Interim Results Half Year 2017 July 2017 A new strategy NSI will - - PowerPoint PPT Presentation

▶
interim results
SMART_READER_LITE
LIVE PREVIEW

Interim Results Half Year 2017 July 2017 A new strategy NSI will - - PowerPoint PPT Presentation

Dec 19, 2022 260 likes •519 views

Interim Results Half Year 2017 July 2017 A new strategy 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

slide-1
SLIDE 1

July 2017

Interim Results

Half Year 2017

slide-2
SLIDE 2

A new strategy

“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

  • perator”

NSI Full Year results 2016 I 2

slide-3
SLIDE 3

Half Year 2017

NSI interim results 2017 I 3 Revenue and Earnings H1 2017 2017 H1 20161 Change % Operating margin 79.9% 74.1% +5.8pp EPRA Vacancy 22.2% 22.9%

  • 0.7pp

Net rents like-for-like 1.8%

  • EPRA Earnings per share (€)

1.35 1.11 21.4% Dividend per share (€) 1.04 1.04 0.0% Balance sheet 30 Jun 1 17 31 Dec 1 161 Change % Portfolio revaluation 0.6%

  • 4.5%2

EPRA NAV per share (€) 35.10 34.61 1.4% EPRA NNNAV per share (€) 34.55 33.56 2.9% Average cost of debt 2.8% 2.8% 0.0pp LTV 38.1% 44.1%

  • 6.0pp

1 2016 numbers restated for 8:1 share consolidation 2 12 month period to 31 Dec 16

slide-4
SLIDE 4

Progress

slide-5
SLIDE 5

A new strategy – firmly on track

2011 2011 2013 2013 YTD 17 2015 2015 2016 2016 2000 2000 1998 1998 1992 1992 Corporate

  • rate Highligh

lights ts Inve vestme stment nt High ghligh lights ts

NSI founded NSI Listed Dutch REIT status Merger with Vastned O/I Succesful €300m re-capitalisation Refinancing of €550m with group of banks and institutions Security release and refinancing results in 73% unencumbered assets Exit from Switzerland Partial exit Belgian IOW stake Acquisition of 8 high-quality

  • ffice assets

(Total €169m) Final exit IOW stake Divesting Industrials portfolio Acquisition of Glass House, Amsterdam, subsequent lease extension in December Sale portfolio of 16 retail assets (Total €151m) Sale portfolio of 6 Large Scale Retail assets (Total €74m)

Start rt asset rotatio ation

St Stron

  • ng

g start rt of

  • f

executi ecution

  • n

new strategy ategy

In transfo sforma mation tion since ce 2013

Acquisition of 4

  • ffice assets in

Amsterdam, Leiden and Utrecht. (Total €117m)

NSI interim results 2017 I 5

slide-6
SLIDE 6

Executing the new strategy

NSI interim results 2017 I 6

Disposals1 YTD 2017 (€m) # Assets Book value Sales result Sales Cost Net sales proceeds Book profit/(loss) GIY Total Retail 23 219.8 229.0

  • 2.3

226.7 6.8 8.3% Total Offices 5 9.4 9.6

  • 0.1

9.5 0.1 5.2% Total 28 229.3 238.6

  • 2.4

236.2 6.9 8.2% Acquisitions2 YTD 2017 (€m) # Assets Book value Jun 17 Purchase Price Purchase cost Total Purchase cost Book profit/(loss) GIY Offices 4 124.0 116.8 7.9 124.7

  • 0.8

7.9% Delta

  • 24
  • 105.3
  • 121.8

10.3

  • 111.5

6.2

  • 0.3%

1 Includes Keizerslanden in Deventer which transfers in 2018 and Maarsen sold post-close 2 Includes Leiden bought post-close

Successf cessful ul start rt asse sset t rotati ation

  • n
slide-7
SLIDE 7

Execution Sector split

Amsterdam 31% Other G4 13%

Other Randstad 11%

Other NL 15% HNK 14% Retail 16%

Retail 16% HNK 14% Offices 69%

Amsterdam 21% Other G4 10%

Other Randstad 8%

Other NL 15% HNK 13% Retail 27% LSR 6%

Retail 33% HNK 13% Offices 53%

Sector split Year End 2016 ( portfolio value €1.2bn) Sector split June 2017 ( portfolio value €1.1bn) NSI interim results 2017 I 7

slide-8
SLIDE 8

Portfolio update

slide-9
SLIDE 9

57% of f retail l assets sets sold ld

  • 23 assets sold in two portfolio deals and
  • ne single asset transaction
  • Disposal proceeds retail ca. €225m
  • On average ca. 3% above book value
  • 2/3 of retail value in 4 assets (Rotterdam

