Cofinimmo buying into healthcare and out of non-core offices

ASSET MANAGEMENT
Tim Harrup

Real estate developer and investor Cofinimmo (which was Belgium’s first sicafi and is its largest quoted real estate company) has outlined its activities and strategy during the first half of this year, in its report. The company starts by saying that the pandemic that the world has been experiencing for almost one year and a half now has highlighted the importance of the healthcare sector for each and every one of us. Cofinimmo is actively participating in the operation, maintenance, extension and renewal of the property portfolio dedicated to healthcare in nine countries.

During the first half-year of 2021, Cofinimmo thus made several investments (for 698 million Euros) in various healthcare real estate sub-segments in Europe including, for the first time, in Ireland and Italy. Thanks to these operations, the company points out, healthcare real estate assets (3.5 billion Euros) account for 64% of the group's consolidated portfolio as at 30.06.2021. In addition to this, and occurring after 30.06.2021, the group made its first investments in the United Kingdom for a total amount of approximately £ 57 million (66 million Euros). Ongoing development projects represent a financial envelope of more than 530 million Euros to be achieved by 2023.

In the office segment, Cofinimmo is also executing its strategy which consists in rebalancing its office portfolio between the various sub-segments to the benefit of high-quality buildings located in the Central Business District of Brussels. On 03.02.2021, the group announced the launch of the contribution project of its office portfolio into a subsidiary, giving the option to open the capital of this subsidiary (of which the control would be maintained) to future investors. On 31.05.2021, the group also announced the future disposal of 17 office buildings located in the periphery of Antwerp and in the decentralised area and the periphery of Brussels for more than 80 million Euros.

Looking forward, the investments planned for 2021, as detailed on 28.04.2021, will be exceeded, and indeed more than doubled. The new gross investment estimate therefore now stands at 930 million Euros (compared to 445 million Euros previously). Turning to investor returns, and based on the information currently available and the assumptions detailed above, and barring major unforeseen events, Cofinimmo says that it expects to achieve a net result from core activities – group share higher than 7.00 Euros per share for the 2021 financial year, up compared to that of the 2020 financial year (6.85 Euros per share), and taking into account the dilutive impact of the possible conversion of convertible bonds maturing next September.