Home Invest Belgium : Results of the 1st quarter of 2020

Be

Under embargo until 19/05/2020 5:40 PM

Regulated information

• • • Qualitative real estate portfolio
  • Increase in the fair value of the real estate portfolio to € 634 .43 million on March 31st 2020.
  • The fair value of the investment properties available for rent consists for 89.1% of residential real estate.
  • 65.1% of the investment properties available for rent are located in the Brussels Capital Region.
  • More than 50% of the investment properties available for rent are younger than 10 years; more than 70% are younger than 20 years.
  • • Strong operational results
  • Increase in the net rental income with 6.9% to € 6.62 million during the first quarter of 2020.
  • High and stable occupancy rate of 95.1% on March 31st 2020.
  • • Increase in the EPRA earnings
• Increase in the EPRA earnings to € 2.06 million during the first quarter of 2020 (compared to €1.00 million during the first quarter of 2019).
• Increase in the EPRA earnings per share to € 0.63 during the first quarter of 2020 (compared to € 0.30 during the first quarter of 2019).
• • Net Asset Value (NAV) per share

- Stable

EPRA

NAV

per

share

of

€

96.08

on

March

31st

2020

(+0.1% compared to € 96.00 on December 31st 2019).

• • • Stable debt ratio and strong liquidity position
  • Debt ratio of 51.54% (RREC Royal Decree) and 50.18% (IFRS) on March 31st 2020.
  • Decrease in the financial cost from 2.07% to 1.49%.
  • Home Invest Belgium has € 45 million available credit lines.
  • In 2020, the company has one credit line which is maturing for an amount of € 20 million. In 2019, Home Invest Belgium has already entered into new credit lines to refinance this credit. The company does not have credit lines maturing in 2021.
  • • Approval of dividend
• The Ordinary General Meeting of May 5th 2020 approved the distribution of a gross dividend of
• • 4.85 per share for the financial year 2019, which is an increase for the 20th consecutive year.

1	RESULTS OF THE 1ST QUARTER 2020

On March 31st 2020, Home Invest Belgium holds a real estate portfolio1 of € 634.43 million, compared to

• 629.92 million on December 31st 2019, or an increase of 0.7%.

REAL ESTATE PORTFOLIO	31/03/2020	31/12/2019
Fair value of investment properties	€ 613.37 m	€ 609.59 m
Investment properties available for rent	€ 574.09 m	€ 573.38 m
Development projects	€ 39.28 m	€ 36.22 m
Investments in associated companies	€ 21.07 m	€ 20.33 m
and joint ventures equity method
TOTAL	€ 634.43 m	€ 629.92 m

The fair value of the investment properties available for rent amounts to € 574.09 million across 53 sites.

The total contractual annual rents and the estimated rental value of vacant space is € 29.32 million as at March 31st 2020.

The investment properties available for rent are valued by independent real estate experts at an average gross yield2 of 5.1%.

Residential properties accounted for 89.1% of investment properties available for rent on March 31st 2020. On March 31st 2020, 65.1% of the investment properties available for rent are located in the Brussels Capital Region, 14.0% in the Walloon Region, 11.4% in the Flemish Region and 9.4% in The Netherlands.

Investment properties available for rent	Investment properties available for rent
By type	By geographical distribution

1. The real estate portfolio includes (i) investment properties and (ii) investments in associated companies and joint ventures equity method.
2. Gross rental yield = (contractual gross rents on a yearly basis + estimated value on vacant spaces / (fair value of the investment properties available for rent).

