Corporate Real Estate / REITs

Real estate certificates emerged in the seventies as real estate-based financial instruments with the purpose of facilitating the access by smaller investors to targeted major investments in the real estate sector, notably shopping malls or offices.

The public and private real estate certificates issuances have gained substantial recognition over the years.

Our team has been advising real estate certificates issuers on many aspects:

• structuring and drafting of documentation relating to the issuance of real estate certificates

• governance

• take-over bids on real estate certificates

• annual meetings of real estate certificate holders

• assistance for sale process of the real estate asset and liquidation of the real estate certificates

LIME’s team, among others, assisted for the sale of the Westland Shopping Center (2012) and of the Woluwé Shopping Center (2018 and 2019), which were held by companies acting on behalf of holders of listed real estate certificates as the construction of said shopping centers had been financed by real estate certificates issued to the public.

The status of specialized real estate investment fund (“fonds d’investissement immobilier spécialisé”/”gespecialiseerd vastgoed beleggingsfonds”) (“FIIS”/”GVBF”) has been created in Belgium by the Royal Decree of 9 November 2016, with the aim to meet the needs of institutional investors looking for specific real estate investments with a limited term.

The FIIS/GVBF status, open to alternative investment funds and other specifically-identified entities, aims at facilitating real estate investments in Belgium and abroad. Due notably to its light regulatory constraints and to the attractive tax regime associated therewith, the FIIS/GVBF status has since its introduction in Belgian law shown some success among the investors.

• Over 2016, 2017 and 2018, Thierry Tilquin and Thérèse Loffet have been assisting the major real estate actors as well as the Union Professionnelle du Secteur Immobilier (UPSI) for the assessment of the FIIS/GVBF status and in the context of the discussions lead between the real estate sector and the federal authorities and financial regulators in relation with the legal and regulatory aspects of the setting-up of the FIIS/GVBF status and improvement thereto

Apart from regulated or semi-regulated vehicles or investments, the structuring of the collaboration around real estate projects or real estate investments can take many forms.

Such structures must be very properly conceived, and their documentation carefully and accurately drafted, in order to avoid any implementation issues or more generally disputes, and to ease the steps towards exit.

Our team has been active in all aspects of the structuring of private real estate structures for major transactions in the sector:

• shareholders and joint venture agreements

• management agreements, project management delegation agreements

• structuring of the collaboration in the context of the acquisition of a company (share deal) which real estate project that still has to be completed

Real estate funds under the form of “société d’investissement à capital fixe immobilière/”vennootschap met vast kapitaal voor belegging in vastgoed” (“Sicafi / Vastgoedbevak”) emerged as vehicles in the nineties, and the major Sicafis/Vastgoedbevaks were set-up at that period on the basis of the Royal Decree of 10 April 1995.

Belgian sicafis/vastgoebevaks have since then chosen to transform themselves into SIRs/GVVs (“sociétés immobilières réglementées”/”gereglementeerde vastgoed vennootschappen”) but the Sicafis/Vastgoedbevaks may still be used in the future, including to set-up on ELTIF (European long-term investment funds).

• Thierry Tilquin has been assisting with the setting-up in 1995 of the first Sicafis/Vastgoedbevaks Befimmo SCA, and our team has since then been advising Sicafis/Vastgoedbevaks on many instances

• Thierry Tilquin assisted the Real Estate Investment Trusts (REITs) sector in the context of the design and the drafting of the law and regulations relating to the “sociétés immobilières réglementées”/”gereglementeerde vastgoed vennootschappen” (SIRs/GVVs)

• Thierry Tilquin assisted the listed company Befimmo in its conversion from a “société d’investissement à capital fixe immobilier” (Sicafi/Vastgoedbevak) into a “société immobilière réglementée”/”gereglementeerde vastgoedvennootschap” (SIR/GVV)

The “société immobilière réglementée”/”gereglementeerde vastgoedvennootschap” (SIR/GVV) status has been organized by the Law of 12 May 2014 and the Royal Decree of 13 July 2014; both have been amended respectively by the Law of 22 October 2017 and the Royal Decree of 23 April 2018.

The Belgian legislator has thereby introduced an ad hoc REIT status in Belgium, adapted to commercial-operational companies which aim at providing real estate assets and more recently for activities linked to infrastructure.

This commercial-operational purpose distinguishes the SIR/GVV from the Sicafi/Vastgoedbevak, which qualifies as an alternative investment fund and is subject to the AIFM Law implementing the Alternative Investment Fund Managers Directive (AIFMD) in Belgium. The SIR/GVV remains however subject to the prudential supervision of the Financial Services and Markets Authority (FSMA) and to various restrictions in terms of leverage, risk diversification and distribution requirements, as are similar instruments under foreign legislations.

Thierry Tilquin assisted from 2012 through 2014 the Real Estate Investment Trusts (REITs) sector in the context of the design and the drafting of the law and regulations relating to the “société immobilière réglementée”/ “gereglementeerde vastgoed vennootschap” (SIR/GVV).

Thierry Tilquin assisted in 2014 the listed company Befimmo in its conversion from a “société d’investissement à capital fixe immobilier” (Sicafi/Vastgoedbevak) into a “société immobilière réglementée” / “gereglementeerde vastgoedvennootschap” (SIR/GVV).

Real estate transactions can take many forms under Belgian law practice, but are often structured as a sale and purchase of shares of the company holding the real estate rights on the real estate asset.

The efficient structuring of such transaction requires a thorough comprehension of the corporate aspects, competences in due diligence in various areas and an in-depth knowledge of the specifics of share purchase transactions.

In cases where the underlying real estate is still under construction, many aspects of the transition period require careful attention and must be adequately defined and specified. In other cases, the transactions shall take the form of a joint-venture, as only part of the shares of the dedicated company are transferred, be it through a sale or a similar transaction.

• Over the past two decades, Thierry Tilquin has assisted numerous clients in major transactions, such as the sale and purchase of the North Galaxy building, the sale in 2006 of the Kievit Plein site located in Antwerp, the purchase of Fedimmo by Befimmo in 2006

• Our team assisted in 2016 the major Belgian real estate actor AG Real Estate (subsidiary of the listed financial holding Ageas and of the insurance company AG Insurance) for the sale of the Wiltcher’s complex, a top-tier hotel and commercial complex in the heart of Brussels

• Our team assisted, in 2017, the major Belgian real estate actor AG Real Estate (subsidiary of the listed financial holding Ageas and of the insurance company AG Insurance) for the setting-up of a joint venture with a commercial real estate developer and investment company for the development of an innovative and high-standard environmental quality building in the heart of Brussels

• Our team assisted over 2017 and 2018 the companies holding the Woluwe Shopping Center (subsidiaries of the major Belgian real estate actor AG Real Estate , itself subsidiary of the listed financial holding Ageas and of the insurance company AG Insurance) in the context of whole process leading to the disposal of their rights in this top-tier Shopping Center (complete vendor due diligences, auction process follow-up, drafting and negotiation of the whole documentation, signing and closing-follow-up), which implied complex issues in view of the specific holding structure of the real estate assets (notably, presence of two silent partnerships financed through the issuance of real estate certificates listed on a regulated market
• Our team assisted AG Insurance in the setting-up of a partnership vehicle aimed at investing in the development of a major real estate complex (comprising hotel, offices and residence) in the suburbs of the Nice airport
  

• Our team advises, on a regular basis, a major Belgian contractor firm in relation to the acquisitions it carries out through its dedicated real estate development department