Annual Report • Mar 30, 2018
Annual Report
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SIR publique résidentielle de droit belge Boulevard de la Woluwe 46, box 11 B -1200 Bruxelles T +32 2 740 14 50 [email protected] www.homeinvestbelgium.be RPM: 0420.767.885. ISIN BE 003760742
| Profile 2 | |
|---|---|
| Risk factors 4 | |
| Panorama 18 | |
| Management report 32 | |
| Real estate report 56 | |
| Stockmarket activity 84 | |
| Corporate governance statement 94 | |
| Financial statements 118 | |
| Permanent Document 156 | |
| RECC (SIR/GVV) and its tax regime 167 | |
| Glossaries 170 | |
| Shareholders' agenda 173 | |
Since its creation in June 1999, Home Invest Belgium has been a listed Belgian real estate company specialising in residential property in the broad sense, including traditional apartments or new forms of housing, studios for students and second homes.
It aims to offer its shareholders a higher return than they would obtain by investing directly in residential property without the cares of management!
With a portfolio in Belgium and the Netherlands valued at over € 450 million, Home Invest Belgium provides its tenants with recent, quality properties and the benefits of professional management.
One of the company's competitive advantages is its capacity to develop its own projects to ensure the growth of its portfolio. Moreover, regularly divesting part of the portfolio enables rotation and increases the return for shareholders.
Home Invest Belgium is listed on the Euronext Brussels regulated market (HOMI) and enjoys the Belgian tax status of a Regulated Real Estate Company (RREC). Its activities are monitored by the Financial Services and Markets Authority (FSMA).
Archview, Etterbeek
As a real estate investor, Home Invest Belgium operates in a constantly changing environment, which presents certain risks. Should these risks actually occur, this could have an adverse effect on the company and on its business, outlook, financial situation or results. Home Invest Belgium takes this into account within the overall management of the company, its investment and divestment decisions, its funding sources and the optimal re-use of its funds.
| Market risks 6 |
|---|
| Risks associated with the property portfolio 7 |
| Risks related to tenants and leases 10 |
| Risks linked to regulations and the political situation 11 |
| Financial risks 13 |
| Risks related to the internal organisation 17 |
A company having a RECC status may not have a debt ratio exceeding 65% of total assets
A property complex may not account for over 20% of the portfolio (RREC regulations)
20%
These risks are therefore monitored regularly. The Management, the Risk Manager and the Board of Directors have adopted prudent policies to better protect the Regulated Real Estate Company (RREC) and its shareholders from their possible occurrence.
The main risks are identified below, along with the various factors and measures that mitigate their
potential negative impact. The list of risks in this report is not exhaustive and is based on the information known as at 30 March 2018.
There may be other risks, unknown and/or unlikely at the moment, which could have a detrimental effect on the business, outlook and financial situation of Home Invest Belgium.
A change in inflation is related to a change in real interest rates. The risk is that financial charges increase more rapidly than the indexation of income, leading to a decline in the company's net result.
Home Invest Belgium has taken the following measures to cover this type of risk:
If the general economic context were to become deflationary or in the event of a temporary freezing full or partial - of the rents imposed by the government, rental income growth could be curbed. Deflation can lead to lower interest rates which would lead to a limited reduction in financial costs due to recourse to the interest rate hedging instruments mentioned above. The current legislation on residential leases does not cater for a rent floor in the event of deflation.
The company closely monitors the intentions of the various competent authorities as regards freezing rents or setting ceilings (through the real estate association UPSI). It also includes in its business plan very prudent assumptions regarding inflation and the trend in rents. Finally, it implements an active maintenance and renovation policy to ensure that rents for newlyconcluded leases are at least equal to the last rent collected.
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 properties in which Home Invest Belgium has invested, the concentration risk is spread over a large number of tenants – almost 1 850. Only one large property complex is leased to a single tenant. This, the largest tenant, accounts for 11.5 % of total rents. The next largest tenant represents 2.4 % of rents (please see the Real Estate Report for more details).
This concentration risk is also mitigated by the geographic diversification of the portfolio.
An error in the choice of own-account investments or developments could result in a mismatch with market demand, potentially with the following negative effects: (i) an increase in rental vacancies, (ii) a decrease in the sale price and consequently (iii) a fall in company revenues.
This risk is mitigated by the following factors:
A significant number of properties in the Home Invest Belgium property portfolio were acquired as part of mergers, de-mergers or 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 this type of transaction, in particular carrying out due diligences on the properties brought in and on the companies taken over or acquired, and has obtained contractual guarantees concerning these liabilities.
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 negative change 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 resulting from independent quarterly appraisals. The potential negative effects of a negative change in the fair value of the buildings have a negative impact on the company's net result, net assets and debt ratio.
This risk is mitigated by the following factors:
Details of the sold properties can be found on page 39 of the Management report.
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 reduction in the company's rental income and hence in the net result.
The risk that properties owned entirely by the RREC are destroyed by fire, explosion or other disasters is covered by appropriate insurance policies covering their new reconstruction value (excluding land), for buildings that are available for rent. Properties that form part of co-ownerships are insured by these various co-ownerships.
As part of its property development activities, Home Invest Belgium is required to obtain a number of administrative permits (urban, environmental, etc.) before undertaking any development, renovation or construction works. The analysis of permit applications by the competent administrative services requires a certain period of time which cannot always be controlled. Once issued, these administrative permits may be subject to appeal by third parties. This may lead to delays, additional costs or even the abandonment of projects for studies have been conducted, incurring costs, and can therefore have an adverse effect on the business and 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 files by the teams and (iii) the use of external advisers specialised in this field.
Poor management of a renovation or development project may result in: (i) an increase in the company's operating cost, (ii) a decrease in the profitability of the project and (iii) a delay in the acceptance time of the work or project and the collection of rent for these buildings (which has a negative impact on the company's earnings per share).
The technical management of the buildings and the coordination of the renovation and development works are undertaken by specialised internal teams who ensure high-quality monitoring of the various sites.
The risk of poor management is also mitigated by:
If a building in need of major renovation is acquired, the acquisition value of the building upon entry in the portfolio reflects the state of the building before renovation. As the cost of the renovation is provided for in the financial plan drawn up before the investment decision is taken, this cost will in principle generate an increase in value of at least the same amount.
A default or the bankruptcy of a contractor with which the RREC has concluded a contract for works or the provision of services can have an impact on the performance schedule and, in certain cases, on the budget of the works.
The RREC mitigates this risk by (i) a rigorous selection of contractors, (ii) using a variety of contractors for a site as far as possible and (iii) establishing financial guarantees to offset the shortfall in the event of default by a contractor.
Many property developers are building large residential projects, bringing to market several hundred new apartments in certain neighbourhoods. These apartments are mostly sold to private investors who then put them on the rental market, creating a large supply and potentially a risk of oversupply. This phenomenon is mainly observed in the Brussels region. So far, however, supply has been relatively stable, meeting the need for about 4 000 new homes per year.
The RREC keeps a constant eye on the balance between supply and demand on the rental micromarket of each of its buildings. It integrates this parameter into its investment and divestment decisions.
The entire turnover of Home Invest Belgium consists of rents generated by renting to third parties (individuals, public authorities, retailers, companies, embassies and foreign delegations, retirement home operators, holiday centre operators).
Delays or defaults in the payment of rent are likely to (i) have a negative impact on results, (ii) give rise to an unexpected vacancy and (iii) involve unforeseen costs and the conclusion of leases on less favourable terms or even the granting of rent-free periods.
To limit this risk, Home Invest Belgium takes the following measures:
As regards unpaid rent, the RREC benefits from the multiplicity and quality of the tenants it selects.
If there is any doubt as to the quality of a receivable, this is provisionally treated as a loss and is recorded as such in the income statement.
Home Invest Belgium is exposed to the risk of loss of rent caused by the departure of tenants. This can adversely affect the financial result and decrease the fair value of the property, particularly in a context of weak economic conditions, for the following reasons:
• this departure may involve unexpected costs (marketing and/or renovation costs);
• the search for new tenants could take some time, during which charges and taxes for unrented properties are borne by the owner;
• new tenants could negotiate a lower rent or a rentfree period.
Prolonged non-occupation of a property results in a fall in portfolio occupancy1 rates, which may adversely affects the results.
Given the large number of tenants, significantly rising demographic trends in Belgium and the fact that housing is an essential need of the population, the risk that vacancies may increase substantially is considered to below.
The company has a proactive commercial management policy to maintain a high occupancy level.
The normal duration of a lease basically depends on the type of property and is usually established as follows:
Lease agreements entered into by Home Invest Belgium are on average shorter than leases for professional properties. This more limited duration therefore generates a higher turnover than recorded by a professional property asset and thus higher management costs over the life of the property.
The RREC overcomes this disadvantage by (i) incorporating this in its preliminary analysis of profitability and (ii) by increasing the loyalty of tenants, through the presence of a team of managers and qualified external managers.
The Company is exposed to changes in the law and increasingly numerous and complex regulations, and of possible changes in their interpretation or application by the authorities or the courts, notably fiscal regulations (e.g. provisions and circulars relating to withholding tax or anti-abuse provisions) and environmental, urban-development and publicprocurement regulations.
Changes in and non-compliance with regulations expose the Company to risks of liability, civil, criminal or administrative convictions, and the risk of not obtaining or the non-renewal of permits. This could adversely affect the Company's business, its results, profitability, financial situation and/or outlook.
The Company has a legal team with the necessary skills to ensure strict compliance with regulations in force and proactively anticipate changes in the law (regulatory monitoring). It also calls upon external consultants.
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 'PRREC' or 'public RREC under Belgian law'. As a Public Regulated Real Estate Company, and 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 relating to regulated real estate companies (the 'RREC act'), as amended by the act of 22 October 2017, which contain restrictions on (inter alia) its activities, the debt ratio, the appropriation of earnings, conflicts of interest and corporate governance. 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 the violation of
applicable rules, including the loss of accreditation as a Public RREC (see also section 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 and 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 Regulated Real Estate Companies. (See paragraph 4.2).
The skills of the team members and the strict internal control procedures followed enable the company to successfully manage its assets and debts and thus meet these specific requirements.
Home Invest Belgium also set up an Audit Committee on 8 April 2009, notwithstanding the exemption granted under Article 526bis of the Companies Code.
The company cannot mitigate the risk of changes in the RREC act itself. It overcomes this by closely following the planned legislative changes locally (Belgium and the Netherlands) and at European level and by being an active member of various professional associations, in particular BE-REIT Association ASBL, one of whose objectives is to defend the interests of the RREC sector.
As a residential Public RREC, Home Invest Belgium is subject to a specific tax system, some aspects of which present specific risks.
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 be altered at any time. The 'real value' of a property, as referred to in this circular, is calculated after deduction of registration duties or VAT. This 'real value' differs from (and therefore may be less than) the fair value of the property as stated in the company's IFRS financial statements.
As a Public RREC, profits generated in Belgium are subject to corporation tax but on a reduced taxable basis consisting of the non-admitted expenses, abnormal or gratuitous benefits received and unjustified remunerations and commissions. Company profits generated abroad may be taxed in the State in which
1 This term is defined in the glossary.. 2 The breakdown between the buildings according to their nature is given in the Real Estate report on page 70.
they arise according to the law applicable in that State and are exempt in Belgium. The net profits generated by Home Invest Belgium resulting from its property investments in the Netherlands are therefore subject to corporation tax at the rate of 25 % and are exempt in Belgium.
Risks related to regulations include the effects of measures taken or envisaged by the legislator, particularly on taxation.
Dividends distributed since 1 January 2017 are subject to a withholding tax of 30 %.
Home Invest Belgium carefully monitors the various laws on this subject and is gradually adapting to changes in the regulations.
The company believes that it has complied fully with all the provisions in this circular for the calculation of the exit taxes for which it was liable.
A change in the urban and environmental regulations might (i) increase the costs to be 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 various laws on this subject and is gradually 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 impact and (ii) frequent discussions and contacts with the statutory auditor.
The financing policy of Home Invest Belgium aims to optimise the cost of financing and to limit the liquidity risk of the company and the counterparty risk.
Under the law, Home Invest Belgium's debt ratio1 may not exceed 65 %. The company risks losing its RREC status if it exceeds this 65 % ratio.
The terms of the bond issue of 18 June 2014 include a maximum consolidated debt ratio of 65 %2. If Home Invest Belgium violates this undertaking, each bondholder may, by sending written notice to the company, demand repayment of the nominal value of the bonds plus accrued interest (if any) on the date of payment, unless the default has been remedied before receipt of the notification by Home Invest Belgium.
The provisions of the company's two credit facilities (with BNP Paribas Fortis and KBC Bank NV) provide for an automatic increase in the margin of these facilities if the debt ratio crosses certain thresholds.
Financial plan (Art.24 of the AR of 13/07/2014)
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.
On the basis of the figures as at 31/12/2017, the RREC's consolidated debt ratio is 51.82%. For more information on the consolidated balance sheet as at 31/12/2017, we refer to the financial statements of the present annual report.
Historically, since its creation in 1999, Home Invest Belgium's debt ratio has always been relatively low, around 30%. The company increased its portfolio partially through successive contributions and partially through acquisitions financed by the debt. In addition, the company has applied a policy of active arbitration of a portion of its portfolio, up to around 4% of its value, since 2010. The money thus collected serves to finance new acquisitions.
In 2012, the company decided to round out is activities by adding the development of projects for its own account. This decision served to accelerate the growth of Home Invest Belgium's portfolio. Given that the sites to be developed were mainly financed by the debt at the time of their acquisition and given that the works were still financed by the debt, the debt ratio gradually increased since 2012 (except in 2014, the year in which exceptional sales of non-residential assets occurred). The debt ratio exceeded the 50% threshold for the first time on 30 June 2017.
The debt ratio is currently at 51.82%. Based on the current debt ratio, the investment potential amounts to approximately € 180 million, not exceeding the maximum rate of 65 %.
Home Invest Belgium entered into credit agreements with banking institutions, some of which offer a debt limit of 55%. According to the agreements, the same calculation method results in an investment potential of close to € 34 million.
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.
Since its creation, Home Invest Belgium has never experienced a negative variation in the fair value of its real estate assets, even during the financial crisis of late 2008 and 2009. This can be explained by the defensive and safe-haven nature of Belgian residential real estate which is at the heart of the company's investment strategy.
Given the current situation and the value of the portfolio determined by the independent expert, Home Invest Belgium does not forecast any substantial negative variations in the fair value of the property. This belief is strengthened by the results of the policy
1 This term is defined in the glossary. 2 Article 23 of law of 13 July 2014 relating to Regulated Real Estate Companies.
of constant arbitration which show that the valuation values are perfectly in line with the market. Therefore, Home Invest Belgium believes that the current debt ratio of 51.82% is sufficient to absorb any potential negative variations in the value of the existing assets.
The company expects to reach a debt ratio of 54.18% at 31 December 2018, and of 55.94% at 31 December 2019. The change of the debt ratio depends on:
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 2019.
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 in the annual and half-yearly financial reports.
The liquidity risk implies that at some point, Home Invest Belgium no longer has the necessary financial resources and can no longer obtain the necessary financing to meet its current liabilities.
There is a risk of the non-renewal of credit lines, even in the context of a review of credit conditions. Moreover, credit margins may be increased upon the renewal of maturing credit lines, if market conditions deteriorate compared with previous years.
In addition, there is a risk of the cancellation of bilateral credit lines through the cancellation, termination or revision of financing contracts due to the failure to fulfil obligations ('covenants') negotiated when these financing agreements were signed.
In the event of non-compliance with its obligations and, more generally, in the event of a failure to fulfil the terms of current contracts, Home Invest Belgium is at risk of mandatory early repayment of these loans.
As part of the diversification of funding sources, on 18 June 2014 Home Invest Belgium issued bond with a nominal value of € 40 million. This 10-year bond matures on 18 June 2024. It is possible that Home Invest Belgium may not be able to redeem the bond at maturity.
The contractual documentation for the bond issue further provides that, in the event of a change of control of the company, bondholders can require advance repayment of the bonds issued from Home Invest Belgium.
As at 31 December 2017, Home Invest Belgium had a total of € 208 million in credit lines, of which € 195 million have already been drawn. Of this total, only the credit line for an amount of € 10 million matures in 2018.
For further information on the structure of Home Invest Belgium financing, please refer to the Financial Statements section of this report.
Home Invest Belgium has neither given nor received any mortgages, loans or deposits outside the credit lines detailed in 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 (low risk and generating stable revenues), the risk of non-renewal of credit lines is limited, even in the context of a review of credit conditions.
Based on current conditions and outlook, Home Invest Belgium has no knowledge of elements that may indicate that one or more of the commitments it has entered into may no longer be respected. This risk is considered theoretical as the company strives scrupulously to honour its obligations.
The liquidity risk for the RREC is mitigated by:
Since Home Invest Belgium's portfolio comprises only buildings in Belgium and the Netherlands and all its leases and credit lines are denominated in euros, the company is not exposed to a 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 to ensure a certain diversification of its sources of financing and interest rate hedging, while paying particular attention to the value for money offered by 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 variable rates (bilateral credit lines at the EURIBOR rate). This allows Home Invest Belgium to take advantage of any favourable rates.
To hedge the risk of rising interest rates, Home Invest Belgium's policy is to use interest 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 a situation like this, 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.
The Board of Directors has consequently set a target of keeping the share of loans at variable rates (not covered by hedging instruments) below 15 % compared to the fair value of the property assets. The risk of rising interest rates is hedged by IRS (Interest Rate Swaps) (see Annex 24 to the Financial Statements).
At 31 December 2017, Home Invest Belgium records no bank debt at fixed rate; the total of the drawn bank debts at floating rate account for € 195 million. The IRS type hedging instruments enabling the exchange of a fixed rate for a floating rate represent a total of € 143 million. The interest rate hedging of the bank loans is then 73 %.
In addition, Home Invest Belgium has a fixed-rate bond loan of € 40 million over 10 years (06/2014-06/2024).
Average duration of hedging instruments
Every change in the interest rate 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 rates. These variations do not affect the cash position and the net current result but may lead to higher financial charges and hence influence the result.
Comment 24 to the Financial Statements summarises the fair value of hedging instruments. An increase or decrease in the interest rates on variable rate debts would theoretically increase or decrease the market value of hedging instruments.
In global, at the end of the financial year 2017, the decrease of the interest rates observed the latest years has a negative impact of € 8.0 million (value which should have been paid to settle the hedging at 31 December 2017) on the net value, being € 2.44 per share (cf. Annex 24 to the "Financial Statements.")
It is difficult for shareholders to modify their position in Home Invest Belgium shares upwards or downwards quickly.
For the financial year 2017, the total volume of shares exchanged on the stockmarket stands at 198 650 versus 191 851 for the financial year 2016.
Failures in reporting could compromise the relevance of the information available to decision-makers.
The company has developed 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 the size of Home Invest Belgium. The loss or unavailability of data could result in (i) a disruption in commercial activity (as the company is active primarily in the apartment building sector where input and output flows are the largest), (ii) an interruption in investment activity and/or (iii) a disruption in the internal and external reporting process.
The management of the IT infrastructure (hardware and software), access security and data continuity have been entrusted to an external service provider on the basis of a 'service agreement'.
A new IT tool is currently being implemented in the company to further centralise data and computerise reporting.
The company is exposed to some organisational risk 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, by ad hoc committees (Appointment and Remuneration Committee and Audit Committee and the Board of Directors of the Regulated Real Estate Company.
If such a situation does arise, Home Invest Belgium will outsource the function concerned and/or quickly recruit a new staff member.
Under the aforementioned article, the distribution of dividends may be limited. No distribution may be made where, at the balance sheet date, the net assets as shown in the annual accounts are, or would become as a result of such distribution, less than the amount of the paid-up capital or, if this amount is higher, the capital called up, plus any reserves available for distribution.
This risk is mitigated by the following elements:
For further information on the calculation of Article 617 and the remaining margin, please refer to Annex 26 to the Financial Statements.
2017 was another favourable year for Home Invest Belgium. The turnover rose by over 19.5%, the net result by 19.7 % compared with the previous year and the fair value of the portfolio exceeded the level of € 450 million.
| Encounter 20 | |
|---|---|
| Key figures 24 | |
| Our journey 26 | |
| Strategy 28 |
the net rental
result
Increase of the net result of key activities + 17.6%
Interview with Liévin Van Overstraeten, Chairman of the Board of Directors, and Sophie Lambrighs, CEO.
The current economic situation remains promising for the residential rental business. During the past financial year, Home Invest Belgium made a number of major acquisitions in this segment, as well as in tourist accommodation. The company keeps a close eye on lifestyle trends and strives to offer its tenants optimal solutions, responsiveness and service, the guarantees of a high degree of loyalty.
LVO: The global economic context has little impact on our profession. The residential real estate market depends mainly on local markets. Factors such as demographic trends, the purchasing power of the population, prompting them to buy or rent their residence, depending on the context, and the general dynamics in the cities where we operate have a more direct influence on our activities.
SLA: The low interest rates mean that we can finance our projects in better conditions. We have taken advantage of this period to lengthen the duration of our hedging instruments which enables us to benefit from a low financing cost even at times of interest increases. But the fall in rates impacts on opportunities for acquisition. Competition in the real estate sector is fierce. The prices offered are higher and higher. We are particularly careful when it comes to selecting buildings that interest us. As regards sales, however, the context is favourable for property owners. In this context, being active in all stages of the real estate cycle, means certainly having a competitive advantage.
SLA: Last year was particularly good in terms of acquisitions. We finalised five in total, including two projects: Jourdan 95 in Saint-Gilles and Brunfaut in Molenbeek. We also purchased 40 apartments and seven houses at Center Parcs Port Zélande, consolidating our presence in the tourist accommodation segment. In addition, we now own a new building in Auderghem. Finally, we purchased a real estate company that owns three buildings in the Brussels region.
LVO: The rental market remains promising. We are not anticipating a slowdown. The cost of credit could rise again, curbing the tendency among households to buy, which would favour renting. What's more, the younger generations set great store by the use of services, at the expense of ownership. For example, shared cars are increasingly popular.
SLA: Tenants naturally prefer new or renovated buildings. The requirements are far higher than in the past. The service offered in terms of intervention if there is a problem to be resolved by the owner is taken into account in the search criteria of potential occupiers. We take care to act swiftly in order to put forward immediate solutions to the problems encountered. On the other hand, we always try to offer them that little bit extra: unique premises that tenants can make their own.
Sophie Lambrighs, CEO
SLA: That's right! The development of a way of life where internet facilities multiply home parcel deliveries prompted us to offer 'drop boxes' in the entrance halls of the buildings. This was successfully tested in The Horizon and then extended to our other buildings.
Providing a shared laundry is another example of a service that we have developed to meet our tenants' wishes as well as we can.
LVO: Residential real estate is not a sector that has seen huge upheavals. The technological aspect of buildings has evolved, of course. The ventilation and heating systems are more sophisticated and require
Cost of financing in 2017 2.09%
cutting-edge knowledge to manage new buildings. The occupiers have to be shown how to use these new technologies, as well. Home Invest Belgium strives to make life easier for its tenants by anticipating the trends that will be standard in the future. For example, occupiers will soon be able to consult their statements of account concerning their tenancy remotely or tell us by smartphone about any problem detected in the building.
SLA: We wanted to reflect our corporate culture through the way these areas are laid out. We operate with a very horizontal structure that promotes collaboration between the teams. We want everyone to show goodwill and listen to their colleagues, and to feel at home while they are at work. So our premises have been set out along residential lines, promoting openness to others.
LVO: We focus on cities with more than thirty thousand inhabitants. We keep an eye on the general dynamics of the city and its demographic trend. For historical reasons, we have a significant presence in Brussels, which accounts for about 60% of our portfolio. Our aim is to turn to other regions of the country in order to diversify.
SLA: The rental market remains favourable, even if real estate has drained quite a lot of private capital in the search for a safe return. Private individuals are turning back to the stock market. That leaves more opportunities for real estate players. 2018 will continue along the same path, with sustained growth in our portfolio. The first apartments in The Pulse were handed over at the end of 2017. The Reine Astrid project in Kraainem will be completed in 2018, along with the renovation of two buildings in Liège. These projects will generate additional income.
LVO: We aim to consolidate our positions and develop tourist accommodation, a sector in which we are already active. We are particularly interested in properties that can be converted into residential buildings if need be. More generally, we are working to ensure that Home Invest Belgium becomes the reference in residential real estate for rent. We want to offer the best service in order to become a real quality label.
Panorama
Fair value of investment properties
Gross dividend per share
Increase in net result from core activities
shareholder
2012 2013 2014 2015 2016 2017 Return for the Distributable result Gross dividend
Fair value of investment properties Return for the shareholder in 2017
10.07
%
per share adjusted and corrected by on dividend
• Creation of Home Invest Belgium • Approval as real
2001 Acquisition of the Residence Clos Saint-Géry in Ghlin
Contribution of the Odon Warland building in Brussels
• Contribution of the Clos de la Pépinière, Bosquet/ Jourdan and Monnaies/ in Brussels
Completion of the renovation of the City Gardens real estate complex in Leuven
• Capital increase of € 31.6 million through issue of new shares • Acquisition of Florida buildings in Waterloo
Haverwerf buildings in Mechelen, Les Érables in Brussels and City Gardens in Leuven
2007
Acquisition of Erainn and Voisin buildings in Brussels
• Approval as a Regulated Real
2008
• Acquisition of Liège
portfolio
• Van Overstraeten group becomes a shareholder • Contribution of
In the common interest of its tenants and its shareholders, Home Invest Belgium looks for highquality residential properties capable of generating high returns (as reflected by net rental income) with the potential to create value (reflected by the development of the fair value), particularly through the use of the real estate expertise of its team. Each building is subject to the usual technical, legal, financial and tax due diligence. They also undergo an assessment of both their intrinsic qualities and their location, accessibility, immediate surroundings and energy performance.
The company strives to anticipate demographic changes and trends in society in general and in the residential property market in particular. This is the context in which it closely follows the market segments for student accommodation and young professionals, as well as being present in the second homes market. The tourist accommodation market, which is very similar in type to the 'traditional' residential property market, is also carefully monitored.
Brussels and the other major Belgian cities remain the historic markets of Home Invest Belgium. Since 2016, the company has invested in Zeeland, in the Netherlands. The attractiveness of a location for Home Invest Belgium is determined chiefly by the dynamism of the rental market and the size of the population.
To accelerate the growth and rejuvenation of its portfolio, Home Invest Belgium pays particular attention to seeking acquisition opportunities involving sizeable development projects on its own account, such as office building conversion projects or the transformation of industrial sites into residential property for rent.
Home Invest Belgium applies very demanding quality and sustainability criteria to its projects. It closely follows demographic changes and trends in the residential market, such as the decrease in the size of dwellings, the emergence of shared space, the demand for the provision of services in buildings and environmental concerns. It thus develops new housing concepts which help the evolution of 'life in the city'.
Its development projects have the following advantages:
Home Invest Belgium aims to be the leading player in residential property intended for renting in the broad sense of the term, from traditional apartments to new forms of housing and including student studios and second homes.
The company develops its activities in compliance with the legal framework applicable to Regulated Real Estate Companies (RREC), whose main features can be summarised as follows:
These four pillars help maximise value creation for the shareholder.
Given the positive experience recorded for on-going projects, the Board of Directors has confirmed development activity as the major growth factor for the company in the years to come. The company aims to achieve substantial annual growth (potentially of around 10 %) in its portfolio by incorporating into it the developments it undertakes.
To achieve this goal, given the relatively long lead times for obtaining the required permits, the company plans to acquire about two new development projects per year, while it continues to develop the sites already in progress.
The development of own-account projects is subject to the following limitations:
The investment criteria applicable to both the acquisition of buildings and development projects are linked to the size of the property, its short- and long-term profitability and intrinsic quality (location, technical quality, etc.). Details are given in the chapter entitled 'Real Estate Report'.
Home Invest Belgium manages a very large number of rental units and therefore leases – over 1 850 at the end of December 2017. The company aims to achieve economies of scale and to stand out from the multitude of private investors active on the residential market by offering its tenants a high-quality professional service. The quality of service at the administrative, technical and commercial levels is essential to the success of the company, benefiting both tenants and shareholders.
Continuous efforts are made to standardise and automate management, while keeping operating costs strictly under control, particularly those involving staff.
At the commercial level, Home Invest Belgium is itself responsible for renting the properties in its portfolio, while also using specialised real estate agents to optimise occupancy levels. The company deals with the technical, administrative and accounting management of most of its buildings in the Brussels Region and the two Brabant provinces in house, leaving the management of properties outside these zones to carefully selected external building managers and agents. Being able to control the technical management in general enables the company to provide a better service for tenants, gain a better knowledge of the property portfolio, anticipate renovation requirements and closely follow the rebilling of charges.
Home Invest Belgium is constantly working to develop the value of its existing assets. In this context, the company also undertakes renovation programmes for buildings in its portfolio. Renovation requirements are revealed by the rigorous monitoring of the performance of each building. The renovation programmes are drawn up in close collaboration with the commercial and technical teams.
Every year, the properties in the portfolio undergo a detailed inspection, combined with the examination of the local real estate context. On the basis of this process, a selection of buildings is identified for divestment during the year.
This selective divestment of part of the portfolio significantly contributes, on a regular and stable basis, to the increase in the return on investment via the substantial capital gains generated for shareholders.
Since 2012, the Board of Directors has set a target of achieving a minimum annual sales volume of 4 % of the portfolio of buildings in operation. In this context, the priorities for disposal are:
Our strategic priorities
| Significant events during the year 34 |
|---|
| Evolution of the property portfolio 36 |
| Summary of the consolidated annual accounts 40 |
| Other elements of the management report 48 |
| Social responsibility 49 |
| Corporate governance statement 51 |
Renting urban residential units and providing quality services for our tenants, thereby standing out from other market players
Creating value by professional and efficient day-to-day management and proactive divestment of parts of our property portfolio
Ensuring the growth of our portfolio through account of buildings
The Horizon, Woluwe-Saint-Lambert
Thanks to the renegotiation of different IRS (Interest
Rate Swaps) in 2016 and in 2017 on the one hand, and the funding of the acquisitions of the financial year through new credit lines granted at very interesting conditions on the other hand, the average funding cost (after converting the debts at variable interest rates in debts at fixed interest rates through those IRS) has again considerably decreased to 2.09% (in comparison with 2.53% in 2016 and 3.40% in 2015).
Following the different acquisitions, the debt ratio of the company stands at 51.8%, which leaves the RREC (SIR/GVV) an investment capacity by debt of € 34 million before reaching a debt ratio of 55%, and of € 180 million before reaching the legal threshold of 65%.
The company's debt ratio stands at 51.8 %, leaving the RREC with a debt capacity of around € 34 million to reach the 55 % debt level and € 180 million to reach the legal limit of 65 %.
The average duration of the hedges is 6 years and 11 months on 31 December 2017, compared to 5 years and 7 months on 31 December 2016. This significant extension allows the RECC (SIR/GVV) to benefit from a long period of low financing cost even at times of
On 12 September based on a decision of the Extraordinary General Assembly, the company has increased its capital with € 12 million in the context of a partial split of the company VOP SA. The split has been financed by the issue of 139 049 new shares of Home Invest Belgium SA. The new shares had an issue price of € 86.30.
These new shares, directly attributable to the shareholders of the company ,which is partially split, participate in the financial results of Home Invest Belgium SA pro rata temporis from the date of their issuance i.e. 13 September 2017. Following this capital increase 139 049 shares are issued which brings the total of issued shares to 3 299 858 on 31 December 2017.
amounts to 5 years on 31 December 2017, compared to 5 years and 3 months on 31 December 2016. On 31 December 2017 an amount of €13 million of the credit lines could still be withdrawn.
| Financing | Confirmed credit lines |
Usage |
|---|---|---|
| Bank financing | € 208 million | € 195 million |
| Bond issue | € 40 million | € 40 million |
| Total | € 248 million | € 235 million |
| Active hedges on 31 December 2017 | IRS |
|---|---|
| Total | € 143 million |
In line with the decision taken in 2015, the company distributed, on 6 December 2017, an interim dividend payable in cash. Coupon 23 entitled shareholders to an interim dividend of € 3.75 gross or € 2.6250 net per share (after deduction of the withholding tax of 30% in force at that date).
