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.