2	RESULTS OF THE 1ST QUARTER 2020

The Inside, Sint-Lambrechts-Woluwe

CONSOLIDATED KEY FIGURES		(In k €)
INCOME STATEMENT	Q1 2020	Q1 2019
NET RENTAL INCOME	6 623	6 197
OPERATIONAL RESULT BEFORE PORTFOLIO RESULT	2 759	2 004
XVI. Result sale investment properties	94	84
XVIII. Changes in fair value of investment properties	-1 548	33 769
XIX. Other portfolio result	-132	-125
PORTFOLIO RESULT	-1 586	33 728
OPERATING RESULT	1 173	35 732
XX. Financial income	4	21
XXI. Net interest charges	-994	-1 189
XXII. Other financial charges	-5	-37
XXIII. Changes in fair value of financial assets and liabilities	-1 968	-3 478
FINANCIAL RESULT	-2 962	-4 683
XXIV. Share in the profit of associates and joint ventures	737	416
TAXES	-61	-21
NET RESULT	-1 114	31 444
Exclusion of portfolio result	1 586	-33 728
Exclusion of changes in real value of financial assets and liabilities	1 968	+3 478
Exclusion of non EPRA elements of the share in the result of associates and joint	-383	-194
ventures
EPRA RESULT3	2 058	999
Average number of shares4	3 288 146	3 288 146
NET RESULT PER SHARE	-0.34	9.56
EPRA EARNINGS PER SHARE	0.63	0.30

3 The EPRA result is the net result excluding the (i) portfolio result (ii) the changes in the fair value of financial assets and liabilities and (iii) the non EPRA elements of the share in the result of associated companies and joint ventures. This term is used in accordance with the Best Practices Recommendations of EPRA.

4 The average number of shares is calculated excluding the 11,712 shares held by the company.

3	RESULTS OF THE 1ST QUARTER 2020

BALANCE	31/03/2020	31/12/2019
Shareholders' equity attributable to shareholders of parent company	307 765	309 618
Total assets	641 629	639 169
Debt ratio (RREC Act)5	51.54%	51.41%
Debt ratio (IFRS)6	50.18%	50.11%
PER SHARE
		31/03/2020	31/12/2019
Number of shares at the end of period7	3 288 146	3 288 146
Stock price at closing date	105.00	114.00
IFRS NAV per share8	93.60	94.16
Premium compared to IFRS NAV (at closing date)	12.2%	21.1%
EPRA NAV per share9	96.08	96.00
Premium compared to EPRA NAV (at closing date)	9.3%	18.7%

5 The debt ratio (RREC Royal Decree) is the debt ratio calculated in accordance with RREC Royal Decree. This means that for the purposes of calculations of the debt ratio, participations in associated companies and joint ventures are processed following the proportionate consolidation method.

6 The debt ratio (IFRS) is calculated like the debt ratio (RREC Royal Decree) but based on and conciliating with a consolidated balance in accordance with IFRS where participations in joint ventures and associated companies are processed following the changes in equity.

7 The average number of shares is calculated excluding the 11, 712 shares held by the company.

8 IFRS NAV per share = Net Asset Value or Net Value per share according to IFRS.

9 EPRA NAV per share = Net Asset Value or Net Value per share following the Best Practices Recommendations of EPRA.

4	RESULTS OF THE 1ST QUARTER 2020

Brunfaut, Sint-Jans-Molenbeek

3.1 NOTES TO THE CONSOLIDATED INCOME STATEMENT

Net rental result

During the first quarter of 2020, the net rental result increased with 6.9% to € 6.62 million (as opposed to

• 6.20 million during the first quarter of 2019).

Operating result before the portfolio result

The operating result before the portfolio result increased with 37.7% and stood at € 2.76 million during the first quarter of 2020 (compared to € 2.00 million during the first quarter of 2019).

Portfolio result

During the first quarter of 2020, Home Invest Belgium recorded a portfolio result of € -1.59 million.

The result on the sale of investment properties amounted to € 0.09 million. In addition, Home Invest Belgium recorded a negative change in the fair value of its real estate investments during the first 3 months of 2020,

amounting to € -1.5 million. The other portfolio result amounted to -0.13 million. In this section the variation of deferred taxes are taken into account.

In accordance with the "Valuation Practice Alert" published by the Royal Institute of Chartered Surveyors ('RICS') on April 2nd 2020, the reports of the independent real estate experts mention that they have been written taking into account the "material evaluation uncertainty" as determined by the RICS regulations.

Financial result

Following an important redesign of the financial instruments and the refinancing of the credits in 2019, the net interest costs have decreased from € 1.19 million during the first 3 months of 2019 to € 0.99 million during the first 3 months of 2020. The average funding costs10 decreased from 2.07% to 1.49% over the same period.

The changes in the fair value of the financial assets and liabilities amounted to € -1.97 million during the first 3 months of 2020. These changes are the consequence of a change in the fair value of the interest rate swaps. With this hedging strategy, the Board of Directors wishes to protect the company against a potential increase in the interest rates.

