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BRUSSELS-Belgian REIT Cofinimmo has been selected by the Belgian government as the real estate partner for a new closed-end real estate investment company, called Sicafi (societe d’investissement a capital fixe immobilier) which will be listed next year. Sicafi will have a portfolio with an estimated value of euro 1.2 billion ($1.5 billion) and comprise 79 state offices currently used by Federal Ministries or the European Commission.

After the IPO, Cofinimmo will own up to 60% of the new company, the state will own 10% and just over 30% will be a free float. The IPO should be worth around euro 200 million, according to Cofinimmo, with the total capital gain going to the state.

Analysts responded well to the announcement, and Cofinimmo stock was upgraded to “accumulate” from “hold.” Jean Baptiste, an analyst at the firm Degroof, said in a briefing note that the “the transaction will have a favorable impact on the net current result of Cofinimmo during the coming years thanks to an improvement in the operating margin and to the increased average lease length, which is due to rise from 7.8 to 9.2 years.”

Cofinimmo officials say they expect the average earnings per share to increase by between 0.20 and 0.30 euro per ordinary share over the next five years. The consolidated debt to total assets ratio of Cofinimmo is expected to reach 59% at the end of the current year but fall back to 51% after the IPO.

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