Notes to the results
Income statement
(€ million) | 2023 | 2022 |
Theoretical rent | 385 | 369 |
Loss of rent | (7) | (6) |
Gross rental income | 378 | 363 |
Service charges income | 12 | 11 |
Other income | 2 | 1 |
Revenues | 392 | 375 |
Property operating expenses (excluding service charges) | (89) | (89) |
Service charges | (19) | (16) |
Net rental income | 284 | 270 |
Result on property sales | 10 | 6 |
Management expenses | (30) | (27) |
Financial results (incl. amortisation of financing costs and IFRS 16) | (56) | (42) |
Realised result before tax | 208 | 207 |
Unrealised result | (863) | (218) |
Result before tax | (655) | (11) |
Tax | (1) | (1) |
Result after tax | (656) | (12) |
Settlement pre-hedge contracts | 1 | 1 |
Revaluation of Property Plant and Equipment (PPE) | (2) | 1 |
Total comprehensive income | (657) | (10) |
Gross rental income
The total theoretical rent increased by €16 million to €385 million in 2023. The average monthly rent (residential) increased to €1,133 at year-end 2023, from €1,081 at year-end 2022. The like-for-like rent increase was 4.7% in 2023 (2022: 3.8%), while the loss of rent fell to 1.7% in 2023, from 1.8% in 2022. Overall, this resulted in an increase in gross rental income of €15 million to €378 million in 2023.
Net rental income
Property operating expenses, including non-recoverable charges, amounted to €96 million in 2023, €2 million higher than in 2022, mainly due to higher non-recoverable charges. Operating expenses, including non-recoverable charges, amounted to 25.2% of gross rental income in 2023 (2022: 26.1%). This resulted in a net rental income of €284 million in 2023, compared with €270 million in 2022.
Result on property sales
In 2023, Vesteda sold a total of 149 homes from its investment portfolio, all of which were individual unit sales. The net result on property sales amounted to €10 million (2022: €6 million).
Management expenses
Management expenses amounted to €30 million in 2023, €3 million higher than in 2022. This was mainly due to higher personnel costs, higher IT costs and higher external FTE costs. The Total Expense Ratio (TER) increased to 34 basis points over Gross Asset Value (GAV) in 2023, from 28 basis points over GAV in 2022.
Financial results
Financial results came in at -€56 million in 2023, compared with -€42 million in the prior year, mainly due to higher interest expenses as a result of higher debt and higher interest rates. The average cost of debt increased to 2.2% in 2023, from 1.8% in the prior year.
Financial results and EBITDA
(€ million, unless otherwise stated) | 2023 | 2022 |
Financial results (incl. amortisation of financing costs and IFRS 16) | 56 | 42 |
Interest expenses | 48 | 35 |
EBITDA including result on property sales | 265 | 252 |
EBITDA excluding result on property sales | 255 | 245 |
Interest cover ratio | 5.3 | 7.1 |
Realised result
The realised result was €208 million in 2023, compared with €207 million in 2022. Rental growth and higher results on property sales were almost completely offset by higher management expenses and higher interest expenses. Realised return as a percentage of time weighted average equity increased to 3.1% in 2023 from 2.6% in 2022. Excluding the result on property sales, the realised result declined to €198 million in 2023 from €201 million in 2022.
Unrealised result
Negative revaluations in four quarters led to a negative unrealised result of €863 million in 2023, compared with a negative unrealised result of €218 million in 2022.
Total comprehensive income
Vesteda’s total comprehensive income declined to a negative result of €657 million in 2023 from a negative result of €10 million in 2022, mainly due to significantly higher negative revaluations in 2023. The total return on time-weighted average equity (ROE) came in at -9.8% in 2023 (2022: -0.1%), consisting of a realised return of 3.1% (2022: 2.6%) which was more than offset by an unrealised return of -12.9% (2022: -2.8%).
Statement of financial position
(€ million, unless otherwise stated) | 31 December 2023 | 31 December 2022 |
Total assets (excl. IFRS 16) | 8,956 | 9,567 |
Equity | 6,392 | 7,298 |
Net debt | 2,479 | 2,180 |
Leverage ratio (%, excl. IFRS 16) | 27.7 | 22.8 |
At year-end 2023, the leverage ratio excluding IFRS 16 stood at 27.7% (year-end 2022: 22.8%). Including IFRS 16, the leverage ratio stood at 28.7% at year-end 2023 (year-end 2022: 24.0%).
Changes in equity
At year-end 2023, group equity amounted to €6,392 million, compared with €7,298 million at year-end 2022. The €906 million decline in equity was the balance of a realised result of €208 million, a negative unrealised result of €863 million, a €1 million income tax expense, a €1 million settlement gain on pre-hedge contracts, a negative €2 million revaluation of the head office, an equity redemption of €50 million and profit distributions to participants totalling €199 million.
Changes in equity (€ million)
Return on equity
(% of time weighted average equity) | 2023 | 2022 |
Realised return | 3.1 | 2.6 |
- return from letting | 3.0 | 2.6 |
- return from property sales | 0.1 | 0.1 |
Unrealised return | (12.9) | (2.8) |
Total return | (9.8) | (0.1) |
Return from other comprehensive income | - | - |
Total comprehensive return | (9.8) | (0.1) |
Total comprehensive income in € per participation right (based on number of participations at year-end) | (18.5) | (0.3) |
Proposed distribution over the financial year | 3.1 | 2.6 |
For more information, please see the Consolidated financial statements and Company financial statements sections of this report.
Performance compared with MSCI benchmark
In 2023, Vesteda underperformed the MSCI IPD Netherlands Residential Benchmark by 0.1%. The underperformance on capital growth was 0.2%, while the annual capital growth for the Benchmark came in at (8.8%). Vesteda outperformed on direct return with 0.1%. On the three-year average return Vesteda outperformed by 0.5%, driven by a higher capital growth in 2021. Our focus for the coming years remains on long-term outperformance, the three-year average total return.[1]
- 1 Direct return and capital growth might not add up to total return as a result of time-weighted averages on a monthly basis.
Vesteda Residential Fund versus MSCI residential benchmark
(%) | 2023 | 2022 | 2021 | 2020 | 3 yr average | 5 yr average | |
Direct return | |||||||
Vesteda | 3.2 | 2.8 | 3.1 | 3.1 | 3.0 | 3.1 | |
MSCI-benchmark | 3.1 | 2.6 | 2.9 | 2.9 | 2.9 | 2.9 | |
Outperformance | 0.1 | 0.1 | 0.2 | 0.2 | 0.1 | 0.2 | |
Capital growth | |||||||
Vesteda | (8.9) | (2.1) | 14.9 | 3.5 | 0.8 | 3.0 | |
MSCI-benchmark | (8.8) | (1.0) | 12.2 | 5.3 | 0.5 | 3.3 | |
Outperformance | (0.2) | (1.1) | 2.4 | (1.7) | 0.4 | (0.3) | |
Total return | |||||||
Vesteda | (6.0) | 0.6 | 18.4 | 6.8 | 3.9 | 6.2 | |
MSCI-benchmark | (5.9) | 1.6 | 15.4 | 8.3 | 3.3 | 6.3 | |
Outperformance | (0.1) | (1.0) | 2.6 | (1.4) | 0.5 | (0.1) |