Income from investment portfolio

Market rents and theoretical rent

The market rent was 5.4% above the theoretical rent at year-end 2018. Reversionary potential increased to 5.4% from 1.5% in 2017. 

Investment portfolio, market rent and theoretical rent

Year-end (€ million)

2018

2017

2016

2015

2014

2013

Market rent

350

264

250

243

244

243

Theoretical rent

332

260

251

244

248

249

Investment portfolio, average monthly rent

Year-end (€)

2018

2017

2016

2015

2014

2013

Average monthly rent

945

910

882

856

843

827

Rental income trends

In 2018, the average monthly rental income per unit rose by 3.8% to €945. The main driver of this increase was the average annual rent increase of 2.4% on 1 July 2018. The rental increase was also positively impacted by the re-lettings (0.4%) and by the higher average rents of residential units that were added to the investment portfolio compared to the homes that were sold.

Total theoretical rent measured at year-end[1] increased by 27.7%. This was mostly driven by the positive impact from the in-and outflow (25.0%) of residential properties.

Investment portfolio, development of total theoretical rent at year-end

Beginning of year compared with year-end

2018

2017

Like-for-like rental increase

2.7%

2.8%

-          Average rental increase for current tenants

2.4%

2.9%

-          Re-letting

0.4%

(0.1%)

Inflow and outflow of properties in the portfolio

25.0%

(0.2%)

Total increase in theoretical rent

27.7%

2.6%

The occupancy rate (in units, year-end) declined slightly to 97.5% in 2018, from 97.6% in 2017. Tenancy turnover declined to 12.4% last year, from 13.2% in 2017.

Physical occupancy and tenancy turnover

Realised rental income

Investment portfolio, realised rental income

(€ million)

2018

2017

2016

2015

2014

Gross rental income

281

247

242

237

237

Net rental income

210

184

182

176

176

Gross/net ratio

25.6%

25.7%

24.9%

25.5%

25.9%

In 2018, the gross/net ratio declined slightly to 25.6% from 25.7% in 2017. The gross/net ratio improved due to the sale of the Urban Core portfolio. This portfolio consisted of units that had a relatively high gross/net ratio. That was mostly due to the fact that the average rent was lower than that of the rest of the portfolio.

  • 1 Theoretical rent is measured at one point in time (year-end) and therefore it does not correspond with the increase in theoretical rent in 2018 compared to 2017, which you will find in Note 5 in the section Notes to the consolidated financial statements.