Definitions

AEGON

AEGON Levensverzekering N.V., a public company under the laws of the Netherlands with its registered office in The Hague and its principal offices at AEGONplein 50, 2591 TV The Hague, the Netherlands.

AIFMD

The Alternative Investment Fund Managers Directive. (Directive 2011/61/EU of the European Parliament).

AFM

The Dutch Authority for the Financial Markets (AFM). The AFM has been responsible for supervising the operation of the financial markets since 1 March 2002.

Amvest

Amvest Vastgoed B.V. or any of its subsidiaries (Amvest Development Fund B.V., Amvest Management B.V., Amvest RCF Custodian B.V., Amvest RCF Management B.V., all private limited liability companies (besloten vennootschap met beperkte aansprakelijkheid) under the laws of the Netherlands) with its principal offices at Zeeburgerkade 1184, 1019 VK Amsterdam, the Netherlands.

Amvest Development B.V.

The former development company of Amvest.

Amvest Development Fund B.V.

A newly incorporated company that was set up by the launching Investors AEGON and PfZW (as per 16 February 2018) following a restructuring of Amvest. This restructuring was prompted by management to make a more clear separation between development and management activities.

Amvest Management B.V.

The Fund Services Provider (also see Fund Services Agreement).

Amvest RCF Custodian B.V.

The Custodian of the ARC Fund. The key responsibility of the Custodian is to hold and dispose of legal title to all assets of the FGR at the Investors’ risk and expense. The Custodian will do so on the instructions of the Fund Manager, but will not engage actively in the management of the ARC Fund.

Amvest REIM B.V.

The AIFMD licensed Fund Manager of the ARC Fund.

Amvest Residential Core Fund (ARC Fund)

The investment fund consisting of (as of 1 January 2016) one fund for joint account (FGR), Amvest RCF Custodian B.V. and Amvest REIM B.V. The FGR holds the economic ownership of the portfolio. Amvest RCF Custodian B.V. is the legal owner of the portfolio and Amvest REIM B.V. is the Fund Manager.

Asset management

The management of all properties and real estate items at property level in accordance with the ARC Fund’s strategy.

Auditor

KPMG Accountants N.V. or such other registered auditor or other expert as referred to in Section 2:393, sub-section 1 of the Dutch Civil Code as appointed from time to time by the Fund Manager, subject to the approval of the Advisory Board.

BAR/NAR-method (yield method)

The appraisal method based on:

1. cash flow estimated based on market rent;

2. deductible items for market-level owners’ charges;

3. value appraisal, through capitalisation of expected cash flows (this is possible based on the gross initial yield or net initial yield of comparable transactions);

4. correcting entries for, among other things, initial vacancy and for the present value of the difference between actual rent and market rent, overdue maintenance, potential future renovations, buyout of ground lease, etc.

Bullet loan

Loan where a payment of the entire principal of the loan and sometimes the principal and interest is due at the end of the loan term.

Capital gains/losses

Profit (or loss) that results from investments in a capital asset, such as stocks, bonds or real estate, which exceeds (or are less than) the purchase price.

CBS

Het Centraal Bureau voor de Statistiek; the Dutch statistics agency (Statistics Netherlands) that provides statistical information for the government, the industry and science.

Central Circle (Randstad)

The agglomeration of cities in Netherlands

Cooltree

Cooltree is a professional real estate sustainability consultancy agency. Cooltree provides services relating to the management of data of the KPI's in the annexes. 

Cornerstone Investor

Means each of AEGON Levensverzekering N.V. and Stichting Depositary PGGM Private Real Estate Fund, in its capacity as title holder of PGGM Private Real Estate Fund, and /or, as required by the context, the feeder entity or entities through which hold their Units.

COROP

COROP stands for Coördinatie Commissie Regionaal OnderzoeksProgramma; the name of the committee that divided the Netherlands into 40 COROP regions. COROP regions are a subdivision of a province and are used for example by the CBS for its statistical analysis.

CPB

Het Centraal PlanBureau; the Dutch bureau for economic policy analysis (CPB Netherlands Bureau for Economic Policy Analysis) that does scientific research aimed at contributing to the economic decision- making process of politicians and policymakers.

Custodian

Also see Amvest RCF Custodian B.V.

