Key figures

Income

(in € million)

FY 2018

FY 2017

Theoretical rent

290

254

Loss of rent

(9)

(7)

Gross rental income

281

247

Service charges income

10

10

Revenues

291

257

Property operating expenses (excluding service charges)

(65)

(57)

Service charges

(16)

(16)

Other income

-

-

Net rental income

210

184

Result on projects in progress

-

-

Result on property sales

44

13

Management expenses

(18)

(16)

Interest expenses (including amortisation of financing costs)

(29)

(31)

Unwind transaction derivatives

-

(12)

Realised result before tax

207

138

Unrealised result

825

544

Result before tax

1,032

682

Tax

-

-

Result after tax

1,032

682

Revaluation of Property Plant and Equipment (PPE)

2

1

Unwind transaction derivatives

-

12

Revaluation of derivatives

-

6

Total comprehensive income

1,034

701

Statement of financial position

(in € million)

31 December 2018

31 December 2017

Total assets

7,337

5,084

Equity

5,517

3,819

Debt capital

1,746

1,177

Leverage ratio (in %)

23.7

23.2

Debt capital

(in € million)

FY 2018

FY 2017

Interest expenses (excluding amortisation of financing costs)

28

30

EBITDA

235

168

Return on equity

(in % of time weighted average equity)

FY 2018

FY 2017

Realised return

4.6

4.1

-          return from letting

3.6

4.1

-          return from property sales

1.0

0.4

-          return from unwind transaction derivatives

0.0

(0.4)

Unrealised return

18.4

16.2

Total return

23.0

20.4

Return from other comprehensive income

0.0

0.5

Total comprehensive return

23.0

20.9

Total comprehensive income in € per participation right (based on number of participations at year-end)

28.80

24.86

Proposed distribution over the financial year (in % of time weighted average equity, excluding capital repayment related to portfolio sale)

3.6

4.1

Non-financial figures
 

31 December 2018

31 December 2017

Number of residential units managed

27,809

22,454

-          apartments

15.376 (55%)

13.605 (61%)

-          single family houses

12.433 (45%)

8.849 (39%)

Number of residential units inflow

7,584

332

Number of units outflow

2,229

507

-          individual unit sales

322

507

-          portfolio sales

1,872

-

-          residential building sales

35

-

Occupancy rate (in % of units)

97.5

97.6

Number of employees (in FTEs)

188

176

Loss of rent
 

FY 2018

FY 2017

Loss of rent (in % of theoretical rent)

3.2

2.9

Tenant satisfaction (rating out of 10)

6.8

6.7

For more information, please see the financial statements section of this report. For more information about our risk management, main risk areas, and ‘in control’ statement, please see the section Risk management and Note 25 ‘Financial risk management objectives and policies’ of this report.

Higher gross rental income

Theoretical rent came in at €290 million in 2018, an increase of €36 million compared with the theoretical rent of €254 million in 2017. This increase was largely due to the increase in the size of our portfolio in 2018. The portfolio size had increased to 27,809 residential units at the end of 2018, compared with 22,454 residential units at the end of 2017, largely as a result of the positive balance of the portfolio sale of 1,872 homes in April and the acquisition of the former Delta Lloyd portfolio of 6,777 homes (including 794 pipeline projects) at the end of June.

In addition, theoretical rent was higher due to a higher average monthly rent (€945 at year-end 2018, from €910 at year-end 2017). The like-for-like rent increase was 2.7% in 2018 compared with 2.8% in 2017. The loss of rent came in at 3.2% in 2018, a slight increase on the 2.9% loss of rent in 2017. This was largely due to the inflow of new complexes in our investment portfolio and the refurbishment of units to achieve higher rents, in line with our strategy of rent optimisation.

Increase in net rental income

Property operating expenses came in at €65 million in 2018, €8 million higher than the property operating expenses of €57 million recorded in 2017. This increase was due to the increased size of the portfolio. Operating expenses, including non-recoverable charges, amounted to 25.6% of gross rental income in 2018 (2017: 25.7%). Net rental income increased to €210 million in 2018, from €184 million in 2017.

Sales proceeds

In 2018, Vesteda sold a total of 2,229 homes from its investment portfolio, compared with the sale of 507 homes in 2017. A total of 1,872 homes were sold as a portfolio, 35 homes as a complex sale, and 322 homes were individual unit sales. The result from property sales increased to €44 million in 2018, from €13 million in 2017.

Management expenses

Management expenses came in at €18 million in 2018, compared with €16 million in 2017. The increase in management expenses was due to higher personnel costs as a result of the acquisition of the former Delta Lloyd portfolio. Vesteda released €0.9 million from its provisions which had a positive impact on management expenses in 2017.

The Total Expense Ratio (TER) declined to 31 basis points over GAV, compared with 35 basis points in 2017. The decline in the Total Expense Ratio was mainly due to the platform efficiencies following the acquisition of the former Delta Lloyd portfolio.

Interest expenses

Despite the higher average debt position, interest expenses fell by €2 million to €29 million in 2018, compared with €31 million in 2017. The average interest rate declined to 2.1% from 2.7% in 2017, mainly as a result of the interest costs related to the derivative which was unwound in December 2017. In early July of 2018, Vesteda issued a €500 million bond. The proceeds from this bond were used to refinance the bridging facility related to the acquisition of the former Delta Lloyd portfolio, as well as to finance the future growth of the residential portfolio. Prior to the issuance of the €500 million bond, in March of last year Vesteda optimised the conditions and term of its €700 million revolving credit facility via an Amend & Extend transaction. Through these transactions, Vesteda has extended the weighted average term of its loan portfolio to 4.8 years and further reduced its average interest rate.

Unwind transaction derivatives

In December 2017, the remaining €215 million notional of the interest rate swap (IRS) was unwound for a total consideration of €12 million. As a result of the unwind in 2017, Vesteda had no interest derivatives for the hedging of its loan portfolio outstanding at year-end 2017 and through 2018.

Realised result

The realised result amounted to €207 million in 2018, an increase of €69 million compared with the realised result of €138 million recorded in 2017. This increase was largely due to the result of €35 million on the portfolio sale in April and the increase in the size of the portfolio.

The realised return in percentage of time weighted average equity increased to 4.6% in 2018 from 4.1% in 2017. Excluding the return from property sales, the realised return came in at 3.6% in 2018, from 4.1% in 2017. This decline is the result of the increased value of the portfolio.

Unrealised result

The continuing positive sentiment on the Dutch housing market led to a positive revaluation of 13.5% on our investment portfolio in 2018, compared with 12.7% in 2017. Appraisals of Vesteda’s investment portfolio showed a further decline of exit yields and an increase in vacant value ratios. The unrealised result amounted to €825 million in 2018, compared with €544 million in 2017.

Total comprehensive income

Vesteda’s total comprehensive income came in at €1,034 million in 2018, compared with €701 million in 2017. This increase was largely due to the positive revaluation of our investment portfolio. Total return on time weighted average equity (ROE) was 23.0% in 2018 (2017: 20.9%), 4.6% of which was realised return (2017: 4.1%), 18.4% of which was unrealised return (2017: 16.2%), and 0.0% of which was due to other comprehensive income (2017: 0.5%).