On 15 September 2017 Mr. Toon Haverals, Chief Development Officer (CDO) of the RREC left the company.
Since last 7 July Home Invest Belgium's offices are located in "la Maison de l'Automobile" at boulevard de la Woluwe 46. The RREC occupies the first floor of the building. The space was entirely renovated in order to correspond to the company's needs, being a spacious and flexible working environment, open spaces with cafeteria and break room, different meeting rooms and multiple "bubbles" for people looking for tranquility and a confidential environment.
The third building in Saint-Gilles (Chaussée de Waterloo 41-43) and comprises 12 units, including nine apartments, two offices and a commercial unit covering a total surface area of 1 029 m2.
As part of the partial de-merger of the company VOP SA, the company has acquired full ownership of a building located in place de l'Amitié in Auderghem (1160 Brussels) covering 3 718 m2 gross, that is 3 391 m2 net and comprising 40 apartments, 41 basements and 40 parking spaces. The location of the building in a small square and within a block, near the Brussels III European school and the Plaine campus and less than 500 m from two metro stations, is excellent.
The apartment finishings meet the current market standards for new apartments and the energy performance certificates applied for are all level A or B.
The building was completed in early 2017 and was offered for rent in March 2017. When this report was finalised, tenants have been found for all apartments.
On 9 November 2017, Home Invest Belgium acquired all the shares in the SA Immobilière S et F, owner of a semi-industrial building previously occupied by the Hayez printing company and located at rue Brunfaut, 13 to 29 and rue Fin, 4 to 12, 1080 Molenbeek, a few hundred metres from the famous MIMA museum and the canal. This transaction, announced in 2015, was completed when the suspensive conditions were lifted (that is the obtaining of permits). The RREC also acquired the house on the corner of rue Fin and rue Brunfaut during 2016 with a view to designing a larger project on the site. The buildings have been totally demolished and will be replaced by a project with a total surface area above ground of over 10 000 m2, or 93 apartments, 66 parking spaces and 443 m2 of surfaces set aside for offices or local amenities meeting the demands of the district. The building is scheduled for completion at the end of 2019.
On 17 January 2017, the company acquired a building covering a surface area of 5 800 m2 and 69 parking spaces, located at 1060 Brussels (Saint-Gilles), rue Jourdan 89/103, in the immediate vicinity of the Louise district.
The current office building is to be converted into a residential property. The company has appointed the firm Studio Farris to carry out the conversion studies and submitted an application for an urban planning permit early in the second half of 2017. At its meeting in December, the Consultative Committee expressed a favourable opinion subject to conditions. The permit is expected to be issued in the first half of 2018.
Once completed, the building, which should comprise around 55 apartments, will form part of the cluster already owned by the company in this district (comprising three buildings, Bosquet-Jourdan, Jourdan 85 and Jourdan-Monnaies). Provisional acceptance of the work is scheduled during 2020.
In Amsterdam on 11 April, the company acquired seven holiday homes and 40 apartments in the Center Parcs Port Zélande complex located in Ouddorp (in the Dutch province of Zélande). In November 2016, it had already acquired 241 holiday homes on the same site.
The RREC's own development projects made significant progress during the year. One of them, The Inside, was completed and went into operation in line with the announced schedule.
The work was completed and the building was handed over on 1 June 2017. The first tenants moved into the building on 1 July. By the completion date of this report, 75 % of the apartments had already been rented. The first commercialisation phase is scheduled to end in the summer of 2018. www.theinside.be
Formerly known as Célidée, The Pulse project aims to give new impetus to the Karreveld district in which it lies. The first phase in the work, comprising 40 apartments, was completed in December 2017 and the first tenants arrived in January 2018. The next two phases will be handed over in March. The site contains 93 apartments and three houses, a garden and a shared courtyard with pétanque areas. A crèche is expected to be opened on the ground floor of the building shortly. 12 of the 40 units have so far been leased. www.thepulse.be.
The structural work continued throughout 2017. The building will include 40 units, shops and a nursery on the ground floor. Completion is scheduled in the last quarter of 2018.
This consolidates its position as the largest owner of holiday homes in the complex. The newly acquired apartments and cottages benefit from a unique location in the complex, at the water's edge and facing the marina. The operating conditions are identical to those obtained for the previous transaction:
On 31 August 2017, the company Home Invest Belgium SA acquired all the shares in the company Investers SA, owner of 27 apartments, four stores and two office surfaces in three buildings in Brussels.
The first building is located in Schaerbeek (rue F.-J. Navez 81-85) and comprises 10 apartments with a total surface area of 626 m2.
The second building is in Uccle, on the corner of the shopping street rue Xavier de Bue and the chaussée d'Alsemberg. Investers SA owns part of this building, that is eight apartments and three stores with a total surface area of 1 029 m2.
turnovers).
Home Invest Belgium is currently focusing its portfolio renovation efforts on its properties in Liège. Two of the four buildings it owns in this city are undergoing in-depth conversion work to bring them into line with market standards. The work in the Léopold and Saint-Hubert buildings are scheduled for completion at the end of 2018.
Meanwhile, the empty apartments in the Scheldevleugel building in Oudenaarde are also undergoing radical renovation in phases. The first phase of the work concerned 29 apartments and was completed in the autumn. The second phase, involving 30 apartments, was handed over at the end of February. The final apartments are to be renovated as and when they are vacated by the current tenants.
Home Invest Belgium's portfolio of investment buildings in operation is considerably 'younger' than the market average, as less than 20 % of the properties have not been renovated in depth during the last 20 years.
The company's internal teams are in charge of the technical, administrative and accounting management of the majority of the buildings in the Brussels Region and the two Brabant provinces, leaving the management of the other properties to carefully selected and guided external building managers and agents.
Backed up by the successful leasing of the two neighbouring buildings, The Horizon and The Inside, the RREC has submitted an urban planning permit application for the plot of land adjacent to the latter. The planning application concerns a building with 47 apartments. At its meeting in December, the Consultative Committee expressed a positive opinion subject to conditions. The permit is expected in the first half of 2018.
In line with its fourth strategic axis of selective divestment of the portfolio, Home Invest Belgium also continued to actively sell certain apartment buildings, unit by unit. Once again last year, this divestment activity made it possible to ensure the liquidity of the company's portfolio and the accuracy of the appraised values.
In addition to the Mélèzes building (Woluwé-Saint-Lambert) and Birch House (Etterbeek), which were already up for sale in 2016, divestment programmes were drawn up for two other buildings. These are Bosquet-Jourdan in Saint-Gilles which contained 27 apartments and Jardins de la Cambre in Ixelles which had 24 apartments. A number of units were also sold in the Cederdreef building in Wetteren.
In 2017, divestment activity involved a total of 41 units or 2.57 % of the fair value of investment properties as at 31 December 2016. The various sales made in 2017 led to the booking of a net capital gain of € 0.7 million compared with the last fair value of properties sold and yielded a result available for distribution of € 4.9 million.
This amount increased the income available for distribution to shareholders for 2017 and confirms the importance of divestment as a strategic axis for Home Invest Belgium.
The average occupancy rate for 2017 as a whole stands at 90.49 %, an improvement compared to the financial year 2016 (90.18 %).
As the company actively manages its portfolio, the portfolio is made up of buildings with very different occupancy rates:
The occupancy rates of the different categories are listed in the table underneath:
| TOTAL 2017 | |
|---|---|
| Buildings currently in operation | 95.33% |
| Contract LT | 100.00% |
| Furnished ST | 73.92% |
| Sales | 84.66% |
| Refurbishment | 42.67% |
| First occupation | 69.93% |
| Total | 90.49% |
As a reminder, lettings for the development projects only start once the works are fully finalised (candidatetenants, opposite to candidate-buyers, do not anticipate their future needs), and the situation of the rental market (sustained demand, but without tension) explains the spread across several months of the first lettings.
For the future, taking into account the constants part of the delivered developments in portfolio, the RREC (SIR/ GVV) expects the occupancy rate to stabilize at its 2017 level.
593 new lease agreements were concluded in 2017, amongst which 177 leases related to first occupations in buildings The Inside, The Horizon and Liberty's. 416 lease agreements were signed in existing buildings (rental
The occupancy rate expresses the percentage of the rents collected from let buildings, augmented by the rental guarantees on vacant spaces, compared to the sum of the rents of the let buildings and the estimated rental value (ERV) on vacant spaces.
This report is based on the consolidated financial statements. The detailed statutory accounts, as well as the statutory management report, are available from the company free of charge on request. The statutory accounts are included in the 'Financial Statements' chapter of this annual financial report.
| ASSETS | 2017 | 2016 |
|---|---|---|
| I. Non-current assets | 459 002 506 | 409 872 451 |
| B. Intangible assets | 416 024 | 278 118 |
| C. Investment properties | 457 636 191 | 408 833 729 |
| D. Other tangible assets | 391 371 | 102 316 |
| E. Non-current financial assets | 112 033 | 75 649 |
| F. Finance lease receivables | 446 887 | 582 639 |
| II. Current assets | 11 058 584 | 9 429 070 |
| A. Assets held for resale | 0 | 1 457 192 |
| C. Finance lease receivables | 135 752 | 135 243 |
| D. Trade receivables | 3 326 818 | 3 169 636 |
| E. Tax receivables and other current assets | 376 707 | 842 449 |
| F. Cash and cash equivalents | 7 183 786 | 3 437 814 |
| G. Deferred charges and accrued income | 35 521 | 386 735 |
| TOTAL ASSETS | 470 061 090 | 419 301 520 |
| ASSETS | 2017 | 2016 |
|---|---|---|
| I. Non-current assets | 459 002 506 | 409 872 451 |
| B. Intangible assets | 416 024 | 278 118 |
| C. Investment properties | 457 636 191 | 408 833 729 |
| D. Other tangible assets | 391 371 | 102 316 |
| E. Non-current financial assets | 112 033 | 75 649 |
| F. Finance lease receivables | 446 887 | 582 639 |
| II. Current assets | 11 058 584 | 9 429 070 |
| A. Assets held for resale | 0 | 1 457 192 |
| C. Finance lease receivables | 135 752 | 135 243 |
| D. Trade receivables | 3 326 818 | 3 169 636 |
| E. Tax receivables and other current assets | 376 707 | 842 449 |
| F. Cash and cash equivalents | 7 183 786 | 3 437 814 |
| G. Deferred charges and accrued income | 35 521 | 386 735 |
| TOTAL ASSETS | 470 061 090 | 419 301 520 |
| PARENT COMPANY SHAREHOLDERS' EQUITY | ||
| A. Capital | 87 999 055 | 75 999 055 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | 102 796 510 | 98 202 791 |
| D. Net result of the financial year | 1 256 723 | 6 097 288 |
| SHAREHOLDERS' EQUITY | 216 955 487 | 205 202 333 |
| LIABILITIES | ||
| I. Non-current liabilities | 232 805 745 | 201 485 901 |
| B. Non-current financial debts | 224 745 100 | 192 205 885 |
| a. Credit institutions | 185 000 000 | 152 500 000 |
| c. Others | 39 745 100 | 39 705 885 |
| C. Other non-current financial liabilities | 8 060 644 | 9 280 017 |
| II. Current liabilities | 20 299 859 | 12 613 287 |
| B. Current financial debts | 10 673 829 | 712 226 |
| a. Credit institutions | 10 000 000 | 0 |
| c. Others | 673 829 | 712 226 |
| D. Trade debts and other current debts | 8 106 746 | 10 385 458 |
| b. Others | 8 106 746 | 10 385 458 |
| E. Other current liabilities | 62 656 | 90 680 |
| F. Accrued charges and deferred income | 1 456 627 | 1 424 923 |
| LIABILITIES | 253 105 603 | 214 099 188 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 470 061 090 | 419 301 520 |
| Number of shares at end of period 1 | 3 288 146 | 3 147 897 |
| Net asset value | 216 955 487 | 205 202 333 |
| Net asset value per share | 65.98 | 65.19 |
| Adjusted net asset value per share 2 | 68.43 | 68.14 |
| Indebtedness | 243 588 331 | 203 394 248 |
| Debt ratio | 51.82% | 48.51% |
| PARENT COMPANY SHAREHOLDERS' EQUITY | ||
|---|---|---|
| A. Capital | 87 999 055 | 75 999 055 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | 102 796 510 | 98 202 791 |
| D. Net result of the financial year | 1 256 723 | 6 097 288 |
| SHAREHOLDERS' EQUITY | 216 955 487 | 205 202 333 |
| I. Non-current liabilities | 232 805 745 | 201 485 901 |
| B. Non-current financial debts | 224 745 100 | 192 205 885 |
| a. Credit institutions | 185 000 000 | 152 500 000 |
| c. Others | 39 745 100 | 39 705 885 |
| C. Other non-current financial liabilities | 8 060 644 | 9 280 017 |
| II. Current liabilities | 20 299 859 | 12 613 287 |
| B. Current financial debts | 10 673 829 | 712 226 |
| a. Credit institutions | 10 000 000 | 0 |
| c. Others | 673 829 | 712 226 |
| D. Trade debts and other current debts | 8 106 746 | 10 385 458 |
| b. Others | 8 106 746 | 10 385 458 |
| E. Other current liabilities | 62 656 | 90 680 |
| F. Accrued charges and deferred income | 1 456 627 | 1 424 923 |
| LIABILITIES | 253 105 603 | 214 099 188 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 470 061 090 | 419 301 520 |
| Number of shares at end of period 1 | 3 288 146 | 3 147 897 |
| Net asset value | 216 955 487 | 205 202 333 |
| Net asset value per share | 65.98 | 65.19 |
| Adjusted net asset value per share 2 | 68.43 | 68.14 |
| Indebtedness | 243 588 331 | 203 394 248 |
| Debt ratio | 51.82% | 48.51% |
The number of shares at the end of the period is calculated excluding the 11 712 own shares held by the company. 2 Corresponds to the value of the net assets adjusted to exclude the fair value of the financial hedging instruments.
Intangible assets related to the Winiris management software that is depreciated over five years and to the new Axxerion integrated software to be implemented during 2018. Winiris is an accounting software program specialising in the management of real estate data. This is to be replaced by Axxerion which includes extensive functionalities in terms of reporting, technical problem management, tenants' portal, etc.
During the year, the fair value of the investment properties increased from € 408.8 million at 31 December 2016 to € 457.6 million at 31 December 2017, including development projects; an increase of 11.9 %, mainly due to:
On 31 December 2017, investment properties in operation totalled € 423.1 million, while current development projects amounted to € 34.5 million (compared with € 381.3 million and € 27.5 million respectively on 31 December 2016).
Other tangible fixed assets include fixed assets for own use.
Financial lease receivables, totalling € 0.6 million, represent the value of receivables arising from the property leases of the buildings in rue de Belgrade and Résidence Lemaire, the long-term element being included in non-current assets and the shortterm portion (less than one year) in current assets. Receivables decrease as the finance lease contracts progress.
Commercial receivables remained stable at € 3.3 million compared with € 3.2 million the previous year, corresponding for the most part to amounts receivable under the asset sale agreements signed at the end of 2017 (€ 2.7 million), with the remainder accounted for by rental claims on the investment properties.
Tax receivables and other current assets amounted to € 0.4 million. Cash and cash equivalents stood at € 7.2 million, compared with € 3.4 million a year before.
The debt ratio increased from 48.51 % in 2016 to 51.82 % in 2017. This rise is due on the one hand to the financing of new investment properties (from € 408.8 million in 2016 to
On 31 December 2017, the share capital of Home Invest Belgium, amounting to € 89 949 294.75 million, was represented by 3 299 858 shares, of which 11 712 shares are held by the company itself and excluded for the calculations per share.
Reserves increased by 4.7 % to € 102.8 million, compared with € 98.2 million one year earlier, further to the appropriation of the 2016 result. The result carried over from previous years should also be noted and now amounts to € 25.4 million or € 7.72 per share.
Finally, the net result for the financial year amounted to € 1.3 million. This corresponds to the net result for the year before appropriation, i.e. € 13.2 million less the interim dividend paid in December 2017.
Non-current financial debts amounted to € 224.7 million compared with € 192.2 million a year previously. This increase is the result of the financing of new acquisitions and development projects. Current financial debts amount to € 10.7 million, including a loan of € 10 million that matures in 2018. It should be noted that this item also includes the rental guarantees received.
Commercial debts and other current liabilities amounted to € 8.1 million, compared with € 10.4 million a year previously. They cover supplier liabilities of € 4.8 million, advance rent collection of € 1.5 million and finally, tax and social security liabilities of € 1.7 million.
Other current liabilities amounted to € 0.1 million and include, inter alia, dividends from previous years that have not yet been claimed by shareholders.
Deferrals and accruals were stable at € 1.5 million and include € 1.1 million in interest accrued but not due on the bond offering of June 2014 and € 0.4 million in property income paid in advance.
Finally, the net asset value per share amounted to € 65.98 compared with € 65.19 as on 31 December 2016, an increase of 1.2 %.
The net asset value per share (i.e. excluding the latent impact of hedging transactions) stood at € 68.43 compared with € 68.14 a year previously.
€ 457.6 million in 2017) and on the other to the financing of the interim dividend paid in December 2016, notwithstanding the income generated by rents net of charges and portfolio divestments.
4.5 4.0 3.5 3.0 2.5 2.0 4.10 4.05 3.38 3.11 3.61
| 2017 | 2016 | |
|---|---|---|
| I. Rental income | 22 683 114 | 18 979 691 |
| III. Rental-related charges | -183 272 | -178 922 |
| NET RENTAL RESULT | 22 499 843 | 18 800 769 |
| IV. Recovery of property charges | 136 764 | 86 482 |
| V. Recovery of charges and taxes normally payable by the tenant on leased properties | 598 574 | 660 864 |
| VII. Charges and taxes normally payable by the tenant on leased properties | -2 769 775 | -2 705 975 |
| VIII. Other income and expenditures related to leasing | -30 000 | 0 |
| PROPERTY RESULT | 20 435 406 | 16 842 140 |
| IX. Technical costs | -1 086 011 | -843 970 |
| X. Commercial costs | -342 219 | -406 804 |
| XI. Charges and taxes on unleased properties | -289 436 | -392 488 |
| XII. Property management costs | -3 766 408 | -2 780 000 |
| XIII. Other property costs | 19 853 | -81 388 |
| PROPERTY COSTS | -5 464 220 | -4 504 650 |
| PROPERTY OPERATION COSTS | 14 971 186 | 12 337 491 |
| XIV. General corporate expenses | -1 066 763 | -845 488 |
| XV. Other operating income and expenses | -112 236 | -29 448 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 13 792 187 | 11 462 554 |
| XVI. Result sale investment properties | 719 633 | 279 654 |
| XVIII. Changes in fair value of investment properties | 1 450 369 | 11 295 322 |
| OPERATING RESULT | 15 962 188 | 23 037 530 |
| XX. Financial income | 90 494 | 78 701 |
| XXI. Net interest charges | -3 548 571 | -3 048 453 |
| XXII. Other financial charges | -65 034 | -65 705 |
| XXIII. Changes in fair value of financial assets and liabilities | 1 226 658 | -2 025 345 |
| FINANCIAL RESULT | -2 296 453 | -5 060 803 |
| PRE-TAX RESULT | 13 665 735 | 17 976 727 |
| XXIV. Corporation tax | -361 199 | -71 034 |
| XXV. Exit tax | -81 555 | 0 |
| TAXES | -442 754 | -71 034 |
| NET RESULT | 13 222 981 | 17 905 693 |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 13 222 981 | 17 905 693 |
| NET RESULT PER SHARE | 4.14 | 5.69 |
| Average number of shares 1 | 3 190 318 | 3 147 897 |
|---|---|---|
| NET RESULT OF CORE ACTIVITIES | 9 826 322 | 8 356 062 |
| NET RESULT OF CORE ACTIVITIES PER SHARE | 3.08 | 2.65 |
| RESULT AVAILABLE FOR DISTRIBUTION | 14 829 888 | 13 856 552 |
| RESULT AVAILABLE FOR DISTRIBUTION PER SHARE | 4.65 | 4.40 |
1
Rental income amounted to € 22.7 million, compared with € 19 million in 2016 (+19.5 %). The increase is due to new acquisitions and the full exploitation of development projects delivered in 2016.
Charges relating to rentals are almost identical to 2016 at € 0.2 million and include, in particular, write-downs on trade receivables.
Net rental income thus totalled € 22.5 million, compared with € 18.8 million one year previously, up 19.7 %.
The rental charges and taxes normally borne by tenants consist mainly of the property withholding taxes paid by the RREC and amounted to € 2.8 million.
Some of these withholding taxes (€ 0.6 million) were, however, recovered from certain tenants, in accordance with the applicable legislation (shops, offices, retirement homes).
Recoveries of property charges correspond to the rental damage invoiced during the rental exists and are at the same level as in 2016.
Consequently, the property result amounted to € 20.4 million, compared with € 16.8 million one year previously, up 21.3 %.
Technical costs cover the maintenance costs to be borne by the owner and the renovation costs. They totalled € 1.1 million, an increase compared with 2016, a year in which proportionally little technical costs were recorded.
Commercial expenses fell by 15.9 % and stood at € 0.3 million. They include commissions paid to real estate agents for the conclusion of new leases, the shared cost of inventories of fixtures and fittings and the legal fees incurred in the context of strict rental portfolio management.
Charges and taxes on un-let buildings amounted to € 0.3 million and represent the costs that the RREC (SIR/GVV) has to bear in the event of rental vacancy; this vacancy may be linked to the time required to find a tenant for a property that has become vacant, but is also due to the time lag until the first commercialisation of new buildings after the completion of work and to buildings emptied for major renovation work.
Property management costs represent personnel and operating expenses, management fees, directors' fees and the fees paid for the outsourced management of various residences. These costs amounted to € 3.8 million. This cost item increased compared with 2016 further to the growth in the portfolio.
In total, property costs were up by 21.3 %, reaching € 5.5 million compared with € 4.5 million in 2016. Their increase in absolute terms is consequently lower than the rise of rental income.
The property operating result amounted to € 15.0 million, up 21.3 % compared with the figure of € 12.3 million recorded in 2016.
The general corporate expenses of the RREC (SIR/ GVV) include all expenses that are not directly related to the operation of the buildings and the management of the company. They mainly comprise the costs relating to the stock exchange listing and special legal status of the RREC (SIR/GVV) (Euronext Brussels, supervisory authority, subscription to the Federal Public Service for Finances, etc.), the fees of the statutory auditor, consultants and the appointed real estate expert of the RREC (SIR/GVV). These costs were up compared with 2016 and amounted to € 1.1 million, and this, a/o following extraordinary costs for publication, and fees paid for studies relating to newly acquired dossiers.
This led to an operating result before the portfolio result of € 13.8 million, compared with the result recorded at the end of 2016 of € 11.5 million, up a very healthy 20.3 %
The result on the portfolio is again positive and amounts to € 2.2 million. It consists, on the one hand, of the capital gains realized compared to the latest fair value of €0,7 million and, on the other hand, of the positive change in fair value of the investment properties. The investment value defined by our experts progresses again, for an amount of some € 7.3 million; amount we adjust by deducting the mutation rights in order to obtain the fair value.
The financial income of € 0.1 million comprises creditor interest and finance lease payments. Interest charges rose by 16.4 % further to the growth in indebtedness from € 203.3 million at the end of 2016 to € 243.6 million end 2017.
Changes in the fair value of financial assets and liabilities represent a purely latent profit arising from the development of the fair value of hedging instruments which are ineffective according to the IFRS standards. The unrealised capital loss stood at € 1.2 million.
In total, the (negative) financial result was € 2.3 million.
Taxes increased due to The Netherlands which were integrated into the portfolio and for which Home Invest Belgium needs to pay a non-residents tax. Moreover, due to the merger of the subsidiary Home Invest Development, an exit tax of € 81 555 has been paid.
After the deduction of financial charges and taxes, Home Invest Belgium's net result amounted to € 13.2 million in 2017.
The net result from core activities reflects the operating profitability of the company, excluding purely latent factors and capital gains, and amounted to € 9.8 million, having stood at € 8.4 million in 2016.
The result available for distribution rose by 7 % to € 14.8 million, compared with € 13.9 million a year previously.
The share of the net result from core activities in the result available for distribution rose to 66.3 %, an increase compared to the level recorded in 2016 (60.3 %).
The result available for distribution amounted to € 14.9 million. This refers to a weighted average number of shares entitled to full dividend, equal to 3 202 714 shares.
No allocation to the legal reserve was made.
No events occurred during the year that would justify the creation of provisions within the meaning of the IFRS reference system.
Consequently, as regards the statutory accounts, the Board of Directors is putting a proposal to the Ordinary General Meeting of Home Invest Belgium to appropriate the net result of the financial year, amounting to € 12 239 070.73, as follows:
• ratification of the distribution of the interim dividend of 6 December 2017 of € 3.75 gross per share for a total amount of € 11 966 258.17;
The dividends which were distributed in 2017 and therefore the interim payment made in December 2017 were subject to withholding tax at a rate of 30 %.
The tax treatment of the dividend is explained in more detail in the chapter entitled 'Permanent Document'.
If the proposed dividend is approved by the General Meeting, it will be payable as of 3 May 2018 by automatic transfer to registered shareholders and over the counter at the custodian bank for the holders of dematerialised shares.
"Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control."
– Article 25 of the Universal Declaration of Human Rights.
The right to housing is enshrined in the Universal Declaration of Human Rights as one of the elements of the right to an adequate standard of living. Home Invest Belgium intends to make a modest contribution to ensuring this right by putting on the rental market quality, affordable homes while naturally safeguarding the interests of its shareholders. The RREC recognises its responsibilities in the environmental and human contexts in which it fulfils its mission.
The responsible activity of Home Invest Belgium may be seen in particular in the management of its portfolio in operation, its investment decisions and the choices made in the context of its development projects.
Owning a large property portfolio comprising buildings with varying lifespans, the company adopts a pragmatic policy aimed at combining a rational and ongoing renovation programme with its financial imperatives. For instance, it may sometime be more sensible to sell an ageing building, rather than incur substantial costs to remedy energy performances deemed to be inadequate.
This policy of sound investments and active divestment of the portfolio is based on a detailed periodic evaluation of the portfolio.
When decisions are taken 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 team is used to design buildings for which each choice of material or technology is part of a long-term, sustainable vision. 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, the provision of shared bicycles, etc. are essential elements for a sustainable city. Home Invest Belgium pays great attention to all these aspects and tries every day to implement them in all its projects and investment choices.
In the field of respect for the environment, the RREC (SIR/GVV) aims to demonstrate the same sense of responsibility in the use of its own offices. Like any business and/or employer, it recognises the need to manage the various aspects of its own functioning such as its energy consumption (heating, lighting, travelling), waste processing (selective sorting, paper use, various consumables) and water consumption (maintenance, cleaning) as well as possible, working closely with its staff. Adopting these best practices – although limited in their impact – is likely to raise awareness among everyone working at Home Invest Belgium of the values that it intends to apply in its own activities.
The risk factors are described earlier in this annual financial report.
The financial management of Home Invest Belgium aims to provide permanent access to credit and to monitor and minimise the interest rate risk.
The use of financial instruments is discussed in the 'Financial Risks' section of the Risk Factors chapter in this report. The following elements are included: debt ratio, liquidity risk, currency risk, risk related to changes in interest rates, risk of change in the fair value of financial instruments as at 31 December 2017, risk linked to liquidity of the share and the risk linked to the distribution of the dividend.
Home Invest Belgium did not carry out any research and development activities during 2017.
the Board of Directors has no indication of the existence of circumstances likely to have a significant influence on the development of the RREC within the meaning of Article 119, 3° of the Companies Code.
M. Eric Spiessens, independent director and chairman of the Audit Committee, has the independence and competence required by Article 119, point 6° of the Companies Code in the field of accounting and auditing. He has a specific academic background in the financial field (see 'Corporate Governance Statement').
In the course of 2017, the company has alienated for the account of the company 1 200 own shares valued at € 114 000. The historical value of these shares amounted to € 70 380. At the end of the financial year, Home Invest Belgium SA held 11 712 own shares.
At the beginning of 2018, the company continued to search for opportunities for acquisitions, to develop and manage its portfolio and to implement its divestment policy.
Several new investment dossiers are at an advanced stage of examination. The Board believes that some of these may be expected to take shape by the end of the year.
The Board of Directors confirms its confidence in the continued growth of the company's results.
The company's income is generated partly by renting out its buildings and partly by the regular selective divestment of part of its portfolio.
The rental market is supported by population growth in the major Belgian cities and is benefiting from increased inflation compared to previous years (development of the health index by 2.13 in 2017, compared with 2.09 % in 2016 and 1.05 in 2015), leading to the indexation of rents.
The acquisition market is supported by interest rates which remain at historically low levels despite the slight increase in the market in early 2017 and which favour the borrowing capacity of households.
For the current financial year, the Board estimates that the result available for distribution for 2018 should be at least equal to that of the previous financial year unless there is a sudden and substantial deterioration of the residential real estate market for sale and/or rental (something which the Board did not anticipate at the time of this report) or other unforeseen events.
In accordance with its dividend distribution policy, the Board of Directors will announce the level of the interim dividend to be paid in cash in December 2018 after the results of the third quarter (25/10/2018). The balance of the dividend will be decided in May 2019 by the Ordinary General Meeting of the company, upon the proposal of the Board of Directors.
in the human context considered broadly, Home Invest Belgium intends to apply a number of ethical values that it considers essential in all areas of its operation, namely the values of honesty, integrity and fairness. Respect for these values is, in the company's view, essential to enable it to properly fulfil its mission for the benefit of all its stakeholders.
These values are recognised and followed both at the level of the Board of Directors and the management and by all members of staff and therefore in all the actions undertaken by the company RECC.
The company basically recognises two groups of individuals with whom it has close relations and towards whom it has responsibilities: its tenants and its staff.
Due to the relatively large number of tenants it deals with, representing more than 1 850 households, Home Invest Belgium is ideally placed to pass on a number of values that it upholds. The company intends to treat tenants well and fairly within the limits of the contractual relationship between landlord and tenant, of course.
In its buildings and projects, Home Invest Belgium tries 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 well-motivated involvement of its staff; they are without doubt its most valuable asset and the only one to enable the company to excel in the market on which it operates.
The Corporate Governance Statement (including the remuneration report and the description of the main characteristics of the control and risk management systems) is included in the section entitled 'Corporate Governance Statement' on pages 94 to 117 of this annual financial report.
It is therefore keen to implement all available tools to foster the personal development of its employees. As the team is relatively small, the focus is on short communication lines as well as on interactive and dynamic work; each team member also undergoes an annual in-depth assessment by the management or the Appointment and Remuneration Committee, based on previously defined tasks and objectives set for the following year.
On 31 December 2017, the Management (four people) led a team of 39 people. The teams are divided up as follows:
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 so as to make the most of this diversity while ensuring a high level of competence.
SPLIT WOMEN/MEN
The Link has been designed to be a place of relationships: meet others, share ideas, discuss, enjoy student life. The 123 studios are allocated over six floors and are the result of an office building completely reconverted and renovated. The studios don't fit into the standard student flat mould. Let it be just that which is their added value.
| The property portfolio 58 | |
|---|---|
| The market 74 | |
| Reports from the real estate experts 81 |
The investment portfolio worth € 457.6 million1 comprises buildings that are at different stages of the property life cycle:
1 In this paragraph, all the values are expressed in fair value (i.e. without transfer taxes) for existing buildings and in cost for projects, always on 31 December 2017.
The RREC invests in residential buildings, whether new, already existing and in operation or old sites once used for other purposes which are to be converted into residential units.
The investment criteria applicable to both property acquisitions and development projects are as follows:
the location, in principle limited to Belgium; priority is given to cities with over 30 000 inhabitants with a healthy economic outlook, favourable demographic trends and the potential for appreciable growth in property values;
intrinsic technical and commercial quality (no risk of structural vacuum);
The RREC has also recently extended its investment scope to include tourist accommodation sites run by specialised operators. In addition to the attraction of their immediate return, these sites also offer fine prospects of capital gains if resold unit by unit.
