Capital Markets Day Ready for the Future 7 November 2018 NSI - - PowerPoint PPT Presentation

NSI Capital Markets Day – 7 November 2018

Capital Markets Day – Ready for the Future

7 November 2018

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

Introduction

by Bernd Stahli

“NSI will be the leading specialist in the Dutch office market, with a strong and efficient platform that will drive returns through pro-active asset management, value-add initiatives and active capital recycling. NSI will be the partner of choice for investors looking to team up with a best-in- class operator”

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NSI Capital Markets Day – 7 November 2018

Comments from our quarterly reports

Clarity and consistency

Introduction

“Key is that NSI has the size, focus, portfolio,

• rganisational set up and culture to be able to thrive”

“We have stepped up our disclosure significantly to facilitate proper scrutiny of our efforts” “Passive investing in property is no longer an option” “NSI needs to specialise to be able to thrive” ”We have put in place an almost entirely new

• rganisation”

“The asset rotation has resulted in a more focused, higher quality portfolio, with better margins and a lower vacancy rate” “We identified substantial development potential in our existing portfolio” “We need to remain disciplined” “We are willing to sacrifice short term EPS in the belief that long term risk-adjusted total returns will be better” “HNK is the house view of how we can best cater to the needs of the office client of the future” “A strong balance sheet does allow us to consider moving up the risk curve selectively” “We prefer to use the improved credit rating to extend the average debt maturity” “At NSI we are in it for the long run and therefore are working hard to prove good stewards of capital over the entire property cycle”

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NSI Capital Markets Day – 7 November 2018

A clear focus

Introduction

A focus entirely on Dutch offices…

• Location – Economic growth centres (Amsterdam, The Hague, Rotterdam,

Utrecht, Eindhoven, Den Bosch, Leiden and selective others)

• Potential – Larger, high quality, high margin, more efficient assets with

growth potential

Offering an attractive risk-adjusted total return…

• Active asset management – Manage vacancy and consistently explore

value-add and (re)development initiatives

• Disciplined capital recycling – Pro-actively and consistently trade assets to

improve the overall risk-return profile of the business

Underpinned by operational and financial leadership…

• Platform – Investing in people, systems and optimising processes
• Transparency – Clear accountability to all stakeholders
• Cost efficiency – Lower EPRA cost ratio

Control Positioning Execution

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NSI Capital Markets Day – 7 November 2018

Creating shareholder value

Introduction

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NSI Capital Markets Day – 7 November 2018

Creating shareholder value Creating the right platform

Introduction

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NSI Capital Markets Day – 7 November 2018

A new team and culture to deliver on the strategy

Introduction

81 79 4 6 9 12 16 17 21 24 25 25 75 71 61 54 50 37 34 27 25 21 Mrt-16 Dec-15 Jun-16

55 66

Sep-16 Jun-17 Dec-16 Sep-17 Mrt-17 Dec-17 Mrt-18 Jun-18 Sep-18

81 79 79 77 70 66 54 51 50 46

• 43%

New

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NSI Capital Markets Day – 7 November 2018 Introduction

Meet the team

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NSI Capital Markets Day – 7 November 2018

Optimising/simplifying processes Corporate structure - December 2015

Introduction

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NSI Capital Markets Day – 7 November 2018

Optimising/simplifying processes Corporate structure - target December 2018

Introduction

NSI N.V. NSI Real Estate B.V. NSI Kantoren B.V. NSI Vastgoed B.V. NSI Development B.V. NSI Flexoffices B.V. HNK Vastgoed B.V. HNK Services B.V.

