Fund return

The Fund realised a total return of 0.6% in 2022, consisting of a 1.9% income return and -1.3% capital growth. Net rental income, administrative and finance expenses were the main drivers for the income return. The decline in capital growth was primarily driven by uncertainties triggered by the geopolitical and economic effects of the war in Ukraine, high interest rates, inflation and energy prices. 

The total fund return ended significantly below target. The Fund’s income return ended on target and capital growth 7.8% points below target as a result of the uncertainties in the market. 

Income return

Net rental income of € 191.2 million was € 3.1 million higher than the plan of € 188.1 million (2021: € 186.4 million). The deviation from plan was due to higher gross rental income (€ 2.8 million), higher service charge income (€ 0.3 million), higher other income (€ 0.3 million) and lower property operating expenses (€ 0.3 million), partly offset by higher service charge expenses (€ 0.6 million). 

Administrative expenses (€ 41.0 million) were € 2.6 million higher than plan (€ 38.4 million) due to higher management fee costs, directly driven by the Fund's higher average NAV. Finance expenses totalled € 4.0 million, which were almost on plan (€ 4.1 million). 

The higher net rental income and higher administrative expenses resulted in an income return of 1.9%, in line with the plan. 

Capital growth

The Fund realised capital growth of -1.3% compared with a plan of 6.5%. This figure confirms that the impact of geopolitical uncertainties, high inflation, high energy prices and the uncertainty regarding the potential regulation of the residential market had a significant impact on the valuation of the (rental) housing market.

Property performance

The total property return for 2022 came in at 1.0%, consisting of a 2.4% income return and -1.4% capital growth. The Fund showed an underperformance of 0.6 basis points versus the MSCI Netherlands Index (all properties). The underperformance was largely driven by the capital growth which was 0.4 basis points lower than the benchmark's capital growth of -1.0%. In addition, the income return was 0.2 basis points lower than the benchmark's income return of 2.6%. 

The Fund return (INREV) and property return (MSCI) are different performance indicators. The Fund return is calculated according to the INREV Guidelines as a percentage of the net asset value (INREV NAV) and the property return is calculated according to the MSCI methodology as a percentage of the value of the investment properties. For example, INREV includes cash, fee costs and administrative costs in the calculation of the income return (INREV). Furthermore, the amortisation of acquisition costs is treated differently by INREV and MSCI.