Rarely does a deal in the Belgian market go by without the Fortis name being bandied about-whether that be as an occupier, developer or investor.
Fortis Real Estate is a 100% subsidiary of the banking and insurance organisation Fortis and is chaired by Alain Devos. Operational out the Netherlands and Belgium, it is in the latter where most of its real estate activities take place. In Belgium, it is the third most active investor based on a local listing, investing €1.8bn whilst leading Reits Cofinimmo and Befimmo (of which Fortis is a 16% shareholder) take a respective first and second place. However, including owner-occupier figures, Fortis takes first place, investing €2.8bn.
“The Expertise list (a local real estate publisher) doesn’t take into consideration the buildings which are owners-occupiers. Fundamentally it doesn’t change anything because we consider ourselves the largest property owner in Belgium” said Marc Brisack, head of Fortis asset management.
Fortis real estate operates under three main areas: development, parking and asset management. Formerly named Bernheim Real Estate Development, Fortis Real Estate Development is headed by Alain De Coster and based in Brussels. It has so far constructed 2m² of office, residential, retail and mixed use space throughout Belgium for clients such as Axa, Allianz and Befimmo. Under its lesser known, but very profitable public car park sector, Fortis manages some 175,000 car parking spaces in 176 cities throughout Europe.
However, the bulk of its activities lie within Fortis asset management. Headed by Marc Brisack in Brussels who handles a team of 120 people and manages around €4bn of investments, his investments includes Belgian offices, shopping malls, retail, industrial and residential properties. 70% of its activities lie within the office market.
Under its asset management umbrella, Fortis has been able to acquire some key prime properties in Brussels over the last year. 70% of Fortis portfolio are prime grade A assets. However, 30% of its portfolio requires renovation due to ageing.
“Our office portfolio has some ageing buildings which need renovating, but that will be our focus over the forthcoming year. We need to change this otherwise you could end up with a portfolio such as the Kungsleden one” he said.
In fact, Fortis- important leasers in the Brussels market confirmed they would lease a ‘significant’ portion of the Manhattan tower- the largest property in the 7 piece Kungsleden portfolio which averages 30 years old. Catalyst Capital recently bought the portfolio for €90m from Swedish property group Kungsleden.
Key acquisitions over the last year for Fortis includes the Ellipse building in Brussels- a brand new 50,000m2 office building. Paying around €180m for the property, the purchase was one of the biggest acquisitions in Belgium in 2006. Another notable acquisition was the Central Plaza located within Brussels’ CBD. The brand new 23,000m2 office building will now house much of Fortis banking services.
Yet so far, the biggest deal Fortis has acquired has been the land purchase in the north area of Brussels- the ‘North light’ development. Finalised in March this year, Fortis will, alongside developers CDP, build a massive 75,000m2 speculative office development over the next three years. The land was purchased from the De Pauw family for a reported (getting price)
“We can be aggressive but some buildings are being sold at crazy prices. We were very surprised when Rubicon bought the Hermes Plaza at a sub 6% yield. It is completely unrealistic for us. The recent RTL buy from Cofinimmo was also very aggressive- we certainly we wouldn’t have paid that. Some these buys are completely illogical” he said.
As yields compress in the traditional asset classes and more aggressive bidders enter the market, diversifying into other asset classes is now a major strategy Fortis is trying to achieve. Following a recent spate of buying, Fortis has now acquired ABX logistics, a global provider of logistics and transport which now brings Fortis industrial portfolio to €100m. In addition, Fortis recently took control of Agridec, a listed Belgian property and real estate investment holding company, which manage a portfolio with a value of €7.5m and controls also 25% of leading Belgian developer Codic.
“The fact that you can control some land as it becomes more and more scarce is important because despite it being industrial land right now, it could be good office land in some year’s time” Brisack said.
“But for 2007, what we would really like is to get an international mandate that will allow us to focus outside of Belgium and more on Southern Europe. France, Italy, Spain and Germany would be ideal targets. Also, we must redevelop some of our office properties which have become outdated” Brisack added.
