This website uses cookies to remember your personal preferences and gather statistics. Click here for more information about cookies.

Yes, I agree No, I do not agree X

Risk management

Major risk factors and corrective measures

Within the domain of the Retail Fund, we distinguish the following risk clusters:

  • Market risks

  • Strategic risks

  • Management risks

Market risks

Market risks focus on the Fund's exposure to adverse market developments. Such developments can affect both the Fund's direct and indirect return. In the quarterly fund reporting the following Key Risk Indicators (KRIs) are shown to reflect the Fund's current risk situation and future risk outlook:

  • Occupancy

  • Operational expenditure

  • Remaining lease term

  • Counterparty risk

  • Valuation movement


The occupancy KRI reflects the current and expected occupancy situation for the Fund. Occupancy depends on market demand, availability of competitive propositions and fund portfolio positioning in the market. Occupancy is an important driver for the expected direct return of the Fund. Because of its importance for direct return it can also affect the Fund's indirect return considerably.

Operational expenditure

The Fund’s direct return, its ability to pay out dividends to its shareholders, also depends on its expected expenditure. As in the case of the occupancy KRI, the direct return performance can also have a significant impact on the indirect performance. The operational expenditure KRI reflects cost performance compared to planned cost. On top of that, the Fund’s quarterly reports include an asset manager outlook for cost performance.

Remaining lease term

In commercial real estate like that of the Retail Fund most of the leases are contracted with a fixed term. The average weighted remaining lease term serves as a KRI to reflect the uncertainty of future direct returns. The outlook for this KRI indicates whether the asset manager expects this uncertainty to increase or decrease.

Counterparty risk

Counterparty risk is the risk that parties the Fund has agreements with will default. This risk is largely determined by the ability of its tenants to fulfil their contractual obligations. For the Retail Fund, this risk is mitigated by active credit management and critical tenant selection.

Valuation movement

The valuation movement KRI indicates the fund return driven by revaluations and it reflects the outlook for this indicator. All properties owned by the Fund are revaluated by external appraisers either on a quarterly (standing properties) or on an annual (non-standing properties) basis. This revaluation is the most important driver for the Fund's indirect return.

Strategic risks

Strategic risks focus on the Fund's ability to achieve its strategic goals. These goals focus primarily on sustainable long term fund performance. In the quarterly fund reporting the following Key Risk Indicators (KRIs) are shown to reflect the Fund’s current risk situation and future risk outlook:

  • Asset risk mix

  • Segment fulfillment

  • Sustainability

  • Acquisition and disposal

Asset risk mix

Different assets in the Fund’s portfolio provide propositions with different levels of risk. Each property is scored in a risk return assessment model and assigned a risk category accordingly. In order to optimise fund return while considering the Fund’s risk appetite, Fund goals are set for each of the three risk categories. The KRI for asset risk mix shows whether or not the Fund is able to match its portfolio to the risk appetite it is aiming for.

Segment fulfilment

Based on analysis and investment beliefs the Retail Fund has specific strategic goals related to the type of assets it aims to own. More specifically, the Fund is focusing its investment activities on high street retail and shopping centres. The Segment fulfilment KRI focuses on the ability of the Fund to attain the segment distribution it is aiming for.


To ensure that the Fund is future proof and able to provide long-term stable returns, the Fund has set sustainability goals. This KRI will show whether or not the Fund is currently able to meet its sustainability goals.

Acquisition and disposal

To meet investor demand, the Fund is aiming for a portfolio of a certain size. The acquisition and disposal KRIs show the Fund’s (expected) ability to meet its portfolio size targets.

Management risks

This refers to the risk that Bouwinvest’s management of the Retail Fund, including its management and control of the risks it faces, may in some way be inadequate or ineffective. This would affect the Fund’s direct and indirect returns. This risk is subdivided into the following risk elements:

  • Fund specific legal or regulatory risk

  • Fund manager continuity and reputation

Fund specific legal or regulatory risk

The aim of this KRI is to enable Fund management to notify investors of any large regulatory or legal circumstances that may affect or are already affecting the Fund's performance. To minimise any legal or regulatory irregularities, Bouwinvest has an experienced legal staff.

Fund manager continuity and reputation

Bouwinvest is responsible for the fund management organisation. If Bouwinvest sees any threats to its functioning as a fund manager, for instance in terms of damaged reputation or threatened continuity, this KRI will be used to inform investors. Going forward, Bouwinvest as a manager will continue to aim for the highest possible standards of integrity.

To control operational and integrity risks, there is a management agreement in place that determines Bouwinvest's responsibilities as the Retail Fund's management company. Bouwinvest's ISAE 3402 certification provides investors with reassurance on the risk management, including risk definition and control measures, of all key processes of the company's day-to-day operations.

  • Share this article