Zuidplein, Rijswijk, Heerlen and Ridderkerk)

  • Retail 16% of total portfolio

Executing the new strategy

Retail portfolio end of June 2017

Sold

NSI interim results 2017 I 9

slide-10
SLIDE 10

▪ Area: 12,079 sqm ▪ Tenant: Government ▪ GIY: 10.3% ▪ WAULT: 4.1 years ▪ Energy Label: C ▪ Acquisition price: €20.5m

Unic icefl flaan an 1, Utre recht cht

Execution – reinvesting proceeds

NSI interim results 2017 I 10

slide-11
SLIDE 11

▪ Area: 11,700 sqm ▪ Tenant: Government ▪ GIY: 7.2% ▪ WAULT: 4.3 years ▪ Energy Label: B ▪ Acquisition price: €45.0m

Pa Parnass ssusw usweg 101, 1, Amste terda rdam

Execution – reinvesting proceeds

NSI interim results 2017 I 11

slide-12
SLIDE 12

▪ Area: 13,300 sqm ▪ Tenant: ING ▪ GIY: 7.6% ▪ WAULT: 3.8 years ▪ Energy Label: C ▪ Acquisition price: €33.8m

Bij ijlm lmerd rdree reef 100, 0, Amsterd erdam am

Execution – reinvesting proceeds

NSI interim results 2017 I 12

slide-13
SLIDE 13

▪ Area: 7,239 sqm ▪ Tenant: Janssen Vaccines ▪ GIY: 8.9% ▪ WAULT: 5.0 years ▪ Energy Label: C ▪ Acquisition price: €17.5m (€2.417 /sqm)

Archim imede desw sweg eg 6, Leid iden

Execution – reinvesting proceeds

Train station City Centre Bio Science Park

NSI interim results 2017 I 13

slide-14
SLIDE 14

Netherlands property market overview

NSI interim results 2017 I 14 0.0 0.5 1.0 1.5 2.0 2.5 3.0

2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3 2016 Q1 2016 Q3 2017 Q1

Investment volumes Offices Netherlands (€bn bn) Prime office yields Netherl rlands

  • 8%
  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8%

2009 2011 2013 2015 2Q17*

Amsterdam Eindhoven Rotterdam The Hague Utrecht

3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5%

2009 2010 2011 2012 2013 2014 2015 2016 2Q17

Amsterdam Rotterdam The Hague Utrecht

Prime rental al growth th 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%

2006 2008 2010 2012 2014 2016

Vacancy rate Offices Netherlands

slide-15
SLIDE 15

Operational performance

Rental growth th (pote tenti tial al) €m Net rent growth th like-for-like ERV growth th like-for-like Reversion Dec 1 16 Reversion Jun 1 17 Offices

  • 1.9%

1.3%

  • 8.3%
  • 3.2%

HNK 20.9% 2.1% 0.3% 2.4% Retail 3.2%

  • 0.6%
  • 6.3%
  • 9.2%

Other 4.8% 1.6%

  • 17.3%
  • 13.9%

Tota tal 1.8% 1.8% 1.2% 1.2%

  • 6.7%

6.7%

  • 3.5%

3.5% Offices + HNK 1.3% 1.5%

  • 6.0%
  • 2.1%

EPRA vacancy Dec 1 16 Like-for-like Disposals als/ Acquisiti tions Jun 1 17 Offices 21.3% 2.1%

  • 2.9%

20.5% HNK 37.1%

  • 3.8%

0.0% 33.3% Retail 12.5% 2.5% 1.1% 16.1% Other 16.5%

  • 2.7%

0.0% 13.8% Tota tal 21.4% 4%

  • 0.8%

0.8% 0.0% 0.0% 22.2% 2% Offices + HNK 25.3% 0.6%

  • 2.5%

23.4%

  • Net rent growth like-for-like 1.8%
  • ERV growth 1.2%
  • Negative reversion tapering off

NSI interim results 2017 I 15

slide-16
SLIDE 16

0.6% 0.6% 0.6% 3.1% 3.1%

  • 0.8%

0.8%

  • 2.9%
  • 40
  • 30
  • 20
  • 10

10 20 30 40

Total Office HNK Retail Others

Positive revaluation Negative revaluation

Half Year 2017 (€m)

Revaluation result

At end of June all investment properties in operation have been externa nally appraised Big differe rences s betwee een segments nts

  • Total revaluation €6.9m
  • Amsterdam offices up €18m
  • Retail small negative €1m

Retail valuations s caused by :

