Befimmo SA: Befimmo completes the first transaction under its dynamic portfolio management programme

Granting of a 99-year leasehold on the Pavilion building

Befimmo has reached an agreement^[1]on the assignment of usufruct fees and the grant of a leasehold on the Pavilion building for a total amount of €93 million.

The Pavilion building, located in the Leopold district of Brussels, is still fully occupied by the European Commission for a period of some 6 years.

This operation will generate a net distributable capital gain of €14.6 million (in relation to the investment value), €8.4 million^[2] of which will be recorded at 30 June 2019. The exit yield amounts to 4.95%. In 2011, Befimmo acquired the company (and has since absorbed it) that owned this building, which had been renovated in 2005. The IRR amounts to 7.12%.

The transaction falls under the dynamic portfolio management programme^[3] and will contribute to the financing of ongoing redevelopment projects. Furthermore, the capital gain generated, €0.57 per share, will reduce the difference between the EPRA earnings and the dividend^[4] forecast during the transitional period over which Befimmo carries out its programme of works.

For the transaction an assignment of receivables (arranged in 2011 at fixed rate) was settled, which will entail a one-off financial charge of €2.7 million as at 30 June 2019.

The impact of this operation on the LTV ratio is -2.06% (in absolute terms and based on the data as at 31 December 2018). It will have an impact on the EPRA earnings forecast^[5] of -€0.09 per share in 2019, -€0.13 per share in 2020 and -€0.13 per share in 2021, with no impact on the dividend forecast for the financial year.

 "The Pavilion is benefiting from the compression of property yields observed in the office market. We have made this transaction at the right time in the life cycle of the building and of the overall Befimmo portfolio," says Benoît De Blieck, CEO of Befimmo.

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