The investment criteria applicable to this type of site are mainly:
The fair value of the portfolio has grown steadily over the company's 18-year history. In 2017, this growth was around 12 %, driven by acquisitions and investments in own-account development projects. In addition to this growth, the chart below shows the expected portfolio growth based on projects currently underway, all other elements being considered constant (no new investments, no sales or portfolio changes). The € 500 million threshold is therefore expected to be crossed before the company's 20th anniversary in 2019.
The gross return on the portfolio excluding development projects, that is gross rent reduced to the investment value, stabilised at 5.66%. The fall in this return over the course of the company's history is understood to be linked to the fall in interest rates over the same period. It also reflects the improvement in the overall quality of the portfolio.
The Home Invest Belgium strategy is based on four pillars (acquisitions, development, operation and sales). This implies that the buildings in the portfolio are at different stages in the property cycle.
This is the only building located outside Belgium (in Ouddorp, in the province of Zeeland, The Netherlands). It is the RREC's largest property complex: 11.61 %. Acquired in two phases, in late 2016 and early 2017, the Home Invest Belgium property comprises 248 houses and 40 apartments which are part of a complex of around 700 holiday homes, organised around central facilities including an aquafun pool, restaurants, boutiques, playgrounds, etc.). The site as a whole is run by the Center Parcs Pierre & Vacances group. As such, the latter is the sole tenant of the RREC on the basis of a fixed 15-year lease, indexed and net of all property costs (triple net). The site was renovated in depth during 2017. The last apartments and cottages will be renovated during 2018. The effects of the renovation on the average price obtained and the occupancy levels can already be felt, enabling the operator to be ahead of schedule on their business plan.
These buildings constitute the company's biggest housing complex in Belgium and in Wallonia and represent 8.7 % of the investment properties in operation. 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 for housing, shops, offices and lecture halls. This complex has the distinction of standing on land owned by the university (UCL) and the RREC has surface rights until 2026.
Home Invest Belgium is commercialising this site under the brand Louv'immo. During 2017, the site had occupancy levels of 99,9% and the RREC carries out regular minor renovations to ensure that this excellent performance continues.
With almost 130 apartments, this is the largest exclusively residential site in Belgium. The complex, which was completed and acquired by the RREC in 2011, consists of four buildings located along boulevard Lambermont in Schaerbeek, next to the Kinetix sports centre.
It comprises a total of 127 apartments, two municipal libraries (French and Dutch speaking), a nursery and 108 underground parking places. This mix of functions is the result of exemplary collaboration with the local authorities.
The largest building in Flanders, located in Leuven, has 109 one-bedroom apartments, 29 two-bedroom apartments, two shops and 92 underground parking spaces. It was renovated by the company when it was acquired in 2010 and 2011. It welcomes both students and young professionals who appreciate its location in the heart of the city. Since autumn 2017, it has lived up to its name as the garden has been fully redeveloped.
Completed and acquired in 2005, this complex located at 2-10 avenue du Frioul in Evere comprises 85 apartments and 85 underground parking places. It is particularly appreciated thanks to its proximity to NATO and means of transportation.
The Scheldevleugel building lies in the centre of Oudenaarde, a stone's throw from the Schelde. The building has been part of the RREC's portfolio since 2016. It underwent an initial transformation this year with the renovation of 29 apartments. The renovation work is to continue in 2018. The building comprises a total of 95 units, mostly studios (80) and 15 one- and two-bedroom apartments. There are also 75 parking spaces. www.scheldevleugel.be
This complex of 38 apartments with parking spaces and cellars is located in avenue Livingstone, Brussels, in the heart of the European district and close to the Berlaymont building. It offers easy access, both by public transport and by car.
In principle, these buildings share many similarities: the location, their former use as offices, the fact that they were redeveloped by the RREC (SIR/GVV), etc.
And yet a closer look reveals several differences: their external appearance, of course, but in particular the concept of the housing provided: compact and offering shared spaces on the one hand, more spacious on the other. The diversity of customers in Woluwe have something to suit all tastes.
Another point in common? Their success among tenants! Delivered in 2016, all 160 apartments in The Horizon have been occupied for some months now. The Inside has 95 apartments, 72 of which have already found tenants.
The construction work on the commercial ground floor and the 40 apartments on the upper floors continued throughout 2017. The structural work was completed, leaving the way clear for the technical and finishing teams. The first tenants will be able to move in at the end of autumn 2018.
Architect: A2D
This is the smallest of the RREC's (SIR/ GVV) buildings. It has six apartments extending over 278 m2 and lies in the heart of the European district in Brussels. It enjoys great success among tenants.
Two years after the application for a permit was submitted, this was issued in the summer of 2017. By the end of the year, the demolition work on the old Hayez printing plant was well advanced. By the end of 2019, 93 apartments and services intended for local residents will replaced the disused buildings.
Architect: DDS
The latest acquisition in the portfolio is The Pulse at Molenbeek, on the corner of the rue de la Célidée 19-25 and the rue Joseph Schols 110. It is another illustration of the reconversion of offices (old Toshiba offices) in residences. The residence, which lies in the Karreveld district, comprises three different buildings with a total of 93 units as well as three houses and a commercial space. Commercialisation started in December 2017. The housing units include studios and one-, two- and three-bedroom apartments. www.the-pulse.be
At the same time, with the agreement of the Commune of Molenbeek, the urban planning charges of the Brunfaut project are to be devoted to the renovation of the square currently known as 'Place Blanche' (white square) by local people. The aim is to contribute towards breathing new life into the district, making this 'Place Blanche' a 'Place d'Or' (golden square) which will be a real meeting place for local people. The project will be led by PT Architecten BVBA, whose offices overlook the square.
On this site, Home Invest Belgium is undertaking a project to develop a new building with about 47 housing units. The subdivision permit was granted in 2017 and the company has applied for an urban planning permit. This is expected to be issued and become definitive during the first half of 2018.
Architect: Art&Build
The studies relating to this project resulted in the submission of an application for a permit during the third quarter of 2017.
The permit for the demolition of the site and the reconstruction of around fifty apartments is expected to be issued shortly, so that work can start during the summer of 2018.
Architect: Studio Farris
| n° | Denomination | Year 2 | Units | Area | Gross rent 3 |
ERV 4 | Effective rents 5 |
Occupancy level 6 |
|---|---|---|---|---|---|---|---|---|
| Nbr | sq.m. | € | € | € | % | |||
| 1. | The Link | 2015 | 124 | 4 353 | 736 909 | 785 139 | 629 107 | 92.5% |
| 2. | Belliard 21 | 2013 | 6 | 278 | 50 596 | 48 925 | 50 596 | 92.5% |
| 3. | Clos de la Pépinière | 1993 | 25 | 3 279 | 458 893 | 447 985 | 386 583 | 91.8% |
| 4. | Joseph II | 1994 | 17 | 1 447 | 343 501 | 205 409 | 343 501 | 75.6% |
| 5. | Lebeau | 1998 | 12 | 1 153 | 250 678 | 197 157 | 239 307 | 97.6% |
| 6. | Livingstone | 2015 | 38 | 4 701 | 742 161 | 737 603 | 690 136 | 96.3% |
| 7. | Résidences du Quartier Européen | 1997 | 50 | 4 316 | 857 530 | 554 987 | 857 530 | 73.2% |
| 8. | Trône | 2015 | 16 | 1 913 | 368 759 | 349 273 | 359 259 | 96.7% |
| 9. | Birch House | 2001 | 0 | 0 | 2 400 | 2 400 | 0 | 83.1% |
| 10. Erainn | 2001 | 12 | 1 252 | 219 609 | 216 462 | 199 604 | 96.6% | |
| 11. | Archview | 2015 | 16 | 1 961 | 376 700 | 371 925 | 374 700 | 99.6% |
| 12. | Giotto | 2005 | 85 | 8 327 | 1 170 348 | 1 082 667 | 1 139 298 | 92.7% |
| 13. | Belgrade | 1999 | 1 | 1 368 | 90 243 | 90 405 | 90 243 | 100.0% |
| 14. Les Jardins de la Cambre | 1992 | 21 | 2 655 | 350 741 | 342 640 | 321 030 | 89.7% | |
| 15. | Charles Woeste | 2015 | 92 | 5 091 | 621 618 | 605 525 | 601 668 | 96.1% |
| 16. Odon Warland | 2012 | 35 | 3 141 | 388 013 | 385 574 | 374 413 | 92.7% | |
| 17. | Baeck | 2001 | 28 | 2 652 | 248 608 | 244 350 | 240 148 | 98.3% |
| 18. Lemaire7 | 1990 | 1 | 754 | 86 717 | 76 230 | 86 717 | 100.0% | |
| 19. La Toque d'Argent | 1990 | 1 | 1 660 | 211 955 | 166 373 | 211 955 | 100.0% | |
| 20. Sippelberg | 2003 | 33 | 3 290 | 402 953 | 392 030 | 390 203 | 97.4% | |
| 21. | Bosquet - Jourdan | 1997 | 11 | 945 | 116 653 | 116 970 | 97 333 | 81.7% |
| 22. Jourdan - Monnaies | 2002 | 26 | 2 814 | 360 135 | 353 375 | 319 690 | 95.8% | |
| 23. Jourdan 85 | 2010 | 24 | 2 430 | 386 738 | 377 819 | 352 730 | 90.4% | |
| 24. Lambermont | 2008 | 131 | 14 107 | 1 740 697 | 1 719 479 | 1 695 439 | 96.1% | |
| 25. Melkriek | 1998 | 1 | 2 034 | 319 086 | 216 878 | 319 086 | 100.0% | |
| 26. Les Érables | 2001 | 24 | 2 201 | 311 568 | 277 458 | 302 368 | 95.7% | |
| 27. Les Mélèzes | 1995 | 3 | 336 | 51 090 | 48 971 | 46 090 | 86.3% | |
| 28. The Horizon | 2016 | 165 | 10 439 | 1 701 326 | 1 532 272 | 1 524 495 | 79.8% | |
| 29. The Inside | 2017 | 96 | 7 872 | 1 074 511 | 1 102 882 | 626 004 | 38.6% | |
| 30. Mélopée | 1961 | 1 | 220 | 41 415 | 36 900 | 41 415 | 100.0% | |
| 31. | De Wand | 1952 | 1 | 208 | 29 366 | 27 600 | 29 366 | 100.0% |
| 32. Liberty's | 2017 | 40 | 3 391 | 543 358 | 544 742 | 472 260 | 85.8% | |
| 33. Navez | 1904 | 10 | 764 | 66 051 | 63 000 | 66 051 | 100.0% | |
| 34. Xavier de Bue | 1950 | 11 | 1 194 | 149 835 | 147 752 | 123 835 | 93.2% | |
| 35. Waterloo | 1950 | 11 | 1 009 | 133 941 | 129 945 | 130 491 | 93.6% | |
| 36. Voisin | 1996 | 9 | 923 | 146 593 | 145 919 | 144 593 | 95.4% | |
| TOTAL | 1 177 | 104 478 | 15 151 295 14 145 021 13 877 244 | 85.6% |
| n° | Denomination | Estimated delivery |
Units | Area | Investment at 31/12/2017 |
Estimated total investment |
|---|---|---|---|---|---|---|
| Nbr | m2 | € | € | |||
| 56. | Brunfaut | 2019 | 93 | 10 681 | 3 789 322 | 21 679 000 |
| 57. | The Pulse | 2018 | 98 | 8 031 | 17 119 320 | 18 500 000 |
| TOTAL | 143 | 12 498 | 23 906 255 | 30 500 000 |
Housing Retirement homes Shops Offices
1 Excluding buildings intended for sale. The Célidée building is the only property held by a subsidiary (HBLC SA). The residual rights in rem in the property The Link, are held by Charlent Freehold sprl, while the long-lease rights are held by Home Invest Belgium. 2 Year of construction or most recent in-depth renovation.
3 Annual gross rent at 31 December 2016, including the estimated rental value for unoccupied areas.
4 Rental value estimated by an independent expert (if necessary unfurnished). 5 Gross rent at 31 December 2016, annualised. 6 Average rate for 2016.
7 The Lemaire building is a real estate leasing with a purchase option, the monthly payment on which consists of part capital and part interest. The real estate expert only values the net present value of the purchase option, which explains the absence of a gross rent, ERV and actual rent.
Housing Retirement homes Shops Offices
Buildings in operation
| n° | Denomination | Year 2 | Units | Area | Gross rent 3 |
ERV 4 | Effective rents 5 |
Occupancy level 6 |
|---|---|---|---|---|---|---|---|---|
| Nbr | sq.m. | € | € | € | % | |||
| 37. City Gardens | 2010 | 140 | 8 409 | 1 117 298 | 1 112 063 | 1 077 548 | 95.1% | |
| 38. Haverwerf | 2002 | 4 | 3 396 | 475 493 | 440 850 | 409 793 | 83.4% | |
| 39. Gent Zuid | 2000 | 18 | 2 346 | 209 125 | 215 324 | 191 350 | 98.2% | |
| 40. Wetteren | 1989 | 1 | 229 | 86 942 | 21 182 | 19 374 | 70.4% | |
| 41. Scheldevleugel | 1980 | 96 | 5 746 | 563 077 | 613 000 | 319 602 | 62.0% | |
| TOTAL | 259 | 20 126 | 2 451 935 2 402 419 2 017 667 | 85.4% |
| n° | Denomination | Estimated delivery |
Units | sq.m. | Investment at 31/12/2016 |
Estimated total investment |
|---|---|---|---|---|---|---|
| Nbr | € | € | ||||
| 57. | Reine Astrid | 2019 | 45 | 4 467 | 6 786 935 | 12 000 000 |
| TOTAL | 45 | 4 467 | 6 786 935 | 12 000 000 |
Buildings in operation
| n° | Denomination | Year 2 | Units | Area | Gross rent 3 |
ERV 4 | Effective rents 5 |
Occupancy level 6 |
|---|---|---|---|---|---|---|---|---|
| Nbr | m2 | € | € | € | % | |||
| 42. Clos Saint-Géry | 2015 | 20 | 4 140 | 342 020 | 310 500 | 310 970 | 100.0% | |
| 43. Quai de Compiègne | 1971 | 1 | 2 479 | 261 661 | 161 135 | 261 661 | 100.0% | |
| 44. Galerie de l'Ange (appartements) | 1995 | 56 | 2 346 | 312 090 | 303 929 | 274 092 | 91.3% | |
| 45. Galerie de l'Ange (commerces) | 2002 | 12 | 2 552 | 672 414 | 654 584 | 661 310 | 97.5% | |
| 46. Léopold | 1988 | 53 | 3 080 | 316 536 | 311 200 | 23 336 | 16.0% | |
| 47. Mont-Saint-Martin | 1988 | 6 | 335 | 31 065 | 30 925 | 31 065 | 93.0% | |
| 48. Saint-Hubert 4 | 1988 | 14 | 910 | 72 850 | 72 850 | 0 | 3.9% | |
| 49. Saint-Hubert 51 | 1988 | 4 | 360 | 26 157 | 31 440 | 26 157 | 100.0% | |
| 50. Florida | 1998 | 5 | 1 460 | 106 681 | 109 500 | 63 181 | 83.8% | |
| 51. | Louvain-la-Neuve CV9 | 1977 | 16 | 7 091 | 779 789 | 753 025 | 779 789 | 100.0% |
| 52. Louvain-la-Neuve CV10&18 | 1977 | 176 | 16 827 | 2 439 493 2 350 517 | 2 396 686 | 100.0% | ||
| 53. Colombus | 2007 | 51 | 3 740 | 433 953 | 425 960 | 407 218 | 93.5% | |
| TOTAL | 414 | 45 320 | 5 794 709 5 515 565 5 235 465 | 93.1% |
Buildings in operation
| € | % |
|---|---|
| 2 746 767 | 100.0% |
| 2 746 767 2 746 767 2 746 767 | 100.0% |
Year of construction or most recent in-depth renovation. 2 Annual gross rent at 31 December 2016, including the estimated rental value for unoccupied areas.
3 Rental value estimated by an independent expert (if necessary unfurnished).
4 Gross rent at 31 December 2016, annualised. 5 Average rate for 2016.
A good geographic distribution allows the RREC to limit the risks associated with a specific market.
The company aims to maintain and even increase the geographic diversity of its portfolio.
While focusing its strategy on residential properties, the RREC again intends to be present in various market segments with a view to limiting the risks.
Given the relatively low-tech nature of residential properties, they may be considered perfectly adapted to the market for at least 20 years. From this point of view, over three-quarters of the buildings in the portfolio can be considered recent. This proportion is rising sharply thanks to the various renovation programmes undertaken over the years.
In 2013 the breakdown by age of buidings was: 25.4% for buildings of 5 years or less, 12.3% for buildings of 6 to 10 years, 39.4% for buildings of 11 to 20 years and 22,9% for buildings of more than 20 years.
The portfolio includes 6 tenants whose annualised rent on 31 December 2017 exceeds € 300 000. By far the biggest is Center Parcs Netherlands NV, whose annual rent is over € 2.7 million), followed by the Catholic University of Louvain with just over € 570 000.
The regulations applicable to the RREC sector (SIR/ GVV) oblige these companies to diversify their risks. Home Invest Belgium may therefore not invest more than 20 % of its assets in a single building complex.
As the largest site accounts for only 11.61 % of the total portfolio of properties available for rental, diversification is fully assured. The nine main sites, each representing over 3 %, account for 56.18 % of the
total portfolio. 1 Calculations based on the fair value of the properties in operation.
The average occupancy rate (1) for the year as a whole has slightly increased compared with 2016 at 90.49%, compared to 90.18% a year earlier. This number can be explained by the progressive renting out of the RREC can be explained by the progressive renting out of the new developments that the RREC is putting on the market. Rental does not start until the work is fully completed (prospective tenants, unlike purchasing clients, do not anticipate their future needs) and the situation of the rental market (characterised by sustained demand but no pressure) explains why the first rentals are spread over several months.
The occupancy rate of residential properties currently in operation remains at the very high level of 96 %, demonstrating the robustness of the rental market and the suitability of the properties owned by the RREC in this market.
| Occupancy rate | |
|---|---|
| 2017 | 90.49% |
| 2016 | 90.18% |
| 2015 | 93.89% |
| 2014 | 94.01% |
| 2013 | 94.96% |
| 2012 | 94.16% |
| 2011 | 95.38% |
Not including buildings up for sale and development projects.
2 The insured value is known only for wholly owned properties; jointly owned properties are insured by the building managers. Accessorily, the difference between the acquisition price and the insured value can be explained on the one hand by the value of the land which is not insured and on the other by the temporal difference between the historical acquisition and the current insured value.
3 Gross rent in progress + ERV on unoccupied property / Investment value.
| Situation of the investment properties on 31 December 20171 |
Fair value | Acquisition value | Insured value2 | Gross yield3 |
|---|---|---|---|---|
| Brussels Capital Region | 267 496 665 | 189 358 109 | 188 401 983 | 5.06% |
| Flemish Region | 39 375 322 | 33 858 785 | 21 115 541 | 5.73% |
| Walloon Region | 67 130 060 | 65 907 327 | 59 711 169 | 8.14% |
| Netherlands | 49 103 922 | 48 851 269 | 0 | 5.48% |
| Total | 423 105 968 | 337 945 489 | 269 228 693 | 5.64% |
At the end of the financial year, the remaining period of the lease agreements was 6 years and 11 months. This information is based on the theoretical end date of the lease agreements signed. However, it should be noted that in the residential sector, the applicable law allows tenants to terminate their lease at any time or to extend their lease at maturity. This average remaining period is therefore purely theoretical.
The most recent demographic forecasts drawn up by the Federal Planning Bureau date from March 2017. These projections confirm the previous forecasts of growth in the Belgian population in the long term. These forecasts are based on assumptions that take account of the impact of the refugee crisis seen in the past few months. In the long term, this demographic outlook is in line with a scenario of unchanged social organisation but nevertheless includes a scenario of a stricter migration policy at European Union level.
At the end of 2017, the Belgian population stood at around 11 330 000 inhabitants, including 1 201 000 inhabitants in Brussels. This represents growth of around 0.57 % compared with 2016. By 2020, the population of Belgium is expected to reach 11 503 000 people, by 2030 almost 12 million inhabitants. This represents average annual growth of around 0.44 %, although there is a downward trend over the years (it is expected to be around 0.36 % by the end of this period). Belgium remains among the most dynamic European countries in terms of population growth.
Growth is greatest in Brussels, compared with the other two regions of the country:
This demographic growth brings with it changes in ways of life which impact on the number of additional households expected every year. Nationally, for instance, the total number of private households is expected to rise from 4 896 000 in 2017 to 5 277 000 in 2030, an increase of around 7.8 % over the period. The differences between Brussels and the two other regions of the country are relatively marked:
In absolute values, the Federal Planning Bureau estimates at 382 000 the number of additional households between 2017 and 2030, i.e. average annual growth of around 27 000 households, implying the creation of 27 000 housing units per year on average to meet this demand.
More specifically in Brussels, the number of households is expected to increase by 32 000 by 2030, or an average rise of around 2 300 units every year, below the figure of 4 000 housing units per year previously put forward. So the demographic pressure appears to be declining a little in Brussels, although the pressure on prices and rents in Brussels is expected to be maintained in the years to come, in a context where the land reserves in Brussels fall year by year.
Another interesting element worth highlighting: given the downward trend in the average size of households, the average size of housing units has also fallen in recent years. The average surface area of a new housing unit in 2005 was 104 m2. Today it is 92 m2 for Belgium
(taking all types of housing together).
In Brussels, the average size of a housing unit is currently around 76 m2. Units with two bedrooms or fewer account for around 84 % of the total number. They clearly meet demand focusing mainly on expats and childless households.
The improvement in the economic climate and interest rates remaining at record low levels (still around 2 % for all types of new contracts) contributed towards supporting real estate activity throughout 2017, albeit at a slower pace than that seen in 2016.
The amount of new mortgage loans granted stood at approximately € 40 billion (compared with € 59 billion the previous year).
The differences in the tax system which are tending to be put in place in the three regions of the country could have an impact on the liquidity of the different regional residential markets. For instance, the Flemish government's decision to revise registration duties (a decision that has yet to be approved) could strengthen the liquidity of the residential market in Flanders. Conversely, the cost of registration duties in Wallonia and Brussels could penalise liquidity in these regions and hence also impact on acquisition prices in the years to come.
Methodological note: our source of information for determining real estate acquisition prices is the Federal Public Service for the Economy through its statistics platform www.statbel.fgov.be. The real estate prices statistics are based on all real estate transactions on which registration duties had to be paid. The data come from the General Administration of Asset Documentation of the Federal Public Service for Finance.
It is important to specify that the figures from 2015 onwards are considered to be provisional and the robustness of these figures may be questioned. Sometimes significant differences may in fact be observed between the figures from the notaries' barometer and the figures published on the website of the Federal Public Service for the Economy.
On a national level, according to the latest statistics from the National Institute of Statistics (which only cover the first three trimesters of the year 2017), prices are rising slightly in the various market segments, a trend which can be observed nationwide.
In Belgium as a whole, the price of a single-family house rose by around 4.89 % compared with 2016 and almost 23 % compared with 2010. In 2017, the average house price was € 223 000. It should be noted, however, that the table below reveals an inconsistency in that the price growth nationally is higher than the growth
observed in each of the three regions of the country. It should also be noted that compared with these figures, the 2017 notaries' barometer shows prices that are € 17 000 to € 33 000 higher depending on the region concerned. Moreover, according to the notaries' barometer, house prices fell by 2.5 % in Brussels in 2017.
| Trend in average house prices per region, in euros | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2017 | Growth 2017-2018 |
Growth 2017-2010 |
|||||||
| Flanders | 235 000 | 2.85% | 22% | ||||||
| Wallonia | 162 000 | 2.80% | 16% | ||||||
| Brussels | 412 000 | - 0.14% | 22% | ||||||
| Belgium | 223 000 | 4.89% | 23% |
According to the Federal Public Service for the Economy, the average price of an apartment also rose in 2017 at a stronger rate than houses.
Nationally, growth was 2.67 % compared with 2016, ranging from 0.9 % in Flanders to 3.7 % in Brussels. Compared with 2010, prices have risen by 19 % in Belgium. The average price of an apartment reached about € 227 000 in 2017, ranging from € 179 000 in Wallonia to € 244 000 in Brussels.
| Trend in average apartment prices per region, in euros | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2017 | Growth 2017-2016 |
Growth 2017-2010 |
|||||||
| Flanders | 230 000 | 0.86% | 18% | ||||||
| Wallonia | 179 000 | 3.17% | 21% | ||||||
| Brussels | 244 000 | 3.71% | 21% | ||||||
| Belgium | 227 000 | 2.67% | 19% |
It should be noted here that the average prices given in the notaries' barometer are lower than those presented by the Federal Public Service for the Economy, with the difference lying between – € 7 000 in Wallonia and – € 10 000 in Brussels and Flanders.
Depending on the sources of information consulted, the observations should therefore be qualified. However, it appears that after a period of sustained price growth between the year 2000 and 2008, the trend has been more moderate since 2012.
All the other real estate indexes (TREVI, Eurostat House Price Index) confirm these trends in terms of both the level of activity observed and the price rises.
Albeit at a slower rate than in the past
The owner – tenant ratio for Belgium as a whole is around 72 % - 28 %, globally in line with the European average (70 % - 30 %).
In Brussels, however, the ratio is totally different because, according to the rental observatory published by the Brussels-Capital Region, the rate of ownership is 38 %. Consequently, around 62 % of the population of Brussels are tenants. This may be attributed in particular to the higher acquisition costs and the greater presence of expats, logically prompting people to be more in favour of renting.
According to the figures from the rental observatory 2016, average rents (i.e. including new and 'secondhand' buildings, both single-family houses and apartments) fell in 2016, after having risen steadily between 2004 and 2015. The average rent thus stood at € 710/month in 2016, compared with € 723/month in 2015. The figure in 2004 was € 601/month.
The average rental of course depends on the intrinsic characteristics of the housing, its surface area, quality, location, the number of bedrooms and/or bathrooms, its environmental performances, etc. So for example the average rent ranges from € 519 in a studio dating from pre-1945 to € 1 623 for a house built or renovated after 2001, with the vast majority of rents lying with a range of between € 500 and € 800/month.
The rental observatory highlights the gradual decoupling observed between rents and the health index in Brussels. It appears that rents have tended to rise more than the health index during the period under review, especially during the years 2008 to 2013. One interesting element worth noting is the fact that the increase in rents has only been due to indexation since 2013.
Although it seems slight at first glance, the study also highlights the gradual decoupling between average rents and average disposable income of households.
On the basis of an index equal to 100 in 2004, the gap between the average rent and the average income is currently more than 30 points. According to the figures from the observatory, half of tenants have income of less than € 2 000/month and the average disposable income is € 1 842/month. So while Brussels is more of a rental market given the high level of acquisition prices, a gradual decoupling may also be observed in the balance between housing on offer for rent and the income of the people of Brussels. It appears in fact that 70 % of the poorest members of the Brussels population have access to just 21 % of the residential property available for rent (considering that a household devotes 25 % of its income to its housing).
Finally, it is important to bear in mind the substantial disparities that exist between the different communes in Brussels. For instance, the lowest average rents are recorded in the commune of Saint-Josse-Ten-Noode, at around € 560/month, whereas they easily rise to over € 900/month on average in the south-east of Brussels, in communes such as Uccle, Watermael-Boitsfort, Woluwe-Saint-Pierre or Woluwe-Saint-Lambert.
By way of illustration, the graph below shows the breakdown of the rents charged by Home Invest Belgium.
The new residential buildings market always arouses more interest among property developers and purchasers, both nationwide and in Brussels. In the capital in particular, characterised by ageing structures, increasingly demanding energy performance standards and the strong demographic growth (need to create around 2 800 housing units per year), a certain lack of interest may be observed in so-called 'secondary' housing units, which often use a great deal of energy and are more costly to renovate, along with a growing desire to develop new projects.
It appears, however, that the price differences between secondary properties and new buildings often constitute an obstacle for a population made up primarily of middle-income households.
So the wish of developers to build increasingly small housing units in Brussels (while remaining relatively big compared with Paris, for instance) is understandable.
With an average price of at least around € 2 700 to € 3 000/m2, the imbalance between the housing on offer and the income of the population is increasing.
In the most sought-after, best located districts, average prices easily reach € 3 500/m2 for acquisition. Finally, the most exclusive projects are now selling at prices well above € 4 000/m2.
The conversion of office buildings is continuing, albeit at a slower pace.
The conversion of obsolete office buildings to create residential projects reached a peak three years ago, with almost 130 000 m2 converted in one year. The conversion trend is currently continuing at a less sustained pace. Approximately 80 000 m2 of obsolete offices are converted annually, mainly for residential purposes.
These office building conversion projects are located mainly in the mixed districts of the city centre. In the Louise district, for example, a number of projects have been started along avenue Louise or near the Porte de Namur. In the decentralised north-east (primarily in Schaerbeek, Evere, Woluwé-Saint-Lambert), conversion is also continuing, mainly in the area around rue Colonel Bourg and avenue Marcel Thiry or along the boulevard de la Woluwe.
SOURCE : Cushman & Wakefield
Gent - Zuid
Regional Housing Observatory, 'Rental Observatory, 2015 survey, April 2016.
In Belgium the ratio between owners and tenants stands at 72 vs. 28% in line with the european overage (70% - 30%)
Developers build continuously smaller properties in Brussels
This is the general rule for leases concluded by Home Invest Belgium.
Further to the sixth reform of the State, competence regarding matters relating to residential leases has been transferred to the Regions. The national regulations continue to apply until a Region decides to make changes or introduce new rules. The Brussels-Capital Region is the first to have adopted its own regulations, which came into force on 1 January 2018.
For the remainder of Belgium, the Civil Code remains provisionally applicable to residential leases. Tenants of residential property for whom the property is their principal residence are protected by the Civil Code (specific rules for leases relating to the principal residence of the tenant).
The amount of the rent is negotiated and set freely between the tenant and the landlord. In principle, rents are indexed annually (if the lease agreement provides for indexation, which is generally the case for the leases concluded by Home Invest Belgium).
Common charges are borne by the tenant (if this is provided for in the lease agreement).
The property tax relating to the rented property is borne by the landlord. The law states that it may not be charged to the tenant.
Each lease agreement is covered by a rental guarantee. This may take several forms:
• either an individual account opened with a financial institution in the name of the tenant (for a maximum of two months' rent);
• or a bank guarantee or any other type of guarantee (for a maximum of three months' rent).
Any lease agreement relating to a principal residence is deemed to be concluded for a period of nine years. The tenant has the right to terminate the lease at any time subject to three months' notice. However, if the tenant terminates the lease during the first three years, 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 is terminated during the first, second or third year.
The landlord has the right to terminate the lease when it expires, subject to three months' notice.
The landlord can also use other, specific reasons for termination (for renovation work or if he wants to occupy the rented premises himself or have them occupied by a member of his family).
Short-term leases cover a maximum of three years. The tenant and the landlord have the right to terminate the agreement when it expires, subject to three months' notice. If notice is not given within this period, the lease is deemed to have a duration of nine years.
The Order is divided into two parts: a general part containing the common rules applicable to all residential leases (rules on pre-contractual information, maintenance and renovation, rent, costs, etc.) and the provisions specific to each type of lease.
The Order requires the landlord to provide a minimum of information for the tenant before the lease is concluded, including an estimate of the charges relating to the private and/or the communal areas to be borne by the tenant. The landlord risks heavy penalties if this duty to provide information is not fulfilled.
Either of the parties may ask the judge at any time to review the costs and fixed charges or convert them into real costs and charges, even if the agreement provides for fixed charges.
The amount of the rent is negotiated and set freely between the tenant and the landlord. Finally, as of 1 January 2018, a new indicative rents schedule has been available in the Brussels region. This schedule is not binding, but it enables the parties to better assess the rent, bearing in mind the location, the condition, the size and the number of rooms in the property.
The ban on charging the property tax to the tenant remains applicable.
