Value of investment portfolio

The table below shows the value of the investment portfolio, which had increased to €7,024 million as at 31 December 2018, an increase of 47.3% compared with the previous year-end (2017: €4,778 million).

Investment portfolio, value

Year-end (€ million)

2018

2017

2016

2015

2014

Single family houses*

2,845

1,753

1,578

1,474

1,399

Apartments*

4,179

3,025

2,629

2,252

2,193

Total

7,024

4,778

4,207

3,726

3,593

Total number of residential units

27,809

22,454

22,629

22,599

22,990

*Including value of associated parking/garage spaces and commercial space in projects.

Value changes in detail

Based on the value at the beginning of 2018, the revaluation of the investment portfolio was 13.5%. The acquisition of the former Delta Lloyd portfolio and the sale of the urban non-core portfolio were the main drivers behind the changes in the value of the investment portfolio. The graph below shows the changes and the impact of revaluation.

Investment portfolio, changes in value (in € million)

Capital expenditures amounted to €34 million compared with €25 million in 2017. This increase was largely due to the acquisition of the former Delta Lloyd portfolio and the increased investments in improvements to the sustainability of our portfolio. Inflow and outflow resulted in a net inflow of €1,452 million. Property revaluations added €760 million, or 13.5%, to the value of the portfolio.

Revaluation (number of residential complexes)

The portfolio revaluation amounted to 13.5% for 2018. This positive result was largely related to the primary region (+13.8%) and the mid-rental segment (+13.8%).

Average value per residential unit

The average value per residential unit in the portfolio had increased by 14.6% to €244,000 at year-end 2018. This increase was largely the result of the revaluation of 13.5%. Additionally, there was a (portfolio) mix effect due to the addition of new units with a higher value and the lower value of the units sold.

Investment portfolio, average value per residential unit

Year-end (€ thousand)

2018

2017

2016

2015

2014

Average value per residential unit

244

213

186

160

152

Gross initial yield

The gross initial yield on the portfolio, defined as the theoretical rent at year-end divided by the value of the portfolio at year-end, declined for the fourth consecutive year. In 2018, the gross initial yield declined by 70 basis points to 4.7%. This decline in yield is the result of favourable market circumstances and increased competition, which was also reflected in the positive revaluation of the portfolio.

Portfolio, gross yield

(in %)

2018

2017

2016

2015

2014

2013

Gross yield

4.7

5.4

5.9

6.6

6.9

6.8