Recycling old buildings, office to residential Xavier Denis Chief Operating Officer February 6 th, 2013 1
Table of content 1. Cofinimmo Today 2. Brussels office market 3. Residential market in Brussels 4. The Livingstone project 2
Table of content 1. Cofinimmo Today 2. Brussels office market 3. Residential market in Brussels 4. The Livingstone project 3
1. Operational platform Leading Belgian listed Real Estate Investment Trust (REIT) exposed to: The office property market in Brussels (800.000 m² and >25y experience), Healthcare Real Estate in Belgium, France and The Netherlands Distribution property networks in Belgium, France and The Netherlands, Public-Private Partnerships in Belgium. Total portfolio fair value of > 3 billion SICAFI status in Belgium, SIIC status in France and FBI status in The Netherlands Internal real estate management platform with 110 employees Total market capitalisation at 30.09.2012: 1.36 billion Included in major indices: BEL20, EPRA Europe and GPR 250 4
1. A diversified portfolio Court of Justice - Antwerp North Galaxy - Brussels Pub - Antwerp Nursing Home - Brussels 5
Table of content 1. Cofinimmo Today 2. Brussels office market 3. Residential market in Brussels 4. The Livingstone project 6
2. Vacancy 7
2. Demand 8
2. Net absorption in Europe 9
2. Net absorption in Brussels 10
2. M² per employee 11
2. Rental level The rental level (before client incentives) is stable... in nominal terms... 12
2. Completions 13
2. Reconversions 14
2. Reconversions of office buildings nothing to do with Belgian surrealism 15
Table of content 1. Cofinimmo Today 2. Brussels office market 3. Residential market in Brussels 4. The Livingstone project 16
3. Population growth 17
3. Construction of new residential units Brussels population in 2020: > 1.230.000 people Based on 2 people per residential unit, there is a need to build > 5.000 units / year Historically, < 2.500 units / year 18
3. Prices 19
Table of content 1. Cofinimmo Today 2. Brussels office market 3. Residential market in Brussels 4. The Livingstone project 20
4. Location of the Livingstone project Brussels Leopold district (CBD), 300 m from Berlaymont and Cinquantenaire 17.000 m² office building from the 1970 s 21
4. Existing building 22
4. Existing building 23
4. Analysis of existing situation Town planning Architecture Structure & technical Accessibility Orientation Mobility Environment Green Area Depth Modulation Height Stairwells Stability Structure (type, capacity) Façade Fire Resistance Acoustics Feasibility of the project: Keep the office use or convert the building into something else? Should the building be refurbished or demolished and rebuilt? 24
4. Scenario analysis Analysis of existing situation: Town planning, Architecture and Structure & Technical Other elements for the scenario analysis: Last quarterly valuation, Market conditions, Timing (planning application, existing tenant contracts, duration of works...), Financial aspects, Strategic considerations, Political environment,... Options for an office building at the end of its economical / technical life: 25
4. Why residential units? Demography: Strong population growth Demand: Clear demand for residential Price increase: Imbalance between offer & demand Liquidity: There is a price at which liquidity is certain Legal framework: The buyers finance the construction Variety of buyers: Occupiers & Investors Timing: Absence of a long search for tenants before launching the project Limited vacancy: +/- 70% sold at the end of the construction phase 3.500 x 90% (not selling all m²) - 1.400 (construction) - 250 (other costs) = 1.500 / m² If conversion possible (< 20% of cases), best capital recovery scenario 26
4. Border of a residential area Residential Offices 27
4. Parks in the vicinity Green zones 28
4. Office to Residential Programme 122 units 4 Entities (A/B/C/D) with one access through the central court Penthouses replacing technical rooms on rooftop. 2 retail areas underground : parking, cellars, and technical equipment. Façades Completely replaced (not structural) Contemporary design with terraces in the existing volume 29
4. Structural limitations Drilling Drilling not recommended Drilling allowed Core Other Services 30
4. Structural limitations Floor depth 31
4. Structural limitations Ceiling height 32
4. Typical floor plan 33
4. Ground floor 34
4. New building 35
4. New building 36
Thank you