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Notes to the results

Income statement

(€ million)

2022

2021

Theoretical rent

369

360

Loss of rent

(6)

(13)

Gross rental income

363

347

Service charges income

11

12

Other income

1

1

Revenues

375

360

Property operating expenses (excluding service charges)

(89)

(84)

Service charges

(16)

(16)

Net rental income

270

260

Result on property sales

6

16

Management expenses

(27)

(25)

Financial results (incl. amortisation of financing costs and IFRS 16)

(42)

(39)

Realised result before tax

207

212

Unrealised result

(218)

1,233

Result before tax

(11)

1,445

Tax

(1)

(1)

Result after tax

(12)

1,444

Settlement pre-hedge contracts

1

1

Revaluation of Property Plant and Equipment (PPE)

1

-

Total comprehensive income

(10)

1,445

Gross rental income

The total theoretical rent increased by €9 million to €369 million in 2022. The average monthly rent (residential) increased to €1,081 at year-end 2022, from €1,042 at year-end 2021. The like-for-like rent increase was 3.8% in 2022 (2021: 2.4%), while the loss of rent fell to 1.8% in 2022, from 3.6% in 2021. Overall, this resulted in an increase in gross rental income of €16 million to €363 million in 2022.

Net rental income

Property operating expenses, including non-recoverable charges, amounted to €94 million in 2022, €6 million higher than in 2021, mainly due to higher planned maintenance costs. Operating expenses, including non-recoverable charges, amounted to 26.1% of gross rental income in 2022 (2021: 25.4%). This resulted in a net rental income of €270 million in 2022, compared with €260 million in 2021.

Result on property sales

In 2022, Vesteda sold a total of 157 homes from its investment portfolio, consisting of 109 individual unit sales and one complex sale consisting of 48 units. The net result on property sales amounted to €6 million (2021: €16 million).

Management expenses

Management expenses amounted to €27 million in 2022, €2 million higher than in 2021. This was mainly due to higher personnel costs, higher IT costs and lower recharged rental expenses in 2022. The Total Expense Ratio (TER) decreased to 28 basis points over Gross Asset Value (GAV) in 2022, from 29 basis points over GAV in 2021.

Financial results

Financial results decreased by €3 million to -€42 million in 2022, mainly due to higher interest expenses as a result of higher debt, higher amortisation of financing costs and less interest income. The average cost of debt remained stable at 1.8%.

Financial results and EBITDA

(€ million, unless otherwise stated)

2022

2021

Financial results (incl. amortisation of financing costs and IFRS 16)

42

39

Interest expenses

35

32

EBITDA including result on property sales

252

253

EBITDA excluding result on property sales

245

237

Interest cover ratio

7.1

7.0

Realised result

Vesteda recorded a realised result of €207 million in 2022, compared with €212 million in 2021. The decline was driven by fewer property sales, which was partly offset by rental growth. The realised return as a percentage of time weighted average equity declined to 2.6% in 2022 from 3.2% in 2021. Excluding the result on property sales, the realised result increased to €201 million in 2022 from €196 million in 2021.

Unrealised result

After several years of positive revaluations, we saw negative revaluations in the third and fourth quarter of 2022. For the full year, the unrealised result amounted to a negative €218 million in 2022, compared with a positive unrealised result of €1,233 million in 2021.

Total comprehensive income

Vesteda’s total comprehensive income declined to a negative result of €10 million in 2022 from a positive result of €1,445 million in 2021, due to the negative revaluations in 2022. The total return on time-weighted average equity (ROE) was -0.1% in 2022 (2021: 22.0%), consisting of a realised return of 2.6% (2021: 3.2%) which was more than offset by an unrealised return of -2.8% (2021: 18.7%).

Statement of financial position

(€ million, unless otherwise stated)

31 December 2022

31 December 2021

Total assets (excl. IFRS 16)

9,567

9,714

Equity

7,298

7,553

Net debt

2,180

1,991

Leverage ratio (%, excl. IFRS 16)

22.8

20.5

At year-end 2022, the leverage ratio excluding IFRS 16 was 22.8% (year-end 2021: 20.5%). Including IFRS 16, the leverage ratio was 24.0% at year-end 2022 (year-end 2021: 21.7%).

Changes in equity

At year-end 2022, group equity amounted to €7,298 million, compared with €7,553 million at year-end 2021. The €255 million decline in equity was the balance of a realised result of €207 million, a negative unrealised result of €218 million, a €1 million income tax expense, a €1 million settlement gain on pre-hedge contracts, a positive €1 million revaluation of head office, an equity redemption of €50 million and profit distributions to participants totalling €195 million.

Changes in equity (€ million)
Return on equity

(% of time weighted average equity)

2022

2021

Realised return

2.6

3.2

- return from letting

2.6

3.0

- return from property sales

0.1

0.2

Unrealised return

(2.8)

18.7

Total return

(0.1)

21.9

Return from other comprehensive income

-

0.1

Total comprehensive return

(0.1)

22.0

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

(0.3)

40.0

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

2.6

3.0

Performance compared with MSCI benchmark

In 2022, Vesteda underperformed the MSCI IPD Netherlands Residential Benchmark by 1.0%. The outperformance on direct return was 0.1%, while Vesteda underperformed on capital growth with 1.1%. However, on the three year average return Vesteda outperformed by 0.1%, driven by the substantial relative capital growth in 2021. This brings the three year average capital growth in line with the benchmark. 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

(%)

2022

2021

2020

2019

2018

 

3 yr average

5 yr average

Direct return

        

Vesteda

2.8

3.1

3.1

3.3

3.5

 

3.0

3.2

MSCI-benchmark

2.6

2.9

2.9

3.2

3.4

 

2.8

3.0

Outperformance

0.1

0.2

0.2

0.2

-

 

0.2

0.2

         

Capital growth

        

Vesteda

(2.1)

14.9

3.5

9.2

15.9

 

5.2

8.0

MSCI-benchmark

(1.0)

12.2

5.3

10.1

14.7

 

5.3

8.1

Outperformance

(1.1)

2.4

(1.7)

(0.8)

1.0

 

(0.1)

(0.1)

         

Total return

        

Vesteda

0.6

18.4

6.8

12.8

19.9

 

8.4

11.4

MSCI-benchmark

1.6

15.4

8.3

13.6

18.6

 

8.3

11.3

Outperformance

(1.0)

2.6

(1.4)

(0.7)

1.1

 

0.1

0.1

Non-financial figures

(year-end, unless otherwise stated)

2022

2021

Number of residential units

27,661

27,570

- multi-family

15,352

15,180

- single-family

12,309

12,390

Number of residential units inflow (full-year)

243

419

Number of residential units outflow (full-year)

157

331

- individual unit sales (full-year)

109

169

- portfolio sales (full-year)

-

-

- residential building sales (full-year)

48

162

Occupancy rate (% of units)

98.6

98.8

Tenant satisfaction (full-year, rating out of 10)

7.1

7.0

Number of employees (FTE)

217

217

For more information, please see the Consolidated financial statements and Company financial statements sections of this report.