes in fair value of financial assets and liabilities | -587 798 | 1 429 687 |
| FINANCIAL RESULT | -2 782 248 | -325 284 |
| PRE-TAX RESULT | 25 058 287 | 8 594 513 |
| XXIV. Corporation tax | -140 586 | -86 344 |
| XXV. Exit tax | 0 | -81 555 |
| TAXES | -140 586 | -167 899 |
| NET RESULT | 24 917 702 | 8 426 615 |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 24 917 702 | 8 426 615 |
| NET RESULT PER SHARE | 7.39 | 2.68 |
| Average number of shares 1 | 3 288 146 | 3 147 897 |
| NET RESULT FROM CORE ACTIVITIES | 4 362 309 | 4 194 197 |
| NET RESULT FROM CORE ACTIVITIES PER SHARE | 1.33 | 1.33 |
| DISTRIBUTABLE RESULT | 4 856 539 | 5 744 914 |
| DISTRIBUTABLE RESULT PER SHARE | 1.48 | 1.83 |
| Statement of comprehensive income | 30/06/2018 | 30/06/2017 |
|---|---|---|
| I. Net result | 24 917 702 | 8 426 615 |
| II. Other items of comprehensive income: | ||
| B. Changes in the efficient part of the fair value of hedging instruments authorised as cash flow as defined in IFRS |
0 | 296 838 |
| 1. Effective hedging instruments | 0 | 296 838 |
| COMPREHENSIVE INCOME (I + II) | 24 917 702 | 17 602 288 |
1 The number of shares at the end of period was calculated without the 11712 shares held in auto-control.
The rental income amounts to € 12.1 million compared to € 11.0 million in June 2017 (+ 10.5%), due to buildings formerly under construction, becoming operational.
The rental expenses amounted to € 0.2 million, mainly due to limited trade receivables, compared to last year when few losses were registered.
The net rental result thus amounts to € 11.9 million compared to € 10.9 million one year earlier, an increase of 9.5%.
The rental charges and taxes normally borne by the tenant are mainly composed of property taxes paid by the RREC, and amount to € 2.8 million. Part of these taxes (€ 0.6 million) could however be charged to certain tenants, in accordance with the applicable legislation (retail spaces, offices, rest homes).
Consequently, the property result stands at € 9.8 million, an increase of 6.8% compared to the previous year.
The operating property result amounts to € 7.1 million, an increase of 8.0% compared to the € 6.5 million registered in June 2017.
Due to the expansion of the property portfolio, the technical expenses, as well as the internal management costs are increasing.
The RREC's general corporate expenses include all expenses that are not directly related to the operation of buildings and the management of the corporation.
They remain stable thus registering an operational result before result on portfolio of € 6.7 million, compared with € 6.1 million recorded end June 2017, realizing an increase of 9.5%.
The portfolio result is once again positive and amounts to € 21.4 million. It results from a positive change in the fair value of the investment properties, amounting to € 21.4 million.
The section XIX "Other results on portfolio" corresponds to the deferred tax which Home Invest Belgium should support in case of arbitration or merger with one of its subsidiaries in the future. The amount of € 291 553 is not included in the calculation of the distributable result.
This result demonstrates once again Home Invest Belgium's capacity to preserve the value of its portfolio and its ability to generate recurring capital gains in the interest of its shareholders.
The operating result, after taking into account the result on the portfolio, amounts to € 27.8 million, compared to € 8.9 million in June 2017.
Given the growth of its portfolio exclusively financed by indebtedness, Home Invest Belgium records financial costs increasing from € 1.8 million in June 2017 to € 2.2 million as at June 30th, 2018.
We record a change in the negative evolution of the fair value of our hedges of € 0.6 million, a purely latent amount, excluded from the distributable result.
After taking into account the financial costs and taxes, Home Invest Belgium's net result amounts to € 24.9 million.
The net result of the core activities reflects the operating profitability of the company, excluding purely latent factors, and reaches € 4.4 million, a 4.0% increase compared to June 2017 (€ 4.2 million).
Following a lower sales volume than in 2017, the distributable result decreases by 15.5%, from € 5.7 million in June 2017 to € 4.9 million in June 2018.
