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Investing in urban renewal

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IMMOBEL is one of the oldest real estate companies currently listed on the Brussels Stock Exchange. Founded in 1863, its mission then was concerned with responding to the key urban and industrial challenges of the 19th century. Nearly two decades into the 21st century, responding to these challenges still form its core area of activity.

“The main focus of our property development work is on urban regeneration,” says CEO Alexander Hodac. “We oversee projects aimed at regenerating inner city properties as well as entire districts. These are usually extremely complex, ambitious, prestige projects which completely transform the face of that part of the city.”

IMMOBEL’s particular specialism is in developments that combine residential, commercial and office space. The complexity involved in satisfying their at times competing needs makes such projects a particular challenge. However, when successful, they also create particularly vibrant inner city areas.

“City living is on the rise as more young people flock to the cities for work,” says Mr. Hodac. “At the same time, they want to enjoy a high standard of living with short commutes and attractive amenities within walking or cycling distance.”

What IMMOBEL is in effect creating are urban villages in which everything needed for life is located within easy reach. After decades in which daily commutes have become longer and longer, city planners are now hoping to entice people back from the suburbs to bring new life into urban districts.

“In a bid to protect the green spaces on the edges of cities, a lot of new development is taking place in the city center,” explains Mr. Hodac. “In many cases, we are rejuvenating longstanding eyesores and derelict properties to create both financial and social value.”

IMMOBEL is committed to sustainable development, patronage and social initiatives. By increasing the attractiveness of a neighbourhood, its developments increase not just the value of the land they are built on but of the surrounding properties as well.

“Our strength lies in the fact that we have real expertise in the planning and construction of mixed-use developments,” says Mr. Hodac. “This chimes with current social trends. Furthermore, we are in an excellent financial position.”

This comes in part from the fact that IMMOBEL holds all of the strings in one hand as it is involved in the project throughout, from purchasing the land to selling the completed units to investors. In the case of residential properties, units are sold individually while, in the case of office buildings, tenants are found first before the entire building is sold to an investor.

“There is currently huge interest from German institutional investors and investment funds,” says Mr. Hodac. “The market is awash with money thanks to the current low interest rates.” This influx of cash into the property market is pushing up prices and making it highly attractive to other developers. As a result, competition is intense for the limited number of available inner city plots. “

“As well as developing projects, IMMOBEL also engages in the practice of landbanking,” says Mr. Hodac. “This consists of buying exceptional sites in order to create the sustainable districts of tomorrow. We keep a close eye on the market to identify potential properties for sale.”

Its sights are increasingly set on properties beyond Belgium’s borders. IMMOBEL is also well known in the Luxembourg market where space is limited and property commands a premium. It also has an office in the expanding Polish market.

“We acquired a share in an office with 60 employees in France which we intend to take over completely by 2020,” says Mr. Hodac. “This will allow us to pursue our goal of expanding in the French market and Paris in particular. The same economic conditions are driving a similar property boom in the French capital, which is seen as one of the most attractive places to live in Europe. We hope to make it even more so.”

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