Leading institutional residential investor
Vesteda invests the pension savings and insurance premiums entrusted to it by institutional investors, such as pension funds and insurance companies, in sustainable Dutch homes for middle-income tenants.
Vesteda is an entrepreneurial and service-oriented institutional residential investor with a sizeable and varied portfolio of homes in attractive neighbourhoods in the Netherlands. With an investment portfolio of more than 28,000 homes, representing a total value of €7.9 billion at the end of the first half of 2019, Vesteda manages the largest Dutch residential fund. Vesteda is internally managed, is cost-efficient and has in-house property management.
As such, Vesteda contributes to future income security for retirees, affordable living for Dutch middle-income households and to the continued improvement of the quality of urban communities.
• Established in 1998 as Vesteda Woningen (Vesteda Residential Fund) as a spin-off of the residential portfolio of Dutch pension fund ABP
• Single fund manager
• Internally managed: no management fee structures and carried interest arrangements
• Open-end core residential real estate fund
• Broad institutional investor base with a long-term horizon
• Attractive risk profile
• Limited use of leverage (target <30%)
• Active investor relations policy
• In-house property management
• Governance in accordance with best practice guidelines, including INREV, with the emphasis on transparency and alignment of interests
• AIFMD (Alternative Investment Fund Managers Directive) Licence obtained in 2014
• Transparent for tax purposes (fund for the joint account of participants; FGR fund structure)
• GRESB score of five out of five stars and second ranking in the peer group of 13 (top 20% performers globally)
•2018 GRESB score of five out of five stars and second ranking in the peer group of 13 (top 20% performers globally)
• Vesteda offers sustainable housing and operates in a socially responsible manner
• All in the Netherlands, all in residential and related properties
• Well-diversified portfolio consisting of more than 500 residential complexes
• Focus on economically strong regions
• Focus on the mid-rental segment: monthly rents of between €711 and approximately €1,000 (€1,200 for G4 cities)
• Tenant satisfaction score of at least 7.0
• Improve sustainability of portfolio; outperform the Energy Agreement: 80% green energy ratings (A, B or C) and maximum 20% rating D (2020)
• Stable annual distributions to participants of realised return, excluding proceeds from property sales
• Outperformance of the three-year MSCI IPD/ROZ Netherlands ‘All Residential’ benchmark
Residential market more volatile, but still fundamentally strong. In 2019, the developments on the Dutch housing market became more volatile than we have seen in recent years. The strong price rises of recent years are no longer just a given fact in every region of the country.
The fundamentals, such as economic growth, low interest rates, household growth and tendency to move house, remain strong for the time being and are acting as a solid foundation of developments in the Dutch housing market.
Focus on affordability and sustainable living:
Vesteda’s main focus is middle-income households. As a socially responsible investor with a long-term perspective, we believe it is important to serve this group as effectively as possible. As a result of the scarcity of homes in this seg- ment, market rents have risen sharply in recent years, especially in the major cities. The increasing pressure on the housing market in the major cities in the Netherlands is pushing more and more people out to the suburbs and the satel- lite cities near major urban centres.
Vesteda continues to make good progress on our ESG objectives. Our efforts relate among other things to resource consumption, portfolio sustainability, stakeholder engagement and health and well-being. Thanks to its focus on sustainability, Vesteda qualifies for financing in the form of green bonds. In May 2019, Vesteda was therefore the first residential real estate investor to issue a euro green bond. We will use the proceeds of this green bond to finance our sustainability strategy. It has already helped us attract a broader group of investors, reduce our average interest rate and extend the average term of our financing facilities. Vesteda will use the €500m proceeds from the bond issue to finance homes with a minimum A EPC energy label and to upgrade homes by at least two energy label steps to a minimum C EPC energy, as well as for the financing of its acquisition pipeline.
Investment principles & strategy
The profile of Vesteda is that of a ‘core’ investment fund. Investment is only in Dutch residential and housing-related properties.
At home with Vesteda. Our mission is to make sure that all our stakeholders feel at home with us. That is especially true for our tenants, the investors who invest in our fund and our employees.
Vesteda is the expert in residential living. We have direct contact with our tenants. This is why we know their current and future living requirements better than anyone. We use our knowledge to constantly improve our services and our existing residential portfolio. We also add residential complexes that are tailored to the living requirements of our tenants now and in the future. We do so in sustainable and innovative ways. Together with our tenants, we create an environment in which they feel at home.
Vesteda’s mission and vision are translated into strategic and portfolio objectives.
Tenants: “Provide high-quality and convenient housing to mid-rental segment tenants in urbanised areas at affordable prices”
Participants: “Provide long-term investors with an attractive risk-return pro- file in a pure play Dutch core residential property fund”
Portfolio: “Improve the quality and sustainability of our portfolio to ensure the stable growth of rental income and MSCI outperformance”
Organisation & staff: “Enhance a collaborative, service-oriented mentality, supported by smart technology, while being the employer of choice in our market”
Funding: “Provide a robust and well-diversified, flexible funding structure with low leverage and low cost of largely fixed-rate debt”
Vesteda compares its yield with the MSCI IPD/ROZ Netherlands ‘All Residen- tial’ benchmark that expresses the average yield of Dutch residential property investments over various periods. The index gives the market average of actual results of all participants (including Vesteda), allowing for sales, purchases and redevelopments in addition to the standing investments.
Vesteda Residential Fund is a contractual investment fund (beleggingsfonds) as defined in section 1:1 of the Dutch Financial Supervision Act (AFS).
The manager, in its capacity as manager and operator of Vesteda Residential Fund, is subject to regulation by the Dutch Financial Markets Authority (Autoriteit Financiële Markten) and the Dutch Central Bank (De Nederlandsche Bank). The manager obtained a license to act as manager of alternative investment funds in accordance with article 2:67 of the AFS on 17 February 2014. The participation rights can only be acquired by professional investors as defined in section 1:1 of the AFS.
This presentation may contain forward-looking statements. These forward-looking statements are based on current assumptions about future activities and are subject to known and unknown factors and other uncertainties, many of which are beyond Vesteda’s control, and so actual results in the future may differ materially from these expectations.