At year-end 2019, 92% of the investment portfolio was located in Vesteda’s primary regions. The portfolio disposals we completed in 2019 reduced our exposure in other regions nearly to 0%.
In 2019, we updated our regional segmentation and added a study on the accessibility of jobs in the Netherlands as an additional criterion in our decision-making. Urban areas have grown significantly in recent decades due to the fact that they offer employment, shopping amenities, leisure, schools, hospitals, etc. Mobility is the key dynamic of urbanisation. The most accessible areas in and around cities, those that offer fast connections to work, city life and leisure will be the most popular areas of the future.
As a result of our redefinition of the regions, we upgraded or downgraded 93 out of a total of 380 municipalities. This new segmentation led to a reduction in the total number of primary regions. The increase in % of Primary regions in 2019 is due to two portfolio sales and the inflow of new-build homes in these regions.
Composition of the investment portfolio by region (%, weight in value)
Vesteda is playing its part in delivering affordable homes in the mid-priced rental segment. As a socially responsible investor, we recognise that finding an affordable home is a growing problem, especially for low-income and middle-income households. The only way to remedy these shortages, including all the knock-on effects of these shortages, is to build more homes. Enlarging the supply of mid-priced rental homes will help to create a balanced housing market and attractive and liveable cities. In line with our strategy of focusing on the mid-rental segment of the market, last year we introduced a new rental segment, the mid regulated rental segment. Under the right conditions, this gives us the opportunity to invest in attractive and affordable homes for the long term.
Furthermore, one of the other measures we took was to cap our annual rent increase in 2019, similar to what we did in 2018. However, we still saw a shift in our overall portfolio from the mid-rental segment to the higher segment due to an increase in market rents in large cities in the Netherlands.
Composition of the investment portfolio by rental segment (%, weight in value)