Cofinimmo - Annual Financial Report 2015

Investment criteria

Moderate risk profile

Investment decisions are based on rigorous valuation models that use

precise financial criteria. The decision to purchase buildings with an

investment value within the portfolio average and for which there is no

specific financing, is made based on the following criterion:

REAL ESTATE STRATEGY

This year’s investment strategy also applies to future years.

[Long-term cash flow +

Residual value]

based on the weighted

average current value of

the cost of [capital + debt]

Compared with the

purchase price, costs

included

Other than when Cofinimmo is not the owner in perpetuity of the prop-

erty and when the plan is to transfer the property free of charge or at a

fixed value to a third party at the expiry of the lease (as, for example, in

the majority of Public-Private Partnerships), a conservative estimate is

used for the residual value.

For large-scale operations (unit amount greater than 7% of the portfolio

value) or those associated with a special financing arrangement, the

company also examines the combination of the average accretions

over five years of the following items:

•

net current result per share;

•

revalued net assets per share.

Differentiation

The Group’s differentiation strategy allows investors to access

portfolios of specific and non-traditional assets, which may not be

replicated individually. As such, thanks to the diversification of its

portfolio, Cofinimmo offers not only assets in healthcare real estate in

four European countries, but also “sale & lease back” transactions and

specific assets intended exclusively for public authorities.

Architectural and environmental quality

In addition to the routine due diligence inspections, each building under

consideration is allocated a score based on various factors:

•

intrinsic qualities (for office buildings, this may mean the size and

divisibility of the floors, the parking ratio, the ceiling heights, the

natural light, etc.; for buildings serving healthcare establishments:

the depth of the floors and the vertical circulations, which affect the

subsequent conversion into residential);

•

the energy performance;

•

the location (vehicle access, public transportation, submarket rental

activity, level of local taxes, etc.);

•

the environment (nearby shops, hotels, nice view, etc.).

“EACH BUILDING IS

ALLOCATED A SCORE

BASED ON ITS INTRINSIC

QUALITIES, ITS ENERGY

PERFORMANCE AND

ITS ENVIRONMENT.”

Geographical presence

Operating exclusively in Belgium until 2006, Cofinimmo went on to

obtain footholds in the Netherlands in 2007 (part of the Pubstone

portfolio) and in France in 2008 (healthcare real estate), in both cases

through long-term partnerships with tenant operators. In 2011 and 2012,

through the acquisition of the portfolio of MAAF insurance agencies

and acute care clinics, the Group strengthened its presence in France

and the Netherlands.

Since 2014, the Group has been present in Germany in the healthcare

real estate segment.

The group’s strategy favours an expansion into Belgium’s neighbouring

countries with a rate of establishment enabling it to acquire sound

knowledge of the foreign property markets it has targeted.

Management report /

Strategy