Immobel Belgian Residential Market Check Up
In this note, we perform a reality check on the BE residential market. Immobel portfolio has 52% exposure to BE and 73% to residential (1H23). In recent quarters, housing inflation has lagged the general consumer price index. We believe that Immobel will continue to sell residential RE units at a lower rate that holds the debt ratio below critical levels (incl. JV debt). We made some adjustments to our model and valuation metrics. We lower our TP from €63.0 to €40.0 and reiterate our Accumulate rating. Our new target price amounts to a discount of 24% to the last reported book value (1H23). This discount offers a cushion for future potential losses. The recent easing in interest rates offers some support for potential buyers of the Immobel assets.Compagnie Immobiliere de Belgique SA (Immobel) is a Belgium-based company active in the real estate development sector. The Company operates in three lines of business in Belgium, Luxembourg and Poland, such as office properties, the residential sector and land banking. Its clients include: the state, the European Union (EU) and/or institutional investors for office complexes; private clients for residential property and land purchases, as well as private clients looking to invest in housing. The Company's main projects in Belgium include Belair, Black Pearl, Parc Seny, Gateway, Bella Vita and Chastre Rue Du Chene. Its main projects in Luxembourg include Westside Village, Green Hill and Galerie Kons. Finally its main projects in Poland include Cedet, CBD One and Okraglak.
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