Portfolio composition at year-end 2019:
A total of 18,227 homes (276 properties) across the Netherlands
Total property value of € 6,483 million at year-end 2019
Type of property
In 2019, the Fund bought and sold both family homes and apartments. Compared with 2018, the proportion of apartments in the total portfolio had increased at year-end 2019 (2019: 63.6% 2018: 61.9%). Due to our focus on inner-city areas and the fact that apartment complexes are almost always larger than projects involving houses, the proportion of apartments will continue to grow for the foreseeable future.
Allocation of investment property by type of property based on market value
In 2019, Bouwinvest updated its core region model. This updated and optimised the input (variables and sources), the weighting and the methodology. It also led to a slight change in the number of municipalities included in the updated core regions, to 126 municipalities in the new version from the 128 municipalities included in the previous version.
The plan is to have at least 80% of the total value of the portfolio concentrated in residential real estate in these core regions. Due to revaluations, together with the acquisitions and divestments we made in 2019, 99.2% of the portfolio value was located in these core regions, with by far the greatest part (85.8%) located in the core region of the Randstad urban conurbation. This is compliant with the Fund’s guideline that a maximum of 90% can be invested in the Randstad conurbation.
As the entire investment pipeline is located in the Fund’s core regions, this percentage will increase slightly in the near future. In addition, the Fund has a guideline that a maximum of 90% can be invested in the Randstad conurbation. This now stands at 85.8%.
Allocation of investment property by core region based on market value
The Fund constantly refines its long-term regional focus. This involves anticipating and responding to long-term trends that may affect the value of the portfolio, such as the growth in the number of households, the ageing population and steadily increasing urbanisation. The Fund’s core regions include the Randstad conurbation (Amsterdam, Rotterdam, The Hague and Utrecht), the Brabantstad conurbation (Eindhoven, Den Bosch, Breda and Tilburg) and cities with a strong economic and demographic outlook in the eastern region of the country (Arnhem, Nijmegen, Zwolle and Apeldoorn). These regions are expected to see the greatest population growth and largest increase in the number of households in the coming decades.
The Fund sees the liberalised sector (rents of € 720 and above) as particularly interesting, as demand is set to increase, while supply is lagging, especially in the Netherlands’ largest and most popular cities. As a result of active asset management, investments and divestments, the percentage of liberalised rental homes in the portfolio increased slightly to 92.3% in 2019, from 90.2% in 2018.
In the graph below, we added the mid-rental segment for liberalised properties with special agreements related to the likes of the rental level and rent increases.
Allocation of investment property by type of rent based on rental contract
With a slightly increased average monthly rent of € 1,104 in 2019, the Fund’s focus continues to be on the mid-rental segment. Around 66.5% of the portfolio has a monthly rent of between € 720 and € 1,250 and more than 33.7% consists of homes in the mid-rental segment (between € 720 and € 1,000). Following the acquisition of 1,192 homes in 2019, with 51% of these in the mid-rental segment, the Fund is well represented in a segment that is in high demand due to the current economic conditions. Despite the recent levelling off of house price rises, individuals, couples and families who no longer qualify for government-regulated rental housing are still finding it difficult to buy homes due to the sharp rise in house prices over the past few year, combined with the lack of affordable supply, especially in the Randstad. In addition to this, the rental market gives tenants greater flexibility, which is becoming more important as people switch jobs more frequently than ever before. The Residential Fund’s sharpened focus on affordable housing in the (lower) mid-rental segment has given it a solid portfolio of prime properties perfect for this target group.
Allocation of investment property by price level based on rental income
The following five cities account for 90% of the rents above € 1,500: Amsterdam (70%), Rotterdam (6%), Utrecht (5%), Diemen (5%), Amstelveen (4%).
Due to the refreshment of our portfolio in 2019, the weighted average age of the portfolio declined slightly compared to year-end 2019 (17.6 years in 2019 versus 18.2 years in 2018).
With a pipeline of around € 800 million and a disposal plan of around € 150 million per year for the coming years, the weighted average age of the portfolio is expected to decline further in the future.
Allocation of investment property by age as a percentage of market value