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Management agenda 2022

Tenants

Mapping the customer journey

Feedback from our tenants enables us to continuously adapt and improve the mapping of different customer journeys. In 2022, we will start a number of projects to improve the customer journey related to repair requests and renovation projects. We will start measuring tenant satisfaction at each step of the process and we will make changes to unify these processes and make them more efficient, which will improve our services and increase tenant satisfaction.

Digitalisation combined with a human touch

We believe that we can deliver the best customer experience through a combination of two equally important things: technology and the human touch. Improving our digital platform will enable us to automate certain parts of processes, which will reduce waiting times and lighten the administrative burden on our employees. This allows them to focus on more value-adding activities that focus on improving our services and complaints handling.

Home sharing for keyworkers

Healthcare staff, teachers and other public sector employees are essential for others to do their jobs. We will continue our efforts to allow key workers to share homes in specific complexes, enabling them to share costs and make their homes more affordable.

Nibud calculation tool

To help current and future tenants gain better insight into their financial situation, we will continue the pilot using the Nibud calculation tool for total living expenses. For 2022, we are also considering the use of the calculation tool to identify and help elderly tenants who are experiencing payment problems, because their pensions lag inflation.

Optimising dashboards and reporting

Big data and data science developments offer us ways to know who our tenants are and what is important to them. Using advanced data analytics enables us to gain a better understanding of where to improve our services and how to improve tenant satisfaction. We can also identify trends and proactively anticipate to them to prevent complaints.

Portfolio

Maintain our focus on improving the quality and sustainability of the portfolio

We continue to improve the quality and structure of our portfolio, focusing on our selected primary regions, the (regulated) mid-rental segment and green energy labels. This provides the basis for keeping our tenants satisfied, for long-term outperformance (GRESB, MSCI residential three-year total return) and for stable low-risk rental income growth.

Our current portfolio is well diversified, with housing solutions for middle and higher-income households in Vesteda’s chosen economically strong primary regions. Our goal is to improve our portfolio by investing in our existing portfolio and focusing on acquiring affordable (regulated) mid-rental product for middle-income tenants in our primary regions in the Netherlands.

Respond to challenging market developments

Ongoing challenging market conditions, with high prices, high demand and low supply is putting pressure on finding affordable and high-quality product.

We take an active role in the discussions regarding regulation of the rental housing market with government authorities and other stakeholders. We recognise that our focus on offering good quality, sustainable, attractive (regulated) mid-rental homes in primary locations and our investments in improving the quality of our existing portfolio mitigates the risks of the potential impact of these developments. We have prepared ourselves to respond adequately to these changes.

Acquisitions and dispositions

In our acquisition process, we focus on sustainability and use a comprehensive scoring framework to assess the sustainability impact score of our projects, covering all aspects of ESG, including bio-based building techniques and materials.

The supply of new development locations remains limited. In addition, making projects financially feasible and getting projects started is challenging. The reasons for this are high construction costs and limited construction capacity, high land costs, high quality and sustainability requirements, rental regulation and challenges in communication, capacity and coordination with and between parties involved in the development process.

Vesteda embraced the regulated mid-rental segment in 2020 as a new lower-risk investment category to provide middle-income tenants with affordable homes, while maintaining long-term value growth potential beyond the restrictive period. This ties in well with our social objectives and long-term investment horizon.

We plan to add approximately 1,100 new homes to our pipeline annually. We handle development risks in a disciplined manner within the given frameworks. We explore investment opportunities earlier in the development process and cooperate with our business partners on this front. This increases our influence on the quality and pricing of the developed product, as well as our access to the product. We are also aiming to invest in temporary housing, as this is a clear answer to short-term housing demand, while it provides Vesteda with access to the permanent product to be realised at the location.

We do not foresee large residential portfolio sales in 2022, although our ongoing asset management process may lead to selective sales of individual assets from time to time.

Large renovation projects

In our asset management process, we continuously identify opportunities where we can create value and simultaneously improve the quality and sustainability of the product. We focus on long-term value creation for these assets. We use data-driven models to support our decision-making in this regard. We also continue to select and work on opportunities within our existing portfolio, aimed at combining densification with renewal and improving the sustainability of our existing portfolio.

Amsterdam leasehold

We continue our programme to change to the perpetual leaseholds at the favourable conditions that Amsterdam’s city council offered. After finalising the first two transfers in 2021, we expect to finalise all transfers in 2023.

Participants

Vesteda strives to provide its participants with an attractive risk-return investment, transparent communication and high-quality service. Participant satisfaction is one of our key performance indicators. We seek to continuously improve the dialogue with our participants, communicating pro-actively about our strategy, operations, financial and non-financial results. We also invest in establishing relationships with potential new participants to increase the liquidity of the fund. And finally, we take our social responsibility seriously and we have set clear ESG targets that represent the importance of this topic for our organisation and participants. For more information, please see the CSSR section of this report.

Funding

Vesteda has aligned its funding structure with its sustainable profile. As part of our funding strategy, we continue to diversify and improve our maturity profile. We actively use debt for the sustainable financing of our portfolio and acquisitions, as it gives attractive terms and will improve our return on equity. We aim to use our increasing share of eligible assets that comply with these terms to increase this type of funding and reduce our cost of debt.

Organisation and staff

We continue to invest in employee development and the improvement of our processes. We are devoting attention to the creation of an inclusive and inspiring culture to ensure that we remain an attractive employer. We will continue to evaluate and where necessary adjust our home-working policy. This will enable us to both build towards our goal of being a high performance organisation and keep our employees engaged.

One of our strategic goals is to be an employer of choice. To attract, engage and retain talent, we will continue to develop our personal branding and market position, offer competitive salaries including equal pay, and stand out due to our HPO culture, with a strong focus on diversity, inclusion and work-life balance. Furthermore, employee engagement is an important part of being an employer of choice; we focus on this by telling our corporate story to our (new) employees and find alternative and creative ways to recruit them. This year, we will devote additional attention to health and well-being.

Corporate Sustainability and Social Responsibility

We tightened our sustainability goals and implemented a CO2 Roadmap to be Paris Proof by 2050. Our goal for 2030 is a 50% energy reduction in kWh/sqm compared with 1990. Part of the roadmap is to continue renovations to reduce energy demand and have 99% green energy labels by 2024. We will certify our portfolio with BREEAM in-use in 2022, and these certificates will help us to define the next steps in improving our existing portfolio. We also actively involve our tenants to increase awareness and motivation to reduce energy use.

Our recent climate studies provided insights into the future potential impact of climate risks on our portfolio. The risks to our total portfolio are low, and we will address and mitigate these effects on the few high-risk properties. We have integrated this in the assessment for our acquisitions.

We will continue our strategy of investing in affordable and sustainable homes in order to provide high-quality homes to middle-income households in the Netherlands.