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QRF
EPRA Gold Award Financial Report 2016
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Strategy

Qrf City Retail is a Public Regulated Real Estate Company (B-REIT), listed on Euronext, that invests in commercial real estate in Belgium and the Netherlands.

Qrf City Retail’s strategy can be summed up along four main lines: Golden Mile, Diversification, Buy-and-Hold and Social Footprint.

In its investment strategy, Qrf City Retail focuses specifically on the acquisition, renovation or development, lease and management of retail property situated in the main shopping streets of major cities and large regional towns.

  • Focus on city-centre retail outlets located within the Golden Mile of major cities and large regional towns. For this reason, Qrf City Retail is always looking for ambitious towns and cities that have an active policy of urban development and city marketing;
  • Emphasis on premises with a minimum frontage of five metres. Qrf City Retail also focuses on transactions with an investment value of at least 1 MEUR. On the one hand, this is to guarantee efficient management, while on the other, it is to invest in a segment where there is less competition from the individual investor;
  • Eye for property of high quality. The quality of the premises is expressed by a blend of optimum technical condition, combined with ease of access and good mobility, as well as the attractiveness of the street and the ability of the property to offer flexible accommodation.
  • In its spread strategy, Qrf City Retail aims to achieve an evenly balanced spread of property types, based on the location, composition of tenants and weight of the individual premises. It seeks a broad base across all sectors of the retail trade;
  • Evenly balanced geographic distribution. Qrf City Retail already has a presence in cities such as Aalst, Antwerp, Brussels, Ghent, Hasselt, Leuven, Liège, Mechelen and Namur in Belgium and Maastricht, Zwolle, Enschede, Nijmegen and Den Bosch in the Netherlands;
  • No single property unit, expressed in Fair Value, may constitute more than 20% of Qrf City Retail’s consolidated assets.

In terms of financial strategy, Qrf City Retail applies a conservative financing strategy, focused on limiting  the debt ratio and hedging against interest rate fluctuations, with the premises actively managed and a long-term strategy in place with tenants.

  • Conservative maximum Debt Ratio target of 55%. This is despite the maximum Debt Ratio permitted under the Regulated Property Companies Act of 12th May is 65%. As of 31th December 2017, Qrf City Retail’s Debt Ratio was 52.69%;
  • At least 75% of the company’s financial debts are hedged against interest rate fluctuations. As of 31th December 2017, 92.98% of the credit lines drawn down were hedged by Interest Rate Swaps;
  • The aim to pay out as capital reimbursement at least 80% of the adjusted net profit (in the sense of article 27 of the Royal Decree of 7th December 2010), minus the net fall in Qrf City Retail’s debt burden during the financial year.

Qrf City Retail also applies a strategy in which sustainability and corporate social responsibility play a central role.

  • Attention for energy consumption, waste management, mobility and security. The aim is to achieve as high a level of comfort, convenience and retail ‘experience’ as possible for both customers and store employees;
  • A sustainable multiyear maintenance and investment plan, with a detailed risk analysis for each premises;
  • Support for projects and artists which/who bring light to the city centre and make it a more pleasant and enjoyable place to be.
  • Conduct a proactive relationship with the local authorities and other stakeholders of the towns and cities where Qrf City Retail operates, with the aim of ensuring and enhancing the security, accessibility, liveability and appearance of the shopping streets in which Qrf City Retail invests.

To support these main lines of its strategy, it is particularly important for Qrf City Retail to have an in-depth knowledge of the retail property market today, while also gaining insights into the trends of tomorrow by conducting surveys and following trends. For this reason, Qrf City Retail regularly conducts shopper surveys in conjunction with Q&A Consultancy.