Acquisitions and property sales

Current macro-economic developments, rising inflation, high interest rates and increased real estate transfer tax, are driving significant yield expansion for residential investment product. On top of that, the announced government regulation of the mid-rental segment does not contribute to a better investment climate. At the same time, construction costs have risen sharply during 2022 on the back of the energy crisis and supply chain disruptions. This makes many new build projects unfeasible at the moment and has a major effect on the ability to invest our institutional capital in residential real estate, which is needed given the large housing shortage. Despite the current macro-economic developments, we will stay active in the market and continue long-term business partnerships, also to be able to benefit from potential market opportunities in the future.

The following table provides an overview of the new-build additions to the investment portfolio in 2022.

New-build additions to the investment portfolio in 2022

Vesteda sold 157 units, consisting of 109 individual unit sales and one non-strategic complex sale totalling 48 units.

Vesteda continues to prefer quality over volume in its acquisitions: quality in terms of residential product, affordability, sustainability, strategic portfolio fit, return and risk profile. We acquired a total of five new-build projects that were added to our pipeline in 2022, totalling 553 residential units. The total committed pipeline was 1,721 units at year-end 2022, with an estimated market value at completion of €602 million as per year-end 2022. All projects are in line with our portfolio strategy. The majority of the projects are located in the 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 2022