Debt ratio
| ASSETS | 30/06/2018 | 31/12/2017 |
|---|---|---|
| I. Non-current assets | 484 114 114 | 459 231 235 |
| B. Intangible assets | 428 214 | 416 024 |
| C. Investment properties | 482 734 527 | 457 864 921 |
| D. Other tangible assets | 403 685 | 391 371 |
| E. Non-current financial assets | 100 800 | 112 033 |
| F. Finance lease receivables | 446 887 | 446 887 |
| II. Current assets | 5 278 405 | 11 058 584 |
| C. Finance lease receivables | 90 774 | 135 752 |
| D. Trade receivables | 1 057 830 | 3 326 818 |
| E. Tax receivables and other current assets | 1 970 214 | 376 707 |
| F. Cash and cash equivalents | 2 280 195 | 7 183 786 |
| G. Deferred charges and accrued income | -120 608 | 35 521 |
| TOTAL ASSETS | 489 392 519 | 470 289 820 |
| SHAREHOLDERS' EQUITY | ||
| A. Capital | 87 999 055 | 87 999 055 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | 100 259 573 | 102 796 510 |
| D. Net result of the financial year | 24 917 702 | -143 685 |
| SHAREHOLDERS' EQUITY | 238 079 529 | 215 555 079 |
| LIABILITIES | ||
| I. Non-current liabilities | 241 826 393 | 234 434 882 |
| B. Non-current financial debts | 231 264 708 | 224 745 100 |
| a. Financial debts | 191 500 000 | 185 000 000 |
| c. Others | 39 764 708 | 39 745 100 |
| C. Other non-current financial liabilities | 8 641 157 | 8 060 644 |
| F. Deferred tax liabilities | 1 920 529 | 1 629 138 |
| II. Current liabilities | 9 486 597 | 20 299 859 |
| B. Current financial debts | 678 194 | 10 673 829 |
| a. Financial debts | 0 | 10 000 000 |
| c. Others | 678 194 | 673 829 |
| D. Trade debts and other current debts | 7 975 047 | 8 106 746 |
| b. Others | 7 975 047 | 8 106 746 |
| E. Other current liabilities | 78 051 | 62 656 |
| F. Accrued charges and deferred income | 755 305 | 1 456 627 |
| LIABILITIES | 251 312 990 | 254 734 741 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 489 392 519 | 470 289 820 |
| Number of shares at end of period 1 | 3 288 146 | 3 288 146 |
| Net asset value | 238 079 529 | 215 555 079 |
| Net asset value per share | 72.41 | 65.56 |
| EPRA NAV 2 | 75.03 | 68.00 |
| Indebtedness | 239 996 000 | 243 588 331 |
1 The number of shares at the end of the period was calculated without the 11 712 shares held in auto-control.
Corresponds to the value of the net assets adjusted to exclude the fair value of the financial hedging instruments.
49.04%
51.80%
The investment properties increased to € 482.7 million compared to € 457.6 million in 2017 (+ 5.5%), as a result of the expansion of the portfolio as explained above, the growth of the assessed values and, notwithstanding, the sales made (see page 3 of the report for more information).
The shareholders' equity increased by 10.45% from € 215.6 million (€ 65.98 per share) in 2017 to € 238.1 million (€ 72.41 per share) in June 2018.
The financing of the new assets being carried out exclusively through debt, indebtness evolves from € 243.6 million to € 240.0 million in June 2018. The debt ratio, however, drops to 49.04% (compared to 51.80% in 2017).
At June 30th, 2018, Home Invest Belgium has withdrawn € 191.5 million in bank loans out of a total of € 208 million of available credit lines. The weighted average duration of this bank funding combined with the 2014 bond issue (for € 40 million) is 4 years and 9 months (compared to 5 years as of December 31rst, 2017).
We note that the bank loan contracted with Degroof for € 10 million with due date ending in 2018 has been renegotiated for a similar amount with new conditions and due date in April 2023.
The average funding cost for the first half of this year is 2.11% (compared to 2.09% in 2017 and 2.53% in 2016).
