Preliminary Full year 2014 results 1 2014: STRATEGY IN PROGRESS 2 - PowerPoint PPT Presentation

Preliminary Full year 2014 results

1 2014: STRATEGY IN PROGRESS 2

2014: strategy in progress  Executing our asset rotation strategy − Full non core office portfolio sold • 52,619 sqm with over 80% vacancy; € 1.0 GRI > negative NOI − 4% office space (22,705 sqm) transformed for alternative use − Value add properties (12,216 sqm) optimised and sold − In total € 28.5 million of assets sold − € 25.7 mio invested in portfolio to improve quality and add value  Operational performance − Take-up Offices NSI two times higher than market − Upward trend effective rent level new leases offices − HNK roll out; 4 HNK’s opened in 2014, 7 HNK’s in operation • l-f-l growth of 33.7%, Q4 vs Q3 2014: 13.6% − Successful redevelopments in retail  Refinancing facility of € 550 mio fundament for new funding strategy − Diversification − Extended maturities − Lowering funding costs  Improving the direct result to € 48.5 million (2013: € 46.5 million) by 4.7% 3

NSI’s clear portfolio vision and strategy Asset management Optimise performance or sell Core Segmentation Keep or sell Client focus Value-add Investment Asset rotation Reduce Non-core Maximise total return Improve portfolio quality Improve operational performance 4

Progressing towards 2016 targets - offices Dutch office portfolio 41% 52% 70% 56% 48% 30% 3% 1-1-2014 1-1-2015 Target 2016 Occupancy 72.1% 71.2% >80% # HNK 3 7 20 5

Dutch Office Portfolio 2014: Overview Portfolio NSI Occupancy rate Passing rent Value Area Labe l In € per sqm In € m p.y. In # Financial occupancy In sqm. ‘14 ‘13 ‘14 ‘13 ‘14 ‘13 ‘14 ‘14 ‘13 ‘13 Core 42 39 71.9% 77.8% 1,230 1,503 233,909 184,451 24.5 23.3 95 69.6% 1,013 376,050 35 90 70.6% 815 326,774 28.3 Value-add 0 15 0 17.1% 0 377 0 54,866 0 1 Non-core Total 132 149 71.2% 72.1% 988 1,104 560,683 615,367 52.8 59.3 Total book value ’14 = € 559.7 m Total book value ’13 = € 679.2 m 3% 52% 41% 48% 56% 6

Progressing towards 2016 targets - retail Nederlandse winkelportefeuille 42% 44% 46% 50% 49% 46% 8% 8% 7% 1-1-2014 1-1-2015 Target 2016 Occupancy 87.2% >90% 87.7% 7

Dutch Retail Portfolio 2014: Overview (Including large scale retail) Portfolio NSI Occupancy rate in % Passing rent Value Area Labe l In € per sqm In € m p.y. In # Financial occupancy In sqm. ‘14 ‘13 ‘14 ‘13 ‘14 ‘13 ‘14 ‘14 ‘13 ‘13 2,248 84,249 Core 16 16 93.9 89.8 2,383 83,681 14.9 14.2 1,472 20 84.3 1,628 144,714 17.2 20 85.8 144,174 16.6 Value-add 6 6 71.3 83.9 699 924 42,058 42,058 2.6 3.5 Non-core Total 42 42 87.7 87.2 1,594 1,752 270,481 270,453 34.1 34.9 Total book value ’14 = € 431.1 m Total book value ’13 = € 474,0 m 8% 7% 44% 42% 41% 56% 50% 49% 33% Core Value-add Non-core 8

2 FINANCIAL 9

NSI signs a Euro 550 million Credit facility  NSI reached agreement on the refinancing of 80% of its Dutch credit facilities, 55% of total NSI facilities − Before 31-12-14 NSI received initial commitment from a strong supporting banking group on Head of Terms − This week, an agreement was reached on the Extended/full Term Sheet. Signed commitments were received on allocated loan amounts from all participating finance parties − Subject to full LMA documentation to be completed within next quarter  The credit facility is a combination of a EUR 450m bank facility and a EUR 100m European Private Placement − Facility amalgates all previous syndicate facilities and non-Pfandbriefe bilateral facilities and harmonizes contracts  Possibility to transfer from secured to unsecured funding − The facility is secured by a joined asset pool − New structure contains triggers which allow for release of security in the future − Unsecuring the majority of funding enables further flexibility for diversification into other funding instruments • Euro 100 mln /year can be refinanced by other non-bank related funding without penalties 10

