Gross rental income can be broken down as follows:
Loss of rent
Gross rental income
Theoretical rent increased, caused by the fact that the number of units in the portfolio in 2020, compared to 2019, increased. The total number of units at the end of 2020 increased with 192 units, from 27,290 (2019) to 27,482 (2020). This is a result from inflow, two residential building sales and individual unit sales. Also, the Theoretical rent increased due to the annual rent increase and rent optimisation resulted in a like for like rental growth of 2.7% (2019: 3.6%). Low inflation and the fact that Vesteda voluntarily capped the annual average rent increase to CPI plus 1%, resulted in a rent increase of 2.2% in July 2020.The loss of rent as a percentage of theoretical rent increased, which was mainly caused by higher vacancy in the Higher rental segment. The impact of COVID-19 is noticeable in declining demand for these units from for instance expats or self-employed, and more supply due to the offering of short stay units (like Airbnb or hotel rooms) on the rental market.
The Fund, predominantly consisting of residential investment property, leases its property investments in the form of contracts with indefinite duration. The nature of the (theoretical) rent has an indefinite duration because there are no fixed rental contract periods and tenancy is in the bases only ended by the tenant. The impact of COVID-19 is noticeable in declining demand for these units from for instance expats.