Nsi Nv · EURONEXT:NSI
Nsi Nv — FY2020 Earnings Presentation
56 slides from Nsi Nv's earnings presentation, Jan 26, 2021
Slide 1: Preliminary Results Full Year 2020
Preliminary Results Full Year 2020 26 January 2021 NSI Preliminary Results 2020 1
Slide 2: Company mission statement
“We enable our customers to achieve maximum productivity and growth, providing best-in-class flexible space solutions and services in modern, healthy, sustainable buildings in prime locations.”
Slide 3: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. Developments 4. Financials 5. Final remarks Annex NSI Preliminary Results 2020 3
Slide 4: Key highlights 2020
Introduction Key highlights 2020 • EPRA Vacancy – 7.0%, like-for-like decrease 0.7% Operational • Rental growth – Increase in like-for-like net rents 0.8% performance • Rent collection – 2020: 98.0%1 → 1.5% waived & restructured • Developments – LOI signed with Municipality of Amsterdam – Laanderpoo
Slide 5: Strong operational performance and sound balance sheet
Introduction Strong operational performance and sound balance sheet Key metrics Change in net rents Net rents like-for-like (%) Revenue and earnings 31 Dec 2020 31 Dec 2019 Change % 5.2% Operating margin 78.7% 81.2% -2.5pp 3.0% Net rents like-for-like2 0.8% 5.2% -4.4pp 1.9% 0.8% EPRA Earnings per sh
Slide 6: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. Developments 4. Financials 5. Final remarks Annex NSI Preliminary Results 2020 6
Slide 7: Acquisition ONE20
Portfolio & market update Acquisition ONE20 From 31% vacancy to fully let within 9 months from acquisition Teleportboulevard 120, Amsterdam Impressions Area: 9,743 m2 Tenant: Multi-tenant Vacancy (at acquisition → current): 31.0% → 0% Yield on cost: 3.5% → 5.6% WAULT: 4.0 → 6.5 years Acquisition pri
Slide 8: Disposals 2020
Portfolio & market update Disposals 2020 Continued rotation out of non-core assets Total disposals Q1 Q1 Total disposal proceeds € 16.0m Premium to book value 0.0 % (Q4 2019) Hagenborgh 1 De Hoefse Wing Europaweg 205 City: Almelo City: Amersfoort City: Zoetermeer m2: 3,484 m2: 8,889 m2: 7,172 Total
Slide 9: A concentrated investment portfolio
Portfolio & market update A concentrated investment portfolio Emphasis on G5 growth locations Total portfolio EPRA vacancy Offices HNK Other 20.2% 19.5% 5.9% 19.9% 15.7% 14.9% € 1.3b 12.6% 74.3% Total vacancy 6.9% 5.7% 7.0% 4.2% 3.3% 3.6% 1.5% 0.8% Total Amsterdam Other Target Cities Other Netherlan
Slide 10: Strong operational performance
Portfolio & market update Strong operational performance Vacancy rate below market average EPRA vacancy rate -17.3pp 25% 24.3% 23.8% 22.3% 21.4% 20.8% 20% 18.4% 15% 13.8% 10% 0.6% 7.1% 7.0% 0.7% 5% 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 EPRA Vacancy LFL Disposals / Acquisitions NSI Prelimin
Slide 11: Negative revaluations over 2020
Portfolio & market update Negative revaluations over 2020 Valuation stabilised in H2 2020 Total portfolio (€m) Offices (€m) 30 10 Positive revaluation 20 Negative revaluation 5 9 9 0 0 1 10 -2 10 9 1 -5 0 -14 -7 -14 -10 -10 -15 -20 -33 -49 -20 -30 -25 -49 -70 -40 -30 -50 -35 -60 -40 -70 -45 -80 -50
Slide 12: ESG is integral to the NSI strategy
Portfolio & market update ESG is integral to the NSI strategy Progress in GRESB and EPC score Actions 2020 EPC score (by value)1 • All buildings are now BREEAM-certified (57% in 2019) 2% F&G 12% 7% 5% 15% E • EPC score improvement for 12 buildings 15% 12% D 29% 16% C 26% • Solar panels installed on
