Independent auditor’s report

To: The Fund Manager of the Amvest Residential Core Fund

Report on the audit of the financial statements 2024 included in the annual report 

Our opinion

We have audited the financial statements 2023 of Amvest Residential Core Fund, based in Amsterdam. The financial statements comprise the consolidated financial statements and the company financial statements.

In our opinion:

• • the accompanying consolidated financial statements give a true and fair view of the financial position of Amvest Residential Core Fund (“the Fund”) as at 31 December 2024 and of its result and its cash flows for the 2024 in accordance with IFRS Accounting Standards as endorsed by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.

• • the accompanying company financial statements give a true and fair view of the financial position of Amvest Residential Core Fund as at 31 December 2024 and of its result for the year 2024 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the financial statements 2024 of Amvest Residential Core Fund (“the Fund”) based in Amsterdam. The financial statements include the consolidated financial statements and the company financial statements.

The consolidated financial statements comprise:

1. the consolidated statement of financial position as at 31 December 2024;

2. the following consolidated statements for the year 2024: the statement of profit and loss and other comprehensive income, statement of changes in equity and the cash flow statement; and

3. the notes comprising material accounting policy information and other explanatory information.

The company financial statements comprise:

1. the summarized company statement of profit and loss for the year 2024;

2. the company statement of financial position as at 31 December 2024; and

3. the notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.

We are independent of Amvest Residential Core Fund in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).

We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and regulations and the key audit matters was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information in support of our opinion

Summary

Materiality

• Materiality of EUR 44 million

• 0.94% of total assets

Group audit

• Performed substantive procedures for 99,7% of total assets

• Performed substantive procedures for 100% of gross rental income

Risk of material misstatements related to Fraud, NOCLAR and Going concern

• Fraud risks: presumed risk of management override of controls identified and further described in the section ‘Audit response to the risk of fraud and non-compliance with laws and regulations’.

• Non-compliance with laws and regulations (NOCLAR) risks: no reportable risk of material misstatements related to NOCLAR risks identified.
  
  

• Going concern risks: no going concern risks identified.

Key audit matter

• Valuation of Investment property and assets under construction

Materiality

Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 44 million (2023: EUR 42.8 million). The materiality is determined with reference to total assets (0.94%) (2023: 0.99%). We consider total assets as the most appropriate benchmark because the nature of the business, the level of activities and asset value is likely the primary focus of the users of the financial statements evaluating Amvest Residential Core Fund’s financial performance. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.

We agreed with the Fund Manager that misstatements identified during our audit in excess of EUR 2.2 million would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.

Scope of the group audit

Amvest Residential Core Fund is at the head of a group of components (hereafter “Group”). The financial information of this group is included in the financial statements of Amvest Residential Core Fund.

This year, we applied the revised group auditing standard in our audit of the financial statements. The revised standard emphasizes the role and responsibilities of the group auditor. The revised standard contains new requirements for the identification and classification of components, scoping, and the design and performance of audit procedures across the group. As a result, we determine coverage differently and comparisons to prior period coverage figures are not meaningful.

We performed risk assessment procedures throughout our audit to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements. To appropriately respond to those assessed risks, we planned and performed further audit procedures, centrally. We identified 1 component associated with a risk of material misstatement. As the group auditor we audited the component with a risk of material misstatement. We set component performance materiality levels considering the component’s size and risk profile.

We have performed substantive procedures for 100% of Group gross rental income and 99,7% of Group total assets. At group level, we assessed the aggregation risk in the remaining financial information and concluded that there is less than reasonable possibility of a material misstatement.

We consider that the scope of our group audit forms an appropriate basis for our audit opinion. Through performing the procedures mentioned above we obtained sufficient and appropriate audit evidence about the Group’s financial information to provide an opinion on the financial statements as a whole.

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapters ‘Risk management’ and ‘Compliance’ of the report of the Fund Manager, the Fund Manager describes its procedures in respect of the risk of fraud and non-compliance with laws and regulations.

As part of our audit, we have gained insights into the Fund and its business environment and the Fund’s risk management in relation to fraud and non-compliance. Our procedures included, among other things, assessing the Fund’s code of conduct, whistleblowing procedures, incident reporting and its procedures to investigate indications of possible fraud and non-compliance. Furthermore, we performed relevant inquiries with management and other relevant functions, such as the Risk and Compliance Officer, and included correspondence with relevant supervisory authorities and regulators in our evaluation. We have also incorporated elements of unpredictability in our audit, by attending a meeting between the asset managers and the external appraisers and involving forensic specialists in our audit procedures. 

As a result from our risk assessment we identified the following laws and regulations as those most likely to have a material effect on the financial statements in case of non-compliance:

• — Financial supervision act;

• — Anti-money laundering and anti-terrorist financing law;

• — Trade sanctions law; and

• — Data protection law.

Our procedures did not result in the identification of a reportable risk of material misstatement in respect of non-compliance with laws and regulations.

Further, we assessed the presumed fraud risk on revenue recognition, relating to gross rental income, as not significant, because there is limited opportunity to commit fraud as gross rental income for existing rental agreements is fixed (except annual indexation), no individual material transactions and no judgement involved to determine the gross rental income for the period.

Based on the above and on the auditing standards, we identified the following fraud risk that is relevant to our audit, including the relevant presumed risk laid down in the auditing standards, and responded as follows:

Management override of controls (presumed risk)

Risk:

Management is in a unique position to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively, such as estimates related to the fair value of investment property and assets under construction.

Responses:

• We evaluated the design and the implementation of internal controls that mitigate fraud and non-compliance risks, such as processes related to journal entries and estimates.

