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Report of the Board of Directors

Financial performance in 2017

Total return

The Fund realised a total fund return of 7.8% (2016: 8.4%), consisting of a 4.5% income return (2016: 4.6%) and a 3.3% capital growth (2016: 3.9%). The total return in Euros was € 61.1 million in 2017, compared to € 64.3 million in 2016.

The Fund's NAV grew to € 889 million from € 824 million in 2016, a growth of 7.9%. The main drivers of the NAV growth were the acquisitions of investment property, the completion of redevelopments and the positive revaluations of the investment properties in the portfolio.

Income return

The Fund realised an income return of 4.5% in 2017, 0.1%-point less than in 2016.

The income return remained at a stable level in 2017, compared to 2016. Due to acquisitions and the completion of redevelopments, the gross rental income in 2017 increased with 10.3% compared to 2016, to an amount of € 49 million. The net rental income increased with 10.7% compared to 2016, to an amount of € 42 million.

The secured rent until 2020 (three-year horizon) at year-end 2017 decreased to 74% of the 2017 gross rental income (year-end 2016: 91%). However, the Fund’s expiration risk is still very low since 39.2% of the total rental income of the Fund expires after 2022. In 2017, the new and extended lease contracts, totaling a 32,022 m² and a rental value of € 6.0 million per year, also contributed to the increase of the secured rent and thereby lowering the expiration risk for the Fund. As a result of the new and extend lease contracts, the average financial occupancy rate also increased to 95.6% in 2017, compared to 94.7% in 2016.

Capital growth

The Fund realised a capital growth of 3.3% in 2017, 0.6%-point less than in 2016.

Property values continued to show an upward trend in 2017 compared to 2016. We believe that this is due to the fact that the Fund is largely invested in the Randstad conurbation and the Fund's continued focus on optimising the portfolio by upgrading and future-proofing the assets.

Property performance

The total property return for 2017 came in at 8.0% (2016: 9.3%), consisting of a 5.2% direct property return (2016: 5.2%) and a 2.8% indirect property return (2016: 4.1%). The total property return is with 8.0% an outperformance of 2.3%-point of the IPD Property Index.

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 Fund 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 € 21.5 million in freely available cash and no cash availabe in a 30-day deposit as at 31 December 2017. During 2017 the cash position decreased by € 31.8 million, as compared to year-end 2016, mainly due to a reduction in working capital.

During 2017, the Fund paid € 36.4 million as dividend to the shareholders. Also during 2017, two capital calls were executed at a total amount of € 40 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 € 117.77 per share for 2017 (2016: € 114.76), 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, 75.0% was paid out in 2017, with the final quarterly instalment paid out on 26 February 2018. The remainder of the distribution over 2017 will be paid out in a final instalment on 26 April 2017, following approval by the Annual General Meeting of Shareholders 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 ditribute 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. With regard to the project Damrak and Nieuwendijk, the Retail Fund is in discussion with the Dutch tax authorities about Bouwinvest Development B.V’s compensation calculated for its redevelopment activities. Untill now, the result is not clear yet.

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