Slide 13: Dutch office market 2020
Portfolio & market update Dutch office market 2020 Investment volumes Offices Netherlands (€bn) Prime Yields (%) 7.7 5.8 5.5 5.2 3.9 3.8 3.5 2.1 1.7 1.7 1.3 1.2 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Amsterdam Eindhoven
Slide 14: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. Developments 4. Financials 5. Final remarks Annex NSI Preliminary Results 2020 14
Slide 15: Development project overview
Developments DEVELOPMENTS UPDATE Development project overview New build area Increase in area Estimated Expected Expected Current Type Area (LFA m2) (LFA m2) Capex start delivery phase Completed The Hague Bentinck Huis Refurbishment - - € 8m Q4 2020 Completed Centre On-going Renovation + Amsterdam V
Slide 16: Bentinck Huis refurbishment – successfully completed
Developments Bentinck Huis refurbishment – successfully completed Investing in quality drives returns Financials Acquisition price (07-2018) € 13.9m Capex € 8.2m Total € 22.1m Estimated market value > € 30m Estimated profit > € 8m Tenant Rijksvastgoedbedrijf Contract 10-year NSI Preliminary Results
Slide 17: Vitrum refurbishment
Developments Vitrum refurbishment Modernising iconic bridge building, close to prime South-Axis Update Project details ▪ The preliminary design phase started (Q2 2020) and the design team has been • New buildings will total approximately 13,400 LFA m2 contracted • Expected start construction date Q1
Slide 18: Redevelopment Laanderpoort Amsterdam
Developments Redevelopment Laanderpoort Amsterdam 2020 targets achieved Update Project details ▪ Letter of intent signed with the Municipality of Amsterdam • New buildings will total approximately 39,000 LFA m2 ▪ Sketch design completed and Preliminary design started • Expected start construction da
Slide 19: Development Vivaldi III
Developments Development Vivaldi III Letter of intent signed with Municipality of Amsterdam News Project details ▪ Agreement has been reached with the Municipality regarding conditions of the • New buildings will total approximately 19,000 LFA m2 development including leasehold (signed 'Afsprakenbri
Slide 20: Amsterdam office market vacancy vs stock
Developments Amsterdam office market vacancy vs stock Development pipeline offers potential Stock Owner occupied1 Pre-let1 Speculative1 Vacancy (LHS) ‘000 sqm 18 6,600 15% 6,300 10% 6,000 5,700 5% 0% 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1. Cumulative
Slide 21: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. Developments 4. Financials 5. Final remarks Annex NSI Preliminary Results 2020 21
Slide 22: Rent Collection 2020
Financials Rent Collection 2020 98% rent collection including COVID-19 impact Deferred 25% Collectable 32% 68% Overdue 2% Collected 98% 75% Uncollectable Restructured 33% 67% Waived Rent collection bridge 2020 104.6 1.1 102.5 0.5 0.2 0.4 13.4 12.5 78.7 Rent invoiced Service charge VAT Invoiced total
Slide 23: EPRA Earnings
Financials EPRA Earnings NRI impact due to COVID-19: € -1.6m 2020 2019 Change % Gross rental income 76.9 82.8 -7.2% Service costs not recharged -1.8 -1.6 11.1% Operating costs -14.6 -14.0 4.3% Net rental income 60.5 67.2 -10.1% Administrative costs -7.1 -8.0 -10.7% Net financing result -8.4 -9.8 -14
Slide 24: EPRA Earnings per share bridge
