Portfolio developments in 2024

Portfolio composition

In 2024, the AL&C Fund delivered 14 locations for a total of 341 units. The portfolio reached a new milestone of 109 locations, comprising of 2,279 care homes. Dagelijks Leven expanded by nine locations, Het Gastenhuis by four locations and the first Seasons assisted living property became operational. The Dagelijks Leven locations were part of the Luxor2+ portfolio acquired in 2023. Both Dagelijks Leven and Het Gastenhuis have ambitious growth objectives and aim to add more locations in the coming years. In terms of the relative investment volume, Dagelijks Leven remained the largest healthcare provider in our portfolio.

Additionally, we introduced our assisted living concept, ‘Seasons’, which bridges the gap between residential living and nursing care. The goal is to establish an efficient care delivery model by incorporating informal care into a community environment. This approach helps to lower healthcare costs, eases the burden on healthcare providers and encourages healthier aging. The share of locations in the low-priced segment (Dagelijks Leven) decreased from 63% to 49%. The share of locations in the mid-priced (Futura Zorg and Het Gastenhuis) and higher-priced segment (De Laren) increased slightly to 39% and 12%, respectively.

At year-end 2024, the committed pipeline consisted of 17 turnkey projects for a total of 723 residential units. It includes eight Het Gastenhuis locations, six Dagelijks Leven locations and three assisted living projects: Seasons De Trappenberg (Huizen), Seasons The Sphinx (Amsterdam) and Seasons Oude Tempel (Soesterberg). The soft pipeline consisted of one Het Gastenhuis turnkey project and one assisted living project.

Figure 5: Number of locations per provider

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Figure 6: Relative investment volume per provider

Fund developments

We periodically conduct a materiality assessment to bring our strategy and actions in line with stakeholder interests and priorities and to better manage our impacts on the economy, environment and people. We use the outcomes of the materiality assessment to determine our targets and KPIs. The materiality assessment also helps us identify what topics to report on. In this section, we report on the topics that have been determined most material to the Fund. The Annex contains additional information on the materiality assessment.

Resident satisfaction

We closely track resident satisfaction to assess the Fund's effectiveness in meeting the expectations of residents and to monitor the quality of care provided by our care partners. In 2024, our care homes received an average score of 9.3 in the Zorgkaart Nederland survey of residents and their families. In the accommodation category – which is most material to the AL&C Fund – our facilities received an average score of 9.4. Nearly all properties scored higher than the care home benchmark score of 9.2.

• Dagelijks Leven 9.3 (based on 242 surveys)

• Het Gastenhuis 9.6 (based on 74 surveys)

• Zorggroep De Laren 9.9 (based on 10 surveys)

• Futura Zorg 9.3 (based on 8 surveys)

Figure 7: Resident satisfaction per provider

The AL&C Fund actively encourages all care providers to join the Zorgkaart Nederland platform in order to monitor resident satisfaction on a regular basis.

Investing in the mid-priced segment

The AL&C Fund has a strong focus on affordability. We aim to invest in nursing homes and assisted living properties in the lower-priced and mid-priced segments for at least 75% of the total portfolio book value. In 2024, we exceeded this target, with these segments making up 88% (2023: 86%) of the total portfolio in terms of book value.

GPR certificates

To improve our score in the Building Certifications category, we continue to obtain GPR certificates for our properties. GPR is an instrument for measuring the sustainability of a property. Measuring the current sustainability of our properties in five different categories (energy use, environmental impact, health, quality and future value) allows us to set goals for future optimisations and track the impact of our optimisation efforts. In the current year, our primary objective has been to certify all newly build properties within six months of completion. However, this target has not yet been fully achieved due to delays at the certification organisation and the unavailability of required documentation within the first six months. As of now, we have successfully certified four of the properties completed in 2024, and we continue to work towards certifying the remaining ones as soon as possible.

GRESB performance

GRESB allows for an objective assessment of the sustainability of our portfolio. It takes a holistic view of sustainability, scoring real estate funds on environmental, social and governance indicators of sustainability. In 2024, the AL&C Fund maintained the maximum five-star GRESB rating and received the GRESB award for Overall Global Sector Leader, Western Europe Healthcare Senior Homes Core for the fifth consecutive year. The award recognises our Fund's commitment to incorporating sustainability into our operations and communicating our sustainability performance to our investors and stakeholders.

Energy and water consumption

The AL&C Funds aims to lower the energy consumption of properties and reduce the CO₂ emissions of its portfolio. We monitor the energy and water consumption of our properties to set goals for optimisation. We use smart meters and an environmental KPI dashboard to track and report on the sustainability performance of our buildings. Energy consumption, carbon emission and water use data for the prior year is not completely available at the time of submission of this annual report. Therefore, the 2023 figures are included in this report.

Energy Use Intensity (EUI) provides a consistent unit of measurement to report on the energy efficiency of our properties by converting heat energy into GJ and gas use into m³ to kWh/m /year. In 2023, the average EUI of our properties was 109.1 kWh/m²*, compared to 111.4 kWh/m² in 2022. The average location-based Carbon intensity (CI) of our properties was 22.2 kg/m²/year, this is a decrease in comparison to previous year CI of 23.3 kg/m²/year. The overall reduction can be attributed to the completion of new properties that comply with the latest requirements. 

The total water usage was 106,631.44 m³(2023: 98,845 m³). The water use intensity in 2024 was 0.98 m³/m² (2023: 0.91)*, which is equal to 980 litres water per m².

Energy performance certificates

The energy performance certificates (EPC) within our portfolio reflect a strong focus on sustainability and energy efficiency. Currently, 99% of the portfolio holds an A or B EPC*(2023: 99%). The majority of the properties have been awarded an A or higher certificate, while one property has a B certificate and one property has a C certificate. The high proportion of A and B certificates aligns with our SFDR standards, reinforcing our commitment to sustainable investments. We continue to focus on optimizing energy performance across all assets to further enhance compliance with our sustainability objectives

^{*Please refer to the KPI tables in the Annexes. KPIs include limited assurance by external auditor. A separate assurance report is included on page 65.}

EU Taxonomy

In 2024, the AL&C Fund voluntarily determined the alignment of its portfolio with the EU Taxonomy for the second time.

This annual report outlines ALC Fund's alignment with the criteria set forth in the EU Taxonomy Regulation (EU) 2020/852, aiming to provide transparency regarding our environmental performance and commitment to sustainable development objective. The SFDR Annex, included in the annual report as other information, contains three required Taxonomy KPIs.

In addition, we have voluntarily assessed our real estate-related assets against the EU Taxonomy alignment criteria for Climate Change Mitigation activity 7.7. Based on this alignment assessment, we are able to categorise 83% of assets as Taxonomy-aligned (2023: 82%). Unlike last year, the 2024 assessment includes assets under construction, other assets, and cash in the analysis. This change is also reflected in the comparative figure for 2023. Our commitment to sustainability is reflected in our business practices and investment strategies.

Last year, we developed adaptation plans aimed at properties with elevated gross risks, such as risks related to flooding, drought and heat stress. In 2024, we converted these gross risks into net risks by utilising building-specific characteristics, as outlined by the Dutch Green Building Council (DGBC). This has led to changes in the risks per property, which may result in a revision of the previous plan. In the current year there we also determined whether there are already adapation measures in place. 13 measures are implemented in this year and previous years which mitigate high or very high climate risks. For the upcomming years new measures are planned. 

We use a flowchart to determine the adaptation plan. The flowchart indicates whether an adaptation plan is needed for EU Taxonomy alignment. The AL&C Fund has six properties with elevated risks. We have already implemented four measures at properties with an elevated risk.