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NSI Capital Markets Day – 7 November 2018

Optimising/simplifying processes Automating and outsourcing

Introduction

Internal reporting External reporting

Reporting Leasing

• Automation
• Efficiency
• Standardisation
• Improved control
• Better conversion

Outsourcing

• Focus on core business and value creating activities
• Technical property management outsourced to 3rd

parties

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NSI Capital Markets Day – 7 November 2018

NSI’s green initiatives will become more visible

Future proof buildings Energy scores Offices & HNK by value (# assets)

Introduction

6% 6% 16% 21% 46% F 3% 2% G E D A C B

• Location with strong public transport
• Good health and wellbeing
• Responsible consumption
• Innovation and infrastructure
• Flexible property use
• Circular (re-)development
• Reducing carbon footprint
• GRESB reporting 2019

Energy label All assets per Sep-18

• Excl. assets on

disposal list A 8.3 5.9 B 5.0 3.8 C 4.5 2.7

Cost to upgrade to energy label (€m)

• From 1 January 2023 all offices need to

have an Energy Label of C or better

• Already 83% of assets are compliant with

the C-label minimum

• The NSI ambition goes well beyond the

minimum A label requirement in 2030

Near term takeaways NSI installed solar panels 3,500 across the portfolio NSI installed Green Walls HNK Amsterdam Houthavens

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

Asset rotation

by Anne de Jong - CIO & Thijs Peek - Head of Transactions

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NSI Capital Markets Day – 7 November 2018

Creating shareholder value Building a sought-after portfolio

Asset rotation

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NSI Capital Markets Day – 7 November 2018

Asset rotation New Transaction Management team

Asset rotation

New Transaction Management team

• 4 Transaction managers and 1 analyst

(4 new)

• Experience:

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NSI Capital Markets Day – 7 November 2018

Moving towards a more concentrated portfolio

Q4 2014 213 assets November 2018 113 assets

Asset rotation

2018 excl. (un)conditional sales ( <100 assets)

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NSI Capital Markets Day – 7 November 2018

Portfolio evolution

Asset rotation

300 50 100 150 250 200 350 2016 2012 2013 2014 2015 2017 Nov -18 2018 excl. (un)cond. disp.

• 70%

10 12 8 6 2 14 4 2016 2012 2013 2014 2015 2017 Nov - 18 2018 excl. (un)cond. disp. 11.1 12.4 +170% Number of assets Average asset value (€m)

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NSI Capital Markets Day – 7 November 2018

Dutch portfolio split since 2014

Asset rotation

7% 14% 23% 36% 41% 42% 15% 16% 17% 20% 24% 26% 5% 8% 8% 11% 10% 12% 26% 21% 18% 16% 11% 9% 47% 41% 34% 17% 14% 11% 7% 14% 23% 36% 41% 44% 15% 16% 17% 20% 24% 25% 5% 8% 8% 11% 10% 11% 26% 21% 18% 16% 11% 10% 47% 41% 34% 17% 14% 11% 2015 2014 2016 2018 excl. (un)conditional sales 2017 November 2018 79% 27% Amsterdam - Office Other G4 - Office Other NL - Office Other target cities - Office Other - Retail & Industrial

€ 1.1bn € 1.1bn € 1.2bn € 1.2bn € 1.3bn € 1.2bn

Target cities

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NSI Capital Markets Day – 7 November 2018

Period January 2015 – November 2018

Asset rotation

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7 5

1) Excludes sale of IOW stake with net proceeds of circa €190m 2) Retail at €3.2m profit; Industrial at €5.1m loss in early 2016 3) When vacancy of 2018 acquisitions is filled NIY increases to 6.4%

Disposals # Assets # Tenants Net sales proceeds Book profit / loss Net contract rent NIY WAULT Offices 67 106 120.3 7.7 6.2 5.2% 3.1 Other 51 320 266.9

• 1.92

19.2 7.2% 3.6 Total disposals 118 426 387.21 5.8 25.4 6.6% 3.5 Acquisitions # Assets # Tenants Total purchase costs Net contract rent NIY WAULT Offices 18 39 529.4

• 5.8

31.5 6.0%3 5.5 Delta

• 100
• 387
• 142.3
• 6.1

0.6% 2.0

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NSI Capital Markets Day – 7 November 2018

Impressions of dispositions 2018

Asset rotation

Amersfoort (958 sqm) Apeldoorn (3,360 sqm) Arnhem (5,863 sqm) Breda (3,187 sqm) Deventer (3,427 sqm) Doetinchem (2,281 sqm) Houten (1,045 sqm) Meppel (6,500 sqm) Tilburg (2,756 sqm) Zutphen (2,954 sqm) Zwaagdijk (2,099 sqm) Diemen (7,510 sqm)

