ANNUAL
REPORT
2023
CONTENT
ANNUAL REPORT
INTRODUCTION
NSI Highlights 3
NSI At a Glance 4
CEO comments 6
MANAGEMENT BOARD REPORT
Purpose & sustainable long term value creation 8
Sustainability 12
Energy and Carbon 14
Future Proof Buildings 16
Climate Risks 18
Social Engagement 21
Income, Costs and Results 23
Dutch Property market overview 24
Real Estate Portfolio 25
Balance Sheet, NTA and Financing 30
Risk Management and Internal Control 34
A Great Place to Work 45
GOVERNANCE
Corporate Governance 55
ESG Governance 60
Details Management Board 62
Report of the Supervisory Board 63
Details of the Supervisory Board 69
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income 72
Consolidated Statement of financial position 73
Consolidated Cash Flow Statement 74
Consolidated Statement of changes in shareholder’s equity 75
Notes to the Consolidated Financial Statements 76
Company Balance Sheet 105
Company Income Statement 106
Notes to the Company Financial Statements 107
OTHER INFORMATION
Statutory Provision in respect of profit appropriation 112
Independent Auditor’s report 114
Assurance report of the Independent Auditor 120
SUPPLEMENTARY INFORMATION
Other Data 123
NSI Share 124
Property List 125
ESG (non-financial) Performance Measures 126
EU Taxonomy eligibility and alignment 132
EPRA Key Performance Measures 138
Five Year Overview 140
Glossary Key Performance Indicators 141
Glossary Sustainability Performance Measures 143
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NSI HIGHLIGHTS
KEY FINANCIAL METRICS
REVENUES AND EARNINGS
2023 2022 Change
Net rental income 58,421 59,325 -1.5%
Net rental income - like-for-like 58,014 55,461 4.6%
Direct investment result 40,402 42,733 -5.5%
Indirect investment result -182,772 -74,103 146.6%
Total investment result -142,370 -31,370 353.8%
EPRA earnings per share 2.01 2.15 -6.6%
Weighted average number of ordinary shares outstanding 20,117,872 19,869,975 1.2%
EPRA cost ratio (excl. direct vacancy costs) 29.1% 27.8% 1.3 pp
BALANCE SHEET
31 December 2023 31 December 2022 Change
Investment property 1,028,801 1,259,235 -18.3%
Net debt -344,443 -365,480 -5.8%
Other assets and liabilities 25,524 -6,746 -478.4%
Equity 709,882 887,008 -20.0%
EPRA NTA per share 35.30 44.17 -20.1%
Number of ordinary shares outstanding 20,155,221 20,054,240 0.5%
Net LTV 33.0% 28.7% 4.4 pp
KEY ESG METRICS (NON-FINANCIAL)
2023 2022 Change
CRREM building energy intensity (kWh/sqm/year)
1
130 136 -4.4%
EPC-label (percentage operational portfolio with label A or better) 95.3% 88.0% 7.3 pp
GRESB score 94 93 1
KEY PORTFOLIO METRICS
31 December 2023
31 December 2022 Change
Amsterdam Other G4 Other NL TOTAL
Number of properties 22 14 10 46 49 -6.1%
Market value (€ m)
2
588 301 154 1,043 1,275 -18.2%
Lettable area (sqm k) 160.7 125.0 64.9 350.7 382.1 -8.2%
Annualised contractual rent (€ m)
3
39 26 12 77 78 -0.9%
Estimated rental value (€ m) 44 27 13 84 88 -5.4%
EPRA net initial yield 5.2% 5.7% 5.0% 5.3% 4.6% 0.8 pp
Gross initial yield 7.4% 8.6% 8.1% 7.9% 6.4% 1.5 pp
EPRA vacancy 5.8% 6.0% 1.5% 5.2% 6.2% -1.1 pp
1 2022 figure has been restated to reflect accurate number of square meters. This figure excludes sold assets and developments.
2 Reported in the balance sheet at book value including right of use leasehold (IFRS 16), excluding lease incentives and part of NSI HQ (own use).