Financials EPRA Earnings (€ per share) 2.70 COVID-impact 2.60 2.50 -0.35 2.40 2.64 0.00 0.08 2.30 -0.05 2.35 0.00 0.01 0.05 -0.03 0.00 EPRA EPS 2019 GRI Service costs Operating costs Administrative costs Net financing result Other EPRA EPS 2020 not recharged NSI Preliminary Results 2020 24
Slide 25: EPRA NTA
Financials EPRA NTA (€ per share) 51 50 2.35 -2.16 49 48 -0.24 47 -3.39 46 45 47.95 0.04 -0.07 -0.03 44 44.44 0 EPRA NTA EPRA Dividend Effect of Revaluation Result Unwinding Other EPRA NTA 1 Jan 2020 Earnings stock on swaps 31 Dec. 2020 dividend sales NSI Preliminary Results 2020 25
Slide 26: Main balance sheet KPIs
Financials Main balance sheet KPIs Metrics consistently favourable Cost of debt Loan to value 2.8% 60% 2.3% 2.0% 2.1% 2.1% 44.1% 36.9% 36.9% 27.4% 29.2% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Covenant Target range LTV Interest coverage ratio Average maturity (years) 7.2x 5.4 6.8x 5.2 5.0
Slide 27: Debt maturity profile
Financials Debt maturity profile No near term maturity Loans maturity profile December 2020 (€m)¹ Strategy and achievements Strategy • Maintain balance sheet capacity for development and acquisitions ‒ Undrawn RCF circa €250m • Further extending and diversifying maturities • Further diversifying fun
Slide 28: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. Developments 4. Financials 5. Final remarks Annex NSI Preliminary Results 2020 28
Slide 29: Initial data on rent collection Q1 2021
Final remarks Initial data on rent collection Q1 2021 Stable year-on-year, with retail lagging Q1 per 21 Jan. Q1 per 21 Jan. 2020 2020 2021 Offices 92.3% 92.4% HNK 90.3% 94.2% Other 91.2% 63.8% TOTAL 91.7% 90.8% 0.9 pp 91.7% 90.8% Offices HNK Other 92% 90% 91% 92% 94% 64% Q1 per 21 Jan. 2020 Q1 per
Slide 30: Three key pillars to the long term NSI business strategy
Final remarks Three key pillars to the long term NSI business strategy Portfolio optimisation, development & customer excellence NSI Preliminary Results 2020 30
Slide 31: Broader market context 2021
Final remarks Broader market context 2021 Change is the only constant... Economic outlook for 2021 uncertain WFH and WFA permanent features ▪ Structural economic recovery only possible after COVID-19 subsides ▪ Ongoing experiment with WFH will result in structurally more flexible working arrangement
Slide 32: NSI business look-through 2020-2025
Final remarks NSI business look-through 2020-2025 2025E assumptions ▪ Disposal of all non-core assets ▪ No further valuation changes ▪ Execution of the business plan for the standing portfolio ▪ Execution of the business plan for all three development projects NSI Preliminary Results 2020 32
Slide 33: Action plan 2021
Final remarks Action plan 2021 Further portfolio optimisation • Continued asset rotation, further disposal of non-core assets • Advanced discussion for € 75m - € 85m acquisition of assets • Focus on occupancy level and tenant retention Progress in development projects • Finalise the scope and Final
Slide 34: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. Developments 4. Financials 5. Final remarks Annex NSI Preliminary Results 2020 34
Slide 35: Track record: Total return
Annex Track record Total return Total return per share (€) NAV growth Dividend 10.38 NTA growth 8.22 5.25 4.18 2.96 3.09 2.02 0.80 2.16 2.16 2.16 2.16 2.16 2.16 -3.68 -3.51 -1.52 -1.35 2015 2016 2017 2018 2019 20201 Total 7.9% -4.0% 12.1% 14.3% 26.1% -2.8% return 1. Per 2020 EPRA recommends reportin