The company's debt ratio stands at 49.04%, leaving the RREC with a debt potential of around € 65 million to reach its 55% of debt and € 225 million to reach the legal authorized maximum of 65%.
Archview, Etterbeek
| 30/06/2018 | 30/06/2017 | |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 7 183 786 | 3 437 814 |
| 1. Cash flow from operating activities | 4 499 597 | 2 823 592 |
| Result for the financial year | 24 917 702 | 8 426 615 |
| Result for the financial year before interest and taxes | 27 840 535 | 8 919 797 |
| Interest received | 20 051 | 35 206 |
| Interest paid | -2 214 500 | -1 790 177 |
| Change in fair value of financial assets and liabilities | -587 798 | 1 429 687 |
| Taxes | -140 586 | -167 899 |
| Adjustment of profit for non-current transactions | -20 481 269 | -4 140 118 |
| Depreciation and write-downs | 74 124 | 92 300 |
| - Depreciation and write-downs on non-current assets | 74 124 | 92 300 |
| Other non-monetary elements | -20 543 465 | -4 379 521 |
| - Changes in fair value of investment properties (+/-) | -21 131 263 | -2 949 834 |
| - Other non-current transactions | 587 798 | -1 429 687 |
| Gain on realization of assets | -11 928 | 147 104 |
| - Capital gains realized on the sale of non-current assets | -11 928 | 147 104 |
| Change in working capital needs | 63 164 | -1 462 905 |
| Movements in asset items: | 876 588 | -726 784 |
| - Current financial assets | 44 978 | 31 779 |
| - Trade receivables | 2 268 987 | 15 140 |
| - Tax receivables and other short-term assets | -1 593 507 | -628 045 |
| - Deferred charges and accrued income | 156 129 | -145 659 |
| Movements of liabilities items: | -813 424 | -736 121 |
| - Trade and other current debts | -127 334 | -45 908 |
| - Other current liabilities | 15 233 | 19 954 |
| - Accrued charges and deferred income | -701 323 | -710 166 |
| 2. Cash flow from investment activities | -3 529 544 | -18 521 983 |
| Investment properties - capitalized investments | -2 221 223 | -694 088 |
| Investment properties - new acquisitions | 0 | -6 631 772 |
| Divestments | 1 410 316 | 5 043 089 |
| Development projects | -2 623 956 | -15 833 875 |
| Other intangible assets | -31 678 | -199 418 |
| Other tangible assets | -66 950 | -215 776 |
| Other non-current financial assets | 3 946 | 9 855 |
| 3. Cash flow from financing activities | -5 873 644 | 15 945 228 |
| Changes in financial liabilities and debts | ||
| Increase (+) / Decrease (-) in financial debts | -3 480 392 | 17 519 608 |
| Dividend of the previous financial year | -2 393 252 | -1 574 380 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 2 280 195 | 3 684 650 |
| Capital | Capital increase expenses |
Share premium |
Legal reserve |
Reserve from the balance of changes in fair value of investment properties |
Reserve from estimated transfer costs and rights |
|
|---|---|---|---|---|---|---|
| BALANCE AT 31/12/2016 | 76 949 295 | -950 240 | 24 903 199 | 98 778 | 108 428 393 | -29 495 716 |
| Transfer | ||||||
| Changes resulting from the sale of a building |
-2 328 291 | 640 542 | ||||
| Dividend distribution | ||||||
| Interim dividend of previous year |
||||||
| Interim dividend | ||||||
| Changes in the fair value of hedges |
||||||
| Changes in the fair value of property |
17 402 429 | -6 107 108 | ||||
| Other increases (decresases) | ||||||
| BALANCE AT 30/06/2017 | 76 949 295 | -950 240 | 24 903 199 | 98 778 | 123 502 532 | -34 962 281 |
| BALANCE AT 31/12/2017 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 120 301 194 | -34 275 030 |
| Transfer | ||||||
| Changes resulting from the sale of a building |
-1 112 046 | 174 799 | ||||
| Dividend distribution | ||||||
| Interim dividend of previous year |
||||||
| Interim dividend | ||||||
| Changes in the fair value of hedges |
||||||
| Changes in the fair value of property |
6 679 297 | -5 854 668 | ||||
| Other increases (decresases) | -20 335 | 20 335 | ||||
| BALANCE AT 30/06/2018 | 88 949 295 | -950 240 | 24 903 199 | 98 778 | 125 848 110 | -39 934 563 |