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NSI Capital Markets Day – 7 November 2018

Blankenstein, Meppel Stammerhove, Diemen Folkert Elsingastraat, Rotterdam

• Completely vacant
• Weak investment and leasing market
• Developed a hotel transformation plan and
• btained a municipality principle consent
• Costs 20K and duration 4 months
• Sold to a hotel investor, sales proceeds up

by 60%

Highlighted dispositions

Asset rotation

• Low investor appetite due to 3-year

lease length and an overrent situation

• Regeared the lease to a 10-year term
• Sales proceeds up by 35%
• 70% vacant and a weak leasing market
• Located in a residential area
• Obtained principle consent from

municipality for a multi-family housing development

• Costs 30K and duration 6 months
• Sold to a residential developer, sales

proceeds up by 220%

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NSI Capital Markets Day – 7 November 2018

Q-Port, Amsterdam Sloterdijk Bentinck Huis, Den Haag Motion Building, Amsterdam Sloterdijk

Recent acquisitions

1) based on Gross Theoretical Rental Income: passing rent including ERV vacancy 2) fully let and after capex spend

Asset rotation

Acquisition date: Q1 2018 Acquisition price: € 36.8 m Vacancy: 25% WAULT: 3.4 year GIY: 7.1%1 Q3 2018 € 13.9 m 100% vacant >7%2 Q3 2018 € 47.3 m 29% 2.3 year 7.2%1

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NSI Capital Markets Day – 7 November 2018

Latest acquisition – Jacobsweerd, Utrecht

Exterior City view Interior impression

Asset rotation

Sint Jacobsstraat 200 - 440

• Acquisition date:

Q4 2018

• Acquisition price:

€ 51.1 m

• Vacancy:

0%

• WAULT:

4.6

• GIY:

6.0%

• Acquired including € 25.7m secured loan facility
• Existing relationship with Berlin Hyp AG facilitated deal

Utrecht Centraal Station Jacobsweerd

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NSI Capital Markets Day – 7 November 2018

Creating selective clusters

Amsterdam Zuid Oost Amsterdam Sloterdijk Utrecht Central station area Leiden Bio Science park

Asset rotation

Hogehilweg Laanderpoort HNK Zuidoost Hettenheuvelweg Centerpoint I&II Motion Building Q-Port Solar Eclipse The Glass House Newtonweg Archimedesweg 17 Archimedesweg 6 Jacobsweerd Uniceflaan HNK Utrecht West HNK Utrecht CS

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NSI Capital Markets Day – 7 November 2018

Remaining disposal pipeline

1) Some disposals in Other and Offices are in the same city

Asset rotation

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Disposals Q4 2018

Market value NIY ERV vacancy EPRA vacancy Number of Cities Expected € 82m 7.8% € 2.7m 28% 15

Disposals after 2018

Market value NIY ERV vacancy EPRA vacancy Number of Cities Other € 130m 6.9% € 1.2m 11% 9 Offices € 63m 8.7% € 2.7m 32% 16 Total € 193m 7.5% € 3.9m 20% 241

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

Break

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

Asset Management

by Anne De Jong - CIO & Mohammed Amlal Head of Asset Management

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NSI Capital Markets Day – 7 November 2018

New team

Asset Management

New Asset Management team

• 7 Asset managers and 1 analyst (7 new)
• Experience:

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NSI Capital Markets Day – 7 November 2018

Key performance indicators

EPRA vacancy Improving the portfolio Retention rate (sqm)

Asset Management

50% 55% 76% 53% 83% 50% 45% 24% 47% 17% 0% 20% 40% 60% 80% 100% 2016 2014 2018 E 2015 2017 Leave Retention 20% 24% 10 12% 22% 14% 16% 18% 2015 2016 2017 Nov-18 2018 excl. (un)cond. disp. Total Other G7

• Steady fall in vacancy since 2015, mainly from asset rotation
• First positive like-for-like fall in vacancy rate in H1 2018
• Target EPRA vacancy rate end 2018 below 14.5% - 15.5%
• Higher retention rate

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NSI Capital Markets Day – 7 November 2018

Regear of the lease Glass House, Amsterdam Sloterdijk

Glass House Glass House acquisition

• Acquisition date:

