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Acquisitions and property sales

Last year, the COVID-19 pandemic had a severe impact on both the Dutch economy and the global economy. So far, the residential (investment) market appears to still be a stable safe haven for investors in uncertain times. The flow of international capital into the Dutch market continues to increase, which is also increasing competition for new-build properties. Although we did see a short pause in investment during the first lockdown, while investors recalibrated their strategy in Q2/Q3, investors continued to pursue residential real estate buying opportunities. Several large existing portfolios were sold at record low yields.

In the third quarter, the Dutch government announced its plans to increase the Real Estate Transfer Tax (RETT) rate for residential investments to 8% from 2% as of 1 January 2021. Theoretically, this rate change is expected to have a negative impact on the value of all rental homes in operation in the Netherlands and the liquidity of the assets for investors with a short or medium horizon. In their Q4 valuations, appraisers did take part of this effect into account, but we still saw a minor positive revaluation of the overall portfolio. Furthermore, the impact of the proposed change on the new construction market appears limited, as these investments are liable for VAT and are acquired by investors with a long-term horizon.

The competition for high-quality new-build residential product remains fierce. Furthermore, rising construction costs, due in part to the tightening of sustainability requirements, and high land prices are making it difficult to get new-build projects started. Vesteda continues to target quality rather than volume and remains selective regarding acquisitions.

Portfolio inflow

The table below provides an overview of the new-build additions to the investment portfolio in 2020.

New-build additions to the investment portfolio in 2020

Residential building

Location

Number of units

Type

Region

Rental segment

Quarter of completion

Hoog Dalem

Gorinchem

25

Single-family

Primary

Mid

Q2

Noorderhaven

Zutphen

126

Single-/Multi-family

Secondary

Mid

Q2

Toren

Hoorn

72

Multi-family

Primary

Mid

Q2

Westergouwe

Gouda

71

Single-family

Primary

Mid

Q2/Q3

Bensdorp

Bussum

40

Multi-family

Primary

Mid

Q3

Koningsoord

Berkel Enschot

32

Single-family

Primary

Mid

Q3/Q4

Onder de Linden

Oosterhout

39

Single-family

Primary

Mid

Q3/Q4

Willemsbuiten

Tilburg

20

Single-family

Primary

Mid

Q4

Total

425

    

Pipeline

Vesteda added a total of five new-build projects to its pipeline in 2020, totalling 486 residential units. The total committed pipeline stood at 1,243 units at year-end 2020, with an estimated market value of €426 million at completion. All projects are in line with Vesteda’s portfolio strategy in terms of region, rental segment and energy label. The majority of the projects are located in urban expansion sites of larger cities in the Netherlands, where Vesteda can benefit from the promising and ongoing development of the areas.

Composition of the committed pipeline at year-end 2020

Residential building

Location

Number of units

Type

Region

Rental segment

Completion

De Generaal

Rijswijk

120

Multi-family

Primary

Mid

2021

Milestone

Eindhoven

1

Single-family

Primary

Mid

2021

Punt Sniep

Diemen

202

Multi-family

Primary

Mid

2021

Tromppark

Dordrecht

40

Single-family

Primary

Mid

2021

Westerwal

Groningen

171

Multi-family

Primary

Mid

2021

Willemsbuiten

Tilburg

22

Single-family

Primary

Mid

2021

Zuidpoort

Veenendaal

34

Single-family

Primary

Mid

2021

Frank is een Binck

Den Haag

205

Multi-family

Primary

Reg/Mid

2022

Goudshof

Gouda

72

Multi-family

Primary

Mid

2022

Regent II

Den Haag

98

Multi-family

Primary

Mid

2023

The Ox

Amsterdam

168

Multi-family

Primary

Reg/Mid

2023

Tetem III

Enschede

110

Multi-family

Primary

Mid

2024

Total

 

1,243

    

Property sales

Vesteda divested 234 units that no longer met our key investment criteria. The disposals consisted of two complex sales and several individual unit sales. Our disposal strategy is limited after our portfolio disposals in 2018 and 2019.