Analyst meeting Full year results. Rotterdam 15 February 2013

Transcription

1 Analyst meeting Full year results Rotterdam 15 February 2013

2 Portfolio & Strategy Focus on Netherlands and Belgium Exit strategy Switzerland; 70% assets sold; sale of 2 remaining assets ongoing High Yield fund Two asset classes: Offices & Retail Netherlands: 1.5 billion GIY: 9.6% Anti-cyclical asset management Active asset management VNOI merger Balancing portfolio over the cycle Office: 0.9 billion Focus on Randstad Retail: 0.5 billion Nationwide regional focus High Yield with office portfolio Stable cash flow from retail is backbone to optimize total return DEN HAAG AMSTERDAM ROTTERDAM ANTWERPEN BRUSSEL MECHELEN UTRECHT LIÈGE Office Retail Logistics Belgium: 0.6 billion GIY: 9.0% 55% stake in listed fund (Intervest Offices) Office: 0.4 billion 17 properties (233k sqm) Focus on Antwerpen- Brussels Logistics: 0.2 billion 21 properties (395k sqm) Strategic axes: Antwerpen- Mechelen & Antwerpen Luik Nr 2 position 2

3 Our long term decisions Asset focus Offices & Retail; 50/50 over the asset cycle Inhouse Property & Asset Management Scale High yield profile Benelux focused Letting teams Technical management Property development and management Marketing & business development Utilizing inhouse property management Diversified and innovative leasing concepts Branding Integrally managed and tenant focused Funding Reduction LTV; < 55% Interest fixing of at least 80% Diversification of funding 3

4 Highlights 2012 Increase of 13% in direct investment result to 63.4 million (2011: 56.0 million) as result of merger VNOI; Direct result per share 0.99 compared to 1.19 in 2011, partly due to a significant increase (13%) in number of shares outstanding Integration VNOI; significant contribution to direct result per share Occupancy total portfolio improved to 81.0% from 80.5% as per Q Occupancy of Dutch office portfolio improved to 71.3% from 70% as per Q In 2012 NSI refinanced in total over 60% ( 507 million) of total Dutch outstanding debt 4

5 Highlights 2012 NSI delivered on its Dutch asset disposal target 47.9 million of assets, partially delivered in 2012, In total million of assets sold in 2012 Total investment result million; revaluations of the real estate portfolio million in 2012 LtV increased to 58.2% (2011: 57.2%), 35,4 million asset sales announced in January 2013, stand alone impact: LtV reduction of 0.8% NSI will propose a change in dividend policy towards a sustainable dividend to support its strategy, of which the main elements are: Pay out ratio % Dividend will be linked to LtV performance 5

6 Towards sustainable dividend Ability to move forward with execution of strategy is crucial and requires investments; Regular investments in quality of assets New concepts/ redevelopments Proposed dividend policy: pay out ratio is geared at funding regular capital requirements Average capital expenditure requirements in general 10-15% of direct result, resulting in pay out 85%-100% These investments are meant to yield into sustainable future dividends. Financial prudency to secure future investments Aligning dividend policy with exceptional market circumstances by linking dividend policy to LtV performance; 55% > LtV < 60%; pay-out ratio 50% of direct result in cash LtV > 60%: pay-out ratio 50% of direct result as stock dividend Possibility to offer stock dividend in case the circumstances are supportive Conditional upon approval in AGM on 26 April 2013; final dividend 0.11 per share (50% of direct result per share), totalling the 2012 dividend to 0.86 per share 6

7 Our key priorities Reducing LtV NSI is highly committed to reduce LtV to below 55% Continue disposal strategy In million of assets sold An additional 35.4 announced in January 2013 Approx. 100 million used to redeem debt Operational Building on operational strength Increasing occupancy levels Roll our HNK concept Further improving effectiveness and efficiency Continued cost control and driving efficiencies Optimise value per property and sell 7