3 Before free rent and other lease incentives.
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4 NSI ANNUAL REPORT 2023
2023
94/100
4 NSI ANNUAL REPORT 2023
NSI AT A GLANCE
GRESB SCORE
★ ★ ★ ★ ★
HIGHLIGHTS 2023
EPC ENERGY PERFORMANCE CERTIFICATES BY VALUE
2
GRESB
1
Excluding development
2
Based on value, excluding (re)developments during development period
MAXIMUM
SCORE IS
5 STARS
INDUSTRY AVERAGE
2018
49/100
2019
71/100
2020
88/100
2022
93/100
2021
92/100
AVERAGE PORTFOLIO VALUE GROWTH
17.6%
City # Assets Book
Value
% of total
portfolio
Gross Initial
Yield
Amsterdam 22 € 588m 56% 7.4%
Other G4 14 € 301m 29% 8.6%
Other NL 10 € 154m 15% 8.1%
TOTAL 46 € 1,043m 100% 7.9%
PORTFOLIO BY SEGMENT
BREEAM BY SQM
1
NO LABEL ACCEPTABLE
-
PASS GOOD VERY GOOD EXCELLENT
9%
6%
13%
35%
38%
PROFILE
NSI is a leading Dutch stock-exchange listed commercial
property investor with a focus on offices in Amsterdam and
selective other growth locations.
MISSION
NSI enables its customers to achieve maximum productivity and
growth, providing best-in-class, flexible, space solutions and
an unparalleled level of services in modern, healthy, sustainable
buildings in prime locations.
A++
AA+
B
C D
E
F & G
29%
23%
29%
7%
6%
6%
2017
44%
26%
15%
5%
6%
4%
2018
74%
12%
12%
2%
2020
80%
7%
10%
2%
2%
2021 2023
65%
8%
4%
10%
13%
2022
61%
16%
15%
3%
3%
2%
2019
0%
73%
(LFL) OCCUPANCY
0.3%
+
(LFL) ERV GROWTH
1.9%
+
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5 NSI ANNUAL REPORT 2023
NETHERLANDS AMSTERDAM
NET PROMOTOR SCORE AMSTERDAM AS A PERCENTAGE OF MARKET VALUE
PROMOTERS (9+)
PASSIVES (7 - 8)
DETRACTORS (6 OR LOWER)
10.3
2023 2022
Amsterdam
Utrecht
Rotterdam
The Hague
Leiden
SLOTERDIJK
ZUIDAS
AMSTERDAM
NON-AMSTERDAM
2016 2017 2018 2019 2020 2021 2022 2023
23%
77%
36%
64%
45%
55%
51%
49%
53%
47%
59%
41%
57%
43%
56%
44%
ZUIDOOST
19.9
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6 NSI ANNUAL REPORT 2023
CEO COMMENTS
FROM CHALLENGES TO OPPORTUNITIES
At the end of 2023 NSI, with a modest 5.2% vacancy rate, 95% of
the portfolio EPC label A or better, a LTV of 31.5% (pro forma), an
undemanding gross yield of 7.9%, no capital commitments, a port
-
folio still full of opportunities and an excellent team ready to drive
performance, is very well placed.
2023 proved a robust year operationally, with healthy leasing activity
driving record occupancy, like-for-like rental growth of 7.4% and new
leases signed on average 2% ahead of ERV. Given the still muted
economic outlook for 2024, we will first and foremost have to make
sure that the portfolio continues to perform. Further asset pruning, to
increase the focus on Amsterdam, will help drive the overall perfor
-
mance, as will additional targeted investments in sustainability and
services.
SUCCESSFUL SALE OF LAANDERPOORT PROJECT
Following a period of intensive discussions, in January 2024 NSI
agreed the sale of the existing Laanderpoort building, together with
the plans, permits and agreements for its redevelopment, to ING for
a total amount of €24m.
We are pleased with this transaction. Not only is it testament to the
quality of the development team (delivering a ‘ready to start’ project
to ING), but it also has released NSI of a sizeable commitment,
thereby allowing the pursuit of more profitable investment opportu
-
nities elsewhere.
Given the sale of Laanderpoort in combination with the strong
balance sheet position, we now feel comfortable to allocate €20m to
a share buy-back programme.
