The Factory

Value creation at Home Invest Belgium: the rule of three

At Home Invest Belgium, we combine a high return with a young building stock (our buildings are on average less than ten years old), and a high dividend that has been increasing for twenty years.

Analysts and critical investors sometimes wonder: is that a sustainable model? We believe it is, yes! This is the strength of the vertical integration we employ: by doing everything in-house, we create a lot of margin.

And although the rental of homes is, of course, our main source of income, it is not our only source of value creation.

1x Construction

To begin with, we already create value through the development or renovation of our buildings ourselves. This means we can collect the construction margin ourselves instead of passing it on to a developer.

Over the years, Home Invest Belgium has developed a great deal of in-house expertise for the development of rental apartments.

Our real estate therefore differs significantly from apartments being developed for sale; in fact, it must meet specific requirements to be attractive to tenants.

That is to say: an apartment being prepared for rental does not have to be maximised in terms of living area, but in terms of living experience. People buy square meters, but they rent living spaces.

We can significantly enhance the living experience of the tenants by providing common areas: bicycle sheds, washing areas, communal relaxation areas, workplaces and even guest rooms. In an apartment building with apartments being offered for sale, these spaces do not offer a return, and are therefore not built.

We also invest relatively more in materials than builders of owner-occupied apartments. A developer of owner-occupied apartments does not have to carry out maintenance; this risk is passed on to the buyer or community of owners.

Home Invest Belgium remains the owner – so we have every interest in building using high-quality materials, and as a result, the total cost of ownership of our buildings is lower.

2x Letting

We can then market these premium apartments to the mid-market segment (where demand is consistently greater than supply) as being made with high-quality materials.

You can rent a well-located, new-build 2-bedroom apartment in Brussels from Home Invest Belgium for less than €1,000 per month. Our occupancy rate is therefore high – around 95%. Even during the corona crisis, the occupancy rate never dropped below 94%.

3x Sell

Finally, we achieve a nice added value when we eventually sell the buildings. We carry out an annual review of our real estate portfolio. We sell all the buildings that no longer meet our requirements, and we do so for more than the original cost price.

This is how we achieve the third time added value for our shareholders.

This means we are able to regain liquidity for new investments, keep the average age of our buildings low, and create the opportunity to pay out a nice dividend year after year.

Vertical integration creates a flywheel effect for Home Invest Belgium that allows us to grow stably and sustainably, without taking major financial risks. As such, we can live up to the two parts of our philosophy: to be the consumer’s landlord of choice, and to offer investors a way to invest in real estate – but without the hassle.