| Reserve from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS applicable) |
Reserve from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS not applicable) |
Reserve for treasury shares |
Other reserves |
Result carried forward from previous financial years |
Net result of the financial year |
Total | |
|---|---|---|---|---|---|---|---|
| BALANCE AT 31/12/2016 | -1 310 093 | -5 944 578 | -757 323 | 1 259 467 | 25 920 070 | 6 101 079 | 205 202 333 |
| Transfer | -6 768 191 | 6 768 191 | 0 | ||||
| Changes resulting from the sale of a building |
1 687 749 | 0 | |||||
| Dividend distribution | -13 378 562 | -13 378 562 | |||||
| Interim dividend of previous year |
11 804 614 | 11 804 614 | |||||
| Interim dividend | 8 426 615 | 8 426 615 | |||||
| Changes in the fair value of hedges |
296 838 | -2 025 345 | 2 025 345 | 296 838 | |||
| Changes in the fair value of property |
-11 295 322 | 0 | |||||
| Other increases (decresases) | 0 | ||||||
| BALANCE AT 30/06/2017 | -1 013 255 | -7 969 924 | -757 323 | 1 259 467 | 22 864 973 | 8 426 615 | 212 351 837 |
| BALANCE AT 31/12/2017 | 0 | -9 280 017 | -686 943 | 1 259 467 | 25 379 059 | -143 685 | 215 555 079 |
|---|---|---|---|---|---|---|---|
| Transfer | -3 361 566 | 3 361 566 | 0 | ||||
| Changes resulting from the sale of a building |
937 248 | 0 | |||||
| Dividend distribution | -14 359 510 | -14 359 510 | |||||
| Interim dividend of previous year |
11 966 258 | 11 966 258 | |||||
| Interim dividend | 24 291 962 | 24 291 962 | |||||
| Changes in the fair value of hedges |
1 226 658 | -1 226 658 | 0 | ||||
| Changes in the fair value of property |
-824 629 | 0 | |||||
| Other increases (decresases) | 0 | ||||||
| BALANCE AT 30/06/2018 | 0 | -8 053 358 | -686 943 | 1 259 467 | 21 728 083 | 24 917 702 | 238 079 529 |
Home Invest Belgium decided to focus its investment strategy on residential real estate in the broadest sense of the term (apartment buildings, houses, studio apartments for students, second residences, etc.).
Its investment strategy is therefore largely determined by the geographical location of the buildings concerned. Consequently, the following segmentation is based here upon.
| 30/06/2018 | Consolidated Total |
Brussels Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| I. Rental Income (+) | 12 108 196 | 7 079 593 | 1 039 096 | 2 616 123 | 1 373 384 | |
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
6 697 344 | 6 356 822 | 956 961 | 2 512 614 | 1 271 323 | -4 400 375 |
| XVI. Result sale investment properties (+/-) |
11 928 | 29 183 | 0 | 0 | -17 254 | |
| XVIII. Changes in fair value of investment properties (+/-) |
21 422 816 | 15 755 176 | 2 193 549 | 2 471 881 | 1 002 210 | |
| FINANCIAL RESULT | -2 782 248 | 17 383 | -2 799 631 |
| 30/06/2017 | Consolidated Total |
Brussels Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| I. Rental Income (+) | 10 959 995 | 6 059 629 | 996 739 | 2 649 457 | 1 254 171 | |
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
6 117 067 | 5 306 593 | 918 896 | 2 449 648 | 1 161 884 | -3 719 954 |
| XVI. Result sale investment properties (+/-) |
-147 104 | -167 928 | 137 735 | 0 | -116 911 | |
| XVIII. Changes in fair value of investment properties (+/-) |
2 949 834 | 2 460 010 | -167 825 | -568 221 | 1 225 871 | |
| FINANCIAL RESULT | -325 284 | 22 184 | -347 468 |
| 30/06/2018 | Consolidated Total |
Brussels Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
|---|---|---|---|---|---|
| Fair value | 463 041 441 | 301 017 655 | 42 177 605 | 70 365 789 | 49 480 392 |
| Rental surface | 197 551 | 111 572 | 20 126 | 45 320 | 20 533 |
| Number of units | 2 230 | 1 269 | 259 | 414 | 288 |
| Occupancy rate | 89.4% | 86.7% | 88.9% | 92.0% | 100.0% |
| 30/06/2017 | Consolidated Total |
Brussels Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
|---|---|---|---|---|---|
| Fair value | 408 317 650 | 253 931 980 | 38 014 501 | 67 650 580 | 48 720 588 |
