Will Belgium become a global player in healthcare real estate?

Aedifica is aiming to become a €12 billion giant in healthcare real estate with its bid for Cofinimmo. In a sector where scale is becoming crucial, this Belgian merger would create a group that may be able to compete with international giants. This means that our Belgian listed real estate is once again in the spotlight. Does this offer opportunities for investors, too?

The background to the proposal is the pressure to consolidate on an international level. According to data from the European Public Real Estate Association (EPRA), European real estate companies are relatively small – with all 450 players together accounting for just 13% of listed real estate worldwide. This makes them susceptible to acquisitions by capital-intensive foreign players. American powerhouses, in particular, have been hoovering up companies in recent years. In the UK, Assura and Care are currently in the process of being plucked from the stock market. In Brussels, office specialist Befimmo and Intervest Offices & Warehouses were bought out last year.

Attractive time for acquisitions

Although interest rates have been falling for some time, many European real estate companies are trading at large discounts on their intrinsic value, making them attractive options to buyers with deep pockets. In other words, if you don't want to be swallowed up (by American firms), you have to merge and increase your scale. "It's not every day that you can buy your neighbour's house at a huge discount", said Daan Killemaes, Chief Economist at Trends, on the timing of Aedifica's offer. Such an acquisition would allow the group to become the fourth-largest player on the world stage, after the three American giants. The demographic context must also be considered. The ageing of the population in Europe is gathering speed, as the first baby boomers are now turning eighty. That means it's better to join forces today than in ten years' time.

1 + 1 = 3

Synergy and economies of scale lie at the heart of Aedifica's logic. Both companies focus on healthcare real estate for the elderly, which results in a significant overlap and therefore enables costs to be allocated more efficiently. That said, Cofinimmo is still sitting on its inheritance from the past and still has offices in its portfolio and cafés that are leased to AB InBev.

In any case, the potential marriage would see the group included in a larger number of international real estate indices and could also increase its credit rating, which is advantageous for financing costs. Finally, a larger firm is also more resilient– a diversified portfolio spanning several countries spreads the risks better. Aedifica is active in Northern Europe – where Cofinimmo barely has a presence – while Cofinimmo would give Aedifica access to markets in Southern Europe. In other words, the two would complement each other nicely on both a geographical and operational level.

Is it "I do"?

Several analysts believe the acquisition plans to be a good thing, and Joost Uwents (CEO of WDP, the largest Belgian listed real estate player) is also a fan. A few days after the plans were announced, he posted on LinkedIn: "You both unexpectedly find yourselves at a key crossroads for you, your companies, and the Belgian and European real estate sector. Either you see things from adifferent perspective, or you sit downtogether, have a coffee and look athow you can use this momentum toallow both sides to forge a unique,new company of winners TOGETHER [...]". Uwents expresses a widely accepted feeling that the Belgian real estate sector does see a marriage between its two healthcare real estate champions. However, nothing has been agreed as yet, and Cofinimmo is biding its time for now.

What is an RREC?

Aedifica and Cofinimmo are both regulated real estate companies (RRECs). An RREC is a listed real estate company that meets specific legal requirements. The RREC status was created to allow private investors to invest in real estate on the stock markets, with attractive tax conditions. Belgium has around fifteen RRECs in total.

The RREC status offers investors a range of advantages. Firstly, they enjoy a high dividend yield, as at least 80% of the profits must be distributed each year. As RRECs distribute the majority of their profits and pay (little or) no income tax themselves, they generally pay out higher dividends than traditional companies. In addition, the withholding tax (dividend tax) on some RREC dividends has been lowered from 30% to 15%. This favourable rate applies to RRECs that invest at least 80% in residential or healthcare real estate. Care Property Invest and Aedifica are two such examples.

Secondly, RRECs allow you to invest in large real estate projects with small amounts. One share exposes you to an entire portfolio of offices, warehouses, retirement homes and/or shopping centres, meaning you don't have to buy a property yourself to collect rent. In addition, a listed real estate company is much more liquid than direct real estate: you can buy or sell your shares on any trading day, which isn't the case with bricks and mortar. Finally, the legal framework (mandatory valuations each quarter, debt limits and so on) provides a degree of protection and transparency.

Belgian real estate shares: who's who?

Belgium has a wide range of listed real estate companies, both large and small. Since March 2025, four RRECs have been included in the BEL 20 Index, which indicates the prominence of the sector on the Brussels stock exchange. In addition to logistics group WDP (portfolio of €7.9 billion as at 31 December 2024), Cofinimmo (portfolio of €6 billion as at 31 December 2024) and Aedifica (€6.2 billion as at 31 December 2024), Montea (logistics real estate) also recently entered the BEL 20. Montea itself specialises in logistics warehouses and distribution centres, with a portfolio of €2.8 billion as at 31 December 2024. The medium-sized players also include Xior (student housing; €3.3 billion as at 31 December 2024) and Retail Estates (€2.1 billion as at 31 December 2024).

The smaller players in Belgium are Care Property Invest (healthcare), Vastned (retail), Wereldhave Belgium (retail), Home Invest Belgium (residential), Ascencio (retail), Inclusio (residential), Warehouses Estates Belgium (retail, logistics, offices), QRF (stores) and Immo Moury (offices, residential, stores).

What makes listed real estate attractive for investors?

Real estate is known as a tangible investment. Listed real estate combines this advantage with the liquidity of a share.

As RRECs are obliged to distribute most of their profits, dividend yields are often higher than in many other sectors. In 2023-2024, we saw returns above 5% on several Belgian real estate shares – a consequence of falling prices in 2022, but also of healthy underlying rental income. Investors aiming for a regular income will therefore find their way into real estate rather quickly.

In addition, real estate companies often offer predictable cash flows. Their income often stems from long-term leases (according to Aedifica and Cofinimmo's annual reports, their weighted average lease term is nineteen and thirteen years, respectively). In addition, leases are often linked to inflation, which means that the rental income increases over their lifespan. For investors, this acts as a partial inflation hedge as the fair value of rental income is maintained.

Diversification is another asset, as listed real estate doesn't always respond in line with traditional shares. Particularly specialised segments (such as healthcare real estate or residential) can follow their own dynamics. Moreover, most RRECs spread their portfolio over hundreds of properties and dozens of tenants to reduce the individual risk. This wide range of possibilities makes real estate a sector that has something for everyone. Many investors add real estate funds to their portfolio for the diversification and as a defensive cornerstone with fixed income.

The real estate is also managed by teams with expertise in property management, development and financing. What's more, they also have access to transactions and markets that aren't available to individual investors.

Finally, some companies can be interesting targets for a takeover. This is particularly true in a climate where real estate players' stock prices are lagging behind their intrinsic value, as is the case today.

There are risks associated with investing in listed real estate, however, as the value of real estate shares can fluctuate significantly due to changes in interest rates, economic slowdowns or changes in regulations.

How can you invest in listed real estate?

Investing in real estate shares can take place in various different ways. The most direct approach is to buy individual shares in RRECs. A range of real estate funds and ETFs are available for anyone looking for greater diversification. These offer access to dozens of real estate companies and spread your risk across multiple countries and real estate segments in one fell swoop.

Before investing, be sure to read up on the main characteristics and risks of financial instruments.

Interested in investing in listed real estate?

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