The Government has drawn up a non-exhaustive list of the repair and maintenance work that must be borne by the tenant or that must be borne by the landlord.
The annual indexation of the rent is also carried out in accordance with common law.
In addition, the Order contains rules specific to leases relating to the main residence of the tenant. This refers to housing that the tenant uses as his main residence, with the express or tacit consent of the landlord.
This lease is deemed to have been concluded for a period of nine years. It terminates after the expiry of this period by means of notice given by one of the parties at least six months before the expiry date. Otherwise, the lease will be extended for a period of three years. The landlord may, however, terminate the lease at any time, giving six months' advance notice, if he intends to occupy the premises himself or have them occupied by a member of his family. At the end of the first and second three-year periods, the landlord may also terminate the lease by giving six months' notice if he intends to rebuild, convert or renovate all or part of the building. At the end of the first and second threeyear periods, the landlord may terminate the lease by giving six months' notice, without giving a reason, but subject to payment of compensation of nine or six months depending on whether the agreement ends at the expiry of the first or the second three-year period. The tenant can terminate the lease at any time subject to three months' notice. However, if the tenant
terminates the lease during the first three years, 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 is terminated during the first, second or third year.
It will still be possible to conclude short-term leases, that is leases covering a period of less than or equal to three years. It is now possible for these leases to be extended on one or more occasions, in writing, under the same conditions, without the total lease period exceeding three years. The Order also introduces the possibility for each of the parties to terminate this short-term lease. This termination may take place at any time for the tenant and after the first year of the lease for the landlord. This can only be done by giving prior notice of three months and paying compensation of one month's rent.
Unless extended, leases of less than six months end at the expiry of the agreed period.
Leases concluded for a period equal to or longer than six months terminate by means of notice given by one of the parties at least three months before the expiry of the agreed period. They may be terminated at any time by the tenant, by giving three months' notice and paying compensation of one months' notice. Unless notice is given within the periods stated or if the tenant continues to occupy the leased premises without any objection from the landlord, the lease is deemed to have been concluded for a period of nine years as of the date when the initial short-term lease came into force.
The rental guarantee amounts to two or three months' rent, depending on whether it is a guarantee in an individual account or a bank guarantee.
The Brussels Capital Region is the first region to have adopted its own regulations, on residendial leases which came into force on 1 January 2018.
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 31st December 2017.
We carried out our valuations based on the capitalisation 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 HOME INVEST BELGIUM 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'slength 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 30/06/2017, the "average" transaction cost for properties over € 2 500 000 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 30/06/2017) 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% or 12.5% have been subtracted, depending on the region of Belgium where they are situated.
Based on our analysis of the portfolio, we have identified the following elements:
Based on the previous comments, we hereby confirm that the estimated Investment Value of the real estate portfolio of HOME INVEST BELGIUM, as of 31st December 2017, amounts to € 413 170 000 (four hundred thirteen million ona hundred seventy thousand euros).
The Fair Value of the real estate portfolio of HOME INVEST BELGIUM as of 31st December 2017, corresponding to the fair investment value under IAS/ IFRS, is estimated at € 374 002 000 (three hundred seventfour million two thousand euros).
Yours sincerely,
Brussels, 22nd January 2018 WINSSINGER & ASSOCIES SA
Christophe ACKERMANS1 MRICS Director Valuation & Advisory
In the Flemish Region, the new rental decree (Huurdecreet) will in principle come into force on 1 September 2018. As in Brussels, this decree will replace the law on residential leases.
A nine-year agreement remains the rule.
During the first three-year period, the landlord will still be able to terminate the lease it he wishes to occupy the premises himself, but no longer for members of his family. The old rule will only become applicable again after the end of the first three-year period.
After the end of the first three-year period, the landlord will be able to terminate the lease at any time to carry out renovation and/or conversion work.
A short-term agreement may be terminated at any time by the tenant, subject to three months' prior notice.
The rental guarantee will be increased from two to three months' rent for guarantees placed in an individual account. Tenants who do not have sufficient financial means will be able to take out an anonymous loan with the Flemish government.
The government is to draw up a non-exhaustive list of the repairs and costs borne by the landlord or the tenant.
The lease permit has existed in the Walloon Region since 2004. This applies to collective housing units and small individual housing units leased to domiciled individuals or non-domiciled individuals who live there for most of the year. Collective housing units are buildings comprising one or more rooms that the various tenant households can use collectively (living areas, kitchens, bathrooms, toilets, etc.), such as student accommodation. Small housing units have a habitable surface area of less than 28 m2. These housing units must be fit for habitation, must have a minimum surface area and must guarantee the inviolability of the home as well as respect for privacy. In addition, they must comply with any municipal regulations on fitness for habitation and fire safety, the urban planning provisions and the rules on the energy performance of buildings. The lease permit which will then be granted by the College of Mayors and Aldermen at the request of the owner will be valid for a period of five years.
In terms of lease agreements in the Walloon Region, a new decree is being prepared. From now on, all residential leases must be concluded in writing. Standard leases and inventories of fixtures and fitting will be drawn up. All residential leases will have to be registered. Clear penalties will be put in place, such as the ban on indexing rents. Tenants will also have to take out insurance to cover their liability in the event of fire.
As in the Flemish region, the government may also draw up a non-exhaustive list of the repairs incumbent on the tenant and those that must be carried out by the landlord.
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 two methods:
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 31 December 2017, amounted to € 50 086 000 (fifty million eighty-six thousand euros). The estimated value corresponding to the Fair Value according to IAS / IFRS standards was € 49 104 000 (forty-nine million one hundred and four thousand euros).
Issy-les-Moulineaux, March 19, 2018.
BNP Paribas Real Estate Valuation France Blandine TROTOT Senior Consultant – Valuation & Consulting – Hotels
| 6. | Livingstone | Bruxelles | Av. Livingstone |
|---|---|---|---|
| 7. | Résidences du Quartier Européen | Bruxelles | Rue Joseph II 82-84 - Rue Lebon 6-10 - Rue Stevin 21 |
| 8. | Trône | Bruxelles | Rue du Trône |
| 9. | Birch House | Etterbeek | Cours Saint-Michel 96 |
| 10. | Erainn | Etterbeek | Rue des Ménapiens 29 |
| 11. | Archview | Etterbeek | Avenue de l'Yser 13 |
| 12. | Giotto | Evere | Av. du Frioul 2-10 |
| 13. | Belgrade | Forest | Rue de Belgrade 78-84 |
| 14. | Les Jardins de la Cambre | Ixelles | Av. de l'Hippodrome 96 - Rue des Echevins 75 |
| 15. | Charles Woeste | Jette | Av. Charles Woeste 296-306 |
| 16. | Odon Warland | Jette | Rue Odon Warland 205 - Rue Bulins 2-4 |
| 17. | Baeck | Molenbeek-St-Jean | Rue Joseph Baeck 22-46 |
| 18. | Lemaire | Molenbeek-St-Jean | Rue Joseph Lemaire 13-15 |
| 19. | La Toque d'Argent | Molenbeek-St-Jean | Rue Van Kalck 30-32 |
| 20. | Sippelberg | Molenbeek-St-Jean | Av. du Sippelberg 3-5 |
| 21. | Bosquet - Jourdan | Saint-Gilles | Rue Bosquet 72 - Rue Jourdan 71 |
| 22. | Jourdan - Monnaies | Saint-Gilles | Rue Jourdan 121-125 |
| 23. | Jourdan 85 | Saint-Gilles | Rue Jourdan 85 |
| 24. | Lambermont | Schaerbeek | Bd du Lambermont 210-222 - Rue Desenfans 13-15 |
| 25. | Melkriek | Uccle | Rue du Melkriek 100 |
| 26. | Les Érables | Woluwe-St-Lambert | Av. de Calabre 30-32 |
| 27. | Les Mélèzes | Woluwe-St-Lambert | Av. de Calabre 34-38 |
| 28. | The Horizon | Woluwe-St-Lambert | Av. Ariane 4 |
| 29. | The Inside | Woluwé St Lambert | Avenue Marcel Thiry 202-206 |
| 30. | Mélopée | Molenbeek St Jean | Rue de la Mélopée 36 |
| 31. | De Wand | Laeken | Rue de Wand 54 |
| 32. | Liberty's | Auderghem | Place de l'Amitié 7-8 |
| 33. | Navez | Schaerbeek | Rue François-Joseph Navez 81-83 |
| 34. | Xavier de Bue | Uccle | Rue Xavier de Bue 30A-34 |
| 35. | Waterloo | Saint-Gilles | Chaussée de Waterloo 41-43 |
| 36. | Voisin | Woluwe-St-Pierre | Rue Montagne au Chaudron 13 |
| 37. | City Gardens | Leuven | Petermannenstraat 2A-2B - Ridderstraat 112-120 |
| 38. | Haverwerf | Mechelen | Haverwerf 1-10 |
| 39. | Gent Zuid | Gent | Woodrow Wilsonplein 4 |
| 40. | Wetteren | Wetteren | Cederdreef 9 |
| 41. | Scheldevleugel | Oudenaarde | Remparden 12 |
| 42. | Clos Saint-Géry | Ghlin | Rue de Tournai 4 |
| 43. | Quai de Compiègne | Huy | Quai de Compiègne 55 |
| 44. | Galerie de l'Ange (appartements) | Namur | Rue de la Monnaie 4-14 |
| 45. | Galerie de l'Ange (commerces) | Namur | Rue de la Monnaie 4-14 |
| 46. | Léopold | Liège | Rue Leopold 2-8 |
| 47. | Mont-Saint-Martin | Liège | Mont Saint-Martin 1 |
| 48. | Saint-Hubert 4 | Liège | Rue Saint-Hubert 4 |
| 49. | Saint-Hubert 51 | Liège | Rue Saint-Hubert 51 |
| 50. | Florida | Waterloo | Av. Florida 75-79 |
| 51. | Louvain-la-Neuve CV9 | Louvain-La-Neuve | Angle des Rues des Wallons et Grand Rue |
| 52. | Louvain-la-Neuve CV10&18 | Louvain-La-Neuve | Rues Charlemagne, Grand Rue, Rabelais, Grand Place, Agora |
| 53. | Colombus | Jambes | Rue de l'Orjo 52-56 |
| 54. | Port Zélande | Ouddorp (Pays-Bas) | Center Parc Port Zélande |
| 55. | Brunfaut | Molenbeek-St-Jean | Rue Fin 4-12 |
| 56. | The Pulse | Molenbeek-St-Jean | Rue de la Célidée 29-33 |
| 57. | Reine Astrid | Kraainem | Bld Reine Astrid 278 |
| n° | Name | City | Address |
|---|---|---|---|
| 1. | The Link | Auderghem | Rue Maurice Charlent 51-53 |
| 2. | Belliard 21 | Brussels | Rue Belliard 21 |
| 3. | Clos de la Pépinière | Brussels | Rue de la Pépinière 6-14 - Avenue Thérésienne 5-9 |
| 4. | Joseph II | Brussels | Rue Joseph II |
| 5. | Lebeau | Brussels | Rue Lebeau 55-57 |
Investors in Home Invest Belgium shares benefit from the professionalism of the management, the transparency of the RREC thanks to its corporate governance and favourable legal and tax provisions.
| The share on the stock market 86 | |
|---|---|
| Dividend and return 90 | |
| Shareholding structure 92 |
Gross dividend per share in 2017
Increase of result for distribution in 2017
+7%
Given the favourable system applicable to Regulated Real Estate Companies, Home Invest Belgium is an attractive security for both individual and institutional investors.
For more details about the RREC system, please refer to the chapter entitled 'Permanent Document'.
Compared to a direct investment in residential property, buying shares in Home Invest Belgium has several advantages:
The company aims to offer its shareholders a return at least equal to that generated by direct investment in residential property.
Home Invest Belgium shares have been listed on Euronext Brussels (HOMI) since 16 June 1999. During the 2017 financial year, the net asset value per share rose by 1.2 % compared with level at the start of the year, increasing from € 65.19 to € 65.98 on 31 December 2017, despite the increase in the number of shares.
Home Invest Belgium shares therefore fell slightly in 2017, dropping by 6.35 % between 2 January 2017 (opening price € 94.74) and 30 December 2017 (closing price € 88.72, without taking account of the balance of the dividend distributed in May 2017 and the interim dividend paid in December 2017 (in total € 4.25.
Home Invest Belgium shares remained above € 95.00 until September 2017 before stabilising at around € 94.00 in October and November and then seeing a drop in price following the detachment of the coupon corresponding to the interim dividend (€ 3.75).
The total average closing price for the 2017 financial year was € 94.93.
Based on the last closing price for 2017 (€ 88.72), the proposed dividend of € 4.50 represents a gross return of 5.07 (compared with a return of 4.49 % in 2016).
The liquidity of the shares is slight increasing, with a daily average of 779 shares traded per trading session during the 2017 financial year as a whole (compared
with a daily average of 747 shares during 2016 and 1 058 during 2015).
The 'velocity' - the ratio between the number of shares traded and the free float - is slightly increasing to 12.09 % compared with 12.04 % in 2016.
Stock market activity
Despite the poor performance in 2017, the graph below illustrates the excellent stock market performance of the Home Invest Belgium share compared with that of the BEL 20 indices since January 2008 (+81,1%).
During the 2017 financial year, the net asset value per share increased by 1.2 % % compared to its level at the start of the year, rising from € 65.19 to € 65.98 on 31 December 2017, despite the increase in the number of shares resulting from the capital increase in September.
It should be noted that the net asset value per share is now 191.5 % higher than its level of € 34.46 at the time of the IPO in June 1999. This reflects the quality of the property investments negotiated by Home Invest Belgium and the good management of its assets, both in terms of maintenance or renovation and in sales. Home Invest Belgium shares benefited from a premium compared with the published net asset value per share throughout 2017.
The performance of the Home Invest Belgium share during the 2017 financial year (-33%) should be compared with the evolution of the BEL 20 index.
On 29 December 2017, the closing price was € 88.72 recording a premium of 35.5 % compared with the net asset value per share at year end.
The premium calculated in relation to the net asset value per share excluding changes in the fair value of financial instruments (€ 68.43) stands at 29.7 %.
This premium once again shows the confidence that shareholders have in the significant performances resulting from investment in Home Invest Belgium. It also reflects the added value created for a series of buildings by a professional management team.
1 Additional information about the EPRA Belgium and BEL 20 indices can be obtained from Euronext Brussels services for the BEL 20 index and by referring to www.epra.com for the EPRA Belgium index.
1 Gross dividend for the financial year divided by the last share price of the financial year. 2 As from 1 January 2017, the withholding tax amounts to 30%. 3 Number of shares traded / free float
| Share price data | 2017 | 2016 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|
| Share price (in €) | |||||
| Highest | € 97.75 | € 103.00 | € 95.50 | € 87.00 | € 82.35 |
| Lowest | € 87.88 | € 91.81 | € 81.95 | € 73.50 | € 69.27 |
| On the last day of the financial year | € 88.72 | € 94.74 | € 92.59 | € 85.10 | € 76.00 |
| Average price | € 94.93 | € 98.40 | € 89.58 | € 80.91 | € 76.03 |
| Gross dividend return1 | 5.07% | 4.49% | 4.32% | 4.41% | 4.61% |
| Dividend (in €) | |||||
| Gross | € 4.50 | € 4.25 | € 4.00 | € 3.75 | € 3.50 |
| Net2 | € 3.1500 | € 3.0875 | € 3.3700 | € 3.1875 | € 2.9750 |
| Volume | |||||
| Average daily volume | 779 | 747 | 1058 | 996 | 703 |
| Annual volume | 198 650 | 191 851 | 270 860 | 254 159 | 179 166 |
| Total number of shares on 31 December | 3 299 858 | 3 160 809 | 3 160 809 | 3 160 809 | 3 056 143 |
| Market capitalization on 31 December | € 293 million |
€ 311 million |
€ 293 million |
€ 269 million |
€ 232 million |
| Free float | 50.19% | 52.54% | 49.21% | 48.96% | 50.24% |
| Velocity3 | 12.09% | 11.55% | 17.41% | 16.42% | 11.67% |
| Pay out ratio (statutory) | 96.54% | 96.75% | 95.81% | 88.93% | 93.03% |
COMPARISON OF THE EVOLUTION OF THE SHARE PRICE COMPARED WITH VARIOUS MARKET INDICES
| Return (in €)1 | Net value per share excluding dividend |
Increase in value |
Gross Dividend |
Return per share2 |
Return as % for shareholder3 |
|
|---|---|---|---|---|---|---|
| 2017 | € 65.23 | € 1.88 | € 4.50 | € 6.38 | 10.07% | |
| 2016 | € 64.69 | € 2.30 | € 4.25 | € 6.55 | 10.50% | |
| 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% | |
| Consolidated | 2012 | € 55.48 | € 0.90 | € 3.25 | € 4.15 | 7.60% |
| accounts | 2011 | € 54.58 | € 2.65 | € 3.00 | € 5.65 | 10.88% |
| in IFRS | 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 | € 4.17 | € 2.19 | € 6.36 | 14.47% | |
| 2005 | € 46.91 | € 4.24 | € 3.47 | € 7.71 | 11.41%4 | |
| 2004 | € 42.67 | € 4.13 | € 2.16 | € 6.29 | 16.32% | |
| Statutory | 2003 | € 38.54 | € 1.15 | € 2.13 | € 3.28 | 8.77% |
| accounts in | 2002 | € 37.39 | € 0.44 | € 2.07 | € 2.51 | 6.79% |
| Belgian GAAP | 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 |
Home Invest Belgium endeavours to offer its shareholders a growing dividend at least equal to if not higher than inflation over a long period. Between 2000 and 2017, the gross dividend rose from € 1.96 to € 4.50 per share, an increase of 230 % in 18 and a half years, or an average annual increase of 12.4 %.
Since 2015, the Board of Directors has adopted a dividend policy of paying an interim dividend in December and a final dividend in May.
Based on the quarterly results as at 30 September 2017 and the general medium- and long-term outlook for the evolution of the portfolio and the residential rental market, on 23 October 2017 the Board of Directors decided to distribute an interim dividend payable in cash of € 3.75 gross or € 2.7375 net per share (after deduction of the withholding tax of 30 %).
Investers, Saint-Gilles
At the Annual General Meeting of shareholders, which will be held on Wednesday, 2 May 2018 and will approve the financial statements for the 2017 financial year, the distribution of the remaining dividend of € 0.75 gross per share will be presented for approval. This will result in a total dividend for the 2017 financial year of € 4.50 gross per share will be validated.
This distribution demonstrates once again a remarkable growth of 5.9 % compared with the gross dividend of € 4.25 distributed for the 2016 financial year, with the distribution rate for 2016 standing at 96.54 %.
The dividend growth achieved, which has been considerably stronger since 2011, is made possible among other things by the increase in the volume of portfolio divestment, the target for which is set by the Board at 4 % per annum.
It should be noted that since the RREC was established, a significant portion of the profits from each financial year has been carried forward. The reserve established currently amounts to € 7.7 per share at the consolidated level, before the appropriation of the profit for 2017. This reserve is expected to smooth the dividend curve in the future if real estate market conditions become more difficult.
The interim dividend distributed in December 2017 and the dividend paid in 2018 by the RREC will be liable to a withholding tax of 30 %. As a result, the proposed net dividend will be € 3.15.
For more information about the tax treatment of the dividends, see the chapter entitled 'Permanent Document'.
The profitability of an investment can be measured both by the immediate return that can be obtained from it and the increase in the net asset value per share that this 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 Registered Real Estate Company, the level of the immediate return is certainly important, but the ability to generate capital gains constitutes the true label of quality for the future.
For a shareholder who participated in the Initial Public Offering (IPO) in June 1999 and reinvested all dividends in Home Invest Belgium shares, the internal rate of
1 Based on consolidated figures as of 2005.
2 Dividend for the financial year plus increase in net asset value per share during the financial year. 3 Idem, divided by the net asset value per share at the beginning of the financial year.
4 Adjusted to twelve months (12/19ths).
Similarly, the return for shareholders in Home Invest Belgium who may not have reinvested their shares every year nevertheless amounts to a remarkable average of 13.45 % per year over the period 1999-2017.
return (IRR) on the investment, calculated over a period of 18 and a half years, would be 13.77 %, despite the weak performance recorded in 2008, 2009 and 2017. This return cannot be compared as is with those of the majority of other RRECs, as the latter are calculated before withholding tax on dividends whereas until the end of 2012, the Home Invest Belgium dividends were exempt from withholding tax and then subject to a reduced withholding tax of 15 % until the end of 2015, 27 % until the end of 2016 and 30 % since 1 January 2017.
The company has a statutory 3 % threshold for declarations of transparency for the application of the mandatory rules relating to the disclosure of major shareholdings in issuers whose shares are admitted for trading on a regulated market.
According to the declarations of transparency received until 31 December 2017, the shareholding structure of Home Invest Belgium is as follows:
1 Shareholder who filed a statement compliant with the Law on Transparency of 2 May 2007.
2 Stavos Luxembourg SA is controlled for 97% by the company under common law BMVO 2014. The company under common law BMVO 2014 is controlled for 25%% by the Stichting Administratiekantoor Stavos and for 75% by the company under common law Van Overstraeten. The company under common law Van Overstraeten is controlled for 99.9% by the Stichting Administratiekantoor Stavos. The Stichting Administratiekantoor Stavos is controlles by Liévin, Hans, JOhan and Bart Van Overstraeten. Cocky NV is controlled for 99.9% by the company under common law Van Overstraeten. VOP NV is controlled for 99.9% by Stavos Luxembourg SA.
3 AXA Belgium is a subsidiary of AXA Holdings Belgium, itself a subsidiary of AXA SA.
| SHAREHOLDERS | NUMBER OF SHARE | % OF CAPITAL |
|---|---|---|
| Van Overstraeten Group1,2 | 880 965 | 26.70% |
| BMVO 2014 Burgerlijke Maatschap | 510 960 | 15.48% |
| Stavos Luxembourg | 257 462 | 7.80% |
| VOP SA | 102 575 | 3.11% |
| M. Hans Van Overstraeten | 6 640 | 0.20% |
| M. Johan Van Overstraeten | 1 231 | 0.04% |
| M. Bart Van Overstraeten | 1 095 | 0.03% |
| M. Liévin Van Overstraeten | 871 | 0.03% |
| COCKY SA | 131 | 0.00% |
| AXA Belgium SA1,3 | 537 830 | 16.30% |
| M. Antoon Van Overstraeten1 | 121 916 | 3.69% |
| Partners Van Overtveldt - Henry de Frahan1 | 102 792 | 3.12% |
| M. S. Van Overtveldt | 51 396 | 1.56% |
| Ms. P. Henry de Frahan | 51 396 | 1.56% |
| Other shareholders | 1 656 355 | 50.19% |
| GENERAL TOTAL | 3 299 858 | 100.00% |
Decision-making bodies ..........................................96 Remuneration report ................................................108 Rules and procedures ...............................................114
CORPORATE GOVERNANCE STATEMENT
The Royal Decree of 6 June 2010 declared the Code 2009 to be the only code applicable to listed companies. The Code 2009 is available on the website of the Moniteur belge (Belgian official journal) and on the website www.corporategovernancecommittee.be.
Taking into account the specificities of the company, Home Invest Belgium considers that it complies with all the provisions of the aforementioned Code, with the following exceptions (application of the comply or explain principle):
The Corporate Governance Charter describes the corporate governance rules applicable within the company. The Charter was drawn up by the Board of Directors of Home Invest Belgium and may be consulted on the company website, www.homeinvestbelgium.be. This charter was last modified on 6 September 2017.
The Corporate Governance Charter is supplemented by the Risk Management Regulations and the Internal Audit Rules, which form an integral part of the charter.
The Board is currently made up of seven directors. Of the six non-executive directors, three are independent within the meaning of Article 526ter of the Companies Code and three represent the shareholders.
The Board of Directors is well aware of the content of the act of 28 July 2011 and provisions of Article 518bis of the Companies Code, which require that at least onethird 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 required is rounded up to the nearest whole number.
The minimum number according the current composition is 7/3 = 2.3, or 2 after application of the rounding-off rule. The current composition of the Board therefore complies with the law.
This corporate governance statement1 falls under the provisions of the Belgian Code of Corporate Governance 2009 ('Code 2009') and the act of 6 April 2010 amending the Companies Code.
First row: W. Aurousseau, L. Van Overstraeten, S. Lambrighs, J. Van Overstraeten Second row: E. Spiessens, K. Dejonckheere, L. de Hemptinne
Liberty's, Auderghem
The resumee of the directors may be summarised as follows:
M. Van Overstraeten, aged 61, has a law degree (KU Leuven 1982) and a degree in advertising management (Vlerick 1983). He has wide experience in business management, particularly in the real estate sector, sports centres and wood processing, in Belgium and in Romania.
Other mandates held in listed companies: none.
Other mandates held in unlisted companies: Managing Director of VOP SA, director of Immovo SA, Sippelberg SA, Behind the Buttons SA, Cocky SA, Stichting Administratiekantoor Stavos, Stavos Luxembourg SA, Burgerlijke Maatschap Van Overstraeten, Burgerlijke Maatschap BMVO 2014.
Mandates expired during the last five years: none.
M. Spiessens is 57 years old and has a degree in sociology (KU Leuven). He is also a qualified secondary school teacher and a social sciences engineer (KU Leuven).
Other mandates held in listed companies: none.
Other mandates held in unlisted companies: various positions of responsibility and mandates in the companies Auxipar, VEH CVBA, Publigas CVBA, Aspiravi NV, Aspiravi International NV, EPC CVBA, Pronet Verzekeringen CVBA and Sociaal Engagement CVBA-SO.
Mandates expired during the last five years: in particular in the companies Gimv NV and DG Infra+ NV, Livingstones CVBA and Sint-Jozefskredietmaatschappij NV.
Ms. Lambrighs, who is 46, obtained a master's degree in civil engineering (ULB) and an executive master's degree in management (ULB). She began her career in construction, undertaking functions related to the design of buildings and engineering structures (at Spie, BGroup and Ergon). She has also held various positions of responsibility in the real estate sector in the companies Axa Belgium, Immobel and Retail Estates. In addition, she has taught at the ULB.
Other mandates held in listed companies: director of Immobel SA1 .
1 Mandate held as permanent representative of Zou2 SPRL. 1 Mandate held as permanent representative of Zou2 SPRL.
Laurence de Hemptinne
Koen Dejonckheere
Johan Van Overstraeten
Other mandates held in unlisted companies: manager of Zou2 SPRL and the SPRL 53 Charlent Freehold1 , director of UPSI/BVS and of CBFI ASBL and of S & F Immobilière SA.
Mandates expired during the last five years: in the companies Gateway SA, Greendog SA and Home Invest Development.1
Haverwerf, Mechelen
M. Aurousseau, aged 46, holds a degree in applied economic sciences and finance (UA) and financial analysis (ICHEC). He has extensive experience in property management and business management, particularly in the banking and insurance sector in Belgium.
Other mandates held in listed companies: none.
Other mandates held in unlisted companies: Chief Investment Officer at Axa Belgium.
Mandates expired during the last five years: none.
Ms. de Hemptinne is 55 years old and holds a law degree from the ULB. She was a lawyer at the Brussels Bar for a number of years. She then worked as an economic and legal journalist. Specialising in issues relating to the property market, urban planning and real estate taxation, she collaborated for almost ten years with various publications, mainly La Libre Belgique. She set up Editions & Séminaires SA, a company dedicated to publishing books and organising seminars related to real estate.
Other mandates held in listed companies: none.
Other mandates held in unlisted companies: Managing Director of Editions & Séminaires SA.
Andates expired during the last five years: none.
M. Dejonckheere is 49 years old and holds a degree in civil engineering (Ghent) and an MBA (IEFSI-ECHEC, Lille-France).
Other mandates held in listed companies: CEO of Gimv NV and independant director of Roularta NV/SA.
Other mandates held in unlisted companies: CEO of Noorderman NV and Invest at Value NV, mandates held in companies TDP NV, AZ Delta VZW (hospital group), Enternext NV/SA, Gimv Arkiv Technology Fund NV, Voka-VEV, European Issuers AISBL/IVZW and VBO-FEB.
Capman Plc (Finland), Biofonds Vlaanderen SA, Belgian Venture Capital & Private Equity Association ASBL.
M. Van Overstraeten, who is 56 years old, has extensive experience in the running and management of companies, especially in the field of property development and software development.
Other mandates held in listed companies: none.
Other mandates held in unlisted companies: Behind the Buttons SA, VOP SA, Immovo SA, Sippelberg SA, Cocky SA, Stavos Luxembourg SA (Grand Duchy of Luxembourg), Stichting Administratiekantoor Stavos NV (Netherlands), Burgerlijke Maatschap Van Overstraeten and Burgerlijke Maatschap BMVO 2014, and Cocky BVBA.
Mandates expired during the last five years: none.
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 interest of clients and users of buildings). Its role is to:
Besides the general functions described above, the Board of Directors has, during the past year, decided on various issues including:
The Board of Directors meets at least seven times a year and whenever a particular or exceptional event so requires.
Erainn, Etterbeek
The rules on the quorum and decision making are laid down in Articles 17 and 18 of the articles of association:
| Name | Position | Start of first appointment |
End of mandate1 |
Business address | Attendance rate at Board meetings in 2017 |
|---|---|---|---|---|---|
| Liévin Van Overstraeten | Chairman Director | 23 May 2008 | 2018 | VOP SA avenue du Sippelberg 3 1080 Brussels |
100% |
| Eric Spiessens | Vice-Chairman Independent director |
3 mai 2011 | 2019 | Beweging.net chaussée de Haecht 579 1030 Schaarbeek |
100% |
| Sophie Lambrighs | CEO | 22 July 2014 | 2018 | Home Invest Belgium SA, boulevard de la Woluwe 46 1200 Brussels |
100% |
| Wim Aurousseau | Director | 12 February 2014 2019 | Axa Belgium SA Place du Trône 1000 Brussels |
92% | |
| Laurence de Hemptinne | Independent director |
5 May 2015 | 2019 | rue de Ferrière 1470 Bousval |
85% |
| Koen Dejonckheere | Independent director |
3 May 2011 | 2019 | Gimv NV Karel Oomsstraat 37 2018 Antwerpen |
92% |
| Johan Van Overstraeten | Director | 18 August 2010 | 2019 | VOP SA avenue du Sippelberg 3 1080 Brussels |
100% |
| Guillaume H. Botermans | Honorary Chairman |
|---|---|
| Michel Pleeck | Honorary Chairman |
| Guy Van Wymersch-Moons | Honorary Chairman |
| Xavier Mertens | Honorary CEO |
| Luc Delfosse | Honorary independent director |
Corporate governance statement
At the Ordinary General Assembly of 2 May 2018 (under reserve of FSMA approval) the proposal will be done to renew the mandates of Ms Sophie Lambrighs as CEO, and of Liévin Van Overstraeten as Director, both for a period of 4 years, ending at the ordinary general meeting in 2022.
• monitoring the statutory audit of the annual and consolidated accounts, including follow-up of questions and recommendations from the statutory auditor.
During the 2017 financial year, the following items in particular were discussed:
Given the size of the company and in the interests of efficiency, a single committee, comprising both appointment and remuneration competences, was set up within Home Invest Belgium.
The Appointment and Remuneration Committee reports regularly to the Board of Directors on the exercising of its missions. The Committee assists the Board in all matters relating to the composition of the Board of Directors (number, skills, gender diversification) and the specialised committees as well as the remuneration of the directors and members of the Management team of the RREC (5SIR/GVV).
The Appointment and Remuneration Committee is responsible in particular for:
LThe responsibilities and functioning of the specialised committees set up within the Board of Directors are detailed in the Corporate Governance Charter of Home Invest Belgium. This Charter can be consulted on the company website.
The Investment Committee is responsible mainly for the selection, analysis and preparation of investment and divestment dossiers, although final approval is given by the Board of Directors.
