Volume of the property portfolio
A large portfolio clearly offers a number of benefits:
- it helps to spread the risk for the shareholders. By investing in commercial property throughout Belgium, it is possible to cushion potential cyclical movements in the market. This also means that the company is not dependent on one or a small number of major tenants or projects.
- the achieved advantages of scale make it possible to manage the portfolio more efficiently, with the result that a greater amount of operating profit can be distributed. It concerns costs of maintenance and repair, the (long term) renovation costs, consultancy fees, publicity costs, etc.
- if the size of the overall portfolio increases, this strengthens the management’s negotiating position in discussions about new terms of lease, offering new services, alternative locations, etc.
- it allows a specialised management team to use its knowledge of the market to pursue an innovative and creative policy, resulting in increasing shareholder value. This makes it possible to realise growth, not only in terms of the rental income, but also in the value of the portfolio. This kind of active management can lead to the renovation and optimisation of the portfolio, negotiations on new terms of lease, an improvement in the quality of the lessees, the offering of new services, etc.
Expansion of the property portfolio can be achieved through a dynamic approach of the market on the one hand, on an internal level through the growth potential of the current property portfolio, and through acquisitions on the other hand.
Vastned Retail Belgium can prove to be a very useful partner for investors who wish to contribute their retail properties against the issue of new shares with a view to spreading risk and cutting administrative activities. Retail chains that still own their own premises can also benefit from concluding sale-and-lease-back transactions with Vastned Retail Belgium.
Improvement of risk spread
Vastned Retail Belgium endeavours to spread its risk in a variety of ways. For example, the tenants often operate in widely divergent sectors of the economy, such as clothes, food, do-it-yourself, home interior, etc. Besides, the investment fund strives to maximize the geographic spread of its premises over entire Belgium.
The administration of the expiry dates and first interim expiry dates of the tenancy agreements are submitted to the restrictions by the legislation on commercial leases (law of 30 April 1951), allowing the tenants to terminate legally their tenancy agreement every three years.