Vastned Offices / Industrial

VastNed Almere Amersfoort Amsterd Officesam Arnhem Barendrecht Breda Capelle a/d IJsse/l Industrials-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda NL GroningeAnnualn Haarlem Heemstede Report Heerlen Hoofddorp 2008 Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint- Agatha-Berchem Sint-Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot- Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint-Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL AWithinlmere Amersfoort the Amsterd eurozone,am Arnhem Barendrecht Breda Capelle a/d IJssel s- Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam SVastNedchiphol-Rijk Son en Breuge Offices/Industriall Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchemfocuses Sint-Niklaas Sontrom btheeek-Bever Netherlands, Vilvoorde Wilrijk Woluwe W ommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven EnschedeBelgium Goes Gouda Gronin andgen Haa rGermany.lem Heemstede Heerle nIn Hoofddorp these Houte ncountries, IJsselstein Leiden Leusde then Maa companystricht Nieuwegein Purmere nd Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaaconcentratesr Antwerpen Berchem (Antwerpe onn) Boomgood Diegem toDilbeek excellent (Groot-Bijgaarden ) officeDuffel Edegem investments Gent Herentals Hoeilaart K orteinnb erg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint-Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoortlarge Amsterd liquidam Arnhem B aofficerendrecht Bred markets.a Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint- Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint-Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer

VastNed Offices VastNed Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint-Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-

/ Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen)

Industrial N.V. Annual Report 2008 Report Annual N.V. Industrial Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint- Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag Deventer Eindhoven Enschede Goes Gouda Groningen Haarlem Heemstede Heerlen Hoofddorp Houten IJsselstein Leiden Leusden Maastricht Nieuwegein Purmerend Ridderkerk Rijswijk Rosmalen Rotterdam Schiphol-Rijk Son en Breugel Tilburg Utrecht Veenendaal Velp Venlo Venray Weesp Woerden Zeist Zoetermeer Zwolle BE Aartselaar Antwerpen Berchem (Antwerpen) Boom Diegem Dilbeek (Groot-Bijgaarden) Duffel Edegem Gent Herentals Hoeilaart Kortenberg Mechelen Meer Merchtem Puurs Schelle Sint-Agatha-Berchem Sint-Niklaas Strombeek-Bever Vilvoorde Wilrijk Woluwe Wommelgem Zellik D Düsseldorf Frankfurt NL Almere Amersfoort Amsterdam Arnhem Barendrecht Breda Capelle a/d IJssel s-Hertogenbosch Den Haag WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Key figures Key figures property portfolio (in operation)

2008 2007 2006 2005 2004 The Netherlands Belgium Germany Total ______Results (x € 1 million) Semi- Semi- Gross rental income 89.0 85.4 83.3 86.8 95.4 Offices industrial Total Offices industrial Total Total ______Direct investment result 32.5 35.1 32.2 33.2 41.5 Indirect investment result (48.3) 5.6 17.6 (12.4) (39.3) Number of tenants 246 53 299 172 37 209 38 546 ______Theoretical annual rental income (x € 1 million) 40.0 5.1 45.1 35.8 13.5 49.3 7.5 101.9 Investment result (15.8) 40.7 49.8 20.8 2.2 Market rent (x € 1 million) 39.1 5.0 44.1 31.9 12.3 44.2 7.3 95.6 (Over)/underrent (in %) (2.2) (2.3) (2.2) (11.9) (10.2) (11.4) (3.0) (6.5) Balance sheet (x € 1 million) Investment properties 1,167.0 1,189.9 1,048.8 1,039.3 1,163.6 Average occupancy rate (in %) 87.3 92.9 98.8 90.7 Equity 568.4 652.1 604.5 581.6 603.0 Occupancy rate at year-end (in %) 93.2 86.0 86.9 98.2 92.5 94.1 99.0 91.2 Equity VastNed Offices/Industrial shareholders 434.1 509.4 450.8 440.8 467.0 Long-term liabilities 321.8 411.7 376.5 284.5 390.3 Number of properties 81 22 103 43 18 61 4 168 Investment properties in operation (x € 1 million) 448 55 503 376 160 536 113 1,152 Average number of ordinary shares in issue 1) 20,515,325 20,525,027 18,984,061 19,335,060 19,143,1244 Investment properties in operation (in %) 39 5 44 32 14 46 10 100 Number of ordinary shares in issue (at year-end) 1) 18,735,053 20,697,219 18,981,259 19,040,803 19,273,904 Average size per property (x € 1 million) 5.5 2.5 4.9 8.8 8.9 8.8 28.2 6.9

Per share (x € 1) Gross yield (in %) 8.9 9.4 9.0 9.5 8.5 9.2 6.7 8.9 Equity VastNed Offices/Industrial shareholders Net yield (in %) 7.7 8.5 6.3 7.8 at beginning of year (including dividend) 24.61 23.75 23.15 24.22 27.02 Final dividend previous financial year (1.20) (1.20) (1.72) (2.13) (2.80) Lettable floor area (x 1,000 sqm) 272 79 351 239 303 542 39 932 Lettable floor area (in %) 29 9 38 25 33 58 4 100 Equity VastNed Offices/Industrial ______shareholders at beginning of year (excluding dividend) 23.41 22.55 21.43 22.09 24.22 Average rent per sqm (x € 1) 1) Super cities 180 90 172 – – – 193 180 Direct investment result 1.59 1.71 1.70 1.72 2.17 Large cities 161 61 145 138 46 77 – 120 Indirect investment result (2.36) 0.27 0.93 (0.64) (2.05) Medium-sized cities 136 58 114 140 56 128 – 121 ______Small cities 135 71 106 162 43 79 – 82 Investment result (0.77) 1.98 2.63 1.08 0.12 Regional spread (in %) Other movements 1.03 0.59 0.19 (0.02) (0.11) Super cities 29 10 27 – – – 100 19 Interim dividend (0.50) (0.51) (0.50) – – Large cities 30 17 28 7 12 8 – 16 Medium-sized cities 32 41 33 45 8 35 – 32 Equity VastNed Offices/Industrial ______Small cities 9 32 12 48 80 57 – 33 shareholders at year-end 23.17 24.61 23.75 23.15 24.23 Industry spread (in %) Share price (at year-end) 6.86 22.77 29.75 22.60 22.80 Financial services 16 19 37 19 Business services 39 25 29 31 Dividend in cash 1.59 1.71 1.70 1.72 2.13 Technology, media, telecom 9 16 23 14 or in cash 1.01 1.56 1.55 1.57 1.88 Government services 21 16 – 17 and in shares charged to the share premium reserve 2) 0.72% 0.49% 0.56% 1.28% Other 15 24 11 19 Dividend yield as a percentage of equity VastNed Offices/Industrial shareholders Occupancy rate at year-end (in %) at beginning of year (excluding dividend) 6.8 7.6 7.9 7.8 8.8 Super cities 84.6 100.0 85.3 n/a n/a n/a 99.0 90.5 Large cities 92.4 100.0 92.9 91.4 100.0 94.9 n/a 93.4 Ratio equity/ Medium-sized cities 79.6 95.7 81.9 94.0 100.0 94.4 n/a 88.6 investment properties (in %) 48.7 54.8 57.6 56.0 51.8 Small cities 92.4 84.0 89.8 91.2 97.8 93.7 n/a 93.1 Ratio long-term loan capital/ short-term loan capital (in %) 52/48 73/27 68/32 59/41 66/34

Supervisory board Monday August 10, 2009 W.M. Steenstra Toussaint, chairman Press release semi-annual results 2009 * H.W. Breukink, vice-chairman Analysts’ meeting/webcast D. van den Bos R.K. Jacobson* Wednesday August 12, 2009 * Chairman audit committee Ex interim dividend 2009 trading (Record date: Friday August 14, 2009) Board of management VastNed Management B.V. Monday August 31, 2009 Represented by: Payment date interim dividend 2009 R.A. van Gerrevink, CEO T.M. de Witte, CFO Monday November 9, 2009 J. Pars, CIO* Press release nine months’ results 2009 * * Member board of management until January 1, 2009 Analysts’ conference call/webcast

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VastNed Offices/Industrial share Monday March 1, 2010 Quotation: NYSE Euronext Amsterdam Press release annual results 2009 * ISIN: NL0000288934 Analysts’ meeting/webcast Ticker: VNOI.NL * Before trading

This is the English 2008 annual report. The Dutch version is available on our website in PDF-format only. In case of inconsistencies, the English version shall prevail. WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Annual report 2008 VastNed Offices/Industrial N.V. WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Dear readers of this annual report,

2008 was a very unusual year and it looks as if 2009 will not be much different. In the 2007 annual report I claimed that 2007 had been a difficult year for stock exchanges all over the world, but in hindsight 2007 was still a good year compared to last year. The subprime crisis has become the leading factor in how economies are evolving. Banks are in disarray Reinier A. van Gerrevink and must be ‘saved’ by national governments or are trying to deleverage their balance sheet to regain an acceptable level of solvency. The lack of trust in the financial markets has seriously impacted the liquidity. I have never seen anything like this before and it is still unclear to me when we can expect any degree of normality to return.

How has this affected our company? Usually, general economic slowdowns trigger slowdowns in our business too. Vacancy grows slowly, rental levels gradually fall and lease incentives become more important to attract tenants. But today’s crisis is completely different; it has caused industrial activity to come almost to a standstill, which is a threat to our business. And yet, despite these sombre circumstances, our business did quite well in 2008; (re)lettings showed an unprecedented volume and were at levels in line with the previous years. Although vacancy is rising, Preface CEO it still seems relatively manageable. Based on fairly conservative forecasts, we think our cashflow is relatively safe. Our three teams (in Belgium, the Netherlands and Germany) are very much on top of their business, and have not yet noticed the effects of the sharp slowdown of the different economies. Nevertheless, we were confronted with a major lack of trust. The negative development of our stock price was partly due to the more volatile nature of office investments, and partly due to the fact that the market expected problems with the loan providing banks due to a breach of the agreed solvency ratios. While we understand shareholders’ worries, the sharp decline of our share price did not at all reflect the way the underlying business is doing. Our problem was how to explain to the market there was no need to worry. What to do in such a situation? The best we could do was to buy back our own shares, showing the market that we believe in the future performance of the share and the underlying business. The gross amount we invested was a modest F 10 million, saving about 12 eurocents annually on the direct investment result per share for the remaining shares. The buyback enabled some major investors to divest their shares. This call of trust stopped the bleeding and the stockmarket found it was the right thing to do, although it took some time before this was accepted. WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 And what of the banks? We have been in talks with In Belgium, the logistics portfolio is virtually fully them since the beginning of the fourth quarter let, for the first time in many years. The largest office of last year, because we expected that we would be in our portfolio, 26,000 sqm in Woluwe, was re-let in breach of the solvency covenants of our key loan- successfully and other lettings are expected soon. providing banks. These talks led to a comprehensive Of course securing rent payment is vital. In that refinancing of the larger part of the property portfolio. context we are closely monitoring the solvency of our This refinancing has a duration of at least three years tenants. From a risk perspective, the large spread and comprises widened conditions concerning the within the property portfolio is beneficial, since any debt ratio (loan to value) and interest coverage ratio. single bankruptcy will only have a minor impact on The new covenants provide us with sufficient room our figures. to manoeuvre in the next few years. One of the benefits is that we will not be forced to sell properties Germany is still doing quite well, although the on unattractive terms. Nevertheless, for the longer expected rise in rental levels is ruled out by the term we strive for a prudent solvency of above 50%. same difficulties in that market as elsewhere. On the cost side, the refinancing leads to higher interest expenses due to higher spreads on the bank The financial performance in 2009 is difficult to loans. Fortunately, this effect is partly mitigated by forecast as it depends on a return of confidence to lower market interest levels. the overall economy and to the financial markets in particular. Due to the current market conditions, On the property side, we have made significant we cannot make any realistic predictions for the 2009 disposals over the past few years and re-invested most direct investment result per share, but I hope not to of the proceeds in prime assets, like De Rode Olifant disappoint you as a shareholder. More important is in The Hague, city centre offices in Frankfurt and the major improvement of the quality of our property Düsseldorf and a logistics centre in Belgium. We halted portfolio and the fact that our debt financing is secure the investment process in the middle of last year as for the next few years. This enables us to survive and we noticed that the market turned. Regretfully, our enjoy a future market upswing. divestment programme did not achieve the desired volume due to the apparent moratorium on financing that affected most of the potential buyers. Yours sincerely, Reinier A. van Gerrevink, CEO As I mentioned above, we halted the investment programme. Taking into account contemplated sales, this will mean that the fund will shrink. All country teams are focused on (re)letting and on improving the marketability of our assets. Capital expenditure will rise, but we expect this to yield returns once the markets revert to a more normal situation. The expected office market cycle suddenly changed direction, after only one year of upswing. Some events will have more impact on the short-term future of our fund than others. Of vital importance is the re-letting of De Rode Olifant, a landmark building in The Hague. If we do not succeed in letting it during 2009, the impact on the direct investment result per share in 2009 will be about 5 eurocents, reason enough to make this a priority. WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 List of definitions Net initial yield Net rental income expressed as a percentage of the acquisition price AFM Dutch Authority for the Financial Markets (including transaction costs) of the respective investment property. Bevak (Belgian) investment company with fixed capital CEO Chief Executive Officer Net rental income CFO Chief Financial Officer Gross rental income less ground rents paid, net service charge expenses CIO Chief Investment Officer and operating expenses attributable to the respective period, such as Code The Dutch corporate governance code maintenance costs, management expenses, insurance, letting costs and CPI Consumer Price Index property tax. EPRA European Public Real Estate Association GPR Global Property Research Net yield IAS International Accounting Standards Theoretical net rental income expressed as a percentage of the market IFRS International Financial Reporting Standards value of the respective investment property. IRS Interest Rate Swap IVBN Dutch Association of institutional property investors Occupancy rate US United States 100% less the vacancy rate.

Straightlining Definitions Phasing the costs of lease discounts, rent-free periods and lease incentives over the duration of the lease contract. Average (financial) occupancy rate 100% less the average (financial) vacancy rate. Theoretical annual rent The annual gross rent at a given time, excluding the effects of Average (financial) vacancy rate straightlining of lease incentives and such, plus the annual The market rent applicable for a particular period of vacant properties, market rent of any vacant properties. expressed as a percentage of the theoretical rental income for the same period. Theoretical rental income The gross rent attributable to a particular period excluding the effects Gross rent of straightlining of lease incentives and such, plus the market rent of Contractually agreed rent for a particular property, taking the effect any vacant properties applicable to the same period. of straightlining of lease incentives into account. Vacancy rate Gross rental income The annual market rent of unleased properties at a certain point in The gross rent recognised for a certain period after deduction of the time expressed as a percentage of the theoretical annual rent at the effects of straightlining of lease incentives. same point in time.

Gross yield Theoretical annual rent expressed as a percentage of the market value of the property.

Lease incentive Any compensation, temporary lease discount or expense for a tenant upon the conclusion or renewal of a lease agreement.

Market rent The estimated amount for which a particular property may be leased at a given time by well-informed parties who are prepared to make a transaction, who are independent and who act prudently and free from duress.

Market value The estimated amount for which a particular investment property might be traded between well-informed parties who are prepared to make a transaction, who are independent and who act prudently and free from duress. WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Key figures Preface CEO 5 Profile and strategy 12

Report of the supervisory board 15 Introduction 15 Consequences public offer on Vastned Retail shares 16 Annual general meeting of shareholders 2008 16 Corporate governance supervisory board 16 Annual accounts 2008 16 Dividend and reservation policy 16 Dividend proposal 16 Refinancing loan portfolio 16 Composition of the supervisory board 16 Committees of the supervisory board 17 Changes of the management board 17 Changes of the supervisory board 17 Profile of the supervisory board 17 Retirement schedule 17 General meeting of shareholders 21 Personnel 21

Report of the board of management 22 Economy and markets in general 22 Property portfolio 32 Personnel and organisation 48 Sustainability 48 Risk management 48 Contents Financial state of affairs 50 Dividend proposal and dividend distribution 56 Outlook for 2009 56

The share and the stock exchange listing 57

Annual accounts 2008 61 Consolidated profit and loss account 62 Direct and indirect investment result 63 Consolidated balance sheet as at December 31 64 Consolidated statement of movements in equity 66 Consolidated cash flow statement 67 Notes to the consolidated annual accounts 68 Company balance sheet as at December 31 101 Company profit and loss account 102 Notes to the company annual accounts 102 Other information 105

Management and corporate governance 108

Remuneration report 120

Risk management 124

Property portfolio 2008 129 Investment properties in operation 130 Investment properties in pipeline 136

Key figures property portfolio WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Zellik Utrecht

Düsseldorf

10 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Woluwe Diegem

Leiden

Capelle a/d IJssel

‘We take great pride in reporting the highest leasing volume for many years. We have achieved that by listening to our tenants and by focusing on solutions.’

Jako Ten Holter, country manager VastNed Offices /Industrial the Netherlands

11 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 The Hague

Breda

Profile and strategy

History Mission and strategic objective

VastNed Offices/Industrial N.V., founded in 1984, is a VastNed Offices/Industrial offers an investment (closed-end) property investment company with product to private and institutional shareholders variable capital which makes long-term investments which primarily concentrates on offices and semi- in well-let individual office properties and industrial properties. By responding dynamically to semi-industrial properties, primarily in the eurozone. the cyclical office market, rent and value increases can The shares have been listed on NYSE Euronext generate profits in an upward market. In a downward Amsterdam since June 23, 1989 and are included market the aim will be to limit investors’ exposure in the Amsterdam AScX-index. VastNed Offices/ to this. By active management, including an active Industrial is part of the VastNed Group. acquisition and disposal policy, VastNed Offices/ Industrial strives to play the office market cycle in Vision order to achieve a relatively high investment result over the entire duration of the office market cycle. The office market is a market in which tenants generally are not strongly dependent on a specific Investment product and investment location for their enterprise. As a result various office methodology locations are in competition with each other for the housing of enterprises. In addition, demand for VastNed Offices/Industrial pursues its objective by office space is strongly determined by economic focusing on the following investment products and developments and office space supply. Supply and by using the following investment methodology: demand vary considerably throughout the years. – a mix of office and semi-industrial property (logistics This results in a cyclical office market, in which centres and industrial premises). The aim is to keep investment results fluctuate. the proportion of office properties between 80% and

12 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Profile and strategy

100% and that of semi-industrial property between market with a relatively low loan capital ratio. Apart 0% and 20% of the invested capital; from the solvency ratio as referred to above VastNed – investments in large liquid office markets, whereby Offices/Industrial will always stay within the fiscal VastNed Offices/Industrial currently focuses on financing limits as meant in Section 28 of the 1969 liquid office markets in the Netherlands, Belgium Netherlands Corporate Income Tax Act. Also, a balance and Germany; is aimed for between financing with short-term and – investments in office markets with legal frameworks long-term fixed-interest periods. In prevailing that are favourable to the landlord; circumstances interest derivatives are used. In times – opportunistic investments in semi-industrial property; when the VastNed Offices/Industrial share price – a balanced risk return profile of the investments; trades at a premium compared to net asset value, – limitation of the investment risk in the downward it may be attractive to issue new shares. The starting phase of the market cycle by active management of point for this is that the issuing of new shares will the office portfolio, among which an active acquisition only take place if there are investment opportunities and disposal policy, and; in the foreseeable future. The decision for issuance – focusing on an optimum spread within the property and re-purchase of shares is at the decision of the portfolio. Spread criteria are: countries, regions, cities, board of management, taking into account the number of tenants, number of properties, spread margins and conditions set by the supervisory board. across categories, limitation of the size of property and the size of individual tenant(s). Currency policy

Size VastNed Offices/Industrial aims to avoid currency risks by investing primarily in the eurozone. VastNed Offices/Industrial’s property portfolio in operation at year-end 2008 represented a value of Dividend and reservation policy F 1,152.0 million (including investment properties in pipeline F 1,167.0 million), and at that time was VastNed Offices/Industrial dividend policy is constituted as follows: aimed at putting the direct investment result fully - 81% offices, and; at the disposals of the shareholders. In order to - 19% semi-industrial premises. comply with the conditions for fiscal investments institutions, at least the fiscal result must be paid Fiscal structure our in cash. The dividend is placed at the shareholders’ disposal in the form of a interim VastNed Offices/Industrial qualifies as a fiscal dividend of 60% of the direct investment result for investment institution as meant in Section 28 of the first six months of the financial year and a final the 1969 Netherlands Corporate Income Tax Act. dividend after conclusion of the financial year. This means that no corporate income tax is due in the Netherlands. In Belgium virtually all investments are Acquisition policy held by the property Bevak (Belgian REIT) Intervest Offices, which is also exempt from income tax. VastNed Offices/Industrial pursues an active An attractive tax climate is an important factor in acquisition policy. New investment opportunities are investment selection. The German investment constantly being assessed. Our policy is that properties are generally held through tax transparent acquisitions will only be made if the market conditions structures and are effectively subject to German are favourable, if the risk return profile is balanced income tax. and if the capital ratios permit it. In this context, acquisition opportunities are constantly off-set Financing policy against financial alternatives such as share buybacks.

The starting point is that the financing of the Risk management property portfolio with loan capital remains limited to approximately 40 to 45% of the market value of the VastNed Offices/Industrial pursues an active policy property. This principle can temporarily be deviated in the area of assessing and, if necessary, taking from should interesting acquisition or disposal appropriate action regarding the risks associated opportunities present themselves and provided the with investing in property. In this context, interest rate is at an acceptable level compared to a distinction is made between strategic risks, the yield on the property. In a upward office market, operational risks, financial risks, reporting risks and we may opt to finance the property portfolio with a compliance risks. relatively high loan capital ratio and in a downward

13 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Profile and strategy

Organisation

VastNed Offices/Industrial pursues an active management of its property portfolio. In the countries in which it operates or will operate, fully-fledged local management is aimed for. With 108 employees in total, VastNed Management in Rotterdam, VastNed Management España in Madrid, VastNed Management France in Paris, Intervest Retail and Intervest Offices, both in Antwerp, VastNed Management Deutschland in Frankfurt and VastNed . Emlak Yatırım ve Ins¸ aat Ticaret in Istanbul manage the investments of VastNed Offices/Industrial and VastNed Retail. VastNed Management has no profit objective, but facilitates the funds with directory board and management.

A cost allocation agreement applies to the collaboration between VastNed Offices/Industrial, VastNed Retail and VastNed Management. Costs incurred are charged on, without mark-up for profit, based on causation. 33% of the shares in VastNed Management are held by VastNed Offices/Industrial and 67% by VastNed Retail.

Self management is the best condition for optimum leasing to creditworthy tenants and for guarding the state in which the properties are kept. Carrying out commercial and administrative management ourselves where possible makes for direct contact with the tenants and the property market, so that market developments can be alertly responded to and operating expenses can be responsibly controlled. Technical management is largely subcontracted to local specialists. By maintenance, renovation and disposals of objects that no longer fit in with the property portfolio, an optimum state and value of the property are secured for the benefit of the return for shareholders.

The property markets in the Netherlands, Belgium and Germany are subject to locally applicable legislation and regulations. A local network as well as know-how of local culture provide a head start in terms of operating the property. VastNed Offices/ Industrial strives to undertake these efforts from within the country itself where possible. In this context, fully-fledged management organisations have been set up in the Netherlands and Belgium. The asset management of the German portfolio is carried out from the Netherlands. Property management is carried out by our management in Frankfurt.

14 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Mechelen

From left to right Dick van den Bos, Robert K. Jacobson, Willem M. Steenstra Toussaint, Henk W. Breukink

Report of the supervisory board

Introduction – the financing structure of the company and its resilience in the face of the credit crisis; The year 2008 was for the supervisory board of – the supervisory board’s own performance and VastNed Offices/Industrial a remarkable year: the performance of the board of management and the offering process on sister fund VastNed Retail, the general counsel; the cancellation of this process and the credit crisis – the composition of the board of management; worsening to unprecedented levels in the second – the performance of the external auditor; half of 2008 were reason to monitor the board of – the supervisory board’s remuneration and the management closely. The supervisory board of remuneration of the board of management; VastNed Offices/Industrial held eight meetings in – corporate governance, and; 2008 which were attended by the board of management, – the performance of the subcommittees of the a number of which were conducted by means of a supervisory board, including the reporting by conference call. The supervisory board also met in these committees. the absence of the board of management. The supervisory board was provided with sufficient The topics discussed at these meetings included: information by the board of management at all times, – the consequences of the offering process on VastNed so that it was able to fulfil its supervisory role Retail for VastNed Offices/Industrial; properly. None of the members of the supervisory – the state of affairs and risks in the property portfolio; board was frequently absent. – the strategy and risks of the company as a whole as well as aspects thereof such as new markets; – the financial results and their disclosure in press releases and the annual report;

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Consequences public offer on Dividend and reservation policy VastNed Retail shares In line with previous years, VastNed Offices/Industrial The supervisory board studied the consequences of a will distribute the direct investment result to its possible successful offer on sister fund VastNed Retail shareholders in full. Part of the dividend can be paid for VastNed Offices/Industrial and concluded that out to the shareholders as stock dividend, charged to the existing agreements (cost sharing- and cooperation the share premium reserve. The supervisory board agreement) with VastNed Retail and VastNed has granted the board of management the authority Management provide for sufficient security for VastNed to buy back shares in the company in order to Offices/Industrial continuing its business. This means prevent dilution of the direct investment result per that, if the offer would have materialised, the quality share due to stock dividend, charged to the share of the management would not have been endangered premium reserve, while at the same time guaranteeing and VastNed Offices/Industrial, together with VastNed the fiscally favourable character of the payout. Management, would have received from VastNed Retail sufficient funds to maintain its present professional Dividend proposal organisation. We are in agreement with the proposal of the board Annual general meeting of shareholders 2008 of management to distribute a final dividend per share having F 5 nominal value as follows: The annual general meeting of shareholders held on – 5% in cash on the priority shares; April 8, 2008 addressed amongst others an amendment – a pay-out on the ordinary shares, after deduction of of the remuneration system for the members of the the interim dividend of F 0.50, of F 1.09, of which: supervisory board and an amendment of the articles – F 1.09 in cash less 15% dividend withholding tax, or; of association. Both items were accepted by the – F 1.01 in cash less 15% dividend withholding tax, plus general meeting of shareholders with large majorities. a percentage in shares yet to be determined, depending on the share price, but approaching a cash equivalent Corporate governance supervisory board of F 0.08, charged to the share premium reserve, without deduction of dividend withholding tax. A major component of the corporate governance structure is the structure of the supervisory board Refinancing loan portfolio as a body of the company. The supervisory board has taken note of the updated Netherlands Corporate In October 2008 the supervisory board approved Governance Code (the ‘Code’) published on the decision of the board of management, to start December 10, 2008. The supervisory board understands negotiations with the main loan providing the rationale behind the changes to the Code and banks regarding an agreement on the consequences will take into account the Monitoring Committee’s of a possible future breach of loan covenants. findings where applicable for future updates of the These negotiations led to the refinancing of the various corporate governance regulations. loan portfolio for the Dutch and German properties totalling approximately F 370 million. This refinancing Annual accounts 2008 has a duration of at least three years and comprises widened covenants concerning the debt ratio (loan to The annual report drawn up by the board of value) and interest coverage ratio. For more details, management includes the 2008 financial statements we refer to the report of the board of management audited by Deloitte Accountants B.V. The supervisory under finance structure. board is in agreement with this report and with the 2008 financial statements and recommends that the Composition of the supervisory board general meeting of shareholders adopts the 2008 financial statements in the form as presented. The supervisory board is composed as follows: Mr Willem M. Steenstra Toussaint, chairman Mr Henk W. Breukink, vice-chairman Mr Dick van den Bos (audit committee member) Mr Robert K. Jacobson (audit committee chairman)

The curricula vitae of the supervisory board members are set out in the chapter on corporate governance on page 113 in this annual report.

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Committees of the supervisory board Selection and appointment committee

The supervisory board has three active committees: The selection and appointment committee is the audit committee, the remuneration committee comprised of the chairman and the vice-chairman of and the selection and appointment committee. the supervisory board. The supervisory board met All committees do have two members. one time for discussions in the area of selection and appointments. Audit committee Changes of the management board Mr Jacobson is the chairman of the audit committee and Mr Van den Bos is a member. In 2008 the audit In the beginning of October 2008, Mr Hans Pars, committee met on five occasions. It is the task of member of the board of management, decided to the audit committee to advise the supervisory board leave the company in order to accept a position as a in the area of finance and control. Topics that were member of the board of management of the Dutch addressed included financial reporting, budgeting, property investment fund Wereldhave, to succeed the role of the external auditor, tax issues/risks, the current chief executive officer. The supervisory compliance (inter alia with the Authority for the board is grateful to Mr Pars for his efforts and his Financial Markets), IFRS, interest rates and financing achievements for VastNed Offices/Industrial and risks, the impact of the credit crisis on both financing wishes him all the best in his new position. and property values, letting risks, catastrophe and liability risks, debtor risks, internal control, IT systems, Changes of the supervisory board legal risks and the follow-up of recommendations by the external auditor as well as the findings by the The composition of the supervisory board remained external auditor. All audit committee reports have unchanged during 2008. been made available to all members of the supervisory board and were discussed at the Profile of the supervisory board subsequent meeting of the supervisory board. The supervisory board profile guarantees that the Remuneration committee supervisory board is composed properly, meaning that based on available knowledge and experience The remuneration committee comprises effective supervision of the board of management of Mr Steenstra Toussaint (chairman) and Mr Breukink. the company can be exercised. This profile is available It is the task of the remuneration committee to advise on the website of the company; copies may be obtained the supervisory board in the area of the remuneration from the office of the company. The supervisory policy to be pursued for the directors. This committee board certifies that all its members are independent met on three occasions in 2008. The remuneration as defined in the Dutch corporate governance Code. committee has prepared the 2008 remuneration report, which will be discussed by the general meeting of Retirement schedule shareholders on April 7, 2009 and which is included in this annual report. All members of the The retirement schedule for the next few years is as remuneration committee are also members of the follows: supervisory board of VastNed Management. – Mr Dick van den Bos, 2009 (eligible for re-election) Coordination with the remuneration committee of – Mr Willem M. Steenstra Toussaint, 2010 (eligible for VastNed Retail takes place in the meetings of the re-election) supervisory board of VastNed Management, since the – Mr Henk W. Breukink, 2011 (eligible for re-election) board of management manages both funds and their – Mr Robert K. Jacobson, 2012 (eligible for re-election) remuneration reflects their activities for both funds. The articles of association stipulate that a term of office is limited to three terms of four years. Thus, VastNed Offices/Industrial acts in accordance with best-practice provision III.3.5 of the Code.

17 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 18 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Iris Wernet, dentist, Ivory & Ivory, Nieuwegein

‘The dentistry profession develops very rapidly, so that the number of specialisms is rising. Ivory & Ivory offers state-of-the-art dentistry services in customer-friendly surgeries. Our Nieuwegein surgery recently opened for business. The property on Krijtwal was an office for many years, but has now been converted into a modern surgery with all branches of dentistry in-house.’

19 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Antwerp Zoetermeer Amsterdam Düsseldorf

Diegem

Eindhoven

Amsterdam

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VastNed Offices/Industrial intends to focus its logistics property portfolio near major distribution hubs and along major national and European corridors.

General meeting of shareholders

The agenda of the general meeting of shareholders of April 7, 2009 and the associated shareholder circular will be published in the middle of March 2009.

Personnel

The supervisory board thanks the board of management and the employees for their efforts and loyalty during the year under review.

