Annex 4: Definitions

AFM	Autoriteit Financiële Markten (Financial Markets Authority).
AIFMD	Alternative Investment Fund Managers Directive.
Business Plan	A strategy document that contains the 5 year strategy of Vesteda.
Core fund	Core fund according to the INREV Style Classification.
CPI	Consumer Price Index.
CSRD	Corporate Sustainability Reporting Directive
Development portfolio	Comprises of land and buildings (principally residential properties) under construction with the aim of adding said property to the investment portfolio upon completion.
GDPR	General Data Protection Regulation: a regulation in EU law on data protection and privacy in the European Union (EU) and the European Economic Area (EEA). It also addresses the transfer of personal data outside the EU and EEA areas.
EBITDA	Non IFRS APM (Alternative Performance Measure). Consolidated earnings before deduction interest charges, tax, depreciation and amortization, excluding result on property sales, and extraordinary items.
ECP	Euro Commercial Paper.
EMTN	Euro Medium Term Note Programme, a programme providing debt instruments.
ESG	The three central factors in measuring sustainability: Environmental, Social and Governance.
Financial liabilities	Interest bearing debt minus capitalized financing costs.
FSA	Dutch Financial Supervision Act.
GAV	Gross Asset Value: the value of total assets (balance sheet).
GRESB	Global Real Estate Sustainability Benchmark: industry-driven organisation committed to assessing the sustainability performance of real estate portfolios (public, private and direct) around the globe. The dynamic benchmark is used by institutional investors to engage with their investments with the aim to improve the sustainability performance of their investment portfolio, and the global property sector at large.
Gross initial yield	Theoretical rent (on a given reference date) from a residential complex divided by the total investment in that residential complex.
Gross rental income	Theoretical rent less loss of rent.
Gross/net ratio	The percentage of property operating expenses relative to gross rental income.
HPO	High Performance Organisation (www.hpocenter.nl).
Interest cover ratio	EBITDA/net interest expenses.
INREV	European Association for Investors in Non-Listed Real Estate Vehicles. Europe's leading platform for the sharing of knowledge on the non-listed real estate industry. Their goal is to improve transparency, professionalism and best practices across the sector, making the asset class more accessible and attractive to investors.
Investment portfolio	All fully-completed and for rent available properties owned by Vesteda.
Investor (or Participant)	Holder of a direct interest in Vesteda Residential Fund.
ISAE 3402	International Standards on Assurance Engagements (ISAE) 3402.
IVBN	Vereniging van Institutionele Beleggers in Vastgoed (Association of institutional property investors in the Netherlands).
KPI (Key Performance Indicator)	Target used to translate strategy in to measurable results.
Leverage	Net debt/total assets (excluding IFRS 16).
Like-for-like rent increase	Comparison of this year’s rent to last year’s rent, taking into consideration only those complexes that were in portfolio during both time periods.
Loss of rent	Net financial vacancy plus incentives.
LTV (loan-to-value)	Net debt/investment portfolio.
Management expenses	Expenses that cannot be allocated directly to the various properties are regarded as management expenses.
Market rent	Rent of a property according to the market at a certain time.
Market value	Value of a property according to the market at a certain time.
MSCI IPD Netherlands Residential Benchmark	Benchmark to determine the performance of the portfolio in comparison to other Dutch real estate portfolios.
NAV	Value of total assets minus the value total liabilities.
Net debt	Total interest bearing debt minus cash and cash equivalents.
Net financial vacancy	Gross financial vacancy less vacancy charged to results on property sales.
Net rental income	Gross rental income minus property operating expenses and other income.
Liberalised rental segment	Residential properties with rents above the regulation limit (€932,93 in 2026). These properties are in the mid and higher rental sectors.
NR Committee	Nomination and Remuneration Committee.
Occupancy rate	The number of residential properties actually generating rental income as a percentage of the number of properties that could generate rental income.
Other region	Regions that are not primary or secondary.
Participant (or Investor)	Holder of a direct interest in Vesteda Residential Fund.
Primary region	Regions that offer the highest market potential for the non-regulated rental sector. These regions are characterised by a high market potential and low market risks.
