IN PREVIOUS ISSUES OF L’ÉVENTAIL MAGAZINE, WE MET THE MANAGERS OF THE LIFE SCIENCES AND TECHNOLOGY “VERTICALS.” THIS MONTH, WE INTERVIEW MR. STÉPHANE VERBEECK, PARTNER AND SECTOR LEAD FOR SMART LIVING, AND MR. JEAN-MARC LEGRAND, FOUNDER AND CEO OF TCD CAPITAL, WHO OVERSEES THE SMART LIVING “VERTICAL.”
By Jean Peletier

With its “multi-strategy” fund, TCD Capital has adopted a multi-sector investment strategy across three verticals, complementing each other in terms of risk allocation and expected returns. TCD Capital has notably invested in smart living concepts developed by companies like Yust and Smartflats.

Stéphane Verbeeck, you are a “serial entrepreneur” in operations, development, and real estate transformation. What are the objectives of your partnership with TCD Capital?

My partnership with TCD Capital first allowed me to leverage the operations we structured together, such as Yust, a company offering an innovative “flex living” solution. Yust is already operating in Antwerp and Liège and will soon be operational on Rue Royale in Brussels. Early on, we identified complementary strengths in project sourcing, structuring selected transactions, and joint governance with TCD Capital. I particularly advise them on the smart living vertical, where I’ve built much of my expertise.

Jean-Marc Legrand, you are the founder of TCD Capital. In previous issues, we discussed your two other verticals: life sciences and technology. Why did you add smart living?

We are convinced that these three verticals still have a bright future, despite the competitive challenges posed by Belgium’s social and tax laws. All three address real needs and seem complementary within an investment risk allocation strategy. We consider smart living less risky, although unforeseen events, like the Covid period, can still arise.

How would you define the concept of smart living, and why is it becoming a viable alternative to traditional housing and hospitality?

Stéphane Verbeeck – Smart living combines residential flexibility with new lifestyles. Today, more professionals embrace a “digital nomad” lifestyle, and young working adults delay purchasing their first homes. Alternative housing solutions, such as co-living, short-term furnished apartments, or hybrid hotel-rental residences, perfectly meet these new needs by offering flexibility, integrated technology, and often stimulating communal spaces.

Jean-Marc Legrand – From an investor’s perspective, these models also address a growing demand for flexibility and services. We’re seeing an extended period of mobility before individuals settle into homeownership. Additionally, these models can generate higher profitability than traditional real estate, as they are optimized for frequent turnovers and flexible rents.

The rise in interest rates has certainly impacted the real estate sector. How do you see this affecting the owners and operators of smart living models?

Stéphane Verbeeck – For infrastructure owners, rising interest rates can make financing more expensive, especially for long-term projects requiring significant initial investments. However, the demand for flexible solutions remains strong, which can offset the impact of higher financing costs. The players who stand out will be those who optimize cost management while delivering a unique customer experience.

Jean-Marc Legrand – On the investment side, rising rates drive greater caution. Financing costs are increasing, but it’s essential to focus on high-value models that can maintain strong demand. Strategically, the emphasis is on solid operations with sufficient margins to withstand these rising costs. This could also encourage operators to seek alternative financing or structure projects differently to minimize debt exposure.

What are the main profitability drivers for smart living businesses despite these economic constraints?

Stéphane Verbeeck – One major driver is space optimization. Operators must maximize returns on every square meter by tailoring their offerings to residents’ needs while integrating high-value-added services, such as smart energy management technologies or on-demand services. Diversifying customer segments (young professionals, digital nomads, etc.) also helps mitigate risks. Another increasingly prominent driver is the “guest experience.” Travelers today generally seek more than just a bed to sleep in—they want to be in a vibrant neighborhood, enjoy sensory experiences through design, food, and activities.

Jean-Marc Legrand – From a profitability standpoint, adopting a growth-oriented approach while optimizing margins is critical. This requires agile management capable of adapting to cost fluctuations. At the same time, it’s necessary to invest in innovation, whether in services offered or operational optimization solutions. The impact of interest rates can be mitigated by diversifying funding sources and focusing on projects with high turnover and high yield.

IN CONCLUSION

We are convinced that our cities must renew themselves and offer both residents and visitors innovative and forward-thinking alternatives to traditional housing and hotels. These alternative and hybrid models should be supported and encouraged by regulators. They contribute to collective well-being, attract interesting profiles to our cities, and help retain talent. Directly and indirectly, they create jobs and contribute to the economic and social vibrancy of our cities.

Source : L’Eventail (https://tcd-capital.com/wp-content/uploads/TCD_Nov_2024.pdf)