8 Operational highlights - Retail Solid occupancy at 92,5% Decrease from 94.5% in Q3 due to expiring rental guarantee; no remaining guarantees C&A signed new contract for t Loon, accelerating rebuilding activities NSI benefiting from strategic choices to target food, in particular supermarkets and daily goods in general Retail environment increasingly challenging, in particular large retail Recently sold properties demonstrate active asset (cycle) management Target for 2013 is to keep occupancy stable Development occupancy in sqm: Total area 1/1/12 Leased 1/1/12 Leased in period Vacated in period Total area 31/12/12 Leased 31/12/ 2012 Area Area % Area Area Area Area % 292, , ,036 16, , ,

9 Operational highlights - Offices Turning point in occupancy; improved from 70% Q3 to 71.3% Further improvement throughout 2013 is expected Continued outperformance market in take up levels; NSI realized 4% of the total market take up, while portfolio represents 1.3% Continued early renewals; actively creating negotiation momentum and managing expiration calendar; Further improvement supported by expiration calendar; 13% of contracts will expire in 2013 (2012: 23%) Trend of growing demand for flexible and full office concepts continues; Roll out HNK progressing HNK Rotterdam opened mid October; Further roll out in portfolio progressing De Rode Olifant delivered to Spaces, contract effective since mid December Total area 1 /1/12 Leased 1/1/2012 Leased in period Vacated in period Total area 31/12/12 Leased 31/12/12 Area Area sqm% Area Area Area Area sqm% 644, , , , , ,056 71% 9

10 10

11 De Rode Olifant, delivered to Spaces in December

12 HNK- distinctive strength A place to be - inspiring meeting place to work and to meet Highly accessible; Free entrance social heart Memberships Managed offices Traditional offices Offering exactly what tenant needs Services Space Flexibility Translates into a well priced solution, benefiting both tenant and NSI Lower total costs for tenants Higher rent per sqm for NSI HNK Rotterdam Occupancy 30% (total property; 18,000 sqm) Investments in HNK 2.8 million Annualized HNK rent level 307,000 HNK: 1,520 sqm leased at 287 per sqm 12

13 Operational Highlights- Belgium Focus on renewals paid off Offices: New lettings 3,200 sqm Renewals: 45,751 sqm Occupancy improved to 85% (84%) Logistics New lettings: 16,552 sqm Renewals: 82,487 sqm Occupancy decreased to 89% (91%) Revaluations impacted by: Renewal contract with PwC until 2021, lower rent level ( 1.4 million per annum) Deloitte leaving Diegem office (21,302 sqm) in 2016; alternative leasing strategies being developed Total revaluation - 13,5 million Investments in strong performing logistics portfolio Second distribution centre at logistics site in Oevel Investment 7,9 million, NRI: 0.7 million Expansion logistics site Oevel Investment: million, NRI 0,3 million Redevelopment Herenthals Logistics 1, Neerland 1 in Wilrijk and Oevel. Investment 3.3 million, NRI 0.6 million Revaluation 18,0 million positive 13

14 Expiration of Leases 31 December 2012 (NL) We actively manage and anticipate expiration calendar; smoothening the future expiration levels In both the office and retail portfolio; the 2013 expiration calendar is below average. The office portfolio is significantly below 2012 level (23%) Expirations in 2013 involve a smaller number large single tenant contracts compared with 2012: (number of contract expiries) > 10, ,000-10, ,000-5, ,000-3, Representing total m2: 64,269 25,024 rental income x 1,000 14

15 Vacancy development Occupancy expected to improve further improvement in 2013 Expiration calendar in 2013 and 2014 below average with limited expiries of large single tenant contracts Increase in vacancy Retail portfolio, for a large part due to an expiry of a rental guarantee (Zuiderterras), no rental guarantees left in portfolio Redevelopment of properties to new concepts impact vacancy until completion Date of merger VNOI 15

16 Portfolio Rent Development Average effective rent/sqm (NL) Effective rent levels are adjusted for incentives remains in line with benchmark Dutch market NSI delivered in 2012 on target to stay above 120/sqm effective rent Alternative strategies in place to increase income per sqm 16

