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Home Invest Belgium NV

Quarterly Report Aug 31, 2012

3958_ir_2012-08-31_c33d1724-3083-4ebd-90e8-4651d3a2e2b2.pdf

Quarterly Report

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Regulatory information

half-year financial report 2012

"Odon Warland-Bulins" - Jette

Important events

  • • Croissance de 13,6%1 du résultat net courant2 par action hors IAS 39 • Growth by 13.6%1 of net current result2 per share excluding IAS 39
  • • Résultat distribuable par action en • Distributable result per share progresses by 9.5%3
  • progrès de 9,5%3 • New credit line and restructuring of hedges
  • • Nouvelle ligne de crédit et restruc-• Average occupancy rate of 95%4
  • turation des couvertures de taux • Net asset value per share reaches e 56.875

Contents

• Taux d'occupation moyen de 95 %4

The Board of directors of Home Invest Belgium has gathered on 22 August 2012 to approve the report on the consolidated half-yearly financial statements on 30 June 2012.

1 Compared to the situation on 30 June 2011.

  • 2 Net result minus the portfolio result.
  • 3 Consolidated distributable result. Over the same period the increase of the statutory distributable result, as defined by the Royal Decree of 7 December 2010, amounts to 8.3%.
  • 4 Average rate for the period, calculated on the basis of rents and rental guarantees for unoccupied properties. Calculation excluding properties held for sale and development projects.
  • 5 In comparison with € 55.63 on 30 June 2011 and with € 57.58 on 31 December 2011. The figures have been calculated excluding the 12 912 shares held under auto-control (IAS 33, paragraph 20).

interim management report

1.1 Activities of the first half-year

1.1.1 1.1.1 The provisional acceptance of the construction works of the building "Odon Warland – Bulins" located in Jette, at the corner of the Avenue Odon Warland and the rue Bulins, took place on 1 June 2012. As a reminder: this building was acquired by Home Invest Belgium (through partial demerger of the SA V.O.P.) in its state of future completion for a conventional acquisition price of e 5 815 000. It counts 34 apartments and 1 commercial space on the ground floor and has a total rental surface of +/- 3 123 m² and 34 indoor parking spaces.

40 % 35 % + investments

The different sales of the first half-year end up in a total realized net capital gain of e 0.7 million in comparison with the latest fair value of the sold buildings. This amount reinforces the distributable result to the shareholders over the period. The graphs above show the details of the realized capital gains, compared both to the latest fair value and to the initial acquisition value of the assets increased by the investments that took place during the period of ownership.

The strategy that has been consistently followed for seven years already, again bears its fruits despite the still weak economic climate, as the results from the sales, piloted with discernment and professionalism, show the importance of the capital gains that can be obtained by investing in a portfolio of high-quality residential property, in combination with a dynamic arbitrage policy.

1.1.2 During the first half-year the lot per lot sales program of different assets was continued:

1.1.3 For the project Belliard/Industrie, of which the construction was delayed due to a problem of faulty concrete, the hotel construction works were completed on 13 July 2012 (see below sub 1.2.1); the completion of the residential part in its turn is expected for the second half-year of 2012. As a reminder: this relates to the development of a hotel residence with 110 rooms and the renovation into 6 apartments of an old mansion by Nexity IG for the account of the SA Belliard 21, a 100% subsidiary of the Sicafi. The property complex is located in Brussels, at the corner of the rue Belliard and the rue de l'Industrie, in the center of the European District. The completion of the works of the hotel corresponds to the date on which the usufruct on the hotel residence that was granted by the SA Belliard 21 to the group groep Pierre & Vacances for 15 years enters into force.

1.1.4 No related party transactions took place during the halfyear under review in the sense of article 13 of the Royal Decree of 14 November 2007.

1.1.5 Home Invest Belgium has further paid special attention, as well at the level of its Board of directors as at the level of its Executive management, to social, environmental and ethical criteria for its decisions with regard to managing its financial resources and the execution of its rights related to the securities held in the portfolio. In this context, Home Invest Belgium remained particularly alert to technological evolutions in the construction sector in general and the energy performance of its property portfolio in particular, as for instance was the case for the building Odon Warland-Bulins, completed on 1 June 2012 (cf. supra sub 1.1.1).

1.1.6 In the course of the 1st half-year of 2012 Home Invest Belgium has successfully started an important restructuring ofits portfolio of credit lines and hedges.

That way, the Sicafi has concluded a new credit line with a variable interest rate of e 25 million, granted by BNP Paribas Fortis that expires on 21 August 2018.

Simultaneously Home Invest Belgium has renegotiated the expiry date of an IRS of e 20 million, concluded with ING, that currently runs till 2018 instead of 2013, and it has concluded a new IRS with BNP Paribas Fortis bank for an amount of e 25 million, that expires in 2018.

Thanks to these agreements, the average interest rate on the withdrawn credit lines could be reduced to 3.51% on 30 June 2012, compared to 3.88% on 31 December 2011, while the weighted average duration of the credit lines could be brought at 2 years and 10 months at the closing of the half-year, against 2 years at 31 December 2011.

This all contributes substantially to an increased securing of the credit and hedges portfolio of Home Invest Belgium.

Other initiatives with regard to the restructuring of the credit lines are foreseen by the Sicafi in the course of the 2nd half-year of 2012.

Bank Amount of credit lines (e) Type Withdrawn (e) Expiry
Credits with variable ING 9 400 000 Roll over credit 9 400 000 30/09/12
interest rate ING 6 540 000 Roll over credit 6 540 000 31/05/13
ING 6 000 000 Roll over credit 6 000 000 1/08/13
BNP 6 250 000 Roll over credit 6 250 000 30/09/13
BNP 6 250 000 Roll over credit 6 250 000 30/09/13
BNP 2 000 000 Roll over credit 2 000 000 31/01/14
BELFIU
S
9 400 000 Roll over credit 9 400 000 27/11/14
BELFIU
S
11 350 000 Roll over credit 11 350 000 31/12/14
ING 12 000 000 Roll over credit 12 000 000 31/12/14
BNP 14 530 000 Roll over credit 4 500 000 7/12/14
BNP 25 000 000 Roll over credit 15 000 000 21/05/18
ING 450 000 Straight loan -
BNP 446 208 Straight loan -
Credits with fixed BELFIU
S
731 250 Investment credit 731 250 30/09/23
interest rate
Total 110 347 458 89 421 250
Hedges BELFIU
S
10 000 000 Floor-double Cap - 10/07/13
BELFIU
S
11 750 000 IRS - 30/10/14
ING 20 000 000 IRS - 16/12/15
BNP 25 000 000 IRS - 20/05/18
ING 20 000 000 IRS - 29/06/18
BELFIU
S
15 000 000 IRS callable - 17/06/19
Total 101 750 000

1.2 Events after the closing of the first half-year

1.2.1 As described above in point 1.1.3, the completion of the works of the hotel for the project Belliard/Industrie took place on 13 July 2012; the completion of the works to the residential part is foreseen for the second half-year of 2012.