The Investment Committee met seven times during the past year and consisted of the following persons:
Charles Woeste, Jette
Archview, Etterbeek
During the 2017 financial year, the committee met primarily to discuss the following points:
On 28 June 2017, Home Invest Belgium took over its subsidiary, Home Invest Development, whose teams focused on monitoring the development and renovation projects in the portfolio. In order to follow the risks specific to these projects, the Board of Directors set up a Projects Committee. This role had previously been fulfilled by the Board of Directors of Home Invest Development.
The Projects Committee met twice during the 2017 financial year and was made up of the following people:
The Committee's role is to follow up and monitor renovation and development projects in terms of the schedule, budget, quality and organisation of the site.
During the 2017 financial year, it met mainly to discuss the following points:
The Inside, Woluwe-Saint-Lambert
Notwithstanding the fact that Home Invest Belgium is not obliged to establish an Audit Committee, given that the RREC meets two of the three exclusion criteria listed in Article 526bis § 3 of the Companies Code, the Board of Directors of the RREC nevertheless decided to set one up.1
M. Eric Spiessens is an independent director and has the required qualities and skills in auditing and accounting.
The statutory auditor of the RREC (SIR/GVV) attended three meetings of the Audit Committee in 2017.
The mains tasks of the Audit Committee are as follows:
1 The average number of employees was in fact less than 250 throughout the 2017 financial year and the net annual turnover in 2017 was below € 50 million.
The resumee of the members of the executive management team (or their permanent representative) can be summarised as follows:
When exercising their duties, members of the management team are assisted by the operating teams. They can also call upon the skills of the directors and external advisers, if need be, within the limits set by the Board of Directors. In addition, they can count on the assistance of the Audit Committee for all matters within its area of competence.
The members of the Management team carry out their duties under the responsibility and supervision of the Board of Directors, to which they report regularly.
Jean-Luc Colson Chief Finance Officer
M. Colson, aged 43, graduated in accounting (HEMES Sainte Marie). He has held various financial positions, including at Axa Belgium, ING Real Estate and Home Invest Development.
M. Van Wijnendaele, aged 41, has a degree in commercial and consular sciences (HUB) and a diploma in business communication (KU Leuven) and a post-graduate degree in real estate (KULAK). He has held various positions of responsibility, including at Immobiliën Hugo Ceusters and with the Société des Centres Commerciaux de Belgique (SCCB).
M. Vincent, aged 38, has a degree from the Institut d'Administration et de Gestion (IAG -UCL) and has followed courses linked specifically to real estate at the University of Columbia (South Carolina - USA) and at Solvay Business School (post-graduate degree in Real Estate).
He began his career with GVA Grimley. He subsequently worked as Associate Director at Cushman & Wakefield in the Capital Markets department.
The Board of Directors is supported by the Management which implements the strategy adopted by the Board and reports to it.
At least once a year, the CEO reports to the Board of Directors, the statutory auditor and the FSMA on the exercising of independent control functions, the main risks identified during the past year and measures taken to address them.
Members of the Management team undergo a formal annual evaluation by the Appointment and Remuneration Committee as part of the determination of their variable fees, based on targets and criteria set at the start of the year. A report is then submitted to the Board of Directors.
1 For the exercising of his functions in this report, M. Jean-Luc Colson acts in his capacity as permanent representative of SPRL Ylkatt.
From left to right: S. Lambrighs, F. Van Wijnendaele, J.-L. Colson, N. Vincent
identification and assessment of key risks are undertaken on a half-yearly basis by the Board of Directors and presented in the published annual and interim financial reports. The risks also undergo specific monitoring, in addition to the periodic exercises, by the Board of Directors during its meetings and continuously by the risk manager.
This risk analysis leads to remedial actions in relation to any vulnerabilities identified. For details of the risks, see the chapter entitled 'Risk Factors' in this report.
information and communication enable the company to manage, monitor and control ongoing operations. The communication put in place by the RREC (SIR/ GVV) is adapted to the size of the company and is based mainly on daily internal communication between the Management and e-mail exchanges.
Computer data is protected by a continuous back-up system on hard disk and a weekly backup outside the company's registered office.
Clos de la Pépinière, Brussels
Home Invest Belgium has appointed an Executive Management team within the meaning of Article 14 of the act of 12 May 2014 on Regulated Real Estate Companies. The responsibilities and functioning of
Home Invest Belgium has set up internal control and risk management systems, identifying the main risks it faces and putting in place the necessary means to control and limit the potential impact of each risk, as well as ensuring the reliability of the reporting and financial communication process.
The policy regarding integrity and the prevention of conflicts of interest (see below) also feature in this control.
The system of internal control and risk management is implemented by the executive management under the supervision of the Board of Directors. It is based on:
The business address of the members of the Executive Management team may be found at the registered office of the company.
The risk management function is undertaken by a risk manager who is appointed by the Board of Directors with the prior approval of the FSMA.
M. Jean-Luc Colson was appointed as risk manager. The risk management regulations describe the functioning, role, objectives and scope of Home Invest Belgium's risk management.
The person responsible for the internal audit function within the company is M. Liévin Van Overstraeten.
He has the skills required for this purpose. He meets the standards of good reputation, experience and expertise required by the RREC (SIR/GVV) and does not fall foul of any prohibitions laid down in the RREC act.
The function of internal auditor is, however, delegated to M. Pierre-Hugues Bonnefoy of Deloitte.
His mandate expires on 31 December 2019. The remuneration of the internal auditor amounted to € 19 872 VAT incl. for the 2017 financial year.
The regulations on internal audits describe the functioning, role, objectives and scope of the internal audit of Home Invest Belgium and can be consulted on the company's website.
Ms. Caroline Maddens was appointed Compliance Officer by the Board of Directors on 18 June 2014. As Ms. Maddens left the company during the financial year, this role has been fulfilled on a temporary basis by M. Eric Spiessens since then.
The Corporate Governance Charter describes the objectives and scope of the function of Compliance Officer of Home Invest Belgium and can be consulted on the company's website.
the Executive Management team are detailed in the Corporate Governance Charter of Home Invest Belgium. This Charter can be consulted on the company website.
The Executive Management team comprises the following persons 1:
internal control at Home Invest Belgium is implemented in particular through:
1
Exercising a mandate as an executive manager in the form of a legal person is temporary and will be regularised within four years of the date of approval of the
| Sophie Lambrighs CEO |
Jean-Luc Colson CFO |
Filip Van Wijnendaele COO |
Nicolas Vincent CIO |
|
|---|---|---|---|---|
| Number of HIB shares held |
1 200 | N/A | N/A | N/A |
| Other mandates2 | Ms. Lambrighs mandates are listed above |
Director of Charlent 53 Freehold SPRL3, director of Investers SA and of S&F Immobilière SA. |
Director of Home Invest Development SA* and Manager of SPRL Charlent 53 Freehold, director of Investers SA and of S&F Immobilière SA |
Manager of Nicolas Vincent SPRL of Charlent 53 Freehold, of BuyerSide SPRL and director of Investers SA and of S&F Immobilière SA |
company as a Regulated Real Estate Company. 2 These are the mandates held by members of the Executive Management team in other companies during the past five years. Expired mandates are marked with an asterisk.
3 Exercied int he quality of permanent representative of the SPRL YLKATT.
This remuneration is based on a fair basic remuneration, taking into account 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 agreed targets.
The variable remuneration is determined according to the evaluation criteria, if possible measurable, 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.
There are no performance bonuses in the form of shares, options or other rights to acquire shares, apart from those allocated to the CEO.
The agreement between Home Invest Belgium and Ms Sophie Lambrighs provides for an annual basic remuneration, payable in monthly instalments, of € 300 000 for 2017 and variable remuneration ranging from 0 % to 20 % of the basic annual remuneration for the year concerned.
Her variable remuneration is determined according to the following criteria:
Ms. Lambrighs has also benefited from performance bonuses in shares, options or other rights to acquire shares, namely:
Ms. Lambrighs also benefits from a mobile phone and payment of mobile phone expenses incurred on behalf of the RREC.
Contractual provisions concerning notice and severance pay: the agreement reached between Ms Sophie Lambrighs and the company states that in the event of termination notified at the initiative of the company, it will observe a six-month notice period starting on the 1st of the month following notification. At the discretion of the company, such notice can (in whole or in part) be replaced by the payment of compensation, the amount of which will be calculated in relation to the fixed remuneration for a period equal to six full months of service or for the balance of the notification period under way. These contractual provisions comply with the Belgian Corporate Governance Code.
(As part of a business agreement concluded on 21 January 2010 between Home Invest Belgium SA and YLKATT SPRL)
The agreement provides for an indexed annual basic remuneration, payable in monthly instalments, and a variable remuneration ranging from 5 % to 20 % of the annual basic remuneration for the year concerned. He also benefits from a mobile phone and payment of mobile phone expenses incurred on behalf of the RREC.
His variable remuneration is determined on the basis of the application of the following criteria during the year concerned:
Pension plan, supplementary insurance or other benefits: nil.
Performance bonuses in shares, options or other rights to acquire shares: nil.
Contractual provisions concerning notice and severance: the business agreement with YLKATT SPRL provides for nine months' notice in the event of the contract being terminated by the RREC, plus a severance payment of three months. The period of notice may be replaced by compensation in proportion to the duration of the remaining period of notice.
The three-month severance allowance will be increased by half a month for each year of service but may not exceed a total of nine months.
This allowance will be calculated taking into account both the fixed and the variable remuneration. These contractual provisions potentially diverge from the recommendations made in this area, as set out in the Belgian Code of Corporate Governance. However, taking into account the level of remuneration, experience and years' service, the Board of Directors considers that these provisions are balanced.1
The Annual General Meeting of shareholders of 3 May 2016 decided that the attendance fees (per meeting) should be as follows:
Members of the Executive Management who attend these meetings do not benefit from these fees.
Home Invest Belgium had entrusted the management, monitoring and supervision of the development of new residential buildings to its subsidiary, Home Invest Development SA. This company merged with Home Invest Belgium on 28 June 2017.
* Permanent representative M. Johan Van Overstraeten.
None of the non-executive directors receives a fixed or variable remuneration of any sort. Non-executive directors are entitled to attendance fees for meetings of the Board of Directors and the various specialised committees. In addition, they may enter expense reports for costs incurred in performance of their duties. The company does not intend to change the directors' remuneration policy for the next two years.
The remuneration report was approved by the Board of Directors on 21 March 2018 and takes account of the recommendations made by the Appointment and Remuneration Committee. It contains the information recommended by the Belgian Corporate Governance Code (2009 edition) and Article 96§3 paragraph 2 of the Companies Code as introduced by the act of 6 April 2010.
| Presence and remuneration for the year 2017 |
Lieven Van Overstraeten |
Eric Spiessens |
Koen Dejonckheere |
Johan Van Overstraeten |
Wim Aurousseau |
Laurence de Hemptinne |
Cocky NV * |
|---|---|---|---|---|---|---|---|
| HOME INVEST BELGIUM | |||||||
| Board of Directors | 11/11 | 13/13 | 12/13 | 11/11 | 12/13 | 11/13 | |
| Investment Committee | 7/7 | 3/7 | |||||
| Audit Committee | 4/4 | 4/4 | 4/4 | ||||
| Appointment and Remuneration Committee |
4/4 | 4/4 | 4/4 | ||||
| Projects Committee | 2/2 | ||||||
| HOME INVEST DEVELOPMENT |
|||||||
| Board of Directors | 4/4 | ||||||
| Total attendance | 19/19 | 21/21 | 12/13 | 20/20 | 16/17 | 18/24 | 4/4 |
| Total remuneration | 29 000 | 26 500 | 12 000 | 25 000 | 15 000 | 17 750 | 1 200 |
In the event of a conversion of the period of notice or part thereof, into compensation for termination, the 12-month maximum compensation stipulated by Principle 7.18 of the Belgian Corporate Governance Code (2009 edition) could be exceeded. This principle states that: "Any contract concluded with the company or its subsidiaries relating to the remuneration of the CEO or any other executive manager shall specify that the severance payment awarded in the event of termination shall not exceed 12 months' basic and variable remuneration". This derogation is justified by the years' service of the person concerned. It results from the negotiations conducted at the time as part of his new mandate as an executive manager and is in line with current market practices for this type of function.
Contractual provisions concerning notice and severance pay: the business agreement concluded with FVW Consult SPRL provides for three months' notice in the event of the contract being terminated by the RREC, supplemented by one month per year's service for a maximum of six months and four months' severance pay to be increased by one month per year's service, with a maximum of six months.
The period of notice may be replaced by compensation in proportion to the duration of the remaining period of notice.
These contractual provisions comply with the Belgian Corporate Governance Code.
(As part of a business agreement concluded on 4 May 2016 between Home Invest Belgium SA and M. Nicolas Vincent SPRL)
The agreement provides for an indexed annual basic remuneration, payable in monthly instalments, and a variable remuneration ranging from 5 % to 25 % of the annual basic remuneration for the year concerned. He also benefits from a mobile phone and payment of mobile phone expenses incurred on behalf of the RREC
(As part of a business agreement concluded on 5 March 2011 between Home Invest Belgium SA and FVW Consult SPRL)
The agreement provides for an indexed annual basic remuneration, payable in monthly instalments, and a variable remuneration ranging from 5 % to 20 % of the annual basic remuneration for the year concerned. He also benefits from a mobile phone and payment of mobile phone expenses incurred on behalf of the RREC (SIR/GVV).
His variable remuneration is determined on the basis of the application of the following evaluation criteria during the year concerned:
His variable remuneration is determined on the basis of the application of the following evaluation criteria during the year concerned:
Pension plan, supplementary insurance or other benefits: nil.
Performance bonuses in shares, options or other rights to acquire shares: nil.
1 Allocation of 1 200 shares in the company. 2 Includes VAT on the remuneration.
| En € | Fixed remuneration | Variable remuneration | Pension plan | Other |
|---|---|---|---|---|
| CEO Home Invest Belgium Sophie Lambrighs |
217 200 | 26 880 | 27 000 | 70 3801 |
| Managing Director CEO Home Invest Development SPRL Zou2 represented by Ms. Sophie Lambrighs |
72 6002 | 29 040 | - | - |
| Direction effective | 510 2972 | 55 879 | - | - |
The Executive Management benefited from the following remunerations in 2017:
The statutory auditor of Home Invest Belgium is accredited by the FSMA, certifies in particular the accounts of the RECC, and revises its half-yearly statements.
SCRL Grant Thornton Auditors, represented by M. Dirk Van den Broeck, was appointed for a three-year term at the Annual General meeting of 3 May 2016. On 29 March 2018, Home Invest Belgium has been informed on the nomination of M. Philip Callens as the new permanent representative of Grant Thornton as from that day, replacing M. Dirk Van Den Broeck, having been barred. This nomination has been approved the same day by the Board of Directors of the FSMA, for approval of the accounts of Home Invest Belgium, closed on 31 December 2017.
His remuneration has been set at € 28 000 per year, increased with VAT and indexation. His mandate as statutory auditor will take an end after the Ordinary General Assembly to be held in 2019.
The statutory auditor has reviewed this 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 integrated into that of the consolidated annual accounts included in the section on 'Financial Statements' below.
The company has appointed three real estate experts, two 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 at the time of acquisition, contribution, sales 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.
Winssinger & Associés SA (RPM Brussels: 0422.118.165), with its registered office at chaussée de La Hulpe 166, 1170 Brussels, Belgium, represented by M. Christophe Ackermans, 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:
During the fiscal year 2017, the total amount of sums paid to the company BNP Paribas Fortis' services amounted to € 14 877.33 VAT incl.
Banque Degroof Petercam acts as the liquidity provider for Home Invest Belgium shares. Remuneration for the liquidity provider amounts to € 20 000 excl. VAT per year.
| € - VAT included | 2017 | 2016 |
|---|---|---|
| Fees for the Statutory Auditor (statutory basis) | ||
| Fees for the exercising of the mandate of Statutory Auditor | € 33 880 | € 33 638 |
| Fees for extraordinary services or special missions | ||
| Other certification missions | € 7 260 | € 8 410 |
| Other missions outside the audit mandate | € 6 330 | € 907 |
| TOTAL | € 47 470 | € 42 955 |
| Surfaces to be appraised | per m2 appraised (excl. VAT) |
|---|---|
| < 0 to 125 000 m2 | € 0.40 |
| > 125 001 and < 175 000 m2 | € 0.35 |
| > 175 000 m2 | € 0.30 |
| Surfaces to be appraised | per m2 appraised (excl. VAT) |
|---|---|
| < 0 to 125 000 m2 | € 0.375 |
| > 125 001 and < 175 000 m2 | € 0.325 |
| > 175 000 m2 | € 0.275 |
| Initial evaluation | € 0.5 |
| Dematerialised securities (excl. VAT) | 0.12% of the net value of the coupon paid (excl. VAT) |
|---|---|
| Bearer securities | 2% of the net value of the coupon paid + € 0.10 per coupon (excl. VAT) |
CBRE Valuations Services SPRL, (RPM Brussels: 0859.928.556), with its registered office at Avenue Lloyd George 7, 1000 Brussels, Belgium, represented by M. 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 2019. Their annual remuneration is calculated as follows:
During the 2017 financial year, the total amount of fees received by Winssinger & Associés amounted to € 115 863 incl. VAT.
BNP Paribas Real Estate Hotels France, with its registered office at 167, quai de la Bataille de Stalingrad, 92867 Issy-les-Moulineaux, France, and represented by Ms Blandine Trotot, acts as an independent property expert for Port Zélande's property portfolio comprising 248 holiday homes and 40 apartments.
Their mandate expires on 30 September 2019. Their annual remuneration is fixed at € 2 500 excl. VAT per trimester and at € 6 500 excl. VAT for a first evaluation. .
During the 2017 financial year, the total amount of fees received by BNP Paribas Real Estate Hotels France amounted to € 13 088 excl. VAT.
During the 2017 financial year, the total amount of fees received by CBRE Valuations Services SPRL amounted to € 0 incl. VAT.
BNP Paribas Fortis SA (RPM Brussels: 0403.199.702), located at rue Montagne du Parc 3, 1000 Brussels, is the lead bank responsible for the financial servicing of Home Invest Belgium shares (paying dividends, subscribing to capital increases, convening General Meetings).
Their remuneration is set as follows, plus VAT:
The second dossier concerns the partial de-merger by take-over of V.O.P. Through this transaction, in September 2017 Home Invest Belgium acquired full ownership of a building located at place de l'Amitié, 1160 Auderghem.
Article 523 of the Companies Code did not have to be observed in this dossier as the merger by partial demerger is a decision taken by the general meeting of shareholders and not by the Board of Directors.
The shareholders of VOP SA are SA Stavos Luxembourg, M. Liévin Van Overstraeten and SA Cocky, M. Liévin Van Overstraeten is the CEO and M. Johan Van Overstraeten is a director. All these people are also shareholders in Home Invest Belgium. Given the fact that VOP SA can be described as a company with a stake in Home Invest Belgium within the meaning of Article 37 of the RREC act, this information was passed on to the FSMA on the basis of Article 37 of the act of 12 May 2014 and Article 8 of the Royal Decree of 13 July 2014. The information was also made public in two press releases dated 19 July 2017 and 8 September 2017. The conclusion of this press release states that the company believes that this transaction is positive for its development. Moreover, M. Liévin and M. Johan Van Overstraeten did not take part in the Board of Director's deliberation in voluntary application of Article 523 of the Companies Code. Preventing insider trading given Home Invest Belgium's reputation for integrity, the Board of Directors has put in place a Code of Conduct1 applicable to transactions involving shares and other financial instruments of the Regulated Real Estate Company by directors and employees of the RREC and its subsidiaries. Among other things, this Code provides for:
Moreover, Article 524 of the Companies Code did not apply to this de-merger either, because this provision does not concern decisions that have to be taken by the general meeting of shareholders. However, the Board of Directors of Home Invest Belgium decided to apply this provision voluntarily. A committee of three independent directors, assisted by PWC as an independent expert, drew up the report provided for by this provision.
This committee concluded that:
the setting of a calendar of periods during which the execution of stock exchange transactions involving shares in the RREC is not authorised ('closed periods');
However, Article 37 of the act of 12 May 2017 was applied to two dossiers during the 2017 financial year. This article contains special provisions when companies that own a stake in the RREC are direct or indirect counterparties or receive any material benefit whatsoever from the transaction planned by the RREC.
On the other hand, Article 524 of the Companies Code was applied to a transaction on a voluntary basis.
The first transaction concerns the purchase by Home Invest Belgium of an office building belonging to SA AXA Belgium, located at rue Jourdan 89-103, 1060 Saint-Gilles, further to an authentic deed dated 17 January 2017 for the amount of € 5 200 000.
Since SA AXA Belgium may be described as a company that owns a stake in Home Invest Belgium within the meaning of Article 37 of the law of 12 May 2014, this information was passed on to the FSMA in a letter of 11 January 2017. The information was also made public in a press release of 17 January 2017 in accordance with Article 8 of the Royal Decree of 13 July 2014. The release stated that:
In fact, Home Invest Belgium aims to expand and renew its portfolio of residential buildings, especially in Brussels.
Article 523 of the Companies Code did not have to be applied to this dossier as it does not settle purely functional conflicts of interest. In fact, the director Wim Aurousseau is 'Chief Investment Officer' (CIO) at SA
AXA Belgium, but not a shareholder in this company.
Article 524 of the Companies Code did not have to be applied, either, because the shareholder who may benefit directly or indirectly does not exert a decisive or notable influence in appointing directors in this company. In this instance, AXA Belgium holds only 17.02 % of the social capital.
The legal rules for preventing conflicts of interests that apply to Home Invest Belgium are contained in Articles 523, 524 and 524ter of the Companies Code and in Articles 36 to 38 of the act of 12 May 2014.
Other rules on preventing conflicts of interest are laid down in the Home Invest Belgium Corporate Governance Charter1 , to which all the directors of the RREC adhere. Article 4.8 of this Charter states as follows: "(…) If Home Invest Belgium proposes to conclude with a director or a company linked to a director, a transaction that is not covered by Article 523 of the Companies Code, (for example because it is a habitual transaction concluded under normal market conditions and guarantees), Home Invest Belgium nevertheless requires the director to signal this intention to the other directors before deliberation by the Board of Directors and to abstain from participating in the deliberations of the Board of Directors on this transaction and taking part in the vote. (…)"
The accumulation of mandates or positions may also give rise to conflicts of interest.
Depending on the specific circumstances,
The Executive Management is subject to the same rules regarding conflicts of interest as the Board of Directors. Likewise, Home Invest Belgium requires its main service providers to adhere to the Corporate Governance Charter regarding the prevention of conflicts of interest1 and insider trading. Specifically regarding the approved property valuation expert of the RREC, the agreement reached with Home Invest Belgium states that in the event of a conflict of interest, the initial evaluation of the property will be entrusted to another real estate agent.
1 The Corporate Governance Charter is available on the company website.
2 The Van Overstraeten Group is represented on the HIB Board of Directors by two directors (currently M. L. Van Overstraeten and M. J. Van Overstraeten) and Axa Belgium is represented on the HIB Board of Directors by one director (currently M. W. Aurousseau).
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 pledging) for a period of five years from the publication in the Annexes to the Moniteur belge (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;
and on the other hand, the possibility of acquiring, pledging and disposing of the company's own shares on its behalf without the need for any prior additional decision of the General Meeting of shareholders of the company, if such acquisition, pledging or disposal is necessary in order to avoid serious and imminent harm to the company. This authorisation is granted for a period of three years as of the publication in the Annexes to the Moniteur belge (Belgian official journal) of the minutes of Extraordinary General Meeting held on 3 May 2016;
there are no significant agreements to which Home Invest Belgium is party and which can take effect, be amended or terminate in the event of a change of control in the context of a public takeover bid, with the exception of a 'change of control' clause (i) in the credit agreements concluded with Banque Degroof Petercam and ING Bank Belgium NV allowing the respective banks to prematurely terminate the credit agreement in the event of a change of control and (ii) in the contractual documentation of the bond issue which stipulates that in the event of a change of control of the company, bondholders can require advance payment of the bonds issues from Home Invest Belgium;
account the legislation applicable in this field (the Companies Code, the act of 12 May 2014, the Royal Decree of 13 July 2014 relating to regulated real estate companies);
The Board of Directors is expressly authorised to increase the share capital on one or more occasions up 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 under 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 Moniteur belge (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). During the 2017 financial year, no use was made of the authorised capital. At 31 December 2017, the authorised capital still available amounted to (€ 88 949 294.75);
• in accordance with Article 6.4 of the articles of association of Home Invest Belgium, the company may acquire or pledge own shares within the following limits:
The following information constitutes explanations about elements likely to have a bearing in the event of a takeover bid on the shares of Home Invest Belgium, as referred to in Article 34 of the Royal Decree of 14 November 2007:
2 See also the act of 1 April 2007 on public takeover bids and Article 21.2.6 of Appendix I to Prospectus Regulation 809/2004. 2 Including 11 712 self-held shares.
1 The Code of Conduct is available on the company website.
| Comptes consolidés 120 | |
|---|---|
| Comptes statutaires148 | |
| Rapport du commissaire 151 |
| BALANCE SHEET | |||
|---|---|---|---|
| ASSETS | Note | 2017 | 2016 |
| I. Non-current assets | 459 002 506 | 409 872 451 | |
| B. Intangible assets | 15 | 416 024 | 278 118 |
| C. Investment properties | 16 | 457 636 191 | 408 833 729 |
| D. Other tangible assets | 18 | 391 371 | 102 316 |
| E. Non-current financial assets | 24 | 112 033 | 75 649 |
| F. Finance lease receivables | 19 | 446 887 | 582 639 |
| II. Current assets | 11 058 584 | 9 429 070 | |
| A. Assets held for sale | 20 | 0 | 1 457 192 |
| C. Finance lease receivables | 19 | 135 752 | 135 243 |
| D. Trade receivables | 21 | 3 326 818 | 3 169 636 |
| E. Tax receivables and other current assets | 21 | 376 707 | 842 449 |
| F. Cash and cash equivalents | 22 | 7 183 786 | 3 437 814 |
| G. Deferred charges and accrued income | 23 | 35 520 | 386 735 |
| TOTAL ASSETS | 470 061 090 | 419 301 520 | |
| SHAREHOLDERS' EQUITY | |||
| A. Capital | 26 | 87 999 055 | 75 999 055 |
| B. Share premium account | 26 | 24 903 199 | 24 903 199 |
| C. Reserves | 26 | 102 796 510 | 98 198 999 |
| D. Net result of the financial year | 26 | 1 256 723 | 6 101 079 |
| SHAREHOLDERS' EQUITY | 216 955 487 | 205 202 333 | |
| LIABILITIES I. Non-current liabilities |
232 805 745 | 201 485 901 | |
| B. Non-current financial debts | 24 | 224 745 100 | 192 205 885 |
| a. Financial debts | 185 000 000 | 152 500 000 | |
| c. Others | 39 745 100 | 39 705 885 | |
| C. Other non-current financial liabilities | 24 | 8 060 644 | 9 280 017 |
| II. Current liabilities | 20 299 859 | 12 613 287 | |
| B. Current financial debts | 24 | 10 673 829 | 712 226 |
| a. Financial debts | 10 000 000 | 0 | |
| c. Others | 673 829 | 712 226 | |
| D. Trade debts and other current debts | 25 | 8 106 746 | 10 385 458 |
| b. Others | 8 106 746 | 10 385 458 | |
| E. Other current liabilities | 25 | 62 656 | 90 680 |
| F. Accrued charges and deferred income | 23 | 1 456 627 | 1 424 923 |
| LIABILITIES | 253 105 603 | 214 099 188 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 470 061 090 | 419 301 520 | |
| Number of shares at end of period 3 | 3 288 146 | 3 147 897 | |
| Net asset value | 216 955 487 | 205 202 333 | |
| Net asset value per share | 65.98 | 65.19 | |
| Adjusted net asset value per share 4 | 68.43 | 68.14 | |
| Indebtedness | 243 588 331 | 203 394 248 | |
| Debt ratio | 51.82% | 48.51% |
| Note | 2017 | 2016 | |
|---|---|---|---|
| I. Rental Income | 4 | 22 683 114 | 18 979 691 |
| III. Rental-related expenses | 4 | -183 272 | -178 922 |
| NET RENTAL RESULT | 22 499 843 | 18 800 769 | |
| IV. Recovery of property charges | 5 | 136 764 | 86 482 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 5 | 598 574 | 660 864 |
| VII. Charges and taxes normally payable by the tenant on let properties | 5 | -2 769 775 | -2 705 975 |
| VIII. Other incomes and expenses related to letting | 5 | -30 000 | 0 |
| PROPERTY RESULT | 20 435 406 | 16 842 140 | |
| IX. Technical costs | 6 | -1 086 011 | -843 970 |
| X. Commercial costs | 7 | -342 219 | -406 804 |
| XI. Taxes and charges on unlet properties | 8 | -289 436 | -392 488 |
| XII. Property management costs | 8 | -3 766 408 | -2 780 000 |
| XIII. Other property costs | 19 853 | -81 388 | |
| PROPERTY COSTS | -5 464 220 | -4 504 650 | |
| PROPERTY OPERATING RESULT | 14 971 186 | 12 337 491 | |
| XIV. General corporate expenses | 9 | -1 066 763 | -845 488 |
| XV. Other operating incomes and expenses | -112 236 | -29 448 | |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 13 792 187 | 11 462 554 | |
| XVI. Result sale investment properties | 10-20 | 719 633 | 279 654 |
| XVIII. Changes in fair value of investment properties | 10 | 1 450 369 | 11 295 322 |
| OPERATING RESULT | 15 962 188 | 23 037 530 | |
| XX. Financial income | 11 | 90 494 | 78 701 |
| XXI. Net interest charges | 12 | -3 548 571 | -3 048 453 |
| XXII. Other financial charges | 13 | -65 034 | -65 705 |
| XXIII. Changes in fair value of financial assets and liabilities | 13 | 1 226 658 | -2 025 345 |
| FINANCIAL RESULT | -2 296 453 | -5 060 803 | |
| PRE-TAX RESULT | 13 665 735 | 17 976 727 | |
| XXIV. Corporation tax | 14 | -361 199 | -71 034 |
| XXV. Exit tax | -81 555 | 0 | |
| TAXES | -442 754 | -71 034 | |
| NET RESULT | 13 222 981 | 17 905 693 | |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 13 222 981 | 17 905 693 | |
| NET RESULT PER SHARE | 4.14 | 5.69 | |
| Statement of comprehensive income | 2017 | 2016 |
|---|---|---|
| I. Net result | 13 222 981 | 17 905 693 |
| II. Other items of comprehensive income: | ||
| B. Variation of the effective part of the fair value of hedging instruments for authorised cash flows as defined in IFRS. |
0 | -303 405 |
| 1. Effective hedging information | 0 | -303 405 |
| COMPREHENSIVE INCOME (I + II) | 13 222 981 | 17 602 288 |
Net result for the year (€ 13 222 981) is recorded in full under section D. Net result for the year under the own funds after deducting the amount of the interim dividend distributed in December 2017 of € 11 966 258.17.
1 The 2017 consolidated annual accounts of Home Invest Belgium include those of its subsidiaries are presented in €, unless mentioned otherwise. The accounting and valuation criteria set out in the "International Financial Reporting Standards" ("IFRS") have been applied since the annual accounts for the 2006 financial year. The annual financial reports (including the consolidated financial statements, with a shortened version of the statutory accounts, the consolidated management reports, the reports of the Auditor and the Surveyor), the interim statements, the half-year financial reports, the description of the financial situation, the information concerning the related parties and the historical financial information concerning the subsidiaries of the SIR, are included by reference in the present financial annual report.
2 The difference between the Net result of the finanical year in the Equities (€ 1 256 723) ant the Net result in the consolidated Profits & Losses (€ 13 222 981) represent the dividend paid in december 2016 for € 11 966 258.
