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Notes to the results

Income statement

(€ million)

2020

2019

Theoretical rent

347

339

Loss of rent

(12)

(10)

Gross rental income

335

329

Service charges income

10

9

Revenues

345

338

Property operating expenses (excluding service charges)

(79)

(72)

Service charges

(15)

(14)

Net rental income

251

252

Result on property sales

7

13

Management expenses

(26)

(23)

Interest expenses (including amortisation of financing costs)

(41)

(40)

Realised result before tax

191

202

Unrealised result

276

653

Result before tax

467

855

Tax

(1)

(1)

Result after tax

466

854

Settlement pre-hedge contracts

1

(6)

Revaluation of Property Plant and Equipment (PPE)

-

1

Total comprehensive income

467

849

Gross rental income

The total theoretical rent increased by €8 million to €347 million in 2020. The average monthly rent increased to €1,016 at year-end 2020 from €986 at year-end 2019. The like-for-like rent was 2.7% in 2020, while the loss of rent increased to 3.4% in 2020 from 2.8% in 2019. Overall, this resulted in an increase in gross rental income of €6 million to €335 million in 2020.

Net rental income

Property operating expenses amounted to €79 million in 2020, €7 million higher than the €72 million recorded in 2019, due to the increased size of the portfolio, higher maintenance costs and non-recoverable service charges due to higher vacancy. Operating expenses, including non-recoverable charges, amounted to 24.9% of gross rental income in 2020 (2019: 23.3%). This resulted in a net rental income of €251 million in 2020, compared with €252 million in 2019.

Result on property sales

In 2020, Vesteda sold a total of 234 homes from its investment portfolio, consisting of 165 individual unit sales and two complex sales totalling 69 units. The net result on property sales amounted to €7 million (2019: €13 million).

Management expenses

Management expenses amounted to €26 million in 2020, €3 million more than the €23 million recorded in 2019. This was due to lower recharged acquisition expenses, lower recharged property sales expenses and higher IT costs in 2020. The Total Expense Ratio (TER) increased to 32 basis points over GAV in 2020, from 30 basis points over GAV in 2019.

Interest expenses

Interest expenses increased by €1 million to €41 million in 2020, mainly due to a higher average debt position. The average cost of debt declined to 1.9% in 2020 from 2.0% in 2019.

Interest expenses and EBITDA

(€ million, unless otherwise stated)

2020

2019

Interest expenses (excluding amortisation of financing costs)

39

37

Interest expenses (excluding amortisation of financing costs and IFRS 16)

34

34

EBITDA including result on property sales

235

243

EBITDA excluding result on property sales

228

230

Interest cover ratio*

6.7

6.8

* 2019 figure has been gecalculated based on a refined EBITDA definition.

Realised result

Vesteda recorded a realised result of €191 million in 2020, compared with €202 million in 2019. The decline was mainly due to a lower result on property sales, higher management expenses and a slightly lower net rental income. The realised return as a percentage of time weighted average equity declined to 3.1% in 2020 from 3.6% in 2019.

Excluding the result on property sales, the realised result declined to €184 million in 2020 from €189 million in 2019. Excluding the return from property sales, the realised return came in at 3.0% in 2020, compared with 3.3% in 2019. This decline was largely due to the increased value of the portfolio.

Unrealised result

The COVID-19 pandemic led to lower revaluations on the Dutch housing market. The unrealised result amounted to €276 million in 2020, compared with €653 million in 2019.

Total comprehensive income

Vesteda’s total comprehensive income declined to €467 million in 2020 from €849 million in 2019, primarily due to lower revaluation results in 2020. The total return on time-weighted average equity (ROE) was 7.6% in 2020 (2019: 14.9%), of which 3.1% was realised return (2019: 3.6%) and 4.5% was unrealised return (2019: 11.4%).

Statement of financial position

(€ million, unless otherwise stated)

31 December 2020

31 December 2019

Total assets

8,440

8,058

Equity

6,294

6,022

Net debt

1,916

1,825

Leverage ratio (%, excl. IFRS 16)

23.1

23.0

At year-end 2020, the leverage ratio excluding IFRS 16 was 23.1%. Including IFRS 16, the leverage ratio stood at 24.5%
at year-end 2020 (year-end 2019: 24.3%).

Changes in equity

At 31 December 2020, group equity amounted to €6,294 million, compared with €6,022 million at 31 December 2019. The €272 million increase in equity was the balance of a realised result of €191 million, an unrealised result of €276 million, a €1 million income tax expense recognised in profit or loss, a €1 million settlement gain on pre-hedge contracts, and distributions to participants totalling €195 million.

Changes in equity (€ million)
Return on equity

(% of time weighted average equity)

2020

2019

Realised return

3.1

3.6

- return from letting

3.0

3.3

- return from property sales

0.1

0.2

Unrealised return

4.5

11.4

Total return

7.6

15.0

Return from other comprehensive income

-

(0.1)

Total comprehensive return

7.6

14.9

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

13.0

23.8

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

3.0

3.3

Performance compared with MSCI

In 2020, Vesteda underperformed the MSCI IPD Netherlands Residential Benchmark by -1.4%. An outperformance on direct return of +0.2% was more than offset by an underperformance on capital growth of -1.7%. Lower capital growth was driven by lower yield compression. However, Vesteda’s market rental growth was in line with that of the benchmark.[1]

Vesteda Residential Fund versus MSCI residential benchmark
 

2020

2019

2018

2017

2016

 

3 yr average

5 yr average

Direct return

        

Vesteda Residential Fund

3.1

3.3

3.5

4.1

4.6

 

3.3

3.7

MSCI-benchmark

2.9

3.2

3.4

3.8

4.2

 

3.2

3.5

Outperformance

0.2

0.2

0.0

0.2

0.4

 

0.2

0.2

         

Capital growth

        

Vesteda Residential Fund

3.5

9.2

15.9

13.5

10.6

 

9.4

10.3

MSCI-benchmark

5.3

10.1

14.7

12.6

10.5

 

10.0

10.6

Outperformance

(1.7)

(0.8)

1.0

0.8

0.0

 

(0.6)

(0.2)

         

Total return

        

Vesteda Residential Fund

6.8

12.8

19.9

18.1

15.7

 

13.0

14.4

MSCI-benchmark

8.3

13.6

18.6

16.9

15.2

 

13.4

14.5

Outperformance

(1.4)

(0.7)

1.1

1.0

0.4

 

(0.4)

(0.0)

Non-financial figures
 

31 December 2020

31 December 2019

Number of residential units

27,482

27,290

- multi-family

15,171

14,959

- single-family

12,311

12,331

Number of residential units inflow

426

817

Number of residential units outflow

234

1,336

- individual unit sales

165

219

- portfolio sales

-

1,117

- residential building sales

69

-

Occupancy rate (% of units)

97.5

98.4

Tenant satisfaction (rating out of 10)

7.1

6.9

Number of employees (FTE, at year-end)

217

194

For more information, please see the sections consolidated and company financial statements of this report.

  • 1 Direct return and capital growth might not add up to total return as a result of time-weighted averages on a monthly basis.