Property operating expenses	All expenses that can be directly allocated to the various properties in the investment portfolio.
Redemption Available Cash (RAC)	Cash that the Manager has available to fund redemption requests, amounting to €150 million per calendar year.
Real Estate Expense Ratio (REER)	Total property operating expenses divided by average GAV expressed in basis points.
Regulated mid rental segment	Sector of the residential property market for rental properties with a net monthly rent from the regulated level to approximately €1.228,07. In addition, the contract may include additional conditions, such as a maximum initial rental price, a minimum operating period and a maximum annual rental price indexation.
Regulated rental segment	Residential properties with rents below the deregulation limit (€932,93 in 2026).
Return on equity (ROE)	The amount of total comprehensive income divided by opening equity.
Reversionary potential	The difference between market and theoretical rent divided by theoretical rent.
Revolving Facility Agreement (RFA)	Revolving credit facility for medium term debt.
Scope 1, 2 and 3 emissions	Scope 1: direct emissions; scope 2: indirect emissions; scope 3: indirect value chain emissions.
Secondary region	Secondary regions have a lower score than primary regions but have a positive economic and demographic outlook.
Sustainable Development Goals (SDGs)	Set of goals set up by the World Business Council for Sustainable Development (WBCSD), serving as guidance for enterprises to conduct business in a more sustainable way.
Systematic Compliance Risk Analysis (SCRA)	Analysis performed by Vesteda's compliance department in order to identify risks within the compliance framework.
TER (NAV/GAV)	Total Expense Ratio: Total management expenses divided by average NAV or average GAV expressed in basis points.
Theoretical rent	Passing rent for rented units and market rent for vacant units.
Anticipated financial effects	Financial effects that do not meet the recognition criteria for inclusion in the financial statement line items in the reporting period and that are not captured by the current financial effects.
BENG 2 Metric	Dutch energy performance standard used for assessing the energy efficiency of buildings constructed after a certain date. Measured as the maximum primary fossil energy use in kWh per square meter of usable floor area per year (kWh/m².yr)
Carbon credit	A transferable or tradable instrument that represents one metric tonne of CO2eq emission reduction or removal and is issued and verified according to recognised quality standards.
Climate change adaptation	Climate change adaptation relates to the undertaking’s process of adjustment to actual and expected climate change.
Climate change mitigation	Climate change mitigation relates to the undertaking’s endeavours to the general process of limiting the increase in the global average temperature to 1,5 °C above pre-industrial levels in line with the Paris Agreement.
Decarbonisation levers	Aggregated types of mitigation actions such as energy efficiency, electrification, fuel switching, use of renewable energy, products change, and supply-chain decarbonisation that fit with undertakings' specific actions.
Do No Significant Harm (DNSH) Criterion	A regulation that no measure (i.e., no reform and no investment) included in a Member State’s Recovery and Resilience Plan (RRP) should lead to significant harm to any of the six environmental objectives (climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems) within the meaning of Article 17 of the Taxonomy Regulation.
Double Materiality Assessment	The process by which an organisation identifies which sustainability matters are material to them based two dimensions: impact materiality and financial materiality. A sustainability matter meets the criterion of double materiality if it is material from the impact perspective or the financial perspective or both.
E1 Climate Change	The first environmental topic of ESRS, formally addressing how an undertaking affects and is affected by climate change, requiring it to disclose its strategy, governance, policies, targets, and actions related to climate change mitigation and adaptation. It encompasses the undertaking’s transition plan toward a climate-neutral economy in line with the Paris Agreement, its greenhouse gas emissions (Scopes 1, 2, and 3), energy consumption and mix, carbon removals, and internal carbon pricing mechanisms, as well as the anticipated financial effects of climate-related risks and opportunities on its business model and value chain.
Energy	Energy used along the value chain for energy production and consumption. Also related to energy purchased by a third party or produced by the company.
Enterprise Value	Financial metric used to assess the total company value defined in terms of its financing, based on its debt, market cap and cash.