RESTRUCTURING TO PREPARE FOR FBI LEGISLATIVE
CHANGES
Legislation has now been passed such that as of 2025 FBI’s can no
longer directly invest in Dutch real estate. NSI NV intends to remain
an FBI at least up to the end of 2024. Yet, in 2023 NSI has executed
the necessary restructuring to limit the negative impact of this legis
-
lative change.
As a result of the restructuring NSI will start to pay some tax in 2023
(ca 2%) and in 2024 (ca 5-7%). The tax rate beyond 2024 may be
higher, dependent on likely further changes to the tax law on interest
deductibility for tax purposes, which are expected later this year. At
the same time, as a result of the restructuring, a €38.7m deferred tax
asset has been accounted for per December 2023.
Meanwhile, we fully support the preliminary discussions by the
Dutch Government to establish a new REIT regime, but as we say in
Dutch: ‘flowers only at the finishing line’.
BACK ON THE FRONT FOOT
The past four years have generally been challenging for office inves-
tors everywhere. Headwinds as Covid, WFH, rising interest rates,
lower valuations, high construction costs, environmental require
-
ments and a consolidating, yet much more demanding, customer
base have severely altered the business prospects for any office
investor compared to the start of this decade.
For NSI – and our shareholders in particular – this has also been a
painful reset period, given the changes to the FBI tax regime as well.
That being said, we are confident that all of the elements are now in
place for NSI to be back on the front foot.
The continued asset pruning and deleveraging in recent years, in
combination with a strong focus on sustainability and services,
whilst scaling back the development pipeline for now, coupled with
the strategic review of the entire business in 2023, provide a sound
basis for 2024 and beyond.
OUTLOOK 2024
We continue to see the long term investment case for high quality,
sustainable and amenitised offices in growth locations.
The wider office market reset will increasingly drive new opportuni
-
ties as not all owner/operators have the stamina, knowledge, time or
money to once again get ahead of the curve. This is particularly so
for the brown-to-green conversions that are bound to be necessary
to keep up with the rising trend in demand for the best product.
There is a moment to put the balance sheet to work and we are
coming nearer that point. Dutch office capital values are down
substantially from the peak, with NSI’s own capital values down 21%
over the same period, and we are starting to see deals emerge that
exceed our implied cost of capital. Having said that, given prevailing
market conditions we are in no rush to deploy capital at this stage.
Whilst we have scaled back development in 2023, it remains a core
competency to the business. The team will continue to explore
opportunities still embedded in the portfolio but, as the sale of Laan
-
derpoort shows, we are and will remain flexible in how these oppor-
tunities are eventually monetised.
Whilst we appreciate liquidity in the market is limited at this stage,
we expect the year 2024 to bring new opportunities for further asset
rotation. We will also explore in more detail the possibilities to use
private/JV capital for this purpose.
In line with previous guidance, we will propose to the AGM a full year
dividend of €1.52 per share, equating to a final dividend of €0.77 per
share. This dividend will be payable in May.
We forecast a post-tax EPRA EPS of € 1.85-2.00 per share for the full
year 2024, subject to further asset rotation.
Bernd Stahli
2023 proved a robust
year operationally, with
healthy leasing activity
driving record
occupancy
6 NSI ANNUAL REPORT 2023
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Purpose & sustainable long term value creation 8
Sustainability 12
Energy and Carbon 14
Future Proof Buildings 16
Climate Risks 18
Social Engagement 21
Income, Costs and Results 23
Dutch Property market overview 24
Real Estate Portfolio 25
Balance Sheet, NTA and Financing 30
Risk Management and Internal Control 34
A Great Place to Work 45
MANAGEMENT
BOARD REPORT
CONTENT
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8 NSI ANNUAL REPORT 2023
PURPOSE AND SUSTAINABLE LONG
TERM VALUE CREATION
NSI’s stated purpose is: “We enable our customers to achieve
maximum productivity and growth, providing best-in-class,
flexible space solutions and an unparalleled level of services
in modern, healthy, sustainable buildings in prime locations”.