Taxes

Taxes amounted to € -0.06 million during the first 3 months of 2020 (compared to 0.02 million during the first 3 months of 2019).

Net result

The net result of Home Invest Belgium amounted to € -1.11 million during the first 3 months of 2020, or

• -0.34per share.

10 The average funding cost is = the interest costs including the credit margin and the cost of hedge instruments and increased by activated intercalary interests divided by the weighted average financial debt over the period in question.

5	RESULTS OF THE 1ST QUARTER 2020

EPRA earnings

After adjustment of the net result before (i) the portfolio result, (ii) the changes in the fair value of the financial assets and liabilities and (iii) non EPRA elements of the share in the result of associates and joint ventures, the EPRA earnings amounted to € 2.06 million during the first 3 months of 2020 (compared to the

• 1.00 million during the first 3 months of 2019).

EPRA earnings per share increased from € 0.30 during the first quarter of 2019 to € 0.63 in the first quarter of 2020.

3.2 CONSOLIDATED BALANCE SHEET

Shareholder's equity and NAV per share

On March 31st 2020, the group's shareholder's equity stood at € 307.77 million, a decrease of -0.6% compared to December 31st 2019.

The IFRS NAV per share has decreased with -0.6% to stand at € 93.60 on March 31st 2020 (compared to

• 94.16 on December 31st 2019).

The EPRA NAV per share has increased with 0.1% to stand at € 96.08 on March 31st 2020 (compared to

• 96.00 on December 31st 2019).

Debt ratio

The debt ratio (RREC Royal Decree) amounts to 51.54% on March 31st 2020. The debt ratio (IFRS) amounts to 50.18%.

3.3 FUNDING STRUCTURE

Composition of the financial debt

On March 31st 2020, Home Invest Belgium had € 313.00 million in financial debts, composed of:

• Bilateral credit lines drawn for an amount of € 253.00 million with 6 different financial institutions, maturity dates well spread between 2020 and 2027. A credit line for an amount of € 20.00 million is maturing in 2020.
  In 2019, Home Invest Belgium has entered into new long-term credit lines to refinance this short-term credit line;
• A bond for an amount of € 40.00 million, maturing in June 2024;
• Treasury notes ("commercial paper") for an amount of € 20.00 million. Notwithstanding the short-term nature of the outstanding commercial paper (with maturity date in 2020), the outstanding amount is fully covered by available long-term credit lines (back-uplines).

6	RESULTS OF THE 1ST QUARTER 2020

Maturity of debts (in € mio)

120

100

							7
80
					28
60							45
40
	20									15
				57				58
20									40
			35					28	15
20
									10
0
2020	2021	2022	2023	2024	2025	2026	2027
					Maturity dates of bonds			Maturity dates of used credit lines
					Maturity dates of available credit lines		Maturity dates of treasury notes

The weighted average duration of the financial debts amounts to 4.2 years.

On March 31st 2020, Home Invest Belgium disposed of € 65.00 million of undrawn available credit lines of which:

• € 20.00 million long-termback-up lines covering short-term outgoing treasury notes;
• € 45.00 million available credit lines.

Hedges

On March 31st 2020, 77.6% of financial debts (243.00 € million) had a fixed interest rate, using Interest Rate Swaps as hedging instruments, among other things.

The fixed interest rates have a weighted average remaining duration of 5.6 years.

The total value of the hedges at closing date was negative for a net amount of € 6.33 million due to a decrease in interest rates after conclusion of the hedges.

Through its hedging policy, the board of directors wishes to protect the company against potential increases in interest rate.

	Type of debt					Fixed/floating interest rate
			Treasury notes
			6.4%
			Floating interest
	Bond loans
						rate
	12.8%
						22.4%

		Bank loans				Fixed interest
		80.8%
					rate
						77.6%
	7				RESULTS OF THE 1ST QUARTER 2020

4.1. RENTAL ACTIVITY

The occupancy rate was high during the first 3 months of 2020. The average occupancy rate11 of the investment properties available for rent stood at 95.01%12 during the first 3 months of 2020 (as opposed to 94.9% during the first quarter of 2019).