Q3 2016

• Acquisition price:

€ 57m

• GIY at acquisition:

11.3%

• LFA:

22,983 sqm

• Single tenant:

KPN

• WAULT at acquisition:

3.2 year

• Historical IRR:

17.7% (since acquisition) Sloterdijk station area Active Asset Management

• Lease re-gear
• Renegotiating terms with KPN in Q4 2016
• New 10 year lease agreed

Asset Management

The Glass House Motion Building Q-Port Train station

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NSI Capital Markets Day – 7 November 2018

Regear of the lease Hogehilweg Amsterdam & Hoofdweg Rotterdam

Hogehilweg 12, Amsterdam Zuidoost Highlights

• Old lease:

G4S, single tenant building

• LFA:

3,143 sqm

• Active asset Management
• Regear tenant:

G4S

• Regear lease:

37.5% above ERV

• Lease term:

10 year

• Book value doubled

Vareseweg 105, Rotterdam Highlights

• Old lease:

Multi-tenant / significant vacancy

• LFA:

6,306 sqm

• Active Asset Management
• New tenant:

Large corporate

• Leased area:

3,959 sqm

• Lease term:

11 year

• Occupancy:

100%

Asset Management

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NSI Capital Markets Day – 7 November 2018

Asset Management Top 5 vacancy

Asset Management

Top 5 based on ERV vacancy Property City Total area (k sqm) Vacant area (k sqm) % EPRA vacancy ERV vacancy (€ m) % of total vacancy Total ERV (€ m) Bentinck Huis Den Haag 6.0 6.0 100%

• HNK Rotterdam,

Scheepvaartkwartier Rotterdam 21.5 7.7 33%

• Motion Building

Amsterdam 16.0 4.9 30%

• HNK Den Haag

Den Haag 14.2 6.9 44%

• Alexanderpoort

Rotterdam 9.4 4.1 43%

• Total top 5 vacancy

67.1 29.6 43% € 5.2 m

27% € 11.9 m

Other focus assets Offices & HNK 371.1 50.2 10% € 7.1 m

38% € 70.9 m

Planned Disposals Offices & Other 242.1 66.9 23% € 6.6 m

35% € 28.6 m

Total 680.3 146.7 17% € 18.9 m

100% € 111.4 m

Reference date 1-1-2018

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NSI Capital Markets Day – 7 November 2018

Top 5 vacancy Bentinck Huis

Bentinck Huis Current state After renovation Lange Voorhoout 7, Den Haag

• Acquisition date:

Q3 2018

• Planned capex:

€ 5.4 m

• LFA:

6,048 sqm

• EPRA Vacancy:

100%

• Planned completion date:

Q1 2020

• Leasing strategy:

Creating high quality office supply, both suitable for single and multi-tenant strategies

Asset Management

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NSI Capital Markets Day – 7 November 2018

Top 5 vacancy HNK Rotterdam Scheepvaartkwartier & Motion Building

HNK Rotterdam Scheepvaartkwartier Vasteland 42-110, Rotterdam

• HNK opening:

2012

• Capex 2014 - 2018:

€ 6.8 m

• LFA:

21,541 sqm

• EPRA vacancy Nov-18:

33%

• MO EPRA vacancy Nov-18: 9%
• Leasing strategy:
• 3,000 sqm connected space available on top floor
• Several large leads 2,000 sqm – 5,000 sqm
• Rent optimisation

Motion Building Amsterdam Radarweg 60, Amsterdam Sloterdijk

• Acquisition date:

Q3 2018

• LFA:

15,921 sqm

• EPRA vacancy:

30%

• Leasing strategy:
• Lease up and rent optimisation
• Marketing
• 750 – 1,500 sqm
• Gain from future expected ERV growth in Sloterdijk

Asset Management

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NSI Capital Markets Day – 7 November 2018

Top 5 vacancy HNK Den Haag

HNK Den Haag Oude Middenweg 11 – 19, Den Haag

• HNK opening:

2014

• Capex 2014 - 2018:

€ 4.5 m

• LFA:

14,240 sqm

• EPRA vacancy:

44%

• EPRA vacancy MO’s:

