The common denominator of everything we do:
Speeding up your business plan by taking over part of the equity requirement from you.
1. Solid partner in project development
Belfius Immo as co-developer for large residential developments
The added value we bring?
- Risk capital designed to support the ambition and growth of property developers.
- A team with extensive technical, urban planning and financial experience that actively shares its know-how.
- A commercial team that can sell property via the Belfius bank network.
What types of property are we familiar with?
- Mixed projects designed mainly for residential use, with a minimum sales value of approximately €25 million.
- Core-strengthening projects all over Belgium, including public authorities.
- Large-scale and long-term projects.
- Apartments, houses, student accommodation, care flats, etc.
How do we work with you?
- Tailored to suit each partner. Our aim with every partnership is to generate a synergy of qualities so that we can form a strong team.
- We prefer to take holdings of 50%, mainly from a ‘governance’ point of view. This means that when managing projects, we are able to take all important decisions unanimously.
Financially speaking, we are prepared to provide more than 50% of the risk, while always complying with the governance rules stated. - We like our contribution to start at an early stage. As soon as an opportunity presents itself, we can supervise the acquisition and structuring (asset or share deals, feasibility studies, establishment of land and construction companies, building leases, ground lease structures, etc.).
- With our diverse team of developers and financial experts, we are able to bring the total development process of acquisition, studies, environmental applications, construction and marketing to a successful conclusion.
- Our partner developers are financially healthy companies able to demonstrate a proven track record in property development.
2. Mezzanine or subordinated loans
What?
Up to 50% of the equity required, these loans are:
- On an equal footing with other existing shareholder loans.
- Senior position in relation to partner ownership.
For property projects that require an equity contribution of €10-20 million and where our subordinated loan is in the range of €5-10 million.
How?
On 3 possible levels:
- Per project
- Usually for projects that are larger than average for the partner or slightly outside their comfort zone
- For spreading the risk more widely
- Per cluster of projects
- To create sufficient critical mass to meet the minimum criteria stated above
- On a group level
- This would be rather exceptional and only to be considered for partners with a strong name, team, business model, track record and reputation in the sector
Here again we can make full use of the various specialist skill areas within Belfius Immo, covering both construction and financial aspects.
Return
While the interest rate for senior loans is an allowance for the financial risk, partly offset by collateral, the interest rate of a subordinated loan is an allowance for the business risk of the transaction. This risk capital therefore generates returns at higher interest rates than those of senior loans.
The interest rate is either fixed or to be determined via a reference rate such as EURIBOR or IRS quotations. Because of this upward limitation, the upside potential remains entirely with the partner. This is what distinguishes this activity from actual shareholdings in property companies, where the upside potential is shared.
3. Holdings in development companies
What?
This involves strengthening the equity of property development companies. By taking a holding in the capital and/or by providing subordinated loans.
How?
On 2 possible levels:
- In terms of the equity of a property development company. However, we will always take a minority interest
- By cluster of projects: we can agree on a selection of projects to be refinanced up to 50% of the venture capital invested with a subordinated loan and/or venture capital.
Return
The return depends entirely on the total realisation of the budget (down to the last unit) and is therefore not limited to repayment of the subordinated loan. The risk taken is higher than for a subordinated loan, therefore the upside potential is shared with the partner.
4. Investment in development funds
What?
Some property developers want to speed up their business plan by establishing one or more funds with multiple investors, along the lines of the Anglo-Saxon General Partner (GP) / Limited Partner (LP) model. With this model, the developer (GP) plays the lead role and the general investor (LP) the secondary role. The GP or its related companies incentivise management through carried interest to maximise returns.
Also, these investments as LP fit perfectly into our business model thanks to the combination of the specialist skills present in the team in construction and finance.
How?
Investments remain within the €5-10 million range, but the principle of taking over 50% of the equity requirement does not apply here. We seek to take a stake that allows us to co-chair the advisory committees and/or corporate bodies of the fund.
Return
Here, it is important to have a good analysis of the IRR and exit multiple expectations, as well as an analysis of the cost structure for the GP and related parties.
Afterwards, depending on the way the fund has performed, the expected return will or will not be achieved or possibly exceeded.
5. Built-to-suit
Looking for a property that suits your organisation and meets your specific requirements? Or do you already have a plot of land? The teams of specialists at Belfius Immo and Belfius Bank will work with you to find a tailor-made solution.
We track the feasibility and entire development and construction process and provide you with the building of your dreams – all within the agreed budget and timeframe set.
Belfius Immo’s built-to-suit approach gives you a reliable, stable partner with a single point of contact.
The benefits for you?
- You can call on our internal group financial, construction, legal, tax and commercial expertise.
- We use the latest technologies to achieve energy-efficient construction.
- If your needs change, your project can call on our flexibility and recycling capabilities.
- Our knowledge of market prices and the many years of experience provided by our construction partners.
- Close relations with the licensing authorities.
- Specialists handle your property project, enabling you to work more efficiently in the future.
- You can focus on your core business, saving you time and money.
- A solution based on your needs.