Outlook

The higher risks associated with the real estate market was underlined by the continued yield decompression throughout 2023. The uncertain impact of rent regulation, higher construction costs and rising interest rates created a weaker real estate market environment. The downward trend that started in mid-2022 continued in the following one and a half years. The last quarter shows further signs of a gradual trend toward stabilisation of real estate valuations.

The long term trend for the AL&C Fund is likely to remain favourable based on the significant shortage of health care real estate in combination with the long term demographic trends.

The AL&C Fund is well capitalised but short term growth objectives might however be hampered due to a lack of feasible new projects. The existing modern and energy efficient portfolio remains resilient in the current market environment.

For the first half year of 2024 we foresee a gradual reversal of the negative trend which is amongst others driven by a pick-up in investment market activity and limited supply for a real estate segment which is in high demand.

Amsterdam, the Netherlands, 19 April 2024

Wim Wensing, Fund Director and Portfolio Manager

Niclas von der Thüsen, Director Finance and Risk

Susan van de Koppel-Nagelmaeker, Portfolio Manager