1.2.2On 5 July 2012 Home Invest Belgium has signed an agreement with Axa Belgium SA in view of the contribution in kind of an office building of +/- 11 793 m² gross, located in 1200 Woluwe-Saint-Lambert, Avenue Marcel Thiry 208, for a value of e 8 357 608. The agreement is subject to a number of conditions precedent of which the realization is expected before 31 December 2013, among which more specifically: the liberation of the building by all its occupants, the obtaining of all permits and authorizations necessary to the change of the allocation and purpose of this building and turning it entirely into a residential building, the approval by the FSMA and the confirmation of the contribution value by the certified real estate surveyor of the Sicafi. The expected initial gross yield after reconversion can be estimated at +/- 7%.

Axa Belgium SA is part of the stable shareholders of the Sicafi. This transaction represented therefore a potential conflict of interest by which, in application of article 523§1 of the Company Code and articles 4.7.2. and 4.8. of the Corporate Governance Charter, the Chairman of the Board of directors (Mr Guy Van Wymersch-Moons), also General Manager Real Estate of the company Axa Belgium, has abstained from participating to the deliberation on this transaction.

1.2.3 Different new lot perlot sales are in an advanced negotiation phase, some of them having already been confirmed by the signing of a pre-sales agreement.

The realisation of only these expected sales, at the moment of editing this report, would represent an additional realized capital gain in the order of e 1.5 million.

1.2.4 On the other hand, the Sicafi is in an advanced negotiation phase regarding a new investment file relating to the take-over, through a gradual transfer of shares, of two residential complexes for students. Different other files have at present already passed the phase of the feasibility-study.

1.3 Outlook

Since the stock exchange listing in June 1999, i.e. since thirteen years, the dividend distributed by the Sicafi could be increased substantially each year.

For the current financial year, and except in case of unforeseen circumstances, there is no reason at all to alter this ascending curve. In those circumstances, it is the Board's opinion that the dividend for the 2012 year should again be higher than the one of the past financial year, except in case of an immediate and substantial downturn of the residential property market with regard to sales and/or letting, not expected by the Board at the moment of editing this report.

Finally, the Board reminds of the fact that the dividend growth partly comes from the increasing volume of arbitrages on the portfolio (see Annual financial report 2011, p. 42); it is however recommended to remind that the Sicafi has no influence on the evolution of the market prices and that it has no absolute control over the exact planning of the sales, as the intended buyer is free to decide until signing the agreement.

1.4 Main risks and uncertainties

It is the Board of directors' opinion that the main risk factors, summarized in pages 7 to 13 of the annual financial report 2011, remain relevant for this half-year report.

The risks with regard to regulation comprise the impact of the measures that were taken or that were considered by the legislator since the appointment of the current government, namely with regard to taxation (see below sub 1.5).

1.5 Fiscal treatment of the dividend

Following the Laws of 28 December 2011 and 29 March 2012, we understand that the tax system for the dividends distributed by Home Invest Belgium is as follows:

  • • The exemption of withholding tax foreseen in article 106, § 8 ARE/CIR, from which the residential Sicafi benefit, has not been modified in this stage. The dividends distributed by Home Invest Belgium thus remain exempt from the withholding tax of 21%.
  • • For Belgian residents-physical persons, an additional levy on income from movable assets of 4% was introduced:
  • It consists of a levy assimilated to the personal income tax, to be charged to physical taxpayers who receive dividends and interests for a net total amount of over e 20 020. The dividends paid by Home Invest Belgium have to be taken into account for the calculation of this amount;
  • The 4% levy seems to be applicable to dividends paid by Home Invest Belgium;
  • The 4% levy shall be payable at the moment of collection of the personal income tax, except if the beneficiary 'opts' for the withholding at the source, of the additional 4% levy;
  • The debtor of the withholding tax (for registered securities), or the paying agent (in the other cases), will have to declare the data with regard to the interests and distributed dividends to the administration by identifying the beneficiaries, except if they opt for a levy at the source of 4%;
  • Home Invest Belgium or the paying agent thus has to declare the distributed dividends and the beneficiaries (physical persons) to the administration, except for those who opt for the withholding at the source of the additional levy of 4%. In the latter case, Home Invest Belgium or the paying agent has to withhold the additional levy of 4% at the source and has to pass it on to the Public Treasury. It appears to be contrary to the law that the form made available by the tax administration for the declaration of the additional levy on income from moveable assets and the circular of 2 July 2012 referring to this form, exclude that shareholders of residential Sicafi can opt for the withholding at the source of the 4% levy.

  • • Moreover, a coordination error occurred in the texts of the revised article 313 of the Belgian Income tax Code by the law of 28 December 2011 that currently not takes into account the dividends exempt from withholding tax. In the absence of a corrective legislation, the dividend exempt from withholding tax, for which the shareholder has not opted for the withholding at the source of 4%, should be declared in the tax declaration as from the income year 2012, and it could be subject to a taxation based on a uniform tax rate of 21 % (+ 4 % additional levy), which was absolutely not the intention of the legislator, if we refer to the content of the parliamentary documents with regard to the Law of 28 December 2011.

  • • The aforementioned information with regard to the fiscal treatment of the dividend is provided with all reservation, taking into account the fact that at present no single clear guideline has been communicated by the tax administration with regard to the fiscal consequences of the laws of 28 December 2011 and 29 March 2012 relating to dividends distributed by residential Sicafi.