Rotterdam, March 6, 2009 On behalf of the supervisory board, W.M. Steenstra Toussaint, chairman

21 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 The Hague

From left to right Reinier A. van Gerrevink, Tom M. de Witte, Arnaud G.H. du Pont

Report of the board of management

Economy and markets in general It is clear that it will take time to recover from such a blow. Official interest rates are falling rapidly and Economy that should have an effect sometime in 2009. Oil and commodity prices have already declined a great deal, A perfect storm with rising and falling inflation, which has had an almost immediate impact on a declining dollar, plummeting stock prices, economic growth. The stimulation packages adopted the bursting of the house price bubble in various by various governments are also likely to have an effect countries, and the near-collapse of the financial either sometime in 2009 or, more likely, in 2010. system in 2008 had a tremendous impact on The blow to the economy in the last quarter of 2008 consumers, who took fright and rapidly scaled back which will probably extend into the first quarter spending. The speed at which consumers gather of 2009 will be huge. This also means that the economic information and react to it is an unpleasant year-on-year comparative growth figures will improve side-effect of today’s information economy. from the last quarter of 2009 onwards. This makes it Central banks and governments moved quickly to highly plausible that an economic recovery will apply every tool available to them in the form of lower arrive in 2010. The longer-term damage to the world interest rates, rescue packages and massive (fiscal) economy, however, is still unknown. Many of the stimulation of the economy. The eventual effect of imbalances in especially the economy of the United all these measures is still unknown as it takes time to States remain in place and even widened because the change behaviour, probably a great deal more time massive stimulation packages have increased the than it took consumers to scale back their spending. country’s debt position. The rollercoaster rides seen in the financial markets and real economies worldwide taught us the meaning In the previous annual report the view was expressed of volatility again and thus of risk. that there would be an interim downwards adjustment of economic growth customary in economic cycles,

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which at the time was the consensus economic view. Real growth of gdp (in %) Various downside risks to this growth scenario were Source: Consensus Forecasts mentioned, which actually materialised and caused economic growth to fade away. What was not expected, however, was a near-meltdown of the financial sector and the resulting massive loss of consumer confidence. The jury is still out who is to blame for the near- Eurozone collapse of the financial system, but the western World economic system always pretended these kind of risks were under control by central banks and various other institutions who control the financial sector. 5 The call for reform is logical and has found a willing ear. It will take time before confidence in the financial 4 system returns. Currently, the extent of write-downs in the financial sector is not yet known. Looking at 3 the scale of the problems it seems likely that further capital injections in the financial sector will be needed. 2

Many risks to economic growth have not gone away 1 and remain in place, such as the supply/demand imbalances on the oil and commodities markets. 0 A recovery of economic growth might easily send prices spiralling upwards, pushing up inflation and -1 interest rates significantly. A new downside risk is the wealth effect. It is very possible that consumers -2 will limit their spending for a long time so as to be able to repair the damage done by the credit crisis to 1999 2000 2001 2002 2003 2004 2005 2006 2007 their personal balance sheets. The worst-case scenario 2008E 2009E 2010E would be a deflationary economic environment caused by consumers continuing to postpone spending. A new Total annual return (in %) risk is also that the economic rescue packages may Source: Global Property Research (GPR), Bloomberg not have the desired effect on economic growth, leaving governments with higher budget deficits with very little in return. In spite of all these dangers to economic growth, the consensus is that the global GPR 250 Europe economy will start to recover in 2010. GPR 250 Netherlands VastNed Offices/Industrial Office market

Due to the delayed impact of the economic slowdown 10 on rental income, the office markets relevant for VastNed Offices/Industrial have done well in 2008. 0 The recovery in the prime segment of these office markets that occurred in 2007 continued into the first -10 half of 2008, but started to level off in the second half. Other office markets segments also showed more -20 activity in 2008 and experienced more headwind later in the year. As there is always a delay between a -30 decisive change in economic growth and the resulting demand in the office market, the full effect of the -40 economic downturn has not yet played itself out. The first signs of changes in demand were observed -50 in the last quarter of 2008 as more and more companies shelved expansion plans, stopped looking for new -60 office space and decided to stay in their current accommodation. Demand for office space is expected -70 to come under real pressure in 2009. In the more 1 year 3 years 5 years 7 years

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liquid rental markets in the major city regions dutch property funds experience has shown that there will always be Development premium (discount) (in %) demand. This demand is expected to come from companies who wish to downsize their office space and/or relocate to a better building or location.

The office market has matured. Office employment will increasingly develop in line with economic growth, instead of the continuous growth of office employment seen the past few decades. Segmentation is a typical feature of mature markets. The offered 40 office product in terms of office buildings and/or office areas will vary in relation to various types of 30 office users. Properties that used to be mass market products are now being tailored to a certain type of 20 office user. Demand for office space focuses on areas preferred by office users. Preferences vary across 10 regions and types of users, cementing the segmentation of the office market. Some office areas 0 are developed to target dynamic international markets in the service industry, while other areas target to -10 provide the status some office users are looking for or are targeted at creative companies. A mass market in -20 back offices will remain, but areas with efficient access and quality surroundings will be preferred by office. -30

Liquid office markets in major cities are fuelled by -40 the trend that employment in the services industry increasingly tends to be concentrated in larger cities -50 where the population is younger than the national average. Larger cities have better facilities for dual- -60 income households. Office users also demand the surroundings of the office property to have a minimum 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 level of quality. Especially the larger cities are capable of providing such quality or create it where necessary. VastNed Offices/Industrial The competitive position of our office property will Industry spread total property portfolio play a key role in our ability to strike favourable deals with tenants. An important difference compared Financial services 19% to the downturn during the last office market cycle Business services 31% is that the recovery of the office markets in the Technology, media, telecom 14% Netherlands, Belgium and Germany had just started Government services 17% and speculative development of new office space had Other 19% not yet picked up. The difference with other office market cycles in the past is that for VastNed Offices/ Industrial’s markets there is not a supply shock, but 19% 19% a demand shock. For some time to come, it will now also be difficult to develop new office space as demand is low and bank finance hard to get. So even at the start of the downturn there is a lack of vacant new space on the market. Existing office space therefore 17% has a better competitive position during this cycle compared to the last. More investments in existing 31% office space to make it look as new will therefore be seen to improve our competitive position. We will 14% also focus more on sustainability issues that might sway tenants to choose one office building over

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another. A focus on liquid office markets with a VastNed Offices/Industrial spread portfolio of office buildings that are Sector spread competitive in the rental market is expected to total property portfolio produce better returns over time.

Within the eurozone, VastNed Offices/Industrial focuses on the Netherlands, Belgium and Germany. Offices 81% In these countries, the company concentrates on Semi-industrial 19% good to excellent office investments in large liquid office markets. In the Netherlands, there is a preference for the bigger cities in the Randstad: 19% Amsterdam, Rotterdam, The Hague and Utrecht. In Belgium, the focus is on the Antwerp-Brussels axis where most commercial activity takes place. In Germany, there is a strong preference for the five major office markets: Berlin, Düsseldorf, Frankfurt, Hamburg and Munich. In these larger cities, VastNed Offices/Industrial invests in various types of office districts. The previously mentioned office 81% market segmentation and trends in demand for office space provide the framework for our investments. Investing in various types of office areas in several larger cities provides for a sound spread of the investments.

The office investment market differed from the rental market in 2008. In the first half of 2008 it became apparent that financing property deals had become more difficult, causing many deals to fall through. Other investors reigned in their expansion plans by backing out of deals where legally possible. Soon a gap developed between what potential investors were willing to pay and the price sellers were asking. It was clear that values would have to decline as the sellers’ markets changed overnight into a buyers’ market. A shortage of investment deals, however, made it hard VastNed Offices/Industrial to determine where values would end up. During 2008, Geographical spread of property portfolio spurred on by sharply decreasing interest rates, investors with equity in hand and low dependence on bank finance started to knock on doors to see if investment deals could be struck. They were. Lower Netherlands 44% interest rates together with lower property values Belgium 46% provide higher risk premiums in property compared Germany 10% to government bonds. This development is expected to continue into 2009. The lowest point in values will 10% ultimately be defined by the level of risk premiums in property compared to government bonds.

Logistics property market 44% The strong growth of emerging economies globally 46% has driven up trading volumes with the established economies. World trade profited as production was relocated from the richer western economies to other parts of the world. As demand is still mainly concentrated in the western economies, new trade flows developed. As a result, the logistics market has

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netherlands

4 9 3 8 1 7 210 5

belgium 9 510 6

4 3 1 7 8

grown well above the rate of economic growth in Although the logistics market in the area will be hit the eurozone. Trade flows depend on demand and hard by the downturn in demand caused by the production location, but also on critical mass. As a slowdown in the economy, the area has good consequence of the economic downturn global sea credentials in terms of critical mass and will also transport shrank in 2008 as shipping companies are profit from the tendency to concentrate cargo on trying to direct the cargo on big shipping routes. big shipping routes. Major ports are favoured. The logistics property sector in northwestern Europe therefore remains an attractive sector. As stated earlier, North-western Europe has always benefited in logistics demand for logistics property will slow down terms from its favourable location in Europe. Parts of considerably, but the fundamentals of northwestern the Netherlands, Belgium and Germany have a Europe in terms of logistics are sound and will dominant position in the logistics market. Some of develop positively once the economy gets going again. the world’s biggest ports are in this region and there VastNed Offices/Industrial intends to focus its are also many major cargo airports. Connections to the logistics property portfolio near major distribution hinterland are excellent and the logistics operations hubs and along major national and European serve a giant industrial and consumer market. corridors. Demand for logistics property is concentrated around large distribution hubs such as the seaports of Risks Rotterdam and Antwerp and the airports of Amsterdam and Brussels. In Germany, Frankfurt for example The fundamental imbalances in the economy of the is a major European distribution hub. Junctions United States remain largely the same. Although the on major arteries, also referred to as national and trade deficit might improve under influence of European corridors, have always been popular. falling oil prices and much lower consumer demand,

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Report of the board of management

As at December 31, 2008 (x € 1,000). Appraisal value Gross theoretical rental income Year-end occupancy (in%) Number of tenants

1 The Hague, Zuid-Hollandlaan 7 30,000 2,140 100.0 1 2 Utrecht, Arthur van Schendelstraat 24,900 1,798 100.0 6 2 3 4 650-698 and 700-748 3 Amsterdam, Burg. Stramanweg 102-108 20,100 1,876 76.7 28 4 Amsterdam, Karel du Jardinstraat 65 13,800 1,087 100.0 1 5 Rotterdam, K.P. van der Mandelelaan 41-43 13,100 1,368 27.9 1 6 ’s-Hertogenbosch, Europalaan 28 11,400 1,238 85.8 4 5 6 7 7 Zoetermeer, Europaweg 205 11,200 973 100.0 1 8 Schiphol-Rijk, Cessnalaan 1-33 9,000 674 100.0 1 9 Amsterdam, Anthony Fokkerweg 1 8,800 811 89.9 14 10 Utrecht, Weg der Verenigde Naties 1 8,300 635 100.0 2

8 9 10

1 Mechelen, Schaliënhoevedreef 20a-20t 88,700 8,508 93.1 52 2 3 4 2 Woluwe, Woluwedal 18-22 66,100 5,186 92.4 1 3 Mechelen, Generaal de Wittelaan 9-21 48,100 5,312 92.0 44 4 Mechelen, Blarenberglaan 2c 25,800 2,371 100.0 1 5 Puurs, Veurtstraat 91 25,100 2,056 100.0 1 6 Herentals, Atealaan 34-34c 23,600 1,500 100.0 9 5 6 7 7 Diegem, Berkenlaan 8b 18,400 1,492 100.0 1 8 Diegem, Berkenlaan 8a 17,500 1,357 100.0 1 9 Antwerp, Brusselstraat 59 16,100 1,593 87.4 7 10 Wilrijk, Boomsesteenseweg 801-803 15,100 1,447 100.0 1

8 9 10

this effect will be mainly cyclical. Structural change The flipside of the coin is the deflation risk. When in energy consumption and economic production of as a result of the present economic slowdown prices goods is needed. Government budget deficits are start to decline and deflation takes hold of the rising strongly. The United States seems more than economy, consumers will start to postpone spending ever dependent on the willingness of the rest of the even more as things will be cheaper at a later date. world to finance its economy. While the dollar may That would considerably deepen the economic be low, the risk of the dollar falling even further has downturn gripping the world today. Such a situation not gone away. A further decline of the dollar would might arise if the present massive stimulation heighten the sense of crisis. Economic growth in the packages thrown in by various governments do not eurozone will come under further pressure as exports have the desired effect as consumers prefer to repair are hit further by an expensive euro. their personal balance sheets over spending their money in the economy. Oil and commodity prices are under the influence of a fundamental mismatch of supply and demand. House prices have come under pressure in 2008, on the The past few years have shown that supply is very one hand because sharply rising unemployment are inelastic and demand can drive up prices at reducing the incomes of many people, some of whom considerable speed. Although demand has come under may be forced to sell their house, and on the other cyclical pressure and therefore is much lower at the hand because banks are less willing to provide moment, the structural mismatch remains. Once the mortgages at many times annual income with almost economic recovery gets under way there is a clear risk no down payment. In many countries it was nearly that oil and commodity prices may spiral upward, impossible for first-time buyers to get on the property causing inflation and interest rates to rise again. ladder. Falling house prices will not turn this situation around as banks are more conservative in providing

27 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

mortgages. If the economic recovery turns out to be Netherlands weak or fails to arrive, house prices will decline Sector spread further, generating a negative wealth effect among consumers in contrast to the positive wealth effect generated by rising prices in the past. A negative wealth effect impacts economic growth. Offices 89% Limited population growth in the eurozone has Semi-industrial 11% become a structural factor keeping the long-term growth rate of the economy low, as this growth now 11% depends mostly on higher-margin economic activity and productivity gains. Both have come under pressure from the present slowdown of the economy. Along with the economic recovery, a higher participation rate of the population in the economy as well as a focused immigration policy such as the blue card initiative will be needed to improve growth prospects for the longer term. Failure will increase downside risks with future slowdowns in economic growth. 89%

Stock exchange

Share prices of listed property funds go through waves of discounts and premiums on net asset value. In the first half of 2007, the property funds listed on NYSE Euronext Amsterdam traded at a historically very high premium compared to net asset value, only to fall to a historically low discount on net asset value at the end of 2008. In less than two years the prospects of the property industry have experienced a dramatic reversal of fortune. Clearly, the massive fall in share prices reflects a fall in property values and higher risk to leveraged positions, although share prices may have overreacted. The fall in share prices might also have been caused by the strong decline in stock Netherlands markets forcing investors to liquidate positions due Industry spread to redemptions and/or margin calls. Financial services 16% Lower interest rates together with lower property Business services 39% values imply higher risk premiums in property Technology, media, telecom 9% compared to government bonds. This development Government services 21% is expected to continue in 2009. The lowest point in Other 15% values will eventually be defined by the level of risk premiums in property compared to the risks on government bonds. Additionally, the price floor of 15% 16% property shares is also determined by the perceived risk of the leveraged position.

The Netherlands 21%

Economy 39%

Growth in the Dutch economy was still positive in 9% 2008 with a growth rate of 2.0% versus 0.9% in the eurozone as a whole. The Dutch Central Bank and the government were quick to react to the sharply

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worsening economic conditions with various Belgium measures widely approved by the Dutch citizens, Sector spread bolstering the popularity of the governing coalition. The budget surplus is allowed to turn into a budget deficit in order to stimulate economic growth. Painful structural adjustments to the economy have already been made earlier this decade and that is an Offices 70% advantage in the present economic crisis. However, Semi-industrial 30% the Dutch economy is very open and will be affected by the downturn of the world economy. It is expected to shrink in 2009. 30% Office market

The Dutch office market started 2008 positively on the back of strong growth in office employment comparable to that of the second half of the nineties, which many forecasters earlier in this decade considered impossible due to the ageing of the 70% population. The larger cities in particular benefited from this momentum, further boosting the recovery in these office markets. The momentum quickly waned once the economy was hit by the series of financial and economic events of the second half of 2008. The office market in the first half of 2008 still showed strong take-up, but that levelled off in the second half of 2008. The same strong take-up was observed in the rental market, in particular in a number of segments of the office markets in the major cities. At the end of 2008 weakness in the rental market returned to the parts of the office market that still have a high vacancy rate or where there are structural problems with the office stock, mostly due to them being outdated and no longer attractive to tenants. Belgium The expectation for 2009 is that demand for office Industry spread space will come under real pressure and that more weakness will be seen. Differences between market Financial services 19% segments and type of office buildings will be Business services 25% considerable and some segments of the office market Technology, media, telecom 16% will be hit much harder than others. The bottom line Government services 16% is the competitiveness of the office space being offered Other 24% in the market. As speculative development of new office space has been limited in recent years, well-positioned existing office stock will do relatively 24% 19% well during the downturn and the subsequent recovery. Belgium 16% Economy 25%

Growth in the Belgian economy was still positive in 2008 at 1.3% versus 0.9% in the eurozone as a whole. 16% The Belgian Central Bank and the government had a bumpy ride, with the rescue of Fortis Bank leading

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to a crisis in the governing coalition. Belgian citizens Germany were severely affected by the demise of the Fortis Bank Sector spread as many Belgian people own shares in this bank as a pension savings scheme. Adding to the problems of the Belgian government is the deep-rooted language conflict which makes it difficult to keep focused on the real problems and the solutions required. At the end of 2008 Belgium resolved the crisis in Offices 100% the government and succeeded in forming a new government, which will have to tackle the country’s economic problems. The Belgian economy is an open economy and a downturn in the world economy will have a significant impact on the country. The economy is expected to shrink in 2009.

Office market

The major office markets in Belgium are located on the Antwerp-Mechelen-Brussels axis, Brussels having the largest office market by far. The Brussels office 100% market is twofold. The city centre is dominated by the financial sector and the regional, national and European government institutions, while businesses are mostly located in the periphery and along the axis to Antwerp. The office market on the Brussels periphery almost equals the entire office market in Antwerp. Mechelen has a small but growing office market and may be considered a new market for companies wishing to relocate to this axis.

In 2008, the office market in the city centre of Brussels in particular was hit by the series of financial and economic events. The city centre took a large hit in take-up due to the trouble in the financial sector. The periphery did much better in terms of take-up, but vacancy levels are still relatively high. The real Germany office supply in Brussels may well be considerably Industry spread below official statistics. A study has shown that a third of this supply is no longer suited for office use. As in many other office markets, this is due to structural Financial services 37% obsolescence. New office supply in the periphery is Business services 29% limited, because vacancy is still high and speculative Technology, media, telecom 23% development therefore unattractive. Existing office Other 11% space therefore has a better market position than in the previous office market cycle, because it does not 11% have to compete extensively with newly built vacant office space. In 2009 the office market will come under considerable pressure as the downturn in the 37% economy filters through to all businesses and thus to 23% the office market. Germany

Economy 29% The German economy was just back on a growth path after a long period in the doldrums. As Germany is very dependent on exports, the economy first was

30 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

hit hard by the strength of the euro, as well as by the VastNed Offices/Industrial troubles in the financial sector. A positive point in Ten largest tenants the German economy is that the housing market Percentage of theoretical rental income never developed the same kind of bubble as those as at December 31, 2008. in many other countries. German consumers seem unimpressed by what is happening, as consumer spending is still strong. Growth in the German economy was still positive in 2008 at 1.3% versus 0.9% of the eurozone as a whole. In 2009 the economy is expected to shrink. PricewaterhouseCoopers 5.2 The German government responded decisively to Tibotec 3.7 the troubles of the financial sector and guaranteed Deloitte/GSI 3.6 all savings deposits. This guarantee is much higher EDS 2.6 than in many other countries, with total savings De Brauw Blackstone Westbroek 2.3 amounting to some F 1,000 billion. This bold move Victoria Versicherung 2.3 had become necessary as German banks were hit Fiege Kalf 2.2 severely by the credit crisis and confidence in the Rijksgebouwendienst 1.8 German economy was at stake. It also became Brico 1.7 necessary for the German government to launch a Rexel 1.6 massive rescue package for German banks. At first the German government was reluctant to also stimulate the economy as it feared that government debt would Total 27.0 rise too far. Subsequently, a massive stimulation package was put together to revive the German economy as it became apparent that such a package was unavoidable.

Office market

The German office market is concentrated in the five major cities: Berlin, Düsseldorf, Frankfurt, Hamburg and Munich. Düsseldorf and Frankfurt are relatively small, but fulfil an important regional role with a major international dimension. There are many office buildings also in other German cities, but these are of less interest to VastNed Offices/Industrial as its focus is on main, liquid office markets. A positive trend in these office markets was observed in 2008 as vacancy fell, on the one hand because of relatively high levels of take-up and on the other hand as the volume of new buildings coming on the market was low. Speculative development of new office space stayed low as the recovery in the office market had just started. As in the other office markets in which VastNed Offices/ Industrial operates, this is positive for existing office space in the present market circumstances.

The office markets in all German cities will go through hard times in 2009 as the downturn in the economy will affect take-up. Because of Frankfurt’s concentration on the financial sector, it is expected to be hit harder than the other four cities. A compensating factor is that the five main office markets are likely to profit from the preference among businesses for locations in the larger cities. As Germany is a large country with the five major cities spread around the country, there is not much competition between these cities.

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Property portfolio vastned offices/Industrial Theoretical rental income Introduction and market rent (x € 1 million)

After the positive developments of recent years, 2008 reversed the direction of the fragile recovery of the office markets in which VastNed Offices/Industrial operates. Property values decreased after minor positive movements in 2007. The negative value movements started in the second quarter of 2008 with minor write-downs and continued in the following quarters with much more significant write-downs. The larger part of the drop in values was caused by yield decompression. The Dutch and Belgian property Theoretical rental income teams realized a large number of new leases and lease Market rent (Over)/underrent (in %) renewals. As in previous year, rental levels remained Netherlands under pressure due to fierce competition and ample Offices 40.0 39.1 (2.2) supply in the market. On balance, average occupancy Semi-industrial 5.1 5.0 (2.3) rates improved. A modest volume of new standing Total 45.1 44.1 (2.2) investments was acquired in 2008. The acquisition of Belgium newly acquired income-generating properties and Offices 35.8 31.9 (11.9) the sale of properties enabled VastNed Offices/ Semi-industrial 13.5 12.3 (10.2) Industrial to improve the risk-return profile of the Total 49.3 44.2 (11.4) property portfolio. VastNed Offices/Industrial’s Germany property portfolio is characterised by spreading in Offices 7.5 7.3 (3.0) terms of countries and regions, types and numbers of tenants as well as types of investment properties. Total 101.9 95.6 (6.5)

As in previous years, reporting in 2008 continued to be a major topic. VastNed Offices/Industrial has implemented the best-practice provisions concerning reporting as formulated by the industry organisations IVBN and EPRA. VastNed Offices/Industrial’s board of management wholeheartedly supports the continuous revision and occasional updating of such provisions, since they contribute to better comparability of property funds and to increased transparency of reporting in general.

Properties

The property portfolio consists for the greater part of medium-sized office properties. In addition, investments are made in small and medium-sized, logistics and light-industrial properties categorized as semi-industrial properties. At year-end 2008, the total property portfolio in operation comprised 168 properties (year-end 2007: 183) spread over three countries, with a total lettable floor area of 932,162 sqm (year-end 2007: 915,755 sqm). The appraisal value of the property portfolio in operation was F 1,152.0 million at year-end 2008 (year-end 2007: F 1,175.6 million).

Occupancy and letting

In 2008, the occupancy rate remained at comfortable levels due to an active letting strategy that resulted

32 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

in an average 2008 rental income that was only slightly VastNed Offices/Industrial below 2007. The main elements that supported the Expiry dates lease contracts gross rental income of the standing property property portfolio (in %) portfolio were: higher average occupancy, indexation, Expiry dates and renewal dates of lease contracts leasing activity, developments in lease incentives (weighted for gross rental income) and a limited number of bankruptcies. Average duration is 3.6 years. Expiry first break Occupancy rate Expiry end date The occupancy rates of the total property portfolio and its different segments are set out below. The occupancy rate at year-end is calculated by dividing 30 the passing rent at year-end plus the contractual rental income year-end of vacant units which are already 20 let but not physically occupied by the year-end theoretical rental income of the property portfolio. 10

Occupancy rate (in %) 0 Year-end Average Average 2008 2008 2007 2009 2010 2011 2012 2013 2014 2015 2016 – ______Netherlands 86.9 87.3 88.3 Belgium 94.1 92.9 88.4 Germany 99.0 98.8 99.1

Total 91.2 90.7 88.5

The average occupancy rate improved in 2008, partly due to the abovementioned leasing activity and partly due to the sales of some troublesome assets in 2007 and 2008. The average occupancy rate in 2008 was 90.7% (2007: 88.5%). On average, occupancy in the office segment was lower than in the semi-industrial part of the property portfolio. The existing vacancy is considered to be relatively modest given the present economic environment. A fall of occupancy rates in the coming years cannot be ruled out, but the board of management is monitoring the developments in the offices markets as closely as possible.

Indexation Virtually all leases stipulate rent indexation based on the consumer price index (CPI). The majority of these leases include a hedge against possible deflation by locking in the rent level indexed earlier. In Germany, however, leases generally include that a particular threshold must be exceeded by cumulative CPIs before a rental increase or decrease may be implemented.

Leasing activity As mentioned earlier, a large number of lease transactions was concluded in 2008. These lease transactions, which we refer to as ‘leasing activity’, include new lettings and lease renewals. The first category comprises the leasing of vacated or shortly to be vacated space to new tenants and the second

33 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 34 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Annelies van Houten, manager staff ProRail Facilities, Utrecht

‘We like to be close to the railroad tracks, which is our product. Many of our employees travel by train, and this property in this location makes that pretty comfortable. Sustainability is one of ProRail’s priorities, and that is evident not only in our product, but also in our business relations. Good contacts and collaboration ensure that the relationship between ProRail and VastNed is sustainable and remains so.’

35 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Amersfoort Hoofddorp

Rotterdam

‘The office market in Belgium has been very competitive for many years, so we are well-prepared to deal with demanding tenants. Our property portfolio of modern Zoetermeer and affordable office properties has enabled us to increase occupancy to an unrivalled 94%.’

Jean Paul Sols, country manager VastNed Offices /Industrial Belgium

36 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Amersfoort Hoofddorp

category comprises the conclusion of new leases with existing tenants. In this context, leases actually signed in 2008 are taken into account, even if the actual commencement date of the lease agreement is in 2009. New leases were concluded in VastNed Offices/Industrial’s core countries at on average a 1.0% higher gross top-line rent compared to the former rent (2007: 10.3% lower). If lease incentives are taken into account, which is relevant for future earnings, the new leases were concluded on average 10.1% below the former rent (2007: 12.0% lower). The total volume of leasing activity, including renewals amounted to F 16.6 million on new or renewed rental income (2007: F 12.6 million). This equates to 17.5% (15.3%) of the theoretical rental income in the core countries. Düsseldorf Leasing activity (in%) Leasing New leases Lease renewals activity ______Change* Volume** Change* Volume** Volume** ______Netherlands 0.3 10.3 0.1 8.6 18.9 Belgium 3.7 4.0 (3.3) 10.8 14.8 Germany 1.8 1.1 – 11.4 12.5

Total 1.4 6.6 (1.7) 9.9 16.5 * Change expressed as the new rent divided by the former rent. ** Volume expressed as a percentage of total theoretical gross rent.

In the new leases and the lease renewals concluded VastNed Offices/Industrial not only compares the rent level relative to the former rent, but also relative to estimated rental values as assessed by independent appraisers. Woerden Lease incentives Lease incentives such as rent-free periods, lease discounts and other payments or contributions benefiting the tenant increased to 3.3% of gross rental income (2007: 2.6%). This increase is steeper if we take into account the lease incentives actually granted in 2008 without straightlining over the duration of the lease contract of 5.2% (2007: 3.2%). This was due to fierce competition in office and semi-industrial markets. Tenants preferred not to move offices and were prepared to sign leases for relatively long periods. In return, landlords granted lease incentives, such as small renovations resulting in up-to-date quality of the property.

37 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

Lease incentives (in %) vastned Offices/Industrial 2008 2007 2008 2007 Value movements investment properties actual actual IFRS IFRS (x € 1 million) ______Netherlands (6.8) (4.8) (4.0) (2.9) Belgium (4.4) (1.8) (3.0) (2.4) Germany (1.0) – (1.0) –

Total (5.2) (3.2) (3.3) (2.6)

Tenants

VastNed Offices/Industrial leases its properties to a

large number of tenants. The total number of leases, Netherlands Belgium Germany France Total excluding parking space leases, was 546 at year-end Value movements (2007: 600). A list of the larger tenants is presented on 1st quarter 2008 6.7 1.6 1.6 – 9.9 page 31. None of the tenants is so dominant as to 2nd quarter 2008 (6.1) 3.0 (1.5) – (4.6) constitute an unacceptable risk to VastNed Offices/ 3rd quarter 2008 (8.1) (5.3) (0.1) – (13.5) Industrial’s rental income. 4th quarter 2008 (28.1) (12.8) (6.3) – (47.2)

Market rent FY 2008 (35.6) (13.5) (6.3) – (55.4)

As at year-end 2008, VastNed Offices/Industrial’s FY 2007 9.2 6.6 (0.4) (0.2) 15.2 property portfolio was leased on average at 6.5% above market rent. This carries the risk that at the Net theoretical yields expiry or renewal of lease contracts, the rent that Year-end 2008 7.7 8.6 6.3 – 7.8 may be charged will be lower than at present. This Year-end 2007 7.2 8.0 5.6 – 7.4 aspect is being closely monitored by the board of management. The table on page 32 compares the theoretical gross rental income with the market rent as at year-end 2008. In the course of re-letting the properties vacated in 2008 and in renewing expired contracts, it became clear that this lower rent level indeed had to be taken into account. However, the proportion of contracts that are up for renewal each year is limited. The organic development of gross rental income confirms this. Some aspects of this development are noteworthy. The stable occupancy rate has been discussed earlier. Indexations are modestly positive, but new lease contracts and lease renewals yield lower rental income, mainly as a result of lease discounts and suchlike. The table on page 33 presents the evolution of gross rental income during 2008.

Lease expiry dates

In the countries in which VastNed Offices/Industrial operates, different types and durations of lease contracts are observed resulting from local legislation and customs. The graph on page 33 lists the expiry dates of the total property portfolio. VastNed Offices/ Industrial defines the expiry date as the first date at which tenants may terminate the lease without additional costs. Under this definition, the average duration is 3.6 years (year-end 2007: 3.2 years). Calculating to the end-date of the lease contract,

38 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

the average duration on December 31, 2008 was still The sales result was F 0.5 million positive 4.4 years (year-end 2007: 4.9 years). (2007: F 4.5 million negative).

Acquisitions Value movements investment properties

New acquisitions were made in the 2008 financial Early this century VastNed Offices/Industrial was year totalling F 55.3 million in the Netherlands, confronted with negative value movements which Belgium and Germany. continued until the end of 2005. 2006 and 2007 were marked by limited value growth. This short period Property acquisitions (x F 1 million) of value growth turned around in the spring of 2008 Amount and turned negative as from the second quarter of ______2008. The strongest driver of the negative value The Netherlands movements was the yield decompression, meaning – The Hague, Neuhuyskade 92-94 7.4 that investors require higher yields from their investments. Values were also affected by lower Belgium expected market rents. – Herentals, Atealaan 34 17.7 The value movements of the property portfolio based Germany on the appraisals by independent appraisers showed – Düsseldorf, Hans-Böckler-Straße 36 30.1 a total value movement of F 55.4 million negative (2007: F15.2 million positive). The net theoretical Total 55.3 yield on the property portfolio (theoretical net rental income, not taking into account non-recoverable Disposals service charges and bad debt provisions, divided by the appraisal value of the property portfolio) at VastNed Offices/Industrial in 2008 disposed of year-end 2008 amounted to 7.8% against 7.4% a year investment properties totalling F 34.0 million. earlier. Please note that the gross theoretical yield The volume was lower than expected due to the credit was decompressed from 8.5% to 8.9%. crunch making property financing more difficult for potential buyers. This led to a number of intended Appraisal methodology disposals falling through, especially in the second half of 2008 when the credit crunch deepened and VastNed Offices/Industrial’s property portfolio is fears of a recession mounted. appraised four times per year. The larger properties, with an (expected) value of at least F 4.5 million The following properties were successfully sold make up approximately 75% of the portfolio and are (x F 1 million): appraised externally every quarter by internationally Amount reputed appraisers (for the identity of the appraisers ______please refer to the overview ‘Property portfolio 2008’ The Netherlands included elsewhere in this annual report). Smaller – Amsterdam, Hogehilweg 14 4.6 properties (< F 4.5 million) are appraised externally – Breda, Paardeweide 3 2.3 once a year, spread evenly across the quarters. After – Breda, Paardeweide 5 2.6 the external appraisal, these properties are appraised – Groningen, Sylviuslaan 6 1.6 internally in the following three quarters by – Groningen, Sylviuslaan 8 1.0 extrapolation of the external appraisal. VastNed – Groningen, Van Ketwich Verschuurlaan 100 2.1 Offices/Industrial ensures that the appraisers have – Groningen, Verlengde Bremenweg 14 1.0 all relevant information at their disposal needed to – Haarlem, Emrikweg 11 0.6 arrive at a balanced assessment. – Houten, Peppelkade 62-64 3.5 – Purmerend, Slenkstraat 60-70 4.0 – Ridderkerk, Glasblazerstraat 13 1.3 – Ridderkerk, Rietdekkerstraat 12 1.0 – Rotterdam, Schuttevaerweg 5 1.1 – Veenendaal, Plesmanstraat 58-60 3.8 – Zoetermeer, Kryptonstraat 21 0.9 – Zwolle, Doctor Stolteweg 17-23 2.6

Total 34.0

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The Netherlands Netherlands Ten largest tenants Properties Percentage of theoretical rental income The Dutch property portfolio (in operation) at as at December 31, 2008. year-end 2008 comprised 44% of VastNed Offices/ Industrial’s total property portfolio. The Dutch property portfolio is characterised by a large number of properties (103, of which 81 are offices and 22 are semi-industrial properties). Tenants at year-end 2008 totalled 299. In terms of value, offices made up 89% of the property portfolio and 11% were semi-industrial De Brauw Blackstone Westbroek 5.6 properties. Rijksgebouwendienst 4.2 Prorail 3.5 Occupancy and letting Rexel 3.0 The Dutch property portfolio is let with an average Gemeente Amsterdam 2.8 occupancy rate of 87.3% in 2008 (2007: 88.3%). RDW 2.5 The occupancy rate at year-end 2008 was 86.9% Imtech 2.0 (2007: 90.7%). We continuously aim to improve tenant ROC 2.0 quality and we constantly monitor rent levels in Shell 1.8 order to safeguard the long-term occupancy level of Interxion 1.8 the property portfolio and the cash flows from rental income. The movement of the average occupancy rate Total 29.2 was still negative in spite of strong letting activity in 2007 and 2008.

