Investing in affordable real estate

Despite not signing any new acquisition agreements, the Fund added 314 homes in the mid-rental segment to the portfolio last year. Driven by current high inflation levels, the Fund started to focus more actively on the affordability of its homes, taking additional measures to reduce energy and service costs where possible. The Fund is heavily involved in the ongoing national debate on increasing the supply of affordable homes. Together with the IVBN, the Fund has been in close contact with the Ministry of the Interior to provide input on the upcoming new rental regulation. At this point in time, the proposed measures will only apply in the event of tenant turnover (new rental agreements) and are expected to have a relatively minor impact on the Fund’s rental income. However, the definitive measures are still uncertain, as parliament has yet to issue a decision on this front. The new regulations are scheduled to come into effect on 1 July 2024. 

Focus on liberalised rental sector

The Fund sees the liberalised sector (monthly rents of € 808 and above) as particularly interesting, as demand is set to increase, while supply is lagging, especially in the Holland Metropole. With more than 90% of its properties in the liberalised segment (including mid-rental), the Fund’s focus continues to be on this segment. 

In the graph below, the Fund has added the mid-rental segment for liberalised properties subject to agreements with local governments, for example regarding rental levels and rent increases. If the proposed legislation around mid-rentals is passed, the proportions in this chart will shift substantially.

Allocation of investment property by type of rent based on rental contract

Price level

Around 64% of the current portfolio has a monthly rent below € 1,380. This means that the majority of homes are affordable for lower to upper middle-income households. This is primarily because the high proportion of energy-efficient homes ensures that energy costs for the Fund’s tenants are relatively low, compared to the national average. The homes in the higher segment are in locations where the demand for this type of home is substantial. The following six cities account for almost 90% of the rents above € 1,640: Amsterdam (62.5%), Rotterdam (6.3%), Diemen (5.2%), Haarlem (5.2%), Utrecht (5.1%) and The Hague (4.7%).

Allocation of investment property by price level based on rental income