Message from the Chairman

Message from the Chairman

Dear stakeholders,

Last year, we finally saw the turnaround in the residential market we expected. This market has always had strong fundamentals, even during the crisis, which is why we continued to invest heavily in this segment. We are now very clearly reaping the benefits of that strategy. The drop in values created numerous opportunities to acquire high-quality properties at a time of increasing scarcity in the liberalised rental sector, especially in major urban areas and elsewhere in our core regions.

We have taken full advantage of those opportunities in recent years, especially the past two years, and now we are seeing values rise as investment volumes increase pretty sharply. Thanks to this and the high quality of our portfolio we saw a positive indirect return in 2014, which we expect to continue in the next few years. On top of that, we saw the completion of several new-build projects last year, almost all of which were fully let before completion, giving us a very solid direct return. Perhaps even more importantly, thanks to the record investments of over € 400 million in 2014 we now have a secured pipeline of new residential properties for the coming years. Because we believe the scarcity of high-quality rental units in the liberalised sector will sustain we will certainly continue this strategy for the foreseeable future.

Many investors share this view on the residential market, something clearly attested to by the fact that we now have five new investors in the Residential Fund. Following the Rabobank pension fund in January 2014, the pension fund for the Dutch confectionary industry joined the Fund in July of that year. Then by January 2015, three more pension funds had committed to investing in the Fund. This gives us a total of six investors, and some of the new investors have already said they would like to increase their allocation of investments in residential real estate via the Fund. These new investments added over € 170 million to our war chest for new investments, and we will continue to focus on acquiring quality real estate, optimising our portfolio and bringing it even further in line with our long-term strategic goals. We took the opportunity to take a significant step in that direction last year, by disposing of € 116 million in non-core properties and increasing our focus on the liberalised rental sector. This was basically our three-year disposal target, and clear evidence that we are now operating in a seller’s market. This presented us with an excellent opportunity to sell a substantial portion of the portfolio at a very good price.

As a result, we have put divestments on the back burner for this year, with a very modest target of € 15 million for 2015, while we expect to invest between € 200 million and € 300 million in the same period. As I’ve said, it’s a seller’s market right now and there is a lot of interest in the residential market, so competition for top quality assets is likely to be quite fierce.

I would like to thank all our employees for their commitment, dedication and hard work in what was a very busy, challenging and exciting period for the Fund. And my thanks to the members of the Shareholders Committee we put in place last year, completing the governance of the Fund. I look forward to working with them again in 2015.

Dick van Hal
Chairman of the Board of Directors

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