October 2, 2023 Today at 4:19 PM
Due to impairments and a lost lawsuit, Ghelamco recorded a net loss in the first half of the year and debts increased. But owner Paul Gheysens is optimistic thanks to a pipeline of more than 6 billion euros in real estate projects.
Like other real estate developers, Ghelamco has had a difficult first half of the year. Owner Paul Gheysens’ company recorded an operating loss of 45 million euros and a net loss of 37 million euros. This is evident from the half-year results that the project developer published last weekend.
6.4 billion
Ghelamco
Ghelamco’s pipeline has a development value of 6.4 billion euros.
In addition, Ghelamco recorded a 3 percent depreciation on its Polish real estate investments as a result of rising interest rates, which is partly offset by higher rents. In Belgium, on the other hand, the value of the portfolio increased.
Pipeline
Despite the loss, Ghelamco is optimistic because it was recently able to close several deals. Last month the company sold the Blue Towers in Ghent for almost 100 million euros. In June, Ghelamco signed a letter of intent for the sale of the HUB hotel in the Polish capital Warsaw to the French investment fund Corum XL, which resulted in a preliminary sales contract at the end of July. The half-year report indicates a sales price of almost 70 million euros for the hotel, after which Ghelamco made a write-down of 11.5 million euros in the first half of the year. Gheysens expects to make a profit in the second half of the year.
“I am very positive, but we should not shout victory either,” says Gheysens about the half-year results. ‘Everything has been unsellable since September last year. Now there is movement. We had the deal with the Blue Towers. There are two more sales coming up in October. We feel there is interest. But the question is: at what yield (rendement, red.)? The situation will weigh heavily on investment funds that want to buy real estate for a long time to come. But it’s going to happen again someday. Now, next year or in the spring of 2025? Don’t know.’
Since September last year everything has been unsellable. Now there is movement.
Paul Gheysens
Owner Ghelamco
Gheysens can fall back on the enormous stock of land that he has acquired in recent decades, including in Poland and Belgium. For the first time, Ghelamco mentions the ‘development value’ of its total pipeline (if all land were developed and sold): 6.4 billion euros, which is more than its listed competitor Immobel. “The auditor wanted that amount in the press release,” said Gheysens. ‘He said: you are a huge company, but you are always so withdrawn.’
Gheysens’ big future trophy lies in Poland. The Unit skyscraper in Warsaw is worth 300 million euros, but has not yet been sold. “There are still few buyers for buildings above 100 million euros,” Gheysens acknowledges. ‘The Unit is for sale, but we have to be patient. That’s an iconic project, isn’t it.’
We have salable assets. This is important.
Paul Gheysens
Owner Ghelamco
Gheysens expects the first income from the United Kingdom, Ghelamco’s third market, soon. The company plans to complete its first project, The Arc, early next year. Daughter Marie-Julie Gheysens’ prestige project faced difficulties because main contractor Henry Construction went bankrupt a few months ago. After Ghelamco took a 10 million euro write-down on The Arc last year, the company had to invest an additional 7 million euros this year. But according to Gheysens, Ghelamco took over the coordination of the yard and the delay has been made up for.
The businessman considers himself fortunate that Ghelamco only does new construction projects, because the demand for them is greater. ‘We have no buildings that are more than four years old, and we have salable assets. This is important. And not everyone in the sector has that.’ In the meantime, Ghelamco continues to acquire projects. For example, it bought the Bayer office building at Diegem station. In exchange, the German company signed a lease in Ghelamco’s office complex The Wings, which is located a little further away.
Bonds
While Ghelamco managed to reduce its debts last year, the net financial debt rose further in the first half of the year to 1.3 billion euros, 9 percent more than at the end of 2022. This debt mountain was offset by 88 million euros in cash on June 30, four times more than at the end of last year. Gheysens calls that a ‘nice cash position’.
To refinance debts, Ghelamco continuously issues bonds in Poland. At the beginning of this year, the company issued three-year bonds worth 240 million zloty (54 million euros) in three steps with an interest rate of 12 percent. At the beginning of July, the developer refunded an old Belgian bond worth 47 million euros, meaning the next deadline is not until next year.
Last week, the Polish stock exchange watchdog approved the prospectus for the issuance of up to 250 million zloty in bonds for private investors. A day later, Ghelamco issued 340 million zloty in bonds at an interest rate of 10.5 percent and early repaid 204 million zloty in old bonds.
Karel De Boeck (ex-Dexia) new director
Ghelamco introduces a remarkable new independent director. Karel De Boeck, the former CEO of Fortis Holding and Dexia (in both cases after the implosion during the banking crisis), joins the board of directors of the real estate company. De Boeck is also on the board of directors of the Willemen construction group, together with Ghelamco director and tech investor Jürgen Ingels. The ex-banker is also vice-chairman of Piraeus Bank, the largest bank in Greece.
