On 01 August 2016, the Cofinimmo Group acquired the medical office building Oranjeplein, located in Goirle, near Tilburg, in the Netherlands. The investment amounted to €4.5m. The building was renovated in 2013 and has a surface area of 1,844m². It is fully occupied by several medical and paramedical professionals (physicians, pharmacists, physiotherapists, dentists). Each professional is a tenant of the Cofinimmo Group under a ‘double net’1 lease contract, indexed annually. The weighted average residual lease length amounts to seven years. The gross initial rental yield stands at 7.48%. Cofinimmo signed a collaboration agreement with a local third party for the very specific commercial management of this asset. This specialised bureau has the mission to maintain the occupancy rate at an optimal level over the long term, whilst ensuring the complimentary of professions represented in the centre, for the benefit of both the patients and the professionals working there.
On 05 August 2016, Cofinimmo purchased the shares of four companies, each owner of an office building in Brussels. The acquired property portfolio, representing a total above-ground surface area of 22,959m², consists of three buildings located in the heart of the Brussels’ European district and one in the decentralized area of Brussels. The average occupancy rate of the premises amounts to 88% and the average weighted residual lease length is 3.3 years until the first break option for the tenants, and 5.8 years until the end of the leases. The four buildings are occupied by several high-quality tenants. The transaction values the buildings at €57.9m, an amount in line with their investment value as determined by the independent real estate expert. This corresponds to an investment value, parking spaces excluded, of €2,100 per m². The ‘double net’ gross rental yield stands at 6.41% today and could reach 7.43% in case of full occupation. The passing rents of the four buildings are lower than the theoretical rents estimated by the real estate expert. All this means that the portfolio offers a significant value creation potential.
Jean-Edouard Carbonnelle, Chief Executive Officer: “With regard to our healthcare real estate portfolio, the acquisition of this asset in the Netherlands introduces a novelty in our strategy as, for the first time, we let a building directly to several healthcare professionals, instead of letting the entire property to a hospital or an operator which in turn sublets to the professionals. We hope to be able to reproduce this type of investment, as there is an important number of medical office buildings in this country and in the other countries in which we are present. With regard to our office portfolio, the acquisition of the four real estate companies and the four buildings they own are in line with Cofinimmo’s announced strategy. Besides renovating and redeveloping the buildings already in our portfolio which require it, we also seek to acquire medium-sized assets, partially empty, located in the Central Business District of Brussels, where our current portfolio is fully occupied. These types of buildings can be purchased at attractive prices in the current market conditions, and have an significant value creation potential. Our company has experienced in-house teams, and their mission will be to lease the remaining surface areas and to improve their overall comfort by appropriate refurbishments. At the end of May 2016, we already acquired, under favorable terms, the building located avenue des Arts/Kunstlaan 46, also in the European district of Brussels. In each case, renovations are eventually planned.”
