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Financial performance in 2017

Total return

The Fund realised a total fund return of 13.1% (2016: 5.5%), consisting of a 2.9% income return (2016: 3.6%) and a 10.2% capital growth (2016: 1.9%). The total return in Euros grew to € 71.7 million in 2017, from € 30.5 million in 2016. The main cause of the difference in total return between the two years is the improvement in capital growth in 2017.

The Fund's NAV increased to € 631 million from € 526 million in 2016, an increase of € 105 million as a result of capital calls (€ 50 million), the addition of the net profit over 2017 to the equity ( € 72 million) and the payments of (interim) dividend to the shareholders (€ -16 million).

Income return

The Fund realised an income return of 2.9% in 2017, 0.7 %-points less than in 2016.

The gross rental income for 2017 was almost at the same level as in 2016 (-1.8%). The net property operating expenses were significantly higher in 2017 (27.9%). This leads to a higher OpEx-ratio in 2017, compared to 2016. The main drivers of the increase in the property operating expenses are the executed maintenance and the letting and lease renewal fees in 2017. Therefore, the income return in 2017 was 0.7% less than in 2016.

The secured rent until 2020 (three-year horizon) at year-end 2017 was 55% of the 2017 gross rental income (year-end 2016: 35%). In accordance with the market conditions, the like-for-like rent decreased -1.9% (2016: -2.0%).

The average financial occupancy rate has increased in 2017, to 86.3% in 2017 from 81.3% in 2016. The rise of the occupancy rate is mainly a result of new lettings for WTC The Hague, De Lairesse Amsterdam and Nieuwe Vaart Utrecht.

Capital growth

The Fund realised a capital growth of 10.2% in 2017, 8.3%-point more than in 2016.

The values of investment property tended to shift upwards in 2017, primarily a result of an improved office real estate investment market. However, for some assets a decrease in value was realised, due to the anticipation of possible lease endings.

Not only investment properties have increased in value, but especially the investement under construction contributed to an overall capital growth of the Fund's portfolio. Both Hourglass, as Building 1931 and Building 1962 have benefited from positive revaluations during 2017.

Property performance

The total property return for 2017 came in at 14.9% (2016: 7.0%), consisting of a 3.6% direct property return (2016: 4.5%) and a 11.0% indirect property return (2016: 2.4%). The Fund outperformed the total property return IPD Property Index (all properties) in 2017 with 2.1%-point. This outperformance was mainly a result of a higher indirect return through revaluations.

The five-year average property performance (4.9%) is slightly lower (-0.1%) compared to the IPD Property Index (5.1%). The optimisation of the Fund in recent years included acquisitions, which added substantial vacancy to the portfolio. Decreased direct returns affected the performance of the Fund. Investments for acquisitions and redevelopments, which have not yet led to rental income, also caused lower direct returns to such an extent that outperformance was not feasible. Especially these investments, including Hourglass and the redevelopment of Building 1931 and Building 1962 in Amsterdam, position the Fund again for a return to outperform in the future.

The fund return (INREV) and property return (IPD) are different performance indicators. The fund return is calculated according to the INREV Guidelines as a percentage of the net asset value (INREV NAV) and the property return is calculated according to the IPD methodology as a percentage of the value of the investment properties. INREV e.g. includes cash, the fee costs and administrative costs in the calculation of the income return (INREV). Furthermore the amortisation of acquisition is threated differently by INREV and IPD.

Capital Management


In accordance with the Information Memorandum, The Fund will be financed solely with equity and will have no leverage, but may borrow a maximum of 3% of the balance sheet total for liquidity management purposes.

During 2017, the Fund was solely financed with equity and did not use any loan capital for liquidity management purposes.

Treasury management

For treasury management The Funds acted accordingly its treasury policy in 2017, in order to manage liquidity and financial risks for the Fund. The main objectives of the treasury management activities were to secure shareholders’ dividend pay-out and liquidity by redemptions, as well as managing the Fund’s cash position.

At year-end 2017, the Fund had € 35.4 million in freely available cash and € 5.0 million in a 30-day deposit as at 31 December 2017. During 2017 the cash position increased with € 12.9 million, as compared to year-end 2016, mainly as a result of an increase in working capital in order to ensure sufficient liquid resources for the instalment payment and VAT payments for investment property under construction.

During 2017, The Fund paid € 16.3 million as dividend to the shareholders and two capital calls were executed at a total amount of € 50 million.

Interest rate and currency exposure

During 2017 The Fund was subject to the negative interest rate development for its bank balances. In order to minimalize the costs of the negative interest rate on the bank balances, during 2017 the Fund used 30-day bank deposits.

As the Fund had no external loans and borrowings during 2017, as well as The Fund did not had any foreign currency exposure during 2017, The Fund had no exposure to interest rate risks or currency exposure risks.

Dividend and dividend policy

The Board of Directors of Bouwinvest proposes to pay a dividend of € 59.81 per share for 2017 (2016: € 73.18 per share), which corresponds to a pay-out ratio of 100%. It is proposed that the dividend be paid in cash, within the constraints imposed by the company’s fiscal investment institution (FII) status. Of this total dividend, 80.0% was paid out in 2017, with the final quarterly instalment paid out in March 2018. The remainder of the distribution over 2017 will be paid out in a final instalment on 26 April 2018, following approval by the Annual General Meeting to be held on 18 April 2018.


The Fund qualifies as a fiscal investment institution (FII) under Dutch law and is as such subject to corporate tax at the rate of zero percent. Being an FII, the Fund is obliged by law to annually distribute hunderd percent of its fiscal profits. To meet this distribution obligation The Fund proposed to pay out hunderd percent of its direct result which equals its fiscal profits. 

The Fund met its obligations related to value added tax, transfer tax and other applicable taxes in their entirety in 2017.

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