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DESCRIPTION OF THE RISK POTENTIAL IMPACT
MITIGATING FACTORS AND MEASURES
Inappropriate choice
of investments or
developments
1. Change in the Group’s income potential.
2. Mismatch with market demand, resulting in
vacancies.
3. Expected yields not achieved.
Strategic and risk analysis and technical, administrative, legal, accounting
and taxation due diligence carried out before each acquisition. (1, 2, 3)
In-house and external valuations (independent experts) carried out for
each property to be bought or sold. (1, 2, 3)
Marketing of development projects before acquisition. (1, 2, 3)
Excessive own account
development pipeline
Uncertainty regarding future income.
Activity limited to maximum 10% of the fair value of the portfolio.
Poor management of major
works
1. Budget and timing not respected.
2. Increase in costs and/or reduction in
income; negative impact on the profitability
of the projects.
Specialised in-house Project Management team. (1, 2)
Specialised external project managers selected for the larger projects.
(1, 2)
Negative change in the fair
value of the properties
Negative impact on the net result, the net
asset value and the debt ratio.
At 31.12.2015 a 1% value change would have
had an impact of around 31.34 million EUR
on the net result and around 1.57 EUR on the
intrinsic value per share (compared with
31.99 EUR million and 1.78 EUR at 31.12.2014).
It would also have had an impact on the debt
ratio of around 0.35% (compared with 0.44%
at 31.12.2014).
Property portfolio valued by independent experts on a quarterly basis
conducive to corrective measures being taken.
Clearly defined and prudent debt policy.
Investment strategy focusing on quality assets and offering stable
income.
Multi-asset portfolio subject to different valuation trends able to offset
one another.
Main asset representing only 2.7% of the portfolio (see page 34).
Negative change in the fair
value of property assets
on the company’s ability to
distribute a dividend
Total or partial incapacity to pay a dividend if
the cumulative changes in fair value exceed
the distributable reserves.
The company has substantial distributable reserves, amounting to
168.4 million EUR.
These reserves allowed the Company to distribute a dividend for the
financial year 2014, even though the net income Group share was
negative.
In the past, the Group carried out certain transactions to allow it to
distribute its dividend: distribution of dividends by the subsidiary to
the parent company and restatement of non-distributable reserves,
corresponding to capital gains realised through mergers with the parent
company, as distributable reserves
1
.
PROPERTY PORTFOLIO
The Group’s investment strategy is reflected in a diversified portfolio of
assets with limited development activity for own account (construc-
tion of new buildings or complete renovation of existing buildings).
Occasionally, the company converts office properties at the end of
their operating period into apartments that it then puts up for sale.
The management of operating properties is carried out in-house by a
proactive team.
The asset diversification aims at a distribution of market risks.
1
As a reminder, the transfer of 214,087,000 EUR approved by the Extraordinary General Shareholders’ Meeting of 29.03.2011 has, on the one hand, increased the distributable amount by
an equivalent amount and made the total amount of the company reserves and the result carried forward of Cofinimmo SA/NV positive, and, on the other hand, reduced the combined
share capital and share premium account.
3