4.2. DEVELOPMENT & REFURBISHMENT PROJECTS

General

During the first months of 2020, the development projects continued at a normal pace. On March 18th 2020, Home Invest Belgium closed the construction sites down in order to fight against the further spread of the coronavirus pandemic. Since April 6th 2020, activities on the construction sites have started again, partly, respecting the security measures which are in place. Up to now, the company thinks that the impact on the delivery dates of the projects will be very limited.

Le Mosan (Liège)

The refurbishment project Le Mosan in Liège will be delivered according to schedule, at the end of the second quarter of 2020. The project, which comprises 29 apartments and a retail space on the ground floor, is ready to be commercialized.

4.3. DISINVESTMENTS

During the first quarter of 2020, Home Invest Belgium has sold property for a total net amount of

• 0.3 million. A net capital gain of € 0.2 million was realised on these sales, compared to the acquisition value (increased by activated investments).

11 The average occupancy rate represents the average percentage over a certain period of the rented spaces, in relation to the sum of the contractual rents of the rented spaces and the estimated rental value of the vacant spaces.

12 The occupancy rate is calculated excluding (i) buildings being renovated (ii) building being commercialized for the first time and (iii) buildings being sold.

8	RESULTS OF THE 1ST QUARTER 2020

DIVIDEND 2019

The General Assembly has approved the distribution of a gross dividend of € 4.85 per share for the financial year 2019 (or an increase by 2.1% compared to 2018). Taking into account the gross dividend of € 3.75 per

share which had been paid out in December 2019 (coupon n°27), the balance amounts to € 1.10 gross per share (coupon n°28), payable on Thursday May 14th.

OUTLOOK 2020

During the first quarter of 2020, the main financial indicators of Home Invest Belgium have developed positively compared to the previous year.

The residential rental market continues to grow steadily in those cities where Home Invest Belgium is active, mostly thanks to:

• A long-term urbanisation trend, marked by demographic growth in big cities, including both young and older people, leading to increased demand for homes;
• An increasing number of tenants in big cities, due to factors including an increasing need for flexibility and a change in attitudes in respect of private property and concepts of urban sharing.

Home Invest Belgium has a sustainable real estate portfolio given its young age. More than 50% of its buildings are younger than 10 years. Based on this undeniable asset, and the geographical location of the buildings which are predominantly located in urban centres, Home Invest Belgium is well positioned to play a leading role in favourable market conditions.

Home Invest Belgium considers expanding its activities internationally within its positioning as the specialist in the residential rental market.

Against this background, the board of directors confirms its confidence in the further evolution of the company's results.

The outbreak of the coronavirus in early 2020 and the results of the measures taken to contain the virus, could impact our financial performance of 2020 and the measurement of certain assets and liabilities. Moreover, we cannot exclude a material impact on the companies' results in 2020.

9	RESULTS OF THE 1ST QUARTER 2020

2020
Annual press release on the financial year 2019	Thursday February 20th
Publication of the annual financial report on the website	Friday April 3rd
Ordinary general meeting of the financial year 2019	Tuesday May 5th
Final dividend for the financial year 2019 - Ex date	Tuesday May 12th
Final dividend for the financial year 2019 - Record date	Wednesday May 13th
Final dividend for the financial 2019 - Payment date	Thursday May 14th
Interim statement: results at March 31st 2020	Tuesday May 19th
Half-year financial report: results at June 30th 2020	Thursday September 3rd
Interim statement: results at September 30th 2020	Friday November 13th

10	RESULTS OF THE 1ST QUARTER 2020

FOR ADDITIONAL INFORMATION

Sven Janssens	Preben Bruggeman
Chief Executive Officer	Chief Financial Officer
Tel: [phone]	Home Invest Belgium
E-mail :[e-mail]	Bld de la Woluwe 46, Box 11
www.homeinvestbelgium.be	B - 1200 Brussels

Liberty's, Auderghem

ABOUT HOME INVEST BELGIUM

Home Invest Belgium is a public regulated real estate company (GVV/SIR) specializing in acquisition, sale, development and management of residential real estate. On March 31st 2020, Home Invest Belgium held a property portfolio of € 634 million in Belgium and The Netherlands.

Home Invest Belgium is listed on Euronext Brussel [HOMI] since June 1999. On March 31st 2020, the market capitalization amounted to € 346 million.