MARKETS WERELDHAVE ANNUAL REPORT 2014 1 ANNUAL REPORT 2014 STRATEGY Growth phase DEVELOPMENTS Itis and Noda SUSTAINABILITY Fully integrated in our business 2 WERELDHAVE ANNUAL REPORT 2014 ANNUAL REPORT 2014 This is the Annual Report 2014 of Wereldhave N.V. including the report from the Board of Management for the year 2014, the property portfolio overview, the financial statements and the report of the Supervisory Board. This report will be published in digital form only on the Company’s website www.wereldhave.com Where relevant, the comparative figures have been restated for the rights issue. WERELDHAVE ANNUAL REPORT 2014 3 CONTENTS 1. ABOUT WERELDHAVE 4 4 2. FOREWORD FROM THE CEO 7 7 3. RECOMMENDATION FROM THE SUPERVISORY BOARD 10 10 4. REPORT FROM THE BOARD OF MANAGEMENT 12 12 4.1 2014 IN BRIEF 12 12 4.2 STRATEGY 15 15 4.3 INTERNET AND RETAIL 18 18 4.4 MARKETS 22 22 THE NETHERLANDS 22 22 EGGERT 26 BELGIUM 30 30 FINLAND 34 34 ITIS 36 36 FRANCE PARIS OFFICES 40 NODA 42 42 FRANCE RETAIL 44 4.5 COMPOSITION OF THE PORTFOLIO 48 4.6 STAFF AND ORGANISATION 5049 4.7 SUSTAINABILITY 51 4.8 RESULTS AND EQUITY 53 4.9 OUTLOOK 2015 58 5. REPORT FROM THE SUPERVISORY BOARD 60 6. CORPORATE GOVERNANCE 66 7. EPRA TABLES 84 8. PROPERTY PORTFOLIO AS AT DECEMBER 31, 2014 88 FINANCIAL STATEMENTS 2014 92 4 WERELDHAVE ANNUAL REPORT 2014 ABOUT WERELDHAVE 1. ABOUT WERELDHAVE Wereldhave is a Dutch listed property investment FINANCIAL company. Wereldhave focuses on dominant mid- CALENDAR 2015 sized shopping centres in larger provincial cities in MARCH 27 northwest continental Europe and sustainable Record date Annual General Meeting offices in Paris. of Shareholders APRIL 24 Update first quarter 2015 The catchment area should comprise of at least 100,000 inhabitants within 10 minutes travel time. Wereldhave’s shopping APRIL 24 centres offer consumers ‘convenient shopping’: 90% of shopping Annual General Meeting needs, strong (inter)national tenants, fully embedded food and of Shareholders beverage functions and easy accessibility, in combination with strong food anchors. APRIL 28 Ex-dividend date For more information: www.wereldhave.com APRIL 29 KEY FIGURES 2014 Record date dividend 2014 2013 Total result € 26.9m € 50.0m MAY 7 Direct result € 85.7m € 81.3m Dividend payment date Indirect result € -58.8m € -31.2m Direct result per share € 2.97 € 2.86 JULY 24 Dividend proposal per share € 2.87 € 2.87 Interim statement 2015 31-12-2014 31-12-2013 OCTOBER 23 Property investment portfolio € 3,221.6m € 1,731.9m Update third quarter 2015 Equity € 1,976.0m € 1,499.8m NAV per share (EPRA) € 54.35 € 56.41 DISTRIBUTION OF INVESTMENT SHARE PRICE 2010-2014 (€) PROPERTIES BY SECTOR AT YEAR END 80 2014 70 60 50 40 30 20 2010 2011 2012 2013 2014 86% Shopping Centres 14% Oces ABOUT WERELDHAVE WERELDHAVE ANNUAL REPORT 2014 5 KEY INFORMATION 2010 2011 2012 2013 2014 Share price at 31/12 63.57 44.65 41.77 49.75 57.00 Price/Direct result at 31/12 14.36 10.43 12.31 17.40 19.19 avg. Transactionvolume/day 166,000 144,000 137,000 131,000 134,000 Marketcapitalisation at 31/12 1,6bn 1,1bn 1,0bn 1,2bn 2.0bn NAV/share 65.20 63.75 55.20 54.02 52.07 EPRA NAV/share 57.57 56.41 54.35 Premium (discount) -2.5% -30.0% -24.3% -7.9% 9.5% Dividend 4.09 4.09 2.87 2.87 2.87 Dividend yield at 31/12 6.4% 9.2% 6.9% 5.8% 5.0% Pay-out 92% 95% 84% 100% 97% Free float 100% 100% 100% 100% 100% NET ASSET VALUE AND SHARE PRICE AT DECEMBER 31 (€) 80 Net Asset Value Share price 70 60 65 64 64 50 57 55 54 50 52 40 45 42 30 20 10 0 2010 2011 2012 2013 2014 LEASE EXPIRIES 20 Shopping centres Oces 1.0% 1.2% 17.6% 17.6% 15 3.0% 5.5% 2.2% 57 12.3% 54 52 11.1% 50 10 9.8% 5.9% 5 0.2% 5.1% 3.2% 2.3% 2.0% 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 > 2023 (as a % of contracted rent at december 31, 2014) Excluding indefinite contracts (4.4% of total) 6 WERELDHAVE ANNUAL REPORT 2014 ABOUT WERELDHAVE SHARE PRICE DEVELOPMENT 2014 (€) 65 60 55 50 45 40 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. KEY FIGURES PAST 5 YEARS 2010 2011 2012 2013 2014 Results (x € 1m) Net rental income 1) 2) 160.2 128.7 107.7 99.9 114.8 Result 3) 88.7 51.3 -98.4 50.0 26.9 Direct result 3) 109.0 106.3 84.9 81.3 85.7 Indirect result 3) -20.3 -55.0 -183.3 -31.2 -58.8 Balance sheet (x € 1m) Investments 2,860.1 