| Rental surface | 186 383 | 104 111 | 16 727 | 45 012 | 20 533 |
| Number of units | 2 085 | 1 125 | 258 | 414 | 288 |
| Occupancy rate | 91.2% | 89.3% | 86.1% | 93.7% | 100.0% |
1 Excluding development projects and assets held for sale.
| 30/06/2018 | 30/06/2017 | ||
|---|---|---|---|
| C. Investment properties, balance at the beginning of the financial year | 457 864 921 | 408 833 729 | |
| a. Investment properties | |||
| Balance at the beginning of the financial year | 423 105 968 | 381 316 652 | |
| Completion of buildings under construction | 17 611 577 | 21 695 358 | |
| Acquisition of buildings | 0 | 6 631 772 | |
| Capitalized subsequent expenses | 2 846 963 | 1 230 229 | |
| Gains (losses) from fair value adjustments | 21 422 816 | 2 949 834 | |
| Cessions (-) | -1 398 388 | -5 190 193 | |
| Balance at the end of the financial year | 462 963 196 | 408 633 653 | |
| b. Development projects | |||
| Balance at the beginning of the financial year | 34 758 953 | 27 517 077 | |
| Investments – development projects | 2 623 956 | 9 759 188 | |
| Other withdrawals | 0 | 6 074 687 | |
| Completion of development projects | -17 611 577 | -21 695 358 | |
| Acquisition of buildings via merger | |||
| Balance at the end of the financial year | 19 771 332 | 21 655 593 | |
| c. Properties for own use | |||
| d. Others |
C. Investment properties, closing balance at the end of the financial year
482 734 527 430 289 246
As at June 30th, 2018, the scope of consolidation is identical to that of December 31st, 2017. It includes the S.A. Home Invest Belgium (0420.767.885), the Sprl Charlent 53 Freehold (0536.280.237), the S.A. Investers (0405.083.876) and the S.A. S&F Immobilière (0419.957.045).
The General Meeting of May 2nd, 2018 approved the appropriation of the result proposed by the Board of Directors. A gross dividend of € 4.50 per share has thus been distributed. Taking into account the interim dividend paid in December 2017 in the gross amount of € 3.75 (coupon n° 23), the balance of the dividend for the 2017
financial year in the gross amount of € 0.75 (coupon n° 24) was paid on May 17th, 2018. As a reminder, the dividend distributed by the RREC is subject to a 30% withholding tax.
At June 30th 2018, apart from an advance payment of € 1 675 000 which has been paid out for the acquisition of the company BE Real Estate S. A., Home Invest Belgium does not have any contingent assets nor liabilities.
The figures listed in the table below relate solely to debts owed to financial institutions:
| Financial debts at 30/06/2018 | Amount confirmed credit lines | Amount drawn | Average duration |
|---|---|---|---|
| Bank debts | 208 000 000 | 191191 500 000 | 4 y and 6 m |
| Belfius | 61 500 000 | 61 500 000 | 4 y and 4 m |
| BNP Paribas Fortis | 46 500 000 | 43 000 000 | 6 y |
| ING | 60 000 000 | 47 000 000 | 4 y |
| KBC Bank | 30 000 000 | 30 000 000 | 2 y and 5 m |
| Degroof | 10 000 000 | 10 000 000 | 4 y and 10 m |
| Bond issue | 40 000 000 | 40 000 000 | 4 y and 6 m |
| Issue of June 18th, 2014 | 40 000 000 | 40 000 000 | 6 y |
| TOTAL | 248 000 000 | 231 500 000 | 4 y and 9 m |
The table below lists the credit lines opened with each bank and their average maturity. No contracted line matures in the second semester of 2018.
