Sustainable development report 2017

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Nursing and care home Zonneweelde –
Rijmenam (BE)
\\ 47
OUR 2017
ACHIEVEMENTS
Optional dividend in shares
As a result of the offer to pay the
2016 dividend in new ordinary
shares, Cofinimmo’s shareholders
chose to reinvest a total of 41 % of
their dividends in new shares, thus
allowing the company to increase its
capital by 33.2 million EUR
( see also our press releases of
10.05.2017 and 01.06.2017 on
).
Renewal of several credit lines for
a total amount of 303 million EUR.
Extension of the maturity of
a 300 million EUR syndicated loan
New Interest Rate Swaps for the
period 2023-2025
Green & Social Bonds
At the end of 2016, we collected
55 million EUR from the issue of
Green & Social Bonds. In 2017, all of
the funds were allocated to projects
contributing positively to sustainable
development, in a proportion of 50%
to offices with BREEAM or BREEAM
In-Use certification (minimum 'Very
Good' level) and 50% to healthcare
assets for the housing of vulnerable or
dependent people requiring specific
care.
Details regarding the strengthening
operations of our financial resources are
described on the pages 86-89 of the
2017 Annual Financial Report
(see ). A detailed
Green & Social Bonds report is included
in the Appendix Innovative use of Green
& Social Bonds to the 2017 Sustainability
Report – full version
(see ).
DEBT RATIO CLOSE TO 45%
Although our RREC legal status allows
a debt ratio of maximum 65 % and
banking agreements allow a ratio of
maximum 60%, our policy is to maintain
a debt ratio close to 45 %.
This choice was not made by chance:
it takes into account the long weighted
average residual length of our leases and
the high returns on our buildings. It also
includes cautious interest rate hedging
measures.
OPTIMISATION OF THE
DURATION AND COST
OF FINANCING
We actively manage our financial resources
by refinancing maturing debt at least one
year in advance. We carefully optimise the
cost of debt by paying attention to the
diversification of our financial resources
and the average maturity of our debt.
As floating rate is part of our debt, we are
exposed to the risk of rising rates, which
could deteriorate our financial result.
We therefore partially hedge our floating
rate debt with Interest Rate Swaps (IRS).
The goal is to secure about 80% of the
overall debt (at fixed and floating rates) for
the next five years, and 50% thereafter.
Our status as a Regulated Real Estate
Company (RREC) offers the general public
the opportunity to invest indirectly in real
estate. Transaction and management
costs are considerably lower than for
direct investments in property.
Cofinimmo’s share must contribute to the
wealth of our shareholders and investors.
This entails the distribution of a high and
consistent dividend and preservation of
the capital invested.
We must also have access to financial
resources at the lowest possible cost
and sufficiently diversified to reduce
refinancing risk at maturity and guarantee
the invested capital maintenance.
DIVERSIFICATION OF
FINANCIAL RESOURCES
To avoid risk concentration, we diversify
not only the asset types and countries
in which we invest but also our financial
resources. We finance our investments
with bank loans, ‘traditional’ bonds (non-
convertible), convertible bonds, Green &
Social Bonds and long- and short-term
commercial paper. In addition, we work
closely with about ten high-quality
banking partners.
REGULAR RECOURSE TO
CAPITAL MARKETS
We use several fund raising methods:
capital increases, optional dividends
in shares, sales of treasury shares,
contributions in kind, issues of
preference shares, ‘traditional’ bonds
(non-convertible), convertible bonds and
Green & Social Bonds.