The 2008 leasing activity led to F 8.3 million in new or renewed rental income. This was 18.2% (2007: 16.8%) of the theoretical rent, the highest volume in the past few years. Nevertheless, the amount of rental income lost by tenants terminating their lease agreement exceeded the new leases. This has put pressure on the occupancy rate in the Netherlands. The fact that considerable losses of tenants are incurred every year is due to the fact that the most common lease duration in the Netherlands is five years, which in theory means that 20% of the tenants may leave each year. For that reason, the team of property specialists put in extra efforts to conclude Netherlands leases with a longer duration. Expiry dates lease contracts property portfolio (in %) The new leases concluded in 2008 – some of which did Expiry dates and renewal dates of lease contracts not commence until 2009 – accounted for F 4.4 million (weighted for gross rental income) or 9.6% of the theoretical rental income. These leases Average duration is 3.4 years. included Hogehilweg 12 in Amsterdam (3,129 sqm), Expiry first break Max Euwelaan 1 in Rotterdam (2,653 sqm), Park Office Expiry end date in Rotterdam (1,800 sqm) and Cosunpark 20-24 in Breda (2,244 sqm). On average the top-line rent was almost the same as the former rent (99.7%). Taking all related 30 lease incentives into account, the effective rent was 88.4% of the former rent, indicating that granting 20 substantial lease incentives is vital for leasing office space. While a number of tenants stayed put and had 10 their leases rolled over at present terms, tenants representing 8.6% (F 4.0 million) of the theoretical 0 rental income renewed their lease. The top-line rent equalled the former rent and, taking average lease 2009 2010 2011 2012 2013 2014 2015 2016 – incentives into account, the effective rent was 92.1%

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of the former rent. With these renewals VastNed F 55.7 million, in 2008 the dial stopped at Offices/Industrial preserved some longstanding F 34.0 million. Next to lower overall volume, the size tenants, for example of Europaweg 205 in Zoetermeer of the individual deals dropped significantly. (7,169 sqm) and Fellenoord 310-370 in Eindhoven (approximately 1,700 sqm). Value movements investment properties In 2008 unrealised value movements were On average both new leases and lease renewals F 35.6 million negative (2007: F 9.2 million positive). were concluded above market rent (4.3% and 2.4% The first quarter of 2008 yielded positive value respectively), which was insufficient to balance out movements, which were counterbalanced by the the amounts of lease incentives granted. subsequent three quarters of 2008 resulting in a total 2008 negative value movement of F 35.6 million. Lease expiry dates This took the net theoretical yield to 7.7% (year-end Lease contracts in the Netherlands are generally 2007: 7.2%). concluded for a period of five years, with a mutual option of termination. Other durations also occur. Belgium At the start of the 2008 financial year, 20% of the lease contracts was set to expire. The tenant approach Properties described above enabled VastNed Offices/Industrial VastNed Offices/Industrial’s Belgian property portfolio to attract and retain tenants. Leasing efforts have represents 46% of the total property portfolio in already been made for the 2009 financial year. For operation. The property portfolio comprises 61 example, the lease of Hogehilweg 12 in Amsterdam properties: 43 offices and 18 semi-industrial properties. commences on April 1, 2009. The share of rental The offices are mainly located on the Antwerp-Brussels income that may be lost through terminations in axis, while the semi-industrial properties are 2009 stood at 22% at year-end 2008. An overview of the predominantly logistic centres located close to existing leases at year-end 2008 is provided on page 40. national and international motorways. The number of tenants at year-end 2008 was 209. In terms of value, Acquisitions offices made up 70% of the Belgian property portfolio The Hague, Neuhuyskade 92-94 and 30% were semi-industrial properties. The latter As in last year’s annual report mentioned as an after are predominantly logistics centres. balance sheet date event, VastNed Offices/Industrial has expanded its property portfolio in The Hague Occupancy and letting with an office property dating from 1928 located at The Belgium property portfolio is let with an Neuhuyskade 92-94 comprising 2,899 sqm of lettable average occupancy rate of 92.9% in 2008 (2007: 88.4%). floor area and 35 parking spaces on freehold land. The occupancy rate at year-end 2008 was 94.1% The property is fully let, mostly to the Netherlands (2007: 91.9%). While the office component of the National Bar Association. Belgian property portfolio was well let at 92.5% at The total gross rent is F 0.4 million per annum or year-end (year-end 2007: 90.1%), the highest level for F 125 per sqm excluding parking spaces. Based on quite a number of years, it was outperformed by the the purchase price including purchase costs of logistics component at an occupancy rate of 98.2% F 7.5 million, the net initial yield amounted to 4.8%. (year-end 2007: 96.4%). This increase in occupancy Next to the quality location, the present underleasing rates was due to an active approach from the team relative to the market rent offers future rent growth of Belgian property specialists realising strong potential. letting activity in both 2007 and 2008.

Investment properties in pipeline The 2008 leasing activity resulted in F 7.3 million in Breda, Cosunpark 4 and 5 new or renewed rental income. This was 14.9% Adjacent to its two properties in Cosunpark, (2007: 14.0%) of the theoretical rent, the highest VastNed Offices/Industrial owns two building plots, volume in recent years. It more than balanced out Cosunpark 4 and 5, with pile foundations already in the rental income lost due to tenants terminating place. These primary construction works and existing their lease. This is reflected in the increased permits allow for the construction of offices with a occupancy rates mentioned above. Nevertheless, total volume of 5,325 sqm. Presently, no concrete the Belgian asset managers realise that they are plans exist for such developments. operating in a very competitive market with oversupply and in which demand for office and Disposals logistics property may well fall in the near future. Total disposals in 2008 did not meet the 2007 level. As in the Netherlands, the Belgian property is While in 2007 disposals were concluded totalling continuously at risk from a possible loss of tenants

41 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

since the most common type of office lease provides Belgium the option to terminate every three years. For that Ten largest tenants reason, the team of property specialists put in extra Percentage of theoretical rental income effort in order to conclude leases with longer durations as at December 31, 2008. or at least leases with a longer first term until the termination option, such as 5-7-9-year leases instead of 3-6-9-year leases.

The new leases concluded in 2008 amounted for F 1.9 million or 4.1% of the theoretical rental income. These leases included Schaliënhoevedreef in Mechelen PricewaterhouseCoopers 10.4 for 2,895 sqm, Terhulpsesteenweg in Hoeilaart for Tibotec 7.4 922 sqm and Riyadhstraat 21-23 in Meer for 7,521 sqm. Deloitte/Gsi 7.1 On average, the top-line rent increased to 103.7%. EDS 5.1 Taking all the related lease incentives into account, the Fiege Kalf 4.5 effective rent was 94.2% of the former rent, indicating Brico 3.4 that granting considerable lease incentives is vital Borealis 2.5 for leasing office space and logistic centres. Tenants PGZ Retail Concept 2.4 representing 10.8% (F 5.3 million) of the theoretical JVC 2.3 rental income renewed their leases. The top-line rent Europese Commissie 2.2 concluded was on average 96.7% of the former rent and taking average lease incentives into account the Total 37,3 effective rent was 93.9% of the former rent . With these renewals the Belgian team secured the loyalty of tenants of properties including Veurtstraat 91 in Puurs (43,490 sqm) and Nijverheidslaan 3 in Strombeek-Bever (3,637 sqm).

On average both new leases and lease renewals were concluded above market rent (1.3% and 8.1% respectively), which was not sufficient to balance out the amounts of lease incentives granted.

Lease expiry dates Lease contracts in Belgium are generally agreed in accordance with the so-called 3-6-9 regime. Expiry Belgium dates of the lease contracts are taken to be the first Expiry dates lease contracts date at which the tenant can cancel his contract. property portfolio (in %) In most cases, the agreement will be continued Expiry dates and renewal dates of lease contracts unchanged. However, VastNed Offices/Industrial (weighted for gross rental income) feels that the present market conditions call for Average duration is 3.7 years. conservative reporting. The graph on the right lists Expiry first break the expiry dates of the lease agreements in existence Expiry end date as at year-end 2008.

Acquisitions 40 Herentals On September 30, 2008, VastNed Offices/Industrial 30 acquired a logistics property development in Herentals through the acquisition of the shares of the 20 limited liability company Edicorp. This transaction took place within the framework of the agreement 10 concluded in November 2007 with building company Cordeel. On the parcels of land along the E313 0 motorway, known in Herentals as the Siemens site, the first phase (20,000 sqm of warehouses and 1,276 2009 2010 2011 2012 2013 2014 2015 2016 – sqm of offices) of the logistics property development

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of a total of 40,000 sqm was constructed during 2008. Germany The building is in a prime location along one of the Ten largests tenants most important logistics corridors in Belgium near Percentage of theoritical rental income the access road to the E313 and with high visibility. as at December 31, 2008. The building has all the characteristics of a state-of- the-art distribution centre. For this first phase, which is currently ready to be let, the seller, contractor/ developer Cordeel, has agreed a rent guarantee for a period of one year at market conditions. This rent guarantee is valued at F 1.0 million on an annual basis. The acquisition value of the transaction was Victoria Versicherung 27.8 F 17.7 million, resulting in a net initial yield of 6.4%. A.T. Kearney 16.4 In the second phase Intervest Offices will extend A.C. Nielsen 15.5 the distribution centre with another 20,000 sqm. Invensys 6.6 The building permit has already been granted. Moneymaxx 3.8 This expansion will also take place in partnership Royal Bank of Scotland 2.9 with building company Cordeel. The timing of this Gruner+Jahr 2.2 extension depends on the demand on the logistics Claus Koch Identity 1.9 rental market. C.I.G. Caravaning 1.2 TK Maxx 1.2 Disposals No disposals were made in 2008. Total 79.5

Value movements investment properties The value movements of the investment properties in operation was F 13.5 million negative in 2008 (2007: F 6.6 million positive). Due to this value increase, the net yield as at December 31, 2008 amounted to 8.5% (December 31, 2007: 8.0%). The larger part of the decrease in values was due to yield decompression.

Germany

Properties VastNed Offices/Industrial’s German property portfolio represents 10% of the total property portfolio Germany in operation. The property portfolio comprises five Expiry dates lease contracts properties: four offices in operation and one office property portfolio (in %) presently in the renovation pipeline. The offices are Expiry dates and renewal dates of lease contracts exclusively located in large liquid office markets, (weighted for gross rental income) which according to VastNed Offices/Industrial’s Average duration is 3.7 years. definition are limited to Berlin, Düsseldorf, Expiry first break Frankfurt, Hamburg and Munich. Presently the Expiry end date portfolio comprises three properties in Düsseldorf and two in Frankfurt, with 38 tenants as at December 31, 2008. 40

Occupancy and letting 30 The average occupancy rate was 98.8% (2007: 99.1%). The occupancy rate at year-end was 99.0% 20 (year-end 2007: 99.1%). The 2008 leasing activity resulted in F 1.0 million 10 new or renewed rental income. This comprised 18.3% of the theoretical rent. 0 The new leases concluded in 2008 – some of which did not commence until 2009 – accounted for 2009 2010 2011 2012 2013 2014 2015 2016 –

43 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 44 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Kay Gleßmann, director VastNed Management Deutschland, Düsseldorf

‘Hans-Böckler-Strasse 36 is our third property in Düsseldorf and our fifth in Germany. It is fully let to Victoria Versicherungen, a subsidiary of the ERGO Versicherungsgruppe. VastNed Offices/Industrial’s long term goal is to develop the German property portfolio profitably to a size of between F 250 and F 500 million.’

45 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Amsterdam Woluwe Leiden

Mechelen

VastNed Offices/Industrial’s property portfolio is characterised by spreading in terms of countries and regions, types and numbers of tenants, as well as types of investment properties.

Breda Arnhem

46 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Amsterdam Woluwe Leiden

F 0.1 million or 0.8% of the theoretical rental income. Lease renewals amounted to F 0.9 million or 12.7% of the rental income.

Lease expiry dates The share of rental income that might be lost through lease terminations in 2009 is 13% at year-end 2008. An overview of the leases in existence at year-end 2008 is provided on page 43. The average duration of the lease agreements is 3.7 years until the first break.

Acquisitions Utrecht In the middle of June 2008, VastNed Offices/ Industrial finalised the acquisition of a F 30.1 million office property located at Hans-Böckler-Straße 36 in Düsseldorf, which is in the heart of Kennedydamm, one of Düsseldorf ’s main office locations on the right bank of the river Rhine, located in between the city centre and the airport/Messe area. The property comprises over 7,550 sqm and has 121 underground parking spaces. Taking into account market rent for these parking spaces, the present square metre price for the office space is F 265 per year. The property is let to Victoria Versicherungen. The present lease expires at the end of 2011. The gross annual rent is F 2.1 million, reflecting a 6.6% net initial yield after corporate income tax (before tax: 6.9%).

Investment properties in pipeline Leusden The office building located in the heart of Frankfurt’s financial centre at Mainzer Landstraße 33A, acquired in 2007, is presently under renovation and is expected to be ready for use in the course of March 2009. This renovation will transform the property into a light and state-of-the-art office, with 3,608 sqm gross lettable floor area and 42 underground parking spaces, which carry great value in Frankfurt. The original purchase price was F 8.7 million and the renovation costs are expected to come to F 1.3 million. The property agent in charge is very positive that this property may be let in the course of 2009 at an attractive rental level, especially in view of the recently completed renovation of the adjacent square, renamed François-Mitterand-Platz.

Vilvoorde Disposals No disposals were made in 2008.

Value movements investment properties In 2008, unrealised value movements amounted to F 6.3 million negative (2007: F 0.4 million negative). This took the net theoretical yield to 6.3% (year-end 2007: 5.6%).

47 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

Personnel and organisation Sustainability

VastNed Retail strives to provide a challenging work Sustainability is important for VastNed Offices/ environment that gives the employees opportunities Industrial. VastNed Offices/Industrial strives for a for development. The organisation is based on a balance between investment in sustainability and transparent, informal company culture, in which the performance of the property portfolio. As the country teams have a high degree of responsibility retailers have such a prominent position in retail based on a clear ‘VastNed Group spirit’. In the annual properties, many of the sustainability issues are in evaluation interview with each staff member, reality tenant issues. challenging objectives are formulated in mutual VastNed Group has joined the Dutch Green Building consultation and matched to those of the Group, so Council to participate in the development of a Dutch that personal development of employees is aligned Breeam certificate for existing retail space for investors. with the Group’s interest. When this certificate is available, the performance of the VastNed Offices/Industrial portfolio in terms of The headquarters of the pan-European property sustainability may be gauged more accurately. In the investor VastNed Group (NYSE Euronext funds other countries, membership of such councils is also VastNed Offices/Industrial and VastNed Retail) was an option and will be considered in 2009. moved to the Park Office building at the K.P. van der Mandelelaan 43a in Rotterdam in November 2008 Risk management

The following table presents a number of personnel Dutch corporate governance code statistics. The staff in the Netherlands provides services to both VastNed Offices/Industrial and On December 10, 2008, the Monitoring Committee VastNed Retail. Depending on their size, the country Corporate Governance Code presented a new full teams comprise management, asset management, version of the Dutch corporate governance code property management, (technical) project management (the ‘New Code’). One of the major changes relates to and finance & control, either supported by head risk management. In line with the recommendations office or independently. In addition, there are various mentioned in the Third report on compliance with staff functions in the area of IT and research, and for the original Code, as also mentioned in last year’s secretarial, fiscal and legal services. The majority of annual report, the New Code prescribes that the these staff functions is centralised at the Rotterdam company’s annual report must include a description headquarters, providing services to both VastNed of the main risks that the company is exposed to in Offices/Industrial and VastNed Retail. The Belgian connection with the implementation of its strategy. team in Antwerp also has a relatively extensive staff The management report should distinguish between department, partly due to Intervest Offices’ and financial reporting risks and operational risks. Intervest Retail’s stock exchange listing. – Financial reporting risks Total number of employees during 2008 (in FTE’s) The management board is required to state that: (i) the internal risk management and control systems Geographical spread provide a reasonable degree of assurance that the – Rotterdam, The Netherlands financial reporting does not contain any errors of – Retail 17 material importance (so-called ‘Control Statement’); – Offices/Industrial 13 and – Board of management and staff 18 (ii) the risk management and control systems – Antwerp, Belgium functioned properly in the year under review. – Intervest Retail 12 Furthermore the annual accounts should include – Intervest Offices 16 a description of any major failings in the internal – Madrid, Spain and Portugal 11 risk management and control systems which have – Paris, France 14 been discovered during the year under review, any – Istanbul, Turkey 2 significant changes or planned improvements and a – Frankfurt, Germany 1 confirmation that these issues have been discussed with the audit committee and the supervisory board. Total 104 – Operational risks The management board shall be required to provide Number of employees taken on 14 insight into the company’s main risks related to the Number of employees left 8 strategy of the company. The description should also Male/Female 60/44 specify the company’s risk profile, the willingness of

48 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

the company to accept risks. It should also describe economic climate and the difficulty to reduce the risk the sensitivity of the results of the company to by divesting investment properties, VastNed Offices/ external factors and variables. Industrial decided to refinance its loan portfolio to reduce its future refinancing risks by extending VastNed Offices/Industrial, which has endeavoured its bank covenants and to limit the portion of to implement the Code since its introduction in 2004, short-term debt. had already followed the above mentioned recommendations of December 2007 to the best of its Due to its capital intensive character, VastNed ability in the annual report 2007. Consequently the Offices/Industrial is sensitive to interest rate effects of the New Code with respect to the disclosure developments, which can impact the value of the of risks in the annual report are limited. VastNed property investments as well as current cash flows Offices/Industrial will however put within its and thus the direct investment result. The interest organisation further emphasis on the importance of rate risk is mitigated by acquiring interest rate comprehensive risk management. Also the supervisory derivatives from major international banks, fixing board and its audit committee will remain closely the interest rate on at least two thirds of the loan involved in monitoring the quality of the internal portfolio with a term to maturity of between 3.5 and risk management and reporting. 5 years. The interest rate derivatives are concluded in such way that the interest review dates are equally Description of the risk profile spread.

Risks associated with the strategic objectives Sensitivity analysis The chapter Profile and strategy states in which types Below, the possible impact on the result is set out of investment properties, which countries and what when the following risk factors change (assuming property sizes VastNed Offices/Industrial intends spread equally over the respective countries): to invest. The company has opted to focus on office – An increase (decrease) of the interest rate of 100 basis investments and on limited investments in points leads to a decrease (increase) of the direct semi-industrial property in countries in the eurozone, investment result of F 0.11 per share; which are characterised by a stable political and – A 50 basispoints (approximately 6.3% of year-end mature economic climate, embedded in generally value) increase (decrease) of the net initial yields used transparent rent and tax laws and regulations, so as to in the valuation leads to a decrease (increase) of the exclude the currency risk. Rent and value developments indirect investment result of F 3.19 and an increase and occupancy rates of office properties are strongly (decrease) in the loan to value of 340 basis points; associated with demand for office accommodation, – A 100 basis points increase (decrease) of the occupancy which is largely determined by the development rate leads to a decrease (increase) of the direct of the economy and the corresponding employment investment result of F 0.04 per share. growth, in particular in the services industry. In order to play the office market cycle, VastNed Offices/ Description of internal risk management and Industrial focuses on investments in liquid office control systems markets, inter alia in the four major cities in the Netherlands, the Antwerp and Brussels regions Actions in Belgium, and the largest cities in Germany. In 2008, both the board of management and the supervisory board as well as the country organisations The investments are financed based on a solid have addressed the company’s risk management. One financing and interest rate policy. We aim for of the topics on the agenda within the management relatively conservative financing ratios between equity board, the supervisory board and audit committee and and loan capital. In an upward cycle, loan capital also with the external auditors related to internal financing is limited to 50% of the market value of procedures within the company to prevent fraud. the investments. Our aim is to reduce the leverage to The topic got additional attention due to several 30-40% of the market value of the investments before potential fraud cases within the real estate industry a cyclical downturn. The bank covenants are set in in the Netherlands. Our internal procedures were line with this policy at 45-50%. Due to the unexpected assessed by matching control measures mentioned rapid change of the economic climate triggered by the in publications like e.g. the one published by the credit crisis and consequently the sudden break in Association of Institutional Investors in Real Estate a upward cycle, VastNed Offices/Industrial hit as of in the Netherlands (‘IVBN’). Based on this assessment December 31, 2008 the 50% solvency ratio (being no major leakages in internal control measures were group equity increased with deferred taxes divided detected. In line with one of its recommendations it by balance total). Taking into account the worsened was decided to implement in 2009 employee training

49 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

on the application of the Code of Conduct and shortcomings have been observed in the risk awareness on fraud risks within the company. management and control systems focused on Another important topic on the agenda of risk controlling financial reporting risks. management related to the financing of the real estate portfolio in the context of the financial crisis. Due to Financial state of affairs the rapid change in economic climate triggered by the credit crisis, it was decided to refinance the loan Investment result 2008 attributable to VastNed portfolio (excluding the part related to Intervest Offices/Industrial shareholders Offices), with as target reducing the portion of short- term debt and widening the loan covenants. As a The investment result decreased in 2008 from result of this refinancing, the (re)financing risk has F 40.7 million positive to F 15.8 million negative. been significantly reduced. The investment result for 2008 consisted of a direct Furthermore in the context of the economic downturn, investment result of F 32.5 million (2007: F 35.1 million) additional attention was paid to the development of and an indirect investment result of F 48.3 million the local economy in the respective countries and negative (2007: F 5.6 million positive). their impact on the future results of individual offices and industrial properties as well as on credit Direct investment result control and collection procedures. In 2008, the direct investment result decreased by 7.4% Next to these topics, both the board of management, from F 35.1 million to F 32.5 million. This decrease the audit committee and the supervisory board have was largely due to negative like for like growth (after addressed a number of other major risks, including deduction of minority share Intervest Offices) of the set-up and functioning of the associated risk almost F 3.0 million. In addition the rise in interest control measures, based on an annual determined rate and higher general expenses resulted in a working scheme, such as: strategic risks, catastrophe decrease of a further F 1.3 million. This was offset by risks (insurance, solvency of insurer), financial the contribution of net acquisitions of F 1.8 million. reporting risks, compliance risks (AFM and NYSE Euronext regulations as well as permits and safety Indirect investment result regulations) interest rate risks, IT risks and tax and The indirect investment result turned from a legal risks. Significant adjustment of the internal positive indirect investment result of F 5.6 million risk management and control systems in respect of positive in 2007 into F 48.3 million negative in 2008. these risks was not deemed necessary. Especially in the second half of 2008 the effects of the credit crisis on the real economy and the real estate Main strategic, operational, financial, legal and investment market became visible. Real estate values regulation and financial reporting risks, and the impact decreased as a result of yield decompression caused of these risks by the fact that investors require higher returns on The chapter ‘Risk management’ includes an overview their investments taking into account the increased of the risks identified by VastNed Offices/Industrial uncertainty on the economy (especially with its and a description of how these risks are controlled. consequences on employment rates and related A major element of the internal risk management vacancy) and lack of financial resources as a result of and control system is the complex of internal control the banking crisis. measures and administrative and organisational procedures as laid down in the Administrative Net income from investment properties Organisation manual, which we believe complies Gross rental income with the requirements of the Act on Financial Total gross rental income rose by 4.2% from Supervision and associated regulations. F 85.4 million in 2007 to F 89.0 million in 2008. This rise is further explained in the table on page 51. Results of the assessment of internal risk management and control systems – Acquisitions The board of management is of the opinion that the The rise of the Dutch rental income was mostly due organisation of the internal risk management and to the acquisition of the property ‘De Rode Olifant’ control systems provide a reasonable assurance that in The Hague in July 2007 with an annual rent of the financial reporting does not contain any errors of approximately F 2.1 million, thus contributing for material importance. In addition, it is of the opinion an additional F 1.1 million in 2008. In addition several that these risk management and control systems smaller acquisitions in 2007 and 2008 resulted in an worked properly during the reporting year. additional gross rental income of F 1.4 million, of which During the reporting year, some administrative and F 0.4 million relates to the latest acquisition of organisational procedures were updated. No material the property Neuhuyskade 92-94 in The Hague. In

50 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

Belgium, the rental income increased in particular due vastned Offices/Industrial to the Mechelen Campus Tower acquisition in the Development net rental income second half of 2007 with an annual rent of F 2.1 million (x € 1 million) and the acquisitions in 2007 and 2008 of the logistic properties in Herentals. The largest increase of gross rental income in 2008 related to the acquisitions in Germany, where at the end of 2007 the so-called Hortus office building in Frankfurt was acquired with an annual rent of F 2.1 million and in June 2008 the Hans-Böckler-straße 36 in Düsseldorf with an annual rent of F 2.0 million.

– Disposals Gross rental income 2007 Acquisitions Disposals Like-for-like growth Gross rental income 2008 During 2008 several smaller properties were sold at Netherlands 40.4 2.5 (1.8) (2.2) 38.9 a total value of F 34.0 million, resulting in a decrease Belgium 41.9 2.2 (1.2) 0.8 43.7 of gross rental income of F 1.5 million. The remaining Germany 3.1 3.3 – – 6.4 part of the decrease due to disposals relates to the sale of a Belgium property (total sales value approximately Total gross F 90.0 million) effectively transferred in May 2007 and rental income 85.4 8.0 (3.0) (1.4) 89.0 the sale of the Dutch pipeline project TriNovium in April 2007. Operating expenses * (10.8) (0.8) 0.7 (0.9) (11.8) – Like-for-like growth The average financial occupancy rate improved Total net from 88.5% to 90.7%. The Belgian average occupancy rental income 74.6 7.2 (2.3) (2.3) 77.2 rate improved from 88.4% to 92.9%, whereas the Dutch average occupancy rate decreased from 88.3% * Ground rents paid, net service charge expenses and to 87.3%. The German average financial occupancy operating expenses remained stable at almost 99%.0. Adjusted for the effect of the sale of (partly) vacant properties, the occupancy rate of the standing portfolio decreased with approximately 1.2%. The decrease was caused by additional vacancy in the Netherlands for mainly the properties Park Office in Rotterdam, Antareslaan in Hoofddorp and Van Kleffensstraat in Arnhem, resulting in a F 1.5 million decrease in gross rental income. This was compensated by an improvement in the occupancy rate of the standing portfolio in Belgium, resulting in additional gross rental income of F 0.5 million. In both countries there was high leasing activity resulting in new leases and lease renewals. As a result of the fact that the portfolio is overrented, next to the fact that in the current office market relatively high lease incentives have to be granted, in 2008 the indexation of existing lease agreements could not avoid a net decrease of gross rental income of F 1.4 million.

Operating expenses (including ground rents paid and net service charge expenses) These expenses increased with 8.3% from F 10.8 million to F 11.7 million. As a percentage of gross rental income there was an increase from 12.7% to 13.2%, which is caused by the high leasing activity, especially in the Netherlands, which resulted in amongst others higher letting fees.

51 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

Value movements investment properties Movement deferred tax assets and liablities The value movements of the investment properties The movements in deferred assets and liabilities amounted to F 55.4 million negative (2007: F 15.2 were F 0.4 million positive, due to devaluation of the million positive). Based on external appraisals German portfolio resulting in a deferred tax asset. the market value of the investment properties in operation was decreased with F 55.1 million, which is Investment result attributable to minority interests approximately 5% of the year-end value of 2007. In all The investment result attributable to minority countries there was a negative yield-shift. Vacant shareholders of F 6.8 million (2007: F 17.9 million) properties or properties for which the lease contracts consists of the direct and indirect investment results expire within the next year are relatively negatively attributable to minority interests of F 12.9 million hit in their valuation. Part of the negative value (2007: F 12.9 million) and F 6.1 million negative movements were compensated by value increases (2007: F 5.0 million positive) respectively. The minority due to new lettings or lease renewals, which interest relates mainly to the minority share of 45.3% increased the average duration of the contracts. in Intervest Offices. Despite an increase in the direct investment result of Intervest Offices, the part of Net result on disposals of investment properties direct investment result attributable to minority During 2008 several smaller properties, only in the shareholders remained stable due to the purchase of Netherlands, were disposed with a total book value the 10% minority share in VastProduct C.V. in 2007. at the moment of disposal of F 33.4 million. The net The rise of the indirect investment result result after sales costs on these disposals amounted attributable to minority interests was due to to F 0.5 million positive. Compared to the historical negative value movements in the property portfolio cost price of the disposed properties, a profit of of Intervest Offices. F 3.0 million was realised. Investment result per share Expenditure Based on the average 20.5 million ordinary shares Net financing costs VastNed Offices/Industrial outstanding, the total Net financing costs rose with F 4.4 million from investment result per share came out at F 0.77 F 21.4 million in 2007 to F 25.8 million. This increase negative (2007: F 1.98 positive). This result consists of can be explained as follows (x F 1 million): a direct investment result per share of F 1.59 (2007: F 1.71) and an indirect investment result per – decrease as a result of disposal of TriNovium share of F 2.36 negative (2007: F 0.27 positive). and part of the Belgium portfolio in 2007 (1.2) – increase as a result of net acquisitions 4.7 The development in direct investment result – increase due to higher average interest rates 0.8 was as follows (in F): – increase due to share buyback program in November 2008 0.1 Direct investment result per share 2007 1.71

Total increase 4.4 – Like-for-like growth (0.11) – Increase due to acquisitions, The average interest rate on the total interest-bearing net of interest and minority interest 0.07 loan capital increased from 4.57% to 4.72%, mainly as – Increase due to disposals (including) a result of the sharp rise of the short-term interest TriNovium and Belgian rate in the fourth quarter of 2008 and higher credit portfolio in 2007 0.01 spreads charged by the banks. – Net financing costs movement (0.05) – Effect share buyback 0.01 General expenses – Increase general expenses (0.03) General expenses rose by 11% from F 5.4 million to – Increase minority interests (0.02) F 6.0 million. This rise was mainly due to the opening of the German office in Frankfurt and some Direct investment result per share 2008 1.59 one-off costs with respect to the movement of the head-office in Rotterdam to Park Office.

Income tax expense Income tax on the reporting period amounted to virtually nil, since both the Dutch and Belgian investment properties are held by effectively tax-exempt entities. In Germany, a limited tax loss was incurred.

52 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

Finance structure vastned Offices/Industrial Contract & interest revision risks loan The year 2008 was characterized by a difficult financing portfolio after refinancing market, evidenced by a tight bank liquidity, (x € 1 million) rising credit spreads and volatile interest rates. As of December 31, 2008 VastNed Offices/Industrial’s balance sheet showed, as a result of decreased values Contract revision and the difficulty to sell properties, a solvency ratio Interest revision of less than 50%. As a result of this, with one of the banks the covenant was breached. In anticipation of this, VastNed Offices/Industrial decided in 4.7% October 2008 to refinance the loan portfolio related to the Dutch and German properties (approximately 180 F 370 million) with widening bank covenants and 160 longer average duration. Taking this into account, 140 together with an overall loan to value ratio of 50% 120 4.3% and an interest coverage ratio of 2.8, VastNed Offices/ 100 Industrial has a solid financing structure, which can 80 5.5% stand the worsening economic environment. 60 6.2% The debt structure, taking into account the 40 6.6% mentioned refinancing after year end, 20 is characterized by the following items: 0 – total interest bearing debt amounted F 589 million; – 93.2% of the outstanding debt has a long-term 2009 2010 2011 2012 2013 2014 2015 – character with a weighted average duration based on contract expiry dates of 3.4 years; – limited expiries of long term debt in 2009 and 2010. Almost 47% of outstanding debt will expire in 2012, partly mitigated by extension options; – 58.8% of the outstanding debt has a fixed interest rate mainly by using interest swaps with a duration based on interest revision date of 3.9 years. The average interest at year-end 2008 taking into account the agreed interest rate swaps, amounts to 5.0% for the total debt after refinancing (before refinancing 4.3%). Based on the refinancing agreement with the syndicated lenders VastNed Offices/Industrial an additional amount of at least F 55.0 million will Loan portfolio after refinancing be hedged in the first quarter of 2009, resulting in (x € 1 million, year-end 2008) almost 70% of the outstanding debt with a fixed interest rate. The remaining debt will have a floating interest rate and can benefit from the low floating interest rate; – as a result of the declined interest rate curve at year-end, a negative change in value of interest swaps was recognized of F 15.0 million. – Unused credit facilities amounted F 40.7 million Fixed Floating % of (after refinancing F 30.4 million). interest* interest Total total

The refinancing of the Dutch and German loan Long-term 315.4 234.0 549.4 93.2 portfolio resulted in widened bank covenants with Short-term 31.0 8.8 39.8 6.8 respect to loan to values and interest coverage ratios to stand the current economic climate. Intervest Total 346.4 242.8 589.2 100.0 Offices was not part of the refinancing, but with a % of total 58.8 41.2 100.0 loan to value of 42% and an interest coverage ratio of 3.7 it conforms well to the covenants of the existing * Interest derivatives taken into acount financing agreements.

