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The Belgian government, through its sovereign wealth fund SFPIM, is buying a portfolio of no fewer than 23 office buildings from the European Commission. The Belgian Cityforward fund, set up by SFPIM and Ethias and managed by their Brussels-Antwerp partner Whitewood, will shortly be converting 21 of these buildings in the European Quarter, totalling 300,000 square metres, into 70% sustainable offices and 30% shops, public facilities and, above all, residential units. These additional residential units will eventually double the number of families living in the heart of the European Quarter. From 2028, the first new residents and office workers will be able to move into these premises.
This transaction is the starting point for a major redevelopment operation that should ultimately, from 2028 onwards, lead to the availability of sustainable offices into which the European institutions will be able to move, thus anchoring them in Brussels for decades to come.
The European Commission has sold a vast portfolio of 23 buildings to SFPIM. SFPIM in turn sold the 21 buildings in the European Quarter to the Belgian fund Cityforward, with a view to transforming them and redesigning a more sustainable and more vibrant neighbourhood. Two other buildings sold by the European Commission are located outside the European Quarter and are therefore not included in Cityforward. They are being sold to the Vicinity Affordable Housing Fund and to neighbourhood developer Matexi, who will transform them into sustainable and affordable flats for rent and sale.
The European Commission, SFPIM and Cityforward have agreed a market price of approximately €880 million for the 21 buildings in the European Quarter. This sum is supported by the analyses of two external and independent experts and represents the sole canon of the 99-year long leasehold contracts granted by SFPIM to Cityforward. The Cityforward fund has raised the necessary financial resources with the support of SFPIM, Ethias, finance&invest.brussels, Belfius, Whitewood, ING, KBC, BNP Paribas Fortis, BIL and Helaba. The fund manager is Whitewood AIFM, accredited to administer funds of this size.
The total cost of the refurbishment work carried out by Whitewood on the buildings is estimated to be of the same scale as that of the acquisition, thus representing a total investment of close to €2 billion.
The final signature for the sale of the buildings and the increase in Cityforward’s capital took place on Monday 29 April 2024.
‘Sustainable, energy-efficient renovation of buildings is one of the main pillars of SFPIM’s energy strategy. For this transformation project, which is unprecedented on this scale, close cooperation and a constructive dialogue between the various parties have been essential factors in achieving success, both the public and regulatory authorities as well as experts and investors. By initiating this dialogue from the outset, we have succeeded in gathering a wide support for the sustainable transformation of obsolete buildings. Through this transformation, we are strengthening our capital’s position as the heart of Europe. We are also responding to the strong demand for diversification and additional housing in the European Quarter.’ Laurence Bovy, Chairperson of the Board of Directors of SFPIM
‘We are extremely enthusiastic about thmle idea of contributing to the transformation and revitalisation of an area as symbolic for Brussels as the European Quarter. All the more so because this project is multifunctional. On the one hand, it will enable the European Commission to settle permanently in sustainable buildings at the cutting edge of technology. On the other hand, it will encourage the arrival of new residents, thanks to the reintroduction of quality housing at affordable prices and the creation of new services – such as a school and local shops – to meet their needs. This is totally in line with Ethias’ values and its desire to be a catalyst for projects that promote a more sustainable society that is committed to future generations.’ – Philippe Lallemand, CEO of Ethias.
‘This large-scale project respects both social imperatives and economic realities. It inspires us with great confidence in the possibilities offered by our capital. The foundations have been laid to become, in the not-too-distant future, an example of a diversified urban environment where planet-friendly workplaces will have their place, in a liveable neighbourhood where life is good. Investors such as SFPIM, Finance &iInvest Brussels and Ethias have made all this possible. They fully supported the project from the outset as true partners.’ – Frédéric Van der Planken, CEO of Whitewood, manager of Cityforward.
‘With this investment, we are reaffirming our commitment to playing a leading role in the economic development of the Brussels Region, as the capital of Europe. This project fits in perfectly with our investment strategy, as it promotes the renovation of the existing architectural heritage, which is essential if we are to meet the challenges of climate change, while at the same time contributing to the revitalisation of a central district, thereby improving the quality of life of the people of Brussels,’ emphasises Pierre Hermant, CEO of finance&invest.brussels
Strong market demand for sustainable offices and housing
According to recent research, there will still be a shortfall of some 300,000 square metres of office space meeting current standards in the European Quarter for the European institutions alone, even after the transformation project is completed. Given the limited supply, the Cityforward fund expects to see significant interest in these new sustainable office buildings.
The project also aims to convert office buildings into housing. Cityforward anticipates that around 30% of the redeveloped space will be devoted to retail, public facilities and a diverse range of residential units. As a result, approximately 750 to 800 new flats will be added to the district as a result of this project.
Ready to begin
With the transaction and financing now complete, the project can really get underway. The aim now is to keep to this ambitious programme and to work closely with all the relevant authorities. The first permits should be obtained by 2026 with the delivery of the first flats and offices by 2028. To this end, Whitewood will be launching the first three architectural competitions (including the ‘Ilot 130’ project) in May this year, in collaboration with the Brussels Bouwmeester Maitre Architecte (BMA), the city’s master builder.
