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Performance on strategy

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Performance on diversification

Type of property

The Covid-19 pandemic has accelerated a number of existing trends, which are likely to increase demand for sustainable and easily accessible office buildings that are well suited to act as a social hub for users. For one, tenants are already looking for even more flexibility, in terms of both office use and in terms of flexible leases. In addition, a healthy working environment is very much top of mind right now, and we could see the introduction of higher climate control and air quality standards. Very importantly, the fact that so many people have been working from home has highlighted just how important offices are as meeting places and workplaces for inspiration, brainstorming and innovation. The fact that many companies are likely to downsize their overall office space will create additional demand for more compact (flexible) offices. These will often be part of larger – multi-tenant and multifunctional – office complexes in vibrant and very accessible locations, as these offer the flexibility and the additional facilities and amenities seen as essential by most modern office users.

Multiple lease agreements reduce the volatility of revaluations and help increase the control of asset management risks. Furthermore, the Fund focuses on locations that attract a widely diverse group of people and offer a mix of culture, education, sport and work facilities. The share of multi-tenant assets in the portfolio had increased slightly, to 64.5% at year-end 2022 (2021: 65.2%). The addition of Central Park (Utrecht) to the portfolio is fully in line with the Fund's focus on multi-tenant buildings.

Since the reduction of Covid restrictions, the dynamics on the occupier marke have increased. There is a particular demand for sustainable buildings in easily accessible locations with something extra to encourage employees to return to the office. Central Park (Utrecht) has benefited from this. The Fund signed new lease contracts for a total of 7,334 m2 in 2022, which means that the occupancy rate at Central Park had risen to 75.1% at 31 December 2022.

Portfolio composition by single versus multi-tenant based on market value

Tenant mix

Most of the Fund’s tenants are considered to have a low debtor’s risk. The top five tenants accounted for a total of 38.2% of the total potential rental income in 2021 (2020: 45.3%), which is in line with the Fund's diversification guideline that the total potential rental income of the five largest tenants may provide a maximum of 50% of the Fund's total potential rental income.

Allocation of investment property by tenant sector as a percentage of rental income
Top 10 major tenants based on passing rent

Expiry dates

Close relationships with its tenants enable the Fund to propose lease extensions at the right time. However, the Fund does take lease expiries into account and anticipates these to attract new tenants. This is one of the reasons tenant satisfaction is so important and why this is a key part of the Fund’s strategy.

The Fund realised a lease extension with the Central Government Real Estate Agency for Centre Court (The Hague). It is for approximately 28,616 m2 of office space and 350 parking spaces. The contract had an initial termination date of 31 December 2023 and a long new lease term has been agreed, so it makes a substantial contribution to both an increase of secured rent and the lease spread. The transaction resulted in a positive revaluation and offset the write-downs on a portfolio level to some extent.

Due to the acquisition of De Zeven Provinciën (The Hague), the tenant, BarentsKrans, is new in the top 10 of largest tenants.

As of 31 December 2022, the weighted average remaining lease term of the Fund stood at 5.6 years. This is equal to the position a year earlier, which confirms the increase in secured rent.

Expiry dates as a percentage of rental income


Reducing the age of the Fund’s portfolio is not a target in itself. More important than age is the asset’s distinctive character, its location, its sustainability and its return prognosis. Some assets have a listed status based on their rich history and architecture. The age of some assets is determined by their date of completion after redevelopment. This means that the construction year of The Garage and Move, which were originally built in 1962 and 1931, is being reported as 2019. However, some older assets that have been or are being renovated and upgraded in phases retain their original construction date, despite being equipped with state-of-the art climate control systems, renewable energy sources and other modern amenities and facilities. Due to the year of construction of the purchase of De Zeven Provinciën (The Hague, 1960), the share of buildings older than 40 years has increased. Other shifts compared to 2021 are due to revaluations.

Allocation of investment property by age based on market value

Allocation by risk

In terms of risk diversification, at least 90% of the investments must be low or medium risk. The actual risk allocation at year-end 2022 is shown in the figure below. Every year, the Fund assesses all properties separately. In 2022, the Fund was classified as 100% low to medium risk and as such was consistent with the framework of the Fund conditions.

Future investments in WTC Rotterdam and Central Park in Utrecht will run parallel to an increase of their occupancy rates and will therefore lower the risk profile of the Fund even further. For instance, WTC Rotterdam is currently categorised as medium risk, but will be categorised as low risk once its occupancy rate climbs above 85%, something the Fund expects this to be solid enough in 2024. This means the Fund has sufficient leeway on the risk front to acquire an office redevelopment project or an office building with a low occupancy rate.

Allocation of investment property by risk category based on market value

Financial occupancy

The Fund's average occupancy rate was 90.4% over 2022 (2021: 90.4%). New rental transactions for Central Park in particular contributed to this. The occupancy rate of that asset has increased during 2022 from 44.3% to 75.1% as of December 31, 2022.

Financial occupancy rate