1.6 Strategy

Home Invest Belgium follows an investment strategy of "pure player" in residential buildings. Beyond apartments and houses, which respond to the needs of the adult population, this investment policy also integrates, on the one hand, housing for youngsters in the form of studios for students and young professionals, and on the other hand, housing for elderly people. It is within the latter context that the company closely examines the serviced residences segment, which is one of the answers to the needs of the new generations of elderly people who are looking for an attractive living environment, which integrates tailor-made services and allows them to keep their autonomy and independence for as long as possible.

"Erainn" - Etterbeek (1040 Brussels)

Home Invest Belgium on the stock exchange

2.1 Home Invest Belgium on the stock exchange

In the course of the past half-year under review the Home Invest Belgium closing price fluctuated between a lowest share price of e 62.90 on 4 January 2012 and a highest one of e 72 on 17 April 2012, also the highest one ever. In general, the first six months of the financial year 2012 were characterized by a quasi constant rise of the share price till the beginning of May to consequently adjust before rising again at the end of May; it has to be pointed out that the detachment of the coupon on 15 May has almost had no impact at all on the share price; on said date it decreased indeed to e 66.51, but already reached e 67 on 16 May and even e 70 on 30 May 2012.

We need to observe that the liquidity of the share increases, with an average daily volume of 1 066 shares per trading session, in comparison with an average of 777 in the course of the 1st half-year of 2011 and of 902 over the entire financial year 2011.

Again we are happy to emphasize the very good performance of the Home Invest Belgium share compared to both, the BEL 20, which progressed by 6.92% during this period, and the entire Belgian sector of Sicafi, reflected in the EPRA Belgium index, which recorded a decrease of - 2.02% over the half-year, compared to a progress by 9.29% for the Home Invest Belgium share.

The premium on the share price on 30 June 2012, last day of listing of the half-year (e 70.00) compared to the net asset value at that same date (e 56.87) amounted to 23.1% (in comparison to a premium of 16.02% on 30 June 2011 and a premium of 11.2% on 31 December 2011). This positive evolution reflects without doubt the confidence of the stock exchange in the solidity of the listed residential property sector in general, and of Home Invest Belgium in particular.

Comparison ofthe stock market evolution: Home Invest Belgium - BEL20 - EPRA Belgium index since the IPO

2.2 Shareholders

Based on the transparency notifications filed by the shareholders passing the statutory threshold of 3% of the capital, and on the register of nominative shareholders, the known shareholder status of Home Invest Belgium on 4 July 2012, compared to the situation on 24 February 2012, as recorded in the Annual financial report 2011 (page 44), reflects the acquisition by the Group Van Overstraeten Properties ("VOP Group") of part of the participation that was previously held by the SCRL Arcopar of the ARCO Group.

Shareholders on 4 July 2012 Number of
shares
In % of
the capital
Group VOP 777 692 25.45%
COCKY SA 110 0.00%
Stavos Luxembourg SA 118 455 3.88%
Mr Liévin Van Overstraeten 128 671 4.21%
Mr Antoon Van Overstraeten 127 714 4.18%
Mr Hans Van Overstraeten 130 605 4.27%
Mr Johan Van Overstraeten 128 569 4.21%
Mr Bart Van Overstraeten 128 568 4.21%
VOP SA 15 000 0.49%
AXA Belgium 433 164 14.17%
Les Assurances Fédérales 105 296 3.45%
Group ARCO 87 575 2.87%
Arcopar SCRL 62 575 2.05%
Auxipar SA 25 000 0.82%
Van Overtveldt - Henry de Frahan 102 792 3.36%
Other registered shareholders 118 364 3.87%
Free Float 1 431 260 46.83%
Total 3 056 143 100.00%

property report

3.1 Property portfolio1 - Occupancy rate

On 30 June 2012 Home Invest Belgium SA owned 74 buildings at 43 sites with a built-on surface of 126 723 m² and 1 189 rented units. The fair value of the property portfolio, determined on the basis of the valuation report of the Sicafi's independent surveyor, Winssinger & Associates, amounts to € 236.4 million, an increase by 2.6% compared to 30 June 2011 and a status quo in comparison with 31 December 2011, and this consequent to the sale of different buildings in the meanwhile. The investment value of the property portfolio in its turn amounts to € 261.5 million.

At the closing of the half-year under review the property portfolio breakdown was as follows:

This portfolio is composed for 81% of residential buildings located in Belgium, which represents a much higher percentage that the 60% required by the current tax legislation to be acknowledged as a residential Sicafi. Moreover, 78.6% of the portfolio is invested in the Sicafi's core business, namely apartments and single-family houses.

No single property complex exceeds the 20% regulatory maximum with regard to risk diversification. The main asset - the Lambermont complex in Schaerbeek – represents indeed less than 11.2% of the total property portfolio, followed by the City Gardens complex in Leuven with 7.6%. The item "Other" recorded in the graph below comprises a total of 60.5% of the portfolio; each site recorded in this item represents individually less than 3% of the Sicafi's property portfolio and contributes thus to an excellent risk diversification.

1 Based on the fair value of the investment properties in operation on 30 June 2012.

The property portfolio is located for 70.5% in the Brussels-Capital Region, region selected by the Sicafi as preferential investment zone due to its good market liquidity and its substantial capital gain perspective in the medium and long term.

Classified by age, the buildings of 10 years or less represent 47.4% of the portfolio, of which more than half have less than 5 years. This breakdown clearly demonstrates the company's intention to invest preferably in new or recent buildings.

The geographical breakdown in the Flemish Region progresses by 2.3% in comparison with the situation on 30 June 2011 to reach 15.7%, thanks to the completion of the project City Gardens. The share in the portfolio of Home Invest Belgium located in the Walloon Region decreases by 0.8% over the same period – it amounts to 13.8% on 30 June 2012, to compare to 14.6% on 30 June 2011 – to be explained by the fact that the Florida site in Waterloo is as from now on recorded under the assets held for sale.

The occupancy rate2 of the property portfolio for the total first halfyear of the current financial year amounts to 95.03%, perfectly stable compared to 95.08% of the 1st half-year of the financial year 2011, and this, notwithstanding a still difficult rental market, mainly in the top segment.

2 Average rate of the period, calculated on the basis of the rents, including rental guarantees for unoccupied space. Calculation excluding assets held for sale and development projects.