At June 30th, 2018, Home Invest Belgium had € 16 500 000 available on its bank credits. All credit lines are contracted at a variable rate.
| Hedge instruments active at 30/06/2018 |
Type | Amount | Interest rate |
Deadline | Qualification | Fair value 30/06/2018 |
|---|---|---|---|---|---|---|
| Belfius | IRS | 10 000 000 | 1.16% | 10/11/2024 | Transaction | -526 922 |
| Belfius | IRS | 10 000 000 | 1.06% | 10/11/2024 | Transaction | -460 902 |
| Belfius | IRS | 15 000 000 | 1.965% | 10/11/2027 | Transaction | -1 789 901 |
| Belfius | IRS | 21 500 000 | 0.585% | 10/11/2025 | Transaction | -159 642 |
| BNP Paribas Fortis | IRS | 25 000 000 | 1.199% | 30/09/2027 | Transaction | -1 128 368 |
| BNP Paribas Fortis | IRS | 21 500 000 | 0.40% | 30/11/2021 | Transaction | -164 400 |
| ING | IRS | 10 000 000 | 1.60% | 14/04/2026 | Transaction | -860 410 |
| ING | IRS | 15 000 000 | 0.35% | 01/06/2022 | Transaction | -49 345 |
| ING | IRS | 20 000 000 | 1.896% | 15/12/2025 | Transaction | -2 098 451 |
| KBC | IRS | 15 000 000 | 0.087% | 05/05/2021 | Transaction | -97 464 |
| Hedge of the IRS type | 163 000 000 | 6 years and 6 months | -7 335 805 |
| Forward hedge | Interest | Fair value | |||||
|---|---|---|---|---|---|---|---|
| instruments | Type | Amount | rate | Start | Deadline | Qualification | 30/06/2018 |
| ING | IRS | 20 000 000 | 1.896% | 14/12/2021 | 14/12/2025 | Transaction | -722 477 |
| ING | IRS | 15 000 000 | 2.340% | 14/11/2021 | 14/05/2024 | Transaction | -582 875 |
| 35 000 000 | -1 305 352 |
The interest rate hedges are exclusively of the IRS type (Interest Rate Swap) which are contracts for swapping variable interest rates for fixed interest rates. At June 30th, 2018, the total nominal sum of the IRS hedges amounts to € 163 million as shown in the above table.
The non-current financial liabilities relate to the IRS, whose negative fair value amounts to € 8 641 157 at the closing date of the half-year. All hedge instruments are not considered as hedge accounting in the sense of IFRS 9.
In accordance with IFRS 9, at June 30th, 2018, the negative fair value of financial instruments is registered as a liability under item I.C. "Other non-current financial liabilities", for a total amount as stated below. The consideration is registered as follows:
| Fair value of financial instruments as at 30/06/2018 |
In the income statement under heading XXIII "Changes in fair value of financial assets and liabilities (+/-)" |
In shareholders' equity under the heading "d. Reserve from the balance of changes in fair value of authorised hedges to which hedge accounting according to IFRS is applied (+/-)" |
In shareholders' equity under the heading "n. Income brought forward from previous years (+/-)" |
|---|---|---|---|
| Effective instruments | |||
| Ineffective instruments (change in 2018) |
-587 798 | ||
| Effective hedges (previous year) |
|||
| Ineffective hedges (previous year) 1 |
-8 053 358 | ||
| TOTAL OVERALL TOTAL |
-587 798 | 0 -8 641 157 |
-8 053 358 |
The credit lines are registered under the item
"Non-current and current financial debts". The financial debts are registered under amortized cost which corresponds to the fair value.
IFRS 13 provides for a hierarchy of fair values at 3 levels of input data (levels 1,2 and 3) and applies to IFRS that require or allow fair value measurements or the disclosure of information on the fair value and therefore IFRS 9.
