Belgian real estate developer Ghelamco has identified a group of properties in its development portfolio that could be sold within the next 18 months.
This, along with securing new or extended financing, will free up enough cash to meet the company's financial obligations.
Ghelamco’s management believes that selling these assets and refinancing its debt will significantly reduce the overall debt burden and make the debt repayment schedule more manageable, aligning it better with the company's current development activities.
Furthermore, Ghelamco won't spend money on any new unplanned acquisitions that require immediate cash outflow within the next 18 months. Additionally, they will only start new development projects once they have secured a minimum percentage of pre-leased space or an agreement to sell the property within 18 months.
The company pointed out that investors remain cautious due to global financial uncertainty in 2023. This situation, combined with high debt and rising interest rates, has significantly increased the company's borrowing costs.
Ghelamco will continue developing and selling properties across various real estate sectors, including mixed-use projects. For 2024, the focus will be on maintaining financial strength and liquidity. At the same time, the company is actively monitoring market trends and has already secured sales for new projects.
Ghelamco Group overcame a challenging first half of 2023 to close the year with a net loss of €6.7 mln. Notably, Ghelamco Invest (Belgium, UK, France) achieved a positive net result of €39.2 mln thanks to strategic investments in data centers and life sciences infrastructure.
Ghelamco's focus on sectors like data centers and life sciences helped offset losses in traditional commercial real estate. The construction of Belgium's first TIER-3 sustainable data center is nearing completion, expected for delivery in May 2024.
The Group's results were impacted by depreciation (-€54.3 mln) due to valuation adjustments on some projects, primarily in Poland. However, positive revaluations on other projects (€68.3 bn), mainly sustainable ones with signed contracts, balanced this out.
Ghelamco boasts total assets of €2.87 bn and a debt ratio of 59.54%. They successfully refinanced maturing Polish debt for €57 mln and have €113 mln in cash available.
Three major projects with signed sales contracts are slated for delivery in H1 2024, generating €160 mln in revenue. These sales, along with ongoing residential sales, are expected to further improve Ghelamco's liquidity and reduce debt.
