Capital Markets Day – Ready for the Future 7 November 2018 NSI Capital Markets Day – 7 November 2018 0
Program ▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour NSI Capital Markets Day – 7 November 2018 1
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”
Introduction Clarity and consistency Comments from our quarterly reports “HNK is the house view of how we can best cater to the “Key is that NSI has the size, focus, portfolio, needs of the office client of the future” organisational set up and culture to be able to thrive” ”We have put in place an almost entirely new “We are willing to sacrifice short term EPS in the belief organisation” that long term risk- adjusted total returns will be better” “NSI needs to specialise to be able to thrive” “We prefer to use the improved credit rating to extend the average debt maturity” “We need to remain disciplined” “A strong balance sheet does allow us to consider moving “Passive investing in property is no longer an option” up the risk curve selectively” “We identified substantial development potential in our “We have stepped up our disclosure significantly to existing portfolio” facilitate proper scrutiny of our efforts” “The asset rotation has resulted in a more focused, “At NSI we are in it for the long run and therefore are higher quality portfolio, with better margins and a lower working hard to prove good stewards of capital over the vacancy rate” entire property cycle” NSI Capital Markets Day – 7 November 2018 4
Introduction A clear focus A focus entirely on Dutch offices… • Location – Economic growth centres (Amsterdam, The Hague, Rotterdam, Positioning 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 Execution 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 Control • Transparency – Clear accountability to all stakeholders • Cost efficiency – Lower EPRA cost ratio NSI Capital Markets Day – 7 November 2018 5
Introduction Creating shareholder value NSI Capital Markets Day – 7 November 2018 6
Introduction Creating shareholder value Creating the right platform NSI Capital Markets Day – 7 November 2018 7
Introduction A new team and culture to deliver on the strategy -43% 81 79 79 77 70 66 66 55 54 51 50 46 75 71 50 81 79 61 54 34 27 25 37 21 25 25 New 24 21 17 16 12 9 6 4 Dec-15 Mrt-16 Jun-16 Sep-16 Dec-16 Mrt-17 Jun-17 Sep-17 Dec-17 Mrt-18 Jun-18 Sep-18 NSI Capital Markets Day – 7 November 2018 8
Introduction Meet the team NSI Capital Markets Day – 7 November 2018 9
Introduction Optimising/simplifying processes Corporate structure - December 2015 NSI NV nl117/nlc117 EUR NSI German Holding BV NSI Beheer BV NSI Beheer II BV NSI Management BV nl106/nlc106 nl107/nlc107 nl108/nlc108 nl100/nlc100 EUR EUR EUR EUR NSI Development BV Hans-Böckler-Strasse VastNed Offices Benelux nl120/nlc120 Hans-Böckler-Strasse SarL VmBH Holding BV EUR de700 de720 nl500/nlc500 EUR EUR EUR VastNed Offices Belgium VastNed Offices Belgium Holdings BV NV nl575 be650 EUR EUR Belle Etoile NV Cocoon Office Park NV be650 be600 EUR EUR MRP NV ABC NV MBC NV EUR EUR EUR NSI International BV NSI Woningen BV NSI Winkels BV NSI Kantoren BV NSI Bedrijfsgebouwen BV NSI Vol Detailhandel BV NSI Monument BV NSI HNK BV NSI Service HNK BV nl109/nlc109 nl111/nlc111 nl112/nlc112 nl113/nlc113 nl114/nlc114 nl115/nlc115 nl116/nlc116 nl510/nlc510 nl530/nlc530 EUR EUR EUR EUR EUR EUR EUR EUR EUR NSI Luxembourg Holding SA RL lu001/luc001 EUR NSI Switzerland SA RL zw200/zwc200 EUR NSI Management NSI (Swiss) AG II NSI (Swiss) AG III NSI (Swiss) AG IV Switserland GmbH zw002/zwc002 zw003/zwc003 zw004/zwc004 zw100/zwc100 CHF CHF CHF CHF NSI Capital Markets Day – 7 November 2018 10
Introduction Optimising/simplifying processes Corporate structure - target December 2018 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 Services B.V. HNK Vastgoed B.V. NSI Capital Markets Day – 7 November 2018 11