3.2 Property portfolio details

Situation ofthe portfolio
on 30 June 20121
Year2 Units Surface Gross
passing
rent3
ERV4 Effective
rent5
Occupancy
rate6
Name District Number e e e %
Brussels-Capital Region 804 88 233 11304764 9 794 976 11 105 327 95.4%
Belliard Brussels 1937 18 2 256 361 627 278 172 351 394 97.3%
Clos de la Pépinière Brussels 1993 25 3 275 442 196 402 192 410 852 93.9%
Lebeau Brussels 1998 12 1 153 257 063 175 205 254 164 100.0%
Résidences du Quartier Européen Brussels 1997 50 4 290 747 326 524 906 871 283 82.3%
Birch House Etterbeek 2001 32 3 438 482 816 431 414 473 514 95.9%
Erainn Etterbeek 2001 12 1 252 206 119 176 695 199 574 97.4%
Yser Etterbeek 1974 15 1 961 304 967 250 738 297 290 99.9%
Giotto Evere 2005 85 8 647 1 198 295 1 064 687 1 160 259 97.2%
Alliés - Van Haelen Forest 1999 35 4 189 394 157 356 142 370 893 93.9%
Belgrade Forest 1999 1 1 368 - - - 100.0%
Les Jardins de la Cambre Ixelles 1992 28 3 552 464 677 397 087 479 783 98.8%
Charles Woeste (apartments) Jette 1998 92 5 091 556 487 465 464 539 069 97.5%
Charles Woeste (shops) Jette 1996 14 2 995 400 868 329 717 385 566 99.2%
Odon Warland - Bulins Jette 2012 35 3 123 369 582 366 596 366 596 13.7%
Baeck Molenbeek St Jean 2001 28 2 652 238 176 231 420 227 855 95.8%
Lemaire Molenbeek St Jean 1990 1 754 - - - 100.0%
La Toque d'Argent Molenbeek St Jean 1990 1 1 618 195 155 154 608 192 187 100.0%
Sippelberg Molenbeek St Jean 2003 33 3 290 387 396 349 250 362 113 95.0%
Bosquet - Jourdan Saint-Gilles 1997 27 2 326 290 285 266 055 288 150 99.3%
Jourdan - Monnaies Saint-Gilles 2002 26 2 814 350 873 319 354 330 905 94.3%
Jourdan 85 Saint-Gilles 2010 24 2 430 359 908 347 524 352 935 98.1%
Lambermont Schaerbeek 2008 131 14 110 1 636 170 1 581 355 1 585 509 97.0%
Melkriek Uccle 1998 1 1 971 290 666 210 578 290 666 100.0%
Ryckmans Uccle 1990 8 2 196 272 847 230 580 271 607 100.0%
Les Erables Woluwé St Lambert 2001 24 2 202 341 722 263 838 311 413 90.2%
Les Mélèzes Woluwé St Lambert 1995 37 4 357 619 247 497 616 590 801 94.9%
Voisin Woluwé St Pierre 1996 9 923 136 139 123 783 140 949 97.3%
Flemish Region 159 15 326 2 282 694 2 202 006 2 124 238 93.2%
Nieuwpoort (shops) Nieuport 1997 1 296 28 419 59 200 28 212 100.0%
Grote Markt Saint Nicolas 2004 17 2 752 387 427 352 441 367 023 94.7%
Wiezelo 's Gravenwezel 1997 13 1 297 169 368 156 735 168 016 98.3%
City Gardens Louvain 2010 106 5 236 1 032 046 1 020 352 982 404 95.3%
Haverwerf Malines 2002 4 3 399 455 518 414 678 377 870 82.4%
Gent Zuid Ghent 2000 18 2 346 209 916 198 600 200 712 98.2%
Walloon Region 226 23 164 2 675 088 2 306 034 2 551 304 94.9%
Clos Saint-Géry Ghlin 1993 1 4 140 349 338 188 400 344 319 100.0%
Place du Jeu de Balle Lasne 1999 7 1 198 165 899 153 329 157 559 96.3%
Quai de Compiègne Huy 1971 1 2 479 196 234 168 572 195 161 100.0%
Galerie de l'Ange (apartments) Namur 1995 50 1 880 244 437 215 757 254 846 96.5%
Galerie de l'Ange (shops) Namur 2002 12 2 552 657 250 543 095 644 739 100.0%
Léopold Liège 1988 53 3 080 307 947 303 580 293 187 95.8%
Mont Saint Martin Liège 1988 6 335 37 820 35 635 18 501 48.5%
Quai de Rome Liège 1953 27 2 490 178 902 202 340 168 236 91.3%
Saint Hubert 4 Liège 1988 14 910 88 156 89 750 44 363 50.5%
Saint Hubert 51 Liège 1988 4 360 31 395 42 480 27 004 100.0%
Colombus Jambes 2007 51 3 740 417 710 363 096 403 389 95.1%
Total 1 189 126 723 16262546 14303016 15 780 869 95.0%

1 Excluding the buildings held for sale and the development projects

2 Year of construction or latest fundamental renovation

3 Annual gross rents applicable on 30/06/2012, including rental guarantees and the estimated rental value on vacancy

4 Value estimated by the independent real estate expert

5 Current gross rents on 30/06/2012, on an annual basis

6 Average rate for the first half-year of 2012, including rental guarantees

3.3 Report of the real estate expert

"Ladies and gentlemen,

Re: Valuation on 30 June 2012

In compliance with legal and statutory provisions, we are proud to provide you with our opinion on the Investment value of the portfolio belonging to the SICAFI HOME INVEST BELGIUM as of 30 June 2012.

We have carried out our valuations using the NPV method of the rental income and in compliance with International Valuation (IVS) and RICS (Royal Institution of Chartered Surveyors) standards.

As is customary, our mission has been carried out on the basis of information provided by HOME INVEST BELGIUM regarding the rental status, charges and taxes to be paid by the lessor, the works to be done, together with any other factors influencing property values. We presume this information to be exact and complete.

As stated explicitly in our valuation reports, these do not include any structural or technical examination of properties or any analysis of the possible presence of harmful materials. These factors are well known by HOME INVEST BELGIUM which manages its portfolio in a professional manner and cares out the necessary technical and legal due diligence when acquiring any property.

The Investment value is defined as the value most likely to be reasonably obtained under normal selling conditions between consenting and well-informed parties, before deduction of transfer costs.