3%

• Leasing strategy:
• Improving quality vacant floors & building
• New bridge and rooftop garden between buildings opening Q1-19,

connecting 3rd tower to club space

• Focus on larger tenants. Running leads are in the

range of 3,000 sqm – 5,000 sqm Realisation new rooftop garden

Asset Management

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NSI Capital Markets Day – 7 November 2018

Top 5 vacancy Alexanderpoort

Alexanderpoort Marten Meesweg, 93 – 121, Rotterdam

• Acquisition date:

Q4 2015

• Capex 2014 – 2018

€ 0.6 m

• LFA:

9,407 sqm

• EPRA vacancy:

43%

• Leasing strategy:
• Scenario 1: Limited renovation, improve occupancy
• Scenario 2: Demolition and rebuild in 5-7 years
• Scenario 3: Strip and redevelop

Artist impression Impression of new train station Rotterdam Alexander

Asset Management

Development

by Anne de Jong - CIO & Wilko Andrik - Manager development

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NSI Capital Markets Day – 7 November 2018

Development team NSI

Anne de Jong Wilko Andrik

▪

Manager Development

▪

Past experience:

▪

Chief Investment Officer

▪

Past experience: Mohammed Amlal

▪

Head of Asset management

▪

Past experience:

▪

Head of Technical management

▪

Past experience:

Development

Dennis van der Stoop

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NSI Capital Markets Day – 7 November 2018

Development process

Development

• 1. Initiative &

Definition

• 2. Design
• 3. Build

Completion & Operations Feasible project Final Design Building Permit Signed pre-let New asset Asset Management

Process Output

• 0. Exploration

Operational results

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NSI Capital Markets Day – 7 November 2018

Substantial long term development potential

1) will be demolished

Development

Project Location Current sqm To be developed sqm Capex Phase Timing Laanderpoort Amsterdam Zuidoost 13,000 1 30,000 – 35,000 € 120m Initiative & Definition Earliest start Q2 2020 Centerpoint I & II Amsterdam Zuidoost 15,000 1 40,000 – 70,000

• Exploration
• Motion Building

Amsterdam Sloterdijk 16,500 15,000 – 27,000

• Exploration
• 4 projects

G4

• Exploration
• All projects subject to property cycle, overall business risk profile, balance

sheet capacity, planning and significant pre-lets

• NSI is responsible for financing and leasing risk
• Execution risk (quality and costs) outsourced to third parties

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NSI Capital Markets Day – 7 November 2018

Laanderpoort

New 30,000 – 35,000 sqm lettable floor area

Concept of the two new buildings Building a new office & shared facilities on ING campus

• In negotiations with ING
• Laanderpoort is part of the planned fintech campus by ING
• Replace two existing buildings totalling 13,000 sqm
• Plan is to build two modern buildings totalling 30,000 – 35,000 sqm
• Earliest start date Q2 2020
• Estimated capex € 120m

Current building

• Year of construction 1991
• Energy label C
• LFA: 12,739 sqm

Development

Look and feel

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NSI Capital Markets Day – 7 November 2018

Laanderpoort

Connecting the ING Campus

Development

I N N O V A T I O N

new business models

HUB

data science, behavioural science, engineering and technology

Centerpoint I&II Train Station Bijlmer arena Transformation of “Zandkasteel” to residential (former ING HQ) New ING HQ Laanderpoort College HvA

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NSI Capital Markets Day – 7 November 2018

Laanderpoort

Connecting - urban situation

Development

Landscape Sport Water

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NSI Capital Markets Day – 7 November 2018

Video ING Campus

Development

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NSI Capital Markets Day – 7 November 2018

Centerpoint

Strong location close to the train station

Development

Laanderpoort Bijlmer ArenA Station Johan Cruijf ArenA Centerpoint I & II HNK Amsterdam Zuid-Oost

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NSI Capital Markets Day – 7 November 2018

Centerpoint

Urban situation plan from municipality

Source: Municipality of Amsterdam

Development

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NSI Capital Markets Day – 7 November 2018