Introduction Optimising/simplifying processes Automating and outsourcing Reporting Internal reporting External reporting Leasing Outsourcing • Automation • Focus on core business and value creating activities • Efficiency • Technical property management outsourced to 3 rd • Standardisation parties • Improved control • Better conversion NSI Capital Markets Day – 7 November 2018 12
Introduction NSI’s green initiatives will become more visible Future proof buildings Energy scores Offices & HNK by value NSI installed solar panels (# assets) 3,500 across the portfolio F G • Location with strong public transport E 3% • Good health and wellbeing 6% D 2% 6% • Responsible consumption • Innovation and infrastructure A 46% C • 16% Flexible property use • Circular (re-)development • Reducing carbon footprint • 21% GRESB reporting 2019 NSI installed Green Walls B HNK Amsterdam Houthavens Near term takeaways Cost to upgrade to energy label (€m) • From 1 January 2023 all offices need to Energy All assets Excl. assets on have an Energy Label of C or better label per Sep-18 disposal list • Already 83% of assets are compliant with A 8.3 5.9 the C-label minimum B 5.0 3.8 • C 4.5 2.7 The NSI ambition goes well beyond the minimum A label requirement in 2030 NSI Capital Markets Day – 7 November 2018 13
Program ▪ Introduction ▪ Asset rotation ▪ Coffee break ▪ Asset management and development ▪ HNK update ▪ Capital structure ▪ Q&A ▪ Lunch break ▪ Property tour NSI Capital Markets Day – 7 November 2018 14
Asset rotation by Anne de Jong - CIO & Thijs Peek - Head of Transactions
Asset rotation Creating shareholder value Building a sought-after portfolio NSI Capital Markets Day – 7 November 2018 16
Asset rotation Asset rotation New Transaction Management team New Transaction Management team o 4 Transaction managers and 1 analyst (4 new) o Experience: NSI Capital Markets Day – 7 November 2018 17
Asset rotation Moving towards a more concentrated portfolio Q4 2014 2018 excl. (un)conditional sales November 2018 213 assets ( <100 assets) 113 assets NSI Capital Markets Day – 7 November 2018 18
Asset rotation Portfolio evolution Average asset value (€m) Number of assets 350 14 12.4 300 12 11.1 250 10 +170% -70% 200 8 150 6 100 4 50 2 0 0 2012 2013 2014 2015 2016 2017 Nov -18 2018 2012 2013 2014 2015 2016 2017 Nov - 18 2018 excl. excl. (un)cond. (un)cond. disp. disp. NSI Capital Markets Day – 7 November 2018 19
Asset rotation Dutch portfolio split since 2014 € 1.1bn € 1.2bn € 1.2bn € 1.1bn € 1.3bn € 1.2bn 11% 11% 14% 14% 17% 17% 9% 10% 34% 34% 11% 11% 41% 41% 47% 47% 16% 16% 11% 12% 10% 10% 11% 11% 18% 18% 25% 26% 24% 24% 21% 21% 20% 20% 8% 8% 26% 26% 79% Target cities 8% 8% 17% 17% 5% 5% 16% 16% 44% 42% 41% 41% 36% 36% 15% 15% 27% 23% 23% 14% 14% 7% 7% 2014 2015 2016 2017 November 2018 excl. 2018 (un)conditional sales Amsterdam - Office Other G4 - Office Other target cities - Office Other NL - Office Other - Retail & Industrial NSI Capital Markets Day – 7 November 2018 20
Asset rotation Period January 2015 – November 2018 Disposals Book profit / Net contract # Assets # Tenants Net sales proceeds NIY WAULT loss rent Offices 67 106 120.3 7.7 6.2 5.2% 3.1 Other 51 320 266.9 -1.9 2 19.2 7.2% 3.6 Total disposals 118 426 387.2 1 5.8 25.4 6.6% 3.5 20 Acquisitions 5 7 20 Total purchase Net contract # Assets # Tenants NIY WAULT costs rent 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 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% NSI Capital Markets Day – 7 November 2018 21
Asset rotation Impressions of dispositions 2018 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) Zutphen (2,954 sqm) Zwaagdijk (2,099 sqm) Diemen (7,510 sqm) Tilburg (2,756 sqm) NSI Capital Markets Day – 7 November 2018 22
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