Regarding financial instruments, all fair values are level 2. Given that it has no other level than level 2, Home Invest
Belgium has not implemented a policy for monitoring transfers between hierarchical levels.
The valuation is carried out by the banks on the basis of the present value of the estimated future cash flows.
Although most of the derivative instruments used are considered trading instruments (transaction) in the sense of the IFRS standards, they are exclusively intended for hedging the interest rate risk and not for speculative purposes.
Trône, Brussels Port Zélande, Ouddorp (The Netherlands)
1 The changes in fair value in previous financial years recognised in the income statement have since been assigned to Earnings brought forward from previous years.
The IFRS 9 standard was finalized and published by the IASB in July 2014 and adopted by the EU in November 2016. IFRS 9 contains the provisions relating to the classification and valuation of financial assets and liabilities, the depreciation of financial assets and general hedge accounting. IFRS 9 replaces most of standard IAS 39 – Financial instruments: Accounting and measurement.
On the basis of an analysis of Home Invest Belgium SA's situation at June 30th, 2018, the IFRS 9 standard doesn't have any material impact on the consolidated financial statements. As regards the depreciation of financial assets measured at amortized cost, including trade receivables and finance lease receivables - if applicable - the initial application of the expected credit loss model in accordance with IFRS 9 leads to the early carrying of credit losses as compared to the incurred credit loss model applied in accordance with IAS 39. Given the relatively low amounts of the trade receivables and finance lease receivables combined with the associated low credit risk, Home Invest Belgium SA does not register any material impact on the consolidated financial statements.
Standard IFRS 15 establishes a single comprehensive model for the recognition of revenue from ordinary activities from contracts with customers. At the time of its entry into force, the new standard replaces IAS 18 which covers revenue from sales of goods and service provision and IAS 11 which relates to construction contracts for third parties and related interpretations.
Standard IFRS 15 does not have any material impact on the consolidated financial statements of Home Invest Belgium SA
Xavier de Bue, Uccle
because leases do not fall under the scope of the standard and are the main source of revenue for Home Invest Belgium SA The principles of standard IFRS 15 are nevertheless applicable to the non-lease components which may be included in leases or in separate agreements, such as maintenance services charged to the tenant.
Given that such non-lease components are relatively limited and mainly relate to services accounted for gradually in accordance with both standard IFRS 15 and standard IAS 18, Home Invest Belgium SA does not see any material impact in this regard.
Home Invest Belgium has not applied the following new standards, interpretations and amendments which have been published but did not yet enter into force:
Standard IFRS 16 provides a comprehensive model for identifying leases and the way they are treated in the lessee's and lessor's financial statements. It will replace standard IAS 17 – Leases as well as the related interpretations once it enters into force. The EU has not yet adopted IFRS 16. IFRS 16 introduces significant changes as regards the lessee's accounting with the removal of the distinction between ordinary lease and finance lease and the accounting of assets and liabilities for all leases (with exceptions limited to short-term leases and rental of low-value assets). Unlike the accounting by the lessee, standard IFRS 16 maintains the substance of the provisions of standard IAS 17 – Lease agreements regarding accounting by the lessor and keeps the obligation for the lessor to categorize a lease as either an ordinary lease or a finance lease..
Given that Home Invest Belgium SA acts almost exclusively as a lessor and has chosen not to re-assess whether a contract is or contains a lease with regard to IAS 17, standard IFRS 16 should not have a material impact on its consolidated financial statements. In the limited cases in which Home Invest Belgium SA is the lessee under contracts categorized as ordinary leases according to IAS 17 and not subject to the exemptions of standard IFRS 16 (e.g. car rentals, buildings used by the group, etc.), an asset under the right to use and a related liability will have to be recorded in the consolidated financial statements.
In compliance with IAS 8, Home Invest Belgium made a recalculation of its financial year 2017 in order to take into account the IAS 12 deferred tax. Indeed, when closing 2017, the deferred tax deriving from a potential sale of the Port Zélande portfolio had not been taken into account. Following this, a provision of € 0.8 million has been entered into the accounts in 2017 under the section
"XIX. Other results on portfolio" of the consolidated result. This provision is purely latent and does not have any impact on the distributable result of the company.
