REAL ESTATE – A row has erupted over the Belgian state’s plans for a €1.2bn real estate investment trust.

AXA last week filed suit against the state over the government’s recent selection of Cofinimmo as partner in a sicafi – a fixed-capital real estate investment trust.

Cedric Borzee of AXA Belgium said the claim rested on the state’s failure to follow the agreed process for selection. He declined to elaborate, citing confidentiality clauses.

However, Cofinimmo chief financial officer Jean-Edouard Carbonnelle said AXA’s claim rested on the selection of Cofinimmo as preferred bidder and the attribution of points according to criteria including strategic vision, finance, properties contributed by the bidder and the role of the state buildings agency.

Carbonnelle said there was “a good chance” that the court would reject AXA’s claim. Otherwise, he said, it would probably ask the three main bidders to resubmit parts of their bids according to the tender criteria. “It’s a possibility, but I don’t think the government will have to change its position,” he said.

Under the deal, Cofinimmo will hold 57%–60% of the sicafi and the state will hold 10%. After a planned flotation next year, the partners forecast that European institutions and domestic retail investors will hold the other 30%–33%.

The sicafi will comprise 79 buildings used by Belgian and EU agencies and 12 properties from Cofinimmo’s own portfolio.

The first hearing of AXA’s suit takes place tomorrow (Tuesday). Asked if he was optimistic for a favourable decision, Borzee said: “We will see.”

Cofinimmo had been counting on the sicafi to open the way to other public sector deals. “We’ve already been involved in sale-and-leasebacks by the government,” chief financial officer (CFO) Jean-Edouard Carbonnelle recently told IPE Real Estate. “We’re looking to the public sector to improve the quality of our portfolio and profitably expand our group.”

To date, Cofinimmo’s public sector development deals have included a fire station in Antwerp and a police station in Edegem. The firm also recently acquired the Antwerp Court of Justice.