Belgium buys 23 Brussels office buildings from the European Commission

The Belgian government, through its investment company SFPIM, is purchasing a portfolio of no fewer than 23 office buildings from the European Commission. The Belgian Cityforward, a fund set up by SFPIM and Ethias and managed by their Brussels-Antwerp partner Whitewood, will soon convert 21 of these buildings in the European district, with a total surface area of 300,000 square meters, into 70 percent sustainable offices and 30 percent shops, public facilities and especially homes. These additional housing units will ultimately double the number of families in the heart of the European Quarter. The first new residents and office workers can move in from 2028.

This transaction is the starting point of a major redevelopment operation that should lead to sustainable offices by 2028 in which the European institutions can settle and anchor them in Brussels for the coming decades.

The European Commission has sold an extensive portfolio of 23 buildings to SFPIM. SFPIM has in turn sold the 21 buildings in the European district to the Belgian fund Cityforward to transform them into a sustainable and dynamic district. The two other buildings sold by the European Commission are located outside the European Quarter and have been sold to Vicinity Affordable Housing Fund and neighborhood developer Matexi, who will redevelop them into sustainable and affordable rental and purchase apartments.

The European Commission, SFPIM and Cityforward agreed on a market price of approximately 880 million euros for the 21 buildings in the European Quarter. This amount is based on the analyzes of two external and independent experts. The purchase price was also taken over as a one-off ground rent for the 99-year leasehold contracts that SFPIM granted 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, which is certified to manage funds of this size.

The total costs of the transformation that Whitewood wants to carry out on the buildings are estimated at the same order of magnitude as that of the purchase, i.e. a total investment of almost 2 billion euros.

The final signature for the sale of the buildings and the capital increase of Cityforward was signed on Monday, April 29, 2024.

“Sustainable, energy-efficient renovation of buildings is one of the key pillars of SFPIM’s energy strategy. For this transformation project, unprecedented on this scale, close cooperation and constructive dialogue between the different parties have been essential factors for its success. Not only for the government and regulatory authorities, but also for experts and investors. By starting this dialogue from the beginning, we have managed to create broad support for the sustainable transformation of outdated buildings. Through this transformation we strengthen our position of our capital as the heart of Europe. At the same time, we are also responding to the strong demand for diversification and additional housing in the European district.”

Laurence Bovy, chairman of the board of directors of SFPIM

“We are particularly enthusiastic to contribute to the transformation and revival of an area very symbolic of Brussels, the European Quarter. All the more so because this project is multifunctional. On the one hand, it will allow the European Commission to settle permanently in sustainable buildings equipped with top technology. On the other hand, it will encourage the arrival of new residents, thanks to the construction of quality housing at affordable prices and the provision of new services – such as a school and local shops – to meet their needs with the values of Ethias and its desire to be a catalyst for projects that promote a more sustainable society for future generations.”
Philippe Lallemand, CEO of Ethias.

“This large-scale project respects both social interests and economic reality. It gives us great confidence in what is possible in our capital. The foundations have been laid to become an example of a diversified urban environment in the near future where sustainable workplaces have their place. place, in a liveable neighborhood where it is good to live. It is thanks to investors such as SFPIM, finance &invest.brussels and Ethias that they have fully supported the project from the start as true partners.”
Frédéric Van der Planken, CEO of Whitewood, manager of Cityforward.

“With this investment, we reaffirm our commitment to play a leading role in the economic development of the Brussels Region, as the capital of Europe. This project fits perfectly into our investment strategy, because it concerns the renovation of the already existing heritage, essential to meet the challenges of climate change. At the same time, it contributes to the revival of a centrally located district, improving the quality of life for Brussels residents.”
Pierre Hermant, CEO of finance&invest.brussels.

Strong market demand for sustainable offices and homes

Even after the transformation project is completed, according to recent studies, there will still be a shortage of 300,000 square meters of sustainable office space in the European Quarter for the European institutions alone. The Cityforward fund expects a lot of interest in these new sustainable office buildings given the limited supply.

The project also aims to convert office buildings into homes. Cityforward expects that approximately 30 percent of the redeveloped space will be intended for shops, public facilities and a diverse range of housing. Thanks to this project, approximately 750 to 800 new apartments will be added to the district.

In the starting blocks

Now that the transaction and financing have been completed, the project can really start. The aim now is to maintain this ambitious program and work closely with the competent authorities. The first permits must be obtained in 2026. The first apartments and offices should be delivered in 2028. That is why Whitewood is launching the first three architectural competitions (including the ‘Ilot 130’ project) in May this year, in collaboration with the Brussels Architect Maitre Architecte (BMA).

List of buildings in this Cityforward transaction