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Report of the Board of Directors

Financial performance in 2018

Total return

The Fund realised a total return of 5.6% in 2018 (plan: 7.7%; 2017: 7.8%) consisting of 3.6% income return (plan: 4.4%; 2017: 4.5%) and 2.0% in capital growth (plan: 3.2%; 2017: 3.3%). The total return came in at € 48.7 million, compared to € 67.6 million in plan (2017: € 61.1 million), while the Fund’s invested capital was 1.0% higher at € 969.7 million, from € 960.0 million in plan (2017: € 888.9 million). The capital growth was less than the nominal growth, as the nominal growth also includes additional capital called. The main drivers for income return and capital growth are explained in more detail below.

Income return

The Fund realised an income return of 3.6% compared to 4.4% mentioned in the Fund Plan (2017: 4.5%). The income return is the balance of increased net rental income from assets and increased Fund and finance costs. Net rental income of € 43.6 million was € 1.2 million lower than plan of € 44.8 million (2017: 42.4 million). At € 11.6 million, Fund and finance costs were significantly higher than the € 4.8 million in plan (2017: € 4.7 million) due to a tax settlement related to the redevelopment of the Damrak and Nieuwendijk assets (€ 5.8 million).

Capital growth

The Fund realised a capital growth of 2.0% in 2018 compared to 3.3% in plan (2017: 3.2%).

Property values continued to show an upward trend in 2018 compared to 2017. 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 its portfolio by upgrading and future-proofing its assets.

Property performance

The total property return for 2018 came in at 7.0% (plan: 8.1%; 2017: 8.0%) consisting of a 5.0% direct property return (plan: 5.0%; 2017: 5.2%) and a 1.9% indirect property return (plan: 3.1%; 2017: 2.8%). The total property return outperformed the MSCI Netherlands Property Index by 2.0%

The Fund return (INREV) and property return (MSCI) 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 MSCI methodology as a percentage of the value of the investment properties. INREV e.g. includes cash, fee costs and administrative costs in the calculation of the income return (INREV). Furthermore, the amortisation of acquisition costs is treated differently by INREV and MSCI.

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.

In 2018, the Fund was financed solely with equity and did not use any loan capital for liquidity management purposes.

Treasury management

For treasury management purposes, the Fund acted in accordance with its treasury policy in 2018, 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 for redemptions, as well as to manage the Fund’s cash position.

At year-end 2018, the Fund had € 20.5 million in freely available cash. In 2018, the Fund's cash position declined by € 1 million, when compared to year-end 2017.

In 2018, the Fund paid € 32.9 million as dividend to its shareholders and made two capital calls for a total amount of € 65 million.

Interest rate and currency exposure

In 2018, the Fund was subject to the negative interest rates on its bank balances. To minimise the costs of the negative interest rate on its bank balances, the Fund used 30-day bank deposits in 2018.

As the Fund had no external loans and borrowings, nor any foreign currency exposure in 2018, the Fund had no exposure to interest rate risks or currency exposure risks. The interest rate risk related to bank balances is limited for the Retail Fund.

Dividend and dividend policy

The Bouwinvest Board of Directors proposes to pay a dividend of € 118.16 per share for 2018 (2017: € 117.77), 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, 60.3% was paid out in 2018, with the final quarterly instalment paid out on 5 March 2019. The remainder of the distribution over 2018 will be paid out in a final instalment on 2 May 2019, following approval by the Annual General Meeting of Shareholders to be held on 24 April 2019.


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 distribute hundred percent of its fiscal profits annually. To meet this distribution obligation the Fund proposes to pay out hundred 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 2018.

in 2018, the Fund reached a settlement with the Dutch tax authorities regarding the calculated compensation of Bouwinvest Development B.V’s activities for the Damrak and Nieuwendijk project.

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