Slide 36: Track record: Asset rotation
Annex Track record Asset rotation Total portfolio 2020 Disposals 2016-2020 NSI Preliminary Results 2020 36
Slide 37: Track record: Average asset size target
Annex Track record Average asset size target Number of assets Average asset value (€m) 350 22 20.9 300 20 18 250 16 -81% +354% 200 14 12 150 10 8 100 6 60 4 50 2 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020 NSI Preliminary Results 2020 37
Slide 38: Track record: Transaction volume
Annex Track record Transaction volume Annual transaction volumes (€m) 600 Acquisitions Disposals 400 595 200 169 139 161 61 32 34 0 -30 -48 -63 -121 -129 -242 -200 -632 -400 -600 -800 2015 2016 2017 2018 2019 2020 Total NSI Preliminary Results 2020 38
Slide 39: Track record: Acquisitions
Annex Track record Acquisitions Uniceflaan 1 Bijlmerdreef 100 Parnassusweg 101 Archimedesweg 6 Kennedyplein 101 Kingsfordweg 43-117 City: Utrecht Amsterdam Amsterdam Leiden Eindhoven Amsterdam m2: 12,079 13,300 11,700 7,239 6,642 12,709 €M: 20.5 33.8 45.0 17.5 13.6 36.8 Year: 2017 2017 2017 2017 201
Slide 40: Track record: Office & HNK vacancy
Annex Track record Office & HNK vacancy EPRA Vacancy rate Offices EPRA Vacancy rate HNK -25.7pp -47.2pp 29.9% 62.1% 28.0% 27.3% 55.1% 22.9% 47.4% 21.3% 43.6% 37.1% 15.9% 29.8% 11.1% 23.1% 23.2% 16.7% 13.6% 14.5% 14.9% 11.6% 4.1% 4.2% 9.1% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2
Slide 41: Segment information: Key portfolio metrics
Annex Segment information Key portfolio metrics 31 December 2020 Dec 2019 Change Offices HNK Other TOTAL Number of properties1 43 13 4 60 65 -7.7% Market value (€)2 931 249 73 1,253 1,287 -2.7 % Annual contracted rent3 58 19 7 84 81 4.0 % Market rent 63 23 7 93 92 1.4 % Lettable area (sqm k) 296 124
Slide 42: Segment information: Offices split
Annex Segment information Offices split 31 December 2020 Other Target Dec 2019 Change Amsterdam Other NL TOTAL Cities Number of properties1 16 22 5 43 46 -6.5% Market value (€)² 555 357 19 931 945 -1.5% Annual contracted rent³ 32 24 2 58 54 6.2% Market rent⁴ 36 25 2 63 61 3.2% Lettable area (sqm k)
Slide 43: Segment information: Yields
Annex Segment information Yields EPRA net initial yield Gross initial yield Reversionary yield Dec. 2020 Dec. 2019 Dec. 2020 Dec. 2019 Dec. 2020 Dec. 2019 Offices 4.4% 4.5% 6.2% 6.0% 6.8% 6.7% HNK 4.3% 4.6% 7.8% 7.5% 9.2% 8.8% Other 6.1% 5.8% 9.6% 8.8% 9.6% 9.4% TOTAL 4.5% 4.6% 6.7% 6.4% 7.5% 7.3% T
Slide 44: Segment information: COVID impact on like-for-like rental income
Annex Segment information COVID impact on like-for-like rental income Gross rental income L-F-L (€ m) Impact 2020 2019 L-f-L 2020 (adj.) 2019 L-f-l (adj.) COVID1 Offices 49.0 46.7 5.1% 0.0 49.0 46.7 5.1% HNK 17.2 17.2 0.3% 0.9 18.1 17.2 5.4% Other 6.8 6.8 0.7% 0.1 6.9 6.8 1.5% Total 73.0 71 3.5% 1.0
Slide 45: Segment information: Expiries and reversion
Annex Segment information Expiries and reversion Total portfolio (€m) Offices portfolio (€m) 0 0 0 0 0 0 0 0 0 0 2021 2022 2023 2024 > 2024 TOTAL 0 Contract rent 11,4 10,5 4,0 5,0 27,1 57,9 ERV 12,8 10,4 3,9 5,1 28,4 60,6 # Contracts 42 38 24 26 66 196 0 Reversionary potential 12,5% -0,4% -1,0% 1,9%
Slide 46: Consolidated financial statements: Income statement
