Adding value to everyday life Integrated Annual Report 2019 Annual Report 2019 1 Introduction Beyond shopping Our business & strategy Creating value Performance & Outlook Governance Additional information Financial statements Wereldhave N.V. At Wereldhave, we believe that everyone deserves to have a comfortable, well-balanced everyday life. No ifs. No buts. End of story. And we play our part by creating best-in-class Full Service Centers. Centers for a better everyday life. How do we do this? By creating a new category in retail real estate; one that helps customers run their daily lives more easily and makes everyday life comfortable and joyful. With our LifeCentral transformation program, we focus on creating the right balance on the four customer need areas that make every day count. Annual Report 2019 2 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V. About this report Who we are and what we do Statement from the Board of Management Wereldhave is a retail property investor in the Netherlands, Belgium and France. For us, As Wereldhave’s Board of Management, we take responsibility for the content and successful commercial real estate goes beyond location. It is about offering tenants services accuracy of this Report. Our Integrated Annual Report gives a fair and balanced picture that support their business and allow people to live a better, more balanced life close to of Wereldhave’s performance, strategy and management, as well as our ability to create home. Together with our local partners, we are building Full Service Centers that serve value for stakeholders and society over the short, medium and long term. This Report communities and help our customers make every day count. also addresses the Company’s most important risks. It is intended for all stakeholders, but is of particular interest to providers of financial capital. About this report About Wereldhave This 2019 Integrated Annual Report explains how, over time, Wereldhave creates values for its stakeholders and society – not only as a real estate investor, but also as an employer and Wereldhave was established in 1930. Shares in Wereldhave are listed on the Euronext a business partner. This Report describes our business, strategy and performance; it also Amsterdam (AMX) Stock Exchange. The Company has the fiscal status of an investment explains our system of governance, and how we take decisions in the long-term interests of institution; as such, it pays no corporation tax in the Netherlands (other than for development Wereldhave and its stakeholders. activities). Wereldhave’s investments in Belgium consist of a 66.53% interest in Wereldhave Belgium, a tax-exempt investment company listed on the Euronext Brussels Stock Exchange. This Report comprises two main parts. The report from the Board of Management is Our investments in France are subject to the SIIC regime. structured around six main sections, starting with the introduction, followed by chapters addressing our business environment, our business and strategy, creating value, Wereldhave is a member of EPRA, IVBN and the Dutch Green Building Council. Wereldhave’s performance and outlook, and governance. The Supervisory Board report is included in the headquarters are located at WTC Schiphol, Schiphol Boulevard 233, 1118 BH Schiphol. Governance section. Our detailed sustainability disclosures can be found at the end of this Report, directly after the financial statements and the auditor’s report. To download this Report or obtain more information, please visit us at Wereldhave.com or contact us at [email protected]. Annual Report 2019 3 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V. In this report Introduction Beyond shopping Our business & strategy Creating value Our highlights of 2019 6 Beyond shopping 11 Our business 14 Creating value 25 Message from our CEO 8 Our business model 16 Our strategy 18 Make every day well-balanced 22 Performance & outlook Governance Additional information Financial statements Financial performance 29 Governance 65 Basis of preparation 85 Consolidated financial Make every day Risk management and Compliance with statements 97 convenient 32 internal controls 68 IIRC framework 86 Notes to the consolidated Results 42 Supervisory Board report 73 Qualifying notes financial statements 102 5-year tables 43 Extract of the CSR reporting 87 Company financial Make every day succesful 46 remuneration report 77 Materiality 88 statements 141 Performance: tenants Statement by the Board Stakeholders