This purpose has served as a clear guide to all our decisions and
initiatives in recent years, both with respect to real estate and
services. We have consistently worked back from the customer’s
needs to the real estate and services.
Two years into the post-pandemic ‘return to office’ the features
of the new workplace have become increasingly clear: : whilst
t
he necessity for a physical office Is no longer unquestioned, the
desire for the right one remains undiminished. The workplace of
the present and future is a place for collaboration, identity and
culture, but also a way to attract talent by way of offering modern,
healthy, high quality, sustainable space, in vibrant locations, with
a good mix of workstations, meeting rooms, collaborative space
and focus rooms, complemented by a variety of amenities.
SUSTAINABLE LONG TERM VALUE CREATION
Our long term value creation model is based on the above purpose.
We strive to become the leading Dutch real estate company, by effec
-
tively and efficiently utilising the permanent capital entrusted to us to
deliver on our strategy to invest in (and where possible create) vibrant
multifunctional urban areas where people want to work, live and play,
underpinned by sustainability, well-being and services.
We generate long term attractive returns by investing in real estate in
those specific locations. Our approach aligns with the prevailing trend
of tenants upgrading to superior locations, placing a pronounced
emphasis on sustainability, health, well-being, and a robust array of
services. Success hinges on delivering the ideal space in precisely
the right location, complemented by services that seamlessly meet
the needs of our discerning tenants.
We also genuinely believe that the real estate industry has a role to
play in reducing the use of the earth’s limited resources and leaving
a better world for the next generation, as the industry currently is
known to make up over 30% of all CO
2
emissions. To acknowl-
edge our responsibility here, we have positioned the environment
and climate as a pre-eminent (albeit silent) stakeholder in our value
creation model. As such, sustainability is deeply rooted in all our
decision-making and activities.
We constantly strive to improve the quality of our offering. We can only
deliver this with an excellent team of ambitious professionals. We aim
to be a great place to work, where our employees feel engaged and
connected, and can help to set and exceed our joint ambitions.
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CAPITAL
- Financial capital from
equity and debt investors
LONG TERM
TOTAL RETURN
- Attractive long term
total return by investing
in Real Estate
REAL ESTATE
- High quality assets on
strategic locations
- Targeting growth clusters
in vibrant cities
VIBRANT URBAN
MULTI-FUNCTIONAL
AREAS
- Offices where people like to come
- Creating cohesive communities
- Fostering innovativecollaboration
OUR PEOPLE
- Attracting best in
class talents
- Invest in training
and development
- Promoting diversity
and inclusion
EMPLOYEE
ENGAGEMENT
- High performance and
entrepeneurial culture
- Employee satisfaction
RELATIONSHIPS
- Customers
- Real Estate
Agencies
- Suppliers
- Governmental
bodies
CUSTOMER
ENGAGEMENT
- Customer satisfaction
- Customer retention
- Premium rents
- Health and Wellbeing
MATERIALS & ENERGY
- Increase use of renewable
energy
- Using sustainable building
materials
- Focus on circularity in
construction and
exploitation
FUTURE PROOF
BUILDINGS
- Adaptive and flexible buildings
- Commitment to highest ESG
standards (BREEAM, WELL, EPC)
- Minimising environmenal impact
INPUT OUTPUT
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INVESTORS
PARTNERS & SUPPLIERS
CUSTOMERS
EMPLOYEES
STAKEHOLDERS
SOCIETY AND CLIMATE
STAKEHOLDERS
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10 NSI ANNUAL REPORT 2023
PORTFOLIO MANAGEMENT
& (RE)DEVELOPMENT
PROGRESS 2023
In 2023, NSI performed an integral strategic review of its portfolio and
activities. The strategic review clarified that in light of the change in
market conditions, a revision of the strategy was warranted. Covid
has been the great accelerator of a series of secular trends for offices:
location remains vital, but sustainability, well-being, and services are
now paramount to asset class success. Key outcomes of the review
Ie a sharpened focus on Amsterdam and an increased commitment
to sustainability. A new €150m disposal programme was announced
(depending on market conditions) to further align the portfolio with
these strategic priorities.
The liquidity in the market was severely restricted in 2023. Three
assets were sold and no acquisitions were made in 2023.