3 Number of shares at the end of the period is calculated with the exclusion of 11 712 own shares.
4 Corresponds to the net asset value, adjusted in order to exclude, among others, the fair value of the financial hedging instruments.
| Capital | Capital increase expenses |
Share premium |
Legal reserve |
Reserver from the balance of changes in fair value of investment properties |
Reserve from estimated transfer costs and rights |
|
|---|---|---|---|---|---|---|
| BALANCE AT 31/12/2015 | 76 949 295 | -950 240 | 24 903 199 | 98 778 | 105 544 309 | -27 453 339 |
| Transfert | ||||||
| Changers resulting from the sale of a building |
-7 221 461 | 2 071 300 | ||||
| Dividend distribution | ||||||
| Interim dividend of previous year | ||||||
| Interim dividend | ||||||
| Result of the financial year | ||||||
| Changes in fair value of hedges | ||||||
| Reclassification of hedges | ||||||
| Changes in fair value of property | 10 105 545 | -4 113 677 | ||||
| BALANCE AT 31/12/2016 | 76 949 295 | -950 240 | 24 903 199 | 98 778 | 108 428 393 | -29 495 716 |
| BALANCE AT 31/12/2016 | 76 949 295 | -950 240 | 24 903 199 | 98 778 | 108 428 393 | -29 495 716 |
| Transfert | ||||||
| Changers resulting from the sale of a building |
-5 529 628 | 1 327 794 | ||||
| Dividend distribution | ||||||
| Interim dividend of previous year | ||||||
| Interim dividend | ||||||
| Result of the financial year | ||||||
| Changes in fair value of hedges | ||||||
| Reclassification of hedges | ||||||
| Changes in fair value of property |
17 402 429 | -6 107 108 |
Partial demerger VOP 12 000 000
Allocation of shares held in treasury
BALANCE AT 31/12/2017 88 949 295 -950 240 249 031 199 98 778 120 301 194 -34 275 030
| Total | Net result of the financial year |
Result carried forward from previous financial years |
Other reserves |
Reserve for treasury shares |
Reserve from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS not applicable) |
Reserve from the balance of changes in fair value of hedgesreserve for treasury shares (IFRS applicable) |
|---|---|---|---|---|---|---|
| 200 191 632 | 3 507 233 | 18 096 940 | 1 259 467 | -757 323 | 0 | -1 006 688 |
| 0 | 3 271 610 | -3 271 610 | ||||
| 0 | 5 150 161 | |||||
| -12 591 588 | -12 591 588 | |||||
| 11 804 614 | 11 804 614 | |||||
| -11 804 614 | -11 804 614 | |||||
| 17 905 693 | 17 905 693 | |||||
| -303 405 | -303 405 | |||||
| 0 | 5 944 578 | -5 944 578 | ||||
| 0 | -5 991 869 | |||||
| 205 202 333 | 6 101 079 | 25 920 070 | 1 259 467 | -757 323 | -5 944 578 | -1 310 093 |
| 205 202 333 | 6 101 079 | 25 920 070 | 1 259 467 | -757 323 | -5 944 578 | -1 310 093 |
| 0 | 6 768 191 | -6 768 191 | ||||
| 0 | 4 201 834 | |||||
| -13 378 562 | -13 378 562 | |||||
| 11 804 614 | 11 804 614 | |||||
| -11 966 258 | -11 966 258 | |||||
| 13 222 981 | 13 222 981 | |||||
| 0 | 2 025 345 | -2 025 345 | 0 | |||
| 0 | -1 310 093 | 1 310 093 | ||||
| 0 | -11 295 322 | |||||
| 12 000 000 | ||||||
| 70 380 | 70 380 | |||||
| 216 955 487 | 1 256 723 | 25 379 059 | 1 259 467 | -686 943 | -9 280 017 | 0.03 |
| 2017 | 2016 | |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3 437 814 | 2 487 426 |
| 1. Cash flow from operating activities | 7 288 851 | 18 778 554 |
| Result for the financial year | 13 222 981 | 19 931 038 |
| Result for the financial year before interest and taxes | 15 962 188 | 23 037 530 |
| Interest received | 90 494 | 78 701 |
| Interest paid | -3 613 605 | -3 114 159 |
| Change in fair value of financial assets and liabilities | 1 226 658 | 0 |
| Taxes | -442 754 | -71 034 |
| Adjustment of profit for non-current transactions | -3 221 069 | -11 498 740 |
| Depreciation and write-downs | 105 211 | 76 236 |
| - Depreciation and write-downs on non-current assets | 105 211 | 76 236 |
| Other non-monetary elements | -2 606 647 | -11 295 322 |
| - Changes in fair value of investment properties (+/-) | -1 450 369 | -11 295 322 |
| - Other non-current transactions | -1 156 278 | 0 |
| Gain on realisation of assets | -719 633 | -279 654 |
| - Capital gains realized on the sale of non-current assets | -719 633 | -279 654 |
| Change in working capital needs | -2 713 062 | 10 346 256 |
| Movements in asset items: | 828 115 | 6 842 801 |
| - Current financial assets | -509 | -509 |
| - Trade receivables | 547 | 7 501 489 |
| - Tax receivables and other short-term assets | 465 742 | -566 580 |
| - Deferred charges and accrued income | 362 335 | -91 599 |
| Movements of liabilities items: | -3 541 177 | 3 503 455 |
| - Trade and other current debts | -3 544 857 | 4 145 324 |
| - Other current liabilities | -28 024 | -532 338 |
| - Accrued charges and deferred income | 31 704 | -109 531 |
| 2. Cash flow from investment activities | -32 541 887 | -49 768 207 |
| Investment properties - capitalized investments | -4 990 057 | -11 932 359 |
| Investment properties - new acquisitions | -3 769 711 | -39 012 825 |
| Divestments | 11 407 839 | 18 185 471 |
| Development projects | -28 815 412 | -15 537 258 |
| Other intangible assets | -140 612 | -274 542 |
| Other tangible assets | -391 560 | -25 334 |
| Other non-current financial assets | -24 242 | -1 463 |
| Acquisitions of subsidiaries | -5 818 133 | -1 169 897 |
| 3. Cash flow from financing activities | 28 999 009 | 31 947 627 |
| Changes in financial liabilities and debts | ||
| Increase/decrease in financial debts | 42 539 215 | 44 539 215 |
| Dividend of the previous financial year | -1 573 949 | -786 974 |
| Dividende intérimaire | -11 966 258 | -11 804 614 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 7 183 786 | 3 437 814 |
| Note A Acquisition of subsidiaries | INVESTERS | S&F |
|---|---|---|
| Cash and cash equivalents | 642 089 | 2 102 |
| Investment properties | 4 507 877 | 2 500 051 |
| Other current financial debts | 4 856 | 0 |
| Trade debts | 17 901 | 4 075 |
| Accrued charges of assets | 6 924 | 4 198 |
| Other current liabilities | -314 454 | -902 322 |
| Accrued charges and deferred income | -10 973 | 0 |
| Total acquisitions | 4 854 220 | 1 608 104 |
| Cash flow of subsidiaries | -642 089 | -2 102 |
| Cash flow on acquisition of subsidiaries | 4 212 131 | 1 606 002 |
Home Invest Belgium SA is a Regulated Real Estate company and is incorporated as a public limited company under Belgian law. Its registered office is located in Belgium at 60 Boulevard de la Woluwe 46/11, 1200 Brussels. The company is listed on Euronext Brussels. The consolidated annual financial statement encompasses those of Home Invest Belgium and its subsidiaries, Home Invest SA, SPRL Charlent 53 Freehold, SA Investers, and SA S&F Immobilière.
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 (fixed capital investment trusts), 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 2005 (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 otherwise stated. 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 subsidiaries.
Subsidiaries are entities controlled by the group. 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.
As Home Invest Belgium holds more than half of the shares/ voting rights of its subsidiaries, these subsidiaries are controlled by Home Invest Belgium (IFRS 12 § 7 (a)).
The annual accounts of the subsidiaries are fully consolidated from the date of acquisition until the date of control. The accounts of subsidiaries are prepared for the same accounting year as that of Home Invest Belgium. 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.
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 recognised 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 having a limited life are initially valued at cost. After initial recognition, they are valued at cost less accumulated amortisation and any impairment losses.
Intangible assets are amortised on a straight-line basis based on a best estimate of their useful lives. The useful life 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 rental and/or to increase capital. Investment properties are initially recognised at cost, including transfer rights and non-deductible VAT. 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. Every quarter an independent external real estate expert 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 valuation per unit. The expert can decide to use one or the other method to value the real estate properties.
In order to determine the fair value of the property assets assessed, Home Invest Belgium makes the following adjustments:
As long as the investment buildings are new according to the VAT Code, the above restatements are limited to the investment value of the plots of land on which they are built.
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:
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, increase 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.
Property that is being constructed or developed is recognized under investment properties at cost till the end of the construction or the development. At that time, the asset is transferred to investment properties in operation. The costs that can potentially be capitalised relate to materials, contracting works, technical studies, fees (architects, engineers, project management), VAT, taxes, internal costs and interest charges during the construction period.
a. all transaction fees and commissions incurred on the acquisition of a building are activated with the purchase
b. all transaction costs and commissions incurred in connection with the purchase of shares of a real estate
c. all transaction costs and commissions incurred in connection with a contribution in kind of a building in
consideration for the issue of new shares or a contribution of assets by merger are deducted from the amount of
d. commissions relating to the letting of buildings are included in the income statement under item X Commercial
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.
Financial assets are presented in the balance sheet under current or non-current financial assets depending on the intention or the probability of realisation during the twelve months following the closing date. A distinction can be made between:
• financial assets held for sale: shares and securities held for sale are valued at their fair value. Changes in fair value are recorded in shareholders' equity until sale or extraordinary impairment loss, at which time the accumulated
• financial assets held to maturity: non derivative financial assets, settled by determined or ascertainable payments and with target date, which the company has the manifest intention and capacity to hold to maturity. The
Financial liabilities are booked at amortised cost.
Financial derivatives
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. Financial derivatives are initially recorded at cost and then marked to fair value at the following period closing dates.
• Economic cover
Changes in the fair value of financial derivatives which do not meet the conditions for hedge accounting under IAS 39 are recognised in the income statement.
• Cash flow cover
The effective portion of the profits or losses from changes in the fair value of financial derivatives which meet the conditions of hedge accounting under IAS 39, specifically designated and qualified as cash flow hedges of an asset or liability or planned transaction which is recorded in the balance sheet, is recognised in shareholders' equity. The non-effective part is recognised in the income statement. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any accumulated profit or loss shown at that time in shareholders' equity is recognised in the income statement.
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. We note that, taking into account the specifity of unit sales (unit by unit) which can carry over several years, the reclassification within this section is not applied.
Trade receivables are stated at their nominal value less estimated non-recoverable amounts. This reduction in value is recognised in the income statement.
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. 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-Sicafi company with a Sicafi. When a company without Sicafi status enters into the group's consolidation scope for the first time, a provision for exit tax is recorded simultaneously as an amount corresponding to the difference between the marked-to-market value of the property and the carrying value of the asset to be acquired in the merger, taking into account the planned merger date.
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 27, para. 1, subpar. 1 of the RD of 7 December 2010, 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.
Home Invest Belgium has not anticipated the application of the new or amended standards and interpretations which were issued before the date of authorisation to publish the consolidated financial statements but whose effective date is after the annual financial year closed on 31 December 2017, namely:
• Amendments to IAS 12 on Recognition of deferred tax assets in respect of unrealised losses, effective from 1
• Amendments to IAS 40 - Transfer of investment property, which will be effective from 1 January 2018, provided EU
• IFRIC Interpretation 22 - Foreign Currency Transactions and Anticipated Counterparty, effective from 1 January
• Amendments to IFRS 4 - Application of IFRS 9, Financial Instruments and IFRS 4, Insurance Contracts, effective from
• New interpretation of IFRIC 23 - Uncertainty linked to the fiscal treatment which will be effective from 1 January
The future application of these standards or interpretations will have no material impact on the annual financial statements.
The investment properties held by Home Invest Belgium comprise three categories:
In terms of geographic breakdown, the majority of Home Invest Belgium's investment properties are situated in Brussels.
The "unattributed" columns contain the amounts which cannot be attributed to any of these three categories:
| 2017 | Consolidated total |
Brussels Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| I. Rental Income | 22 683 114 | 12 800 798 | 2 007 308 | 5 247 454 | 2 627 554 | |
| III. Rental-related expenses | -183 272 | -104 446 | -10 251 | 5 169 | -73 744 | |
| NET RENTAL RESULT | 22 499 843 | 12 696 352 | 1 997 058 | 5 252 623 | 2 627 554 | -73 744 |
| IV. Recovery of property charges | 136 764 | 113 124 | 9 263 | 14 377 | ||
| V. Recovery of charges and taxes normally payable by the tenant on let properties |
598 574 | 170 432 | 31 825 | 355 002 | 41 316 | |
| VII. Charges and taxes normally payable by the tenant on let properties |
-2 769 775 | -1 919 981 | -186 787 | -621 079 | -41 927 | |
| VIII. Other incomes and expenses related to letting |
-30 000 | -30 000 | ||||
| PROPERTY RESULT | 20 435 406 | 11 029 927 | 1 851 358 | 5 000 923 | 2 626 943 | -73 744 |
| IX. Technical costs | -1 086 011 | -731 846 | -106 612 | -247 553 | ||
| X. Commercial costs | -342 219 | -225 322 | -51 637 | -65 260 | ||
| XI. Taxes and charges on unlet properties |
-289 436 | -177 754 | -41 540 | -70 142 | ||
| XII. Property management costs | -3 766 408 | -20 610 | 0 | -25 681 | -66 865 | -3 653 251 |
| XIII. Other property costs | 19 853 | 15 526 | 4 328 | |||
| PROPERTY COSTS | -5 464 220 | -1 140 006 | -195 461 | -408 637 | -66 865 | -3 653 251 |
| PROPERTY OPERATING RESULT | 14 971 186 | 9 889 920 | 1 655 896 | 4 592 286 | 2 560 077 | -3 726 995 |
| XIV. General corporate expenses | -1 066 763 | -1 066 763 | ||||
| XV. Other operating incomes and expenses |
-112 236 | -112 236 | ||||
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
13 792 187 | 9 889 920 | 1 655 896 | 4 592 286 | 2 560 077 | -4 905 994 |
| XVI. Result sale investment properties | 719 633 | 761 779 | 127 823 | -169 969 | ||
| XVIII. Changes in fair value of investment properties |
1 450 369 | 3 203 483 | -750 284 | -1 702 558 | 699 729 | |
| OPERATING RESULT | 15 962 188 | 13 855 182 | 1 033 435 | 2 889 728 | 3 259 806 | -5 075 963 |
| XX. Financial income | 90 494 | 71 566 | 18 928 | |||
| XXI. Net interest charges | -3 548 571 | -3 548 571 | ||||
| XXII. Other financial charges | -65 034 | -65 034 | ||||
| XXIII. Changes in fair value of financial assets and liabilities |
1 226 658 | 1 226 658 | ||||
| FINANCIAL RESULT | -2 296 453 | 71 566 | -2 368 019 | |||
| PRE-TAX RESULT | 13 665 735 | 13 926 749 | 1 033 435 | 2 889 728 | 3 259 806 | -7 443 982 |
| XXIV. Corporation tax | -361 199 | -361 199 | ||||
| XXV. Exit tax | -81 555 | -81 555 | ||||
| TAXES | -442 754 | -442 754 | ||||
| NET RESULT | 13 222 981 | 13 926 749 | 1 033 435 | 2 889 728 | 3 259 806 | -7 886 737 |
| 2016 | Consolidated total |
Brussels Capital Region |
Flemish Region |
Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| I. Rental Income | 18 979 691 | 11 386 568 | 2 285 745 | 5 114 285 | 193 094 | |
| III. Rental-related expenses | -178 922 | -56 269 | -17 549 | -46 735 | -58 369 | |
| NET RENTAL RESULT | 18 800 769 | 11 330 299 | 2 268 195 | 5 067 549 | 193 094 | -58 369 |
| IV. Recovery of property charges | 86 482 | 73 472 | 8 612 | 4 398 | ||
| V. Recovery of charges and taxes normally payable by the tenant on let properties |
660 864 | 238 818 | 74 950 | 347 096 | ||
| VII. Charges and taxes normally payable by the tenant on let properties |
-2 705 975 | -1 863 438 | -232 589 | -609 948 | ||
| VIII. Other incomes and expenses related to letting |
||||||
| PROPERTY RESULT | 16 842 140 | 9 779 152 | 2 119 168 | 4 809 095 | 193 094 | -58 369 |
| IX. Technical costs | -843 970 | -534 739 | -61 136 | -248 094 | ||
| X. Commercial costs | -406 804 | -334 477 | -31 102 | -41 226 | ||
| XI. Taxes and charges on unlet properties |
-392 488 | -231 006 | -25 006 | -136 475 | ||
| XII. Property management costs | -2 780 000 | -205 | -7 020 | -23 467 | -2 749 307 | |
| XIII. Other property costs | -81 388 | -82 885 | -450 | -8 204 | 10 151 | |
| PROPERTY COSTS | -4 504 650 | -1 183 313 | -124 714 | -457 466 | 0 | -2 739 156 |
| PROPERTY OPERATING RESULT | 12 337 491 | 8 595 839 | 1 994 454 | 4 351 629 | 193 094 | -2 797 525 |
| XIV. General corporate expenses | -845 488 | -1 068 093 | ||||
| XV. Other operating incomes and expenses |
-29 448 | -112 236 | ||||
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
11 462 554 | 8 595 839 | 1 994 454 | 4 351 629 | 193 094 | -3 977 854 |
| XVI. Result sale investment properties | 279 654 | 115 111 | 325 072 | -160 529 | ||
| XVIII. Changes in fair value of investment properties |
11 295 322 | 11 201 277 | 254 104 | 287 017 | -447 076 | |
| OPERATING RESULT | 23 037 530 | 19 912 228 | 2 573 630 | 4 638 645 | -253 982 | -4 138 384 |
| XX. Financial income | 78 701 | 76 586 | 2 116 | |||
| XXI. Net interest charges | -3 048 453 | -3 606 773 | ||||
| XXII. Other financial charges | -65 705 | -63 846 | ||||
| XXIII. Changes in fair value of financial assets and liabilities |
-2 025 345 | 1 226 658 | ||||
| FINANCIAL RESULT | -5 060 803 | 76 586 | -2 441 845 | |||
| PRE-TAX RESULT | 17 976 727 | 19 988 813 | 2 573 630 | 4 638 645 | -253 982 | -6 580 229 |
| XXIV. Corporation tax | -71 034 | -456 803 | ||||
| XXV. Exit tax | ||||||
| TAXES | -71 034 | -456 803 | ||||
| NET RESULT | 17 905 693 | 19 988 813 | 2 573 630 | 4 638 645 | -253 982 | -7 037 032 |
| 2017 | Consolidated total |
Properties valued by individual units |
Properties valued "en bloc" >2 500 000€ |
Properties valued "en bloc" <2 500 000€ |
Unattributed |
|---|---|---|---|---|---|
| I. Rental Income | 22 683 114 | 15 012 577 | 7 352 988 | 317 549 | |
| III. Rental-related expenses | -183 272 | -109 527 | 0 | 0 | -73 744 |
| NET RENTAL RESULT | 22 499 843 | 14 903 050 | 7 352 988 | 317 549 | -73 744 |
| IV. Recovery of property charges | 136 764 | 122 700 | 13 344 | 720 | |
| V. Recovery of charges and taxes normally payable by the tenant on let properties |
598 574 | 152 123 | 394 513 | 51 938 | |
| VII. Charges and taxes normally payable by the tenant on let properties |
-2 769 775 | -2 215 107 | -491 557 | -63 111 | |
| VIII. Other incomes and expenses related to letting |
-30 000 | -30 000 | |||
| PROPERTY RESULT | 20 435 406 | 12 932 766 | 7 269 288 | 307 097 | -73 744 |
| IX. Technical costs | -1 086 011 | -909 360 | -168 745 | -7 906 | |
| X. Commercial costs | -342 219 | -322 548 | -17 493 | -2 178 | |
| XI. Taxes and charges on unlet properties |
-289 436 | -240 178 | -29 922 | -19 336 | |
| XII. Property management costs | -3 766 408 | -46 292 | -66 865 | -3 653 251 | |
| XIII. Other property costs | 19 853 | 19 853 | 0 | 0 | |
| PROPERTY COSTS | -5 464 220 | -1 498 524 | -283 026 | -29 420 | -3 653 251 |
| PROPERTY OPERATING RESULT | 14 971 186 | 11 434 242 | 6 986 262 | 277 677 | -3 726 995 |
| XIV. General corporate expenses | -1 066 763 | -1 066 763 | |||
| XV. Other operating incomes and expenses |
-112 236 | -112 236 | |||
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
13 792 187 | 11 434 242 | 6 986 262 | 277 677 | -4 905 994 |
| XVI. Result sale investment properties | 719 633 | 889 602 | -169 969 | ||
| XVIII. Changes in fair value of investment properties |
1 450 369 | 2 221 203 | -188 785 | -582 049 | |
| OPERATING RESULT | 15 962 188 | 14 545 047 | 6 797 477 | -304 372 | -5 075 963 |
| XX. Financial income | 90 494 | 71 566 | 18 928 | ||
| XXI. Net interest charges | -3 548 571 | -3 548 571 | |||
| XXII. Other financial charges | -65 034 | -65 034 | |||
| XXIII. Changes in fair value of financial assets and liabilities |
1 226 658 | 1 226 658 | |||
| FINANCIAL RESULT | -2 296 453 | 71 566 | -2 368 019 | ||
| PRE-TAX RESULT | 13 665 735 | 14 545 047 | 6 797 477 | -232 806 | -7 443 982 |
| XXIV. Corporation tax | -361 199 | -361 199 | |||
| XXV. Exit tax | -81 555 | -81 555 | |||
| TAXES | -442 754 | -442 754 | |||
| NET RESULT | 13 222 981 | 14 545 047 | 6 797 477 | -232 806 | -7 886 737 |
| 2016 | Consolidated total |
Properties valued by individual units |
Properties valued "en bloc" >2 500 000€ |
Properties valued "en bloc" <2 500 000€ |
Unattributed |
|---|---|---|---|---|---|
| I. Rental Income | 18 979 691 | 13 787 348 | 4 834 669 | 357 675 | |
| III. Rental-related expenses | -178 922 | -87 748 | -35 072 | 2 266 | -58 369 |
| NET RENTAL RESULT | 18 800 769 | 13 699 600 | 4 799 597 | 359 941 | -58 369 |
| IV. Recovery of property charges | 86 482 | 86 032 | 0 | 450 | |
| V. Recovery of charges and taxes normally payable by the tenant on let properties |
660 864 | 186 466 | 425 665 | 48 733 | |
| VII. Charges and taxes normally payable by the tenant on let properties |
-2 705 975 | -2 201 120 | -441 366 | -63 489 | |
| VIII. Other incomes and expenses related to letting |
0 | ||||
| PROPERTY RESULT | 16 842 140 | 11 770 977 | 4 783 897 | 345 635 | -58 369 |
| IX. Technical costs | -843 970 | -725 037 | -107 557 | -11 376 | |
| X. Commercial costs | -406 804 | -402 178 | -283 | -4 344 | |
| XI. Taxes and charges on unlet properties |
-392 488 | -324 759 | -22 230 | -45 498 | |
| XII. Property management costs | -2 780 000 | -22 199 | -8 493 | -2 749 307 | |
| XIII. Other property costs | -81 388 | -83 194 | -8 345 | 10 151 | |
| PROPERTY COSTS | -4 504 650 | -1 557 367 | -146 909 | -61 217 | -2 739 156 |
| PROPERTY OPERATING RESULT | 12 337 491 | 10 213 610 | 4 636 988 | 284 418 | -2 797 525 |
| XIV. General corporate expenses | -845 488 | -1 068 093 | |||
| XV. Other operating incomes and expenses |
-29 448 | -112 236 | |||
| OPERATING RESULT BEFORE PORTFOLIO RESULT |
11 462 554 | 10 213 610 | 4 636 988 | 284 418 | -3 977 854 |
| XVI. Result sale investment properties | 279 654 | 440 184 | -160 529 | ||
| XVIII. Changes in fair value of investment properties |
11 295 322 | 11 861 831 | -465 682 | -100 827 | |
| OPERATING RESULT | 23 037 530 | 22 515 624 | 4 171 306 | 183 591 | -4 138 384 |
| XX. Financial income | 78 701 | 76 586 | 2 116 | ||
| XXI. Net interest charges | -3 048 453 | -3 606 773 | |||
| XXII. Other financial charges | -65 705 | -63 846 | |||
| XXIII. Changes in fair value of financial assets and liabilities |
-2 025 345 | 1 226 658 | |||
| FINANCIAL RESULT | -5 060 803 | 76 586 | -2 441 845 | ||
| PRE-TAX RESULT | 17 976 727 | 22 515 624 | 4 171 306 | 260 177 | -6 580 229 |
| XXIV. Corporation tax | -71 034 | -456 803 | |||
| XXV. Exit tax | |||||
| TAXES | -71 034 | -456 803 | |||
| NET RESULT | 17 905 693 | 22 515 624 | 4 171 306 | 260 177 | -7 037 032 |
The other tangible assets are described in Annex 18. The other intangible assets are described in Annex 15.
| 2017 | 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 | |
| Investment properties - Development projects |
34 530 224 | 27 743 288 | 6 786 935 | |||
| Assets held for sale | ||||||
| Finance lease receivables | 582 639 | 582 639 | ||||
| Other assets | 11 842 260 | 11 842 260 | ||||
| TOTAL ASSETS | 470 061 090 | 295 822 592 | 46 162 257 | 67 130 060 | 49 103 922 | 11 842 260 |
| Percentage by sector | 100.00% | 62.93% | 9.82% | 14.28% | 10.45% | 2.52% |
| Shareholders' equity | 216 955 487 | 216 955 487 |
| Liabilities | 253 105 603 | 253 105 603 |
|---|---|---|
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
470 061 090 | 470 061 090 |
| 2017 | Consolidated total |
Properties valued by individual units |
Properties valued "en bloc" >2 500 000€ |
Properties valued "en bloc" <2 500 000€ Unattributed |
|
|---|---|---|---|---|---|
| Investment properties in operation |
423 105 968 | 363 798 520 | 55 768 780 | 3 538 667 | |
| Investment properties - Development projects |
34 530 224 | 34 530 224 | |||
| Assets held for sale | 0 | 0 | |||
| Finance lease receivables | 582 639 | 582 639 | |||
| Other assets | 11 842 260 | 11 842 260 | |||
| TOTAL ASSETS | 470 061 090 | 398 328 744 | 55 768 780 | 4 121 305 | 11 842 260 |
| Percentage by sector | 100.00% | 84.74% | 11.86% | 0.88% | 2.52% |
| Shareholders' equity | 216 955 487 | 216 955 487 | |||
| Liabilities | 253 105 603 | 253 105 603 | |||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
470 061 090 | 470 061 090 |
| 2017 | Consolidated total |
Properties valued by individual units |
Properties valued "en bloc">2 500 000€ |
Properties valued "en bloc"<2 500 000€ Unattributed |
|
|---|---|---|---|---|---|
| Investment properties | |||||
| Investments | 4 990 057 | 4 747 006 | 131 224 | 111 827 | |
| Other tangible assets | |||||
| Investments | 589 960 | 589 960 | |||
| Depreciation | -198 589 | -198 589 | |||
| Intangible assets | |||||
| Investments | 458 932 | 458 932 | |||
| Depreciation | -42 908 | -42 908 | |||
| 2016 | Consolidated total |
Brussels | Capital Region Flemish Region | Walloon Region |
The Netherlands |
Unattributed |
|---|---|---|---|---|---|---|
| Investment properties in | 381 316 652 | 234 841 512 | 37 913 104 | 67 851 252 | 40 710 784 | |
| ti Investment properties - Development projects |
27 517 077 | 23 535 745 | 3 981 332 | |||
| Assets held for sale | 1 457 192 | 923 556 | 533 636 | |||
| Finance lease receivables | 717 882 | 717 882 | ||||
| Other assets | 8 292 718 | 8 292 718 | ||||
| TOTAL ASSETS | 419 301 520 | 260 018 694 | 42 428 072 | 67 851 252 | 40 710 784 | 8 292 718 |
| Percentage by sector | 100.00% | 62.01% | 10.12% | 16.18% | 8.66% | 1.98% |
| Shareholders' equity | 205 202 333 | |||||
| Liabilities | 214 099 188 | |||||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
419 301 520 |
| 2016 | Consolidated total |
Properties valued by individual units |
Properties valued "en bloc" >2 500 000€ |
Properties valued "en bloc" <2 500 000€ Unattributed |
|
|---|---|---|---|---|---|
| Investment properties in operation |
381 316 652 | 321 481 422 | 55 826 341 | 4 008 889 | |
| Investment properties - Development projects |
27 517 077 | 27 517 077 | |||
| Assets held for sale | 1 457 192 | 1 457 192 | |||
| Finance lease receivables | 717 882 | 717 882 | |||
| Other assets | 8 292 718 | 8 292 718 | |||
| TOTAL ASSETS | 419 301 520 | 350 455 691 | 55 826 341 | 4 726 770 | 8 292 718 |
| Percentage by sector | 100.00% | 83.58% | 13.31% | 1.13% | 1.98% |
| Shareholders' equity | 205 202 333 | 205 202 333 | |||
| Liabilities | 214 099 188 | 214 099 188 | |||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |
419 301 520 | 419 301 520 |
| 2016 | Consolidated total |
Properties valued by individual units |
Properties valued "en bloc">2 500 000€ |
Properties valued "en bloc"<2 500 000€ Unattributed |
|
|---|---|---|---|---|---|
| Investment properties | |||||
| Investments | 11 932 359 | 3 720 496 | 8 188 053 | 23 810 | |
| Other tangible assets | |||||
| Investments | 534 763 | 534 763 | |||
| Depreciation | -432 447 | -432 447 | |||
| Intangible assets | |||||
| Investments | 318 320 | 318 320 | |||
| Depreciation | -40 202 | -40 202 |
| INCOME STATEMENT | 2017 | 2016 |
|---|---|---|
| I. Rental income | ||
| A. Rent | 22 619 301 | 18 959 663 |
| C. Rent-free periods | -53 941 | -77 186 |
| E. Early lease termination indemnities | 117 753 | 97 214 |
| III. Rental-related expenses | ||
| A. Rent payable on leased premises | -101 173 | -108 248 |
| B. Impairments on trade receivables | -150 195 | -207 574 |
| C. Reversal of impairments on trade receivables | 68 096 | 136 900 |
| NET RENTAL INCOME | 22 499 843 | 18 800 769 |
Rental income increased following the acquisition and delivery of new buildings.
| 2017 | 2016 | |
|---|---|---|
| NET RENTAL INCOME | 22 499 843 | 18 800 769 |
| IV. Recovery of property charges | ||
| A. Indemnities for tenant damage | 136 764 | 86 482 |
| V. Recovery of charges and taxes normally paid by the tenant on let properties | ||
| A. Re-invoicing of rental-related charges paid by the owner | 67 818 | 56 511 |
| B. Re-invoicing of property and other taxes on let properties | 530 756 | 604 353 |
| VII. Rental-related charges and taxes normally paid by the tenant on let properties | ||
| A. Rental charges incurred by the owner | -458 146 | -494 623 |
| B. Property and other taxes on leased buildings | -2 311 629 | -2 211 352 |
| VIII. Other rental income and expenses | -30 000 | 0 |
| TOTAL | -2 064 437 | -1 958 629 |
| PROPERTY RESULT | 20 435 406 | 16 842 140 |
The re-invoicing of rental expenses mainly concerns the insurance premiums relating to the abandonment of recourse which are contained in the majority of the fire policies of the buildings, as well as certain expenses related to the supply of telephone lines.
The rental expenses incurred by the owner relate to all charges for buildings whose rent paid by tenants includes all services and charges.
