Last year was another strong year for the Dutch residential real estate market. Investors continued to pursue residential real estate buying opportunities. Several large existing portfolios were sold at record low yields.
The competition for new-build high-quality residential product remains fierce. Furthermore, rising construction costs, due in part to tightening sustainability requirements, high land prices and the nitrogen crisis are making it difficult for new-build projects to get off the ground. Yield compression in larger cities seems to be bottoming out, while we are still seeing yield compression in smaller cities and municipalities around larger cities. Vesteda continues to target quality rather than volume and remains selective regarding acquisitions.
Portfolio inflow 2019
In 2019, Vesteda added a total of 817 residential units to its investment portfolio, including 1 transformation unit. The table below provides an overview of the new-build additions to the investment portfolio in 2019.
New-build additions to the investment portfolio in 2019
Residential building | Location | Total number of units | Apartments/Family houses | Region | Rental segment | Quarter of completion/delivery |
De Boulogne 1 | Utrecht | 45 | Apartments | Primary | Mid | Q1 |
De Boulogne 2 | Utrecht | 24 | Apartments | Primary | Mid | Q1 |
De Belvedere 2 | Utrecht | 16 | Apartments | Primary | Mid | Q1 |
De Belvedere 3 | Utrecht | 32 | Apartments | Primary | Mid | Q1 |
De Belvedere 4 | Utrecht | 27 | Apartments | Primary | Mid | Q1 |
De Rossfeld | Utrecht | 65 | Apartments | Primary | Mid | Q1 |
Koningoord | Berkel Enschot | 33 | Family houses | Primary | Mid | Q1 |
Parijsh | Culemborg | 42 | Family houses | Secundary | Mid | Q1 |
Keijzershof | Pijnacker | 26 | Family houses | Primary | Mid | Q1 |
Hooghkamer | Voorhout | 55 | Family houses | Secundary | Reg/Mid | Q1/Q4 |
De Enter | Amsterdam | 96 | Apartments | Primary | Mid/High | Q1 |
Willemstoren | Rotterdam | 76 | Apartments | Primary | Mid/High | Q2 |
De Lanen | Rosmalen | 39 | Family houses | Primary | Mid | Q2 |
Helenahof | Arnhem | 55 | Apartm. & Fam. houses | Primary | Mid | Q2/Q3 |
De Draai | Heerhugowaard | 31 | Family houses | Secundary | Mid | Q3 |
Kolenpark | Groningen | 139 | Apartments | Primary | Mid | Q3 |
Hoog Dalem | Gorinchem | 15 | Family houses | Primary | Mid | Q4 |
Total new-build additions to the portfolio | 816 | | | | |
Pipeline year-end 2019
In 2019, Vesteda added a total of seven new-build projects, totalling 606 residential units to its pipeline. The total committed pipeline at year-end 2019 was 1,223 units, with an estimated market value at completion of €381 million. All projects are an excellent fit with Vesteda’s portfolio strategy in terms of region, rental segment and energy label. The majority of the projects are located in urban expansion sites of larger cities in the Netherlands, where Vesteda can benefit from the promising continued development of the areas.
Composition of the pipeline at year-end 2019
Residential building | Location | Total number of units | Apartments/Family houses | Region | Rental segment | Completion/delivery |
Bensdorp | Bussum | 40 | Apartments | Primary | Mid | 2020 |
Hoog Dalem | Gorinchem | 25 | Family houses | Primary | Mid | 2020 |
De Generaal | Rijswijk | 120 | Apartments | Primary | Mid | 2020 |
Noorderhaven | Zutphen | 126 | Apartm. & Fam. Houses | Secondary | Mid | 2020 |
De Toren | Hoorn | 72 | Apartments | Primary | Mid | 2020 |
Zuidpoort | Veenendaal | 34 | Family houses | Primary | Mid | 2020 |
Koningsoord | Berkel Enschot | 32 | Family houses | Primary | Mid | 2020 |
Punt Sniep | Diemen | 202 | Apartments | Primary | Mid | 2020 |
Willemsbuiten | Tilburg | 83 | Apartments | Primary | Mid | 2021 |
Westerwal | Groningen | 171 | Apartments | Primary | Mid | 2021 |
Onder de Linden | Oosterhout | 39 | Family houses | Primary | Mid | 2020 |
Tromppark | Dordrecht | 40 | Family houses | Primary | Mid | 2021 |
Westergouwe | Gouda | 71 | Family houses | Primary | Mid | 2021 |
The Ox | Amsterdam | 168 | Apartments | Primary | Reg/Mid | 2022 |
Total committed pipeline | | 1,223 | | | | |
Property sales in 2019
Vesteda divested 1,336 units that no longer met our key investment criteria, in one large portfolio transaction, one smaller portfolio transaction and several individual unit sales. Most of these assets were located in the central and southern parts of the Netherlands. Furthermore, we took advantage of the current attractive market conditions to reduce our stake in what we see as more volatile and higher risk properties that require high operating and capital expenditures and have limited rental upside.