Annex Consolidated financial statements Income statement Offices HNK Other Other Other Corporate¹ TOTAL (€ m) Amsterdam Target Other NL Amsterdam Target Other NL Cities Cities Gross rental income 29.4 21.6 1.8 4.6 9.4 3.3 6.8 76.9 Service costs not recharged -0.2 -0.3 -0.1 -0.2 -0.5 -0.4 -0.2 -1.8 O
Slide 47: Consolidated financial statements: Balance sheet
Annex Consolidated financial statements Balance sheet (€ m) 31 December 2020 31 December 2019 Real estate investments 1,240 1,263 Assets classified as held for sale 0 16 Other assets 18 11 Cash and cash equivalents 0 1 Total assets 1,258 1,291 Shareholders' equity 854 903 Interest bearing loans 365
Slide 48: Consolidated financial statements: EPRA NAV / NTA
Annex Consolidated financial statements EPRA NAV / NTA 31 December 2020 31 December 2019 (€ m) EPRA NTA per share EPRA NTA per share IFRS Equity attributable to shareholders 854 44.29 903 47.75 Diluted NAV 854 44.29 903 47.75 Diluted NAV at fair value 854 44.29 903 47.75 Fair value of financial inst
Slide 49: Property market data: Amsterdam
Annex Property market data Amsterdam Stock (m sqm) Prime yields 6.75 7.0% 6.6 6.5 6.5 6.0% 5.8% 6.50 6.4 5.6% 5.6% 5.5% 5.5% 5.2% 6.3 6.3 6.3 5.0% 4.8% 6.25 6.1 6.1 4.3% 6.0 6.0 4.0% 3.8% 6.00 6.0 3.0% 2.9% 3.0% 3.0% 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2011 201
Slide 50: Property market data: Utrecht
Annex Property market data Utrecht Stock (m sqm) Prime yields 2.55 7.0% 6.3% 2.52 2.52 2.52 6.1% 6.1% 2.51 5.7% 5.8% 5.9% 5.8% 2.51 6.0% 2.50 2.50 5.3% 2.49 5.0% 5.0% 2.47 4.3% 2.46 4.0% 4.0% 2.45 2.45 2.44 4.0% 2.44 3.0% 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 201
Slide 51: Property market data: Rotterdam
Annex Property market data Rotterdam Stock (m sqm) Prime yields 3.7 7.0% 3.66 3.62 3.63 3.63 6.2% 3.59 6.0% 5.8% 5.8% 5.8% 3.6 5.6% 5.7% 5.5% 3.55 3.56 5.3% 5.1% 3.5 5.0% 3.45 4.4% 3.43 4.0% 4.0% 3.39 4.0% 3.4 3.36 3.37 3.0% 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2
Slide 52: Property market data: The Hague
Annex Property market data The Hague Stock (m sqm) Prime yields 4.6 7.0% 4.51 6.2% 4.5 5.9% 6.0% 6.0% 5.9% 5.8% 4.40 6.0% 5.6% 5.7% 4.4 4.37 4.32 4.32 5.3% 4.29 4.3 5.0% 4.6% 4.18 4.3% 4.4% 4.2 4.11 4.1 4.06 4.07 4.0% 4.04 4.04 4.0 3.0% 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 53: Property market data: Eindhoven
Annex Property market data Eindhoven Stock (m sqm) Prime yields 1.75 7.0% 6.6% 6.6% 6.6% 6.6% 6.6% 6.5% 1.70 6.1% 6.2% 6.0% 1.64 1.64 6.0% 1.65 5.5% 1.60 1.60 5.0% 5.0% 1.56 1.55 5.0% 1.50 1.50 1.50 1.48 1.48 1.48 1.45 1.46 4.0% 1.45 3.0% 0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 54: Additional information: Leesman survey
Annex Additional information Leesman survey Working from home versus the office On average: No 36% My workplace enables me to work 1. employees’ home working experience appears to be relatively productively 64% good Yes 2. the home environment enables employees more to do individualistic tasks like
Slide 55: Additional information: Leesman survey
Annex Additional information Leesman survey Choosing where you want to work Creating an outstanding office environment • Employees that are able to go to an outstanding office • The office should enable our tenants and their employees to environment are significantly less likely to want to work from
Slide 56: NSI Preliminary Results 2020
NSI Preliminary Results 2020 56