Centerpoint

New 40,000 – 70,000 sqm lettable floor area

Development

Development of Centerpoint I & II

• Centerpoint I & II 15,000 sqm
• Demolish existing buildings
• Possibility to develop 40,000 – 70,000 sqm (phasing)
• Ambition for highest level of sustainability
• Mix of:
• Office
• Residential
• Local facilities

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NSI Capital Markets Day – 7 November 2018

Sloterdijk

Area in transition

Development

Sloterdijk Station Motion Q-Port Glass House Solaris Eclipse

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NSI Capital Markets Day – 7 November 2018

Motion Building Utilise parking area adding 15,000 – 27,000 sqm LFA

Current situation Development opportunity adjacent to Motion Building in Amsterdam

▪

Possibility to develop the parking lot of Motion Building

▪

Study of 3 scenario’s

▪

High sustainability ambitions Motion Building plot

Development

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

HNK

by Remco Boelens Head of HNK

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NSI Capital Markets Day – 7 November 2018

HNK key figures - September 2018

HNK

€204m

GAV

14

Assets

127k

Area (sqm)

3.0 yrs

WAULT

€1,595

Value psm

€16m

Contracted rent €184 Average rent psm

25.8%

EPRA Vacancy €22m ERV

4.0%

EPRA NIY

32% 49% 19% Amsterdam Other G4 Other NL

Sector split NSI Portfolio and subsector split HNK (%GAV)

17% 67% 16% HNK Offices Other

“HNK is NSI’s house view of how we can best cater to the needs of the office client of the future”

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NSI Capital Markets Day – 7 November 2018

Fully dedicated team Past experience

The Team

• Coworking provider
• Business centres
• Convention centre management
• Hospitality
• Brokerage
• Marketing

HNK

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NSI Capital Markets Day – 7 November 2018

70+ flexible office concepts in The Netherlands

Source: NSI internal classifications and assumptions, Vastgoedjournaal

HNK

Top 10 players in The Netherlands Number of locations

Seats2Meet 117 Regus 80 The Office Operators 27 FlexOffiZ 22 Smart Office 20 Tribes 16 Officetime 15 HNK 14 Unitz 11 Workspot 10

Differentiation

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NSI Capital Markets Day – 7 November 2018

HNK product offering

HNK

Parking Flex work spots Managed offices Conventional+ floors Meeting rooms Cafés Club HNK - Networking events Managed offices Conventional+ Club space: central reception, meeting rooms and café Flex spots/ co-working space

Avg Split % (sqm) 80% 15% 5% Flex space Traditional

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NSI Capital Markets Day – 7 November 2018

HNK offering at a glance

Conventional+ Managed office Meeting room

HNK

Café

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NSI Capital Markets Day – 7 November 2018

HNK locations

HNK

G4 HNK Amsterdam Houthavens HNK Amsterdam Zuid Oost HNK Amsterdam Schinkel HNK Utrecht Central Station HNK Utrecht West HNK Den Haag HNK Rotterdam Scheepvaartkwartier HNK Rotterdam Centre Other HNK Apeldoorn HNK Den Bosch HNK Dordrecht HNK Ede HNK Hoofddorp HNK Groningen

2 2

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NSI Capital Markets Day – 7 November 2018

Flex space makes up circa 20% of HNK sqm and produces 28% of revenues

HNK income split

HNK

Lease type GRI FY18E (€m) % of total GRI Conventional+ 11.4 69% Retail (in plinth) 0.5 3% Managed Offices 2.9 18% Meeting rooms 0.8 5% Other Income 0.7 4% Memberships 0.1 1% Total 16.4 100%

Revenue flexible

• perations

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NSI Capital Markets Day – 7 November 2018

HNK vacancy decline

HNK

L-f-L Change

• 9.8%
• 27.8%
• 3.3%
• 7.6%
• 7.3%
• 4.3%

# assets 14 13 13 10 9 3 1 Positive like-for-like since inception

2014 2012 2016 2013 2015 2017 HNK Schinkel Other 11 HNKs Sep-18 HNK Den Haag HNK Rotterdam 25.8% 62.1% 47.4% 55.1% 43.6% 37.1% 5.4% 29.8% 3.9% 2.6% 13.9%

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NSI Capital Markets Day – 7 November 2018

