The Belgium government is considering relaxing the borrowing rules for the Société d’Investissement capital fixe en immobilier (Sicafi) sector.
The sector has a 33% gearing ceiling and this is expected to be increased to around 50%.
The move would free up the sector to grow faster as it has found the 33% gearing restrictive. It would also bring the sector more in line with other tax efficient vehicles such as the Dutch investment funds – the beleggingsinstelligen – which retain their rights to a 0% corporate tax status as long as their gearing does not exceed 60%.
The changes will have to be made at government level rather than by the Banking Commission, which regulates the sector. This is likely to be a slow process with no changes likely to happen before the year-end.
In May, Cofinimmo broke new ground when it circumvented the 33% restriction in a major portfolio purchase. It structured a deal whereby it bought 33% of the €600m (BFr24bn) Primaedis company while a CSFB-controlled company, Belgian Office Properties, bought 67% with a debt and mezzanine funding facility. Cofinimmo now has six years to buy the remainder of the portfolio.
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