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Acquisitions and property sales

The residential (investment) market turned out to be a safe haven for investors in uncertain times after the start of the pandemic. This fuelled demand and competition for residential investment product, from both national and international investors. The supply of new product remains limited, lead times to make projects feasible and getting projects to the start of construction are prolonged due to limited capacity at municipalities, objections to permits from third parties, regulation, high (sustainability) ambitions and cost uncertainties due to the extreme rise in construction costs.

As a result, and on the back of ongoing low interest rates, initial yields for residential investment product compressed further last year. GIY for Vesteda’s existing portfolio declined from 4.4% at year-end 2020 to 3.8 % at year-end 2021.

Portfolio inflow

The following table provides an overview of the new-build additions to the investment portfolio in 2021.

New-build additions to the investment portfolio in 2021

Residential building

Location

Number of units

Type

Region

Rental segment

Quarter of completion

De Generaal

Rijswijk

120

Multi-family

Primary

Mid

Q1

Punt Sniep

Diemen

202

Multi-family

Primary

Mid

Q1

Zuidpoort

Veenendaal

34

Multi-family

Primary

Mid

Q1

Tromppark

Dordrecht

40

Single-family

Primary

Mid

Q2/Q3

Willemsbuiten

Tilburg

22

Single-family

Primary

Mid

Q1

Milestone

Eindhoven

1

Single-family

Primary

Mid

Q2

Total

 

419

    

Acquisition pipeline

Vesteda continues to prefer quality above volume in acquisitions: quality in terms of residential product, affordability, sustainability, location, return and risk profile. We added a total of four new-build projects to our pipeline in 2021, totalling 581 residential units. The total committed pipeline stood at 1,404 units at year-end 2021, with an estimated market value of €534 million at completion. All projects are in line with our 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.

Committed acquisition pipeline at year-end 2021

Residential building

Location

Number of units

Type

Region

Rental segment

Completion

Westerwal

Groningen

171

Multi-family

Primary

Mid

2022

Goudshof

Gouda

72

Multi-family

Primary

Mid

2022

The Ox

Amsterdam

168

Multi-family

Primary

Reg Mid/Mid

2023

Regent II

Den Haag

98

Multi-family

Primary

Mid

2023

Waterburcht

Helmond

70

Multi-family

Primary

Mid

2023

Grote Beer

Rotterdam

193

Multi-family

Primary

Reg Mid

2023

Frank is een Binck

Den Haag

205

Multi-family

Primary

Reg/Reg Mid/Mid

2024

De Weverij

Enschede

109

Multi-family

Primary

Mid

2024

Imagine

Rotterdam

133

Multi-family

Primary

Mid

2024

CZAN Singelblok

Amsterdam

185

Multi-family

Primary

Mid

2025

Total

 

1,404

    

Upgrades & (re)development pipeline

In order to improve the quality of our portfolio and achieve our sustainability targets, we actively pursue and execute opportunities to create value in existing assets through renovations and measures to improve sustainability. This generally involves outdated, but attractive product at a good location, which we convert into a future-proof, sustainable and affordable product. Value creation emerges from increasing reversionary potential, lower capital and operational expenditures going forward and a lower risk profile. In 2021, we upgraded a total of 295 units.

Completed renovations in 2021

Residential building

Location

Number of units

Type

Quarter of completion

Previous energy label

New energy label

Churchilllaan

Rijswijk

215

Multi-family

Q4 2021

E

B

Kapittelweg

Hilversum

80

Multi-family

Q4 2021

D

B

Total

 

295

    

Moreover, we are currently renovating or approaching the renovation phase for 14 projects, totalling over 1,300 homes.

Committed renovation pipeline at year-end 2021

Residential building

Location

Number of units

Type

Current energy label

New energy label

Completion

Westkapellelaan

Den Haag

96

Multi-family

G

B

Q1 2022

Schuilenburg

Amersfoort

116

Single-family

E

A

Q1 2022

New Amsterdam

Amsterdam

171

Multi-family

A

A

Q1 2022

Klaverhof

Alphen aan den Rijn

85

Multi-family

D

B

Q1 2022

Egelantierstraat

Badhoevedorp

71

Single-family

D

A

Q3 2022

Total

 

539

    

In addition to the committed renovation pipeline, another 9 projects are in the initiative or design phase to upgrade approximately 800 homes.

Portfolio outflow

Vesteda sold two assets in Almere and Rijswijk in a controlled auction process. These two complexes were sold because they did not contribute to Vesteda’s portfolio strategy.