Management agenda 2017

Portfolio Strategy

Strengthening focus on (future) tenants

Our strong focus on future developments in the Dutch residential market, such as the declining size of households, changing housing demands etc., puts us in a much better position to differentiate our offering and to offer our clients lifetime housing opportunities that meet their changing and evolving needs and demands. We will continue to adjust the alignment of our product market combinations (PMCs) to the demands of our (potential) tenant groups. Through the growth of our portfolio and our unique integrated business approach, we aim to create additional value for both our tenants and our shareholders.

Growing and improving quality of our portfolio

We will focus on value-enhancement and sustainable investments in our portfolio, targeting significant improvements in rent and value. We will introduce alternative strategies and tactics for underperforming properties. Block sales will be considered when the size of our portfolio has grown. We will be accelerating investments in energy modernisations to outperform the Dutch government’s energy agreement 2020. When possible, we will install solar panels to provide for energy in the public areas of our properties. We will acquire new complexes only when they exceed the regulatory energy standards, as required under the national building decree (Bouwbesluit). If necessary, we will make additional investments to outperform the decree. All suppliers must be CSSR compliant.

The growth and management of our portfolio is aimed at yield compression and the maximisation of performance. We update and closely monitor risk adjusted required rates of return for investments. We will make increasing use of big data to support our research and decision making.

Operations

In 2017, we plan to continue with the optimisation of our processes and cooperation with Portfolio Strategy and Acquisitions.

We will focus on like-for-like rental growth and we will improve the efficiency of Operations, while at the same time devoting a great deal of attention to the continued professional and personal development of our employees.

We will be looking for new innovations and we will also focus on further digitisation. We aim to introduce smart solutions that will make life easier for our tenants and simultaneously provide support in the letting process for the large projects currently in our acquisition pipeline and that are due to be delivered in the years ahead. For instance, this year we will start our ‘online letting’ pilot project. Other initiatives we are planning to introduce or roll out further this year include the installation of smart meters, car sharing, and Well certification. On top of this, we are also planning to introduce an English version of our tenant portal My Vesteda (Mijn Vesteda) in response to the demand expressed by (future) tenants.

Acquisitions

Vesteda’s target for the year ahead is to continue expanding its investment portfolio. Our target for 2017 is to add more than 800 houses to our pipeline, both new-build and existing properties that meet our strict investment criteria. Through entrepreneurship and operational excellence in sourcing, selecting and executing transactions, we aim to acquire attractive projects in which we have a relatively large influence on the design, life-cycle costs and sustainability of the product.

Our primary focus remains on the Randstad, the Brabant metropolitan area and the strong cities in the periphery of the Netherlands. In these regions, Vesteda targets attractive, high-quality residential units in the mid-rental price segment of the liberalised rental market. The foundation of our growth strategy remains the acquisition of new-build projects, but we also acquire existing real estate, residential complexes or entire portfolios, which can be added to the investment portfolio and generate immediate returns.

Organisation

In 2017, we will continue the implementation of the restructuring, which we expect to complete in the second quarter of 2017. We will subsequently relocate to our new head office, De Boel in Amsterdam, at the end of the summer.

Digitisation and innovation

Vesteda has to improve the current status quo of its IT landscape and the expert level of IT staff in order to be ready for further growth. We aim to offer a reliable IT infrastructure and accelerate innovation and solutions to support tenant intimacy and facilitate operational excellence for the entire lifecycle of our business.

Improve supporting systems and services

In 2017, we will be devoting considerable attention to the redesign and optimisation of our Enterprise Architecture. The aim of this initiative is to reduce the number of systems we use in the future to increase the manageability of the system. We also want to maximise the use of standard systems and minimise the use of customised IT programmes. We expect to complete the selection process and to proceed to the implementation phase for a new ERP system in 2017. In addition, the entire technical infrastructure is reviewed and various initiatives are examined.

Inspiration is key to innovation

In February 2017, we launched the Vesteda Inspiration Platform. This platform consists of monthly inspiration sessions, where Vesteda employees discuss and update each other on a wide range of subjects, such as efficient working practices, special complexes, innovation, CSSR and market developments.

Funding

In 2017, we aim to raise new equity to finance our acquisition pipeline. 

Vesteda has no refinancing obligations for 2017, while we are actively managing the headroom under Vesteda’s Revolving Credit Facility to ensure adequate headroom to cover refinancing commitments for 2018. The focus in 2017 will therefore continue to be on the optimisation of Vesteda’s financing structure. This could include looking at the possibility of extending the average term of our facilities at relative low interest charges.

Amsterdam, 17 March 2017

Vesteda Managing Board

Gertjan van der Baan (CEO) and Frits Vervoort (CFO)