Whitewood Capital Group is pleased to announce receipt of Vastgoed Bevak/Sicafi accreditation from the Belgian Financial Services and Markets Authority ('Autoriteit voor Financiële Diensten en Markten') (FSMA) for its intended Whitewood CAPE Comm. VA Core Plus Commercial Offices Fund.
Whitewood Capital Group is the first real estate investment manager to be accredited Bevak/Sicafi status based on the new Belgian Royal Decree on REITs which was introduced on December 7, 2010. The Fund will be managed by Whitewood Capital Real Estate Investment Management (REIM) NV as Statutory Manager.
A Sicafi ('Société d'investissement immobilière à capital fixe immobilier' - fixed public capital real estate investment trust) in Belgium is similar in concept to the Real Estate Investment Trusts (REITs) common in the United Kingdom (UK-REITs), Australia (LPTs), US (REITs), Société d'investissements Immobiliers Cortées (SIIC) in France, and FII/FBI (Fiscal Investment Institution/Fiscale Beleggingsinstellingen) in the Netherlands.
Most notably, in order to maintain its status, a Sicafi is required to; not exceed a consolidated debt and liabilities ratio of 65% of total assets, diversify risk by having no more than 20% of total assets invested in a single real estate complex, distribute a minimum of 80% of cash flow as dividends (whereupon such dividends are exempted from corporate income tax) and deduct a 15% withholding tax when the dividend is paid.
The group's intended Euronext (Brussels) listed flagship fund will specialize in the active asset management of commercial office buildings mainly across Belgium and the Netherlands. The portfolio currently comprises 131 million of quality core plus office assets concentrated in established major sub markets and business centers.
Said Frederic Van der Planken; Joint CEO: "We believe that despite current market turmoil, now is the perfect time in the cycle to launch a defensive core-plus offices fund. With the yield gap between prime and secondary at an all-time historical high, and the majority of other investors focusing on over-priced prime product, significant opportunities for value creation exist for those with the right team and experience to realize a value-add strategy.
"We call our strategy CAPE: Capital Enhancement and Preservation.
"To take advantage of a now cost conscious occupier market, the Fund will position its rents at the upper end of those being asked in the mid-quality range, but lower than those of the rents being asked in the lower end of the Prime and upper Grade A tiers, thus creating a compelling value proposition for tenants seeking value for money."
Said Christopher Millen; Joint CEO: "Property markets across the Belgo-Dutch region have undergone a period of structural repricing, particularly in regard to secondary office properties requiring selective capital expenditure in order to re-position the quality of such properties to meet occupier and investor demand.
"According to research from CBRE and Jones Lang LaSalle, the Belgo-Dutch markets have, both before and after the financial crisis, displayed a 'relative robustness' with limited capitalization rate and face rent decline or increases. This is in contrast to other markets such as the UK and France which experienced severe 'peak-to-trough' falls in property values and rents. A stark contrast to the evidenced stability of the Belgo-Dutch markets.
"The Fund is being launched with post crisis asset valuations, no legacy issues to contend with, and at a time when Prime and Grade A commercial office pricing has rebounded to the extent that such pricing has not just returned to pre-financial crisis levels, but in many cases has exceeded such levels, with secondary office values approximately 350-400 basis points softer than prime initial yields.
This can be contrasted with the period around June 2007 'peak' where, at the peak, secondary office yields had virtually merged with prime yields as a transactional hungry market, neglected to accurately differentiate pricing between o
