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Performance

Rental income

The total theoretical rent at year-end 2020 amounted to €351 million, an increase of €21 million compared with year-end 2019 mainly due to the inflow of new-build home into the portfolio. Additionally, part of the increase was caused by the fact that since the new ERP implementation, permanent finishes such as floors and screens are included in the market rent and theoretical rent. The total market rent at year-end 2020 was 3.7% higher than the theoretical rent and leads to an increase of reversionary potential in comparison to last year.

Market rent and theoretical rent

(€ million, year-end)

2020

2019

2018

2017

2016

Market rent

364

337

350

264

250

Theoretical rent

351

330

332

260

251

The average monthly rent (residential only) increased by 3.0% due to the like-for-like growth of our standing portfolio and the inflow and outflow (portfolio composition changes) in 2020.

Average monthly rent per unit

(€, year-end)

2020

2019

2018

2017

2016

Average monthly rent

1,016

986

945

910

882

The table below shows the impact of the rent increase, reletting and portfolio inflow/outflow.[1]

Development of total theoretical rent of residential units

(%)

2020

2019

Like-for-like rental increase

2.7

3.6

- Average rental increase for current tenants

2.3

3.1

- Re-letting

0.3

0.5

Inflow and outflow of properties in the portfolio

0.1

0.0

Total increase in theoretical rent

2.7

3.6

Occupancy

The occupancy rate (in units) declined to 97.5%, primarily driven by a higher vacancy rate in the higher segment in Amsterdam due to less demand for housing by freelancers and expats during the COVID-19 pandemic. Tenant turnover increased to 13.6% in 2020, compared with 12.8% in 2019.

Occupancy (%, year-end) and tenant turnover (%)
Rental income

The gross rental income of the portfolio increased last year. Due to higher vacancy and higher operating expenses, net rental income remained broadly in line with 2019. The higher operating expenses were largely due to several investment projects that were delayed in 2019 and delivered in 2020, plus higher maintenance costs. As a result, the gross/net ratio increased to 24.9%, compared with 23.3% in 2019.

Rental income

(€ million, unless otherwise stated)

2020

2019

2018

2017

2016

Gross rental income

335

329

281

247

242

Net rental income

251

252

210

184

182

Gross/net ratio (%)

24.9

23.4

25.1

25.6

24.8

Market value

The table below shows the market value development of the investment portfolio. The value increased to €8.2 billion at year-end 2020 (including IFRS 16). This is 5.1% higher than at year-end 2019, mainly as a result of a higher number of units in the portfolio and positive revaluations. Market values continued to increase despite COVID-19 uncertainties and partly driven by the increase of the Real Estate Transfer Tax (RETT) to 8% from 2% as per 1 January 2021. The investment market remained strong, both for residential complexes and individual unit sales.

Changes in market value in 2020 (€ million)

The revaluation of the total portfolio was +3.5% in 2020. This positive result was driven by a solid value increase of mid-rental properties, especially in medium-sized cities and in the suburbs or larger cities.

Revaluation in 2020
Average value per residential unit

The average value per residential unit in the portfolio had increased by 5.0% to €292 thousand at year-end 2020. This increase was largely driven by the revaluation of 3.5% and changes in the composition of the portfolio (inflow and outflow).

Average market value per unit

(€ thousand, year-end)

2020

2019

2018

2017

2016

Average value per residential unit

292

278

244

213

186

Gross initial yield

The gross initial yield on the portfolio, defined as the theoretical rent at year-end divided by the value of the portfolio at year-end (excl. IFRS 16), changed slightly, from 4.3% in 2019 to 4.4% in 2020. The slight increase is caused by the steeper increase of rental income at year-end compared with the value increase, which was lower due to the impact of mainly the increased real estate transfer tax.

Gross initial yield

(%)

2020

2019

2018

2017

2016

Gross initial yield

4.4

4.3

4.7

5.4

5.9

  • 1 Theoretical rent is measured at a single point in time (year-end) and therefore does not correspond with the increase in theoretical rent in 2020 compared with 2019, which you will find in Note 5 of the consolidated financial statements in this report.