EU Taxonomy	The EU Taxonomy is a classification system established by the European Union to provide a clear framework for determining which economic activities are environmentally sustainable. It aims to guide investors, companies, and policymakers in making informed decisions that support climate and environmental objectives. The taxonomy sets criteria to assess and label activities based on their contribution to six environmental objectives. Activities must meet specific criteria to qualify as sustainable, including making a substantial contribution to at least one of the objectives while not significantly harming any others. The taxonomy is designed to enhance transparency, reduce greenwashing, and facilitate the investment needed to achieve the EU's environmental goals, including the transition to a low-carbon economy.
External Stakeholder Engagement	External stakeholder engagement is the process by which an organisation identifies, analyses, and interacts with individuals or groups outside the organisation—such as customers, suppliers, investors, regulators, NGOs, and community representatives—who are affected by or can affect the organisation’s operations, with the aim of understanding their perspectives, addressing their concerns, and integrating their input into decision-making.
G1 Business Conduct	The governance topic of ESRS, covering how the organisation embeds ethical behaviour into its governance, risk management, and operational processes, and how it monitors and reports on these practices through defined disclosure requirements.
Greenhouse Gases (GHG)	The gases listed in Part 2 of Annex V of Regulation (EU) 2018/1999 of the European Parliament and of the Council13. These include Carbon dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), Sulphur hexafluoride (SF6), Nitrogen trifluoride (NF3), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs).
Grievance Mechanism	Any routinised, state-based or non-state-based, judicial or non-judicial processes through which stakeholders can raise grievances and seek remedy. Examples of state-based judicial and non-judicial grievance mechanisms include courts, labour tribunals, national human rights institutions and regulatory oversight bodies. Non-statebased grievance mechanisms include those administered by the undertaking, either alone or together with stakeholders, such as operational-level grievance mechanisms and collective bargaining, including the mechanisms established by collective bargaining.
Incident	An incident refers to either a formal legal action or compliant submitted to the organization or relevant authorities, or a case of non-compliance identified internally through established procedures.
Impacts	The effect the undertaking has or could have on the environment and people, including effects on their human rights, connected with its own operations and upstream and downstream value chain, including through its products and services, as well as through its business relationships. The impacts can be actual or potential, negative or positive, intended or unintended, and reversible or irreversible. They can arise over the short-, medium-, or long-term. Impacts indicate the undertaking’s contribution, negative or positive, to sustainable development.
KIM Tool	A tool used by Vesteda in collaboration with Climate Adaptation Services (CAS) to assess climate change adaptation risks for real estate assets.
Locked-in GHG emissions	Estimates of future GHG emissions that are likely to be caused by an undertaking’s key assets or products sold within their operating lifetime.
Management Board	The Management Board consists of Astrid Schlüter (CEO) and Frits Vervoort (CFO). The Management Board is supported by the Management Team consisting of Michiel de Bruine (COO) and Renée Verhulst (HR Director) for the day-to-day execution of the fund’s business plan.
Management Team	The Management Team consists of Astrid Schlüter (CEO), Frits Vervoort (CFO), Michiel de Bruine (COO) and Renée Verhulst (HR Director). The Management Team supports the Management Board for the day-to-day execution of the fund’s business plan.
Material opportunities	Sustainability related opportunities with positive financial effects that materially affect, (or could reasonably be expected to affect) the undertaking’s cash flows, access to finance, or cost of capital over the short, medium or long term.
Material risks	Sustainability related risks with negative financial effects that materially affect (or could reasonably be expected to affect) the undertaking’s cash flows, access to finance, or cost of capital over the short, medium or long term.
Minimum Disclosure Requirement	A minimum disclosure requirement sets the required content of the information that the undertaking includes when it reports on policies, actions, metrics or targets, either pursuant to a Disclosure Requirement in an ESRS or on an entity-specific basis.
Minimum Safeguards	A set of basic requirements as part of the EU Taxonomy Regulation based on recommendations, originating from the European Parliament and the Technical Expert Group, to ensure that any investments or activities labelled as “Taxonomy-aligned” meet certain minimum governance standards and do not violate social norms, including human rights and labour rights.
Non-employees	These are the people hired to take over work in case of illness or for specifically required expertise. Hence, people who carry out assignments for Vesteda and are not paid by Vesteda but for whom Vesteda pays a hiring fee. As such, these people are not part of the payroll of Vesteda.
