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Notes to the results

Income statement

(€ million)

2021

2020

Theoretical rent

360

347

Loss of rent

(13)

(12)

Gross rental income

347

335

Service charges income

12

10

Other income

1

-

Revenues

360

345

Property operating expenses (excluding service charges)

(84)

(79)

Service charges

(16)

(15)

Net rental income

260

251

Result on property sales

16

7

Management expenses

(25)

(26)

Interest expenses (including amortisation of financing costs)

(39)

(41)

Realised result before tax

212

191

Unrealised result

1,233

276

Result before tax

1,445

467

Tax

(1)

(1)

Result after tax

1,444

466

Settlement pre-hedge contracts

1

1

Revaluation of Property Plant and Equipment (PPE)

-

-

Total comprehensive income

1,445

467

Gross rental income

The total theoretical rent increased by €13 million to €360 million in 2021. The average monthly rent had increased to €1,042 at year-end 2021, from €1,016 at year-end 2020. The like-for-like rent increase was 2.4% in 2021, while the loss of rent increased to 3.6% in 2021, from 3.4% in 2020. Overall, this resulted in an increase in gross rental income of €12 million to €347 million in 2021.

Net rental income

Property operating expenses amounted to €84 million in 2021, €5 million higher than in 2020, mainly due to higher maintenance costs, more costs of tenant renewals and more reletting fees due to higher vacancy. Operating expenses, including non-recoverable charges, amounted to 25.4% of gross rental income in 2021 (2020: 24.9%). This resulted in a net rental income of €260 million in 2021, compared with €251 million in 2020.

Result on property sales

In 2021, Vesteda sold a total of 331 homes from its investment portfolio, consisting of 169 individual unit sales and two complex sales totalling 162 units. The net result on property sales amounted to €16 million (2020: €7 million).

Management expenses

Management expenses amounted to €25 million in 2021, €1 million lower than in 2020. This was mainly due to higher recharged rental expenses offset with higher personnel costs and higher IT costs in 2021. The Total Expense Ratio (TER) fell to 29 basis points over GAV in 2021, from 32 basis points over GAV in 2020.

Interest expenses

Interest expenses declined by €2 million to €39 million in 2021, mainly due to lower debt, a one-off gain, and a lower average cost of debt, which declined to 1.8% in 2021 from 1.9% in 2020.

Interest expenses and EBITDA

(€ million, unless otherwise stated)

2021

2020

Interest expenses (excluding amortisation of financing costs)

37

39

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

32

34

EBITDA including result on property sales

253

235

EBITDA excluding result on property sales

237

228

Interest cover ratio

7.0

6.7

Realised result

Vesteda recorded a realised result of €212 million in 2021, compared with €191 million in 2020. The increase was driven by the inflow of new-build homes, adding gross rental income, as well as increased result on property sales, mainly due to higher sales prices and the sale of two complexes. The realised return as a percentage of time weighted average equity increased to 3.2% in 2021 from 3.1% in 2020.

Excluding the result on property sales, the realised result increased to €196 million in 2021 from €184 million in 2020. Excluding the return from property sales, the realised return was 3.0% in 2021, in line with the previous year.

Unrealised result

Strong market fundamentals and continued housing shortages resulted in strong revaluations of the portfolio. The unrealised result amounted to €1,233 million in 2021, compared with €276 million in 2020.

Total comprehensive income

Vesteda’s total comprehensive income increased to €1,445 million in 2021 from €467 million in 2020, primarily due to strong revaluation results in 2021. The total return on time-weighted average equity (ROE) was 22.0% in 2021 (2020: 7.6%), 3.2% of which was realised return (2020: 3.1%) and 18.7% was unrealised return (2020: 4.5%).

Statement of financial position

(€ million, unless otherwise stated)

31 December 2021

31 December 2020

Total assets (excl. IFRS 16)

9,714

8,285

Equity

7,553

6,294

Net debt

1,991

1,916

Leverage ratio (%, excl. IFRS 16)

20.5

23.1

At year-end 2021, the leverage ratio excluding IFRS 16 stood at 20.5% (year-end 2020: 23.1%). Including IFRS 16, the leverage ratio stood at 21.7% at year-end 2021 (year-end 2020: 24.5%).

Changes in equity

At 31 December 2021, group equity amounted to €7,553 million, compared with €6,294 million at 31 December 2020. The €1,259 million increase in equity was the balance of a realised result of €212 million, an unrealised result of €1,233 million, a €1 million income tax expense, a €1 million settlement gain on pre-hedge contracts, and distributions to participants totalling €186 million.

Changes in equity (€ million)
Return on equity

(% of time weighted average equity)

2021

2020

Realised return

3.2

3.1

- return from letting

3.0

3.0

- return from property sales

0.2

0.1

Unrealised return

18.7

4.5

Total return

21.9

7.6

Return from other comprehensive income

0.1

-

Total comprehensive return

22.0

7.6

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

40.0

13.0

Proposed distribution over the financial year (% of time weighted average equity)

3.0

3.0

Performance compared with MSCI benchmark

In 2021, Vesteda outperformed the MSCI IPD Netherlands Residential Benchmark by 2.6%. The outperformance on direct return of 0.2% was in line with the previous two years. The capital growth in 2021 was considerable for both the benchmark and Vesteda. Despite the high growth for the benchmark, Vesteda outperformed on capital growth with 2.4%. This was driven by a higher yield compression than the benchmark.[1]

Vesteda Residential Fund versus MSCI residential benchmark
 

2021

2020

2019

2018

2017

 

3 yr average

5 yr average

Direct return

        

Vesteda

3.1

3.1

3.3

3.5

4.1

 

3.2

3.4

MSCI-benchmark

2.9

2.9

3.2

3.4

3.8

 

3.0

3.2

Outperformance

0.2

0.2

0.2

0.0

0.2

 

0.2

0.2

         

Capital growth

        

Vesteda

14.9

3.5

9.2

15.9

13.5

 

9.1

11.2

MSCI-benchmark

12.2

5.3

10.1

14.7

12.6

 

9.2

10.9

Outperformance

2.4

(1.7)

(0.8)

1.0

0.8

 

(0.1)

0.2

         

Total return

        

Vesteda

18.4

6.8

12.8

19.9

18.1

 

12.5

15.0

MSCI-benchmark

15.4

8.3

13.6

18.6

16.9

 

12.4

14.5

Outperformance

2.6

(1.4)

(0.7)

1.1

1.0

 

0.1

0.4

Non-financial figures
 

31 December 2021

31 December 2020

Number of residential units

27,570

27,482

- multi-family

15,180

15,171

- single-family

12,390

12,311

Number of residential units inflow

419

426

Number of residential units outflow

331

234

- individual unit sales

169

165

- portfolio sales

-

-

- residential building sales

162

69

Occupancy rate (% of units)

98.8

97.5

Tenant satisfaction (rating out of 10)

7.0

7.1

Number of employees (FTE, at year-end)

217

217

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.