EPRA vacancy rate

HNK managed office (MO) vacancy rate Vacancy rate when fully operational below 10%

HNK

New units added

Property Year of

• pening

NEN MO MO % YE 2016 YE 2017 mrt-18 jun-18 sep-18 HNK Amsterdam Houthavens 2014 391 3.7% 100.0% 58.2% HNK Amsterdam Schinkel 2018 571 10.6% 100.0% 65.2% 17.2% HNK Amsterdam Zuid Oost 2016 278 2.4% 100.0% 14.2% 13.9% 13.5% 23.0% HNK Apeldoorn 2014 471 3.4% 22.1% 28.6% 14.7% 8.1% 5.2% HNK Den Bosch 2014 589 7.9% 25.3% 1.6% 3.3% 2.1% 0.0% HNK Den Haag 2014 840 5.9% 33.3% 3.3% 3.7% 0.5% 3.3% HNK Dordrecht 2016 170 2.9% 37.2% 6.9% 5.5% 6.8% 0.0% HNK Ede 2014 1,306 13.3% 7.2% 13.9% 7.9% 2.9% 0.9% HNK Groningen 2014 2,270 65.7% 10.6% 4.8% 5.0% 8.3% 19.4% HNK Hoofddorp 2013 645 20.2% 34.3% 40.0% 39.3% 14.9% 10.1% HNK Rotterdam Centrum 2016 1,167 14.0% 71.1% 30.2% 15.4% 29.2% 55.5% HNK Rotterdam Scheepvaartkwartier 2012 1,806 8.4% 12.4% 8.0% 8.7% 9.6% 9.1% HNK Utrecht Centraal Station 2015 1,631 18.4% 2.4% 1.7% 21.4% 9.2% 6.3% HNK Utrecht West 2013 2,261 76.4% 14.0% 6.6% 10.4% 3.1% 1.0% Total 14,396 11.3% 23.1% 13.6% 19.8% 13.3% 10.9%

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NSI Capital Markets Day – 7 November 2018

HNK rent vs ERV1 comparison

Managed offices rent relative to ERV (%) Meeting room rent relative to ERV (%) Conventional+ rent relative to ERV (%)

▪ In the best locations managed offices and meeting rooms can

achieve more than double the rent of conventional let space

▪ Conventional+ space achieves a premium as occupiers have

access to HNK services such as meeting rooms and reception

▪ The premium typically is sufficient to cover higher operating costs,

depreciation of fit-out and an economic return on HNK conversion capex

Note 1: ERV of same space let in conventional way with standard fit out

HNK

Key conclusions

Max 125% Min Average 100% 141% 244% Min 193% Average Max 125% 169% Min Max Average 100% 345%

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NSI Capital Markets Day – 7 November 2018

Conversion to higher value use can be very profitable

HNK return on investment

HNK

(€ psm) Conventional+ Managed Offices Additional rent 38 137

• /- HNK costs

(10) (10)

• /- Depreciation fit-out

(2) (12) Additional income 26 115 Conversion investment 120 250 Club space allocated capex (7% of LFA) 55 55 Total HNK investment 175 305 Yield on cost 15% 38%

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NSI Capital Markets Day – 7 November 2018

Several ways to grow HNK revenue

HNK

Increase turnover current locations

• Increase occupancy and rents
• Transform conventional+ space in

managed offices

• Lower non-recoverable service costs

as occupancy improves

• Lower op-ex from cost control

Low capital intensive strategy New openings in existing assets

• Transform existing NSI assets
• Expand platform and spread fixed

costs over additional sqm Moderate capital intensive strategy New openings from acquisitions

• Identify and acquire new assets for

HNK

• Expand platform and spread fixed

costs over additional sqm Capital intensive strategy Internal growth External growth

GRI NRI

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

Capital structure

by Alianne de Jong CFO

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NSI Capital Markets Day – 7 November 2018

Creating shareholder value Managing the balance sheet

Capital Structure

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NSI Capital Markets Day – 7 November 2018