The fair value can be obtained as follows:

  • for residential or mixed-purpose properties which are, by nature and conception, appropriate for resale by separate units: by deducting from the Investment value the transfer costs (amounting to 10% in Flanders and 12.5% in the Brussels-Capital Region and Wallonia);
  • for the other properties in the portfolio: by deducting from the Investment value a rate of 2.5% when this value exceeds € 2 500 000, and the total transfer costs, set at the abovementioned rates of 10% and 12.5%, if the investment value is below € 2 500 000.

An analysis of sales realised on the Belgian market in the 2003 – 2005 period shows an average rate of 2.5% for transaction costs for properties sold 'en bloc' with an investment value exceeding € 2 500 000.

This 2.5% rate will be reviewed periodically and adjusted insofar as the gap shown for the institutional market exceeds +/- 0.5%.

In our analysis of Home Invest Belgium's portfolio, we have arrived at the following findings:

  • 1) 84.74% of the portfolio consists of residential properties, of which 2.55% are nursing homes, 13.20% are commercial premises and 2.06% office space3 .
  • 2) the occupancy rate of the property portfolio on 30 June 2012 was 92.36%4 .
  • 3) the average level of rents received or guaranteed is 9.58% above the normal rental value currently estimated for the portfolio.

On the basis of the remarks made in the previous paragraphs, we confirm that the Investment value of HOME INVEST BELGIUM's property portfolio on 30 June 2012 amounts to € 279 667 000 (two hundred seventy-nine million six hundred sixty-seven thousand euro).

The likely realisable value of HOME INVEST BELGIUM's property portfolio on 30 June 2012 corresponding to its fair value in the sense of IAS/IFRS is set at € 252 596 000 (two hundred fifty-two million five hundred ninety-six thousand euro).

Yours faithfully,

Brussels, 19 July 2012

WINSSINGER & ASSOCIES SA

Geoffroy REGOUT Director"

3 These calculations were made based on parameters that differ from those used by Home Invest Belgium; that way, they are based on the investment value of the buildings of the portfolio and comprise the buildings held for sale.

4 The occupancy rate differs from the one published by Home Invest Belgium, which is an average occupancy rate over the entire half-year of the financial year, excluding the buildings held for sale.

corporate governance

Board of directors

The mandate of Mr Gaëtan Hannecart, director since the start, has ended at the end of the ordinary General meeting of 2 May 2012. The Board of directors expresses him its deep gratitude for his important contribution to the launch and the development of the Sicafi, and this since its listing in June 1999.

The Board of directors of Home Invest Belgium SA is since then composed as follows:

Guy Van Wymersch-Moons Chairman, non-executive director
Xavier Mertens Managing director of Home Invest Belgium SA, Executive director
Guillaume Botermans Non-executive director, independent
Koen Dejonckheere Non-executive director, independent
Luc Delfosse Non-executive director, independent
Eric Spiessens Non-executive director, independent
Johan Van Overstraeten Non-executive director
Liévin Van Overstraeten Non-executive director

abridged consolidated financial statements

The accounting and valuation criteria used for the interim financial statements, as recorded in the current half-year report are identical to those used for the annual financial statements closed on 31 December 2011.

This half-year report applies the IAS 34 standard, prescribing the minimum content of this interim financial report as well as the accounting and valuation criteria to apply.

Taking into account the company activities, the figures presented hereafter have no cyclic or seasonal character.

Finally, the percentages quoted in the comments below have been calculated based on non rounded figures of the income statement or the balance sheet and can consequently differ from those that would be calculated on the basis of the rounded figures recorded hereafter.

The company has not applied new or modified standards anticipatively, which consequently do not have any impact on the financial statements under review.

5.1 Consolidated income statement on 30 June 2012

Compared with the results of the first half-year of 2011, the main results of the 1st half-year 2012 are as follows:

(in e) 30/06/12 30/06/11
I. Rental income (+) 8 373 628 7 669 533
III. Rental-related expenses (+/-) -174 274 -110 250
NET RENTAL RESULT 8 199 354 7 559 283
IV. Recovery of property charges (+) 14 203 24 177
V. Recovery of charges and taxes normally payable by the tenant on let properties (+) 69 298 44 020
VII. Charges and taxes normally payable by the tenant on let properties (-) -666 914 -660 903
VIII. Other rental-related income and expenditure (+/-) 1 458 0
PROPERTY RESULT 7 617 400 6 966 577
IX. Technical costs (-) -563 827 -480 873
X. Commercial costs (-) -162 085 -257 110
XI. Taxes and charges on un-let properties (-) -31 144 -239 518
XII. Property management costs (-) -930 931 -802 513
Property charges -1 687 987 -1 780 015
PROPERTY OPERATING RESULT 5 929 413 5 186 562
XIV. General corporate expenses (-) -338 533 -262 752
OPERATING RESULT BEFORE PORTFOLIO RESULT 5 590 879 4 923 810
XVI. Result on the sale of investment properties (+/-) 669 285 632 575
XVIII. Changes in fair value of investment properties (+/-) 2 385 713 4 494 372
OPERATING RESULT 8 645 877 10 050 757
XX. Financial revenues (+) 53 033 45 238
XXI. Net interest charges (-) -1 292 355 -1 324 535
XXII. Other financial charges (-) -31 747 -25 801
XXIII. Changes in fair value of financial assets and liabilities (+/-) -1 747 657 223 408
FINANCIAL RES
ULT
-3 018 726 -1 081 689
PRE-TAX RESULT 5 627 151 8 969 068
XXIV. Corporation tax (-) -10 106 -527
Taxes (XXIV + XXV) -10 106 -527
NET RESULT 5 617 046 8 968 541
Net result per shar
e
1.85 3.09
Average number of shares 3 043 231 2 901 290
Net current result (without the items XVI. XVII. XVIII and XIX.) 2 562 048 3 841 594
NET CURRENT RESULT PER SHARE (without the items XVI. XVII. XVIII. and XIX.) 0.84 1.32
Net current result excluding IAS 39 (without the items XVI. XVII. XVIII. XIX. and XXIII.) 4 309 705 3 618 186
NET CURRENT RESULT excluding
IAS 39 PER SHARE (with
out the items XVI. XVII. XVIII. XIX. and XX
III.)
1.42 1.25
Result on the portfolio (XVI. to XIX.) 3 054 998 5 126 947
RESULT ON THE PORTFOLIO PER SHARE (XVI. to XIX.) 1.00 1.77
Distributable result 4 967 149 4 323 271
Distrib utab
le result PER SHARE
1.63 1.49
Operating margin (operating result before portfolio result / property result) 73.40% 70.68%
Operating margin before tax (pre-tax result – portfolio result / property result)
Net current margin (net result – portfolio result / property result)
33.77%
33.63%
55.15%
55.14%
(in e) 30/06/12 30/06/11
Statement of global result
I. Net result 5 617 046 8 968 541
II. Other elements of the global result:
B. Change of the effective part of the fair value of authorized cash flow hedges as defined by IFRS 945 526 1 113 895
1. Effective hedges -222 408 0
2. Requalification according to IAS 39 §101 1 167 935 0
GLOBAL RESULT (I + II) 6 562 572 10 082 436