2,830.2 2,073.0 1731.9 3,221.6 Development projects 134.5 227.9 240.0 413.2 43.9 Equity 4) 1,611.2 1,591.9 1378.8 1349.4 1,823.4 Interest bearing debt 1,148.0 1,289.1 1,288.8 680.7 1,251.0 Number of shares At December 31 21,448,525 21,679,608 21,679,608 21,679,608 35,020,921 Average during the year 21,389,310 21,593,238 21,678,608 21,679,608 25,384,336 Share data 5) (x € 1) Equity 6) 65.20 63.75 55.20 54.02 52.07 Direct result 7) 4.43 4.28 3.39 2.86 2.97 Indirect result 7) -0.82 -2.21 -7.33 -1.28 -2.38 Dividend 4.09 4.09 2.87 2.87 2.87 Pay-out 92% 96% 85% 100% 97% Result per share 7) 3.60 2.07 -3.94 1.58 0.59 1) as a result of change in accounting policies, as per 2011 leasehold contracts are presented as operational lease contracts 2) figures 2011 and onwards excl. discontinued operations 3) excluding minority interest 4) excluding minority interest, before distribution of profit 5) per ordinary share ranking for dividend and adjusted for bonus issue 6) before distribution of profit 7) based on the average number of ordinary shares in issue FOREWORD FROM THE CEO WERELDHAVE ANNUAL REPORT 2014 7 2. FOREWORD FROM THE CEO Dear stakeholders, The past two years have been truly transformational for Wereldhave. In a real estate landscape that is changing fast, Wereldhave shifted gear and moved even more rapidly. Over the past two years, our total transaction volume in acquisitions and disposals amounted to well over € 2.5bn. The entire portfolios in the United States, the United Kingdom and Spain were sold. The acquisition of six French shopping centres for € 850m was completed in December 2014. During the full year 2014, our DIRK ANBEEK assets in operation grew by 86% from € 1.7bn to € 3.2bn. The Company is now in the strategic growth phase. We want to play a pro-active role in the consolidation that is currently taking shape. Our portfolio is much more focused now: mid-sized shopping centres in northwest continental Europe represent almost 90% of our assets. Good progress was also made on the refinancing of our debt portfolio. Wereldhave traditionally had a high percentage of loans at variable interest rates, usually about half of the loan portfolio. The interest rate is now fixed for a long time and the percentage of loans at fixed interest rate is currently at 81% with an average rate of 2.2%. This has significantly improved Wereldhave’s risk profile and we do have one of the lowest cost of debt of the sector. The largest transformation however has been the change in corporate culture. Early in 2013, we defined Entrepreneurship, Ambition, Teamwork and Transparency/Integrity as our key values. Changing the culture was necessary to create a solid foundation towards operational excellence. Staff and operations must be aligned towards the same target. Focus on a clear management agenda is one of the keys to success. Our ambition is to become the leading operator of mid-sized shopping centres in northwest continental Europe. 8 WERELDHAVE ANNUAL REPORT 2014 FOREWORD FROM THE CEO The change in culture went hand in hand with many and frequent adjustments to the organisation, also in the Management Team. We used key priorities to focus on operational excellence. Clear targets were set and management attention and reporting shifted towards these priorities. By mid-2014, it became clear that we were ready for Growth. Our like-for-like rental growth is far above indexation and occupancy levels went up, in spite of a harsh leasing environment. “We used key So we did not only reshape our portfolio, but also succeeded in building a strong operational platform. priorities to focus on operational The use of key priorities also paid off in the field of sustainability. In 2014, Wereldhave was rated GRESB Green star and more excellence” recently, SAM rated Wereldhave a Dow Jones Sustainability Index industry fast mover. We have a sound ambition to keep the pace in improving our sustainability performance. I would particularly like to thank all committed Wereldhave employees, also the ones we had to say goodbye to after exiting their country. Without their relentless effort and loyal support, we would never have been able to change the Company this rapidly. I also would like to express my gratitude towards our loyal shareholders.