In the residential sector, the withholding tax is payable by the lessor for all principal residence leases. Invoicing of property tax and taxes therefore mainly concern commercial or office space.
| 2016 |
|---|
| -734 101 |
| -140 491 |
| -22 287 |
| 52 909 |
| -843 970 |
Within the light of its annual estimated budget, Home Invest Belgium determines a specific maintenance and renovation policy for each of its buildings, so that they correspond to the requirements of the rental market. The technical costs are often incurred during rental exits or in case of necessary repairs during the rental period.
| 2017 | 2016 | |
|---|---|---|
| X. Commercial costs | ||
| A. Agency and experts' fees | -266 421 | -249 034 |
| B. Publicity | -50 619 | -96 946 |
| C. Lawyers' fees, legal costs | -25 179 | -60 824 |
| TOTAL | -342 219 | -406 804 |
Marketing expenses are stable compared to 2016.
| 2017 | 2016 | |
|---|---|---|
| XI. Taxes and charges on un-let properties | -289 436 | -392 488 |
| XII. Property management costs | ||
| A. Managers' fees | -284 123 | -81 548 |
| B. (Internal) property management costs | -3 482 285 | -2 698 451 |
| XIII. Other property charges | 19 853 | -81 388 |
| TOTAL | -4 035 990 | -3 253 875 |
| PROPERTY CHARGES | -5 464 220 | -4 504 650 |
| PROPERTY OPERATING RESULT | 14 971 186 | 12 337 491 |
Internal property management expenses mainly include personnel costs incurred during the year.
| 2017 | 2016 | |
|---|---|---|
| PROPERTY OPERATING RESULT | 14 971 186 | 12 337 491 |
| XIV. General corporate expenses | -1 066 763 | -845 488 |
| XV. Other operating income and charges | -112 236 | -29 448 |
| TOTAL | -1 178 999 | -874 937 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 13 792 187 | 11 462 554 |
analysis (technical survey, judicial appraisal…) and the subscription tax.
| 2017 | 2016 | |
|---|---|---|
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 13 792 187 | 11 462 554 |
| XVI. Result on sale of investment properties | 719 633 | 279 654 |
| A. Net sales of properties (sales price – selling costs) | 11 273 651 | 18 185 471 |
| B. Accounting values of the properties sold | -10 554 018 | -17 905 816 |
| XVIII. Changes in fair value of investment properties | ||
| A. Positive changes in the fair value of investment properties | 8 743 019 | 18 724 402 |
| B. Negative changes in the fair value of investment properties | -1 437 982 | -1 321 973 |
| C. Positive changes in the estimated transfer costs and rights intervening in case of hypothetical alienation of investment property |
130 419 | 75 767 |
| D. Negative changes in the estimated transfer costs and rights intervening in case of hypothetical alienation of investment property |
-5 985 086 | -6 182 874 |
| TOTAL | 2 170 002 | 11 574 976 |
| OPERATING RESULT | 15 962 188 | 23 037 530 |
The gain on sale of investment property arises from the sale of real estate. The full details of the completed sales and realised capital gains are included in the Management Report.
We remind that the result on the sale of investment properties is accounted for as the difference between the sales price minus the expenses related to the conclusion of these sales (heading XVI.A.) and the latest fair value recorded for the asset in question (heading XVI.B.)
In accordance with article 13 §1 - § 1 of the Royal Decree of 13 July 2014 and Annex C, the distributable capital gains realised on property during the financial year are calculated in comparison with the acquisition value increased by the capitalized investment expenses. At 31/12/2017, the realised distributable capital gain generated was € 4 921 467 (compared to the acquisition value), while the realised capital gain compared with the last fair value was € 719 633.
| 2017 | 2016 | |
|---|---|---|
| XX. Financial income | ||
| A. Interest and dividends received | 18 928 | 2 116 |
| B. Lease-financing and similar payments | 71 566 | 76 586 |
| TOTAL | 90 494 | 78 701 |
Interest and dividends received come exclusively from the short-term deposit of cash surpluses.
The lease-financing payments relate to the leasings described in Note 19.
| 2017 | 2016 | |
|---|---|---|
| XXI. Net interest charges | ||
| A. Nominal interest on borrowings | -2 580 286 | -2 144 866 |
| C. Income from allowed hedges | ||
| 1. Allowed hedges to which hedge accounting as defined by IFRS is applied | 0 | -208 099 |
| 2. Allowed hedges to which hedge accounting as defined by IFRS is not applied | -968 285 | -695 489 |
| TOTAL | -3 548 571 | -3 048 453 |
The charges resulting from hedging instruments relate to the difference between the fixed interest rate paid for the IRS purchased subsequently and the variable interest rates in effect during the course of the financial year. For more detail on the financial debt structure, please refer to Note 24 hereafter.
| 2017 | 2016 | |
|---|---|---|
| XXII. Other financial charges | ||
| A. Bank charges and other fees | -61 842 | -65 705 |
| 0 Realized loss on sale of financial assets | -2 522 | 0 |
| D. Other | -671 | 0 |
| XXIII. Changes in fair value of financial assets and liabilities | ||
| A. Allowed hedges | ||
| 2. Allowed hedges to which hedge accounting as defined by IFRS is not applied | 1 226 658 | -2 025 345 |
| TOTAL | 1 161 624 | -2 091 051 |
| FINANCIAL RESULT | -2 296 453 | -5 060 803 |
| PRE-TAX RESULT | 13 665 735 | 17 976 727 |
The changes in fair value of financial assets relate to hedges considered as ineffective according to the application of IAS 39, and are consequently accounted for in the income statement. This cost or product is purely latent, which does only count in the hypothesis that the RREC or the banks does not proceed to an early liquidation of these products and is excluded in the calculation of the distributable result.
| 2017 | 2016 | |
|---|---|---|
| PRE-TAX RESULT | 13 665 735 | 17 976 727 |
| XXIV. Corporation tax | -361 199 | -71 034 |
| XXV. Exit tax | -81 555 | 0 |
| TAXES | -442 754 | -71 034 |
| NET RESULT | 13 222 981 | 17 905 693 |
Registered Real Estate companies enjoy a specific tax regime. Only benefits in kind, abnormal and benevolent advantages as well as certain specific charges are subject to corporation tax in Belgium. The subsidiaries do not enjoy this specific tax regime. Income from the Netherlands is taxed at source. This total represents the due taxes paid by Home Invest Belgium. We remark that in 2017, following a merger with the subsidiary Home Invest Development, an exit tax of € 81 555 has been paid.
| 2017 | 2016 | |
|---|---|---|
| Intangible assets, beginning of the financial year | 278 118 | 7 733 |
| 1. Gross value | 318 320 | 43 778 |
| 2. Accumulated amortization (-) | -40 202 | -36 045 |
| Investments | 140 612 | 274 542 |
| Amortizations (-) | -2 706 | -4 158 |
| Intangible assets, end of the financial year | 416 024 | 278 118 |
| 1. Gross value | 458 932 | 318 320 |
| 2. Accumulated amortization (-) | -42 908 | -40 202 |
Intangible assets consist of the WinIris real estate software amortised on a straight-line basis over a 5-year useful life, but equally its replacement Axxerion of which the amortisation will be done in 6 years as from the start of use foreseen in 2018. The amortisations are accounted for under heading XII "Property management costs" of the income statement.
| 2017 | 2016 | |
|---|---|---|
| C. Investment properties, balance at the beginning of the financial year | 408 833 729 | 346 100 301 |
| a. Investment properties | ||
| Balance at the beginning of the financial year | 381 316 652 | 313 635 127 |
| Transferts vers les projets de développement ( - ) | ||
| Completion of buildings under construction | 21 802 265 | 22 319 503 |
| Acquisition of buildings | 5 894 980 | 39 012 825 |
| Capitalized subsequent expenses | 4 990 057 | 11 932 359 |
| Acquisitions par voie de regroupements d'entreprises | 16 882 659 | |
| Gains (losses) from fair value adjustments | 1 450 369 | 11 295 322 |
| Transfer to assets held for sale | 1 457 192 | -16 878 483 |
| Balance at the end of the financial year | 423 105 968 | 381 316 652 |
| b. Development projects | ||
| Balance at the beginning of the financial year | 27 517 077 | 32 465 174 |
| Investments – development projects | 28 815 412 | 17 371 406 |
| Completion of development projects | -21 802 265 | -22 319 503 |
| Balance at the end of the financial year | 34 530 224 | 27 517 077 |
| c. Properties for own use | ||
| N/A | N/A | |
| d. Others | ||
| N/A | N/A | |
| C. Investment properties, closing balance at the end of the financial year | 457 636 192 | 408 833 729 |
The development projects at the closing of the financial year 2017 are commented in detail in the Management report and the Property report.
IFRS 13 is applied to IFRS standards that demand or allow fair value measurements or disclosures on fair value and, consequently, IAS 40 Investment properties. IFRS 13 foresees a hierarchy in fair values under 3 data input levels (levels 1, 2 et 3).
As shown in the table above, the fair value of investment property at 31 December 2017 is € 457 636 192, all of which are at level 3. With no levels other than level 3, Home Invest Belgium does not have a policy to monitor transfers between hierarchical levels.
The valuations are made based on 2 methods:
The valuations take into account the rental state, the charges and taxes to be borne by the landlord and potential works to be carried out. The valuations are also based on market transactions, and this taking into account the values per square meter. carried out.
The valuations are also based on market transactions, and this taking into account the values per square meter.
| Reconciliation between the financial years 2016 and 2017 | |
|---|---|
| Investment properties at 31/12/2013 | 408 833 729 |
| Acquisitions and investments | 56 583 107 |
| Transfer to assets held for sale | 1 457 192 |
| Profits resulting from fair value adjustments | 1 450 369 |
| Investment properties at 31/12/2014 | 440 389 102 |
As mentioned above, all these fair values are level 3 and no transfer to or from level 3 took place.
| Properties valued by | Properties valued "en bloc" | Properties valued "en bloc" | |
|---|---|---|---|
| individual units | > € 2 500 000 | < € 2 500 000 | |
| Rents per m2 per year | Weighted average of € 113 m2 | Weighted average of € 145 m2 | Weighted average of € 91 m2 |
| (range between: € 21 m2 and € 217 | (range between: € 105 m2 and € | (range between: € 47 m2 and € 170 | |
| m2) | 348 m2) | m2) | |
| Estimated rental value per m2 per year |
Weighted average of € 114 m2 (range between: € 46 m2 and € 168 m2) |
Weighted average of € 131 m2 (range between: € 99 m2 and € 275 m2) |
Weighted average of € 92 m2 (range between: € 65 m2 and € 200 m2) |
| Capitalization rate | Weighted average of 5.27% | Weighted average of 6.68% | Weighted average of 7.50% |
| (range between 3.70% and 7.35%) | (range between 5.75% and 7.65%) | (range between 4.70% and 10.50%) |
Sensitivity analysis for the level 3 fair values :
A decrease or an increase of the estimated rental value and/or the rents obtained will potentially have a downward or upward impact of the fair value of the investment properties. A decrease or an increase of the actualisation rate and/or capitalisation rate will potentially have an upward or downward impact of the fair value of the investment properties. These rates are defined by the conditions in the financial and real estate markets.
The valuations of investment properties are realised four times a year by an independent and qualified real estate surveyor. These reports are realised based on information communicated by the company with regard to the rental state, the charges and taxes to be borne by the landlord, the rents, the works to be carried out,... This information is extracted from the database of the company's IT-system and is part of the administrative organisation and internal control of the company. The real estate surveyor uses market parameters (actualisation rate,…) that are based on his judgements and his professional experience. The information communicated to the real estate surveyor, the parameters and the valuation models used by the real estate surveyor are controlled by the Executive Management and by the Audit committee.
Note that the development projects are included among the investment properties in Note 16.
| 2017 | 2016 | |
|---|---|---|
| Other tangible assets, balance beginning of period | 102 316 | 149 060 |
| 1. Gross value | 534 763 | 509 429 |
| 2. Accumulated depreciation (-) | -432 447 | -360 369 |
| Investments | 391 560 | 25 334 |
| Cessions (-) | -336 363 | 0 |
| Transfer depreciation (-) | -102 505 | -72 078 |
| Cessions (+) | 336 363 | |
| Other tangible assets, closing balance end of period | 391 371 | 102 316 |
| 1. Gross value | 589 960 | 534 763 |
| 2. Accumulated depreciation (-) | -198 589 | -432 447 |
The other tangible assets relate exclusively to the operating assets. The increase in the tangible assets is due to the redecorating/installment of the new corporate offices.
| D. Other tangible assets | 2017 | 2016 |
|---|---|---|
| a. Tangible assets for own use | 391 371 | 102 316 |
| 2017 | 2016 | |
|---|---|---|
| Receivables after 5 years | 208 625 | 272 217 |
| Receivables after one year and within 5 years | 238 262 | 310 421 |
| Receivables within one year | 135 752 | 135 243 |
| TOTAL | 582 639 | 717 882 |
Finance lease receivables relate to the buildings Rue de Belgrade in Forest and Lemaine Lemaire in Molenbeek.
Short description of these contracts:
| 2017 | 2016 | |||||
|---|---|---|---|---|---|---|
| < 1 year | 1 year < > 5 years |
> 5 years | < 1 year | 1 year < > 5 years |
> 5 years | |
| 1. Gross investment in finance lease |
163.084 | 303.442 | 227.739 | 169.722 | 390.643 | 303.622 |
| 2. Present value of future minimum lease payments |
135.752 | 238.262 | 208.625 | 135.243 | 310.421 | 272.217 |
| 3. Unearned finance income |
27.332 | 65.180 | 19.114 | 34.479 | 80.221 | 31.405 |
| 2017 | 2016 | |
|---|---|---|
| Net sales prices (excl. costs) | 11 273 651 | 18 185 471 |
| Latest fair value | -10 554 018 | -17 905 816 |
| Realized capital gain | 719 633 | 279 654 |
| Distributable realized capital gain | 4 921 467 | 5 429 815 |
| A. Assets held for sale | 2017 | 2016 |
|---|---|---|
| a. Investment properties | 0 | 1 457 192 |
The unit sales (unit by unit) of a property takes place over several years. Teken into account that the real estate expert values a property as a whole (and not piece by piece), the uptake in this section is unreliable and could mislead the reader as compared to the strategy put in place and described in earlier chapters. Therefore, starting ion. 2017, the company has decided to no longer reclassify these sales under this heading.
| D. Trade receivables | 2017 | 2016 |
|---|---|---|
| Tenants | 948 545 | 500 849 |
| Other | -317 984 | 134 423 |
| Realized sales | 2 696 257 | 2 534 364 |
| TOTAL | 3 326 818 | 3 169 636 |
Trade receivables consist of rental payments still receivable from tenants. These rents are payable in advance. In addition, following the signing of various sales agreements at the end of 2017, Home Invest Belgium had receivables of € 2 696 257 at 31 December 2017, which will be paid at the beginning of 2018 upon enactment of the notarial deeds.
| E. Tax receivables and other current assets | 2017 | 2016 |
|---|---|---|
| a. Recoverable tax and other taxes | 289 268 | 696 222 |
| c. Others | 87 440 | 146 227 |
| TOTAL | 376 707 | 842 449 |
Working capital payments which are the funds made available to building managers and agents (syndics) to enable them to financially assume the management of the common expenses of the investment properties are detailed in section c. Other.
Concerning the tax debts of 2017, they concern the enlistment to preliminary withholding taxes which have been contested.
| 2017 | 2016 | |
|---|---|---|
| Cash in hand | 0 | 57 |
| Bank balances | 7 183 786 | 3 437 757 |
| TOTAL | 7 183 786 | 3 437 814 |
| 2017 | 2016 | |
|---|---|---|
| Accrued and not due property income | 14 454 | 8 298 |
| Prepaid property charges | 21 067 | 393 339 |
| Other | 0 | -14 902 |
| TOTAL ASSETS | 35 521 | 386 735 |
| Property income received in advance | 368 074 | 263 578 |
| Interest and other charges accrued and not due | 1 088 336 | 1 159 692 |
| Other | 218 | 1 653 |
| TOTAL LIABILITIES | 1 456 627 | 1 424 923 |
Interest and other accrued liabilities represent, on the one hand, drawings on our credit lines and interest rate hedging instruments of which the interests are to be paid on the expiry of the drawing period and interest payable at the closing date of our bond issue.
| E. Non-current financial assets | 2017 | 2016 |
|---|---|---|
| a. Assets hold until the maturity | ||
| 5. Others | 4 089 | 0 |
| e. Others | 100 657 | 75 649 |
| TOTAL | 104 747 | 75 649 |
Other financial assets represent a guarantee in favour of the NSSO and reserve funds paid in several co-ownerships.
| I. Non-current liabilities | 2017 | 2016 |
|---|---|---|
| B. Non-current financial debts | ||
| a. Financial debts | 185 000 000 | 152 500 000 |
| c. Others | ||
| 1. Other debts | 39 745 100 | 39 705 885 |
| C. Other non-current financial liabilities | ||
| a. Hedging | 8 060 644 | 9 280 017 |
| II. Current liabilities | ||
| B. Current financial debts | ||
| a. Financial debts | 10 000 000 | 0 |
| c. Others | ||
| 2. Bank guarantee | 586 663 | 632 226 |
| 5. Others | 87 166 | 80 000 |
The other financial liabilities represent an annual long lease payment due by the company.
The other borrowings of € 39 745 100 correspond to the bond investment (net of fees) realised in June 2014. The notional amount is equal to € 40 000 000 with maturity date at 18/06/2024.
Non-current financial liabilities relate to the IRS detailed below. Their negative fair value was € 8 060 644 at the end of the financial year. Hedge accounting as defined in IAS 39.
| I. Non-current liabilities | 2017 | 2016 |
|---|---|---|
| D. Trade debts and other current debts | ||
| b. Others | ||
| 1. Suppliers | 4 839 837 | 9 133 693 |
| 2. Tenants | 1 537 994 | 716 496 |
| 3. Tax, salary, social security | 1 728 915 | 535 269 |
The figures in the table below relate solely to debts to financial institutions:
| 2017 | 2016 | |
|---|---|---|
| Current financial liabilities at up to 1 year | 10 000 000 | 0 |
| Non-current financial liabilities at 1 to 5 years | 102 000 000 | 74 500 000 |
| Non-current financial liabilities at more than 5 years | 122 745 100 | 117 705 885 |
| TOTAL | 234 745 100 | 192 205 885 |
The table below shows the credit lines of credit opened with each bank (contracted and withdrawn amounts) and the average maturity. Only one credit line matures in 2018 with the bank Degroof Petercam for € 10 million. As on 31/12/2017, Home Invest disposes € 13 million availabilities on its credit lines. The total of the credit lines are contracted at floating rate.
| Financial debts | Amount of credit line | Amount drawn | Average duration |
|---|---|---|---|
| Bank debts | 208 000 000 | 195 000 000 | 4 years and 9 months |
| Belfius | 61 500 000 | 61 500 000 | 4 years et 10 months |
| BNP Paribas Fortis | 46 500 000 | 46 500 000 | 7 years |
| ING | 60 000 000 | 47 000 000 | 4 years et 6 months |
| KBC Bank | 30 000 000 | 30 000 000 | 2 years and 11 months |
| Degroof | 10 000 000 | 10 000 000 | 4 months |
| Bond issue | 40 000 000 | 40 000 000 | 6 years et 6 months |
| Issue of 2014, 18 June | 40 000 000 | 40 000 000 | 6 years and 6 months |
| TOTAL | 248 000 000 | 235 000 000 | 5 years |
Interest rate hedging instruments are exclusively IRS (Interest Rate Swaps), which constitute fixed-rate floating rate swaps. As of 31 December 2016, the total amount of IRS hedges subscribed is € 143 million as shown in the table below.
Following a restructuring in 2015, Home Invest Belgium benefits various IRS with staggering commencement dates as described below.
No instrument is subject to hedge accounting under the form of a cash flow hedge subject to IAS 39.
| Hedge instruments 31/12/2017 | Type | Amount | Interest Rate |
Deadline Qualification | Fair value 31/12/2017 |
|
|---|---|---|---|---|---|---|
| Belfius | IRS | 10 000 000 | 1.160% | 10-11-2024 Transaction | -515 873 | |
| Belfius | IRS | 10 000 000 | 1.060% | 10-11-2024 Transaction | -445 048 | |
| Belfius | IRS | 15 000 000 | 1.965% | 10-11-2027 Transaction | -1 821 254 | |
| Belfius | IRS | 21 500 000 | 0.585% | 10-11-2025 Transaction | -73 443 | |
| BNP Paribas Fortis | IRS | 25 000 000 | 1.199% | 30-09-2027 Transaction | -1 060 470 | |
| BNP Paribas Fortis | IRS | 21 500 000 | 0.400% | 30-11-2021 Transaction | -111 680 | |
| ING | IRS | 10 000 000 | 1.600% | 14-04-2026 Transaction | -864 431 | |
| ING | IRS | 15 000 000 | 0.350% | 1-06-2022 Transaction | 7 286 | |
| KBC | IRS | 15 000 000 | 0.087% | 5-05-2021 Transaction | -55 668 | |
| Hedging instrument IRS type | 143 000 000 | 5 years and 7 months | -4 940 581 |
| Hedge instruments 31/12/2017 | Type | Amount | Interest Rate |
Start | Deadline Qualification | Fair value 31/12/2017 |
|---|---|---|---|---|---|---|
| ING | IRS | 20 000 000 | 1.90% | 14-06-2018 | 14-12-2025 Transaction | -1 911 075 |
| ING | IRS | 20 000 000 | 1.90% | 14-12-2021 | 14-12-2025 Transaction | -660 513 |
| ING | IRS | 15 000 000 | 2.34% | 14-11-2021 | 14-05-2024 Transaction | -541 190 |
| TOTAL | 55 000 000 | -3 112 777 |
The prudent hedging policy of Home Invest Belgium has enabled it to obtain average interest rate of 2.09% for the year, including banking margin and hedging cost, compared with 2.53% and 3.40% for the previous years. Average interest rate calculated after conversion of variable rates on fixed-rate lines of credit through Interest rate swaps (IRS). Given the prudent financial structuring of its debt, combined with the moderate debt ratio, Home Invest Belgium has limited
exposure to fluctuations in market interest rates.
In accordance with IAS39, the negative fair value of financial instruments as at 31 December 2017, is recognised in liabilities under heading IC "Other non-current financial liabilities" for a total amount of - € 8 053 358. The consideration is recognised as follows:
| Fair value of financial instruments as at 31/12/2017 | 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 2017) | 1 226 658 | ||
| Effective instruments previous year | -1 310 093 | ||
| Ineffective hedges (previous year)1 | -7 969 924 | ||
| TOTAL | 1 226 658 | -1 310 093 | -7 969 924 |
| OVERALL TOTAL | -8 053 358 |
Credit lines are recognised in "Non-current and current financial debts". Financial liabilities are recorded at amortised cost, IFRS 13 is applied to IFRS standards that demand or allow fair value measurements or disclosures on fair value and, consequently, IAS 39. IFRS 13 foresees a hierarchy in fair values under 3 data input levels (levels 1, 2 et 3).
Regarding financial instruments, all of these fair values are level 2. With no levels other than level 2, Home Invest Belgium does not have a policy to monitor transfers between hierarchical levels. The valuation is made by banks based on the present value of estimated future cash flows.
Although the majority of hedging instruments used are considered to be trading instruments within the meaning of IFRS, they are exclusively intended for the purpose of hedging interest rate variations and not for speculative purposes.
We note that the non current liabilities also include our bond investment issued in 06/2014 for the amount of € 39 745 100 (amount deduction of charges).
On 31 December 2017, Home Invest Belgium has opened bank credits for an amount of € 195 million on a total of € 208 million available credit lines. The average maturity of bank financing, linked to the 2014 bond issue (€ 40 million) enables to obtain an average maturity of 5 years (as compared to 4 years and 9 months on 31 December 2016).
The financial hedging instruments of the IRS type are concluded for a total of € 143 million and an average duration of 6 years and 11 months on 31 December 2017 (in comparison with 5 years and 1 month on 31 December 2016).
The IRS type non current financial liabilities amount to a negative real value of - € 8 060 644 at the semester closure. Only one instrument is subject to hedge accounting under the form of a cash flow hedge subject to IAS 39. The hedging accounting under IAS 39 is applied for just one IRS opened with BNP for € 25 million maturing on 23/08/2021 and covers the credit also taken with BNP for an amount of € 25 million. All the other hedging instruments are not considered as hedging accounting under IAS 39.
| TRADE DEBTS AND OTHER CURRENT DEBTS | 2017 | 2016 |
|---|---|---|
| Suppliers | 4 839 837 | 9 133 693 |
| Tenants | 1 537 994 | 716 496 |
| Tax, salary, social security | 1 728 915 | 535 269 |
| TOTAL | 8 106 746 | 10 385 458 |
| OTHER CURRENT LIABILITIES | 2017 | 2016 |
| Dividends | 39 060 | 39 491 |
| Other | 23 596 | 51 188 |
| TOTAL | 62 656 | 90 680 |
Dividend debts relate exclusively to former dividends not yet claimed by the shareholders.
| 2017 | 2016 | |
|---|---|---|
| A. Capital | ||
| a. Capital | 88 949 295 | 76 949 295 |
| b. Capital increase expenses | -950 240 | -950 240 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C.Reserve | ||
| a. Legal reserve (+) | 98 778 | 98 778 |
| b. Reserve from the balance of changes in fair value of investment properties (+/-) | 120 301 194 | 108 428 393 |
| c. Reserve from estimated transfer costs and rights resulting from hypothetical disposal of investment properties (-) |
-34 275 030 | -29 495 716 |
| d. Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is applied (+/-) |
0 | -1 310 093 |
| e. Reserve from the balance of changes in fair value of allowed hedges to which hedge accounting according to IFRS is not applied (+/-) |
-9 280 017 | -5 944 578 |
| h. Reserve for treasury shares (-) | -686 943 | -757 323 |
| m. Other reserves (+/-) | 1 259 467 | 1 259 467 |
| n. Result carried forward from previous financial years (+/-) | 25 379 059 | 25 920 070 |
| D. Net result of the financial year | 1 256 723 | 6 101 079 |
| TOTAL EQUITY | 216 955 487 | 205 202 333 |
| 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 | ||
| 31/12/2011 | 122 709 | Partial demerger of SA Masada | 59.72 | 102 792 |
| 31/12/2011 | 5 585 | Mixed demerger of SA Urbis | 63.32 | 6 318 |
| 31/12/2011 | 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 | ||
| 11/6/2014 | 2 548 073 | Contribution of properties 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 | 86.30 | 139 049 |
| Total on 31/12/2017 | 88 949 295 | 3 299 858 |
On 31 December 2017, 11 712 treasury shares were held by Home Invest Development
| Name | Company nr. | Country of origin | Direct or indirect shareholding |
Annual accouts dd. |
|---|---|---|---|---|
| In 2017 | ||||
| Home Invest Belgium N.V. | 0420.767.885 | Belgium | - | 31-12-2017 |
| Home Invest Development N.V. | 0466.151.118 | Belgium | 100% | 31-12-2017 |
| Charlent 53 Freehold Bvba | 0536.280.237 | Belgium | 100% | 31-12-2017 |
| HBLC Sprl | 0541.863.576 | Belgium | 100% | 31-12-2017 |
| In 2016 | ||||
| Home Invest Belgium N.V. | 0420.767.885 | Belgium | - | 31-12-2016 |
| Home Invest Development N.V. | 0466.151.118 | Belgium | 100% | 31-12-2016 |
| Charlent 53 Freehold Bvba | 0536.280.237 | Belgium | 100% | 31-12-2016 |
| HBLC Sprl | 0541.863.576 | Belgium | 100% | 31-12-2016 |
All the companies that are part of the consolidation scope are domiciled in Belgium at Boulevard de la Woluwe 46/11, 1200 Brussels. At 31 December 2017 there are no minority interests.
With the exception of the remuneration of the Managing director (see "Management report" - "Corporate Governance Statement") there have been no transactions with related parties within the meaning of IAS 24.