53 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 54 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Claude Herreman, director Support Services, Q8, Antwerp

‘We chose this property because of the many possibilities it offered, such as flexibility in terms of layout, the location of the property close to the motorway network and its accessibility by public transport. Everything is in place to make it better, and that objective perfectly matches Q8’s motto: ‘Constantly better’.’

55 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Report of the board of management

Dividend proposal and dividend distribution centralizing their activities to one central location, leaving behind some empty buildings and At the shareholders’ meeting of April 8, 2008, other tenants not being able to fulfil their payment the total dividend for the 2007 financial year was obligations. Based on these developments, the declared at F 1.71 per share, of which an interim occupancy rate of the offices and industrial premises dividend of F 0.51 per share was already distributed market in general is also in 2009 expected to rise, in September 2007. The final dividend so came to although the level of increase will vary significantly F 1.20, of which the mandatory cash part amounted by region and property. Also our portfolio will feel to F 1.05 and the optional part to F 0.15 in cash or the consequences of the economic crisis, although 1 new share per 139 shares. In this context, holders of we are rather confident that the spread portfolio with 25% (2007: 32%) of the number of shares in issue opted its improved quality, due to the active divestment for stock dividend, increasing the total number of policy of less liquid assets in the past years, will better shares by 37,834 shares. stand this crisis than it did in the former downturn cycle. An important challenge will be the reletting of VastNed Offices/Industrial’s dividend policy consists the property ‘Rode Olifant’, which will effectively of distributing the direct investment result to become vacant in July 2009, representing more than the shareholders in full. As from 2006, an interim 2% of VastNed Offices/Industrials’ rental income. dividend is also distributed based on 60% of the In addition to the focus on leasing activity, we will direct investment result as included in the continue to further improve the risk return profile semi-annual figures. In this context, an interim of the property portfolio by divesting less liquid dividend of F 0.50 per share was distributed on properties, although, as we also noticed during 2008, September 1, 2008. In line with previous years, it will take additional efforts to realize, taking into an optional dividend is proposed to the shareholders, account the tight financing market of today. giving them the option of receiving the final Taking into account the sharply decreased floating dividend either fully in cash or partly in cash and interest rates, it is expected that compared to 2008 partly in stock dividend, charged to the share the increase in interest expenses will be limited, premium reserve. In order to comply with the fiscal despite the higher interest rates as a result of the conditions for fiscal investment institutions, at least refinancing at the beginning of 2009. the fiscal result must be paid out in cash. In accordance with the dividend policy described above, it will be Taking into account the turbulent economic proposed to the general meeting of shareholders to environment and the difficulty to reliably assess its be held on April 7, 2009 to declare a final dividend of effects on the office and industrial property markets F 1.09 per ordinary share, being the 2008 direct and based on the expectation the financing market investment result per share of F 1.59 less the interim will remain tight and interest rates will remain dividend of F 0.50 per share. Taking into account the volatile, the board of management does not make a fiscal distribution obligation and the share price at clear statement with respect to the direct investment that time, it will be possible to receive the dividend result for 2009. either fully in cash or F 1.01 in cash and a percentage of VastNed Offices/Industrial shares, charged to the This outlook is based on current expectations, assessments share premium reserve, which will approach a value and prognoses and on the information currently available of F 0.08 per share. The final dividend will be made to the company. These statements are subject to certain payable on May 4, 2009. risks and uncertainties which are hard to evaluate, such as the general economic conditions, interest rates, exchange Outlook for 2009 rates and amendments to statutory laws and regulations. No guarantees can therefore be given that these expectations In the current economic climate with decreasing will materialise. Furthermore, we are under no obligation employment rates, VastNed Offices/Industrial will to update the statements made here. mainly focus on maintaining its net operating income as much as possible by intensive leasing activity Rotterdam, March 6, 2009 indexation and closely monitoring tenants’ payment The board of management behaviour. In the current environment, tenants might be more eager to lengthen their lease contracts, because they have become more cautious and have put their expansion or relocation plans on the back burner. Also a lot of new developments are cancelled, reducing the (future) supply of offices and industrial premises. On the other hand we see some tenants

56 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Rotterdam

Frankfurt

The share and the stock exchange listing

Listing on NYSE Euronext them in the composition of their equity portfolios. Other indices, like indices from Global Property VastNed Offices/Industrial is listed on NYSE Euronext Research (GPR) and from the European Public Real Amsterdam since June 23, 1989. Since March 2005, the Estate Association (EPRA), play a more important role, share is included in the AScX index (Amsterdam Small especially for international institutional investors. Cap Index). The average daily trading volume in 2008 was 101,283 shares, which represents an increase in As at December 31, 2008, the weighting of VastNed numbers compared to 2007 (77,452 shares daily). Offices/Industrial in the GPR indices was as follows: VastNed Offices/Industrial makes use of various GPR 250 Global 0.05% liquidity providers to guarantee the continuous GPR 250 Global ex-North America 0.09% liquidity of the share. During 2008, Kempen & Co, GPR 250 Europe 0.30% Royal Bank of Scotland, All Options and Rabobank GPR 250 Europe ex-UK 0.45% acted as liquidity providers for VastNed Offices/ GPR 250 Eurozone 0.56% Industrial. Kempen & Co acted as paid liquidity GPR 250 Netherlands 2.94% provider, Royal Bank of Scotland, All Options and Rabobank as unpaid liquidity providers. With EPRA, VastNed Offices/Industrial as per December 31, 2008 is included in the following indices: Indices EPRA/NAREIT Global 0.05% EPRA/NAREIT Global ex-Asia 0.08% VastNed Offices/Industrial is included in a number EPRA/NAREIT Global ex-North America 0.09% of NYSE Euronext indices. These indices support EPRA/NAREIT Europe 0.29% investors in the composition of their share portfolio. EPRA/NAREIT Europe (UK restricted) 0.33% As stated above, VastNed Offices/Industrial is EPRA/NAREIT Europe ex-UK 0.43% included in the AScX index. Our impression is that EPRA/NAREIT Eurozone 0.53% investors make limited use of this index to guide EPRA/NAREIT Netherlands 2.49%

57 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 The share and the stock exchange listing

Return The stock price was more significantly affected than the net asset value per share, resulting in an In 2008, VastNed Offices/Industrial realised the increased discount of 70.4% at year-end 2008. Other following return, expressed in euros and as a European property investment funds in 2008 also percentage of the 2007 year-end closing price of F 22.77. experienced a fall of the share price. VastNed Offices/ Industrial’s total performance per share was worse Return Return than the European average (GPR 250 Europe: 51.0% 2008 2007 negative) and the Dutch average (GPR 250 ______Netherlands: 36.6% negative). Closing price 2008 6.86 Closing price 2007 22.77 Market capitalisation based on the share price at ______year-end 2007 amounted to F 128.5 million, compared Movement share price (15.91) (69.9) % (23.4) % to F 479.8 million at year-end 2007. The lowest share Dividend May 2, 2008 1.20 5.3 % 4.0 % price of F 4.38 was quoted on November 20, 2008, Interim dividend while the share quoted the highest price of F 23.28 September 1, 2008 0.50 2.2 % 1.7 % on April 4, 2008. ______Total return (14.21) (62.4) % (17.7) % Dividend

Assuming immediate reinvestment of the dividends, In accordance with its existing dividend policy the total return for 2008 amounts to 67.1% negative (see Profile and Strategy) VastNed Offices/Industrial (2007: 18.8% negative). paid out the final dividend for 2007 of F 1.20 on May 2, 2008. Share price The stock ratio entailed that 1 new share was distributed per 139 shares held. Depending on the By the end of 2007, the share traded at a 7.5% discount shareholder’s choice, this meant that per share either to the net asset value per share. Net asset value per F 1.20 has been paid in cash or F 1.05 in cash and 1 share VastNed Offices/Industrial shareholders /139 VastNed Offices/Industrial share. In this including the 2008 investment result decreased from context, a total of 37,834 shares were issued and F 24.61 (beginning of the year 2008) to F 23.17 charged to the share premium reserve. (year-end 2008). The net asset value decrease was significantly dampened by the share buyback of 2,000,000 shares VastNed Offices/Industrial in November 2008.

CLOSING PRICES VastNed Offices/ Industrial 2008 (in €)

25.00 22.77 20.00

15.00

10.00 6.86 5.00

0 July May April June March August October January February November December September

58 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 The share and the stock exchange listing

Number of shares and share buyback Investor roadshows programmes A crucial element of investor relations is investor The number of ordinary shares amounted to 18,735,053 roadshows. In 2008, meetings were held with a large of F 5 per share per year-end 2008. The outstanding number of institutional investors in the financial share capital furthermore includes 100 priority shares centres in Europe and in the United States. of F 5 each. In November 2008, VastNed Offices/ Industrial performed a share buyback program Press releases and publication of periodical reports acquiring 2,000,000 of its own shares at an average price of F 5.00. Price sensitive information is always disclosed to the general public by means of press releases, reported Major shareholders to the financial authorities (Netherlands Authority for the Financial Markets and NYSE Euronext) and The company has knowledge on the identity of large placed on the company’s website (www.vastned.nl). shareholders. Disclosed and reliable information on Only previously published information is commented the exact numbers is limited available. For that upon in contacts with the press, with individual purpose the company qualifies major shareholders investors and analysts. At the publication of annual as shareholders that have a holding of more than 5% and semi-annual figures, VastNed Offices/Industrial according to the filings with the Netherlands holds an analysts’ meeting. At the publication of the Authority for the Financial Markets (AFM). first three months’ results and nine months’ results, Please note that these filings do not provide actual a conference call is used to comment on these results shareholdings as at the reporting date, but inertly to analysts. Both the analysts’ meetings and the give an indication of the brackets that the conference calls can be followed on audio webcasts on shareholdings are in (e.g. 5-10% and 20-25%). www.vastned.nl. No analysts’ meetings, presentations to or direct meetings with investors take place The following investors can be designated as major shortly before publication of financial reports. shareholders (> 5%, as registered by AFM): – Fortis Investment Management Netherlands 6.94% Sell-side analysts

Investor relations Analysts’ reports are not evaluated in advance nor corrected other than for factual correctness. VastNed VastNed Offices/Industrial has continued its active Offices/Industrial does not provide fees to any party investor relations policy in 2008. This policy is aimed to draw up analysts’ reports. Currently, VastNed at raising awareness of the fund among institutional Offices/Industrial is being covered by some ten and private investors. Contacts with these investors (sell-side) analysts of reputed banks who publish have active involvement of the CEO, CFO and the research reports on a regular basis. The following general counsel. For specific matters, such as property financial institutions have their sell-side analysts tours, other personnel of the VastNed Group is also cover VastNed Offices/Industrial: involved. Various means are used in the pursuit of the – Amsterdams Effectenkantoor (AEK) investor relations policy, such as investor roadshows, – Exane BNP Paribas sending out press releases, the set up of the annual – Fortis Bank (Netherlands) report, the VastNed website and the newsletter – Iris Research Behind the Façade. – JPMorgan – Kempen & Co Contact – Merrill Lynch – PeterCam Questions may be sent to: – Rabobank VastNed Offices/Industrial – Royal Bank of Scotland Attn Mr Arnaud du Pont, general counsel / Director investor relations Annual report PO Box 4444, 3006 AK Rotterdam Telephone +31 10 24 24 302 In 2008, for the second consecutive year, VastNed [email protected] Offices/Industrial’s reporting gained high praise: the IVBN (Dutch Association of Institutional Property Investors) awarded the annual report a mark of 9.2 out of ten for transparency and compliance with IVBN recommendations, which was among the

59 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 The share and the stock exchange listing

highest assessments of the IVBN members. The IVBN annually investigates the degree to which the IVBN members observe its recommendations. The European association of listed property investment companies EPRA also annually surveys listed companies. In 2008, 92 companies were surveyed. VastNed Offices/Industrial did not manage to end in the top five in terms of absolute points or in terms of improvement, after having been there for a number of years. Consequently, VastNed Offices/Industrial requested its external auditor to assess in which fields improvement of the annual report can be realised. In this report VastNed Offices/Industrial implemented the larger part of the recommendations made, such as including the EPRA triple net asset value in the annual accounts. Furthermore, all internal disciplines actively contribute to guaranteeing the level of quality and improve it where necessary. The 2008 annual report is available in English and Dutch. The English version is available in hardcopy, while the Dutch copy is for cost saving purposes, available on www.vastned.nl in PDF-fortmat only. Website

VastNed Offices/Industrial’s website www.vastned.nl provides for information on the property fund, including the fund’s profile and strategy, the property portfolios in the various countries, investor information, corporate governance, media and tenants. Additionally, VastNed Offices/Industrial also sets out the evaluation of the fund according to analysts’ reports prepared by sell-side analysts. The website offers an alert service that sends press releases, presentations and the newsletter to subscribers by e-mail. As providing information through the internet has a high priority for VastNed Offices/Industrial, the company closely follows the latest internet developments. The company has recently carried out an external assessment of its website by a professional internet consultancy firm. This firm reported late December 2008. The outcome was positive and VastNed Offices/Industrial strives to implement the recommendations made by this consultant. Behind the Façade

The newsletter Behind the Façade informally highlights topical issues affecting the total VastNed Group for all its business relations, focusing on the typical local atmosphere of the countries and cities where the VastNed Group operates.

60 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Annual accounts 2008 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Consolidated profit and loss account (x € 1,000)

Notes 2008 2007 ______Net income from investment properties

Gross rental income 4, 23 88,967 85,433 Ground rents paid 4 (232) (221) Net service charge expenses 4 (1,240) (1,264) Operating expenses 4 (10,258) (9,328) ______Net rental income 77,237 74,620

Value movements investment properties in operation 5 (55,152) 15,185 Value movements investment properties in pipeline 5 (282) – ______Total value movements investment properties (55,434) 15,185

Net result on disposals of investment properties 6 545 (4,546) ______Total net income from investment properties 22,348 85,259

Expenditure

Financial income 7 601 1,054 Financial expenses 7 (26,435) (22,446) ______Net financing costs (25,834) (21,392)

General expenses 8 (5,980) (5,377) ______Total expenditure (31,814) (26,769) ______Investment result before taxes (9,466) 58,490

Current income tax expense 9 17 48 Movement deferred tax assets and liabilities 9 420 (15) ______437 33 ______Investment result after taxes (9,029) 58,523

Investment result attributable to minority interests _____(6,773) _____(17,862) Investment result attributable to VastNed Offices/Industrial shareholders (15,802) 40,661

Per share (x € 1) Investment result attributable to VastNed Offices/Industrial shareholders 10 (0.77) 1.98 Diluted investment result attributable to VastNed Offices/Industrial shareholders 10 (0.77) 1.98

62 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Direct and indirect investment result (x € 1,000) 2008 2007 ______Direct investment result 1)

Gross rental income 88,967 85,433 Ground rents paid (232) (221) Net service charge expenses (1,240) (1,264) Operating expenses (10,258) (9,328) ______Net rental income 77,237 74,620

Financial income 601 1,054 Financial expenses (26,435) (22,446) ______Net financing costs (25,834) (21,392)

General expenses (5,980) (5,377) ______Direct investment result before taxes 45,423 47,851

Current income tax expense 17 48 ______Direct investment result after taxes 45,440 47,899

Direct investment result attributable to minority interests (12,893) (12,853) ______Direct investment result attributable to VastNed Offices/Industrial shareholders 32,547 35,046

Indirect investment result

Value movements investment properties in operation (55,152) 15,185 Value movements investment properties in pipeline (282) – ______Total value movements investment properties (55,434) 15,185

Net result on disposals of investment properties 545 (4,546) ______Indirect investment result before taxes (54,889) 10,639

Movement deferred tax assets and liabilities 420 (15) ______Indirect investment result after taxes (54,469) 10,624

Indirect investment result attributable to minority interests 6,120 (5,009) ______Indirect investment result attributable to VastNed Offices/Industrial shareholders (48,349) 5,615 ______Investment result attributable to VastNed Offices/Industrial shareholders (15,802) 40,661

Per share (x € 1) Direct investment result attributable to VastNed Offices/Industrial shareholders 1,59 1,71 Indirect investment result attributable to VastNed Offices/Industrial shareholders (2,36) 0,27

1 The direct investment result is presented in accordance with the Best Practices Recommendations as published by EPRA.

63 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Consolidated balance sheet as at December 31 (x € 1,000)

Notes 2008 2007 ______Assets

Investment properties in operation 12 1,142,419 1,169,820 Other assets in respect of lease incentives 12 9,587 5,805 ______1,152,006 1,175,625 Investment properties in pipeline 12 15,020 14,324 ______Total investment properties 1,167,026 1,189,949

Tangible fixed assets 324 437 Financial derivatives 21 – 8,297 Deferred tax assets 13 737 121 ______Total fixed assets 1,168,087 1,198,804

Debtors and other receivables 14, 16 18,001 14,912 Income tax 1,099 84 Cash and cash equivalents 15, 16 1,866 3,352 ______Total current assets 20,966 18,348

______Total assets 1,189,053 1,217,152

64 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes 2008 2007 ______Equity and liabilities

Capital paid-up and called 17 93,675 103,487 Share premium reserve 17 330,188 330,386 Hedging reserve in respect of financial derivatives 17 (8,634) 6,331 Other reserves 17 34,712 28,573 Investment result attributable to VastNed Offices/Industrial shareholders 17 (15,802) 40,661 ______Equity VastNed Offices/Industrial shareholders 434,139 509,438

Equity minority interests 17 134,254 142,619 ______Total equity 568,393 652,057

Deferred tax liabilities 13 455 927 Long-term interest-bearing loans 18, 21 310,417 409,429 Financial derivatives 21 9,743 – Guarantee deposits 1,155 1,314 ______Total long-term liabilities 321,770 411,670

Payable to banks 19 260,487 104,482 Redemption long-term liabilities 18,355 15,290 Income tax 1,488 4,266 Other liabilities and accruals 20 18,560 29,387 ______Total short-term liabilities _____298,890 _____153,425 Total equity and liabilities 1,189,053 1,217,152

65 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Consolidated statement of movements in equity (x € 1,000)

2008 2007 ______

Equity as at January 1 652,057 604,525

Value movements financial derivatives (18,040) 3,477

Direct investment result 45,440 47,899 Indirect investment result (54,469) 10,624 ______Investment result (9,029) 58,523

Proceeds from share issue – 50,000 Costs of share issue – (544) Share buyback (10,000) – Costs of share buyback (6) – Acquisitions and disposals of shares in subsidiaries 40 (16,442) ______(9,966) 33,014

Final dividend previous financial year in cash (24,048) (23,799) Interim dividend in cash (10,368) (10,556) Dividend paid to minority interests (12,209) (13,121) Costs of stock dividend (4) (13) ______Dividend payment in cash (46,629) (47,489)

Other movements – 7 ______Equity as at December 31 568,393 652,057

Value movements financial derivatives directly recognised in equity (18,040) 3,477 Investment result (9,029) 58,523 ______Total result (27,069) 62,000

Attributable to: VastNed Offices/Industrial shareholders (30,873) 43,591 Minority interests 3,804 18,409 ______(27,069) 62,000

66 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Consolidated cash flow statement (x € 1,000)

2008 2007 ______Cash flow from operating activities

Investment result (9,029) 58,523 Adjustments for: Value movements investment properties 55,434 (15,185) Net result on disposals of investment properties (545) 4,546 Net financing costs 25,834 21,392 Income tax (437) (33) ______Cash flow from operating activities before changes in working capital and provisions 71,257 69,243

Movement current assets (2,152) (6,071) Movement short-term liabilities (2,648) 1,669 ______66,457 64,841

Interest paid (on balance) (25,439) (21,568) Income tax paid (1,225) (10) ______Cash flow from operating activities 39,793 43,263

Cash flow from investment activities

Acquisition of and capital expenditure on investment properties (73,664) (201,147) Disposal of investment properties 28,952 151,164 Acquisitions and disposals of shares in subsidiaries 40 (20,132) ______Cash flow from property (44,672) (70,115)

Movement tangible fixed assets 113 65 ______Cash flow from investment activities (44,559) (70,050)

Cash flow from financing activities

Share issues – 49,456 Share buyback (10,006) – Dividend paid (34,404) (34,421) Dividend paid to minority interests (12,209) (13,121) Interest-bearing loans drawn down 75,370 148,979 Interest-bearing loans redeemed (15,471) (121,689) ______Cash flow from financing activities 3,280 29,204

Movement in cash and cash equivalents (1,486) 2,417

Cash and cash equivalents as at January 1 _____3,352 _____935 Cash and cash equivalents as at December 31 1,866 3,352

67 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the consolidated annual accounts (x € 1,000)

1 General information

VastNed Offices/Industrial N.V. (‘the Company’), with its registered office in Rotterdam, the Netherlands, is a (closed-end) property investment company with variable capital which makes long-term investments in a well-let property portfolio comprising offices and semi-industrial properties, primarily in the eurozone. At year-end 2008, the investments were concentrated in the three core countries: the Netherlands, Belgium and Germany. VastNed Offices/Industrial N.V. is listed on NYSE Euronext Amsterdam.

On October 20, 2006, the Authority for the Financial Markets granted to VastNed Management B.V. the licence as meant in Section 65(1)(a) of Book 2 of the Act on Financial Supervision as enacted in 2007 (previously Section 5 of the Act on the Supervision of Investment Institutions) pursuant to which this company may act as the director of the Company.

The consolidated annual accounts of the Company comprise the Company and its subsidiaries (jointly referred to as ‘the Group’) and the interests the Group has in associates and entities over which it has joint control.

The company profit and loss account has been rendered in abbreviated form pursuant to Section 402 of Book 2 of the Netherlands Civil Code.

2 Significant principles for financial reporting

a Statement of compliance

The consolidated annual accounts of the Company are presented in compliance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. These standards comprise all new and revised Standards and Interpretations as published by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), as far as they apply to the Group’s activities, effective for the financial years starting from January 1, 2008.

New or amended Standards and Interpretations which became effective in 2008 Compared to the Standards effective in 2007, in 2008 no new Standards or amendments to the Standards became effective for the Group. The following Interpretations published by the International Financial Reporting Interpretations Committee became effective in 2008: – IFRIC 11 Group and Treasury Share Transactions This interpretation has become effective for financial years starting on or after March 1, 2007 and provides, supplementary to IFRS 2, an interpretation of the recognition of payments in or based on shares to the company’s employees. The Group already applied this IFRIC in 2007 so this did not cause any changes. – IFRIC 12 Service Concession Arrangements This interpretation applies to financial years starting on or after January 1, 2008. This did not result in changes in the 2008 annual accounts. – IFRIC 14, IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction This interpretation applies to financial years starting on or after January 1, 2008. In view of the nature and the relatively limited size of the applicable defined benefit pension schemes in the Group, this interpretation did not have a material effect on the 2008 annual accounts.

68 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the consolidated annual accounts

New or amended Standards and Interpretations not yet effective A number of new Standards, amended Standards and Interpretations had not yet taken effect in 2008, but may be applied in advance. Unless stated otherwise, the Group has not made use of this. To the extent that these new Standards, amended Standards and Interpretations are relevant to the Group, the effect their application might have on the consolidated accounts for 2008 and beyond is set out below.

– IAS 1 (revised) Presentation of Financial Statements This amendment applies to financial years starting on or after January 1, 2009. Next to several not substantive changes in terminology (e.g. ‘balance sheet’ is referred to as ‘statement of financial position’), the amendment includes the introduction of a ‘statement of comprehensive income’ and a more extensive ‘statement of changes in equity’ (currently included in the notes to the financial statements). The main effect of this amendment relates to the presentation of value movements of financial derivatives currently directly recognised in equity, which will be shown separately (with their related tax effect) as other comprehensive income in the statement of comprehensive income. – IAS 23 (revised) Borrowing Costs This amendment applies to financial years starting on or after January 1, 2009. The amendment of IAS 23 cancels the option to recognise all costs associated with taking out loans directly as costs at the time they are incurred. The Group already applies this amendment, even though it has no effect on the principles for financial reporting applied by the Group, since the Group already capitalises financing costs directly attributable to the acquisition or construction of investment properties. – IAS 27 (revised) Consolidated and Separate Financial Statements & IFRS 3 (revised) Business Combinations These amendments apply to financial years starting on or after July 1, 2009, but have not yet been endorsed by the European Union. The amendments refer especially to the accounting of changes in ownership of (non-) controlling interests, in particular in situations where control is obtained or lost. Once control is obtained, all subsequent changes in ownership interests not involving the loss of that control are treated as transactions among shareholders. Goodwill is not remeasured or adjusted. Furthermore, the consideration for an acquisition, based on which the goodwill is measured, is determined at fair value at the acquisition date. Changes in the consideration after the acquisition date do not result in a remeasurement or adjustment of goodwill. Costs incurred to effect a business combination (e.g. advisory, legal, accounting fees) are not included in the consideration, but expensed in the period incurred. The Group will evaluate any consequences for the mandatory application in the 2010 financial year. – IAS 32 & IAS 1 (revised) Puttable Financial Instruments and Obligations Arising on Liquidation The amendments apply to financial years starting on or after January 1, 2009, and relate to the criteria for classifying puttable financial instruments as equity. IAS 1 was amended by the introduction of new disclosure requirements relating to puttable instruments and obligations arising on liquidation. Based on the nature of the currently applicable financial instruments within the Group, it is not expected that these amendments will have a material effect on the Group’s financial statements. – IAS 39 (revised) Eligible Hedged Items This amendment applies to financial years starting on or after July 1, 2009. It has not yet been endorsed by the European Union. The amendment clarifies the conditions for two specific situations where hedge accounting may be applied: hedging of inflation risk and hedging with options. Based on the present nature of the currently applied financial instruments, it is not expected that this amendment will have an effect on the Group’s financial statements. – IAS 40 (revised) Investment Property This amendment applies to financial years starting on or after January 1, 2009, but has not yet been endorsed by the European Union. The key change as a result of this

69 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the consolidated annual accounts

amendment is that IAS 40 also applies to investments properties in pipeline. Currently, investment property in pipeline is valued in accordance with IAS 16, which is the lower of cost or market value. If the fair value option is used in IAS 40 (as the Group has opted to do), investment properties in pipeline should also be valued at fair value. Depending on the nature of the properties in pipeline, it may be complex to determine their fair value. The Group is assessing the consequences of this amendment, but taking into account the relatively limited size of properties in pipeline and the fact that the larger part of these properties are already valued at fair value, the effects on the financial statements of the Group are thought to be limited. – IFRS 1 & IAS 27 (revised) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate These amendments apply to financial years starting on or after January 1, 2009 and relate especially to the measurement of the cost of investments in subsidiaries, jointly controlled entities and associates when adopting IFRS for the first time. The Group is assessing whether this amendment will have effect on the Group’s financial statements. – IAS 39 & IFRS 7 (revised) Reclassification of Financial Assets These amendments apply to financial years starting on or after July 1, 2008. These amendments permit reclassification of certain non-derivative financial assets recognised in accordance with IAS 39. It is not expected that these amendments will have effect on the Group’s financial statements. – IFRS 1 (revised) First-time Adoption of Financial Reporting Standards This amendment applies to financial years starting on or after July 1, 2009, but has not yet been endorsed by the European Union. The revision only relates to an improvement of the structure of the Standard; no new or revised technical matters have been introduced. – IFRS 2 (revised) Share-based Payment: Vesting Conditions and Cancellations This amendment applies to financial years starting on or after January 1, 2009. IFRS 2 relates inter alia to share-based payment transactions. For the Group, this amendment may apply to the bonus scheme of the managing directors, especially to the bonus related to the direct investment result which is awarded conditionally in the form of VastNed Offices/Industrial shares. The bonus is cancelled if two years after the awarding the direct investment result per share (the so-called ‘vesting period’) is lower than at the time of awarding. The amendment clarifies inter alia the accounting treatment of a bonus cancellation in case the conditions are not met. The Group will evaluate any consequences of this revised IFRS. Based on the size of the bonus scheme, a change, if any, will not have a material effect on the Group’s financial statements. – IFRS 8 (new) Operating Segments This new standard, effective as from January 1, 2009, supersedes IAS 14 Segment Reporting. This standard introduces new guidelines regarding the information on distinct segments to be disclosed. It prescribes that the choice of the distinct segments matches the related notes to the segments currently in use in internal reports. As the current reporting segments are in line with those used in internal reports, it is expected that this new Standard will not lead to major changes in the segment information provided in the consolidated annual accounts. – IFRIC 13 Customer Loyalty Programmes This interpretation applies to financial years starting on or after July 1, 2008. This interpretation has no consequences for the Group since it does not have such programmes. – IFRIC 15 Agreements for the Construction of Real Estate This interpretation applies to financial years starting on or after January 1, 2009, but has not yet been endorsed by the European Union. It addresses the accounting for revenue and associated expenses by entities that undertake construction of property and sell the properties in pipeline before construction is completed. The Group is assessing the effects of this interpretation on its financial statements. – IFRIC 16 Hedges of a Net Investment in a Foreign Operation This interpretation applies to financial years starting on or after October 1, 2008. It has

70 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the consolidated annual accounts

not yet been endorsed by the European Union. The interpretation clarifies the accounting for hedging of foreign currency exposure of foreign operations. As the Group does not have foreign currency exposure, this interpretation does not apply to the Group. – IFRIC 17 Distribution of Non-cash Assets to Owners This interpretation applies to financial years starting on or after July 1, 2009, but has not yet been endorsed by the European Union. It provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its shareholders. The most significant conclusion in the IFRIC is that the dividend should be measured at the fair value of the assets distributed and that any difference between this amount and the previous carrying amount of the assets distributed should be recognised in the profit and loss account when the entity settles the dividend payable. The Group will assess the effects of this interpretation on its financial statements.

b Principles applied in the compilation of the financial reporting

The financial statements are presented in euros; amounts are rounded off to thousands of euros, unless stated differently. Investment properties are valued at fair value. Financial derivatives are valued at fair value. The other items in the financial statements are valued at historical cost, unless stated differently.

Interim financial reports in the form of quarterly reports are presented in compliance with IAS 34 ‘Interim Financial Reporting’.

The accounting principles for financial reporting under IFRS set out below have been applied consistently within the Group and for all periods presented in these consolidated financial statements.

In the presentation of the annual accounts in compliance with IFRS the board of management has made judgements concerning estimates and assumptions which impact the figures included in the annual accounts. The estimates and underlying assumptions concerning the future are based on historical experience and other relevant factors, given the circumstances at balance sheet date. The actual results may deviate from these estimates.

The estimates and underlying assumptions are evaluated regularly. Any adjustments are recognised in the period in which the estimate was reviewed or, if the estimate also impacts future periods, also in these future periods.

The principal estimates and assumptions concerning the future and other important sources of estimate uncertainties at balance sheet date which have a material impact on the annual accounts and which present a significant risk of material adjustment of book values in the subsequent financial year are included in ’27 Accounting estimates and judgements’.

c Principles for consolidation

Subsidiaries Subsidiaries are entities in which the Company has control. Control of an entity entails that the Company has the authority, either directly or indirectly, to determine the financial and operational policies of the entity in order to obtain benefits from its operations. In the assessment of whether this is the case, potential exercisable or convertible voting rights are taken into account. The financial statements of the subsidiaries are included in the consolidated statements as from the date at which control is obtained until such time when control ceases. Minority interests are separately recognised in the balance sheet under equity. Minority interests in the result of the Group are also recognised separately in the profit and loss account.

71 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the consolidated annual accounts

Associates Associates are those entities in which the Group exerts significant influence on the financial and operational management, but in which it does not have a controlling interest. The consolidated financial statements comprise the share of the Group in the total result of associates according to the equity method, as from the date at which significant influence is obtained until such time when significant influence ceases. If the share of the Group in the losses exceeds the value of the interest in an associate, the book value of the entity on the Group’s balance sheet is written down to nil and no further losses are taken into account, except insofar as the Group has entered into a legally enforceable or actual obligation or has made payments on behalf of an associate.