The net rental result progresses by 8.5% in comparison with that of the first half-year 2011, thanks to the incorporation of new buildings consequent to the acquisitions realized in the course of the second half-year 2011. The property result amounts to 9.3%, in line with the increase of the rental result.

The property charges on the other hand decrease by 5.2% in comparison with the first half-year 2011; this is due to different components: the technical costs increase +/- in line with the growth of the portfolio, while the costs for commercialization and the costs of vacant properties strongly drop. Finally, we need to report a rise of the internal property management costs of nearly 16%, essentially caused by the hiring of new employees.

The general costs increase by 28.8% in comparison with the first half-year 2011; this rise is explained by more extended activities and contacts in the scope of the expansion of the Sicafi.

The operating result before the portfolio result increases by 13.6% and amounts to € 5.6 million.

The operating margin1 thus stands at 73.40%, again a substantial improvement, both compared to that of 70.68% in the first half-year 2011 and to that of 71.64% on 31 December 2011.

The result on the sale of investment properties, calculated compared to the last fair value, after deduction of the investments of the year, amounts to € 0.7 million, compared to € 0.6 million in the first half-year 2011; the distributable capital gain on these sales amounts to € 0.5 million.

The changes in fair value of the investment properties is positive and amounts to € 2.4 million, in comparison with € 4.5 million in the first half-year 2011.

The operating result amounts that way to € 8.6 million compared to € 10.1 million on 30 June 2011.

The financial result shows a noticeable deterioration. It stands at € - 3 million compared to € - 1.1 million on 30 June 2011, which represents an increase of 179% that is explained by the changes in the fair value of the financial assets and liabilities recorded under line XXIII. Making abstraction of this unrealized latent variation, the financial result would amount to € - 1.3 million, perfectly stable in comparison with the situation on 30 June 2011, and this notwithstanding the increase of the bank debts over the period. On the other hand, we need to remind that nearly all of the Sicafi's debt is hedged by financial derivatives (see above in point 1.1.6).

The net result amounts to € 5.6 million compared to that of € 9.0 million on 30 June 2011, or a decrease of 37.4%.

The net current result2 drops by € 3.8 million on 30 June 2011 to € 2.6 million, or -33.3%. Per share, this stands at € 0.84 compared to € 1.32 for the first half-year of 2011, a decrease of 36.4%.

The net current result excluding IAS 39 is a better barometer for the operating profitability of the company as this makes abstraction of the recording of purely latent capital gains and losses on hedges; it substantially rises from € 3.6 million to € 4.3 million. Per share it also progresses from € 1.25 to € 1.42 (+ 13.6%). This important progress can mainly be attributed to the rise of the rental income of € 0.7 million, in combination with the perfectly stable financial result excluding IAS 39 (see above).

The distributable result also progresses and stands at € 5 million compared to € 4.3 million a year ago. Per share this amounts to € 1.63 compared to € 1.49 on 30 June 2011, and this notwithstanding an average number of shares entitled to dividends that increases by 4.89%. It has to be pointed out that this amount takes into account the capital gains realized in the course of the first half-year under review, whereby the Board has confidence in an acceleration of the realisation of capital gains during the second half-year to come.

1 Operating result before the portfolio result / Property result.

2 The net current result equals the net result of the period, after deduction of the portfolio result (lines XVI, XVII and XVIII of the income statement).

5.2 Consolidated balance sheet on 30 June 2012

(in e) 30/06/12 31/12/11
ASSETS
I. NON-CURRENT ASSETS 250 661 616 257 986 342
B. Intangible assets 6 534 7 623
C. Investment properties 249 248 493 256 558 090
D. Other tangible assets 182 920 200 744
E. Non-current financial assets 41 538 37 755
F. Finance lease receivables 1 182 131 1 182 131
II. CURRENT ASSETS 22 539 512 15 492 597
A. Assets held for sale 16 224 222 7 522 808
C. Finance lease receivables 70 080 98 890
D. Trade receivables 2 569 564 4 118 361
E. Tax receivables and other current assets 1 271 742 1 928 583
F. Cash and cash equivalents 2 167 640 1 701 118
G. Deferred charges and accrued income 236 264 122 836
TOTAL ASSETS 273 201 128 273 478 939

SHAREHOLDERS' EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY
A. Capital 73 469 670 73 469 670
B. Share premium account 19 093 664 19 093 664
C. Reserves
a. Legal reserve (+) 98 778 98 778
b. Reserve from the balance of the changes in fair value of investment properties (+/-) 91 785 187 85 457 148
c. Reserve from transfer costs and rights resulting from hypothetical disposal
of investment properties (-)
-26 032 278 -23 441 309
d. Reserve from the balance of changes in fair value of authorized hedges to which
hedge accounting according to IFRS is applied (+/-)
-1 603 620 -2 549 147
h. Reserve for treasury shares (-) -757 323 -757 323
m. Other reserves (+/-) 1 259 467 1 259 467
n. Result carried forward from previous financial years (+/-) 10 131 021 7 773 304
D. Net result of the financial year 5 617 046 14 833 588
SHAREHOLDERS' EQUITY 173 061 612 175 237 840
LIABILITIES
I. Non-current liabilities 85 517 265 64 115 189
B. Non-current financial debts 79 988 750 59 388 750
C. Other non-current financial liabilities 5 528 515 4 726 439
II. Current liabilities 14 622 252 34 125 911
B. Current financial debts 9 864 126 24 926 363
D. Trade debts and other current debts 3 713 786 8 206 419
E. Other current liabilities 501 794 519 171
F. Accrued charges and deferred income 542 545 473 957
LIABILITIES 100 139 517 98 241 099
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 273 201 128 273 478 939
Number of shares at end of period 3 043 231 3 043 231
Net asset value 173 061 612 175 237 840
Net asset value per share 56.87 57.58
Debts 94 068 457 93 040 703
Debt ratio 34.43% 34.02%

Among the assets of the balance sheet we find under the noncurrent assets mainly the item investment properties, that reflects the fair value of the property portfolio of Home Invest Belgium (including the development projects). On 30 June 2012 the fair value reaches € 249.2 million, to compare to € 256.6 million on 31 December 2011.