engagement 89 Notes to the company and visitors 48 of Management 81 Property portfolio 90 financial statements 143 Performance: employees EPRA tables 92 Other information 149 and contractors 50 Auditor’s report 150 Performance: investors 53 Performance: society 55 Make every day responsible 60 Performance: suppliers and business partners 62 Outlook 63 Annual Report 2019 4 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V. At a glance LifeCentral program Asset-by-asset transformation Residential towards portfolio of Full Service Centers with mix of ‘life central’ experiences as base for ess elln Fo sustainable growth w o d d, an fr s es rt h About Wereldhave o a p Fi n s xi d , n e g g s Focus on Benelux, and phase r in t e a e h r c e v Wereldhave owns and operates more than b ic out France, proceeds to be h - t e l l b l s a a thirty retail and Full Service Centers in the s e invested in transformation e e s c i H W i c Netherlands, Belgium and France. Our centers f f Full Service s o T r combine leisure, food & beverage, entertainment, d a n Centers n a s and health & beauty, as well as traditional retail. Total investments in LifeCentral: p e F o c a 300-350 million euro a At the end of 2019, our portfolio was worth for better r l ( s S t p h just over € 2.9 billion. Wereldhave is k i e o r l everyday life t n o f e , f n registered in the Netherlands as an investment ) i e W a e l c m c x g n Total targeted divestments: institution, the Dutch equivalent of a Real Estate e p i s in a s r t Investment Trust (REIT). Our shares are listed o e y r book value of 1,075 million euro ri s jo te e si n n s on E e on Euronext Amsterdam. , b nd ea a ut B y a F& nd Wereldhave to adopt a total home property return investment approach Hotels New target LTV of 30-40%, without an equity / rights issue Annual Report 2019 5 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V. Total result 2019: € -318.9 € -318.9m (2018: € -55.6m) Direct result 2019: € 128.6 € 128.6m (2018: € 146.7m) Indirect result 2019: € -447.5 € -447.5m (2018: € -202.3m) € 2.81 EPRA EPS 2019: € 2.81 Dividend for 2019: € 2.52 € 2.52 (final distribution of € 0.63 per share) Outlook EPRA EPS 2020: € 2.35-€ 2.45 € 2.35 to € 2.45 Dividend pay-out ratio between 75%-85% 75% and 85% of EPRA EPS Dividend for 2020: € 1.76 (three interim payments of € 0.44 and an expected final € 1.76 distribution of € 0.44 per share) Introduction Our highlights of 2019 Annual Report 2019 6 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V. Our highlights of 2019 January CEO Dirk Anbeek steps down, July Herman van Everdingen interim CEO. Construction start phase 2 Tilburg inner-city redevelopment. February August USPP € 56m redeemed. New CEO Matthijs Storm takes the helm. March September New Supervisory Board member announced. Q2 WH rated GRESB 5 star for 6th consecutive year. Q1 Q3 April NRW shopping center marketing award. Sale of former V&D in Hoofddorp. May € 250m convertible bond redeemed. June Completion phase 2 Koperwiek, Capelle a/d IJssel. Annual Report 2019 7 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V. Operations 2018 2019 Net rental income (x € 1m)1 166.4 171.5 Like-for-like SC rental growth (%) 0.1 -0.6 Occupancy SC portfolio (%) 96.3 94.8 Visitors, like-for-like (x 1m) 134.0 135.5 Leasing activities (# leases) 347 362 Results & finance 2018 2019 Total result (x € 1m)1 16.4 -319.5 Direct result (x € 1m)1 118.0 128.6 Indirect result (x € 1m)1 -101.6 -448.1 Direct result per share (in €)1 2.62 2.81 EPRA NAV per share (in €) 43.82 32.99 Dividend proposal per share (in €) 2.52 2.52 Investment property (x € 1m) 3,280 2,907 Shareholders’ equity (x € 1m) 1,744 1,320 Q4 Net debt (in € 1m) 1,232 1,315 LTV (Loan-To-Value) (as a%) 37.5 44.8 Outlook 2020 October EPS: between € 2.35 and € 2.45 Completion redevelopment former Carrefour Dividend 2020: € 1.76 per share, € 0.44 per quarter in Liège, Belgium. Sustainability 2018 2019 November Building energy intensity (kwh/m2/year) 70.26 68.34 Truffaut opening in Bordeaux, France. Solar energy produced onsite (MWh) 2,360 3,667 Green roofs (m2) 25,365 25,365 December Employee engagement 7.6 7.6 % Green lease 49% 49% Carrefour and Biltoki to open stores in Docks76, Society investments (x € 1m) 1.6 1.5 Rouen, France. 1 From continuing operations Message from our CEO Annual Report 2019 8 Introduction Beyond shopping Our business & strategy Creating value Performance & outlook Governance Additional information Financial statements Wereldhave N.V.