The table hereunder details the remunerations of the directors and effective managers.
| Name | Short term benefits as at 31/12/2017 |
Post employment benefits as at 31/12/2017 |
Short term benefits as at 31/12/2016 |
Post employment benefits as at 31/12/2016 |
|---|---|---|---|---|
| BOTERMANS Guillaume | 0 | 28 133 | ||
| VAN OVERSTRAETEN Lieven | 29 000 | 26 250 | ||
| SPIESSENS Eric | 26 500 | 22 250 | ||
| DEJONCKHEERE Koen | 12 000 | 11 000 | ||
| VAN OVERSTRAETEN Johan | 25 000 | 20 000 | ||
| AUROUSSEAU Wim | 15 000 | 9 500 | ||
| DE HEMPTINNE Laurence | 17 750 | 13 250 | ||
| COCKY NV represented by Johan VAN OVERSTRAETEN |
1 200 | 900 | ||
| LAMBRIGHS Sophie | 341 460 | 27 000 | 157 600 | 27 000 |
| ZOU2 Sprl represented by Sophie LAMBRIGHS |
101 640 | 160 492 | ||
| Other effective leaders | 566 176 | 488 618 | ||
| TOTAL | 1 135 726 | 27 000 | 937 993 | 27 000 |
| ASSETS | 2017 | 2016 |
|---|---|---|
| I. Non-current assets | 456 869 467 | 405 340 681 |
| B. Intangible assets | 416 024 | 278 118 |
| C. Investment properties | 448 986 831 | 402 753 097 |
| D. Other tangible assets | 391 371 | 102 316 |
| E. Non-current financial assets | 6 628 354 | 1 624 511 |
| F. Finance lease receivables | 446 887 | 582 639 |
| II. Current assets | 11 715 333 | 14 403 846 |
| A. Assets held for sale | 1 457 192 | |
| C. Finance lease receivables | 135 752 | 135 243 |
| D. Trade receivables | 3 337 699 | 3 238 028 |
| E. Tax receivables and other current assets | 1 607 723 | 6 012 866 |
| F. Cash and cash equivalents | 6 609 760 | 3 173 782 |
| G. Deferred charges and accrued income | 24 400 | 386 735 |
| TOTAL ASSETS | 468.584.800 | 419 744 527 |
| SHAREHOLDERS' EQUITY | ||
|---|---|---|
| A. Capital | 87 999 055 | 75 999 055 |
| B. Share premium account | 24 903 199 | 24 903 199 |
| C. Reserves | 102 800 276 | 98 986 509 |
| D. Net result of the financial year | 272 813 | 6 081 114 |
| SHAREHOLDERS' EQUITY | 215 975 343 | 205 969 877 |
| LIABILITIES | ||
| I. Non-current liabilities | 232 805 745 | 201 485 901 |
| B. Non-current financial debts | 224 745 100 | 192 205 885 |
| a. Financial debts | 185 000 000 | 152.500.000 |
| c. Others | 39 745 100 | 39.705.885 |
| C. Other non-current financial liabilities | 8 060 644 | 9 280 017 |
| II. Current liabilities | 19 803 713 | 12 288 748 |
| B. Current financial debts | 10 664 663 | 712 226 |
| a. Financial debts | 10 000 000 | 0 |
| c. Others | 664 663 | 712.226 |
| D. Trade debts and other current debts | 7 621 767 | 10 060 920 |
| b. Others | 7 621 767 | 10.060.920 |
| E. Other current liabilities | 62 656 | 90 680 |
| F. Accrued charges and deferred income | 1 454 627 | 1 424 923 |
| LIABILITIES | 252 609 457 | 213 774 650 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 468 584 800 | 419 744 527 |
1 Home Invest Belgium's statutory annual financial statements have been prepared in accordance with IFRS standards since 1 January 2005. They are presented in an abridged version, in accordance with article 105 of the Company Code. The detailed statutory financial statements will be lodged with National Bank following the Annual General Meeting. They are also available upon request from the company's registered headquarters.
| 2017 | 2016 | |
|---|---|---|
| I. Rental Income | 22 576 322 | 18 977 691 |
| III. Rental-related expenses | -183 272 | -178 922 |
| NET RENTAL RESULT | 22 393 050 | 18 798 769 |
| IV. Recovery of property charges | 136 764 | 86 482 |
| V. Recovery of charges and taxes normally payable by the tenant on let properties | 598 574 | 660 864 |
| VII. Charges and taxes normally payable by the tenant on let properties | -2 763 020 | -2 705 975 |
| VIII. Other incomes and expenses related to letting | -30 000 | 0 |
| PROPERTY RESULT | 20 335 368 | 16 840 140 |
| IX. Technical costs | -1 085 251 | -842 135 |
| X. Commercial costs | -342 219 | -406 804 |
| XI. Taxes and charges on unlet properties | -289 436 | -392 488 |
| XII. Property management costs | -3 759 573 | -2 861 945 |
| XIII. Other property costs | 19 853 | -81 388 |
| PROPERTY COSTS | -5 456 625 | -4 584 760 |
| PROPERTY OPERATING RESULT | 14 878 744 | 12 255 380 |
| XIV. General corporate expenses | -1 064 434 | -841 829 |
| XV. Other operating incomes and expenses | -112 236 | -29 448 |
| OPERATING RESULT BEFORE PORTFOLIO RESULT | 13 702 073 | 11 384 103 |
| XVI. Result sale investment properties | 719 633 | 279 654 |
| XVIII. Changes in fair value of investment properties | 421 475 | 11 295 322 |
| OPERATING RESULT | 14 843 181 | 22 959 078 |
| XX. Financial income | 344 098 | 233 053 |
| XXI. Net interest charges | -3 700 382 | -3 142 062 |
| XXII. Other financial charges | -62 129 | -63 989 |
| XXIII. Changes in fair value of financial assets and liabilities | 1 226 658 | -2 025 345 |
| FINANCIAL RESULT | -2 191 755 | -4 998 344 |
| PRE-TAX RESULT | 12 651 426 | 17 960 735 |
| XXIV. Corporation tax | -412 355 | -26 587 |
| TAXES | -412 355 | -26 587 |
| NET RESULT | 12 239 071 | 17 934 148 |
| NET RESULT ATTRIBUTABLE TO THE PARENT COMPANY | 12 239 071 | 17 934 148 |
| Appropriation and withdrawals | 2017 | 2016 |
| A. Net result | 12 239 071 | 17 934 148 |
| B. Transfer to/from reserves (-/+) | ||
| 1. Transfer to/from reserves of the balance (positive or negative) of changes in fair value of investment properties (-/+) |
||
| - financial year | -5 497 698 | -17 402 429 |
| - realisation of real estate | 4 201 834 | 5 150 161 |
| 2. Transfer to/from reserves of estimated transfer rights and costs resulting from hypothetical disposal of investment properties (-/+) |
5 076 223 | 6 107 108 |
| 5. Transfer to the reserve of the balance of changes in the fair value of the hedge instruments to which hedge accounting as defined in IFRS is applied. |
||
| - financial year | -1 226 658 | 2 025 345 |
| 11. Transfer to/from result from previous financial years carried forward (-/+) |
-433 262 | -380 895 |
| C. Remuneration of capital according to art.27, § 1, lid 1 | -11 899 897 | -11 108 006 |
| D. Remuneration of capital – other than C | -2 459 613 | -2 325 433 |
| Scheme for calculation of result according to art. 27, § 1, § 1 | 2017 | 2016 |
|---|---|---|
| Corrected result (A) | ||
| Net result | 12 239 071 | 17 934 148 |
| + Depreciations | 150 195 | 207 574 |
| - Write-back of depreciations | -68 096 | -136 900 |
| +/- Other non monetary items | -1 226 658 | 2 025 345 |
| +/- Result on sale of property | -719 633 | -279 654 |
| +/- Changes in fair value of property | -421 475 | -11 295 322 |
| Corrected result (A) | 9 953 404 | 8 455 192 |
| 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) |
4 921 467 | 5 429 815 |
| = Net capital gains on the sale of property not exempt from distribution (B) | 4 921 467 | 5 429 815 |
| TOTAL (A + B) | 14 874 871 | 13 885 007 |
| 80% according to art. 13, §1, al. 1 | 11 899 897 | 11 108 006 |
| Net reduction in debt | 0 | 0 |
| Minimum distribution required by art. 13. | 11 899 897 | 11 108 006 |
In accordance with art. 617 of the Belgian Company Code, the net assets, after distribution of the proposed dividend, must not be less than the called-up capital, plus all reserves which the law or the articles of association do not permit to be distributed. The margin remaining after distribution is € 20.6 million.
| Net statutory assets after distribution of the dividend: | 213 582 091 | |
|---|---|---|
| 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 (+) | 120 164 015 | |
| Reserve for transfer rights and costs estimated to arise on the hypothetical disposal of investment properties (-) |
-34 275 030 | |
| Authorised hedging instruments where hedge accounting according to IFRS is not applied | -9 280 017 | |
| Legal reserve (+) | 98 778 | |
| TOTAL | 189 610 001 | |
| Difference | 23 972 090 |
ended 31 december 2017
In the context of the statutory audit of the consolidated financial statements of the company Home Invest Belgium NV (the Company) and its subsidiaries (together referred to as 'the Group'), we hereby present our statutory auditor's report. It includes our report on the audit of the consolidated financial statements as well as our report on the other legal and regulatory requirements. These reports form part of an integrated whole and are indivisible.
We have been appointed as statutory auditor by the general meeting of 3 May 2016, following the proposal formulated by the board of directors issued upon recommendation of the audit committee. Our statutory auditor's mandate expires on the date of the general meeting deliberating on the annual accounts closed on 31 December 2018. We have performed the statutory audit of the consolidated financial statements of the company for 2 consecutive years.
We have performed the statutory audit of the Group's consolidated financial statements, which comprise the consolidated balance sheet as at 31 December 2017, and the consolidated statement of profit or loss, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information, and which is characterised by a consolidated statement of financial position total of € 470 061 090 and for which consolidated income statement shows a profit for the year of € 13 222 981.
In our opinion, the consolidated financial statements give a true and fair view of the Group's net equity and financial position as at 31 December 2017, as well as of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Our responsibilities under those standards are further described in the 'Statutory auditor's responsibilities for the audit of the consolidated financial statements' section in this report. We have complied with all the ethical requirements that are relevant to the audit of consolidated financial statements in Belgium, including those concerning independence.
We have obtained from the board of directors and company officials the explanations and information necessary for performing our audit.
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 year. These matters were addressed in the context of our audit of the consolidated accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The board of directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory provisions applicable in Belgium, and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
In preparing the consolidated financial statements, the board of directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are 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 statement.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Home Invest Belgium NV and its subsidiaries have investment properties on their balance sheets with a consolidated value of € 457 636 191 as at 31 December 2017. Investment properties include investment properties in operation for an amount of € 423 105 968 which are valued at fair value.
The determination of the fair value requires a high level of judgement by the board of directors, in which they are assisted by an external and independent real estate expert. In determining the fair value, parameters, assumptions and estimates are used.
In view of the significant estimation uncertainty, and the possible effect of minor adjustments to the expectations on the total of the valuation of this section in the financial statements, we have designated the valuation of the investment properties in operation as a key audit matter of our audit.
In our audit, we have obtained sufficient assurance regarding the competence and independence of the external real estate experts.
We have established for all valuation methods that valuation methodologies as used by the external real estate experts are acceptable for the underlying property. We have established that the valuation is useful for the purpose of the valuation in the financial statements.
We have fully reconciled the valuation reports with the accounting records. In addition, we have determined the integrity of the source data used, such as rental income and surfaces for the calculation of the valuation, on the basis of a sample. We did not find any material differences in this respect.
We then reviewed the parameters used by the real estate expert and management using the information we obtained from other control procedures and external data. Based on this, we can conclude that the parameters used are reasonable for the purpose of the valuation.
Finally, we have ascertained that all necessary disclosures regarding the property portfolio, the fair value valuation and the underlying parameters have been included in the financial statements and that these disclosures are sufficiently, accurately and clearly stated. We have no comments in this respect.
Revenue Recognition
The consolidated income statement of Home Invest Belgium NV shows rental income amounting to € 22 683 114. As a result, rental income is an important item in the consolidated income statement of Home
Invest Belgium NV.
The number of rent contracts that generated revenues for Home Invest Belgium NV is significant. We conclude from this that there is a significant risk, in particular an income recognition that would not be in line with the underlying contracts, as a result of fraud or errors.
We have verified the accuracy of the rental income by reconciling the reported rental income in the annual accounts with the income from the current rental contracts. By means of a sample check, we have reconciled the booked rental income with the underlying signed rental contract and checked whether the terms stipulated in the rental contract are correctly recorded in the accounts.
As the rental terms and conditions may vary from one rental agreement to another for each rental agreement, we have specifically verified that the cut-off for rental income is properly reflected in the financial statements.
We have paid particular attention to the explanations provided with regard to the recognition of revenue in the financial statements. We believe that the explanations provided are sufficient, accurate and clear.
Recognition of sale and acquisition of property
In 2017 Home Invest Belgium NV acquired and sold various real estate investments. The accurate and complete processing of these transactions is a key
audit matter in our control.
We have checked the buying and selling transactions on the basis of a sample. We have reconciled this with relevant supporting documents, checked the reporting and determined the correct and accurate processing of the results in the financial year.
In addition, for sales transactions, we have reviewed the sales price against recent valuations.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit as well as significant audit findings, including any significant deficiencies in internal control identified during the audit.
We also provide the Audit Committee 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, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year, and are therefore the key audit matters. We describe these matters in our statutory auditor's report unless law or regulation precludes public disclosure about the matter.
The board of directors is responsible for the preparation and the contents of the management report on the consolidated financial statements and for the other information included in the annual report on the consolidated financial statements.
In the context of our mandate and in accordance with the Belgian standard (revised in 2018) that is supplementary to the International Standards on Auditing (ISA) as applicable in Belgium, it is our responsibility to verify, in all material aspects, the management report on the consolidated financial statements and the other information included in the annual report on the consolidated financial statements, as well as to report on these elements.
Our audit firm and our network did not provide services which are incompatible with the statutory audit of consolidated financial statements, and we remained independent of the Group throughout the course of our mandate.
The fees related to additional services which are compatible with the statutory audit as referred to in article 134 of the Company Code were duly itemised and valued in the corporate governance statement.
This report is in compliance with the contents of our additional report to the audit committee as referred to in article 11 of Regulation (EU) No 537/2014.
Antwerp, 11 April 2018
Grant Thornton Bedrijfsrevisoren CVBA
Statutory Auditor represented by
Philip Callens Registered Auditor
In our opinion, after having performed specific procedures in relation to the management report, the management report is consistent with the consolidated financial statements for the same same financial year, and it is prepared in accordance with article 119 of the Company Code.
In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge we have obtained during the audit, whether the management report on the consolidated financial statements and the other information included in the annual report on the consolidated financial statements, namely:
contain a material misstatement, i.e. information which is inadequately disclosed or otherwise misleading. Based on the procedures we have performed, there are no material misstatements we have to report to you. We do not not express any form of assurance whatsoever on the management report on the consolidated financial statements nor on the other information contained in the annual report on the consolidated financial statements.
PERMANENT DOCUMENT
General in formation ................................................ 158 Share capital .................................................................159 Co-ordinated articles of association - excerpts .....159 Statements ................................................................... 165
| Company name | Home Invest Belgium SA, a Belgian Public Regulated Real Estate Company (RREC) (SIR/GVV) |
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| Legal form | A Belgian public limited liability company (Société anonyme - SA) |
| Register of legal entities (RPM) | The company is registered with the RPM in Brussels under number 0420.767.885. |
| Registered office | B - 1200 Brussels, Boulevard de la Woluwe 46/11 |
| Telephone number | +32 2 740 14 50 |
| Website | www.homeinvestbelgium.be |
| Incorporation | The company was established on 4 July 1980 under the name 'Philadelphia', further to a deed received by Notary Daniel Pauporté in Brussels published in the annexes to the Moniteur belge (Belgian official journal) on 12 July 1980 under No 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 Moniteur belge (Belgian official journal) on 21 November 2017 under no 0161972). |
| Term | The company is established for an unlimited period of time. |
| Company purpose | The company purpose is reproduced in full hereafter, in Article 3 of the coordinated articles of association. The company's exclusive purpose is to make available buildings to users, directly or through a company in which it holds a stake in accordance with the provisions of the regulations on Public Regulated Real Estate Companies. |
| Changes to the company purpose | The company can only make changes to its company purpose in accordance with its articles of association and provided that said changes are consistent with the laws and regulations applicable to Regulated Real Estate Companies. |
| Financial year | The financial year begins on 1 January and ends on 31 December. |
| Places where the documents accessible to the public can be consulted |
• The company's articles of association can be consulted at the Registrar's Office of the French speaking Commercial Court of Brussels and on the company's website. • The company's deed of incorporation can be consulted at the Registrar's Office of the French speaking Commercial Court of Brussels and at the company's registered office. • The annual financial statements are filed with the National Bank of Belgium and can be consulted at the Registrar's Office of the Commercial Court of Brussels. • Decisions concerning the appointment and dismissal of members of the Board of Directors are published in the annexes to the Moniteur belge (Belgian official journal). • The annual financial reports are available at the registered office or can be consulted on the website. These reports include the real estate expert's report and the auditor's report and are sent every year to the registered shareholders and to anyone who requests them. Other publications can be obtained at the registered office or by consulting the company's website. Anyone interested can register free of change on the website in order to receive press releases and |
| Issued share capital | on 31 December 2017, the share capital stood at € 88 949 294.75. It is represented by 3 299 858 shares without indication of nominal value. The share capital is fully paid-up. |
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| 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 has been 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 2017, the balance of the authorised capital amounted to € 88 949 294.75. |
The complete coordinated articles of association of Home Invest Belgium SA can be consulted at the Registrar's Office of the French-speaking Commercial Court of Brussels, at the company's registered office and on the website www.homeinvestbelgium.be. Company purpose (Article 3 of the articles of association) 3.1.The company's exclusive purpose 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 mentioned in Article 2, 5°, vi 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 buildings 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 granting one or more properties to the company in the form of a finance lease or conferring similar rights of use; vi. shares in public real estate investment funds (sicafi); vii. shares 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 relating to alternative foreign undertakings for collective investment and their managers; viii. shares in undertakings for collective investment in real estate established in another Member State of the European Economic Area and not included on the list referred to in Article 260 of the act of 19 April 2014 relating to alternative foreign undertakings for collective investment and managers, insofar as they are subject to similar supervision as that applicable to public sicafi; ix. shares issues 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 certain types of entities whose company 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 buildings, the company may in particular undertake all activities related to the building, conversion, renovation, development, acquisition, sale, management and operation of buildings.
| 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 adequate risk diversification. 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 hedging instruments, intended exclusively to cover exposure to interest rate and currency exchange risks in the framework of the financing and management of the company's real estate and to the exclusion of any speculative transactions. |
Acquisition of own shares (Article 6.4. of the articles of association) |
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| 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 these buildings are intended for public purposes including social housing and education (in which case the activity may be exercised as the company's primary activity). |
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| 3.4. The company may take an interest, by merger or otherwise, in any business, 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 rules and within the limits set by the RREC regulations and any other applicable legislation. |
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| 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; |
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| 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 on loans of securities by certain collective investment bodies; d. acquire financial instruments issued by a private company or association which has been declared bankrupt, which enters 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. |
Capital increase (Article 6.5. - 6.7. of the articles of association) |
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| 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 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 Moniteur belge (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 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 increases may lead to the issuing of voting or non-voting shares. Such capital increases may also take the form of the conversion of convertible bonds or the exercising of subscription rights - whether or not attached to another security - which can give rise to the creation of voting or non-voting shares. Where 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'. This will constitute, in the same way as capital, 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 majority required for a capital reduction, unless incorporated into the capital. |
The company may acquire its own shares by purchase or accept them as a security under
conditions laid down by law. Directors is authorised:
By decision of the extraordinary general meeting of shareholders of 3 May 2016, the Board of
• in the context of Articles 620 ff. of the Companies Code, on behalf of the company, to acquire, 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 pledging) 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 pledging) for a period of five years as of the publication in the annexes to the Moniteur belge (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, 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, pledging or disposal is necessary in order to avoid serious and imminent danger. This authorisation is granted for a period of three years as of the publication in the annexes to the Moniteur belge (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.
The above authorisations extend to acquisitions and disposals of shares in the company by one or more of its direct subsidiaries, within the meaning of the legal provisions relating to the acquisition
by subsidiaries of shares in their parent companies.
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 sub-scription 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 must meet the
following conditions under the RREC regulations:
it is granted to shareholders in proportion to the portion of the capital represented by their
is effectively granted to all shareholders.
a maximum price per share is announced at the latest on the eve of the opening of the public subscription period which must last for at least three trading days. Without prej-udice to the application of Articles 595 to 599 of the Companies Code and the RREC reg-ulations, said irreducible allocation right must not be granted in the event of a contribu-tion in cash with limitation or abolition of the preferential right, as a supplement to a contribution in kind within the framework of the distribution of an optional dividend, provided that this dividend
6.6.1. Furthermore, the following conditions must be respected in the event of a contribution in kind, in accordance with the RREC regulations:
1° the contributor's identity must be indicated in the report from the Board of Directors referred to in Article 602 of the Companies Code and, if appropriate, in the convening notice to the general meeting that will decide on the capital increase;
2° the issue price cannot amount to less than the lowest value of (a) a net asset value per share dating back no more than four months before the date of the agreement on the contribution or, if the company prefers, before the date of the deed relating to the capital increase and (b) the average closing price of the thirty calendar days prior to this date. In this respect, it may be decided 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, pro-vided that the Board of Directors specifically justifies the amount of the accumulated dividends to be deducted in its special report and explains the financial conditions of the transaction in
3° unless the issue price or, in the event of the situation referred to in Article 6.6.3., the exchange ratio, as well as the applicable terms, are determined and communicated to the public at the latest on the working day following the conclusion of the contribution agreement, indicating the period during which the capital increase will actually take place, the capital increase deed will be recorded within a maximum period of four months; and 4° the report referred to in point 1° above must also explain the impact of the proposed contribution on the situation of existing shareholders, in particular with regard to their share of the profit, the net asset value and the capital, as well as the impact with re-gard to
| 6.6.2. The conditions laid down in Article 6.6.1. do not apply in the case of a contribution of the right to a dividend within the framework of the distribution of an optional dividend, on condition that this right to a dividend is open to all the shareholders. |
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| 6.6.3. In accordance with the RREC regulations, Article 6.6.1. of these articles of association will apply mutatis mutandis in the context of mergers, de-mergers and similar transactions referred to in Articles 671 to 677, 681 to 758 and 772/1 of the Companies Code. In this case, the contribution agreement date relates to the date when the plan for the merger or de-merger is filed. |
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| Article 6.7. Capital increase of a subsidiary with the status of an institutional RREC. 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 for the company. This report and the valuation criteria and methods are commented on by the statutory auditor in a separate report. 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. |
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| Article 6.8. Capital reduction The company can reduce its capital in compliance with the applicable legal provisions. |
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| 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 these 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 shares and similar securities, and subject to specific legal provisions on this matter, in particular those resulting from the RREC regulations, the company can issue other securities in accordance with 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 financial instruments 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 |
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 | six years. Their mandate may be revoked at any time. |
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| directors | ter of the Companies Code. |
| (Article 9 of the articles of | statutory minimum. |
| association) | Authority (FSMA). |
| Actual management (Article 12 of the articles of association) |
at least two natural persons. the Financial Services and Markets Authority (FSMA). |
| Representation of the company | members of this committee acting jointly. |
| (Article 13 of the articles of | their mission. |
| association) | the Board of Directors for this purpose. |
| General meeting | the next working day at the same time. |
| (Article 23 of the articles of | of the company's capital. |
| association) | in the letter convening the meeting or in any other way. |
General meetings and extraordinary general meetings are convened by means of an announcement
| (Article 24 of the articles of association) |
published just once in the Moniteur belge (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 participant 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 share 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. 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 its owner 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 Company Code. 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 related to external events and factors. By their nature, these financial forecasts imply risks 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 SA are responsible for the information provided in this annual financial report. They have done everything in their power to verify the information contained in the report and, having taken every reasonable measure to this end, declare that the information in this report corresponds to reality and that no information likely to alter the scope of this annual financial report has been omitted.
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, 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.
All the financial reports since the 2001 financial year are included by reference in this current annual financial report.
As regards any government, economic, budgetary, monetary or political strategy or factor having a significant impact or that could have a significant impact, whether directly or indirectly, on the operations of Home Invest Belgium, see the chapter entitled 'Risk factors'.
No proceedings are currently in progress that could have significant effects on the financial position or profitability of the company.
The Board of Directors of Home Invest Belgium declares that to the best of its knowledge:
1 The composition of the Board of Directors and the Executive Management are detailed in the chapter entitled 'Management Report - Corporate Governance Statement'.
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, commented on in the above management report, no significant changes have taken place in the financial or commercial situation of Home Invest Belgium since the close of the 2017 financial year.
The information provided below is based on 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.
Each shareholder and each potential investor is invited to enquire of their own advisers about the tax implications in Belgium and aboard with respect to acquiring, owning and disposing of shares in Home Invest Belgium, as well as collecting dividends and proceeds from shares in the company.
The extraordinary general meeting of 14 September 2014 approved the change of status of the sicafi company to an RREC.
the RREC (SIR/GVV) is subject to the act of 12 May 2014 and the decree of 13 July 2014 on Regulated Real Estate Companies.
The Regulated Real Estate Company is defined in the act by its activity which consists of providing buildings - directly or through a company in which it has a holding - for users and possibly, within the limits specified for this purpose, to hold other types of 'real estate property' (shares in public sicafi, stakes in certain foreign undertakings for collective investment in real estate, shares issued by other REITs and real estate certificates). In this context, the RREC can perform all activities related to the building, conversion, renovation, development (for its own portfolio), acquisition, transfer, management and operation of buildings.
There are no restrictions to be reported concerning the use of capital that have had a significant effect or that could have a significant effect, whether directly or indirectly, on the company's operations.
Apart from the contracts concluded with the members of the Executive Management (cf. Chapter entitled 'Management Report - Corporate Governance'), there are no other service contracts binding the members of the administrative, management or supervisory bodies to the company or to any one of its subsidiaries and providing for the granting of benefits at the end of such a contract.
There have not been any transactions with related parties within the meaning of Article 19 of Commission Regulation (EC) No 809/2004.
Major contracts concluded during the past two financial years of the RREC are identified in the Management Report of this annual financial report or in that of the year 2016, which can be consulted on the company's website.
The Public Regulated Real Estate Company has the following main characteristics:
Companies that apply to the FSMA for approval as an RREC or which are taken over by an RREC are subject to an exit tax, similar to a liquidation tax, to be paid on their latent capital gains and untaxed reserves at the reduced rate of 12.5 %, plus 2 % supplementary crisis contribution, bringing the total to 12.75 % for the tax years 2019 and 2020 and amounting to 15% as from the tax year 2021.
As an RREC, the Belgian profits of the company are subject to corporation tax, but on a reduced basis of non-admitted expenses, abnormal or gratuitous benefits received and unjustified remunerations and commissions. The company's profits of foreign origin may be taxed in the State in which they arise according to the law applicable in that State and are exempt in Belgium. The net profits generated by Home Invest Belgium resulting from its property investments in the Netherlands are therefore subject to corporation tax at the rate of 25 % in the Netherlands and are exempt in Belgium.
| 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 (and the royal decree implementing the Income Tax Code) or by international agreements. |
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| Belgian natural persons | For Belgian natural persons who act privately and are liable for personal income tax, the dividends distributed by Home Invest Belgium are subject to the withholding tax mentioned above. For Belgian natural persons who may allocate their shares to their professional activity, the dividends received will be included with their professional income at the usual personal income tax rate, with the withholding tax being chargeable. |
| Belgian legal entities | For taxpayers liable for tax on legal entities, the dividends distributed by Home Invest Belgium are subject to the withholding tax mentioned above. |
| Belgian companies and permanent establishments of foreign companies in Belgium |
The dividends distributed are subject to the withholding tax mentioned above. Belgian companies and foreign companies that allocate their shares to 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, §1er, 2bis and §2, al. 2 of the Income Tax Code applicable to dividends distributed from 1 July 2016. The dividends, received by Belgian companies or by foreign companies that allocate their shares to a stable Belgian institution 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 plus the additional 2% crisis contribution). Under certain conditions, a reduced rate may be applicable. The withholding tax levied at the source will be chargeable and any surplus refundable through the tax declaration. |
| 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 at source which may, at the request of the shareholder, be reduced by international tax treaties preventing double taxation or be exempt under 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 commune 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. The minimum holding condition of six months does not apply to RREC shares such as Home Invest Belgium. Capital gains may also be subject to tax at 16.5%, plus the additional municipal tax in the commune 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. |
|---|---|
| Belgian legal entities | For Belgian legal entities subject to the tax on legal entities, the capital gains made on the sale of Home Invest Belgium shares are not, in principle, taxable in Belgium. Capital losses suffered on the shares are not tax deductible. |
| Belgian companies and permanent establishments of foreign companies 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 (expressed or suffered) are not tax deductible. |
| Non-resident natural persons and foreign companies without a permanent establishment in Belgium |
Capital gains made by non-residents, whether natural persons or companies, on 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 for 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) is 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 currently limited to € 1 300 per transaction and per party.
The following persons are exempt from the tax on stock market transactions in all circumstances:
• the professional intermediaries referred to in Article 2, 9° and 10° of the act of 2 August 2002 on the supervision of the financial sector and financial services, acting on their own behalf;
As of 1 January 2008, in accordance with the act of 14 December 2005, Home Invest Belgium securities can no longer be delivered in physical form.
The occupancy rate is the percentage of the rents generated by the occupied properties, plus the rental guarantees on the unoccupied properties, compared with the total rents of the occupied properties and the estimated rental value (ERV) of the unoccupied properties. All the investment properties in the portfolio are taken into account for the calculation, with the exception of the development projects, assets held for resale and properties undergoing in-depth renovation and therefore unavailable for renting.
The pay-out ratio corresponds to the dividend granted, compared with the result available for distribution, calculated on a consolidated basis.
The shareholder's return is equal to the dividend of the financial year plus the growth in the net asset value during the financial year.
Rental surfaces are the surfaces taken into account by the real estate expert of the RREC. They include 50 % of the surface of terraces and 10 % of that of private gardens.
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 duration of the advances is sub-divided into successive interest periods, each with their own rate. In this way, mediumor long-term investments can be financed at a variable short-term interest rate, which is more advantageous.
Velocity is the ratio between the annual traded and the total number of shares included in the free float.
The year in which the property was built or last underwent major renovation.
This is the operating result before the portfolio result divided by the property result.
This APM is used to measure the profitability of the company as a percentage of the rental income.
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Operating result before portfolio result |
13 792 187 | 11 462 554 |
| Property result | 20 435 406 | 16 842 140 |
| Operating margin | 67.49% | 68.06% |
The net result of core activities is the net result adjusted for the following income statement items:
XVI. Result of sales of investment properties
This APM measures the company's profitability without taking into account variations in the value of the property portfolio or hedging instruments or portfolio divestments.
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Net result | 13 222 981 | 17 905 693 |
| XVI. Result of sales of investment properties |
-719 633 | -279 654 |
| XVIII Variations in the fair value of investment |
-1 226 658 | -11 295 322 |
| XXIII. Variations in the fair value |
-1 450 369 | +2 025345 |
| Net result of core activities | 9 826 322 | 8 356 063 |
| Average number of shares | 3 288 146 | 3 147 897 |
| Net result of core activities per share |
3.08 | 2.65 |
The actual rent is the gross rent applicable on 31 December 2017, annualised, excluding rental guarantees and the estimated rental value of unrented surfaces.
The fair value of a building or a portfolio of buildings is equal to its investment value, after deduction of transfer costs, calculated as follows:
The total number of registered and dematerialised shares for which no declaration of transparency has been made.
The gross estimated rental value (ERV) is the rental value which, in the view of the real estate expert, corresponds to a market rent.
The gross passing rent is the most recent gross rental income, either monthly or quarterly, or as at 31 December 2017, which is annualised and includes any rental guarantees and the estimated rental value of unoccupied premises. It takes into account any furniture present. It may therefore differ from the rent collected during the financial year, as included in the income statement, for example if there was a vacant period or if indexation has since been applied.
Interest Rate Swap: this is an exchange of interest rates between two parties, with a view to exchanging their exposure to the risk of rate fluctuations.
'APM' is a financial indicator, historical or future, of the performance, financial situation or cash flows other than a financial indicator defined or specified in the applicable financial reporting framework.
Home Invest Belgium has used Alternative Performance Measures (APM) within the meaning of the Guidelines recently issued by the European Securities and Markets Authority (ESMA) for many years. These APMs have been defined by Home Invest Belgium in order to provide the reader with a better understanding of its results and performances. Performance indicators that are defined by the IFRS or by law are not considered to be APMs. Nor are indicators that are not based on items in the income statement or the balance sheet.
The net asset value or intrinsic value, in total or per share, is the value of the net assets, in total or per share, taking into account the latest fair value of the property portfolio, as defined by the real estate expert of the RREC.
The adjusted net asset value is the value of the net assets adjusted to exclude the fair value of the financial hedging instruments.
These APMs enable the calculation of the net asset value adjusted to the value of the IRS.
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Value of net assets | 216 955 487 | 205 202 333 |
| Number of shares at the end of the period |
3 288 146 | 3 147 897 |
| Net asset value per share | 65.98 | 65.19 |
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Value of net assets | 216 955 487 | 205 202 333 |
| Fair value of financial instruments |
8 053 358 | 9 280 017 |
| Adjusted net asset value | 225 008 845 | 214 099 188 |
| Number of shatres at the end of the period |
3 288 146 | 3 147 897 |
| Net asset value per share | 68.43 | 68.14 |
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 financial debts converted into fixed-rate debt via the IRS in effect at the end of the financial year. The denominator corresponds to the total amount of financial debt drawn on the closing date.
A significant portion of the company's financial debts are at floating rates. This APM measures the risk associated with interest fluctuations and its potential impact on the results.
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Fixed-rate financial debt | 40 000 000 | 40 000 000 |
| Floating rate debt converted into fixed-rate debt via IRS |
143 000 000 | 143 000 000 |
| Total fixed-rate debt | 183 000 000 | 183 000 000 |
| Total floating-rate debt | 52 000 000 | 38 000 000 |
| Coverage rate | 235 000 000 | 192 500 000 |
| Total debt | 77.87% | 95.06% |
The average cost of financial debts is calculated by dividing the financial debt of the year by the weighted average debt of the year.
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 interim interest included in the assets.
The denominator corresponds to the average financial debt calculated over 365 days.
The company is partly financed by debt. This APM is used to measure the cost of this source of financing and its impact on the results. It also allows an analysis of its evolution over time.
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Net interest charges (item XXI) |
3 548 571 | 3 048 453 |
| Interest during construction included in assets |
676 468 | 927 317 |
| Total cost of financial debt | 4 376 850 | 3 975 770 |
| Weighted average debt | 208 947 671 | 157 063 874 |
| Average cost | 2.09% | 2.53% |
All the information concerning the APMs detailed in this registration document has been checked by the statutory auditor. The information included by reference in the annual financial report can be found in:
| 2018 | |
|---|---|
| Annual financial report goes on line on the website | Friday, 30 March |
| Ordinary general meeting of the 2017 financial year | Tuesday, 2 May |
| Interim statement: results at 31 March 2018 | Tuesday, 2 May |
| Payment of dividend for 2017 financial year | Friday, 18 May |
| Half-yearly financial report: results at 30 June 2018 | Thursday, 6 September |
| Interim statement: results at 30 September 2018 | Thursday, 25 October |
| 2019 | |
| Annual press release on the 2018 financial year | Thursday, 21 February |
| Annual financial report goes on line on the website | Friday, 29 March |
| Ordinary general meeting of the 2018 financial year | Tuesday, 6 May |
| Interim statement: results at 31 March 2019 | Tuesday, 6 May |
| Payment of dividend for 2018 financial year | Friday, 17 May |
| Half-yearly financial report: results at 30 June 2019 | Thursday, 5 September |
| Interim statement: results at 30 September 2019 | Thursday, 24 October |
As Home Invest Belgium has opted for French as its official language, the annual financial report in French is the sole official version.
The Dutch and English versions are translations produced under the responsibility of Home Invest Belgium.
Communication Manager: Laure-Anne Blavier
Design: Chris Communications
Photo credit: Jean Michel Byl, Yvan Glavie
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