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DESCRIPTION OF THE RISK POTENTIAL IMPACT
MITIGATING FACTORS AND MEASURES
Reduced solvency/
bankruptcy of clients
1. Loss of rental income.
2. Unexpected rental vacancy.
3. Marketing costs incurred for re-letting.
4. Re-letting at a lower price/granting of rent-
free periods and other incentives (offices).
Main tenants: Korian-Medica Group 16.1%, AB InBev 14.2%, Armonea 11.1%,
Buildings Agency (Belgian Federal State) 6.0%. The two main office clients
belong to the public sector. (2)
Before accepting a new client, a credit risk analysis is requested from an
outside rating agency. (2)
Advance/bank guarantee corresponding to six months’ rent generally
required from non-public-sector tenants. (1)
Rents are payable in advance (monthly/quarterly/annually) + quarterly
provision to cover property charges and taxes which are incurred by the
Group but can contractually be invoiced to the tenants. (1)
The solvency risks for an individual nursing home are pooled at the level of
the operating group. (2, 3)
Under the terms of the operating licences issued to healthcare operators
in Belgium, France and the Netherlands, a large portion of their income is
received directly from the social security bodies. (1, 2, 3)
Predominance of the
largest tenants
Negative impact on rental income in the event
of departure.
Diversified client base. Cofinimmo has 389 clients in total, with the largest
client representing 16.1%. The public sector represents 9.6%. Several
tenant operators in healthcare real estate.
Non-renewal or early
termination of leases
1. Rental vacancy.
2. Higher marketing costs resulting from
vacancy.
3. Negative rent reversion.
4. Granting of rent-free periods and other
incentives.
(Pro)active marketing and property management. (1, 2, 3)
Ongoing contact between in-house letting team and real estate agencies.
(1)
All the leases provide for a compensation in the event of an early
departure. (2)
Rent-free periods/incentives, in line with market conditions and not
endangering the Group’s solvency, may be granted in certain cases in the
office segment. They are calculated based on the lease length, the state
of the building and its location.
CLIENTS
The Group actively manages its client base in order to minimise vacan-
cies and the rotation of office tenants.
It is in no way involved in the operational management of the health-
care assets, pubs/restaurants and insurance agencies.
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