17 Property values NSI wrote down approx. 34% in Dutch office portfolio ( 342 million) since 2008, revaluation Q4 slowed down compared to preceding quarters, to Q level Revaluations primarily driven by vacancy and market rent adjustments Lack of reference due to lackluster market; increased influence of assumptions Development activity and pipeline all time low Valuation level below replacement costs 17

18 Financial highlights Increase of 13% in direct investment result to 63.4 million in 2012 compared with 56.0 million in 2011 as result of merger with VNOI Direct result per share of 0.99 in 2012, compared to 1.19 in 2011 NSI delivered on its Dutch asset disposal target; 47.9 million of assets, partially delivered in 2012 In total million of assets (incl Switzerland and Belgium) sold in 2012 Q direct investment result ( 15.0 million) decreased 5.6% vs Q ( 15.9 million), due to a combination of Loss of gross rental income of disposed assets Higher financing and administrative costs Offset by exceptional items of 2.2 million 0.7 million penalty payments 1.5 million provisioned insurance income Revaluations of the real estate portfolio million in 2012 LtV increased to 58.2% from 57.2% as per year end 2011 (57.6% as per 30 September 2012). NSI will propose a change in dividend policy towards a sustainable dividend 18

19 Financial Highlights Result x 1,000 FY 2012 FY 2011 Q Q Gross rental income 160, ,964 40,317 38,879 Service costs not recharged to tenants - 4,754-2,751-1,141-1,026 Operating costs - 18,457-15,716-4,884-4,312 Net rental income 137, ,497 34,292 33,541 Administrative costs - 6,469-4,180-1,930-1,386 Financing costs - 56,011-38,514-14,464-13,679 Direct investment result before tax 75,019 58,803 17,898 18,508 Corporate income tax Direct investment result attributable to non-controlling interests - 11,287-2,608-2,844-2,626 Direct investment result 63,405 56,030 14,958 15,877 Indirect result - 166,522 6,675-42,126-45,991 Total result - 103,117 62,705-27,268-30,114 19

20 Operating costs Q Q Municipal taxes 4,600 3,991 1,117 1,001 Insurance premiums Maintenance costs 3,927 3,366 1, Contribution to owner s associations Property management (including attributed administrative expenses) ,816 3,599 1,210 1,166 Letting costs 2,167 2, Other expenses 1,707 1, Total 18,457 15,716 4,884 4,311 20

21 Actuals Q3-Q x 1,000 *) Including 2.0 million one offs 21

22 Financial Highlights Balance sheet x 1, Real estate investments 2,106,091 2,154,754 2,321,813 Shareholders equity 789, , ,620 Shareholders equity NSI 666, , ,218 Debts to credit institutions (excluding derivatives) 1,226,432 1,241,966 1,329,166 Loan to value (%) Average interest rate (%) Average maturity loans (years) Fixed interest debt (%) Interest coverage ratio NAV EPRA NAV

23 Financing Extending average duration of loan portfolio and addressing upcoming maturities well before expiration is key priority Timely addressing million maturing debt in 2013, million (55%) of debt, initially maturing in 2013, already covered in 2012 refinancing arrangements Approx. 60% of Dutch outstanding debt ( 507 million) successfully refinanced in 2012 Average maturity increased to 2.3 years Managing interest costs Rising margins vs low swap/euribor rates Lowering hedging costs through expiring swaps Reduction outstanding debt ( million) Average cost of funding expected to rise 23

24 Loan Duration x 1,000 x capital sum until

25 Debt by Country Fixed Float Total Working capital Hedged % Fixed Maturity Interest % NL % % CH % % BE % % Total , % % Hedge portfolio of swaps: No overhedged positions Swaps reviewed for potential redemption or extention 25

26 Prospects Operational Further improvement occupancy in Dutch office portfolio throughout 2013 Further roll out HNK concept to anticipate growing demand for flexible and full service office solutions Continue to actively pursue favorable mix in retail portfolio Financing Further reducing LTV by selling non strategic assets, including sale of remaining assets Switzerland Revised dividend policy Average costs of funding expected to rise Further extending debt maturities Direct result FY 2013 expected to develop in range 50 to 56 million; expected to improve in

27 Q & A 27