Financial performance
Fund return
The Fund realised a total return of 3.6% in 2023. The Fund's income return ended at 4.4%, which was 0.1 basis points higher than plan. Capital growth was negative and came in at -0.8%, compared with the budgeted -5.8%, due to higher-than-expected valuation movements.
Fund performance | 2023 | 2022 | |
Actual | Plan | Actual | |
Income return | 4.4% | 4.3% | 4.2% |
Capital growth | (0.8)% | (5.8)% | 6.1% |
Fund performance | 3.6% | (1.7)% | 10.5% |
Income return
The net rental income of € 49.8 million (2022: € 47.6 million) was € 1.4 million higher than the plan of € 48.4 million. The most significant impact on the net rental income compared to 2022 and plan was the realisation of higher rental income (€ 1.0 million) due to a higher occupancy rate and higher rents as a result of new contracts and indexation.
Administrative expenses (€ 5.2 million) were € 0.3 million higher than plan (€ 4.9 million) due to higher management fee costs (€ 0.2 million) and higher other administrative expenses (€ 0.1 million). The deviation in management fee costs was directly driven by the Fund's higher-than-planned average NAV. The finance result (€ 1.2 million) was € 1.5 million higher than plan (-€ 0.3) due to higher interest income (€ 1.5 million).
The slight increase in income return to 4.4%, compared with the plan of 4.3% was due to higher net rental income, partly offset by higher administrative and other expenses.
Capital growth
The Fund realised a capital growth of -0.8% compared with the plan of -5.8%. Highly changing market circumstances in 2023 caused all real estate forecasts to be less accurate. Especially the further rise of inflation and interest rates affected the yields and thus the capital values. Concerning the retail market, the yield increase for high street was less severe than in other segments due to the stronger than expected interest from the broad range of investors, while in the convenience market segment market rental growth counterbalanced the increase in yield.
Property performance
Property performance | 2023 | 2023 | 2022 |
Actual | MSCI | Actual | |
Income return | 5.1% | 5.3% | 4.7% |
Capital growth | (1.0)% | (4.0)% | 6.5% |
Property performance | 4.0% | 1.1% | 11.5% |
The total property return for 2023 came in at 4.0%, consisting of a 5.1% income return and 0.4% capital growth. This total property return was 292 basis points higher than the 1.1% property performance of the MSCI Netherlands Property Retail Index (all properties). This outperformance was mainly due to the Fund's capital growth, which was 295 basis points higher than the benchmark's capital growth of -4.0%. Meanwhile, the income return was 18 basis points lower than the benchmark. The outperformance is driven by the strong selection of assets in both the Experience as the Convenience segment. The Fund had a total return of 3.2% in Experience, which was 374 basis points higher than the benchmark's total return for Experience of 4.8%. The Fund had a total return of 6.1% in Convenience which was 133 basis points higher than the benchmark's total return for Experience of 4.8%.