Customer Due Diligence

Customer Due Diligence (CDD) is an important part of ‘knowing your customer’. CDD is executed for new but also existing customers/ relations. Important questions with regard to a (potential) customer:

1. financial position;

2. overview of business activities;

3. integrity issues (if any);

4. ultimate beneficial ownership (in some cases).

Customeyes

Customeyes is an agency that conducts customer research. The research performed is focused on tenant satisfaction in many ways.

DCF calculation

DCF calculation is an acronym for Discounted Cash Flow calculation, whereby all future cash flows are estimated at a given rate of return and discounted to give their present value.

Depositary

Also see Intertrust Depositary Services.

Direct yield/result

Yield/result from rental income of the letting portfolio.

Divestment, Disposal

Any sale of property by the ARC Fund including, but not limited to, individual homes and complete properties (block sales).

Dividend yield

The dividend yield is the ARC Fund’s total annual dividend payments divided by the INREV NAV as at the first day of the year (1 January).

Euro (EUR)

The euro, the single currency of the participating Member States of the European Union.

FGR

Fund for joint account (fonds voor gemene rekening) under the laws of the Netherlands.

FMSA

The Dutch Financial Markets Supervision Act (Wet op het financieel toezicht, Wft).

Fund Manager

Also see Amvest REIM B.V.

Fund Services Agreement

Agreement between Amvest Management B.V. and Amvest REIM B.V. (the Fund Manager) under the terms of which Amvest Management B.V. provides back office services to the ARC Fund.

GRESB

The Global Real Estate Sustainability Benchmark (GRESB) is an industry- led organisation committed to rigorous and independent evaluation

of real estate portfolios. GRESB works in tandem with institutional investors and their fund managers to identify and implement sustainability and best practices, in order to enhance and protect shareholder value.

Gross Asset Value

The total fund assets.

Gross Initial Yield

The gross initial yield (GIY) is the passing rent divided by the gross property value.

ICR

Interest coverage rate, which is used to assess the ability to pay its interest obligations on outstanding debt. The ICR is calculated by dividing  earnings before interest and taxes (EBIT) by the interest expense.

IFRS

International Financial Reporting Standards.

Income return

Net result excluding the capital gains/losses on investments.

Indirect yield/result

Yield/result from movements in the value of the portfolio.

INREV

European Association for Investors in Non-listed Real Estate Vehicles. The INREV’s stated goal is to improve the accessibility of non-listed real estate funds by promoting greater transparency, accessibility,

professionalism, and standards of best practice. As a pan-European body, it represents a platform for the sharing and dissemination of knowledge on the non-listed real estate fund market.

INREV Guidelines

The INREV Guidelines adopted by the European Association for Investors in Non-listed Real Estate Vehicles (INREV) as published in December 2008 and revised in 2014.

INREV NAV

Net Asset Value as determined in accordance with the INREV Guidelines.

Interest cover ratio (ICR)

The interest cover ratio is used to determine the ability to meet interest payments on outstanding debts.

Intertrust Depositary Services B.V.

The depositary of the ARC Fund which acts (following the AIFM Directive) as independent depositary as defined in section 1:1 of the FMSA for the benefit of the Investors.

Main responsibilities:

1. safeguard or otherwise verify ownership of assets;

2. monitor cash flows;

3. perform overall oversight (risk assessment, investor transactions, commitments and distributions, valuation, legal and fund compliance, outsourcing).

Investment

Any investment made by the ARC Fund, including, but not limited to, direct or indirect investments in properties and real estate items, bonds, notes, debentures, loans and other debt instruments, shares, convertible securities and other securities, interests in public or private companies and other assets.

Investor

A person who, as a participant, is subject to the Terms and Conditions and participates in the ARC Fund in accordance with its Subscription Form and the Terms and Conditions of the PPM (Private Placement Memorandum).

IRR

Internal Rate of Return, which is used in capital budgeting to measure and compare the profitability of investments. The ARC Fund calculates with a 10-year period.

IRS (Interest Rate Swap)

An IRS is a financial derivative instrument in which two parties agree to exchange interest rate cash flows, based on a specified notional amount from a fixed rate to a floating rate (or vice versa) or from one floating rate to another. Interest rate swaps are commonly used for hedging.

