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Foreword by the Management Board

Dear stakeholders,

It is our pleasure to present you with our annual report for 2020. In this report, we account for our financial and non-financial performance in 2020 and we report on how we intend to realise our ambitions for the future. We would also like to share our vision of the Dutch housing market and the role we want to play as an active and socially-engaged residential real estate investor. But let us first start with the COVID-19 pandemic, which affected most of our stakeholders in 2020.

COVID-19 pandemic

In 2020, the outbreak of the COVID-19 virus resulted in a global crisis and governments across the world taking various extreme measures, such as (partial) lockdowns of cities and countries. In the Netherlands, the first COVID-19 case was reported on 27 February 2020, after which the government announced measures to prevent the further spread of the virus, eventually resulting in a partial lockdown on 23 March. As in other countries, these measures slowed down the spread of the virus and from mid-May onwards the government gradually eased restrictions.

After the summer, we saw the start of a second wave of infections, resulting in a sharp increase in the number of new cases. The Dutch government imposed new restrictions, starting from 18 September 2020 onwards. This resulted in a partial lockdown in October and additional restrictions followed as of 15 December 2020. People were advised to work from home, schools were closed and only essential shops remained open. Sadly, these measures failed to reduce the number of infections sufficiently and on 23 January 2021, the government introduced a night-time curfew, which is currently imposed for the period through to 30 March 2021.

Vesteda also took several actions aimed at containing the spread of the virus. We asked our staff to work from home as much as possible, we took additional hygiene measures at the offices, and we restricted travel and face-to-face meetings. We also quickly changed our protocol for viewings and home inspections, from 100% physical to 100% digital within just a few days’ time. Working from home experiences were not merely negative. We will work out a system to facilitate this also in the future and therewith make Vesteda more resilient for whatever external events.

The good news is that the first vaccines have been approved by the EMA (European Medicines Agency). The Dutch government started its vaccination programme on 6 January 2021, which was relatively late compared with the rest of Europe. The government is planning to vaccinate all priority groups before the summer. The lockdown, night-time curfew and the start of the vaccination programme in January had the desired effect and the number of new cases began to decline. As per 8 February 2021, the government lifted a number of restrictions and schools and some non-essential shops reopened under strict conditions. As per 15 March 2021, the total number of deaths in the Netherlands due to COVID-19 officially stood at 16,087 (931 per million inhabitants).

The Dutch government has launched an extensive economic rescue package to save as many jobs, incomes and companies as possible. We believe it is our social responsibility to help our tenants during this crisis. Together with the Ministry of the Interior and Kingdom Relations and the IVBN (Association of institutional property investors in the Netherlands), we agreed that we would not evict tenants during the crisis, not charge them collection costs, and extend temporary leases. We offer custom-made solutions to all our tenants in immediate financial difficulties, providing flexibility in terms of payment arrangements. Since the implementation of these measures, the number of payment arrangements we have reached with tenants remained stable and represent approximately 1% of total. In addition to this, we followed the advice of the IVBN and moderated our annual rent increase.

Our business operations and processes continue to run well and we can deliver all our services to our tenants, mostly via digital channels. The effects of the COVID-19 pandemic did impact our financial results, largely due to significantly lower revaluations than expected earlier in the year. The impact on our rental levels has been limited to date, but we are experiencing higher vacancy rates in the higher rental segment, especially in Amsterdam, and higher frictional vacancies. Our financing structure and liquidity position give us the necessary buffers to withstand this crisis. However, the exact impact will very much depend on the duration of this crisis and the Dutch government’s financial support to secure the income of Dutch citizens, including our tenants.

New housing regulations

While housing shortages and house prices continued to rise, the need for more affordable housing increased and both national and local authorities are looking for measures to solve this problem. This has led to some debate between the Dutch Senate and the House of Representatives and eventually resulted in new regulations for the Dutch housing market as per 1 January 2021. First-time home buyers are now exempt from transfer tax, while the transfer tax rate for investors was increased to 8% from 2%. In addition, the government has announced to freeze the rents for the regulated segment and is planning to cap the annual rent increase for the liberalised segment to a maximum of CPI plus 1%. And finally, the government is also launching initiatives to stimulate the construction of new homes.

Residential real estate market

Vesteda’s HMI (Housing Market Indicator) declined to 6.2 in Q3 2020, from 7.4 in Q4 2019, after which it recovered slightly to 6.7 in Q4 2020. Market conditions got tougher in the course of the year. GDP declined, unemployment increased and consumer confidence was low. However, the HMI improvement in Q4 2020 also shows early signs of a possible recovery. This was mainly driven by improved GDP growth, less negative consumer confidence and an improved GRESB score of Dutch residential non-listed real estate. The housing shortage continues to increase and house prices are still rising. Although the exact implications of the COVID-19 pandemic for the housing market are not yet clear, strong demand still seems to be providing a solid price foundation for mid-segment rental homes.

Operational highlights

Overall tenant satisfaction improved to 7.1 in 2020 from 6.9 in 2019, outperforming the benchmark (7.0). The construction of pipeline projects continued during the pandemic, mostly as planned. We are keeping to our hard commitments or approved investment proposals, but we are very selective regarding new opportunities. We signed turnkey building contracts for 486 residential units and we sold 234 units. Our sustainabilty efforts resulted in an increased share of green energy labels to 91.1% at year-end 2020 (YE 2019: 87.8%). We completed the insourcing of the former Delta Lloyd portfolio and we successfully implemented our new ERP system, including the launch of a new website, rental portal and tenant portal. We did experience some issues after the launch, but we managed to resolve most of them in the second half of the year. We continue to develop and make refinements to the ERP system, to improve our processes and efficiency.

Financial performance

Total comprehensive income amounted to €467 million in 2020, 45% lower than in 2019, primarily due to lower revaluations. We recorded a total return of 7.6%, consisting of a 3.1% realised return and a 4.5% unrealised return.


We expect that housing shortages will continue and that the demand for mid-rental homes will stay strong. However, we do expect higher vacancies in the higher rental segment and in some commercial spaces, especially in Amsterdam, which will most likely recover when expats return and commercial restrictions are terminated. We will continue our strategy and we will take additional action if needed. We also expect the increased transfer tax rate to have a negative impact on the value development of our portfolio, although it is still difficult to predict the exact impact given the lack of evidence of transactions under this new tax regime. Our solid financial foundation, together with our flexible organisation, put us in a solid position to deal with this crisis and emerge in good shape.

Looking back on 2020, it was a challenging year and we are proud of what we achieved. We would like to express our gratitude to all our employees for their flexibility, dedication and hard work during these extraordinary and sometimes challenging circumstances at home. And we thank our participants for their continued commitment and support.

Vesteda Management Board

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