Property information
Size of the real estate portfolio
A large portfolio clearly offers a number of benefits:
- it helps to spread the risk for the shareholders. Potential regional fluctuations in the market can be absorbed by investing in real estate throughout Belgium. This also means that the company is not dependent on one or a small number of major tenants or projects.
- the achieved economies of scale allow the portfolio to be managed more efficiently, with the result that a greater amount of operating profit can be paid out. This relates, for instance, to costs of maintenance and repair, the long-term renovation costs, consultancy fees, publicity costs, etc.
- with a larger total portfolio increases, management’s negotiating position is improved when discussing new lease terms and offering new services, alternative locations, etc.
- it makes it possible for a specialised management team to use its knowledge of the market to pursue an innovative and creative policy, resulting in an increase of shareholder value. This makes it possible to realise growth, not only in terms of the number of properties let, but also in the value of the portfolio. This kind of active management can lead to the renovation and optimisation of the portfolio, negotiations on new terms of lease, an improvement in the quality of the tenants, the offering of new services, etc.
Each acquisition must be checked against the following criteria:
Property-related criteria:
- quality of the buildings (construction, finishing, number of parking spaces)
- location/accessibility/visibility
- quality of the tenants
- respect for the legal provisions and regulations (permits, soil pollution, etc.)
- the Brussels office market or other large cities
- potential for re-rental
Financial criteria:
- enduring contribution to the result per share
- exchange ratio based on net asset value (investment value)
- prevention of dividend yield dilution.
Improvement of the risk spread
Interest Offices & Warehouses tries to spread its risk in a variety of ways. For example, tenants often operate in widely divergent sectors of the economy, such as the computer industry, media, consultancy, telecommunications, travel and the food industry.
In addition, the expiry dates and first interim expiry dates of the tenancy agreements are monitored to be relatively well spread.