  • Lower ERV ‘s : -0.6%

HNK remarks ks

  • Amsterdam and Utrecht up
  • Decline mostly related to Rotterdam and Den Bosch

Office market t remains polarise sed

  • G4 like-for-like +5.2%
  • Other Netherlands like-for-like -8.8%

NSI interim results 2017 I 16

slide-17
SLIDE 17

En Energy gy score

  • res

ESG

Bette ter r reportin rting

  • NSI will start with regular updates on sustainability
  • All office buildings must have an energy label of C or better
  • There is more to ESG than energy scores, so NSI will become a

member of GRESB Already y strong ng focus on ESG

  • Energy consumption CO2 Neutral
  • NSI installing 3,500 solar panels

Energy scores C label o

  • r better

ter

  • 78% Offices portfolio
  • 87% HNK portfolio
  • 79% of Offices and HNK
  • Estimated €5m to upgrade remaining Offices and HNK assets

to C label or better NSI interim results 2017 I 17 86% 63% 78% 87%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

G4 Other Total office portfolio HNK

A B C D E F G Cum A-C

slide-18
SLIDE 18

Financials

slide-19
SLIDE 19

EPRA Earnings

1.11 11 1.35 35

  • 0.01

01

  • 0.03

03 0.06 06 0.09 09 0.01 01 0.12 12

1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 EPRA EPS H1 2016 Gross rental income Service costs not recharged Operating costs Administrative costs Net financing result Other EPRA EPS H1 2017

EPRA Earnings bridge per share (€)

NSI interim results 2017 I 19

  • EPRA Earnings per share up 21.4%
  • Growth driven by cost reduction
slide-20
SLIDE 20

EPRA Earnings

€ '000 H1 2017 2017 H1 2016 2016 Change % Gross rental income 45,640 45,787

  • 0.3%

Service costs not recharged

  • 1,237
  • 2,277
  • 45.7%

Operating costs

  • 7,958
  • 9,601
  • 17.1%

Net rental income 36,446 446 33,910 910 7.5% 7.5% Administrative costs

  • 4,425
  • 4,588
  • 3.6%

Direct investment result from participations (IOW) 565

  • 100.0%

Earnings before re interest t and taxes 32,021 021 29,887 887 7.1% 7.1% Net financing result

  • 7,834
  • 10,040
  • 22.0%

Direct investment nt result t before re tax 24,187 187 19,847 847 21.9% 9% Corporate income tax

  • 12
  • 5

133.3% EPRA Earnings 24,175 175 19,842 842 21.8% 8% NSI interim results 2017 I 20

slide-21
SLIDE 21

EPRA NAV

EPRA NAV bridge per share (€)

NSI interim results 2017 I 21

  • EPRA NAV per share up 1.4%
  • EPRA NNNAV per share €34.55, up 2.9% versus Dec 16 (€33.56)

34.61 35.10

  • 1.12
  • 0.28
  • 0.03

1.35 0.39 0.18 0.01 33.0 33.5 34.0 34.5 35.0 35.5 36.0 36.5 Dec 16 EPRA Earnings Dividend Revaluation Result on sale Swap cancellation Effect of stock dividend Other Jun 17

slide-22
SLIDE 22

Balance sheet

(€ ‘000) Jun 2 2017 Dec 2 2016 Real estate investments 879,323 770,434 Assets held for sale 195,899 389,923 Other assets 5,603 4,038 Cash 10,093 2,067 Tota tal assets 1,090, 90,918 918 1,166, 66,462 462 Total shareholders’ equity attributable to shareholders 629,441 604,254 Interest-bearing loans 413,012 510,904 Debts to credit institutions 7,257 3,429 Other liabilities 41,208 47,875 Total liabilities 461,477 562,208 Total shareholders’ equity and liabilities 1,090, 90,918 918 1,166, 66,462 462 NSI interim results 2017 I 22

slide-23
SLIDE 23

43 220 43 60 50 90 90 20 50 100 150 200 250 2017 2018 2019 2020 2021 2022 2023 Headroom Drawn Swaps Unsecured syndicated bank debt € 220m 53% RCF unsecured bank debt € 86m 21% Secured EUPP € 60m 14% Secured bank debt € 50m 12%

Strong balance sheet

  • LTV 38.1%
  • Cost of debt down to 2.8%
  • ICR 4.7x well above 2.0x covenant
  • 74% of debt unsecured
  • 71% unencumbered assets
  • Debt maturity 3.6 years
  • No expiries prior to November 2019
  • Undrawn credit facilities €199m

Loans and swaps maturity profile (€m)

NSI interim results 2017 I 23

slide-24
SLIDE 24

Final remarks

slide-25
SLIDE 25
  • Disposal of retail assets
  • Further asset rotation in offices
  • Continued focus on costs
  • Identifying value-add opportunities for 2018/2019
  • 2017 EPS guidance of 2.52-2.55

Final remarks

NSI interim results 2017 I 25