Strategy
Aedifica profiles itself as being the main Belgian stock quoted company specialised in residential real estate.
Aedifica’s objective is to build a residential real estate portfolio characterised by stable and recurring revenues, as well as potential for value increase. Aedifica is driven by the return to city centres and the aging of the population.
In order to realise its objective, Aedifica has identified 4 main strategic areas in which it concentrates its investments: residential or mixed buildings in Belgian cities, buildings with furnished apartments in Brussels, senior houses and hotels. Aedifica’s search for diversification evolves amongst these 4 strategic axes, which allow Aedifica to adapt itself to market opportunities and to the evolution of the economy. As a result, the weight of each strategic axis can vary from one year to another, depending on the circumstances.
This strategy of specialising in the residential market and diversifying through its investment choices represents the strength and the particularity of Aedifica; Aedifica wishes to be innovative and constructive in order to ensure a safe and sustainable investment in real estate for its shareholders and to guarantee stable and recurring revenues.
a. Residential or mixed buildings
In this “classic” residential market, Aedifica is looking for apartment buildings, preferably not in co-ownership, located in animated areas in Belgium’s main city centres. The investments are realised in two ways:
The acquisition of existing buildings
Aedifica is mainly interested in new apartment buildings that are large enough to guarantee a good profitability. Primarily residential, these building can also comprise some offices or commercial areas since they are located in mixed neighbourhoods. Besides, Aedifica also acquires complete real estate portfolios in order only to keep those parts that really fit into the strategy.
The acquisition of new buildings
Aedifica can decide to invest in a very early stage of a building project, hence investing in projects with future completion in order to fully benefit from their profitability and to ensure the quality of the buildings.
Aedifica also intends to participate in partnerships with public institutions for the development of medium-end / social housing. These partnerships are characterised by long term contracts.
This strategic axis of residential and mixed buildings offers a strong potential for value increase.
b. Furnished apartment buildings
In the furnished apartment market, Aedifica selects buildings that are located in highly quoted areas of Brussels which are particularly liked by expatriates and business people. This type of housing primarily reaches a professional and international clientele looking for a comfortable place to stay. This clientele and the specific type of contract, which is often of shorter term, constitute an increase in the diversification of Aedifica’s portfolio and allow for the realisation of interesting returns.
c. Senior housing
Professionalisation and consolidation of this market is increasing very quickly and Aedifica contributes actively by acquiring buildings, for instance through “sale and rent back” operations. Aedifica negotiates long term contracts with professional and specialised operators. These investments generate “triple net” returns since all charges and costs are carried by the operators. As a result, the long term predictability of these contracts compensates for an important part of the risks linked to the shorter duration of residential contracts, notably concerning fluctuations of occupancy rates. As a real estate investor, Aedifica provides a solution for both operators and for the increasing demand caused by the demographic evolution.
The senior housing market generates stable and recurring revenues for Aedifica, which are necessary for the consistent payment of dividends. Besides, this market allows to grow quickly as a company.
d. Hotels and others
Aedifica has also invested in the hotel sector through long term contracts with important professional and specialised operators. Even thought this market might not be considered properly as residential, it corresponds to Aedifica’s aim to fulfil the different needs of the population in matters of urban housing.
Growth strategy
Aedifica is also pro-active and ambitious in order to benefit from economies of scale, being:
- A better liquidity – important criteria for investors;
- Optimal spread of risk;
- A larger capacity to seize market opportunities;
- An improvement of the portfolio management by attracting high level collaborators and partners;
- Stable revenues and an optimal profitability for shareholders, thanks to an optimisation of the fixed costs.