Transactions eliminated on consolidation Balances within the Group and possible unrealised profits and losses on transactions within the Group, or income and expenditure from such transactions are eliminated in the presentation of the financial statements. Unrealised profits in respect of transactions with associates and joint ventures are eliminated proportionally to the interest that the Group has in the entity. Unrealised losses are eliminated in the same way as unrealised profits, but only to the extent that there is no evidence of impairment.

Goodwill All acquisitions of subsidiaries are recognised using the purchase accounting method. The costs of an acquisition are valued at the fair value of the underlying assets, equity instruments issued or debts taken over at the time of transfer, plus costs directly attributable to the acquisition. Acquired identifiable assets and (contingent) liabilities are initially recognised at fair value on the acquisition date. Goodwill is the amount by which at its first recognition the cost price of an acquired entity exceeds the net fair value of the identifiable assets, liabilities and contingent liabilities. The value of the assets, liabilities and contingent liabilities of entities acquired before January 1, 2004 is based on the previously applied accounting principles.

After first recognition, the goodwill is valued at cost less any cumulative impairment losses. Goodwill is attributed to cash generating entities and is not amortised. Annually, or earlier if circumstances give cause, goodwill is assessed for impairment. For associates, the book value of the goodwill is included in the book value of the investments in associates.

Negative goodwill resulting from an acquisition is recognised directly in the profit and loss account.

d Investment properties in operation and under renovation

Investment properties are properties held in order to realise rental income, value increases or both. Investment properties are classified as investment properties in operation when they are available for letting.

Acquisitions and disposals of property available for letting are recognised in the balance sheet as investment properties at the time when the obligation to buy or sell is entered into by means of a signed agreement, at which time the conditions of the transaction can be identified unequivocally and any contingent conditions included in the agreement can no longer be invoked or the chance that they will be invoked is small. Upon first recognition the investment properties are recognised at acquisition price, plus costs attributable to the acquisition, including transfer tax, property agency fees, due diligence costs and legal and civil-law notary costs. Investment properties are classified as investment properties under renovation at such time when it is decided that for continued future use an existing investment property must first be renovated and as a consequence is no longer available for letting during renovation. Both investment properties in operation and under renovation are stated at fair value,

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corrected for any balance sheet items in respect of lease incentives (see under ‘o Gross rental income’). The fair value is based on market value (costs payable by the purchaser), i.e. the estimated value at which an investment property could be traded at balance sheet date between well-informed and independent parties who are prepared to enter into a transaction, both parties operating prudently and without duress. Account is taken of differences between market rent and contractual rent, operating expenses, vacancy, maintenance and future developments. All investment properties in operation and under renovation are appraised at least once per year by independent certified appraisers.

The valuation methodology is based on international appraisal guidelines (RICS Appraisal and Valuation Standards). In order to present the fair value at balance sheet date in (interim) financial statements as accurately as possible, the following system is used: – All investment properties in operation and under renovation with an expected individual value exceeding € 4.5 million are appraised externally every quarter. Once a year, evenly spread across the various quarters, an extensive appraisal report is drawn up by the external appraiser. In the other quarters, an update of the most recent extensive report by the external appraiser is considered sufficient. – Investment properties with an expected individual value of € 4.5 million or less are appraised externally at least once per year, evenly spread across the different quarters. Based on the outcome of these appraisals (each quarter approximately 25% of all investment properties with an individual value of € 4.5 million or less) the fair value of the part not externally appraised in that quarter is determined internally. – In the selection of the external appraisers, reputation, independence, relevant experience with the location and the type of investment property are taken into account. For every investment property, the external appraiser is replaced in principle every three years.

The remuneration of the external appraisers is based on a permillage of the value of the properties to be appraised.

Profits and losses resulting from a change in the fair value of an investment property in operation or under renovation are entered in the profit and loss account under ‘Value movements investment properties in operation/under renovation’ in the period in which they occur.

Profits and losses resulting from disposal of an investment property are determined as the difference between net income from disposal and the latest published book value of the investment property and are recognised in the period in which the disposal takes place under ‘Net result on disposals of investment properties’.

e Investment properties in pipeline

Investment properties in pipeline concern properties under construction or development for future use as investment properties in operation. Investment properties in pipeline are valued at cost less any cumulative impairment losses until such time when the construction or development is completed. At the time of transition to investment properties in operation, the difference between the fair value at that time and the book value is recognised in the profit and loss account. The cost price of investment properties in pipeline includes, to the extent applicable, acquisition costs, transfer tax and all directly attributable costs necessary for preparing the property for letting. Overhead costs are not capitalised.

Financing costs directly attributable to the acquisition or construction of the investment property are capitalised as part of the cost price of the investment property. Capitalisation of financing costs starts at the time when the preparations for construction or renovation have begun, expenditure is made and financing costs are incurred. Capitalisation of financing costs is terminated at such time when construction or renovation is complete and the investment property in pipeline is recognised as investment property in operation.

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For the determination of financing costs a capitalisation percentage is applied to the expenditure that is equal to the weighted average of the financing costs of the Group’s interest-bearing loans outstanding during the period concerned, excluding loans specifically taken out in connection with the investment properties in pipeline. Financing costs relating to these loans specifically taken out are capitalised in full.

f Tangible fixed assets

Tangible fixed assets particularly comprise assets held by the Group in the context of supporting business operations, such as office furniture, computer equipment and vehicles. Tangible fixed assets are valued at cost less any cumulative depreciation and any cumulative impairment losses. Depreciation is recognised in the profit and loss account using the straight-line method, taking account of the expected useful life and residual value of the respective assets. The expected useful life is estimated as follows: – Office furniture and such 5 years – Computer equipment 5 years – Vehicles 5 years

g Financial derivatives

The Group uses financial derivatives to hedge interest rate risks resulting from its operating, financing and investing activities. In accordance with the treasury policy set by the board of management and the supervisory board, the Group neither holds nor issues derivatives for trading purposes. At first recognition, financial derivatives are valued at cost. After first recognition, financial derivatives are valued at fair value.

The fair value of financial interest rate derivatives is the amount the Group expects to receive or to pay if the financial interest rate derivatives are terminated at balance sheet date, whereby the actual interest and the actual credit risk of the respective counterparty or counterparties at balance sheet date are taken into account. The amount is determined based on information from reputed market parties.

A derivative is classified as a current asset or short-term debt if the remaining term of the derivative is less than 12 months or the derivative is expected to be realised or settled within 12 months.

Hedging When entering into hedging transactions, the relation between the derivatives and the hedged loan positions is documented and matched to the objectives of the treasury policy. In addition, it is investigated both retrospectively and prospectively whether the hedging transactions are effective in compensating the risk of changes in the fair value of the hedged position or the hedged risk of attributable cash flows. The recognition of gains and losses depends on the degree of hedging: – Derivatives not designated as hedge accounting or that do not qualify for hedge accounting These are stated at fair value; the results are recognised in the profit and loss account. – Fair value hedging Changes in the fair value of derivatives designated and qualifying as fair value hedges are recognised in the profit and loss account simultaneously with changes in the fair value of the hedged liabilities associated with the hedged risk. The Group currently does not hold any interest rate derivatives that qualify as fair value hedges. – Cash flow hedging The Group uses interest rate derivatives to hedge interest rate risks of floating interest loans. Gains and losses in respect of the effective portion of the derivatives designated and qualifying as cash flow hedges are taken to group equity (less any deferred tax liabilities) under the item ‘Hedging reserve in respect of financial derivatives’. The ineffective part of the financial interest derivative is recognised in the profit and loss account.

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When an interest derivative expires or is sold, terminated or exercised, or when the entity revokes designation of the hedge relationship, but the hedged future transaction is still expected to take place, the cumulative gain or loss at that point remains in equity and is recognised when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss in equity is recognised immediately in the profit and loss account.

h Debtors and other receivables

Debtors and other receivables are stated at nominal value less a provision for possible bad debts.

i Cash and cash equivalents

Cash and cash equivalents comprise deposits, call money and bank account credit balances.

j Capital paid-up and called, share premium reserve and other reserves

Ordinary shares and priority shares are classified as VastNed Offices/Industrial shareholders’ equity. External costs directly attributable to the issuing of new shares, such as issuing costs, are deducted from the proceeds and consequently recognised in the share premium reserve. In the issue price of shares, account is taken of the estimated investment result for the current financial year attributable to the shareholders of the Company up to the issuing date. The investment result included in the issue price is added to the share premium reserve. The increase of the capital paid-up and called associated with the issue of ordinary shares in respect of stock dividend is charged to the share premium reserve, as are the costs in respect of stock dividend.

When purchasing the Company’s own shares, the balance of the compensation paid, including costs directly attributable, is recognised as a movement in equity.

Dividends in cash to holders of ordinary and priority shares are charged to other reserves in the period in which the dividends are declared by the Company.

k Deferred tax assets and deferred tax liabilities

Deferred tax assets are recognised for income tax to be reclaimed in future periods relating to offsettable temporary differences between the book value of assets and liabilities and their fiscal book value, and for the carry forward of unused tax losses or unused tax credits. Deferred tax assets are only recognised if the temporary differences will probably be settled in the near future and sufficient taxable profit will be available for compensation.

Deferred tax liabilities are recognised for income tax payable in future periods on taxable temporary differences between the book value of assets and liabilities and their fiscal book value. For the valuation of deferred tax liabilities, tax rates are taken into account that are expected to apply in the period in which the liability will be settled based on tax rates (materially) enacted at balance sheet date. For the valuation of deferred tax liabilities, the tax consequences of the way in which the Group expects to realise or settle the book value of its assets and liabilities are taken into account. Deferred tax liabilities are not discounted.

l Other provisions

Provisions are recognised in the balance sheet if the Group has a legally enforceable or constructive obligation resulting from a past event and it is probable that the settlement of that liability requires an outflow of funds. If the effect is material, provisions are

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entered to the present value of the expenditure that is expected to be required for the settlement of the liability.

m Interest-bearing debts

Upon first recognition, interest-bearing debts are stated at fair value less the costs associated with the incurring of the interest-bearing debt. After their first recognition, interest-bearing debts are stated at amortised cost, whereby a possible difference between the cost price and the debt to be repaid is recognised in the profit and loss account for the term of the debt based on the effective interest rate method. Interest-bearing debts with a duration of more than one year are recognised under long-term liabilities. Any repayments on interest-bearing debts within one year are recognised under short-term liabilities.

n Other liabilities and accruals

Other liabilities and accruals are stated at nominal value.

o Gross rental income

Gross rental income from operational lease contracts is recognised on a time-proportionate basis over the duration of the lease contracts. Rent-free periods, lease discounts and other lease incentives are recognised as an integral part of total gross rental income. The resulting accruals are recognised under ‘Other assets in respect of lease incentives’. These accruals are part of the fair value of the respective investment properties in operation and under renovation.

p Net service charge expenses

Service charges relate to costs of energy, doormen, garden maintenance and such, which under the terms of the lease contract can be charged on to the tenant. The part of the service charges that cannot be charged on relates largely to vacant (units in) investment properties. The costs and recovery are not specified in the profit and loss account.

q Operating expenses

Operating expenses concern costs directly connected to the operation of the property, such as maintenance, management costs, insurance, allocation to the provision for doubtful debtors and property tax. These costs are attributed to the period to which they relate. Costs incurred when concluding operational lease contracts are recognised in the period in which they are incurred.

r Net financing costs

Net financing costs comprise interest expenses on loans and debts attributable to the period, calculated using the effective interest rate method less capitalised financing costs on investment properties and interest income on outstanding loans and receivables. Net financing costs also include profits and losses resulting from changes in the fair value of the financial derivatives. These gains and losses are recognised immediately in the profit and loss account, unless a derivative qualifies for hedge accounting (see under ‘g Financial derivatives’).

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s General expenses

General expenses concern inter alia personnel costs, housing costs, IT costs, publicity costs and the costs of external consultants. Costs relating to the internal commercial, technical and administrative management of the property are attributed to operating expenses.

t Income tax

Income tax comprises taxes actually payable and recoverable attributed to the reporting period and the movements in deferred tax assets and deferred tax liabilities (see under ‘k Deferred tax assets and deferred tax liabilities’). Income tax is recognised in the profit and loss account, except to the extent that it concerns items that are taken directly to equity, in which case the taxes are recognised under equity.

Taxes actually payable and offsettable on the reporting period are taxes that are expected to be payable on taxable profit in the financial year, calculated based on tax rates and tax legislation enacted or materially enacted at balance sheet date, and corrections for taxes payable on previous years. Additional income tax in respect of dividend payments by subsidiaries is recognised at the same time as the obligation to pay out the dividend concerned.

u Direct investment result

The direct investment result attributable to VastNed Offices/Industrial shareholders comprises net rental income less net financing costs (excluding value movements of financial derivatives), general expenses, income tax expense and the part of this income and expenditure attributable to minority interests.

v Indirect investment result

The indirect investment result attributable to VastNed Offices/Industrial shareholders comprises the value movements and the net result on disposals of investment properties, movements in deferred tax assets or deferred tax liabilities, and the value movements of financial derivatives that do not qualify as effective hedges, less the part of these items attributable to minority interests.

w Cash flow statement

The cash flow statement is presented based on the indirect method. The funds in the cash flow statement consist of cash and cash equivalents. Income and expenditure in respect of interest are recognised under cash flow from operating activities. Expenditure in respect of dividend is recognised under cash flow from financing activities.

x Segment information

The primary segment information is presented based on the countries where the investment properties are located. The secondary segment information is presented based on the type of investment property, distinguishing between offices and semi-industrial property.

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3 Segment information

Primary segmentation Netherlands Belgium Germany France Total ______2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 ______Net rental income 31,379 33,987 39,906 37,848 5,952 2,874 – (89) 77,237 74,620 Value movements investment properties in operation (35,622) 9,207 (13,497) 10,242 (6,033) (397) – (177) (55,152) 18,875 Adjustment to net asset value Intervest Offices shares – – – (3,690) – – – – – (3,690) Value movements investment properties in pipeline – – – – (282) – – – (282) – Net result on disposals of investment properties 463 (4,456) 82 (83) – – – (7) 545 (4,546)

Total net income from ______investment properties (3,780) 38,738 26,491 44,317 (363) 2,477 – (273) 22,348 85,259

Net financing costs (25,834) (21,392) General expenses (5,980) (5,377) Income tax 437 33 Minority interests (6,773) (17,862) _____, _____ Investment result attributable to VastNed Offices/Industrial shareholders (15,802) 40,661

Netherlands Belgium Germany France Total ______2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 ______Investment properties in operation Balance as at January 1 553,386 503,844 528,724 471,158 87,710 34,330 – 2,090 1,169,820 1,011,422 – Acquisitions 7,432 67,856 17,686 43,812 30,137 55,383 – – 55,255 167,051 – Capital expenditure 3,128 6,176 1,137 3,512 1,666 (1,606) – 87 5,931 8,169 – Disposals (33,435) (33,697) – – – – – (2,000) (33,435) (35,697) ______530,511 544,179 547,547 518,482 119,513 88,107 – 177 1,197,571 1,150,945 – Value movements (35,055) 9,207 (13,497) 10,242 (6,600) (397) – (177) (55,152) 18,875 ______Balance as at December 31 495,456 553,386 534,050 528,724 112,913 87,710 – – 1,142,419 1,169,820 – Other assets in respect of lease incentives 7,249 4,348 2,338 1,457 – – – – 9,587 5,805 ______Appraisal value as at December 31 502,705 557,734 536,388 530,181 112,913 87,710 – – 1,152,006 1,175,625 Investment properties in pipeline 1,500 1,500 4,151 4,151 9,369 8,673 – – 15,020 14,324 ______Investment properties 504,205 559,234 540,539 534,332 122,282 96,383 – – 1,167,026 1,189,949

Other assets 6,521 902 941 2,639 1,273 426 – 23 8,735 3,990 Not allocated to segments 13,292 23,213 _____, _____ Total assets 1,189,053 1,217,152

Liabilities 16,946 15,577 6,841 4,888 3,358 8,978 – 8 27,145 29,451 Not allocated to segments 593,515 535,644 _____, _____ Total liabilities 620,660 565,095

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Secondary segmentation Offices Semi-industrial Total ______2008 2007 2008 2007 2008 2007 ______Net rental income 62,809 59,296 14,428 15,324 77,237 74,620 Value movements investment properties in operation (44,327) 8,596 (10,825) 10,279 (55,152) 18,875 Value movements investment properties in pipeline (282) – – – (282) – Net result on disposals of investment properties 374 (1,581) 171 (2,965) 545 (4,546) ______18,574 66,311 3,774 22,638 22,348 88,949 Adjustment to net asset value Intervest Offices shares – (3,690) ______Total net income from investment properties 22,348 85,259

Offices Semi-industrial Total ______2008 2007 2008 2007 2008 2007 ______Investment properties in operation Balance as at January 1 959,960 812,438 209,860 198,984 1,169,820 1,011,422 – Acquisitions 37,570 159,099 17,685 7,952 55,255 167,051 – Capital expenditure 6,796 5,904 (865) 2,265 5,931 8,169 – Disposals (29,995) (26,077) (3,440) (9,620) (33,435) (35,697) ______974,331 951,364 223,240 199,581 1,197,571 1,150,945 – Value movements (44,327) 8,596 (10,825) 10,279 (55,152) 18,875 ______Balance as at December 31 930,004 959,960 212,415 209,860 1,142,419 1,169,820 – Other assets in respect of lease incentives 7,899 4,887 1,688 918 9,587 5,805 ______Appraisal value as at December 31 937,903 964,847 214,103 210,778 1,152,006 1,175,625 Investment properties in pipeline 15,020 14,324 – – 15,020 14,324 ______Investment properties 952,923 979,171 214,103 210,778 1,167,026 1,189,949

Other assets 6,030 2,386 1,383 787 7,413 3,173 Not allocated to segments 14,614 24,030 _____, _____, _____, _____, _____, _____, Total assets 958,953 981,557 215,486 211,565 1,189,053 1,217,152

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4 Net rental income

Net service Operating Net rental Gross rental income Ground rents paid charge expenses expenses income ______2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 ______Netherlands 38,881 40,490 (232) (221) (785) (558) (6,485) (5,724) 31,379 33,987 Belgium 43,720 41,863 – – (430) (684) (3,384) (3,331) 39,906 37,848 Germany 6,366 3,080 – – (25) (6) (389) (200) 5,952 2,874 France – – – – – (16) – (73) – (89) ______88,967 85,433 (232) (221) (1,240) (1,264) (10,258) (9,328) 77,237 74,620

Ground rents paid 2008 2007 ______Attributable to leased properties 226 213 Attributable to vacant properties 6 8 ______232 221

Net service charge expenses 2008 2007 ______Attributable to leased properties 19 19 Attributable to vacant properties 1,221 1,245 ______1,240 1,264

Operating expenses 2008 2007 ______Attributable to leased properties 9,305 8,258 Attributable to vacant properties 953 1,070 ______10,258 9,328

Operating expenses 2008 2007 ______Maintenance 2,845 2,959 Administrative and commercial management 1) 2,675 2,563 Insurance 245 203 Property tax and such 964 1,255 Letting costs 2,202 1,382 Other operating expenses 1,327 966 ______10,258 9,328

Other operating expenses includes inter alia the allocation to the provision for doubtful debtors.

1 3% of gross rental income, consisting of external and general expenses, attributable to operating expenses.

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5 Value movements investment properties

2008 2007 ______Positive Negative Total Positive Negative Total ______Investment properties in operation 18,093 (73,245) (55,152) 39,349 (24,164) 15,185 Investment properties in pipeline – (282) (282) – – – ______18,093 (73,527) (55,434) 39,349 (24,164) 15,185

6 Net result on disposals of investment properties

2008 2007 ______Sales price 34,418 57,797 Book value at time of disposal (33,435) (62,787) ______983 (4,990) Sales costs (418) (146) ______565 (5,136) Other (20) 590 ______545 (4,546)

7 Net financing costs

Interest income 2008 2007 ______Bank accounts and short-term deposits (51) – Other interest receivable (392) (1,054) Capitalised financing costs (158) – ______(601) (1,054)

Interest expense 2008 2007 ______Long-term interest-bearing loans 20,313 18,131 Short-term credits and cash loans 6,089 3,838 Other interest payable 33 477 ______26,435 22,446 ______25,834 21,392

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8 General expenses

2008 2007 ______Personnel costs 4,670 4,426 Remuneration supervisory board 107 109 Consultancy and audit costs 783 729 Appraisal costs 384 398 Accommodation and office costs 954 930 Other expenses 1,265 861 ______8,163 7,453 Attributed to operating expenses (2,183) (2,076) ______5,980 5,377

During 2008, on average 104 (2007: 98) employees (full-time equivalents) were employed by VastNed Offices/Industrial and VastNed Retail jointly, of whom 48 in the Netherlands and 56 abroad. Personnel costs of the employees working in the Netherlands are attributed to VastNed Offices/Industrial based on actual work done. VastNed Offices/Industrial has no employees. In the year under review, VastNed Offices/Industrial accounted for: wages and salaries € 3.4 million (2007: € 2.9 million), social security charges € 0.4 million (2007: € 0.4 million) and pension premiums € 0.2 million (2007: € 0.3 million).

Consultancy and audit costs include an amount of € 0.2 million (2007: € 0.2 million) of which € 0.1 million relates to Deloitte Accountants B.V. for audit costs. These costs concern virtually all the costs of the audit of the annual accounts, as well as the audit costs of the statutory annual accounts of subsidiaries. The external auditor has performed virtually no separate consultancy commissions in 2007 and 2008.

Other expenses include inter alia publicity costs and IT costs.

9 Income tax

Current income tax expense 2008 2007 ______Current financial year (11) (24) Adjustment previous financial years (6) (24) ______(17) (48)

Movement deferred taxes 2008 2007 ______In respect of: Value movements investment properties (420) 15 ______Total income tax (437) (33)

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Reconciliation of effective tax rate 2008 2007 ______Investment result before taxes (9,466) 58,490

Income tax at domestic tax rate 0.0% – 0.0% – Effect of tax rates of subsidiaries operating in other jurisdictions (5.4%) (514) 0.0% (28) Non-tax deductible costs 0.4% 34 0.0% 19 Adjustment previous financial years 0.6% 43 0.0% (24) ______(4.4%) (437) 0.0% (33)

VastNed Offices/Industrial qualifies as a fiscal investment institution as referred to in section 28 of the Netherlands Corporate Income Tax Act 1969. This implies that conditional on compliance with specific conditions, the company is exempted from the obligation to pay income tax. These conditions mainly concern the investment requirement, the fiscal financing ratios, the composition of the shareholders base and the cash dividend distribution of the fiscal result.

In Belgium virtually all properties are held by the Bevak Intervest Offices. A Bevak materially has a tax-exempt status, so that no tax is payable on its profits. The requirements of the Bevak are comparable to those of the Dutch fiscal investment institution. A small part of the Belgian property is held by effectively taxable companies. The nominal tax rate is 33.99%. The taxable net rental income realised in these companies is reduced by depreciation and interest.

In Germany, the properties are held by taxable companies. The effective tax rate in Germany is 15.825%. The taxable net rental income realised in Germany is reduced for tax purposes by, amongst others, depreciation and interest. The interest amount that can be deducted from net rental income is in fact maximised at € 1.0 million per year per company.

10 Investment result per share

2008 2007 ______Basic Diluted Basic Diluted ______Direct investment result 32,547 32,547 35,046 35,046 Indirect investment result (48,349) (48,349) 5,615 5,615 ______Investment result (15,802) (15,802) 40,661 40,661

Average number of ordinary shares in issue 2008 2007 ______Basic Diluted Basic Diluted ______Balance as at January 1 20,697,219 20,697,219 18,981,259 18,981,259 Effect of share issues – – 1,522,070 1,522,070 Effect of share buybacks (207,117) (207,117) – – Effect of stock dividend 25,223 25,223 21,698 21,698 ______Average number of ordinary shares in issue 20,515,325 20,515,325 20,525,027 20,525,027

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2008 2007 ______Basic Diluted Basic Diluted ______Per share (x € 1): Direct investment result 1.59 1.59 1.71 1.71 Indirect investment result (2.36) (2.36) 0.27 0.27 ______Investment result (0.77) (0.77) 1.98 1.98

11 Dividend

VastNed Offices/Industrial’s dividend policy is aimed at putting the direct investment result fully at the disposal of the shareholders. In order to comply with the conditions for the Dutch fiscal investment institutions, at least the fiscal result must be paid out in cash.

On May 2, 2008, the final dividend for the 2007 financial year was made payable, consisting of 5% in cash on the priority shares and an optional dividend on the ordinary shares of € 1.20 in cash or € 1.05 in cash and 0.72% in shares charged to the share premium reserve. This dividend payment totalled € 24.0 million.

On September 1, 2008, the interim dividend for the 2008 financial year was made payable. The interim dividend amounted to € 0.50 per share in cash (total payout: € 10.4 million). The board of management proposes the following final dividend for the 2008 financial year: – 5% in cash on the priority shares; – an optional dividend on the ordinary shares of: – € 1.01 in cash plus a percentage in shares yet to be determined, depending on the share price, charged to the share premium reserve; or – € 1.09 in cash.

If the general meeting of shareholders approves the dividend proposal, the dividend will be made payable to shareholders on May 4, 2009. The dividend to be paid has not been entered in the balance sheet as a liability.

12 Investment properties

Investment properties in operation 2008 2007 ______Balance as at January 1 1,169,820 1,011,422 Acquisitions 55,255 167,051 Capital expenditure 5,931 8,169 Disposals (33,435) (35,697) ______1,197,571 1,150,945 Value movements (55,152) 18,875 ______Balance as at December 31 1,142,419 1,169,820

Other assets in respect of lease incentives 9,587 5,805 ______Appraisal value as at December 31 1,152,006 1,175,625

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87% of the investment properties in operation were appraised by independent certified appraisers as per December 31, 2008. The remaining properties were appraised earlier in the financial year by independent certified appraisers. The fair value of these properties is determined internally as per December 31, 2008.

As of year end 2008, properties to a value of € 71.8 million (2007: € 78.3 million) serve as security for loans contracted (see also ’18 Long-term interest-bearing loans’).

For further details on the investment properties in operation, reference is made to the overview ‘Property portfolio 2008’ included elsewhere in this annual report.

Investment properties in pipeline 2008 2007 ______Balance as at January 1 14,324 32,741 Acquisitions and development expenditure 978 8,673 Disposals – (27,090) ______15,302 14,324 Value movements 1) (282) – ______Balance as at December 31 15,020 14,324

For further details on the investment properties in pipeline, reference is made to the overview ‘Property portfolio 2008’ included elsewhere in this annual report.

13 Deferred tax assets and liabilities

Deferred tax assets and liabilities are offset if there is a legally enforceable right to set off deferred tax assets and liabilities against each other and when the deferred tax assets and liabilities concern the same tax regime.

The movements of deferred tax assets and liabilities were as follows:

2008 2007 ______Assets Liabilities Assets Liabilities ______Balance as at January 1 121 927 – – Net credit/charge to the profit and loss account 616 161 121 137 Acquisition of subsidiaries – 193 – 790 Transferred to income tax (short–term liabilities) in connection with disposal or merger – (826) – – ______Balance as at December 31 737 455 121 927

The deferred tax assets and liabilities as per December 31, 2008 concern Belgium and Germany.

The deferred tax assets concern: – offsettable losses; – the difference between the market value and the fiscal book value of the property investments.

1 As at December 31, 2008, the market value of the investment properties in pipeline was determined internally. These valuations led to the recognition of an impairment loss of € 0.3 million. The impairment loss has been included in the line item ‘Value movements investment properties in pipeline’ in the consolidated profit and loss account.

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As at balance sheet date, unused tax losses totalled € 21.1 million. In view of the expectation that based on the present structure these unused tax losses cannot be set off against taxable profits in the near future, no deferred tax asset is recognised.

14 Debtors and other receivables

2008 2007 ______Debtors 2,336 3,802 Provision for doubtful debtors (1,400) (1,238) ______936 2,564 Taxes 2,952 2,228 Receivable from disposals 5,060 32 Interest 399 708 Service charges 596 366 Receivables in respect of claims 3,514 3,514 Other receivables and prepayments 4,544 5,500 ______18,001 14,912

The item ‘Receivable from disposals’ concerns the disposal of two properties in Groningen and Purmerend. The transfer of the properties will take place in March and July 2009 respectively.

Under receivables, items have been entered with a term in excess of one year totalling € 2.7 million (2007: € 2.5 million).

15 Cash and cash equivalents

Cash and cash equivalents concern deposits, call money and bank account credit balances with a duration of less than three months. The cash and cash equivalents are freely available to the company.

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16 Credit risk

VastNed Offices/Industrial’s principal financial assets consist of cash and cash equivalents, debtors and other receivables.

The credit risk on cash and cash equivalents is very small, since the cash and cash equivalents are held at reputed banks.

The credit risk is primarily attributable to debtors. This credit risk is limited by prior careful screening of potential tenants. Also, security is required from tenants in the form of guarantee deposits or bank guarantees.

The aging analysis of the debtors as at December 31 was as follows:

2008 2007 ______Gross amounts Provision Gross amounts Provision ______Overdue by less than 30 days 464 10 1,197 5 Overdue by between 31 days and 90 days (5) 3 558 55 Overdue by between 91 days and one year 781 239 715 78 Overdue by more than one year 1,096 1,148 1,332 1,100 ______2,336 1,400 3,802 1,238

Movements in the provision for doubtful debtors were as follows:

2008 2007 ______Balance as at January 1 1,238 1,758 Allocation to the provision 607 260 Write-off for bad debts (245) (497) Release (200) (283) ______Balance as at December 31 1,400 1,238

Receivables are recognised less a provision for bad debts.

Since the tenant base consists of a large number of different parties, there is no credit risk concentration.

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17 Equity Investment result Hedging attributable to Equity reserve VastNed VastNed Capital Share in respect Offices/ Offices/ Equity paid-up and premium of financial Other Industrial Industrial minority Total called reserve derivatives reserves shareholders shareholders interests equity ______Balance as at January 1, 2007 96,939 287,491 3,401 13,098 49,823 450,752 153,773 604,525

Acquisition of shares in subsidiaries – – – – – – (16,442) (16,442) Share issues 8,417 41,583 – – – 50,000 – 50,000 Costs of share issues – (544) – – – (544) – (544) Cancellation own shares (2,031) 2,031 – – – – – – Investment result – – – – 40,661 40,661 17,862 58,523 Stock dividend 162 (162) – – – – – – Costs of stock dividend – (13) – – – (13) – (13) Final dividend previous financial year in cash – – – – (23,799) (23,799) – (23,799) Interim dividend 2007 in cash – – – (10,556) – (10,556) – (10,556) Dividend paid to minority interests – – – – – – (13,121) (13,121) Contribution from profit appropriation – – – 26,024 (26,024) – – – Value movements financial derivatives – – 2,930 – – 2,930 547 3,477 Other movements – – – 7 – 7 – 7 ______Balance as at December 31, 2007 103,487 330,386 6,331 28,573 40,661 509,438 142,619 652,057

Disposal of shares in subsidiaries – – – – – – 40 40 Share buyback – (10,000) – – – (10,000) – (10,000) Costs of share buyback – (6) – – – (6) – (6) Cancellation own shares (10,000) 10,000 – – – – – – Investment result – – – – (15,802) (15,802) 6,773 (9,029) Stock dividend 188 (188) – – – – – – Costs of stock dividend – (4) – – – (4) – (4) Final dividend previous financial year in cash – – – – (24,048) (24,048) – (24,048) Interim dividend 2008 in cash – – – (10,368) – (10,368) – (10,368) Dividend paid to minority interests – – – – – – (12,209) (12,209) Contribution from profit appropriation – – – 16,613 (16,613) – – – Value movements financial derivatives – – (14,965) (106) – (15,071) (2,969) (18,040) ______Balance as at December 31, 2008 93,675 330,188 (8,634) 34,712 (15,802) 434,139 134,254 568,393

The authorized share capital is € 400.0 million and is divided into 79,999,900 ordinary shares of € 5 par value and 100 priority shares of € 5 par value.

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Equity VastNed Offices/Industrial shareholders was € 23.17 per share as at December 31 (December 31, 2007: € 24.61 per share). Equity VastNed Offices/Industrial shareholders per share increased by € 1.75 as a result of the share buyback of 2,000,000 shares at a price below the equity VastNed Offices/Industrial shareholders per share at that time.

Diluted EPRA triple net asset value

Diluted EPRA net asset value represents the fair value of equity on a long-term basis. Items that have no long-term impact on the company, such as fair value of derivatives and deferred taxes on property fair value, are therefore excluded.

