Cofinimmo acquires control over the newly-built police station in Dendermonde, constructed by the company Cordeel. The property is let to the Buildings Agency (Belgian State) for 18 years with an initial gross yield of 7%.
News:
Cofinimmo acquired 100% of the shares of the company Immopol Dendermonde SA, which has as sole asset a newly-built police station. The construction firm Cordeel previously owned this company and delivered the building at the end of March.
Cofinimmo lets the property to the Buildings Agency (Belgian State) for an 18-year period, through a lease contract that started on 01.04.2012. It will be occupied by the Federal Police as from this month, the exact entry date not yet being defined. At the end of the lease, the Buildings Agency can choose to a) renew the lease for a minimum period of three years, b) vacate the building, or c) buy the building at a price equal to the conventional value depreciated at a 3% rate per year.
The conventional value of the building equals € 15.57m (land included), in line with the fair value determined by an independent expert. The initial gross yield amounts to 7% and the rent will be indexed annually. Cofinimmo paid a price which equals the equity value of Immopol Dendermonde SA, plus the difference between the conventional value of the building and its book value.
Our View:
This transaction was already announced and is part of Cofinimmo’s Public-Private Partnership segment. It confirms Cofinimmo’s strategy of renting assets on a long-term basis to first class tenants.
Conclusion:
No impact on our valuation, TP and Hold rating maintained.