Performance

Rental income

The total market rent was 2.1% above the theoretical rent at year-end 2019. The reversionary potential declined compared to prior year, as in 2018 the Delta Lloyd portfolio led to a significant increase in the reversionary potential.

The total theoretical rent at year-end 2019 was lower than at year-end 2018, due to the fact that we had more outflow than inflow in the portfolio in 2019.

Market rent and theoretical rent

(€ million, year-end)

2019

2018

2017

2016

2015

Market rent

337

350

264

250

243

Theoretical rent

330

332

260

251

244

Average monthly rent per unit

(€, year-end)

2019

2018

2017

2016

2015

Average monthly rent

968

945

910

882

856

The chart below shows the impact of the rent increase, reletting and portfolio inflow/outflow.[1]

Development of total theoretical rent

(%)

2019

2018

Like-for-like rental increase

3.6

2.7

- Average rental increase for current tenants

3.1

2.4

- Re-letting

0.5

0.4

Inflow and outflow of properties in the portfolio

0.0

25.0

Total increase in theoretical rent

3.6

27.7

  • 1 Theoretical rent is measured at a single point in time (year-end) and therefore does not correspond with the increase in theoretical rent in 2019 compared to 2018, which you will find in Note 6 of the consolidated financial statements in this report.

Occupancy

The occupancy rate (in units) increased from 97.5% at year-end 2018 to 98.4% at year-end 2019. Demand remained high, which enabled us to record a strong reletting performance. Tenant turnover slightly increased to 12.8%, from 12.4% in 2018.

Occupancy (%, year-end) and tenant turnover (%)

Rental income

In 2019, the gross/net ratio improved to 23.3%, compared with 25.6% in 2018, driven by the portfolio sales programme over the past two years, which gave us a qualitatively better portfolio. This combined with the inflow of new developments and the addition of the Delta Lloyd portfolio in 2018, has enabled us to realise efficiency benefits due to our size and composition.

Rental income

(€ million)

2019

2018

2017

2016

2015

Gross rental income

329

281

247

242

237

Net rental income

252

210

184

182

176

Gross/net ratio

23.3%

25.6%

25.7%

24.9%

25.5%

Market value

The table below shows the value of the investment portfolio, which increased to €7.8 billion as at 31 December 2019 (including IFRS16), 11% higher than at year-end 2018, with a lower number of units. This higher valuation was largely driven by market developments and lower yields. In addition to this, the quality and value of the inflow was higher than the quality and the value of the outflow. We also made value-add investments in the sustainability or quality of our homes.

Changes in market value (€ million)

The revaluation of the total portfolio was 8.7% in 2019. This positive result was driven by the primary region (8.8%), across all rental segments, except for the regulated mid segment which saw slightly lower revaluation gains.

Revaluation in 2019

Average value per residential unit

The average value per residential unit in the portfolio increased by 13.9% to €278 thousand at year-end 2019. This increase was largely the result of the revaluation of 8.7%. The valuation increase was also partly driven by the new portfolio mix effect, due to the addition of new units with a higher value and the divestment of units with a lower value.

Average market value per unit

(€ thousand, year-end)

2019

2018

2017

2016

2015

Average value per residential unit

278

244

213

186

160

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 (excl. IFRS16), declined for the fourth consecutive year. In 2019, the gross initial yield declined by 40 basis points to 4.3%. This decline in yield was the result of favourable market conditions and increased competition, which was also reflected in the positive revaluation of the portfolio.

Gross initial yield

(%)

2019

2018

2017

2016

2015

Gross initial yield

4.3

4.7

5.4

5.9

6.6