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Strategy \
Management Report
Strategy
Cofinimmo’s strategy within the healthcare real estate sector is aimed at
spreading risks by combining a strategy of diversification by country, by
operator and by care specialty (geriatrics, psychiatry, revalidation, acute
care) and an investment policy in to-be-built and newly-built properties.
The healthcare real estate portfolio includes, for nursing and care homes,
follow-up care and rehabilitation clinics or psychiatric clinics, medi-
um-sized buildings consisting of a series of individual rooms, small
apartments and common areas for residents. Acute care clinics in the
Netherlands also include operating theatres and recovery rooms.
Cofinimmo’s property investments in this sector achieve initial yields
similar to those in the office sector, with longer leases and lower pur-
chasing prices per square metre. Furthermore, they are based on real
needs for growth triggered by the population growth, and consequently
have considerable potential for expansion. In addition, in Belgium, France
and the Netherlands, they are heavily regulated at both the national and
regional level, thereby securing access to the sector and the income of
the operators.
Cofinimmo always selects operators with proven experience, a reputa-
tion of high quality of care, financial stability, a balanced management
team and realistic growth ambitions. With a few exceptions, the assets
are leased to operator groups which each manage many sites. The leases
are either signed with the parent company of the operator group or guar-
anteed by it.
Cofinimmo acquires the property from medical establishment operators in
order to allow them to concentrate on their primary professional activity
and to free up funds for their expansion. The property is then immediately
leased back to them for a long or even very long term (usually 12 years in
France, 27 years in Belgium and 15 years in the Netherlands).
Even once the acquisition is complete, Cofinimmo continues to assist
the operators with their expansion plans by taking over the renovation
of existing establishments or by developing new projects. These projects
are managed by the in-house Project and Property Managers, who ensure
that the work is carried out properly and advise the operators with a view
to optimising the sustainable performance of the buildings.
On a case-by-case basis, Cofinimmo will consider, as for offices, the arbi-
trage of assets in order to optimise the composition of this healthcare real
estate portfolio.
Management
Thanks to their extended term, the leases, which are all indexed annually,
generate a stable long-term cash flow. In each case, Cofinimmo has only
one tenant/rent debtor and a single lease contract, and assumes no risk
related to the professional management of the facilities. Rents are not tied
to the resident occupancy rates of the establishments.
In addition, almost all the leases are triple net type contracts, which
means that the tenant is fully responsible for the building maintenance
and repairs, thus favouring the long-term presence of the operator.
For more information, see the chapter “Healthcare Real Estate” of this
Annual Financial Report.
HEALTHCARE REAL ESTATE
Diversification by country, by operator and by care specialty
Allocation of risks among the different social security systems
Long-term leases
36.7%
Zevenbronnen – Walshoutem
MAAF agency – France
Souverain/Vorst 24 – Brussels
Fire station – Antwerp