Existing syndicated facilities and bilateral facilities will be restructured into one large pooled facility containing a EUPP, a Term Loan, and two RCFs Overview of Dutch credit facilities before and after refinancing (committed amounts) 2014 H1 2015 Q2* 703.8 703.8 Remaining maturities 100.0 EUPP - 7 yrs 215.0 Syndicated loan TLs, RCFs & WC facilities 1 July 2017 200.0 Term Loan - 5 yrs 185.0 Syndicated loan TL & RCFs 31 Dec 2015 125.0 RCF A - 3 yrs 70.0 Bilateral TL & WC facility 1 July 2016 125.0 RCF B - 5 yrs 55.0 Bilateral 15 January / 15 October 2016 Bilateral 50.0 1 April / 30 September 2015 50.0 RCF B - Accordion option Bilateral – Uncommitted working capital facilities 25.0 103.8 Secured financing remaining in place 103.8 * Assuming refinancing effective as per 2015 Q2 11

NSI Group maturity increases from 1.9 to 4.0 years, Dutch maturities increase to 4.7 years NSI Netherlands (excl. Belgium) 100% = € 524m 100% = € 542m Average maturity: 1.4yr Average maturity: 4.7yr 270 200 141 145 104 100 34 22 23 19 4 0 0 0 0 0 4 0 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 NSI Group (incl. Belgium) 100% = € 837m 100% = € 848m Average maturity: 1.9yr Average maturity: 4.0yr 290 280 185 172 131 112 104 66 68 66 61 46 35 35 10 7 4 0 7 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 12

The refinancing further improves NSI’s cost of debt Average cost of debt Remarks  NSI has a relatively high Cost of Debt because of: − Margins/contracts agreed upon before recapitalization -17% 5,3% − Relatively high hedge position (90%) due to repayment of 35% of outstanding debt in previous years 4,8% − Expensive remaining hedge contracts (+3% on average). 4,6% 4,4%  Ever since the recapitalization in November 2013, NSI has been focussed on further reducing its cost of debt 2013 Q3 (pre 2013 Q4 (post 2014 Q4 2015 Q2* recapitalization) recapitalization) − Reduced from 5,3% to 4,6% EoY 2014 Swap maturity calender 150 160 − New facility @ average margin of 2% at LTV<50% 140 120 99 92 100 − Following the refinancing, the average cost of debt will be 80 55 50 60 approx. 4.4% per mid Q2-15 40 20 0 − Expected to reduce to 4% @ start of 2016 due to 2015 2016 2017 2018 2019 a.b. Maturity profile 50 92 150 55 99 Belgium bond refinancing(30/6), maturing swaps Average swap % 3,04% 2,91% 2,98% 2,52% 2,88% Interest % maturing swaps 3,54% 3,47% 3,14% 3,66% (Q4/15/Q1/16) and reducing margins * Assuming refinancing effective as per 2015 Q2 13

Strategic financing aims well on track: focus on flexibility and 2015-2016 refinancing 2014-2016 Introduction of € 100 mln institutional facility  Launch of € 60 mln Belgian Bonds  Decrease dependency of only  Funding diversification one source of funding  Banking exposure significantly reduced  Room for refinancing with other instruments New facility @2% average margin (-40bp)   Cost of debt to reduce  Decrease overall cost of debt Reduce cost of debt  to 4.4% at signing facility  To 4% begin 2016  No more than 25% of loans  Introduction of 3/5/7 year tranches Refinancing risk maturing in any single year Maturity extended   Aim to maintain LTV below 50%,  Corporate LTV covenant @60% peak-to-trough between 40-50%,  Pricing grid incentivises lower LTV Covenants with covenant at 60-65%  Current LTV below 50% ICR > 2, current 2,6   Maintain ICR > 2.0  Extend and maintain average NL debt maturity extended to 4,7 yrs  Debt maturity debt maturity to over 3 years NSI maturity extended to 4 yrs   Anticipate move to unsecured in Trigger mechanism: switch to unsecured if during 2 testing periods: refinancing 2015 – 2016 Move to unsecured  LTV below 45% maturities financing  ICR > 2.5  Revaluation > 0 14