The current assets comprise, under the assets held for sale, the investment properties of which the arbitrage has been decided by the Board and of which the fair value stands at € 16.2 million.

The liabilities are characterized by a decrease of 1.2% of the total shareholders' equity in comparison with the situation on 31 December 2011 that still comprises the total result of the financial year 2011, dividend included, in accordance with the IAS-IFRS standards.

On 30 June 2012 the debt ratio of Home Invest Belgium amounted to 34.4% compared to 34% on 31 December 2011, which is thus largely below the legal maximum of 65% and which is a valuable asset in the still unstable current context of the financial and capital markets. The additional debt capacity amounts on the other hand to € 239 million; it stands at € 85 million for a debt ratio below 50%, limit adopted by the Board of directors.

Based on the fair value of the investment properties, as defined in the real estate expert's report, and taking into account the result accumulated in the course of the past half-year, the net asset value of the Home Invest Belgium3 share on 30 June 2012 is € 56.87, an increase by 2.2% compared to that of 30 June 2011 (€ 55.63) and a decrease of 1.2% in comparison with the one on 31 December 2011 (€ 57.58), whereby the latter figure however comprises the total result of the financial year 2011.

5.3 Cash flow statement

(in e) 30/06/12 30/06/11
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1 701 118 1 036 510
1. Cash flow from operating activities 2 059 943 3 382 217
Result of the financial year 5 617 046 8 968 541
Result of the year before interest and taxes 8 645 877 10 050 757
Interest received 53 033 45 238
Interest paid -3 071 759 -1 126 928
Taxes -10 106 -527
Adjustment of profit for non-current transactions -1 274 342 -5 344 127
Depreciation and write-downs: 32 999 8 228
- Depreciation and write-downs of non-current assets 32 999 8 228
Other non-monetary elements: -638 056 -4 719 780
- Changes in fair value of investment properties (+/-) -2 385 713 -4 494 372
- Other non-current transactions 1 747 657 -225 408
Gain on realization of assets: -669 285 -632 575
- Gains realised on the sale of non-current assets -669 285 -632 575
Change in working capital requirements -2 282 761 -242 197
Movements in asset items: 2 121 021 -677 940
- Current financial assets 28 811 26 636
- Trade receivables 1 548 797 -1 674 664
- Tax receivables and other short-term assets 656 842 1 136 486
- Deferred charges and accrued income -113 428 -166 397
Movements of liabilities items: -4 403 782 435 743
- Trade and other current debts -4 492 633 362 393
- Other current liabilities 20 263 16 314
- Accrued charges and deferred income 68 588 57 037
2. Cash flow from investment activities 1 645 256 565 197
Investment properties - capitalized investments -279 018 -226 405
Divestments 2 584 882 1 827 826
Development projects -642 683 -1 041 931
Other tangible assets -14 087 -459
Non-current financial assets -3 838 6 167
3. Cash flow from financing activities -3 238 678 -3 669 411
Changes in financial liabilities and debts 5 517 500 4 024 128
Increase (+) / Decrease (-) in financial debts 5 517 500 4 024 128
Change in capital (+/-) 0 -83 596
Dividend of the previous financial year -8 756 178 -7 609 943
Total cash flow 2 167 640 1 314 513
CASH AND CASH EQUIVALENTS AT END OF PERIOD 2 167 640 1 314 513

5.4 Changes in shareholders' equity

(in e) Capital Capital
increase
costs
Share
premium
Legal
reserve
BALANCE ON 31/12/2010 71 639 409 -692 530 19 093 664 97 827
Transfer
Changes resulting from the sale of a building
Dividend distribution
Partial demerger Masada 122 709 -83 596
Result of the financial year
Changes in fair value of the hedges
BALANCE ON 30/06/2011 71 762 118 -776 126 19 093 664 97 827
BALANCE ON 31/12/2011 74 401 222 -931 552 19 093 664 98 778
Transfer
Changes resulting from the sale of a building
Dividend distribution
Result of the financial year
Changes in fair value of the hedges
BALANCE ON 30/06/2012 74 401 222 -931 552 19 093 664 98 778

5.5 Segment information

As a residential Sicafi, Home Invest Belgium has chosen to entirely focus its investment strategy on residential property (apartment buildings, houses). Its investment strategy is consequently defined to a large extent by the geographical location of the buildings. The segmentation recorded hereafter is thus based on that geographical situation.

Segmentation Brussels-Capital Region
(in e) 30/06/12 30/06/11
Rental income 5 898 901 5 638 109
OPERATING RESULT BEFORE PORTFOLIO RESULT 4 712 294 4 417 678
Result on disposal of investment properties 669 285 530 930
Changes in fair value of investment properties 2 132 204 2 476 871
Financial result
Key figures1 Brussels-Capital Region
(in e) 30/06/12 30/06/11
Fair value of investment properties 166 748 789 166 130 156
Rental surface of investment properties 88 233 90 438
Number of units 804 818
Occupancy rate 95.4% 95.7%

