Retail Estates, the Belgian REIT specialising in out-of-town retail properties, is navigating potential rental income disruption after Leen Bakker Belgium initiated judicial transfer proceedings for its 44-store Belgian operation on 14 August 2025.
The proceedings, conducted by court-appointed liquidators seeking buyers for all or part of the retail chain, directly impact 11 Retail Estates properties totalling 16,452 m² of retail space across Belgium. These stores generate €2m in annual rental income for Retail Estates, representing 1.39% of the REIT's total rental income from its 1,021-property portfolio.
What makes this situation particularly noteworthy for institutional investors is the strategic risk management approach Retail Estates has deployed over recent years. The company has systematically reduced its Leen Bakker exposure from 18 properties three years ago to the current 11 units, actively collaborating on store closures as the retailer's financial position deteriorated. This proactive portfolio management demonstrates how sophisticated landlords can mitigate tenant concentration risk before insolvency events occur.
The affected properties span strategic Belgian locations, including Bruges, Liège, Dendermonde, and eight other municipalities. Significantly, Jan De Nys, CEO of Retail Estates, confirmed that Leen Bakker Belgium had no rent arrears at the time of the judicial proceedings, highlighting how even compliant tenants can create sudden vacancy risk through corporate restructuring.
Retail Estates expects the liquidation process to generate sufficient proceeds to cover rents until the creditor protection period expires on 7 December 2025. However, the company acknowledges uncertainty around potential vacancy duration following any successful store transfers, creating near-term cash flow visibility challenges for investors tracking the REIT's performance.
The judicial proceedings contrast sharply with the stability of Leen Bakker's Dutch operations, where no similar restructuring is planned according to Retail Estates' intelligence. This geographic divergence illustrates how retail sector challenges can vary significantly across European markets, even within the same corporate family, offering valuable insight for cross-border retail real estate investors assessing tenant risk profiles.
People mentioned:
- Jan De Nys, CEO, Retail Estates NV
- Kara De Smet, CFO, Retail Estates NV
Companies mentioned:
- Retail Estates NV - Belgian public real estate investment trust, property owner
- Leen Bakker Belgium NV - retail tenant entering judicial proceedings
- Leen Bakker Nederland BV - Dutch sister company (not affected)
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