Portfolio developments in 2023

We delivered 264 homes to the standing portfolio, sold 44 individual homes and 75 homes as part of a block sale. Between 2022 and 2023, the ARC Fund standing portfolio increased from 11,010 to 11,155 homes, a net addition of 145 homes. The occupancy rate increased year-over-year from 97.8% to 98.3%. Our strong operational results resulted in an income return of 2.4% (2022: 2.8%).

Operating expenses (OPEX) rose from 21.7% in 2022 to 23.4% in 2023, which was within our budget of 23.5%. Operating expenses rose primarily as a result of extensive planned maintenance activities and are expected to fall in the coming years due to divestments in older properties and the completion of new properties.

The increase in the transfer tax rate from 8.0% to 10.4%, ten consecutive interest rate hikes and negative revaluations resulted in the stagnation of the residential real estate market. Despite these unfavourable market conditions, we were able to execute a block sale of 75 homes in Velp with a net gain of 4%. In addition, we executed 44 individual sales with a net gain of 23%.

The committed pipeline includes 2,269 homes representing EUR 305 million in off-balance sheet commitments. There were many assets under construction in 2023 that are expected to be delivered in 2024, such as Olympiade in Amstelveen (358 homes), Clubhouse Boompjes in Rotterdam (342 homes), Hollandpark in Diemen (144 homes) and Groot Hartje in Eindhoven (201 homes). Remaining assets in the committed pipeline are expected to be delivered in the following years. We added one project to the soft pipeline in 2023. The Houtsma project is the last in a series of development projects on Cruquius Island in Amsterdam, which have all proven to be valuable additions to our portfolio.

A large part of our committed pipeline is originated through our RoFR Agreement with Amvest Development Fund B.V. (ADF). If a project is developed by ADF in partnership with a third party developer, the ROFR ensures that there is a best effort basis to offer the project to ARC Fund. The RoFR agreement, which went into effect in 2023 to include a rotation mechanism, continues to ensure sufficient and constant access to new, high-quality residential rental properties at excellent conditions on a long-term basis.