1 Excluding buildings held for sale and development projects.

Reserve from the
Reserve from
balance of the
hypothetical
changes in fair
transfer costs
value of investment
and rights
properties
Reserve from
Reserve for
Other
Result carried
Net result of
the balance of
treasury
reserves
forward from
the financial
changes in fair
shares
previous
value of hedges
financial years
Total
year
75 461 347
-23 784 358
-2 974 112
-757 323
1 138 120
5 416 341
9 329 651
153 968 037
1 664 593 -1 664 593
-162 140
84 215
77 925
-7 742 983
-7 742 983
4 241 754 67 496
1 707 297
6 055 659
8 968 541
8 968 541
1 113 895 1 113 895
79 540 960
-23 700 143
-1 860 217
-757 323
1 205 615
8 788 232
8 968 541
162 363 149
85 457 148
-23 441 309
-2 549 147
-757 323
1 259 467
7 773 304
14 833 588
175 237 840
9 279 527
-2 830 280
2 357 717 -8 806 965
-2 951 488
239 311
2 712 177
-8 738 800
-8 738 800
5 617 046
5 617 046
945 526 945 526
91 785 187
-26 032 278
-1 603 620
-757 323
1 259 467
10 131 021
5 617 046
173 061 612
Brussels-Capital Region Flemish Region Walloon Region Non-allocated Total
30/06/11 30/06/12 30/06/11 30/06/12 30/06/11 30/06/12 30/06/11 30/06/12 30/06/11
5 638 109 1 095 378 790 746 1 379 350 1 240 678 8 373 628 7 669 533
4 417 678 955 562 558 181 1 221 246 1 001 710 -1 298 223 -1 053 759 5 590 879 4 923 810
530 930 123 219 -21 574 669 285 632 575
2 476 871 200 084 967 112 53 425 1 050 389 2 385 713 4 494 372
-3 018 726 -1 081 689 -3 018 726 -1 081 689
Brussels-Capital Region Flemish Region Walloon Region Total
30/06/11 30/06/12 30/06/11 30/06/12 30/06/11 30/06/12 30/06/11
166 130 156 37 030 732 30 559 778 32 592 694 33 602 992 236 372 214 230 292 927
90 438 15 326 14 322 23 164 23 034 126 723 127 794
818 159 147 226 211 1 189 1 176
95.7% 93.2% 90.7% 94.9% 95.5% 95.0% 95.1%

5.6 Explanatory Notes

5.6.1 Investment properties – Item I.C. of the assets

(in e) 30/06/12 30/06/11
Investment properties, balance at the beginning of the period 256 558 090 233 344 258
Investments – development projects 642 683 1 041 931
Completion of development projects (-) -5 871 324 -2 482 700
Completion of buildings under construction 5 871 324 2 482 700
Capitalized subsequent expenses 279 018 226 405
Acquisition of buildings 8 479 624
Transfer (-) -10 617 012 -8 164 140
Changes in fair value 2 385 713 4 494 372
Investment properties, balance at the end of the period 249 248 493 239 422 450

5.6.2 Consolidation scope

The consolidation scope on 30 June 2012 is unchanged compared to the one on 30 June 2011. It comprises the SA Home Invest Belgium (0420.767.885), the SA Home Invest Management (0466.151.118) and the SA Belliard 21 (0807.568.451).

5.6.3 Dividend distributed

Following the ordinary General meeting of 2 May 2012, Home Invest Belgium proceeded to the payment, on 15 May 2012, of a gross (= net) dividend of € 3 per share upon presentation of coupon nr. 15, or a total of € 8 777 536,454 .

5.6.4 Contingent assets and liabilities on 30 June 2012

On 30 June 2012, Home Invest Belgium had no contingent assets and liabilities.

4 Dividend calculated on a statutory basis in accordance with the Royal Decree of 7 December 2010 and consequently without exclusion of the shares held in autocontrol by Home Invest Management SA.

auditor's report1

REPORT ON THE LIMITED REVIEW OF THE INTERIM CONSOLIDATED FINANCIAL INFORMATION FOR THE HALF-YEAR CLOSED ON 30 JUNE 2012

Introduction1

We have executed an assessment of the related interim consolidated balance sheet of Home Invest Belgium closed on 30 June 2012, as well as of the interim consolidated income statement, the statement of changes in equity and the cash flow statement over the 6-month period closed at that date, of the overview of main fundamentals of financial reporting and the other notes. Management is responsible for the preparation and the faithful presentation of this interim consolidated financial information in accordance with International Financial Reporting Standards as adopted for use in the European Union, applicable to interim financial reporting (IAS 34). Our responsibility is to formulate a conclusion on the interim financial consolidated information based on our review.

Scope of the limited review

We conducted our review in accordance with ISRE 2410, "Assessment of interim financial information, executed by the entity's independent auditor."

A review of interim financial information consists of making inquiries, mainly of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the international auditing standards and, consequently, does not enable us to

obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing came to our attention that would imply us to believe that the related interim consolidated financial information is not a faithful presentation, in all material respects, of the consolidated financial position of the entity per 30 June 2012 and of its financial performance and cash flows for the 6-month period closed at that date, in accordance with International Financial Reporting Standards as adopted by the European Union.

Antwerp, 28 August 2012

Karel Nijs Company auditor and auditor certified by the FSMA for UCI's

Statutory auditor

1 This report relates to chapters I and II of the present half-year report.

statement of responsible persons in accordance with article 13, §2, 3° of the Royal Decree of 14 November 2007

Xavier Mertens, Managing director of the Sicafi, states that to his knowledge:

  • a) the abridged financial statements, established in accordance with the applicable accounting principles, present a fair view of the assets, financial situation and the results of the Sicafi and the companies included in the consolidation;
  • b) the interim management report contains a fair presentation of the mandatory information, and particularly the information recorded in § 5 and 6 of article 13 of the Royal Decree of 14 November 2007.

22 August 2012

The Board of directors

Home Invest Belgium is a residential Sicafi, created in June 1999 and listed on the continuous market of NYSE Euronext Brussels. Per 30 June 2012, its portfolio of investment properties in operation was composed of 74 buildings at 43 sites, with a total surface of 126 723 m2 and a fair value of € 236 million, excluding the development projects.

Investor relations

The present half-year financial report is available on the website of the company or can be sent by mail on simple request at the registered office.

Home Invest Belgium SA

Sicafi under Belgian law Boulevard de la Woluwe 60, Box 4, B-1200 Brussels Register of legal persons 0420.767.885 ISIN BE 003760742

T +32 (02) 740 14 50 F +32 (02) 740 14 59 www.homeinvestbelgium.be

Design and layout: www.theimagecompany.be

Home Invest Belgium SA

Belgian Sicafi Boulevard de la Woluwe 60/4, B -1200 Brussels

T +32 2 740 14 50 - F +32 2 740 14 59 [email protected] www.homeinvestbelgium.be RPM : 0420.767.885 ISIN BE 003760742

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