Annex 6: External appraisers

Appraisal process for investment properties

The purpose of the appraisal is to gain an accurate and independent valuation of the assets at the end of each quarter. The valuation of the residential properties in the investment portfolio complies with the relevant legislation and regulations (AIFM Directive, IFRS and Dutch legislation and regulations).

The appraisal is conducted in accordance with the guidelines and regulations of the Nederlands Register Vastgoed Taxateurs (NRVT; Dutch Register of Real Estate Appraisers), the prevailing valuation guidelines and valuation models as laid down by the Dutch property index, IPD, and the RICS Appraisal and Valuation Standards, the Red Book (including the International Valuation Standards, IVS) or the Blue Book (including the European Valuation Standards, EVS). The valuations of the residential properties are conducted using the Return TM valuation system.

In 2019, the valuations of the properties in the portfolio were conducted by the following agencies:

  • Capital Value

  • JLL

  • Savills

  • Cushman & Wakefield

  • Dynamis

  • MVGM (for Q3 and Q4)

Valuations are conducted by qualified appraisers from these agencies; the appraisers are registered in the NRVT, which guarantees the initial qualification of the appraiser and his/her continuous training, and preferably also in RICS. In order to guarantee their independence and objectivity, every appraisal agency is contracted for a period of maximum of four years (two in-growth quarters – three base years – two out flow quarters).

For the purpose of the valuations, Vesteda divides its properties into five portfolios, each with its own appraisal agency. Once a property has been valued by the same appraisal agency for three years, it is assigned a different appraisal agency, to guarantee the objectivity of the appraisal. The appraisers value the properties that Vesteda assigns them once every three years, based on a full valuation. For this valuation, the appraiser visits the property in question and incorporates, substantiates and records all the factors relevant to the value of the property in the appraisal. In the remaining two years and quarters, the valuation is an update or a reappraisal of the previously conducted (full) appraisal. For this update or reappraisal, the appraiser does not need to visit the property and will update data and references and adjust the value on the basis of market developments relevant to the property. The existing valuation cycle for a property is structured as follows:

Four-year period:

Two quarters : appraiser A : out flow quarters and appraiser B : in-growth quarters (slow build up to full valuation)
Four quarters : appraiser B : full valuation and 3 quarters update
Four quarters : appraiser B : reappraisel and 3 quarters update
Four quarters : appraiser B : reappraisel and 3 quarters update
Two quarters : appraiser B : out flow quarters and appraiser C : in-growth quarters (slow build up to full valuation)