In the context of our appointment as the company's statutory auditor, we conducted a review of the interim consolidated balance sheet of Home Invest Belgium at 30 June 2018 and the interim consolidated statements of income, consolidated changes in equity and consolidated cash flows for the six months ending on that date, and notes comprising a summary of significant accounting policies and other explanatory notes. These statements show a consolidated statement of financial position total of EUR 489 392 519 and a consolidated profit for the six-month period of EUR 24 917 702. The Board of Directors is responsible for the preparation and fair presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standards Repository, as approved by the European Union, applicable to the communication of interim financial reporting ("IAS 34"). Our responsibility is to express a conclusion on these interim condensed financial statements based on our review.
We conducted our review in accordance with IRSE Standard 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" applicable to review engagements. A review of interim financial information consists of making inquiries, primarily with persons responsible for financial and accounting matters and applying analytical procedures
and other review procedures. The scope of a review is substantially less than that of an audit conducted in accordance with ISA standards and consequently does not enable us to obtain assurance that we would become aware of all significant facts that might be identified in an audit. Accordingly, we do not express an audit opinion on this consolidated interim financial information.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements does not present fairly, in all material respects, the consolidated financial position of the entity at 30 June 2018, and its financial performance and cash flows for the six month period ending on that date, in accordance with IAS 34, as approved by the European Union.
Grant Thornton, auditors, represented by Philip Callens Company auditor and auditor approved by the FSMA for UCI's Statutory Auditor
In accordance with article 13§2, 3° of the Royal Decree of November 14th, 2007, The Board of Directors and the effective leaders of Home Invest Belgium, hereby state that, to their knowledge:
a) the set of abridged financial statements, drawn up in accordance with the applicable accounting standards, provides a true and fair view of the assets, financial situation and results of the RREC and of the companies included in the consolidation;
b) the interim management report contains a true and fair disclosure of the required information, in particular that referred to in § 5 and 6 of article 13 of the RD of November 14th, 2007.
The HIB Team
| 2018 | ||
|---|---|---|
| Half-year financial report: results on June 30th, 2018 | Thursday, September 6th, 2018 | |
| Interim statement: results on September 30th, 2018 | Thursday, October 25th, 2018 | |
| 2019 | ||
| Annual press release on the financial year 2018 | Thursday, February 21st, 2019 | |
| Publication of the annual financial report on the website | Friday, March 29th, 2019 | |
| Ordinary general meeting of the financial year 2018 | Tuesday, May 7th, 2019 | |
| Interim statement: results on March 31st, 2019 | Tuesday, May 7th, 2019 | |
| Payment of the dividend of the financial year 2018 | Friday, May 17th, 2019 | |
| Half-year financial report: results on June 30th, 2019 | Thursday, September 5th, 2019 | |
| Interim statement: results on September 30th, 2019 | Thursday, October 24th, 2019 |
Liévin Van Overstraeten Chairman of the Board of Directors Tel: +32.2.740.14.50 E-mail: [email protected]
Home Invest Belgium SA Public RREC under Belgian Law Woluwe Boulevard 46, Box 11 1200 Brussels RPM: 0420.767.885 | ISIN BE 003760742 www.homeinvestbelgium.be
Since its creation in 1999, Home Invest Belgium has been a Belgian real estate company listed on the stock market and specialized in residential property for the letting market and certains forms of tourist accommodation. As the owner of a portfolio of over € 460 million, it makes quality residential real estate available to its tenants and provides them with professional management services. Home Invest Belgium also develops its own projects to ensure the growth of its portfolio and also conducts regular arbitrage on a fraction of its portfolio. Its portfolio is located in Belgium and in the Netherlands.
Home Invest Belgium is listed on the Euronext Brussels continuous market (HOMI) and enjoys the Belgian tax status of an RREC (SIR/GVV).
Public RREC under Belgian law Woluwe Boulevard 46, Box 11 1200 Brussels T +32 2 740 14 50 [email protected] www.homeinvestbelgium.be RPM: 0420.767.885. ISIN BE 003760742
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