Diluted EPRA triple net asset value represents the fair value of equity and includes fair value adjustments of all material balance sheet items which are not reported as part of the net asset value in the IFRS balance sheet.

31-12-2008 31-12-2007 ______Per share Per share ______Equity VastNed Offices/Industrial shareholders 434,139 23.17 509,438 24.61 Fair value adjustment investment properties in pipeline – – – – Fair value of financial instruments 8,634 0.46 (6,331) (0.30) Deferred tax (363) (0.02) 440 0.02 ______Diluted EPRA net asset value 442,410 23.61 503,547 24.33

Fair value of financial instruments (8,634) (0.46) 6,331 0.31 Fair value of debt 1) (370) (0.02) (527) (0.03) Deferred tax 363 0.02 (501) (0.02) ______Diluted EPRA triple net asset value 433,769 23.15 508,850 24.59

Number of shares in issue 2008 2007 ______Ordinary Priority Ordinary Priority shares shares shares shares ______Balance as at January 1 20,697,219 100 18,981,259 100 Share issues – – 1,683,502 – Share buyback (2,000,000) – – – Stock dividend 37,834 – 32,458 – ______Balance as at December 31 18,735,053 100 20,697,219 100

The holders of ordinary shares are entitled to receive the dividend declared by the company and are entitled to cast one vote per share at the shareholders’ meetings. In case of a share buyback by VastNed Offices/Industrial without a cancellation of shares, these rights are suspended until such time when the shares are reissued.

1 In the calculation of the market value, only the difference with the interest rate curve was taken into account. The effect of increased credit spreads is not included based on the fact that in the current financial market credit spreads are difficult to determine.

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including the voting right, the receipt of dividend and other distributions and all that which is related thereto in the broadest sense. The board of management of the Stichting Prioriteit VastNed Offices/Industrial consists of the members of the board of management and of the supervisory board of VastNed Offices/Industrial. They are the directors A and directors B respectively of the Stichting Prioriteit VastNed Offices/Industrial. Directors A are not entitled by the articles of association to cast more votes than directors B. Thus, the requirements of appendix X, article 10 of the Stock Exchange Regulations are complied with.

In 2008, VastNed Offices/Industrial bought back 2,000,000 shares for a total of € 10.0 million including costs. The 2,000,000 shares bought back are cancelled.

18 Long-term interest-bearing loans

2008 2007 ______Remaining term Remaining term ______Average Average interest interest More than rate at More than rate at 2-5 years 5 years Total year-end 2-5 years 5 years Total year-end ______Secured loans: fixed interest 1) 720 10,811 11,531 5.37 4,404 10,988 15,392 5.75 floating interest 3,247 - 3,247 5.39 3,362 – 3,362 5.39 ______3,967 10,811 14,778 5.37 7,766 10,988 18,754 5,69

Unsecured loans: fixed interest 1) 209,182 298 209,480 4.27 197,786 112,096 309,882 4.29 floating interest 86,159 – 86,159 4.04 55,835 24,958 80,793 5.17 ______295,341 298 295,639 4.20 253,621 137,054 390,675 4.47

Total: fixed interest 1) 209,902 11,109 221,011 4.33 202,190 123,084 325,274 4.36 floating interest 89,406 – 89,406 4.08 59,197 24,958 84,155 5.18 ______299,308 11,109 310,417 4.26 261,387 148,042 409,429 4.53

As at December 31, 2008 the (partial) right of mortgage had been granted as security for the secured loans on properties with a value of € 71.8 million (2007: € 78.3 million). For the unsecured loans a positive/negative mortgage covenant has been issued. A number of lenders have set conditions regarding the solvency and interest coverage of the company and/or its subsidiaries.

At December 31, 2008 the solvency ratio as set in a covenant with one of lenders was breached by VastNed Offices/Industrial. This concerned loans with a total amount of € 111.6 million. As a consequence, at December 31, 2008 these loans were classified as ‘Payable to banks’ under short-term liabilities.

The part of the remaining long-term interest-bearing loans due within one year of € 18.4 million (2007: € 15.3 million) is included under short-term liabilities.

1 Including the part that was fixed by means of interest derivatives.

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At December 31, 2008 the total credit facility of the long-term interest-bearing loans, including the part due within one year and excluding the loans of which the covenant was breached, amounted to € 328.8 million (2007: € 448.9 million). There was no unused credit facility regarding on the long-term interest-bearing loans as at December 31, 2008 (2007: € 24.2 million).

The average duration of the long-term interest-bearing loans excluding the loans of which the covenants have been breached as at December 31, 2008 was 3.0 years (2007: 4.4 years).

The market value of the long-term interest-bearing loans is calculated as the present value of the cash flows based on the historical interest rate curve.

The market value as at December 31 of the long-term interest-bearing loans, including the part due within one year and excluding the loans of which the covenant has been breached, based on the historical interest rate curve at year-end 2008 and year-end 2007 respectively, was as follows: 2008 2007 ______Market Carrying Market Carrying 1) 1) _____value _____amount _____value _____ amount 329,220 328,772 425,397 424,719

The average interest rate in 2008 was 4.64% (2007: 4.57%).

In the first quarter of 2009, the loan portfolio excluding the part related to Intervest Offices, has been refinanced. The consequences of this refinancing are presented in ‘24 Events after balance sheet date’.

19 Payable to banks

2008 2007 ______Credit facility 190,629 165,629 Of which undrawn (41,742) (61,147) Loans of which the covenant has been breached 111,600 – ______Drawn as at December 31 260,487 104,482

Payable to banks concerns short-term credits and cash loans. By way of security for the credit facilities, it has been agreed with the lenders that property above a certain threshold will only be mortgaged on behalf of third parties subject to the lender’s approval.

Included in ‘Payable to banks’ are the loans of which the covenant regarding the solvency rate of VastNed Offices/Industrial had been breached as at December 31, 2008. In the first quarter of 2009, the loan portfolio excluding the part related to Intervest Offices, was refinanced. The consequences of this refinancing are presented in ‘24 Events after balance sheet date’. One of the consequences is that as from 2009 the major part of the payables to banks will be classified as long-term interest-bearing loans.

Payable to banks is reclaimable at the lenders request within one year.

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The average interest rate in 2008 was 5.01% (2007: 4.63%).

The market value of the payable to banks is deemed to be equal to the balance sheet value.

Where the company operates a notional cash pooling arrangement the cash and payable to banks are netted off.

20 Other liabilities and accruals

2008 2007 ______Accounts payable 1,677 2,567 Dividend 396 380 Taxes 3 761 Prepaid rent 9,704 11,073 Interest 1,503 1,025 Operating expenses 2,924 2,583 Payable in respect of acquisitions – 8,673 Other liabilities and accruals 2,353 2,325 ______18,560 29,387

21 Financial instruments

a Financial risk management

For the realisation of its objectives and the exercise of its daily activities, the Group has defined a number of financial conditions to mitigate the (re)financing risk, liquidity risk, interest rate risk and currency risk. These conditions have been laid down inter alia in the annually updated financing and interest rate policy memorandum and in the treasury regulations. Quarterly reports on these risks are submitted to the audit committee. Below, a summary is presented of the main conditions aimed at mitigating these risks.

(Re)financing risks Investing in property is a capital-intensive activity. The property portfolio is financed partly with equity and partly with loan capital. In case of a high ratio of loan capital financing, when returns are below expectations or the property decreases in value, there is a risk that the interest and repayment obligations on the loans and other payment obligations can no longer be met. This would make loan capital or refinancing more difficult to attract, with a possibility that more unfavourable conditions have to be agreed to. To limit this risk, VastNed Offices/Industrial’s principle is to limit loan capital financing to approximately 40-45% of the market value of the investment properties. In an upward market, VastNed Offices/Industrial may choose for a slightly higher rate (up to 50%), and in a downward market for relatively less loan capital (up to 30%). In line with these objectives, solvency ratios and interest coverage ratios have been agreed in most credit agreements with banks. Due to the unexpected rapid change of the economic climate triggered by the credit crisis, as of December 31, 2008 VastNed Offices/Industrial has hit the 50% solvency rate. Taking into account this worsened economic climate and the difficulty of reducing the risk by divesting investment properties, VastNed Offices/Industrial has decided to refinance its loan portfolio excluding the part related to Intervest Offices, to reduce its future refinancing risks by widening its bank covenants. Reference is made to ‘24 Events after balance sheet date’.

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In addition, VastNed Offices/Industrial aims to secure access to the capital market through transparent information provision, regular contacts with financiers and potential shareholders and by increasing the liquidity of the VastNed Offices/Industrial share. Finally, with regard to long-term financing, a balanced spread of refinancing dates and a weighted average duration of at least 3.5 years are aimed for. At year-end 2008, after reclassification of the long-term interest-bearing loans of which the covenants were breached, the weighted average duration of the long-term interest- bearing loans was 2.9 years.

At year-end 2008, the solvency ratio, calculated by taking equity plus deferred tax liabilities divided by the balance sheet total, amounted to 47.8%, which fell short of the solvency ratio agreed with one of the lenders. In anticipation VastNed Offices/Industrial has refinanced its loan portfolio with new widened covenants.

The interest coverage ratio for 2008, calculated by taking net rental income less general expenses divided by net financing costs, totalled to 2.8, which was above the 2.0-2.5 ratios agreed with lenders.

Liquidity risk VastNed Offices/Industrial must generate sufficient cash flows in order to be able to meet its daily payment obligations. On the one hand this is realised by taking measures aimed at striving for a high occupancy rate of the property and by preventing bankruptcies of tenants. On the other hand, we aim for sufficient credit facilities to absorb fluctuations in liquidity needs. Liquidity management is centralised in the Netherlands.

At year-end 2008, VastNed Offices/Industrial had € 190.6 million in short-term credit facilities available, of which it had drawn-down € 148.9 million.

Interest rate risk The interest rate risk policy aims to mitigate the interest rate risks arising from the financing of the property portfolio while optimising net interest rate expenses. This policy translates into a loan portfolio composition in which in principle at least two thirds of the loans has a fixed interest rate. Depending on the developments of the interest rate, this principle can be temporarily deviated from. Furthermore, within the long-term loan capital portfolio a balanced spread of the interest rate review dates and a typical minimum interest rate duration of 3 years are sought. At least once per quarter, a report is prepared for the audit committee on the interest rate and refinancing risks.

VastNed Offices/Industrial mitigates its interest rate risk by making use of financial derivatives (interest rate swaps), swapping the floating interest rate it pays on a part of its loans for a fixed interest rate. The interest rate swaps (IRS) are designated as cash flow hedges, whereby it has been established that none of these hedges is materially ineffective. Thus, cash flow hedge accounting has been applied to these swaps, based on which value movements of these swaps are recognised directly in equity. For loans with a nominal value of € 314.7 million, at year-end 2008 the interest rate risk was hedged by entering into interest rate swaps. In this context, contracts have been concluded with fixed interest rates ranging from 3.47% to 4.63% (excluding margins) and expiry dates ranging from 2011 through 2015. Taking into account the refinancing and the conditions thereof (see ‘24 Events after balance sheet date’), in the first quarter of 2009 VastNed Offices/Industrial intends to conclude additional interest rate swap contracts totalling € 55.0 million.

The majority of the (forward) interest rate swaps is settled quarterly. The floating interest rate is based on 3-month Euribor. The differences between the floating and agreed fixed interest rate are settled at the same time.

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The average duration of the long-term interest-bearing loans, excluding the loans of which the covenants has been breached, calculated in fixed interest periods was 3.4 years (2007: 4.6 years).

All transactions involving financial derivatives are effected with reputed banks as counterparties. For this reason, it is unlikely that the counterparties should not be able to fulfil their obligations.

Interest rate sensitivity As per December 31, 2008, the impact on the direct investment result of a (hypothetical) 100 basis points increase of the interest rates – all other factors remaining equal – would be € 2.0 million negative. Should interest rates decrease by 100 basis points as per this date, the impact on the direct investment result would be € 2.0 million positive. In the calculations account has been taken of the financial derivatives.

Currency risk Due to the strategic choice to invest in the eurozone (Netherlands, Belgium and Germany), there was no currency risk at year-end 2008.

b Summary of expiry dates and fixed interest rates on long-term interest-bearing loans

2008 2007 ______Contract Interest Average Contract Interest Average renewal review interest rate 1) renewal review interest rate 1) ______2009 3,247 17,353 4.32 38,033 34,672 4.86 2010 25,000 – n/a 20,000 – n/a 2011 124,857 146,305 4.12 105,448 146,297 4.12 2012 99,993 – n/a 96,676 – n/a 2013 44,924 19,993 4.02 54,958 74,991 4.15 2014 12,396 12,396 5.44 94,314 69,314 4.82 2015 - – 24,965 5.21 – – – ______Total long-term interest-bearing loans with a fixed interest rate 310,417 221,012 4.33 409,429 325,274 4.36 Long-term interest-bearing loans with a floating interest rate – 89,405 4.08 – 84,155 5.18 ______Total long-term interest-bearing loans 310,417 310,417 4.26 409,429 409,429 4.53

As a result of the refinancing in the first quarter of 2009, the expiry dates and interest rates have changed after balance sheet date. For more information reference is made to ‘24 Events after balance sheet date’.

c Summary of market value interest rate derivatives

2008 2007 ______Asset Liability Asset Liability ______Interest rate swaps – 9,743 8,041 – Forward interest rate swaps – – 256 – ______– 9,743 8,297 –

1 Interest rate swaps taken into account.

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22 Rights and obligations not recorded in the balance sheet

A long-term alliance exists between VastNed Offices/Industrial, VastNed Retail and VastNed Management as well as a long-term agreement for the allocation of expenses in which mutual rights and obligations are laid down. A further agreement provides for specific change of control clauses, including that if a public offer on VastNed Retail is honoured, VastNed Offices/Industrial will be compensated for the consequences of the interim termination of these contracts and vice versa. At the end of 2007 certain points of this further agreement were clarified by VastNed Offices/Industrial, VastNed Retail and VastNed Management. In this context, the compensation to be paid by VastNed Retail or VastNed Offices/Industrial has been estimated at between € 10 million and € 25 million.

In September 2005, VastNed Offices/Industrial received a summons from three companies associated with the bankrupted Ravenswade Ontwikkeling B.V., with which VastNed Offices/Industrial did not and does not have any contractual relationship, claiming damages totalling € 103.0 million. In August 2007, the court rejected the claims of these companies of the Multiplan Group. They appealed against this decision and substantiated their objections against this decision in March 2008. VastNed Offices/ Industrial responded in June 2008, after which Multiplan companies asked to argue their case. This plea will take place at the court in June 2009. Based on the decision rendered in August 2007 and the advice previously obtained from both its regular legal adviser and another internationally operating law firm, the board of management of VastNed Offices/Industrial is confident of a positive conclusion. VastNed Offices/ Industrial deems it unnecessary to make a provision for this claim.

The tax authorities have served VastNed Offices/Industrial with additional transfer tax assessments as well as additional corporate income tax assessments concerning alleged tax liabilities of property companies acquired by VastNed Offices/Industrial in the past. In the fourth quarter of 2007, a settlement was reached with the tax authorities for an amount of € 4.2 million in total. VastNed Offices/Industrial has attempted to recover this amount from the seller and a guarantor and is currently engaged in lawsuits against both of them. In a lawsuit concerning transfer tax against the guarantor, in December 2008 the court awarded the claim of VastNed Offices/Industrial totalling € 3.3 million in full. After the judgement has become final and conclusive, VastNed Offices/Industrial will try to collect the amounts awarded.

In 2001, VastNed Offices/Industrial sold a portfolio. The buyer claims to have suffered damages of € 2.5 million and has started legal proceedings. In November 2007, the court rendered an interlocutory decision in which it put a number of questions to the parties. The buyer as well as VastNed Offices/Industrial have answered these questions. In January 2009, the court has rendered another interlocutory decision. It decided, inter alia, that the buyer will have to prove that VastNed Offices/Industrial has promised the buyer to compensate them, either unconditionally or conditionally, for the alleged damages by means of future transactions. VastNed Offices/Industrial has provided a bank guarantee of € 2.6 million to the buyer. The board of management of VastNed Offices/Industrial expects the court to rule in its favour and therefore deems it unnecessary to make a provision.

The Belgian subsidiary Intervest Offices has a difference of opinion with the Belgian tax office regarding tax assessments imposed concerning the so-called ‘exit tax’ totalling € 4.0 million. The difference of opinion relates to whether the so-called ‘effectiseringspremies’ are subject to the exit tax. Intervest Offices disputes this. Moreover, some previous owners have provided guarantees. VastNed Offices/Industrial and its advisers believe that there is a substantial probability that Intervest Offices’ view will be confirmed, and deems it unnecessary to make a provision for these tax claims.

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The Dutch tax authorities have put questions to the buyer of a former subsidiary of VastNed Offices/Industrial concerning the justification of a reinvestment reserve formed in the period that the sold company was part of VastNed Offices/Industrial. The tax authorities were claiming € 1.4 million. Objection has been made against the assesment, but this objection was rejected by the tax authorities. Subsequently, VastNed Offices/Industrial decided to start proceedings. Mid 2008, the court decided that the reinvestment reserve was formed correctly. Based on the court decision, the tax authorities have decided not to appeal and stop the proceedings.

23 Operating leases

VastNed Offices/Industrial leases its property investments in the form of non-cancellable operating leases.

The future minimum income from non-cancellable leases is as follows:

2008 2007 ______Within one year 84,366 84,935 One to five years 189,812 163,864 More than five years 33,255 67,342 ______307,433 316,141

In the Netherlands the majority of the leases are concluded for a period of five years, the tenant having the option of extending the lease by five years. Annual rent increases are based on the cost-of-living index. In Belgium leases are normally concluded for a period of nine years, with mutual termination options after three and six years. Annual rent increases are based on the cost-of-living index. In Germany the majority of the leases is concluded for a period of five or ten years, tenants in prevailing cases having the option of extending the lease by periods varying from one to five years. Rent increases are based on the cost-of-living index. In prevailing cases, indexation is subject to mitigation rates and/or thresholds.

24 Events after balance sheet date

Refinancing In the first quarter of 2009, VastNed Offices/Industrial agreed a new syndicated credit facility replacing the current credit facilities for financing the Dutch and German property portfolio and VastNed Offices/Industrial’s share in Intervest Offices. The headlines for this new facility, in which all existing lenders will participate, are as follows: – total facility of approximately € 370.0 million structured by way of a working capital facility, revolving credit facilities (duration 3.0 till 4.8 years) and bullet loans (duration 3.0 till 5.0 years); – refinancing of uncommitted short-term loans to committed long-term loans; – a security package consisting of: – mortgages on Dutch and German investment properties, – pledges on shares held in Intervest Offices; – financial covenants as loan to value (LTV) and interest coverage ratio’s (ICR) appropriate for the type of facility and risk profile of VastNed Offices/Industrial; – pricing based on Euribor increased with a margin based on the LTV level (price grid mechanism); – a minimum of two thirds of the total committed facility are to be hedged for interest rate risk.

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A summary of expiry dates and fixed interest rates on total interest-bearing loans comparing the situation ‘before refinancing’ with ‘after refinancing’, including the unchanged financing of Intervest Offices, is as follows: Before refinancing 2008 After refinancing 2008 ______Contract Interest Average Contract Interest Average renewal review interest rate 1) renewal review interest rate 1) ______2009 282,089)2) 34,672 4.86 39,841 30,987 4.49 2010 25,000 – – 25,000 – – 2011 124,857 146,305 4.12 98,553 146,305 4.34 2012 99,993 – – 276,680 – – 2013 44,924 74,993 4.15 48,320 74,993 5.57 2014 12,396 69,317 4.87 100,865 69,176 6.24 2015 - – 24,965 5.21 – 24,965 6.61 ______Total interest-bearing loans with a fixed interest rate 589,259 350,252 4.43 589,259 346,426)3) 5.15 Interest-bearing loans with a floating interest rate – 239,007 4.15 – 242,833 4.77 ______Total interest-bearing loans 589,259 589,259 4.32 589,259 589,259 4.99

25 Related parties transactions

Related parties constitute: major shareholders, subsidiaries and participations, supervisory board members and members of the board of management.

To the company’s best knowledge, no property transactions were effected during the year under review involving persons or institutions that might be regarded as related parties.

Interests of major investors As of year end 2008, the Authority for the Financial Markets has received the following reports from shareholders with an interest in the company exceeding five percent: Fortis Investment Management Netherlands N.V. 6.94%

Subsidiaries and participations For an overview of major subsidiaries and participations, please refer to ’26 Subsidiaries and participations’ and the chapter ‘Management and corporate governance’ included elsewhere in this annual report. Transactions as well as internal balances and income and expenditure between the company and its subsidiaries are eliminated in the consolidation and not commented upon.

The subsidiary VastNed Management has a cost allocation agreement with VastNed Offices/Industrial and VastNed Retail. Costs relating directly to the company or the property of the company or its subsidiaries are recognised directly there. Other costs that cannot be allocated directly are borne by VastNed Management and are charged on to VastNed Offices/Industrial and VastNed Retail based on causation without mark-up for profit.

1 Interest rate swaps taken into account. 2 Including the long-term interest bearing loans due within one year and payable to banks. 3 Based on the situation as per December 31, 2008. According to the agreement with the syndicated lenders it is planned in the first quarter 2009 to conclude additional interest rate swaps contracts for an amount of at least € 55.0 million.

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Supervisory board members and members of the board of management During the 2008 financial year none of the members of the supervisory board and board of management of VastNed Offices/Industrial had a personal interest in the investments of the company.

Remuneration of the supervisory board and shareholding

Remuneration Shareholding at 2008 year-end 2008 ______W.M. Steenstra Toussaint 30 – H.W. Breukink 27 – D. van den Bos 25 – R.K. Jacobson 25 – ______107 –

Remuneration of the statutory directors and shareholding

Salaries Offering (including social Bonus for 2007 process Pension Shareholding at security charges) paid in 2008 bonus premiums Total year-end 2008 ______R.A. van Gerrevink 451 43 51 98 643 6,809 T.M. de Witte 222 20 25 23 290 220 J. Pars (until January 1, 2009) 266 20 30 33 349 n/a ______939 83 106 154 1,282 7,029 Of which allocated to VastNed Retail (494) (45) – (83) (622) ______445 38 106 71 660

No option rights have been granted to the statutory directors nor to the supervisory board members. Nor have any loans, advances or guarantees been provided on their behalf.

The VastNed Offices/Industrial shares stated above held by the supervisory board members and the statutory directors have all been acquired at their own cost.

For further details of the remuneration, please refer to the chapter ‘Remuneration report 2008’ included elsewhere in this annual report.

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26 Subsidiaries and participations

The most important subsidiaries and participations are: Interest and Established in voting right in % ______VastNed Industrial B.V. Netherlands 100 VastProduct C.V. Netherlands 100 VastNed Offices Monumenten B.V. Netherlands 100 – De Rode Olifant B.V. Netherlands 100 Intervest Offices NV Belgium 55 – Edicorp NV Belgium 55 VastNed Offices Belgium NV Belgium 100 – Cocoon Office Park NV Belgium 100 Kaistrasse B.V. Netherlands 100 – Grundstücksgesellschaft Kaistraße 16-18 N.V. & Co K.G. Germany 94 Rheinoffice B.V. Netherlands 100 – Grundstücksgesellschaft Rheinoffice N.V. & Co K.G. Germany 100 Hortus Duitsland B.V. Netherlands 100 – Grundstücksgesellschaft Hortus N.V. & Co K.G. Germany 100 Mainzer Landstrasse B.V. Netherlands 100 – Grundstücksgesellschaft Mainzer Landstraße N.V. & Co K.G. Germany 100 VastNed Management B.V. Netherlands 33 Hans-Böckler-Straße S.A.R.L. Luxembourg 100 VastNed Management Deutschland GmbH Germany 100

27 Accounting estimates and judgements

In consultation with the audit committee, the board of management has applied the following essential estimates and judgements which have a material effect on the amounts included in the annual accounts.

Key sources of estimation uncertainty Assumption regarding pending legal proceedings Under ’22 Rights and obligations not recorded in the balance sheet’ the most important pending legal proceedings have been expounded. If the outcome of these legal proceedings should differ from what is presented there, this might have a negative impact on the investment result.

Critical judgements in applying the company’s accounting principles Assumptions concerning investment properties in operation As described in ‘2 Significant principles for financial reporting’ all investment properties in operation are valued at least once a year by independent certified appraisers. These valuations are based on assumptions including estimated rental value of the investment property, net rental income, future capital expenditures and the net market yield of the property. The appraisers also make reference to market evidence of transaction prices for comparable investment properties. The credit crisis has led to a significant lower number of transactions many of which may be classified as enforced transactions. This has caused appraisers to even more carefully examine the limited number of transactions as well as cancelled transactions. Furthermore, appraisers emphasize other instruments such as discounted cash flow parameters in their determination of the value of the property.

99 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the consolidated annual accounts

Assumptions concerning investment properties in pipeline Investment properties in pipeline are valued at cost less any cumulative impairment losses. The investment properties in pipeline are valued internally as well as externally. The valuations are based on assumptions including expected estimated rental value of the investment property in pipeline, future capital expenditures and the net market yield for the property. There is a possibility that the actual outcome may differ from the assumptions, which might have a positive or negative effect on the value of the investment properties in pipeline and as a consequence on the investment result.

Deferred tax liabilities If the possibility exists of effecting the disposal of property through the disposal of shares in a (taxable) company which has ownership of the respective property, no income tax is payable on the disposal. The transfer of the deferred tax liability to the purchaser will in that case normally take place through a reduction of the sale price of the shares, whereby (usually) a deferred tax liability of 50% of the nominal tax rate is taken into account. The board of management of VastNed Offices/Industrial is of the opinion that in these cases the deferred tax liabilities must be valued at 50% of the nominal tax rate. The board of management of VastNed Offices/Industrial has applied this valuation method to the deferred tax liabilities in respect of the German property. If these deferred tax liabilities should be valued at 100% of the nominal tax rate, the effect on equity as per December 31, 2008 would be € 0.5 million positive.

Deferred tax liabilities Belgium The large majority of the Belgian property is held by the Bevak Intervest Offices, which is listed on NYSE Euronext Brussels and has a tax-exempt status. If VastNed Offices/ Industrial acquires Belgian property by taking over taxable companies with the intention to merge these companies with Intervest Offices in due time, the deferred tax liabilities are valued at the exit tax rate, being 16.995%. If these deferred tax liabilities should be valued at 100% of the nominal tax rate, the effect on equity as per December 31, 2008 would be € 0.2 million negative.

28 Total expense ratio

The total expense ratio for 2008 was 3.08% (2007: 2.74%).

The total expense ratio is calculated by dividing the total costs for the reporting period by the average equity VastNed Offices/Industrial shareholders. The total costs include net service charge expenses, operating expenses, general expenses and income tax. These costs are corrected for the share of these costs attributable to third parties.

29 Approval of the consolidated annual accounts

The consolidated annual accounts have been drawn up by the board of management and authorised for publication by the supervisory board on March 6, 2009.

100 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Company balance sheet as at December 31 (x € 1,000)

2008 2007 ______Assets

Investment properties in operation 374,169 407,337 Other assets in respect of lease incentives 6,579 3,774 ______380,748 411,111 Investment properties in pipeline 1,500 1,500 ______Total investment properties 382,248 412,611

Participations in group companies 295,406 286,198 Financial derivatives – 4,190 ______Total fixed assets 677,654 702,999

Group companies 64,080 127,665 Debtors and other receivables 7,677 5,391 Income tax 880 – Cash and cash equivalents 40 127 ______Total current assets 72,677 133,183 ______Total assets 750,331 836,182

Equity and liabilities

Capital paid-up and called 93,675 103,487 Share premium reserve 330,188 330,386 Hedging reserve in respect of financial derivatives (8,634) 6,331 Revaluation reserve 65,731 81,746 Other reserves (31,019) (53,173) Investment result attributable to VastNed Offices/Industrial shareholders (15,802) 40,661 ______Equity VastNed Offices/Industrial shareholders 434,139 509,438

Long-term interest-bearing loans 94,469 189,893 Financial derivatives 6,534 – Guarantee deposits 253 380 ______Total long-term liabilities 101,256 190,273

Payable to banks 199,265 124,441 Redemption long-term liabilities 3,799 305 Group companies 1,290 1,227 Income tax 402 1,133 Other liabilities and accruals 10,180 9,365 ______Total short-term liabilities 214,936 136,471 ______Total equity and liabilities 750,331 836,182

101 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Company profit and loss account (x € 1,000)

2008 2007 ______Company result (16,647) 20,650 Result from participations in group companies 845 20,011 ______Investment result (15,802) 40,661

Notes to the company annual accounts

General The company profit and loss account has been rendered in abbreviated form pursuant to Section 402 of Book 2 of the Netherlands Civil Code. The company annual accounts are part of the 2008 annual accounts, which also include the consolidated annual accounts. The company has availed itself of the provisions of Section 379(5) of Book 2 of the Netherlands Civil Code. The list as referred to in this article has been filed with the offices of the Commercial Register in Rotterdam. The company has issued certificates of guarantee for a number of group companies in accordance with Section 403 of Book 2 of the Netherlands Civil Code.

Principles for the valuation of assets and liabilities and the determination of the result The company annual accounts have been prepared in accordance with Part 9 of Book 2 of the Netherlands Civil Code. In the preparation of the company annual accounts, the provisions of Section 362(8) of Book 2 of the Netherlands Civil Code have been used. The valuation principles for assets and liabilities and the method of determining the result are identical to those used in the consolidated annual accounts. Reference is therefore made to the notes thereto. The participating interests in group companies have been stated at net asset value.

Rights and obligations not recorded in the balance sheet The company heads a fiscal unity for the purposes of corporate income tax and value added tax and is consequently jointly and severally liable for the tax liabilities of the fiscal unity as a whole.

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Investment properties 2008 2007 ______In operation In pipeline Total In operation In pipeline Total ______Balance as at January 1 407,337 1,500 408,837 376,500 1,500 378,000 Acquisitions 7,432 – 7,432 28,645 – 28,645 Capital expenditure 2,075 – 2,075 2,805 – 2,805 Disposals (17,109) – (17,109) (10,774) – (10,774) ______399,735 1,500 401,235 397,176 1,500 398,676 Value movements (25,566) (25,566) 10,161 – 10,161 ______Balance as at December 31 374,169 1,500 375,669 407,337 1,500 408,837

Other assets in respect of lease incentives 6,579 – 6,579 3,774 – 3,774 ______Appraisal value as at December 31 380,748 1,500 382,248 411,111 1,500 412,611

Participations in group companies 2008 2007 ______Balance as at January 1 286,198 271,777 Acquisition and expansion of interest 27,474 10,855 Share in investment result 845 20,011 Disposals (40) – Payments received (14,723) (17,106) Other movements (4,348) 661 ______Balance as at December 31 295,406 286,198

As per December 31, VastNed Offices/Industrial held 7,587,654 Intervest Offices shares (December 31, 2007: 7,589,263 shares), whose net asset value per share as at December 31 was € 20.95 (December 31, 2007: € 22.30 per share). The share price of Intervest Offices shares was € 17.75 per share as per December 31 (December 31, 2007: € 29.65 per share).

103 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Notes to the company annual accounts

Equity Investment Hedging result reserve attributable to Equity Capital Share in respect of VastNed Offices/ VastNed Offices/ paid-up premium financial Revaluation Other Industrial Industrial and called reserve derivatives reserve reserves shareholders shareholders ______Balance as at January 1, 2007 96,939 287,491 3,401 70,108 (57,010) 49,823 450,752

Share issues 8,417 41,583 – – – – 50,000 Costs of share issues – (544) – – – – (544) Cancellation own shares (2,031) 2,031 – – – – – Investment result – – – – – 40,661 40,661 Stock dividend 162 (162) – – – – – Costs of stock dividend – (13) – – – – (13) Final dividend previous financial year in cash – – – – – (23,799) (23,799) Interim dividend 2007 in cash – – – – (10,556) – (10,556) Contribution from profit appropriation – – – – 26,024 (26,024) – Value movements financial derivatives – – 2,930 – – – 2,930 Allocation to revaluation reserve – – – 11,638 (11,638) – – Other movements – – – – 7 – 7 ______Balance as at December 31, 2007 103,487 330,386 6,331 81,746 (53,173) 40,661 509,438

Share buyback – (10,000) – – – – (10,000) Costs of share buyback – (6) – – – – (6) Cancellation own shares (10,000) 10,000 – – – – – Investment result – – – – – (15,802) (15,802) Stock dividend 188 (188) – – – – – Costs of stock dividend – (4) – – – – (4) Final dividend previous financial year in cash – – – – – (24,048) (24,048) Interim dividend 2008 in cash – – – – (10,368) – (10,368) Contribution from profit appropriation – – – – 16,613 (16,613) – Value movements financial derivatives – – (14,965) – (106) – (15,071) Allocation to revaluation reserve – – – (16,015) 16,015 – – ______Balance as at December 31, 2007 93,675 330,188 (8,634) 65,731 (31,019) (15,802) 434,139

The authorized share capital is € 400.0 million, and is divided into 79,999,900 ordinary shares of € 5 par value and 100 priority shares of € 5 par value.

