Role of ING:
  • Sole Global Coordinator
  • Joint Bookrunner

Other managers have their say


Marc Brisack

General Director of Ascencio

Michèle Delvaux

Financial Director of Ascencio

Stéphanie Vanden Broecke

Legal Director of Ascencio



Ascencio is a young investment company which invests fixed capital in real estate. The investment company, on the stock market since February 2007, specialises in retail properties on the outskirts of cities in Belgium and France, more specifically those on the Paris-Lyon-southeast France axis. Ascencio has 30% of its portfolio there. Today this amounts to almost half a billion euros, or three times the portfolio at the initial public offering. The investment company grew out of the retail group Mestdagh. “The Mestdagh family still has a strong presence in Ascencio. Carl Mestdagh is chairman of the board, the family holds 25% of the capital and the supermarkets run by the group account for about 10% of the rental income of the investment company,” explains managing director Marc Brisack.

Ascencio’s challenge: guarantee portfolio development in a competitive market

The commercial real estate sector is consolidating. Compared to office real estate, where investments and properties are generally larger, there are more players in the commercial real estate market. With its asset niche of 10 to 30 million euros, Ascencio not only encounters other real estate investment companies but family offices as well. "In addition to this increased competition, market conditions have also become more difficult,” continues Marc Brisack. “In France, for example, the turnover of many shops has decreased because of lower consumption. In these circumstances you cannot impose increases when renewing leases. Again, in Belgium wage costs are increasing at the expense of the margin. Nevertheless, the commercial real estate sector is fairly stable. We have an occupancy rate of 97%. Ascencio’s strength lies in its extensive knowledge of the industry and guidance.”

To achieve its ambitions for growth, Ascencio must expand its portfolio. In October 2013 the Belgian market was presented with an opportunity not to be missed. Cora was selling about thirty commercial spaces around its shopping centres.

“It involved an investment of 80 million euros,” says Michèle Delvaux, CFO of the investment company. “In addition we were also working in parallel on a second, though smaller, acquisition case: the purchase of a retail park – the trading formula that we prefer – in the French Chalon-sur-Saône,” adds Stéphanie Vanden Broecke, legal director. “This acquisition amounted to 20 million euros. Within a single month we were going to spend 100 million euros which would have expanded Ascencio’s portfolio by a third.”

“After these operations, we exceeded our debt ratio of 56%. The industry average fluctuates between 50 and 55%. A capital increase became essential,” explains Michèle Delvaux.

The solution chosen by Ascencio: bridging loan, long-term credit and capital increase

Cora imposed strict requirements for the purchase of its assets. Tenders could not contain a suspension clause in case of insufficient financing. Ascencio, which mainly finances itself through bank lending, talked to its existing financial partners and received two concrete offers.

“ING immediately proposed a bridging loan, a loan that would allow us to finance the entire acquisition. Immediately afterwards we would raise capital on the stock market enabling us to repay the bridging loan in particular. Because of the possible acquisition of Cora’s assets, our debt ratio would also fall from 56% to less than 50%, a threshold that we want to keep lower in the long term,” explains Michèle Delvaux. “ING’s margin was particularly competitive and the bank guaranteed the full bridging loan.”

“In addition," adds Marc Brisack, “ING knows us and our sector well. It immediately understood that this was a unique opportunity for Ascencio.”

In such cases it is best to respond quickly. “Thanks to the ING experts, we managed to meet the tight deadline,” says Michèle Delvaux. With 45 million euros, ING ultimately bore the bulk of the temporary financing. Another Belgian bank paid for the second instalment of 20 million. Ascencio placed the balance of 20 million in a long-term financing arrangement, with ING notably. The real estate company did not want to work with just long-term credit as the capital increase would generate new money. The formula with a bridging loan was ideal.

The benefits for Ascencio: portfolio a third larger, better result per share

Ascencio was able to participate in the call for tenders as well as satisfy Cora’s conditions. In this way it was able to win the tender. “ING agreed to trust us. These days it is not easy to find a partner who wants to lend the full amount of 80 million euros to expand your portfolio by a third. ING was willing. Even though we eventually decided to take a second banker on board to spread the risk and maintain a balanced relationship with our partners,” says Stéphanie Vanden Broecke. “We are extremely pleased with this financial operation because it is about quality assets that fit in perfectly with our business.”

Meanwhile Ascencio also succeeded in building a relationship of trust with Cora. Marc Brisack: “It was not merely a sale and purchase transaction. It involves long-term cooperation since Cora has retained ownership of its hypermarkets. Every month we have joint meetings where we share our ideas with them. Our knowledge of the sector probably also influenced their decision in our favour. Moreover we already had a successful test case behind us with the Cora Group. In December 2011 we purchased the Caen retail park from the real estate company of Cora France.”

The successive acquisitions reflect Ascencio’s ambitions. It wants to achieve – without a specific deadline – a portfolio of a billion euros. “This is an optimal size,” says Marc Brisack. “By expanding the portfolio without doubling the size of the team, we want to obtain the best possible operational margin.”

ING also took on the role of global coordinator for the capital increase that Ascencio carried out at the end of March. By raising more than 80 million euros, the investment company obtained some breathing space. The transaction resulted in visibility and Ascencio can analyse new investments to continue its growth strategy.

The shareholders responded positively to the company’s appeal and they can feel satisfied. “If we had carried out a capital increase before the transaction with Cora, the result per share would have dropped to the detriment of shareholders,” explains Marc Brisack. “Today the share is profitable and we can maintain our growth schedule.” Brisack is satisfied that he strengthened and expanded share ownership. By consolidating cooperation with loyal shareholders and attracting new shareholders in parallel, the organisation is sowing the seeds to develop new growth. “Essentially we have strengthened the position of the organisation. We want to reinvest in Belgium or France, but we do not need to rush.”

Other managers have their say


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