Transaction presentation 8 November 2013 Not for release, - PowerPoint PPT Presentation

Transaction presentation 8 November 2013 Not for release, distribution or publication, whether directly or indirectly and whether in whole or in part, into or in the United States of America, Australia, Canada or Japan, or in any other jurisdiction in which the release, distribution or publication would be unlawful.

Contents 1 Transaction 2 Rationale 2

1 TRANSACTION

Transaction  Raising of € 300 million by placing 75 (seventy five) million new shares (Shares) in a private placement to qualified Transaction investors in the Netherlands and certain other jurisdictions (Placement)  A group of investors, including CBRE Clarion Securities and Cohen & Steers UK Limited have pre-committed to participate for a total amount of approx. € 220 million at € 4.00 per Share Structure and  The remainder is underwritten by ABN AMRO, ING and Rabobank Price  The Shares will rank pari passu in all respects with NSI’s existing issued ordinary shares, including the final dividend over the year 2013  The proceeds of the Placement will be used to strengthen the company’s balance sheet and take advantage of potential market opportunities in the Dutch market Use of proceeds  As a result of the Placement, the loan to value (LtV) ratio will reduce from approx. 60% to approx. 45% as at September 2013 on a pro forma basis  Agreement in principle with lending banks involved in the Placement on more favorable financing terms to lower average costs of funds Financing terms  Negotiations with other lending banks initiated 4

2 RATIONALE

Strengthen the balance sheet and take advantage of potential market opportunities Recapitalizing the company  NSI has expressed to be highly committed to reduce its LtV to below 55%  Dutch real estate landscape has changed completely: availability of real estate financing decreased and costs increased, while property values have been declining  We have been deleveraging by disposing assets, which also means selling rental income, and retaining dividends to manage our LtV  Due to the long lasting crisis, this route has not allowed us to deliver on our commitment to reduce our LtV - the contrary occurred despite our efforts and achievements to dispose assets ( € 86 million in 2012, € 115 million in 2013 YTD)  We have a strong operational platform, but financial condition limits our ability to execute our strategy  Position largest shareholder complicated the process  Currently, we see first signs that investment market is gaining momentum and a returning appetite amongst investors for the Dutch real estate market. This provides a good opportunity to recapitalize the company now  We have carefully considered all alternatives available to the company, and are of the opinion that a pre-placement with a group of reputable investors and the remainder underwritten by the banks, is the only ‘deal - certain’ route  This transaction enables us to minimize the execution risk and provides certainty of funds within the shortest possible timeframe  It creates headroom to seize market opportunities, creating a strong long term basis for all shareholders 6

NSI perfectly positioned to leverage platform  Portfolio of € 1.9 billion consisting mainly of offices and retail properties in the Netherlands, and offices and industrial in Belgium  High yielding Netherlands: a balanced mix between retail properties mostly in local shopping centres and more cyclical, high- portfolio yielding offices  Belgium: through Intervest Offices & Warehouses, NSI invests primarily in up-to-date buildings that are strategically located outside municipal centres  Focus on attractive loyal SMEs and corporates, large national (food) retailers, government-linked institutions and, in Strong and particular in Belgium, large logistic companies diversified tenant  base Local/regional character further characterised by underlying variations in duration and size of lease agreements  Distinct and scalable operating model, positions NSI to take advantage of potential future growth opportunities, Strong and based on three pillars: scalable - Dedicated letting platform organisational - Property and asset management platform - Innovation  Strong track record of adding value within its portfolio through redevelopment and rebranding Proven track - Technical optimisation (such as measures to reduce energy consumption) record in redevelopment - Operational optimisation (such as layout of the properties and interior styling) and new business  New FII regulation, once adopted, will enable NSI to provide services to tenants  Management Board has over 50 years of combined professional and real estate experience  Turned NSI into a professionally managed organisation with a strong tenant focus in culture and business Experienced processes management team  Successfully managed NSI through the downturn by divesting assets to focus NSI's portfolio, introducing new concepts such as the HNK Formula and reducing debt exposure 7

Evolving to improved capital structure 1 Intention to maintain LtV sustainably below 50%  Reducing term loans and committed revolving credit facilities  Reducing committed revolving credit facilities, providing flexibility to re-use these funds for future investments  LtV of approx. 45% as at 30 September 2013 on a pro forma basis, following completion of the Placement 2 Reducing average costs of funds  NSI and the lending banks involved in the Placement agreed on more favorable financing terms to lower its average costs of funds  NSI will initiate negotiations with other lending banks 3 Create the fundament to move to a solid financing structure  LtV level < 50% opens opportunities for non secured financing  Diversify funding base  Extending maturities 8

Real estate investment market sentiment  Investment market starts moving again - investment volume is increasing (CBRE European Investment Quarterly Q3 2013) - international investors are returning (CBRE European Investment Quarterly Q3 2013) Market Turnover ( € million) Q3 2013 Q3 2012 Change % NL 1,213 744 63.1 Europe Total 35,509 29,411 20.7  Lack of funding the missing ingredient to fuel a broader recovery  Well capitalized players benefit from current market opportunities - more opportunistic acquisitions are taking place - well capitalized funds teaming up with operationally strong parties (e.g. Goldman Sachs/ OVG) Source: CBRE Research, Property Data 9

Market momentum Value ( € m) 1 ( € /sqm) Property Location Date Buyer Size (sqm) Atrium Amsterdam Jun-2013 Victory Advisors 95.0 33,900 2,800 Union Investment Akzo Toren Amsterdam Mrt-2013 80.0 15,200 5,300 (Unilmmo) Amsterdam, Schiphol, UBS EVA portfolio Apr-2013 Victory Advisors 80.2 84,300 950 Cappel a/d IJssel, Arnhem Admiraal de Ruyter Amsterdam Feb-2013 HIH Global Invest 30.8 7,300 4,200 Marina Offices Amsterdam (IJdock) Mrt-2013 Union Investment 19.5 5,800 2,230 Multiple offices (8) Amsterdam, Rotterdam, Den Sep-2013 JV OVG/ Goldman Sachs 120.0 62,000 1,935 CBRE Dutch Office fund Bosch 2,400 retail De Kroon The Hague May-2013 Real IS 38.0 9,000 offices Som & Ito Amsterdam Oct-2013 Tishman 240.0 49,500 4,850 HQ Siemens The Hague Sep-2013 PingProperties 61.3 30,000 2,040 Amsterdam, The Hague, Axa portefeuille Jun-2013 PPF Real estate 140.0 100,000 1,400 Arnhem, Rijswijk, Rotterdam Raiffeisen Immobilien Rietlandgebouwen Amsterdam IJ-oevers Kapitalanlage 28.8 10,000 2,900 Gesellschaft Significant number of transactions in 2013 Mid-market segment starts to move Source: NSI 1. Market estimates 10

Current dividend policy  Pay out ratio is geared at funding regular capital requirements − Average capital expenditure requirements in general 10-15% of direct result  Financial prudency to secure future investments − Aligning dividend policy with exceptional market circumstances by linking dividend policy to LtV performance  Meeting REIT criteria for profit distribution LtV Pay out of direct result < 55% 85-100% 55%> LtV < 60% 50% in cash > 60% 50% in stock  LtV post (theoretical) Q3 interim dividend > 60%; in light of the Placement interim dividend Q3 foregone  The Placement will bring the LtV to below the 55% threshold in the dividend policy, which corresponds with a pay-out ratio of 85 to 100% in cash going forward 11