The legal reserves comprise the Hedging reserve in respect of financial derivatives and the Revaluation reserve.

Approval of the company annual accounts The company annual accounts have been drawn up by the board of management and authorised for publication by the supervisory board on March 6, 2009.

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Special controlling rights

The company’s articles of association confer special controlling rights on the priority shares. The priority shares have been placed on par with the Stichting Prioriteit VastNed Offices/Industrial. The objective of this foundation is to acquire ownership of the priority shares in the company and to exercise all rights vested in such shares, including the voting right, the receipt of dividend and other distributions and all that which is related thereto in the broadest sense. The board of management of the Stichting Prioriteit VastNed Offices/Industrial consists of the members of the board of management and of the supervisory board of VastNed Offices/Industrial. They are the directors A and directors B respectively of the Stichting Prioriteit VastNed Offices/Industrial. Directors A are not entitled by the articles of association to cast more votes than directors B.

Profit distribution

The company’s articles of association stipulate that a dividend is paid out on the priority shares of 5% of the nominal amount. The remaining profit is placed at the disposal of the general meeting of shareholders. The company may only make distributions to shareholders insofar as equity VastNed Offices/Industrial shareholders exceeds the sum of the capital paid-up and called augmented by the reserves required by law to be maintained. In order to retain its fiscal status of an investment institution, the company must distribute the taxable profit, after making permitted reservations, within eight months after the end of the reporting year.

Profit appropriation

The board of management proposes to distribute the investment result as follows (x € 1,000):

Investment result attributable to VastNed Offices/Industrial shareholders (15,802) Allocation of indirect investment result to reserves 48,349 ______Available for dividend payment 32,547 Distributed earlier as interim dividend (10,368) _____ Available for final dividend payment 22,179

The board of management proposes to distribute the final dividend as follows: – 5% in cash on the priority shares; – an optional dividend on the ordinary shares of: – € 1.01 in cash plus a percentage in shares yet to be determined, depending on the share price, charged to the share premium reserve; or – € 1.09 in cash.

and to add the remainder of the distributable profit to the other reserves. Shareholders opting for distribution in cash plus shares must ensure that this is effected prior to April 25, 2009. As from this date, they can only claim the cash dividend within the parameters as laid down in the articles of association.

105 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 To the shareholders of VastNed Offices/Industrial N.V.

Auditors’ report

Report on the financial statements

We have audited the accompanying financial statements 2008 of VastNed Offices/ Industrial N.V., Rotterdam. The financial statements consist of the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at December 31, 2008, profit and loss account, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. The company financial statements comprise the company balance sheet as at December 31, 2008, the company profit and loss account for the year then ended and the notes.

Management’s responsibility Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the report of the board of management in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of VastNed Offices/Industrial N.V. as at December 31, 2008, and of its result and its cash flow for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code.

Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of VastNed Offices/Industrial N.V. as at December 31, 2008, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal and regulatory requirements

Pursuant to the legal requirement under 2:393 sub 5 part f of the Netherlands Civil Code, we report, to the extent of our competence, that the report of the board of management is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Rotterdam, March 6, 2009 Deloitte Accountants B.V.

H.H.H. Wieleman

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Introduction

A property investment fund can only produce sustainable flows of income and make balanced decisions, e.g. in the field of acquisitions and disposals with solid management and clear rules about how the company should be governed. This chapter details the organisational and legal structure and the people who manage the company. In addition, VastNed Offices/Industrial’s corporate governance structure is described.

Organisational structure VastNed Group

VastNed Offices/Industrial is a NYSE Euronext Amsterdam listed company which is part of the VastNed Group. The VastNed Group, which is not a legal entity in itself, consists of VastNed Offices/Industrial, VastNed Retail and their respective subsidiaries. Management, including asset management and property management of the Dutch property portfolio, is conducted by VastNed Management. The shares in VastNed Management are held by VastNed Offices/Industrial and VastNed Retail. As a result of this joint management, cost benefits are realised and synergic knowledge exchange takes place.

Legal structure As a listed investment institution, VastNed Offices/Industrial is a public company with limited liability founded under Dutch law. VastNed Offices/Industrial has the status of an investment company with variable capital pursuant to Book 2, Section 76(a) of the Netherlands Civil Code. An investment company with variable capital is a public limited company: – which exclusively aims to invest its capital in such a way that the risks are spread, in order to let its shareholders share in the profits; – whose board of management has the authority pursuant to the articles of association to issue, acquire and dispose of shares in its capital (share issues and share buybacks); – whose shares, with the exception of shares to which the articles of association grant extraordinary rights of control in the company, are included in the price list of a stock exchange and; – whose articles of association stipulate that the company is an investment company with variable capital.

VastNed Management VastNed Management is the sole managing director of VastNed Offices/Industrial. VastNed Management has no independent profit objective and has entered into an agreement with VastNed Offices/Industrial and VastNed Retail regarding distribution of costs (cost allocation agreement). Costs relating directly to either the company or the property of that company or its subsidiaries are recognised directly there. Other costs that cannot be allocated directly are borne by VastNed Management and charged on to VastNed Offices/Industrial and VastNed Retail based on actual work done. This is assessed on an annual basis; during 2008 the ratio was 46% / 54%. Two thirds of the shares in VastNed Management are held by VastNed Retail and one-third by VastNed Offices/Industrial. This ratio originates in the size of the property portfolios at the time of the conclusion of the cost allocation agreement in January 1996 and does not affect the results or the equity position of the two shareholders. The agreement has a ten-year term and has been extended by a period of five years, which started on January 1, 2006. A further agreement includes specific change of control clauses, meaning that in case of a public offer on VastNed Retail, VastNed Offices/Industrial’s performance is not affected and vice versa.

VastNed Management has a licence within the meaning of Article 2:25 sub 1 part a of the Netherlands Act on Financial Supervision. Based on this licence, VastNed Management is authorised to conduct the management of VastNed Offices/Industrial and VastNed Retail.

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VastNed Offices/Industrial and its subsidiaries The legal structure of VastNed Offices/Industrial and its major subsidiaries is presented below:

VastNed Offices/Industrial VastNed Offices/Industrial is a publicly listed company which does directly hold the larger part of the Dutch office properties. It furthermore acts as a (inter)national holding company. VastNed Offices/Industrial has the status of a fiscal investment institution in the Netherlands.

VastNed Industrial This private limited company holds the Dutch semi-industrial property. VastNed Industrial is part of the fiscal unity headed by VastNed Offices/Industrial.

VastProduct VastNed Offices/Industrial has a 90% interest in VastProduct CV. The remaining 10% of the shares are held by VastNed Industrial. Due to the tax transparent structure of this limited partnership, the income from this interest is subjected to the regime of the fiscal investment institution.

VastNed Offices Monumenten This company indirectly holds the property De Rode Olifant on Zuid-Hollandlaan 7 in The Hague. VastNed Offices Monumenten has a special tax status enabling the company to acquire historic monuments exempt from real estate transfer tax. This company is also part of the fiscal unity headed by VastNed Offices/Industrial.

Intervest Offices As at December 31, 2008, VastNed Offices/Industrial had a 54.6% interest in the Bevak Intervest Offices, which is listed on NYSE Euronext Brussels. A Bevak materially has a tax-exempt status and as such is comparable to a Dutch fiscal investment institution. On behalf of VastNed Offices/Industrial, in principle two members of the board of management of VastNed Management are on the board of directors of Intervest Offices. As at December 31, 2008, this board consisted of Mr Reinier van Gerrevink and former VastNed Management employee Mr Hubert Roovers, in addition to three independent members. VastNed Offices/Industrial consolidates this subsidiary fully and recognises the minority interest under equity. Intervest Offices carries out its own asset and property management. All employees have employment contracts with Intervest Offices without the intervention of a management company. Some managing directors perform their duties through the intervention of a separate company.

VastNed Offices Belgium One property in the Belgian portfolio is held through VastNed Offices Belgium. This company does not have Bevak status, so its profits are normally subject to income tax.

Kaistrasse This Dutch company, which is part of the fiscal unity headed by VastNed Offices/ Industrial, indirectly holds, by way of a 94% interest in a German Kommanditgesellschaft, the property on the Kaistraße 16-18 in Düsseldorf.

Rheinoffice This Dutch company, which is part of the fiscal unity headed by VastNed Offices/ Industrial, indirectly holds, by way of a 100% interest in a German Kommanditgesellschaft, the property Emanuel-Leutze-Straße 11 in Düsseldorf.

Hortus Duitsland This Dutch company, which is part of the fiscal unity headed by VastNed Offices/ Industrial, indirectly holds, by way of a 100% interest in a German Kommanditgesellschaft, the property on the Insterburgerstraße 16 in Frankfurt.

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Mainzer Landstrasse This Dutch company, which is part of the fiscal unity headed by VastNed Offices/ Industrial, indirectly holds, by way of a 100% interest in a German Kommanditgesellschaft, the property on the Mainzer Landstraße 33A in Frankfurt.

Hans-Böckler-Strasse Sarl This Luxemburg company holds the property on the Hans-Böckler-Straße 36 in Düsseldorf.

VastNed Management Deutschland This German company takes care of the day-to-day property management of the German property portfolio.

The Netherlands VastNed Offices/Industrial NV

33.3% VastNed Rheinoffice BV Kaistrasse BV Mainzer VastNed Offices Hortus VastNed Industrial BV

Management BV Landstrasse BV Monumenten BV Duitsland BV 90% 10% VastProduct CV

54.6% De Rode Olifant BV

Belgium Intervest VastNed Offices Offices NV Belgium NV

Edicorp NV Cocoon 94% Offices Park NV

Germany VastNed Management Grundstücksgesellschaft Grundstücksgesellschaft Grundstücksgesellschaft Grundstücksgesellschaft Deutschland GmbH Rheinoffice NV & Co KG Kaistraße16-18 NV & Co KG Mainzer Landstrasse NV & Co KG Hortus NV & Co KG

Luxembourg Hans-Böckler-Straße SARL

Board of management

Board of management and management team VastNed Management is sole managing director of VastNed Offices/Industrial. VastNed Management is represented by its board of management. The board of management carries out the daily management of the company within margins agreed with the supervisory board. The board of management puts the operational and financial objectives, the strategy and the margins to be observed to the supervisory board for approval. The board of management and the general counsel comprise the management team, which generally meets every fortnight. One of the three members of the board of management, Mr Hans Pars, announced in October 2008 that he would leave VastNed Management to join the board of management of Wereldhave, a Dutch listed real estate company, as the future successor to the present CEO. The director of strategy and planning joined the meetings of the management team subsequent to the actual departure of Mr Hans Pars in the last quarter of 2008 to provide support pending Mr Pars’ replacement. The board of management is responsible for having full and correct information at its disposal.

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Curricula vitae management team members Reinier A. van Gerrevink (March 3, 1950) Nationality: Dutch Position: Statutory director, CEO Joined the company: July 1, 2002 Appointment to present position: September 1, 2002 Previous positions: various management positions with: – Robeco (Weiss Peck & Greer); – Rodamco, and; – ABN AMRO. Other positions: member of the supervisory board of the foundation Stadsherstel Rotterdam Education: Dutch law, Utrecht University.

Tom M. de Witte (September 7, 1966) Nationality: Dutch VastNed Industrial BV Position: Statutory director, CFO Joined the company: June 16, 2003 VastProduct CV Appointment to present position: June 16, 2003 Previous positions: auditor with Deloitte Education: business economics, Dutch law and accountancy, Erasmus University Rotterdam.

Arnaud G.H. du Pont (May 25, 1966) Nationality: Dutch Position: General counsel/Director investor relations Joined the company: January 1, 2000 Previous positions: – tax adviser with BDO, and; – tax consultant with PricewaterhouseCoopers. Education: tax law, Erasmus University Rotterdam.

Supervisory board and subcommissions

Corporate secretary & Investor relations Finance & Control Board of management and management team Strategy, Planning & IT Tax & Legal Treasury

Netherlands Belgium Germany Jako Ten Holter Jean-Paul Sols Kay Gleßmann

Asset management Asset management Property management Finance Finance & Corporate staff Property management Property management

All members of the board of management have disclosed their significant other positions. None are members of the supervisory board of any other publicly listed company. Acceptance of such a position would require approval from the supervisory board.

Remuneration of the board of management Reference is made to the separate remuneration report included in this annual report.

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Share ownership of the members of the board of management Summary of share ownership of the members of the board of management

Reinier A. van Gerrevink Tom M. de Witte ______Number of shares as at January 1, 2008 6,809 220 Movements – – ______Number of shares as at December 31, 2008 6,809 220

Mr Van Gerrevink and Mr De Witte have acquired all shares at their own expense. VastNed Offices/Industrial has not provided any guarantees with regard to these shares. The above share ownership has been reported to the Netherlands Authority for the Financial Markets at the time of acquisition and may be referred to on www.afm.nl. VastNed Offices/Industrial has drawn up regulations as referred to in Article 5:65 of the Netherlands Act on Financial Supervision. These regulations determine during which periods the members of the supervisory board, members of the board of management and employees of VastNed Management may trade VastNed Offices/ Industrial shares (open periods). The closed periods, during which trade is not permitted, concern (at least) the periods preceding the publication of financial reports. The full text can be inspected on www.vastned.nl.

Country teams Netherlands Next to the management team, which performs central management of and coordination for the various country portfolios from the Netherlands, the Dutch team of 8 property specialists is headed by Mr Jako Ten Holter. These activities are carried out from the Rotterdam head office.

Belgium The Belgian activities, incorporated in Intervest Offices, are under the daily management of Mr Jean-Paul Sols (CEO) and Mrs Inge Tas (CFO). The Belgian team of property specialists consists of 6 employees. Mr Reinier van Gerrevink and as of January 1, 2009, Mr Tom de Witte, replacing Mr Pars are members of the board of Intervest Offices, joined by former VastNed Management employee Mr Hubert Roovers and four independent members. Mr Van Gerrevink is also delegated member in the daily management of Intervest Offices. The activities are carried out from the Antwerp office.

Germany The German organisation, VastNed Management Deutschland, located in Frankfurt, is managed by Mr Kay Gleßmann. VastNed Management Deutschland solely employs Mr Gleßmann, who acts as an advisor to the asset management team located in the Netherlands. Key decisions are made by the members of the board of management of VastNed Management.

Supervisory board

VastNed Offices/Industrial has a two-tier board, meaning that next to the board of management there is a supervisory board.

Composition of the supervisory board – W. M. Steenstra Toussaint, chairman – H.W. Breukink, vice-chairman – D. van den Bos – R.K. Jacobson

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The curricula vitae of the supervisory board members are presented below: Willem M. Steenstra Toussaint (March 26, 1951) Nationality: Dutch Position: independent consultant Appointed as member on April 4, 2006 and as chairman on April 3, 2007 Previous positions: – various management and board positions with MeesPierson/Fortis Bank (1978-2000), most recently as Chief Operating Officer of Fortis Bank Asia; – Consultant to the Firm with PricewaterhouseCoopers Corporate Finance the Netherlands (2001-2006), and; – member of the supervisory board of Scala Business Solutions N.V. (2002-2004). Other positions include: – member of the supervisory board of Exendis N.V., and; – secretary of the audit committee of STMicroelectronics N.V. Education: Dutch law, University of Leiden.

Henk W. Breukink (June 5, 1950) Nationality: Dutch Position: retired Appointment: April 3, 2007 as member and as vice-chairman Previous positions: – managing director of F&C Asset Management plc; – country head and director of F&C Netherlands; – associate Boer & Croon Executive Managers (1996-2002), and; – various management and board positions with Royal Shell (1977-1996). Other positions: – member of the supervisory board of ING Group, Amsterdam; – adviser F&C Netherlands; – non-executive director of the F&C Hedge funds (listed in Ireland); – member of the supervisory board of Heembouw Holding, Roelofarendsveen; – member of the advisory board of Rinnooy Kan & Partners, Schiphol; – board member of INSID, The Hague, and; – member of the supervisory board of Omring (health care institution), Hoorn. Education: business economics, University of Groningen.

Dick van den Bos (January 17, 1940) Nationality: Dutch Position: retired Appointment: April 18, 2001 Previous positions: – various management positions with Hollandsche Beton Groep, inter alia responsible for project development activities, and; – property director with PGGM, and associate director investments. Education: economics, Erasmus University Rotterdam.

Robert K. Jacobson (October 2, 1946) Nationality: Dutch Position: retired Appointment: April 6, 2004 Previous positions: – various management positions with Unilever, including senior vice-president Finance East Asia & Pacific, and most recently senior vice-president chairman’s office Unilever Other positions: – member of the supervisory board of Onderlinge Levensverzekering-Maatschappij ‘ ’s-Gravenhage’ U.A. Education: business economics and accountancy, Erasmus University Rotterdam

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Retirement schedule D. van den Bos 2009 W.M. Steenstra Toussaint 2010 H.W. Breukink 2011 R.K. Jacobson 2012

Tasks of supervisory board The supervisory board supervises the daily policy of the board of management of VastNed Offices/Industrial and provides the board with advice. In the fulfilment of its task, the supervisory board considers the interests of VastNed Offices/Industrial, weighing the relevant interests of all stakeholders (including the shareholders). The supervisory board bears responsibility for the quality of its own performance. VastNed Offices/Industrial provides the supervisory board with the necessary means for the execution of its task. In case of inadequate functioning, structural incompatibility of interests and other problems, a member of the supervisory board will tender his resignation. The tasks of the supervisory board include: – supervision and monitoring of and advising the board of management on: – realisation of the objectives of the company, – the strategy and the risks associated with the business operations, – the structure and functioning of the internal risk management and control systems, – the financial reporting process and compliance with legislation and regulations; – publication of, compliance with and upholding of the corporate governance structure of the company; – approval of the annual accounts, the annual budget and of major investments and disposals of the company; – selection and nomination of the external auditor of the company; – selection of the board of management, at present VastNed Management, including the members of the board of management of VastNed Management, the proposal for adoption by the general meeting of shareholders of VastNed Offices/Industrial for the remuneration policy for members of the board of management, for the adoption of the remuneration (taking account of the stated remuneration policy) and the contractual employment conditions of the members of the board of management; – selection of the members of the supervisory board and the proposal regarding the remuneration of its members to be adopted by the general meeting; – evaluation and assessment of the performance of the board of management and the supervisory board as well as their individual members (including an assessment of the profile of the supervisory board and the induction, education and training programme); – handling of and decisions regarding reported potential conflicts of interest between VastNed Offices/Industrial on the one hand and members of the board of management, the external auditor and the major shareholder(s) on the other; – handling of and decisions regarding reported alleged irregularities that concern the performance of members of the board of management. The supervisory board will annually draw up and publish a report after the conclusion of the financial year on the performance and the activities of the supervisory board and its committees in that financial year. For a full list of the tasks of the supervisory board, reference is made to the regulations drawn up by the supervisory board, which may be inspected on www.vastned.nl.

Chairman of the supervisory board The chairman of the supervisory board has a coordinating task. The chairman ensures compliance with the requirements of best-practice provision III.4.1 of the Code, assisted by the general counsel. The general counsel is appointed and dismissed by the board of management, either on the initiative of the supervisory board or otherwise, subject to supervisory board approval. The chairman is neither a former member of the board of management nor a former employee of VastNed Offices/Industrial or one of its subsidiaries.

Profile of the supervisory board The profile of the supervisory board is part of the regulations of the supervisory board and may be inspected on www.vastned.nl.

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Audit committee Tasks The audit committee is charged with supervising the financial affairs of VastNed Offices/ Industrial in the broadest sense. For a complete list of the tasks, please refer to www.vastned.nl.

Procedural tasks Four times per year the audit committee draws up a report of its deliberations and findings. At least once a year the committee reports on the developments in the relationship with the external auditor. Once every four years a thorough assessment is made of the performance of the external auditor. The external auditor receives the financial information on which the quarterly and semi-annual figures are based and is given the opportunity to comment on it. The audit committee is the first point of contact for the external auditor when irregularities are observed. The committee decides whether members of the board of management and the external auditor are present at its meetings. The committee meets at least once a year with the external auditor in the absence of the members of the board of management.

Composition The audit committee consists of two independent members. Mr Jacobson is chairman. Mr Van den Bos is a member. Mr Jacobson is a financial expert.

Remuneration committee Tasks The remuneration committee is charged with advising the supervisory board on the remuneration policy in the broadest sense. For a complete list of the tasks, please refer to www.vastned.nl. Its tasks include making a proposal to the supervisory board regarding the remuneration policy to be pursued for the board of management to be adopted by the general meeting of shareholders and the same for individual members of the board of management.

Procedural tasks In addition, the remuneration committee draws up the remuneration report to be adopted by the supervisory board. The remuneration report of the supervisory board is included in this annual report and placed on the website of the company and contains the information as meant in best-practice provisions II.2.10 and II.2.12 of the Code.

Composition The remuneration committee consists of two independent members. Neither are members of the board of management of another Dutch publicly listed company. Mr Steenstra Toussaint is the chairman and Mr Breukink is a member of the remuneration committee.

Selection and appointment committee Tasks The tasks of the selection and appointment committee include drawing up selection and appointment criteria, periodic assessment of the size and composition of the supervisory board and the board of management as well as evaluating the performance of the members of the supervisory board and the board of management, supervising the board of management concerning the appointment of senior management and taking concrete decisions with regard to selection and appointments.

Composition VastNed Offices/Industrial’s selection and appointment committee consists of Messrs Steenstra Toussaint and Breukink.

Reports of the meetings of the three committees are provided to the supervisory board.

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Remuneration of the members of the supervisory board The members of the supervisory board receive a remuneration of € 21,000 annually. The chairman receives an annual remuneration of € 27,000 and the vice-chairman receives € 24,000. In view of the labour-intensive character of their duties, members of the audit committee receive an additional annual remuneration of € 4,000. The members of the remuneration committee annually receive an additional € 3,000. The above compensation is based on eight meetings per year (four meetings focusing on financial reporting, one on (admission to) the general meeting of shareholders, one meeting in the context of the budget and strategy and two additional meetings). Assuming that the work of the supervisory board and its members may, in specific circumstances, become more time-consuming than in the going concern situation, to be determined by the chairman of the supervisory board, a supplemental remuneration is paid to the relevant member of € 2,000 per day.

All the members of the remuneration committee are also members of the supervisory board of VastNed Management. The members of the remuneration committee of VastNed Offices/Industrial are also members of this supervisory board. For the membership of the supervisory board of VastNed Management, no separate remuneration is paid. The members do not receive any further compensation to those mentioned, other than reimbursement of expenses as incurred.

Share ownership of the members of the supervisory board None of the supervisory directors holds any shares in VastNed Offices/Industrial.

Compliance with the Corporate Governance Code Introduction VastNed Offices/Industrial confirms the importance of proper corporate governance as a basis of trust between the company and its shareholders. In the interest of the transparency that is inextricably linked to corporate governance, VastNed Offices/ Industrial continues in this annual report to report extensively on the way in which its corporate governance operates and the extent to which the company complies with the Dutch corporate governance code (the Code). The company has taken note of the updated Corporate Governance Code published on December 10, 2008. VastNed Offices/ Industrial understands the rationale behind the changes to the Code and will take into account the Monitoring Committee’s findings where applicable for future updates of the various corporate governance regulations.

Statement of compliance and deviations from the Code VastNed Offices/Industrial subscribes to the Code and its principles and currently complies with virtually all the best-practice provisions of the Code. At present, VastNed Offices/ Industrial deviates from the principles and best-practice provisions as formulated in the Code on two points. They are: – Appointment of members of the board of management for a period of four years: all current members of the board of management were appointed before the publication of the (draft) Code. All of the existing employment contracts have an indefinite term. – Limitation of any severance payment to a maximum of one year’s salary: all current members of the board of management were appointed before the publication of the (draft) Code. When concluding these contracts, dismissal schemes were agreed which took account of the years of service with previous employers. These schemes may result in compensation of more than one year’s salary.

Availability corporate governance documents The documents that determine the corporate governance structure, such as the articles of association and the regulations of the supervisory board, as well as the registration document in the context of the Financial Supervision Act, have been made available on the company’s website www.vastned.nl.

Statement of share ownership (principle) Members of the supervisory board will only hold shares in VastNed Offices/Industrial

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for long-term investment and purchase these shares at their own cost. When purchasing and selling shares, they act in accordance with the regulations adopted by the company as meant to in Article 5:65 of the Netherlands Act on Financial Supervision. Transactions are also reported to the Netherlands Authority for the Financial Markets (www.afm.nl ) in accordance with relevant regulations. VastNed Offices/Industrial has also drawn up regulations in respect of trade in publicly listed securities. Transactions by members of the supervisory board and the board of management are reported at the end of each quarter to VastNed Offices/Industrial’s compliance officer.

Independence None of the members of the supervisory board is or has been a member of the board of management or employee of VastNed Offices/Industrial or of any company associated with it. No member has received any fees other than for his membership of the supervisory board, nor has any member had a major business relationship with VastNed Offices/Industrial or any associated company during one year prior to his appointment. None of the members of the board of management is a shareholder, member of the board of management or supervisory board member of a company that holds at least 10% of the shares in VastNed Offices/Industrial. The above also applies to the direct family members of the respective members.

Specific corporate governance requirements for the board of management Transactions of members of the board of management VastNed Offices/Industrial has not entered into any transactions with any of the members of the board of management other than those that arise from their employment contracts.

Conflicting interests of members of the board of management None of the members of the board of management has entered into competition with VastNed Offices/Industrial in any way. No fees were provided by VastNed Offices/ Industrial to the members of the board of management or their family members, no unjustified benefits were provided to third parties by any member of the board of management, nor were any business opportunities provided by VastNed Offices/ Industrial to either any of the members or their families. In the context of the corporate governance pursued by VastNed Offices/Industrial, the members of the board of management declare that they comply with the Code in all abovementioned cases. The offering process on VastNed Retail might have generated a possible conflict of interest in that the members of its board of management are also the members of the board of management of VastNed Offices/Industrial and might have prioritised the interests of VastNed Retail in their decisions. The separation of the supervisory boards of VastNed Retail and VastNed Offices/Industrial effected in 2006 has safeguarded good corporate governance. Generally, in prevailing cases the respective member of the board of management reports any conflict of interest to the chairman of the supervisory board and will refrain from participation in the discussion of and resolution on the matter in which the member of the board of management has a conflict of interest. In addition, transactions with a conflicting interest will be agreed under conditions customary in the industry.

Loans to members of the board of management VastNed Offices/Industrial has not provided loans to the members of its board of management, nor have the members of the board of management provided loans to VastNed Offices/Industrial.

Specific corporate governance requirements for the supervisory board Principle None of the members of the supervisory board of VastNed Offices/Industrial is also on the supervisory board of VastNed Retail. The chairman and the vice-chairman are also members of the supervisory board of VastNed Management. This system guarantees the independence of the members of the supervisory board. The supervisory board has four members.

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Conflicting interests of members of the supervisory board A member of the supervisory board reports a material conflicting interest to the chairman of the supervisory board. In the context of the corporate governance pursued by VastNed Offices/Industrial, the members of the supervisory board state that they will comply with the Code and the respective member will refrain from participation in the discussion of and resolutions on the matter in which the member has a conflicting interest. In addition, transactions with a conflicting interest will be agreed under conditions customary in the industry. Resolutions on entering into transactions with major shareholders, i.e. shareholders holding more than 10% of the share capital in issue, must be approved by the supervisory board and are entered into under conditions customary in the industry. VastNed Offices/Industrial at present does not have a delegated supervisory board member. In prevailing cases, the supervisory board will comply with best-practice provisions III.6.6 and III.6.7.

Loans to members of the supervisory board VastNed Offices/Industrial has not provided loans to any member of the supervisory board, nor has any member of the supervisory board provided loans to VastNed Offices/Industrial.

Other information

Stichting Prioriteit VastNed Offices/Industrial and protection measures The Stichting Prioriteit VastNed Offices/Industrial (‘Stichting’) is a foundation that holds the priority shares and has specific authority regarding the appointment of members of the supervisory board and the board of management, as well as regarding extraordinary decisions such as amendments to the articles of association, the winding up or liquidation of VastNed Offices/Industrial. On the board of the Stichting are the members of the supervisory board and the members of the board of management of VastNed Management.

General meeting of shareholders and voting rights At the general meeting of VastNed Offices/Industrial shareholders, the state of affairs is commented upon and the general meeting is asked for approval on subjects determined by law and in the articles of association. The board of management and the supervisory board supply the general meeting of shareholders with all information required unless a material interest is opposed to that. VastNed Offices/Industrial will announce the meeting by placing an announcement in the Officiële Prijscourant of NYSE Euronext and at least one Dutch nationwide daily newspaper. The agenda and shareholders’ circular are available at the offices of VastNed Offices/Industrial in Rotterdam and from www.vastned.nl. In these announcements, inter alia the ultimate registration date is given for exercising voting rights on the share. The minutes of the general meeting of shareholders will be made available after the meeting in accordance with best-practice provision IV.3.8.

Financial reporting and the external auditor Financial reports are drawn up in accordance with internal procedures. The board of management is responsible for the correctness, completeness and timeliness of the financial reports. The external auditor is involved in the content and publication of the semi-annual report and the annual accounts and their publication. The external auditor will attend the general meeting of shareholders and may be asked to comment on the correctness of the annual accounts. The external auditor will in any case attend the meetings of the supervisory board and of the audit committee in which the annual accounts are discussed.

Code of conduct and whistleblower’s code VastNed Offices/Industrial has drawn up a code of conduct which applies to all employees including the board of management. A whistleblower’s code has also been implemented, which allows employees and members of the board of management to report abuses within the company without fear for their own employment. The texts of these regulations have been published on www.vastned.nl.

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Supervisory board

Willem M. Steenstra Henk W. Breukink Dick van den Bos Robert K. Jacobson Toussaint

Management team

Reinier A. van Gerrevink Tom M. de Witte Arnaud G.H. du Pont

Country managers

The Netherlands Belgium Germany Jako Ten Holter Jean-Paul Sols Kay Gleßmann

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Introduction

VastNed Offices/Industrial has one single managing director, VastNed Management, a subsidiary and management company of both VastNed Retail and VastNed Offices/ Industrial. This remuneration report outlines the remuneration of the managing directors of VastNed Management, the private individuals representing the funds (hereinafter referred to as: ‘the funds’). All directors work for both funds. VastNed Management’s costs are charged on to the separate funds based on causation in accordance with a cost allocation agreement.

Main points of the remuneration policy

VastNed Management’s remuneration policy was approved by the shareholders of both funds in the general meetings of shareholders on April 6, 2004 and is based on the following principles: a The level and structure of the total remuneration should enable VastNed Management to attract and retain qualified and expert managing directors; b The remuneration structure must provide for a relationship between the fixed and variable salaries that advances the interests of the funds in the medium and long term.

Based on these principles, the following criteria have been formulated for the various components of the remuneration policy in the next few years: a The chairman of the board of management (CEO) is awarded a fixed annual salary that is in line with the fixed annual salaries of the chairmen of the boards of management of competing investment funds. This peer group comprises the property investment funds Corio, Eurocommercial Properties, Unibail-Rodamco and Wereldhave; b The members of the board of management are awarded a fixed annual salary of between 40-70% of the CEO’s fixed salary, and which depends on performance, experience and the weight of their duties; c In order to limit the pension costs, not the entire annual salary is taken as a basis for pension calculation. The pensionable part is limited to 75-90% of the fixed annual salary, taking into account that this percentage decreases when the fixed annual salary increases; d Next to the fixed annual salary, a bonus may be awarded of a maximum of € 200,000 to the CEO and of € 100,000 to each member of the board of management for their activities for the two funds jointly. Per fund no more than 50% of the abovementioned amounts may be awarded.

Bonus system

Personal bonus A maximum bonus of € 50,000 and € 25,000 respectively may be awarded to the CEO and to each member of the board of management based on an assessment by VastNed Management’s supervisory board of the personal performance of the CEO and the members of the board of management (personal bonus). This assessment will be based on the degree to which during the financial year the member of the board of management concerned has realised qualitative and/or quantitative targets defined in advance. This bonus is paid out in cash. The costs of this bonus are distributed in accordance with the cost allocation agreement between the funds.

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Below, all the total personal bonuses are reported specifying the parts attributable to VastNed Retail and to VastNed Offices/Industrial.