ISAE 3402

Number 3402 of the International Standard on Assurance Engagements of the International Auditing and Assurance Standards Board of the International Federation of Accountants. This is an attestation procedure for assessing service organisations’ compliance with process controls and IT. Before ISAE 3402 was introduced, SAS70 was in place.

IVBN

The Dutch association of institutional real estate investors.

Leveraged/unleveraged

Leverage (sometimes referred to as “gearing”) is a general term for any technique to multiply gains and losses. Common ways to attain leverage are borrowing money, buying fixed assets, and using derivatives.

LTMV

Loan-to-mortgage-value; the consolidated total external leverage at the ARC Fund level as a percentage of the mortgaged part of the property investments.

LTV

Loan-to-value; the consolidated total external leverage at the ARC Fund level as a percentage of the total property investments.

Management Fee

The fixed part of the fee payable by the ARC Fund to the Fund Manager as remuneration for its management of the ARC Fund.

MSCI all residential assets

The MSCI index figure for the yield of all residential properties, including purchase and sale transactions and development/redevelopment activities.

MSCI index

The MSCI property index (formerly known as IPD/ROZ property index) measures the returns on real estate properties and property portfolios.

MSCI standing investments (SI) residential

The MSCI index figure for residential standing investments. A standing investment is a property that has been part of the letting portfolio throughout the year (from 1 January until 31 December) without any transactions or developments/redevelopments related to that property.

NAV

The Net Asset Value used to describe the value of an entity’s assets less the value of its liabilities.

Net Proceeds

Total rental income, realisation proceeds, and other direct and indirect investment proceeds, and all other income and proceeds of the ARC Fund, net of taxes, fees, costs, and other charges to be borne by the ARC Fund, and after payment of or making reasonable reservation for any obligations and liabilities of the ARC Fund.

NEPROM

The Dutch association of real estate developers.

NHG (Nationale Hypotheek Garantie)

Mortgage guarantee under which the “Stichting Waarborgfonds Eigen Woningen” (homeownership guarantee fund) acts as surety for the loan.

Participation

A participation right, not having a nominal value, in the ARC Fund consisting of one (1) unit in the FGR.

PfZW

An acronym for Stichting Pensioenfonds Zorg en Welzijn; the pension fund for healthcare and social welfare sectors.

Portfolio management

The management and monitoring of real estate assets and property investments of the portfolio.

Portfolio Plan

The ARC Fund’s annual strategic investment plan.

Portfolio value

Total gross value of the ARC Fund’s investment portfolio.

Realised capital gains on investments

Also see “realised indirect return”.

Realised indirect yield/return

Yield/return from book profits following divestments.

REER

Real Estate Expense Ratio as determined in accordance with the INREV Guidelines.

Revolving credit facility

A type of credit facility that does not have a fixed number of payments, in contrast to instalment credit. Until the maturity of the facility, money can be withdrawn or paid at any time.

Rent control limit

The price ceiling for regulated rental homes determined annually by the Ministry of the Interior and Kingdom Relations.

RoFR (Right of First Refusal) Agreement

The ARC Fund has a Right of First Refusal (RoFR) agreement with Amvest Development Fund B.V. This means that all rental homes developed by Amvest Development Fund B.V. (and previously Amvest Development B.V.) must first be offered to the ARC Fund, which has the right to acquire them on arm’s length conditions.

Secured net leverage ratio

The "Secured Net Leverage Ratio" is used to evaluate the financial leverage, particularly concerning the secured debt. This ratio compares the secured debt to the earnings before interest, taxes (EBIT), minus capital expenditures.

Set-up costs

Any costs incurred in connection with the formation of the ARC Fund, including promotion, establishment, legal, and closing costs of the ARC Fund, professional and consulting fees, research costs, and printing costs.

TER

Total Expense Ratio as determined in accordance with the INREV Guidelines.

Terms and Conditions

The terms and conditions of the ARC Fund.

Theoretical income

Passing rent for rented units and market rent for vacant units.

Unrealised capital gains on investments

Also see unrealised indirect return.

Unrealised indirect yield/return

Yield/return from unrealised movements in the value of the portfolio.

VAT

Value Added Tax.

Wft

Also see FMSA.

WOZ

WOZ stands for wet Waardering Onroerende Zaken (Valuation of Immovable Property Act). A WOZ value is available for all real estate in the Netherlands. The WOZ value is the basis for property taxes.