• We performed a data analysis of high-risk journal entries related to fraudulent reporting and evaluated key estimates and judgements for bias by the Fund’s management, including retrospective reviews of prior year’s estimate with respect to the valuation of investment property and assets under construction. Where we identified instances of unexpected journal entries or other risks through our data analysis, we performed additional audit procedures to address each identified risk, including testing of transactions back to source information.

• We identified and selected journal entries and other adjustments made at the end of the reporting period for testing.

Our evaluation of procedures performed related to fraud and non-compliance with laws and regulations did not result in an additional key audit matter.

We communicated our risk assessment, audit responses and results to the Fund Manager.

Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance that are considered material for our audit.

Audit response to going concern

The Fund Manager has performed a going concern assessment and has not identified any going concern risks. To assess the Fund Manager’s assessment, we have performed, inter alia, the following procedures:

• We considered whether the Fund Manager’s assessment of the going concern risks includes all relevant information of which we are aware as a result of our audit;

• We inspected the terms of conditions in the financing agreement that could lead to going concern risks, including the terms of the agreement and any covenants;

• We analysed the Fund’s financial position as at year-end and compared it to the previous financial year in terms of indicators that could identify going concern risks.

The outcome of our risk assessment procedures did not give reason to perform additional audit procedures on management’s going concern assessment.

Our key matter

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matter to the Fund Manager. The key audit matter is not a comprehensive reflection of all matters discussed.

Valuation of investment property and assets under construction

Description

Investment property and assets under construction (hereinafter ‘investment property’), amount to EUR 4.6 billion and represent 97% of Fund’s total assets as of 31 December 2024. Investment property is measured at fair value, therefore the Fund Manager has to make significant estimates and assumptions in determining those fair values. The fair value is, as explained in the significant accounting policies and note 4 to the financial statements, determined by the Fund Manager based on appraisal reports by an independent appraiser (98%) or on the acquisition price of assets under construction as a proxy for fair value for properties that are not nearly completed (2%). 

Because the valuation of investment property and assets under construction is complex and highly dependent on estimates and significant assumptions, we consider the valuation of investment property as a key audit matter in our audit.

Our response

Our procedures for the valuation of investment property included:

• Assessment of the valuation process with respect to the investment property as at 31 December 2024, including an evaluation of the design and implementation of related internal controls and test of details.

• Verification of the accuracy of key data elements provided to the appraisers.

• Evaluation of the competence, capabilities and objectivity of the external appraisal firms.

• Involvement of property valuation experts to verify the appropriateness of the valuation methodology and verification of the appropriateness of key assumptions in the valuation process, which consists of gross initial yield (implicitly the discount rate and exit yield), vacant value and market rent. This included our understanding of the market and market developments, and a comparison of assumptions and movements therein with publicly available data.

• Involvement of our own property valuation experts to perform a regression analysis to assess the correlation between the reported fair value and the independent key inputs to the valuation calculation, which consists of vacant value, contract rent and rent potential.

• Discussion of the results of the valuation process and our findings and observations with management and the appraisal firms.

• Evaluation of the adequacy of the disclosures in note 4 in respect of investment property in conformity with EU-IFRS. 

Our observation

Overall, we assess that the assumptions and methodologies used, and related estimates resulted in a valuation of investment property which is deemed reasonable and concur with therelated disclosures in the financial statements.

Report on the other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the annual report contains other information.

Based on the following procedures performed, we conclude that the other information:

• is consistent with the financial statements and does not contain material misstatements; and

• contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and other information.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements.

The Fund Manager is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements

Engagement

We were initially appointed by the Fund Manager as auditor of Amvest Residential Core Fund as of the audit for the year 2012 and have operated as auditor ever since that financial year.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audits of public-interest entities.

Services rendered

For the period to which our  audit relates, in addition to this audit, we have provided the following services to the Amvest Residential Core Fund and its controlled undertakings:

• Audit of the Amvest Residential Core Fund NAV statement per 31 December 2024

• Audit of the Amvest Residential Core Fund INREV NAV calculation per 31 December 2024

• Limited assurance engagement on selected non-financial indicators in the annual report 2024 of Amvest Residential Core Fund

• Limited assurance engagement on the Amvest Residential Core Fund green bond allocation report 2024

• Audit of De Utrechtse Fondsen Vastgoed C.V. financial statements per 31 December 2024

Description of responsibilities regarding the financial statements

Responsibilities of the Fund Manager for the financial statements

The Fund Manager is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Fund Manager is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. In that respect the Fund Manager, is responsible for the prevention and detection of fraud and non-compliance with laws and regulations, including determining measures to resolve the consequences of it and to prevent recurrence.

As part of the preparation of the financial statements, the Fund Manager is responsible for assessing the Amvest Residential Core Fund’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Fund Manager should prepare the financial statements using the going concern basis of accounting unless the Fund Manager either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. The Fund Manager  should disclose events and circumstances that may cast significant doubt on the Fund’s ability to continue as a going concern in the financial statements. 

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

A further description of our responsibilities for the audit of the financial statements is included in the appendix of this auditor’s report. This description forms part of our auditor’s report.

Rotterdam, 16 April 2025

KPMG Accountants N.V.

S. van Oostenbrugge RA

Appendix

Description of our responsibilities for the audit of the financial statements

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:

• identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control;

• evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Fund Manager;

• concluding on the appropriateness of the Fund Manager’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Fund’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a Fund to cease to continue as a going concern;

• evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and

• evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We are responsible for planning and performing the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the financial statements. We are also responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We bear the full responsibility for the auditor’s report.

We communicate with the Fund Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the Fund Manager with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Fund Manager, we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.