A Dutch real estate developer bought the Brussels Finance Tower from the government for €311 million, and has now sold it for €1.2 billion.
The price that the building was sold for is as high as it is because the buyer, South Koreans investment group Meritz Securities, can count on a permanent, well-paying tenant: the federal government, which uses the tower to house its FPS Finance and Social Security, according to De Tijd.
"It is truly decadent that the government gave such a big gift to the private sector. A lot of social housing could have been built with those hundreds of millions. It is, and it remains deceitful," said Pascal Paepen, a finance professor at the KU Leuven, reports Bruzz. "And it's our country that pays the bill for it," he added.
The Finance Tower close to Botanique is one of the tallest buildings of Belgium, reaching a height of 144 meters. In 2001, the Verhofstadt government sold the building to Dutch real estate developer Frank Zweegers, which renovated it for €325 million, and then leased it again to the FPS Finance.
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"This sale served to polish up the budget, because Belgium had to be prepared for implementing the Euro," said Paepen. "Greece prepared itself by tampering with the accounts, and the Belgian government sold its buildings, only to rent them back afterwards at a high price," he added.
This kind of 'sale-and-lease-back-construction' was heavily criticised back then. "However, it is not even a proper sale-and-leaseback, because in such a formula the government has the option to buy the building back at a cheap price at the end of the lease. It doesn't even have that now," said Paepen.
The government will rent the building until at least 2034, for €59 million per year, an amount that will be indexed automatically every year.
"The amount is way too high. Calculated on the total price of €1.2 billion, this is a rental yield of 5%. That's phenomenal," said Paepen. "Once the government is out, the Korean owner won't be able to rent the building for the same amount again," he added.
Maïthé Chini
The Brussels Times