Mr R.A. van Gerrevink (CEO): € 25,000 Mr T.M. de Witte (CFO) € 15,000 Mr J. Pars (CIO) € 8,125

Attributable to VastNed Retail € 25,988 Attributable to VastNed Offices/Industrial € 22,137

Bonus related to the direct investment result The remaining € 150,000 and € 75,000 respectively are directly related to the development of the direct investment result per share, as evidenced by the annual accounts and approved by the external auditor and corrected for subsequent changes to the funds’ accounting system (like-for-like). The performance criteria of the investment result-related bonus creates alignment between directors and shareholders both in the short and the long term, since an increase of the direct investment result per share above inflation benefits both the directors and the shareholders. The personal bonus promotes the realisation of key objectives that do not lead to an increase in the direct investment result per share in the short term.

System The bonus system provides for a bonus of € 5,000 for the CEO and € 2,500 for the members of the board of management for every 10 basis points increase of the direct investment result per share above the average weighted inflation in the countries in which the funds invest (calculated based on average value of the properties in the respective countries). This part of the bonus has a maximum per fund of € 75,000 for the CEO and € 37,500 for the other members of the board of management respectively. Increase and decrease percentages of the two funds’ direct investment result are not set off against each other. The costs of the direct investment result-related bonus will be charged to the fund to which the increase may be attributed.

Payment in shares The direct investment result-related bonus is awarded conditionally in the form of shares in the relevant fund at the first ex dividend share price after the annual general meeting of shareholders. The award is made on a condition precedent that the award becomes unconditional after two years, provided that the direct investment result per share in the previous financial year is not lower than the direct investment result per share for the financial year preceding the conditional granting of the bonus.

Lock-up Once the CEO or a member of the board of management is unconditionally entitled to the shares, he is allowed to sell a maximum of 50% of the shares awarded. The proceeds may be used for settling the wage withholding tax which has become payable at the time of unconditional entitlement of the shares. The other shares must then be held for a period of at least three years or until the end of the employment of the respective director, if earlier.

Dividend entitlement The shares are entitled to dividend from the time when they are awarded conditionally. The cash equivalent of the dividends on the shares awarded will not be paid out until the awarding has become unconditional.

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2008 investment result-related bonus VastNed Retail will not pay the bonus related to the result in the 2008 financial year as the direct investment result per share was € 3.85. This is the same as the 2007 direct investment result per share, whilst the average weighted inflation in the countries where VastNed Retail operates was 3.4%. VastNed Offices/Industrial will not award an investment result-related bonus since it reports a 2008 direct investment result per share of € 1.59, which is lower than in 2007 and the average weighted inflation for VastNed Offices/Industrial amounted to 3.5%.

No claw-back on shares VastNed Retail granted in 2007 The 2008 direct investment result per share of € 3.85 was higher than the 2006 direct investment result per share (granted in 2007) which amounted to € 3.70 per share. For the purpose of assessing the 2008 direct investment result per share, the supervisory board has resolved, in accordance with the presentation of the key figures in the annual report, to calculate the direct investment result per share for VastNed Retail without taking the costs of the offering process into account. As a rule, the claw-back rules apply to all shares including the shares granted to Mr Pars, who left the company on December 31, 2008. For this reason all the shares conditionally granted in 2007 will become unconditional on April 9, 2009 (ex-dividend date).

The bonuses are non-pensionable.

Pensions The pensions awarded are non-contributory. Mr Van Gerrevink’s pension is based on a final pay formula, while the pension plans of Messrs De Witte and Pars are based on the career average pension plan. Mr Van Gerrevink’s expected actual retirement age is 63, those of Messrs De Witte and Pars are 65.

Expenses and perks Customary arrangements are in place for a company car and reimbursement of expenses.

Duration and termination conditions of employment agreements The employment contracts with the directors have been concluded for an indefinite period. All contracts contain a severance payment scheme with a minimum compensation in case of termination by VastNed Management that is above the compensation of one year’s salary as referred to in the Dutch corporate governance code (‘the Code’). This was necessary at the time to convince the CEO and the present member of the management board to give up their employment elsewhere and enter into an employment contract with VastNed Management. The current arrangements will be honoured. VastNed Management does, however, intend to implement the Code in this context for future new managing directors. If termination of the employment contract is the consequence of, or happens within a certain period after a takeover or merger, in certain cases a higher minimum dismissal compensation applies.

In case of involuntary dismissal by the general meeting of shareholders of VastNed Management, Mr Van Gerrevink is entitled to a compensation of at least € 600,000. If the employment contract is terminated due to a merger or takeover of one of the funds, a compensation of at least € 400,000 (for each fund) will be paid. If a share price is realised for shareholders of over 105% of net asset value, an additional bonus is awarded of 2% of the increase per share, multiplied by the number of shares in issue. This additional bonus has a maximum of € 750,000 per fund. These arrangements were stipulated at the conclusion of the employment contract.

In case of involuntary dismissal, Mr De Witte is entitled to a compensation to be determined in accordance with the ‘kantonrechtersformule’ system (Dutch severance payment system according to subdistrict courts), taking account of his 12 years of service at the time of appointment. This arrangement was stipulated at the conclusion of the employment contract. If the employment contract is terminated in case of a merger or

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take-over of one of the funds on the initiative of VastNed, a compensation of at least 15 months’ salary will be paid.

The notice periods for the members of the board of management are: Employer Employee ______Mr R.A. van Gerrevink 6 months 3 months Mr T.M. de Witte 6 months 3 months

Remuneration of the CEO and the members of the board of management in 2008

The salaries for 2008 are presented below (personal bonus refers to the bonus for the 2008 financial year, paid out in 2009). Offering Fixed salary process bonus Years of (excl. nat. Of which fully Personal VastNed Offices/ service sec. contr.) pensionable bonus Industrial ______Mr R.A. van Gerrevink 7 446,900 339,600 25,000 51,394 Mr T.M. de Witte 6 215,280 184,200 15,000 24,757 Mr J. Pars 6 259,200 229,200 8,125 29,808 ______Total 921,380 753,000 48,125 105,959

The proposed increase of the fixed salaries to the CEO and the members of the board of management as set out in the 2007 remuneration report was not approved by VastNed Retail’s annual shareholders’ meeting on April 8, 2008; the same proposal was approved by the annual shareholders’ meeting of VastNed Offices/Industrial held on the same day. For that reason, the supervisory board of VastNed Management has resolved to grant the members of the management board a pro rata part of the salary increase, which means that 46% of the proposed amounts were paid out. The bonus to the CEO and the members of the board of management with respect to the offering process on the shares of VastNed Retail was paid out in 2008 by VastNed Offices/Industrial only.

In 2008. VastNed paid the following pension contributions on behalf of its managing directors: Mr Van Gerrevink € 98,000, Mr De Witte € 23,000 and Mr Pars € 33,000.

Remuneration of the CEO and the members of the board of management in 2009

The present remuneration policy, adopted in 2004, will not be changed.

Mr Van Gerrevink’s fixed annual salary for 2009 will be raised to € 465,000. The fully pensionable component is raised to € 348,000.

Mr De Witte’s annual fixed salary will be raised to € 240,000. The fully pensionable component is raised to € 210,000.

These increases are in accordance with the approved remuneration policy and reflect Mr Van Gerrevink’s and Mr De Witte’s growing experience and contributions to the development of the funds.

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Taking the recommendations of the Monitoring Commission published in December 2005 into account and making use of the so-called COSO (The Committee of Sponsoring Organisations of the Treadway Commission) Risk management framework, VastNed Offices/Industrial has broken down the risks into the following risk categories: strategic risks, financial reporting risks, operational risks, financial risks and compliance risks. Hereafter, for every risk category it will be set out which significant risks are included in that category and how VastNed Offices/Industrial endeavours to control those risks.

Description of risk Impact Control measures ______Strategic risks Impact of external factors due to The choice of investment country, A strategic choice has been made to: investment and financial policy investment type, relative size and – Invest mainly in eurozone countries with a relatively stable political choices. time of investment can have major and economic climate; impact on dependence on inflation, – Investing in major liquid office markets (see chapter Profile and currency fluctuations, employment, strategy); rent legislation and permit policies – Spreading across several locations and tenants; on expected rent developments – Large number of properties due to relatively modest investment and demand for office locations. volume per property; – Opportunistic investments in semi-industrial property; – Critical size per country/region to guarantee sufficient local expertise and solid research, and; – Play the office market cycle; – extend the duration of lease agreements in upward cycle to bridge downward cycle; – raise solvency before downturn to 60%-70% through disposals to create a buffer for value decreases during downward cycle. ______Financial reporting risks The impact of incorrect, – Incorrect analysis of risk A solid system of internal control measures and administrative and incomplete or late provision of return profile in investment organisational measures has been implemented and laid down in information on internal decision- decisions, and; the Administrative Organisation manual. These result in key checks making or that of external – Reputation damage and claims and balances with respect to financial reports, such as: parties, such as shareholders, due to making misleading – Involvement of various disciplines in the preparation of reports banks and regulators. statements to stakeholders. and proposals for investments and disposals; – Budgeting, forecasting and statistical analysis; – Appraisal procedures (independent external appraisers that are frequently replaced, internal IRR analyses and internationally accepted appraisal guidelines); – Periodical business report meetings in which based on reports, the operational activities are discussed with the country managers; – Frequent meetings of the board of management, discussion of the results of external audits with the board of management, the audit committee and the supervisory board, and; – Group instructions on accounting principles and report data, as well as internal training in the area of IFRS et cetera. ______

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Description of risk Impact Control measures ______Operational risks Risks arising from daily transactions and (external) events.

Investment and disposal risks Incorrect investment or disposal – Incorrect assessment of the risk Careful acquisition and selling procedures, comprising: analysis. return profile, and; – Using the checklist in the performance of due diligence to assess – Late investment or disposal. financial, legal, construction and tax aspects; – Involvement of various disciplines in acquisitions and disposals; – Standard format for investment or disposal proposals, and; – Internal authorisation procedures (investment and disposals exceeding € 25 million require supervisory board approval).

Leasing and debtor risks The risk that a property due to – Fall of rental income and rise Internal procedures aimed at: its nature and location and/or of uncharged net service – Frequent evaluation of environment factors and the investment the quality of the tenants cannot charge expenses due to property itself by portfolio and technical managers, and be let at the anticipated rent or vacancy; research; the rent cannot be collected. – Decreasing property values – Extensive annual forward-looking yield analysis, including due to vacancy; ten-year forecast; – Write-off of overdue – Achieving a balanced spread of expiry dates of lease contracts receivables, and; in accordance with current rent law and regulations; – Lower (than expected) direct – Achieving an optimal tenant mix and setting a maximum and indirect investment result. exposure to any individual tenant; – Periodic reports on the occupancy rate and rent arrears in the property portfolio, resulting in actions; – Screening of tenants in the conclusion of lease contracts, and requiring guarantee deposits and bank guarantees, and; – Securing bank guarantees and/or payment of guarantee deposits from tenants.

Cost control risks The risk of unexpected – Incorrect assessment of the – Budgeting procedures and maintenance forecasts; increases of operating expenses risk return profile, and; – Authorisation procedures for entering into maintenance and general expenses, and of – Lower direct and indirect and investment commitments; having to make unexpected investment result. – Periodic reports (realisation – budget analysis), and; further investments. – Benchmarking costs to other funds.

Pipeline risks Risks associated with acquired – Delivery delays; – The pipeline risk is generally transferred to contracted reputed pipeline projects. – Deviation from agreed and solid project developers and building contractors. By way of (technical) specifications or early involvement in the design and the composition of the tenant lease conditions; mix, leasing risks may be accepted; – Failure to secure the projected – Periodic progress reports (realisation – budget analysis), and; rent levels fully or partly, and; – Continuous involvement of in-house commercial and technical – Lower direct and indirect experts to monitor progress. investment result.

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Description of risk Impact Control measures ______Legal and tax risks Risks associated with – Legal and tax claims resulting Internal procedures, comprising: amendments to tax law and in fines, loss of income or – Mandatory evaluation of contractual commitments by internal corporation law, and risks additional costs; and, where necessary, external lawyers and tax experts; arising from incorrect – Loss of tax status; – Ensuring relevant staff receive technical training; assessment of contractual – Reputation damage, and; – Continuous monitoring of and application of the conditions of provisions or tax exposures. – Lower direct and indirect the tax regime, including financial ratios, dividend distributions investment result. and the composition of the shareholder base, by internal and external tax experts, and; – Careful analysis of tax risks involved in acquisitions and disposals, including value added tax, transfer tax, deferred tax liabilities and related issues.

IT risks Risks associated with – Late or incorrect internal or Internal procedures aimed at: malfunctions or security issues external reporting; – Access security; of the internal ICT infrastructure. – Loss of relevant information; – Back-up and recovery procedures; – Unauthorised access to – Periodic checks by external experts; information by third parties, and; – Digitisation of key documents, and; – Reputation damage. – Hiring external know-how and experience to stay abreast of developments in ICT. The ICT network between the countries is centralised in Rotterdam; individual countries are connected to the company’s Wide Area Network by means of fixed lines contracted from professional network providers. ______Financial risks

(Re)financing risks Risks that insufficient – Insufficient financing facilities – Frequent contact with (potential) shareholders and loan capital (long-term) loan capital can for investments; providers by means of roadshows, transparent financial be raised, or at unfavourable – Forced sale of properties; reporting and analysts’ meetings; conditions. – Higher financing costs, and; – Loan capital financing limited to at least 50% of the market – Lower direct and indirect value of the property in cyclical downturn. Raising solvency investment result. to 60%-70% before cyclical downturn; – No more than a third of the loan portfolio comprises short-term loans; – Balanced spread of refinancing dates; – Weighted average duration of long-term loan portfolio of at least 3.5 to 5 years, and; – Internal monitoring of the refinancing risk based on periodic internal financial reports.

Liquidity risk The risk that insufficient – Reputation damage, and; – Procedures aimed at reducing operational risks that may resources are available for – Additional financing costs. result in loss of cash flow (see above); daily payment obligations. – Attracting sufficient credit facilities; – Preparing daily cash flow prognoses, and; – Internal monitoring of the credit facilities and conditions based on periodic internal financial reports.

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Description of risk Impact Control measures ______Interest rate risk Risks arising from interest – Rising financing costs, and; – In principle, no more than a third of the loan portfolio has rate fluctuations. – Lower direct investment result. a floating interest rate; – Fixing interest rates by concluding interest rate derivatives with (inter)national banks; – Balanced spread of interest review dates; – Typical minimum interest rate duration of long-term loan portfolio of at least 3.0 years, and; – Internal monitoring of the interest rate risk based on periodic internal financial reports.

Currency risk Risks arising from currency – Falling proceeds, and; – Investing in the eurozone to exclude currency risk. fluctuations. – Lower direct and indirect investment result. ______Compliance risks Risks associated with – Reputation damage; – Internal procedures and training aimed at keeping knowledge non-compliance or incomplete – Claims and legal of laws and regulations up to date; compliance with regulations, proceedings, and; – Internal code of conduct and whistleblower code; or unethical conduct. – Lower direct investment result. – Compliance with code of conduct is discussed with employees at least once a year; – Procedures aimed at hiring ethical staff (including references), and; – Execution of the system of internal representation letters as prescribed by the AFM, signed at least once a year by the country managers in the context of periodic self-assessment ______

As indicated above, VastNed Offices/Industrial devotes a great deal of attention to risk management. However, VastNed Offices/Industrial is an organisation of limited size, and is spread across various country organisations. Activities in the areas of financing, cash management, taxation, legal affairs, IT, research, budgeting and budgetary control are executed at group level in Rotterdam, which also benefits the local country organisations. VastNed Offices/Industrial does not have a separate internal audit department. In everyday practice the informal character of the organisation is relied on. In view of the limited complexity of daily transactions and the short internal communication lines, the absence of a separate internal audit department is deemed to be acceptable in terms of risk management.

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king spaces r a Country City Location Type of property acquisition of Year Year of construction/ renovation Lettable floor space (sqm) Number of tenants Number of p Theoretical rental income (x € 1,000) ______

Netherlands

Almere Antennestraat 2-26 Office 1995 1990 4,762 11 82 384 Beemsterweg 19 Industrial premises 1998 98/03 10,926 1 103 697 Amersfoort Beeldschermweg 3 Office 1998 1991 1,912 1 68 130 Hardwareweg 15 Industrial premises 1998 1991 5,693 1 68 479 Amsterdam Anthony Fokkerweg 1 Office 1997 1990 5,329 14 59 811 Burg. Stramanweg 102-108 1) Office 97/07 1989 11,579 28 223 1,876 De Lairessestraat 1) Office 2007 1920 429 2 – 140 Herengracht 105-107 Office 1997 1952 1,510 2 – 215 Herengracht 499 Office 2007 1667 1,085 2 – 211 Hettenheuvelweg 12 1) Office 1997 1988 2,371 1 70 342 Hettenheuvelweg 14 1) Office 1997 1988 2,361 3 80 348 Hettenheuvelweg 37-39 1) Office 1997 1987 2,517 3 78 341 Hettenheuvelweg 41-43 1) Office 1997 1988 2,501 4 74 385 Hogehilweg 12 1) Office 1997 1985 3,129 – 62 572 Karel du Jardinstraat 65 Office 1997 1900/96 7,576 1 28 1,087 Koningin Wilhelminaplein 18 1) Office 1997 1995 5,474 1 25 773 Leidsegracht 101-107 Office 1997 1900/99 2,514 3 15 413 Osdorperban 1-33 1) Office 1997 1990 3,353 16 105 550 Oudezijds Voorburgwal 282 Office 1997 1980 1,000 1 – 189 Paasheuvelweg 15 1) Office 1989 1989 2,049 7 37 291 Strekkerweg 79 1) Office 1998 1990 1,310 1 32 216 Tijnmuiden 5 and 73 1) Industrial premises 1999 77/97 1,975 1 5 196 Arnhem Mr. E.N. van Kleffensstraat 10 Office 1997 1997 3,303 – 70 424 Barendrecht Zuideinde 10 Industrial premises 1995 1986 1,340 1 16 115 Breda Cosunpark 1-5 Office 2000 1975 4,528 6 86 646 Cosunpark 20-24 Office 2002 2002 2,244 – 48 349 Franse Akker 15 Industrial premises 1995 83/05 1,100 1 6 60 Lage Mosten 1-11 Office 2000 2000 3,188 4 52 456 Lage Mosten 13-23 Office 2000 2000 3,830 2 59 536 Zinkstraat 1-11 Office 1992 1999 3,952 6 84 293 Capelle a/d IJssel Hoofdweg 22-26 Office 1991 1990 4,098 2 77 355 Rivium Boulevard 41 / Rivium Westlaan 42 Office 1997 1992 3,169 2 40 573 Deventer Roermondstraat 37001-37003 / Deventerweg Industrial premises 1997 1970 10,064 8 – 338 Eindhoven Fellenoord 310-370 Office 1996 1987 5,133 4 75 606 Larixplein 5-7 Office 1997 1997 4,388 4 71 577 Luchthavenweg 34 Office 1999 1991 1,865 1 78 295 Parklaan 81 Office 1988 1930 762 1 24 113

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Enschede Hoedemakerplein 2 Office 1991 1991 2,171 2 15 282 Piet Heinstraat 4-6 Office 1989 1989 1,377 1 6 203 Goes Stationsplein 21 Office 1998 1992 5,271 1 91 824 Gouda Hanzeweg 5 Office 1997 1992 5,965 1 132 790 Groningen Hereweg 93-95 Office 1990 1990 2,545 2 34 347 Haarlem Leidsevaart 574 Office 1997 1997 3,384 – 36 361 Heemstede Herenweg 103a Office 1989 1989 1,025 5 20 148 Heerlen Geerstraat 105-111 Office 1994 1992 3,600 3 48 405 ’s-Hertogenbosch Europalaan 28 Office 1997 1990 7,900 4 184 1,238 Hoofddorp Antareslaan 10-26 Office 1998 1998 3,441 5 93 630 Antareslaan 65-81 Office 1998 1998 3,441 1 63 621 Kruisweg 765 and 765a Industrial premises 1989 89/04 1,720 2 15 123 Neptunusstraat 15-37 Office 1991 1991 5,400 8 57 788 Wegalaan 2-8 Office 2006 1997 2,960 1 62 518 Houten De Molen 82-92 Office 1992 1992 2,421 5 72 321 Kokermolen 10-16 Office 1997 1991 2,623 1 55 433 Leiden Archimedesweg 17 1) Office 2001 2001 2,502 2 65 430 Schipholweg 68 Office 1998 1991 2,383 4 41 395 Leusden Plesmanstraat 2 Office 1999 1997 1,360 3 22 208 Maastricht Adelbert van Scharnlaan 170-180 Office 1997 1977 3,977 7 38 540 Nieuwegein Archimedesbaan 8 Industrial premises 1988 1986 1,323 1 12 78 Archimedesbaan 10 Industrial premises 1990 1990 1,100 2 12 71 Groningenhaven 18-20 Office 1998 1993 5,200 1 75 427 Krijtwal 1-15 Office 1990 1990 4,317 2 17 506 Marconibaan 42-42o Industrial premises 1998 1990 4,790 11 70 366 Ravenswade 5 Industrial premises 1995 1987 1,822 1 15 113 Ravenswade 134 Industrial premises 1988 1979 955 1 12 61 Ridderkerk Touwslagerstraat 17 Office 1991 1991 1811 1 25 229 Rijswijk Volmerlaan 7 Office 1996 82/01 5,358 1 72 676 Rosmalen Graafsebaan 109-111 / Eikenburglaan 3-11 Industrial premises 1997 88/02 5,884 12 38 379 Rotterdam Albert Plesmanweg 161 1) Office 1997 91/03 2,058 1 62 264 Caïrostraat 2-4 1) Industrial premises 1991 1991 2,515 2 18 178 K.P. van der Mandelelaan 41-43 1) Office 2006 1989 7,367 1 162 1,368 Klompenmakerstraat 29 1) Industrial premises 1999 1998 1,240 1 5 140 Max Euwelaan 1 1) Office 2000 1988 2,653 1 63 519

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Max Euwelaan 31-49 1) Office 2006 88/00 2,094 4 73 388 Veerhaven 16-18 Office 1996 90/02 1,725 1 9 292 Schiphol-Rijk Cessnalaan 1-33 Industrial premises 1999 1991 6,719 1 65 674 Son en Breugel Ekkersrijt 4404 Industrial premises 1995 1990 1,648 1 8 91 The Hague Bezuidenhoutseweg 2 Office 1996 1986 1,905 2 18 204 Laan Copes van Cattenburch 48-52 Office 1996 1989 1,734 3 20 284 Neuhuyskade 92-94 Office 2008 1928 2,899 2 35 415 Parkstraat 101-109 Office 2007 1920 2,957 1 – 541 Zuid-Hollandlaan 7 Office 2007 1924 10,413 1 78 2,140 Tilburg Dr. Hub van Doorneweg 81, 85 and 89 Office 1997 78/01 2,758 3 88 391 Utrecht Arthur van Schendelstraat 650-698 and 700-748 1) Office 2006 1995 9,224 6 46 1,798 Savannahweg 59 Industrial premises 1988 1982 2,018 1 19 105 Weg der Verenigde Naties 1 1) Office 2007 1991 3,092 2 68 635 Veenendaal Fokkerstraat 36 / Wiltonstraat 1 Office 1999 1995 1,610 1 11 125 Generatorstraat 9a / Turbinestraat 10 Industrial premises 1997 1980 2,876 2 13 105 Velp Arnhemsestraatweg 348 Office 1988 1995 2,404 1 69 245 Venlo Prinsessesingel 20-26 Office 1998 1994 1,498 2 30 202 Prinsessesingel 30 Office 1998 1994 2,280 – 35 260 Venray Macroweg 10 Industrial premises 2006 2002 5,300 – 40 259 Weesp Pampuslaan 141-145 Industrial premises 1997 1970 2,500 1 24 114 Van Houten Industriepark 23 Office 1988 1989 1,389 2 30 171 Woerden Pelmolenlaan 1 Office 1998 1992 2,339 6 58 286 Zaagmolenlaan 12 Office 1988 1985 1,663 2 40 192 IJsselstein Anthonie van Leeuwenhoekweg 5 Industrial premises 1998 1991 5,364 1 34 369 Zeist Montaubanstraat 1 / Utrechtseweg 135 Office 1989 1989 1,614 5 28 263 Zoetermeer Eleanor Rooseveltlaan 3-25 Office 1997 1991 3,856 1 75 508 Eleanor Rooseveltlaan 29-51 Office 1997 1992 3,856 1 75 639 Europaweg 205 Office 1997 1991 7,169 1 112 973 Koraalrood 33 Office 1998 1991 2,070 – 32 218 Koraalrood 50 Office 1998 91/02 2,464 1 47 313 Plein van de Verenigde Naties 15 Office 1991 1990 3,788 1 51 546 ______Total investment properties in operation the Netherlands 351,404 299 5,138 45,108

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Belgium 2)

Aartselaar Dijkstraat 1a Industrial premises 2002 1994 8,062 1 – 374 Kontichsesteenweg 54 Office 2001 2000 4,000 1 100 530 Antwerp Brusselstraat 59 Office 2001 93/94 11,318 7 155 1,593 Kaaien 218-220 Industrial premises 2002 1997 5,500 1 – 160 Uitbreidingstraat 66 Office 2001 1988 5,700 10 101 764 Boom Industrieweg 18 (Krekelenberg) Industrial premises 2002 2000 24,363 1 – 1,077 Diegem Berkenlaan 6 Office 2001 1990 3,664 – 79 443 Berkenlaan 8a Office 2001 2000 7,787 – 190 1,357 Berkenlaan 8b Office 2002 2001 8,729 1 181 1,492 Woluwelaan 148-150 Office 2001 2000 8,903 5 167 1,152 Dilbeek Pontbeekstraat 2 Office 2001 2000 3,468 5 56 529 Pontbeekstraat 4 Office 2001 2000 3,401 4 64 533 Duffel Stocletlaan 23 Industrial premises 2002 1998 23,675 3 – 1,089 Walemstraat 94 Industrial premises 2002 1995 9,111 1 – 496 Edegem Prins Boudewijnlaan 45 Office 2001 1997 1,918 1 39 251 Prins Boudewijnlaan 47 Office 2001 1997 2,766 1 59 367 Prins Boudewijnlaan 49 Office 2001 1997 2,740 4 55 345 Ghent Xavier de Cocklaan 66 Office 2000 92/93 1,210 6 33 138 Xavier de Cocklaan 68 Office 2000 92/93 1,460 6 40 163 Xavier de Cocklaan 70 Office 2000 92/93 1,460 1 40 152 Xavier de Cocklaan 72 Office 2000 92/93 1,220 1 33 129 Herentals Atealaan 34 Industrial premises 2007 1977 32,768 8 47 500 Atealaan 34c Industrial premises 2008 2008 34,010 1 – 1,000 Hoeilaart Terhulpsesteenweg 6a Office 2001 1994 2,801 6 80 455 Kortenberg Arthur De Coninckstraat 3 Industrial premises 2001 2001 10,952 1 10 1,005 Mechelen Blarenberglaan 2c Office 2001 2001 12,917 1 391 2,371 Dellingstraat 57 Industrial premises 2002 1998 4,614 1 20 373 Generaal de Wittelaan 9 Office 2000 93/00 7,123 16 164 684 Generaal de Wittelaan 11a Office 2000 93/00 7,807 3 184 833 Generaal de Wittelaan 11b Office 2000 93/00 4,747 – 115 637 Generaal de Wittelaan 15 Office 2000 93/00 1,820 1 18 122 Generaal de Wittelaan 17 Office 2000 93/00 10,007 16 281 1,123 Generaal de Wittelaan 19 Office 2000 93/00 8,313 7 240 1,008 Generaal de Wittelaan 21 Office 2000 93/00 2,295 1 47 905 Oude Baan 14 Industrial premises 2002 1999 15,252 1 – 747 Schaliënhoevedreef 20a Office 2002 02/05 4,378 7 146 683 Schaliënhoevedreef 20b Office 2002 02/05 3,994 2 147 610 Schaliënhoevedreef 20c Office 2002 02/05 5,365 6 134 673 Schaliënhoevedreef 20d Office 2002 02/05 5,289 8 176 745

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Schaliënhoevedreef 20e Office 2002 02/05 4,763 8 137 670 Schaliënhoevedreef 20f Office 2007 2007 2,950 – 113 453 Schaliënhoevedreef 20g Office 2002 02/04 5,446 – 158 891 Schaliënhoevedreef 20h Office 2002 02/04 4,959 7 113 647 Schaliënhoevedreef 20i Office 2002 02/05 5,297 3 112 765 Schaliënhoevedreef 20j Office 2002 02/05 4,793 8 135 592 Schaliënhoevedreef 20t Office 2007 2007 13,534 3 230 1,779 Meer Riyadhstraat 21 / 23 Industrial premises 2002 1990 7,619 1 – 216 Merchtem Preenakker 20 Industrial premises 2002 1992 7,285 1 – 496 Puurs Veurtstraat 91 Industrial premises 2002 2001 43,490 1 – 2.056 Schelle Molenberglei 8 Industrial premises 2002 1993 8,000 3 – 404 Sint-Agatha-Berchem Technologiestraat 11,15,51,55,61 and 65 Industrial premises 2002 1992 6,463 3 84 673 Sint-Niklaas Eigenlostraat 23-27a Industrial premises 2002 1992 7,863 5 – 283 Strombeek-Bever Nijverheidslaan 1 Office 2003 2000 5,454 4 103 801 Nijverheidslaan 3 Office 2001 1999 4,889 2 103 770 Vilvoorde Luchthavenlaan 1-3 3) Office 2001 2001 2,338 1 26 410 Luchthavenlaan 25a Office 2000 1998 6,357 1 168 1.002 Luchthavenlaan 25b Office 2000 1998 2,400 4 64 313 Wilrijk Boomsesteenweg 801-803 / Kernenergiestraat 70 / Geleenweg 1-7 Industrial premises 2002 86/89 29,168 1 – 1.447 Woluwe Woluwedal 18-22 Office 2001 2000 25,074 1 923 5.186 Wommelgem Koralenhoeve 25 Industrial premises 2002 1998 24,719 1 – 1.126 Zellik Zuiderlaan 91 Office 2007 2002 3,943 5 69 675 ______Total investment properties in operation Belgium 541,711 209 6,130 49,263

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Germany

Düsseldorf Kaistraße 16-18 4) Office 2006 1995 9,374 16 52 2,093 Emanuel-Leutze-Straße 11 Office 2007 1977 9,095 17 108 1,191 Hans-Böckler-Straße 36 Office 2008 1991 7,550 1 121 2,075 Frankfurt Insterburgerstraße 16 Office 2007 2003 13,028 4 158 2,178 ______Total investment properties in operation Germany 39,047 38 439 7,537 ______Total investment properties in operation 932,162 546 11,707 101,908

1 Land on long lease. 2 At year-end 2008, VastNed Offices/Industrial had a 54.7% interest in Intervest Offices. 3 This property is held by intervention of the wholly-owned subsidiary VastNed Offices Belgium. 4 At year-end 2008, VastNed Offices/Industial effectively held a 94% interest in this property.

Notes to the property portfolio in operation

The theoretical rental income as per December 31, 2008 is based on full occupancy. – In the Netherlands the majority of the lease contracts are concluded for a period of five years, the tenant having the option of extending the lease by five years. Annual rent increases are based on the cost-of-living index. Insofar as the ground rent has not been bought off, it is paid annually; – In Belgium lease contracts are normally concluded for a period of nine years, with mutual termination options after three and six years. Annual rent increases are based on the cost-of-living index; – In Germany the majority of the lease contracts is concluded for a period of five or ten years, tenants in prevailing cases having the option of extending the lease by periods varying from one to five years. Rent increases are based on the cost- of-living index. In prevailing cases, indexation is subject to mitigation rates and/or thresholds.

Appraisers

– CBRE in Amsterdam – Cushman & Wakefield in Brussel – De Crombrugghe & Partners te Brussel – Jones Lang LaSalle in Amsterdam and Brussel – DTZ Zadelhoff Taxaties in Utrecht and Amsterdam

135 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Investment properties in pipeline Country Citiy Location Type of property Year of completion Lettable floor space (sqm) Investment (x € 1 million) Net initial yield ______

Netherlands

Breda Cosunpark 4 Office – 2,225 – – Cosunpark 5 Office – 3,100 – –

Belgium

Vilvoorde Luchthavenlaan Site – – – –

Germany

Frankfurt Mainzer Landstraße 33a Office 2008 3,608 9 –

136136 WorldReginfo - 7df1b1fe-1765-48fd-9876-6976250ace56 Key figures Key figures property portfolio (in operation)

VastNed Offices/Industrial has reported its figures in accordance with IFRS since 2005. The 2004 key figures have been adjusted. 1 Taking share buybacks into account. 2 A percentage of shares yet to be determined, charged to the share premium reserve. 1 Parking spaces included in rent. 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