Omnibus	A legislative simplification package aimed at consolidating and streamlining key EU sustainability frameworks, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy, into a more coherent and proportionate regulatory structure.
Physical climate risk (Physical risk from climate change)	Risks resulting from climate change that can be event-driven (acute) or from longer-term shifts (chronic) in climate patterns. Acute physical risks arise from particular hazards, especially weather-related events such as storms, floods, fires or heatwaves. Chronic physical risks arise from longer-term changes in the climate, such as temperature changes, and their effects on rising sea levels, reduced water availability, biodiversity loss and changes in land and soil productivity.
S1 Own Workforce	The first social topic of ESRS, observing the impact of the undertaking on an individual performing work within the undertaking’s own operations. The scope of this ESRS encompasses all individuals directly engaged by the organisation to perform work in one of the following manners: - Employees: individuals in a formal employment relationship with the undertaking. - Non-employees: individuals who are either people with contracts with the undertaking to supply labour (“self-employed people”) or people provided by undertakings primarily engaged in “employment activities” (NACE Code N78)
S2 Workers in the Value Chain	The second social topic of ESRS, observing the impact of the undertaking on an individual performing work in the value chain of the undertaking, regardless of the existence or nature of any contractual relationship with the undertaking. In the ESRS, the scope of workers in the value chain includes all workers directly representatives in the value chain who are or can be materially impacted by the undertaking. This includes impacts that are connected with the undertaking’s own operations and value chain, including through its products or services, as well as through its business relationships.
S3 Affected Communities	The third social topic of ESRS, observing the impact of the undertaking on people or group(s) living or working in the same area that have been or may be affected by a upstream and downstream value chain. Affected communities can range from those local communities to those living at a distance. Affected communities include actually and potentially affected indigenous peoples.
S4 Consumers and End-users	The fourth social topic of ESRS, observing the impact of the undertaking on individuals who acquire, consume or use goods and services for personal use, either for themselves or for others, and not for resale, commercial or trade, business, craft or profession purposes and on individuals who ultimately use or are intended to ultimately use a particular product or service.
Severe human rights incidents	In line with the UN Guiding Principles on Business and Human Rights, a severe human rights incident is defined by the substantial impact it may cause. This impact is assessed based o three key factors: scale, scope and irremediability. An incident may be considered severe if it meets one or more of these criteria.
SFDR	Regulation (EU) 2019/2088 of the European Parliament and of the Council with the aim to enhance transparency in the financial sector by requiring financial market participants and financial advisers to disclose how they integrate sustainability risks and consider adverse sustainability impacts in their investment decisions and advice.
Supervisory Committee	The Supervisory Committee comprises five members, which are appointed, suspended and dismissed by the participants with due observance of any nominations made and a profile as set forth in the Terms and Conditions. The members are appointed for a period of four years, which term may be extended once by four years. The Supervisory Committee supervises how the Vesteda Investment Management B.V. executes its task, as well as the general course of the fund, on behalf of the participants in the fund. The Supervisory Committee has an Audit Committee and a Nomination and Remuneration Committee, both of which are governed by by-laws.
Sustainability Statement	A sustainability statement is a document detailing an organisation's commitment to sustainability, including actions and strategies.
Taxonomy Alignment	Taxonomy alignment refers to the degree to which an economic activity complies with the EU Taxonomy Regulation by being listed as eligible, making a substantial contribution to at least one of the six environmental objectives, doing no significant harm to the others, and meeting minimum social safeguards such as the OECD Guidelines and UN Guiding Principles on Business and Human Rights.
Transition risk	Risks that arise from the transition to a low-carbon and climate-resilient economy. They typically include policy risks, legal risks, technology risks, market risks and reputational risks.
Trias Energetica	The Trias Energetica is the most commonly applied strategy for implementing energy-saving measures, ensuring they work together efficiently based on three principles. The principle of the Trias Energetica is that step 1 is the most sustainable option (requires no energy during the usage phase), and step 3 is the least sustainable (uses fossil energy); step 2 falls in between: it does consume energy, but it comes from renewable sources."
Vesteda	Vesteda Residential Fund