Befimmo set to start development of major office in Liège

Belgian listed property group Befimmo plans to start construction next month of its flagship Rue de Paradis development project in Liège.

The 39,000 m² scheme - part of its Fedimmo unit - is entirely pre-let to the Finance Federal Public Service through 2038 and will involve an investment of EUR 95 mln. Delivery is expected for June 2014.

In a statement to announce its 2011 financial results, the office property group said it posted higher-than-expected net rental income of EUR 156 mln in 2011, driven by strong letting and asset management activities. The company signed new leases and renewals for over 70,000 m² of space, nearly double the amount seen in the three previous years (36,500 m² per year on average). As a result, occupancy reached 94.3% compared to an average of 88.5% for the Brussels office property market.

Looking ahead, the company decided to cut its outlook on earnings as it expects to see more headwind on letting levels and rising financing expenses. More specifically, Befimmo lowered its forecast for 2012 EPRA earnings to EUR 68 mln, from EUR 75 mln previously.

Fair value changes in the portfolio were still negative in 2011 but lower than in the previous year, at 0.93%, compared to 1.77% in 2010. For 2012, the company has forecast a decline in value of 1.44%.