Key figures

Income

(in € million)

FY 2017

FY 2016

Theoretical rent

254

248

Loss of rent

(7)

(6)

Gross rental income

247

242

Service charges income

10

10

Revenues

257

252

Property operating expenses (excluding service charges)

(57)

(55)

Service charges

(16)

(15)

Other income

-

-

Net rental income

184

182

Result on projects in progress

-

1

Result on property sales

13

14

Management expenses

(16)

(22)

Interest expenses (including amortisation of financing costs)

(31)

(33)

Unwind transaction derivatives

(12)

-

Realised result before tax

138

142

Unrealised result

544

391

Result before tax

682

533

Tax

-

-

Result after tax

682

533

Revaluation of Property Plant and Equipment (PPE)

1

-

Unwind transaction derivatives

12

-

Revaluation of derivatives

6

4

Total comprehensive income

701

537

Statement of financial position

(in € million)

31 December 2017

31 December 2016

Total assets

5,084

4,375

Equity

3,819

3,045

Debt capital

1,177

1,237

Leverage ratio (in %)

23.2

28.3

Debt capital

(in € million)

FY 2017

FY2016

Interest expenses (excluding amortisation of financing costs)

30

31

EBITDA

168

160

Return on equity

(in % of opening equity)

FY 2017

FY 2016

Realised return

4.5

5.4

-          return from letting

4.5

4.9

-          return form project development

0.0

0.0

-          return from property sales

0.4

0.5

-          return from unwind transaction derivatives

(0.4)

0.0

Unrealised return

17.9

14.9

Total return

22.4

20.3

Return from other comprehensive income

0.6

0.1

Total comprehensive return

23.0

20.4

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

25.58

20.81

Proposed distribution to investors (in % of equity at year-end)

3.6

4.2

Proposed distribution to investors (in € per participation)

4.89

4.96

Non-financial figures
 

31 December 2017

31 December 2016

Number of residential units managed

22,454

22,629

-          apartments

13,605 (61%)

13,602 (60%)

-          single family houses

8,849 (39%)

9,027 (40%)

Number of residential units inflow

332

598

Number of units outflow

507

570

-          individual unit sales

507

570

-          residential building sales

-

-

Occupancy rate (in % of units)

97.6

97.8

Number of employees (in FTEs)

176

181

Loss of rent
 

FY 2017

FY 2016

Loss of rent (in % of theoretical rent)

2.9

2.5

Tenant satisfaction (rating out of 10)

6.9

7.0

Higher gross rental income

Theoretical rent amounted to €254 million in 2017, an increase of €6 million compared with the theoretical rent of €248 million recorded in 2016. Despite a slight drop in the size of the portfolio compared with 2016, the theoretical gross rental income was higher due to a higher average rent (€910 at year-end 2017, from €882 at year-end 2016). The like-for-like rent increase was 2.8% in 2017.

The loss of rent came in at 2.9% in 2017, a slight increase on the 2.5% loss of rent in 2016. This was largely due to the inflow of new complexes in our investment portfolio and the refurbishment of units in order to achieve higher rents, in line with our strategy of rent optimisation.

Gross rental income amounted to €247 million in 2017, compared with €242 million in 2016.

Increase in net rental income, despite higher planned maintenance expenses

Property operating expenses came in at €57 million in 2017, €2 million higher than the property operating expenses of €55 million recorded in 2016. This increase was largely due to higher planned maintenance costs. The gross/net ratio amounted to 25.7% in 2017, compared with 24.9% for the previous year. The non-recoverable service charges (service charges less service income) increased to €6 million in 2017, compared with €5 million in 2016. Despite the relatively higher property operating expenses and the increase in non-recoverable service charges, net rental income rose to €184 million in 2017, compared with €182 million in 2016.

Realised result

The realised result amounted to €138 million in 2017, a decline of €4 million compared with the realised result of €142 million recorded in 2016. Excluding the €12 million loss on the unwind of the derivative position in 2017, plus the reorganisation provision of €7 million in 2016, the realised result in 2017 was slightly higher than the result recorded in 2016.

Sales proceeds

In 2017, Vesteda sold a total of 507 homes from its investment portfolio, compared with the sale of 570 homes in 2016. These were all individual unit sales in both 2016 and 2017. The proceeds from the sales declined slightly to €13 million in 2017, from €14 million in 2016, with the sales margin stable at 15.9%.

Management expenses

Management expenses came in at €16 million in 2017, compared with €22 million in 2016. Excluding the one-off expense of €7 million for the reorganisation provision, taken in connection with the restructuring programme and relocation of the offices to a single centralised location in Amsterdam, management expenses amounted to €15 million in 2016. The slight increase in management expenses was due to the planned increase of IT expenses as a consequence of the transition from Maastricht to Amsterdam and the new ERP system. In 2017, a €0.9 million release from provisions had a positive impact on management expenses, compared with a €1.0 million release from provisions in 2016.

Interest expenses

Interest expenses declined to €31 million in 2017, compared with €33 million in 2016. The equity investment of €280 million on 29 May was partly used to reduce the Vesteda’s Revolving Credit Facility, as a result of which the average debt position was lower in 2017 than in 2016. The average interest rate declined slightly to 2.7% from 2.8% in 2016. This drop was the result of refinancing of mortgage loans at lower interest rates and a reduction of the notional of the interest rate swap during the year.

Unwind transaction derivatives

In December 2017, the remaining €215 million notional of the interest rate swap (IRS) was unwound for a total consideration of €12 million. As a result of the unwind in 2017, Vesteda had no interest derivatives for the hedging of its loan portfolio outstanding at year-end 2017.

Unrealised result

The continuing positive sentiment on the Dutch housing market led to a positive revaluation of 12.7% on our investment portfolio in 2017, compared with 10.1% in 2016. Appraisals of Vesteda’s investment portfolio showed a further decline of exit yields and an increase of vacant value ratios. The unrealised result amounted to €544 million in 2017, compared with €391 million in 2016.

Total comprehensive result

Vesteda’s total comprehensive result amounted to €701 million in 2017, compared with €537 million in 2016. This increase was largely due to the positive revaluation of our investment portfolio. Total return on opening equity (ROE) was 23.0% in 2017 (2016: 20.4%), 4.5% of which was realised return (2016: 5.4%), 17.9% of which was unrealised return (2016: 14.9%), and 0.6% of which was due to the revaluation of derivatives (2016: 0.1%).