After a call for tenders, the Buildings Agency (The Belgian Federal
Government) designated Cofinimmo yesterday for taking-over its rights and obligations regarding the new Court of Justice in Antwerp.
Through this transaction, Cofinimmo acquires from the Buildings Agency a ground charged with a 27 year head lease starting on November 1st, 2005. This head lease was granted to the property developer Justinvest SA to build the new Court of Justice, which thus is and remains the property of Justinvest for 27 years. At the maturity of the head lease, within 27 years, Cofinimmo will become the owner of the building for free.
The Court of Justice has a total surface of 72,131m², of which 45,829m² of office space and hearing rooms, 19,256m² of technical and archiving rooms and 267 inside parking. The construction of the building was recently terminated.
Moreover, Cofinimmo today concluded the following agreements:
▪ as a lessee: a head lease (non indexed) of 27 years with Justinvest SA;
▪ as a lessor: a sublease (indexed) with the Buildings Agency for 36 years and for 100% of the surfaces.
Both the head- and the subleases take effect retroactively as of November 1st, 2005.
Within 27 years, the head lease with Justinvest will terminate, but the Buildings Agency will still remain Cofinimmo's tenant for another 9 years. In 36 years, under the sublease, the Buildings Agency has three options: prolong this lease at market conditions, purchase the property or withdraw from the building.
Both leases are financial leases. Cofinimmo has sold to Fortis Bank 91.5% of the receivables from the sublease.
The proceeds from this sale have been transferred to an external fiduciary company (managed by Mees Pierson) which will discharge all payments on the head lease. 8.5% of the receivables have not been sold and will be used for covering Cofinimmo's insurance and maintenance obligations.
The detail of the transaction and its impact on the accounts will be published with the annual results of 2005 on February 9, 2006. The impact on the income statement and balance sheet of Cofinimmo will remain limited during the first years as the structuration has transferred a majority of the financial income and liabilities to third parties.
This transaction allows Cofinimmo to reinforce its activity of long term building manager for public bodies.