Debt transactions 2018

Capital Structure

Implied investment grade credit rating

Margins reflecting new status

4 Transactions

Capitalising on an improving real estate portfolio and risk profile

2 Private Placements

A total of €90m of unsecured notes issued to Pricoa and Barings

1 Term loan & RCF

Unsecured syndicated bank loan with five banks

1 Secured loan

Existing €25m facility transferred as part of Jacobsweerd acquisition

€595m new debt facilities

Total €539m outstanding, €125m undrawn committed, plus €270m uncommitted facilities

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NSI Capital Markets Day – 7 November 2018

Maturity profile loans Oct 2018 (€m) Maturity profile loans Dec 2017 (€m)

Development of debt KPIs

Capital Structure

26 180 40 50 175 69 2018 2019 2023 2020 2026 2021 2022 2024 2025 2027 2028 US PP TL RCF BH 59 220 59 69 2023 2022 2021 2019 2018 2020 2026 2024 2025 2027 2028 59 59 TL RCF BH

0% 15% 54% 15% 0% 17% 0% 0% 0% 0% 0%

Avg maturity: 2.4 years

+1 +1

0% 0% 5% 0% 0% 77% 0% 0% 8% 0% 10%

Avg maturity: 5.2 years Cost of Debt (%)

0.0% 2.0% 4.0% 6.0% 1.0% 5.0% 3.0% 4.8% 17Q1 1.9% 3.7% 2.3% 18Q3 2.8% 15Q1 15Q2 3.8% 15Q3 5.2% 16Q1 16Q2 16Q3 2.8% 16Q4 17Q2 17Q3 17Q4 18Q1 18Q2 Nov-18 5.2% 3.8% 3.4% 2.8% 2.7% 2.3% 1.9% 2.0% 15Q4

Loan to Value (%)

LTV Target range 2017 44.1% 2011 2012 2013 2014 45.4% 2015 2016 Sep 18 40% 35% 36.9% 39.5% 57.0% 58.0% 48.9% 43.3%

• 18.5%

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NSI Capital Markets Day – 7 November 2018

Planned disposals (Un)conditional disposals 2018

Managing the debt book Extending maturities whilst keeping flexibility

Capital Structure

Term loan: can be repaid, however no possibility to re-draw Semi-flexible debt

69 50 664 125 40 RCF Headroom 175 180 26 Oct ’18 RCF Term Loan BerlinHyp2 BerlinHyp Pricoa Barings

RCF: flexible to repay and can be re-drawn when required Flexible debt BerlinHyp, Pricoa & Barings: Make-whole clause, so early repayment is prohibitively expensive Long-term debt

€364m €184m Gross debt Drawn €539m Development capex €384m

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NSI Capital Markets Day – 7 November 2018

Managing the debt book Execute development within LTV target range

Capital Structure

109 185 180 55 120 152 193 Disposals Net debt Sep 181

• 193

Acquisition Jacobsweerd2

• 82

Development Laanderpoort 482

• 275

382

• 21%

Term Loan Investments RCF Disposals Q4 ’18 Planned disposals Long-term debt 39.5% 42.1% 26.2% 34.1% 34.1% LTV

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NSI Capital Markets Day – 7 November 2018

Program

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

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NSI Capital Markets Day – 7 November 2018

Creating shareholder value

Conclusion

Guidance 2018 + medium term outlook

• We will continue to favour total return in the long run over short term EPS
• For the medium term we expect to enhance the overall quality and sustainability level of the

portfolio, with an improved income profile and a lower LTV. This will provide further capacity to explore other value-add opportunities

• The positive momentum in the business provides considerable comfort to the EPRA EPS
• utlook so that it should be possible to keep the dividend at least stable for the coming

years

1) The medium term outlook is based on the following assumptions:

• Selling remaining Retail and Offices outside focus areas (circa € 193m)
• Developing Laanderpoort (circa € 120m in capex)
• Filling up top 5 vacant assets, rest of the portfolio stable
• No revaluations and no (further) acquisitions

2018 Mid-term1 EPRA EPS € 2.50 - € 2.55 LTV 35% - 40% EPRA Vacancy 14.5% - 15.5% 6% - 8%

Ready for the future

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NSI Capital Markets Day – 7 November 2018

Program

Introduction

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour

80

NSI Capital Markets Day – 7 November 2018

Program

Introduction

▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour