IMMOBEL posts a net income of EUR 11 million for 2017.
This result is in line with our forecasts and reflects the transition of the past year: consolidation of acquisitions, strengthening of teams, acquisition of new plots and geographical and sectoral expansion.
IMMOBEL's Board of Directors will propose to the Shareholders' Meeting to grant Shareholders a gross dividend of EUR 2.2 per share for the 2017 financial year, an increase of 10 % to reflect the confidence the Board has in its medium and long-term business plan.
The many projects launched are following their course in Belgium, Luxembourg and Poland. The subdivision activity is doing well. Sales figures for residential units on sale are encouraging and the acquisition of NAFILYAN & PARTNERS in Paris is emerging as a promising new market.
The IMMOBEL Group published its annual results on 31st December 2017. The consolidated net income stood at EUR 11 million, which confirms that the year 2017, as previously announced, was a year of transition.
The year 2017 was marked by the sale of a number of new residential projects such as: Ernest the Park (198 units), Greenhill Park (31 untis), O’Sea (171 units), Parc Seny (120 units), Universalis Park (161 units) in Belgium, INFINITY (150 units) in the Grand-Duchy of Luxembourg and Granary Island (120 units) in Poland.
Residential activities have contributed to the annual results, notably thanks to the Lake Font projects (12,000 m² in Knokke-Heist), Riverview (11,000 m² in Nieuwpoort), O’Sea (88,500 m² in Ostend) and the sale of the Chien Vert project (5,000 m² in Woluwe-Saint-Pierre).
The landbanking activities have also made a significant contribution to the results with 222 plots and units sold, representing a total turnover of EUR 22.2 million.
Alexander Hodac, Chief Executive Officer, comments: "These results are in line with forecasts and confirm that 2017 was essentially dedicated to the launch of new projects as well as the reorganization and consolidation of internal structures. The increased quality of the latter will enable the team and the structures to become a real foundation for sustainable international expansion for IMMOBEL”.
On the occasion of this annual IMMOBEL press release, the company and its Executive Chairman Marnix Galle wish to share the conclusions they draw from 2017 and the main prospects for the coming years.
2017: A year of transition
IMMOBEL accelerated and exceeded its five-year business plan in 2016 and had a better year than expected. 2017 became thus the transition year with less profit where we continued sowing in order to harvest in the coming years. This is exactly what is happening. Our net income for 2017 stands at EUR 11 million, not a grand cru year indeed. However, the current business plan is on schedule and the reorganization of IMMOBEL will enable it to become a successful pan-European player.
During the past year, we have been thinking and executing, adjusting our strategy to the ever-changing real estate horizon, upgrading our teams, designing, developing and building our projects and extending our geographic and sectorial reach.
On 31st December 2017, we had nearly 175,000 m² of projects under construction. In the next two years, we intend to introduce and hope to obtain permits for an additional 175,000 m².
Belgium is doing well and several projects have started up and enjoy excellent sales: O’Sea, Ernest (Solvay) phase II, Universalis Park, Parc Seny, Greenhill Park, Royal Louise and Lake Front (Knokke-Heist).
RAC 4 and the last phases of Universalis Park prove to be a bit of a permitting nightmare with continuous resets after in both cases already ten (10) years of design and permitting history. We do hope to clear this out in 2018-2019. We are in full design phase for our 40,000 m² Brussels Sablon and our 50,000 m² Place de Brouckère projects. The construction of the new Allianz Headquarters in Möbius I is in full execution.
We are continuously fine tuning our Belgian team. Additional management control systems and other support tools have been put in place. The close relationships between our various departments allow the efficient execution of projects. A matrix structure has been put in place so that Group’s highly qualified talents can add know how and value throughout our international markets when needed.
We have developed a new activity within our Landbanking department and created a team to develop residential units on our existing landbanking sites. Landbanking has done well this year and profits should increase in the coming years thanks to this additional business model.
The Polish team has been completely reshuffled, a new CEO has joined and additional competencies have been recruited to further bring our organization to our international standards. Our Warsaw office project Cedet is nearing completion and currently 74 % has been leased to high quality tenants. We expect a sale in 2018. We won the lawsuit that impeded the development of our other Warsaw office project Central Point (formerly known as CBD One) and start of construction is foreseen in the coming months. Our Gdansk Granary Island project has, as Cedet, not been a smooth technical ride, but it is going forward and sales are excellent. We remain cautious on Poland.
In the Grand-Duchy of Luxembourg
Luxembourg is enjoying the development of INFINITY where 80 % of apartments have been sold. The office building and retail area have been leased and pre-sold. Our 26,000 m² mainly residential development Polvermillen in Luxembourg City is a year behind schedule but sales prices keep rising. All other projects are doing well, are on target, and we remain keen on Luxembourg.
Following a strategic assessment, we have found our 4th market and it is Paris where we are in process to acquire, in three stages, NAFILYAN & PARTNERS, a leader in the French residential market. The French market has boosted into full gear. We plan to expand our Paris platform over the coming years into several asset classes and it could very well become our largest market.
Acquisition plan, bond issue and asset prices
Our purchases were below our business plan in 2017. We are happy with the Brussel ING site (in partnership) but we did not hit our 100,000 m² acquisition goal across geographies. The French purchase does mitigate this disappointment.
We successfully placed a more than doubly oversubscribed EUR 100 million bond with a five-year duration at 3 % interest, confirming the markets confidence in our company. This bond will replace repaid bonds and further provides the required capacity to realize our ambitious business plan. IMMOBEL could again consult the financial markets in the coming years, in order to expand its financial capacity.
Asset prices are ever increasing which is great for our stock but worrisome for every new purchase.
We are adjusting our products to rapidly changing user demand. We seek out the last uncrowded asset classes in Europe. And we are studying an update of our business model to decrease its risk level and assure long term steady income. Risk is less and less rewarded but it has not gone away, to the contrary.
From 2018 on
As announced last year, the years 2018, 2019 and 2020 should be excellent years that will see the culmination of our existing pipelines and developed strategies. Greenhill Park, two projects in Knokke-Heist, first and second phase of O’Sea, INFINITY, Polvermillen, Centre Etoile, Cedet, Central Point (formerly known as CBD One), Granary Island, Ernest (Solvay), Universalis Park, RAC 4 and Parc Seny should all be in various advanced stages of completion or sales. Construction works on the iconic 40,000 m² building in the Sablon district of Brussels and the 50,000 m² site at the Place de Brouckère should have started. The Allianz headquarters should have been delivered, close to Brussels North station.
The Board of Directors has confirmed its intention to propose a recurring and increasing dividend to Shareholders. The outlook confirms this possibility.
At the Shareholders' Meeting, it will propose to grant Shareholders a gross dividend of EUR 2.2 for the 2017 financial year, up by 10 % to reflect the Board's confidence in its medium and long-term business plan. This amount is expected to increase every year, subject to the absence of any currently unforeseen exceptional events.
Finally, the Board of Directors wishes to allocate a part of the net profit to charities on the following three themes: culture, social integration and health. A special body has been set up to analyse and select the various charities.
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