NSI is convinced that sustainability is increasingly becoming a driver
of polarisation. Only those buildings with the right credentials in the
right locations will be able to remain occupied and generate rental
growth. Only in those locations where rent and capital value levels
are sufficiently high enough, the economics for the necessary invest
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ments in sustainability will be favorable. Everywhere else there is a
clear risk of stranding. As such, sustainability will also remain a key
criterion in defining our asset rotation / disposal strategy. The share
of NSI's portfolio with Label A Energy Performance certificates
increased to 95%, from 88% in 2023. The percentage Breeam ‘Very
Good’ and ‘Excellent’ labels increased to 73% from 66% in 2023.
In line with the prevailing difficult overall market conditions, NSI has revis-
ited the risk/return prospects of its developments and decided to scale
back its near-term initiatives. Laanderpoort was sold to ING in January
2024
inclusive of plans, permits, and redevelopment agreements.
However, development remains a core competency to the business
and the team will continue to explore opportunities still embedded in
the portfolio. The sale of Laanderpoort in combination with the strong
balance sheet position, has enabled NSI to allocate €20m to a share
buy-back programme.
SERVICES
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PORTFOLIO MANAGEMENT
With its portfolio management, NSI pursues a long-term total return
strategy, through active management, refurbs, asset repositionings
and (re)developments, always with a clear focus on sustainability and
underpinned by regular asset rotation. NSI is active in high-growth
Dutch locations in selected key cities in the Netherlands, with its
primary focus on Amsterdam, in line with the global trend of urban
-
isation. We have a strong emphasis on inner city locations and loca-
tions at or near the main transport hubs, which are – or will become
– vibrant multi-functional locations, where people want to work, live
and play. We believe that this is where companies want to be, because
of the proximity to their wider network and available talent pool.
In addition to location, traditionally the most important driver to real
estate returns, we see sustainability taking an increasingly prevalent
role in determining the future attractiveness of assets, and conse
-
quently their value. We have now established a Paris-Aligned pathway
and the outcome will significantly determine our investment plans and
asset rotation from here.
Our focus is on highly sustainable and adaptable buildings, with suffi
-
cient scale to be able to offer services on a profitable basis, but we
may also own or acquire assets that in time can be redeveloped to
offer all this (or can profitably be converted to alternative use).
Going forward the primary focus will remain location: the future poten
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tial and our ability to strengthen the attractiveness of locations. This
may go beyond our main office activities, as we have identified several
mixed-use and residential development opportunities in our portfolio.
(RE)DEVELOPMENT
NSI pursues selective (re-)development opportunities to expand its
asset portfolio with the most sustainable, modern, Paris-aligned
assets in the best locations, at better risk-adjusted returns relative
to acquiring comparable assets in the open market.
Our (re)development projects enable us to shape our buildings
and portfolio around the changing needs of our customers. We
anticipate changes in the way people work and the ever-growing
importance of sustainability to ensure a future-proof design.
Furthermore, we incorporate services and technology to create
flexible and adaptable workspaces to maximise usability.
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Customer behaviour and demands are structurally shifting, with flex-
ibility, hospitality, services and amenities increasingly becoming key
considerations in the wider real estate industry. The focus on quality
assets in attractive economic growth locations (and the asset rotation
in recent years to achieve this) has resulted in a clear change in our
tenant profile.
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11 NSI ANNUAL REPORT 2023
Tenants focus on being able to attract the right talent, productivity,
sustainability and well-being, less so on costs. Providing the right mix
of attractive spaces and services so that their businesses can thrive
are therefore key to our success.
Our in-house team regularly reviews every individual asset what level
of services is appropriate and how these should be organised, based
on location, size, (potential) tenant profile and market dynamics.
For multi-tenant buildings where a smaller selection of services is
deemed appropriate, we aim to start introducing NSI itself as a brand,
with a clear promise as owner/operator of the building.
HNK – OUR IN-HOUSE SERVICED OFFICE CONCEPT
HNK is our in-house serviced office concept, currently operating
a total of 7 buildings. The upgraded HNK concept, relaunched in
2022, has a strong focus on sustainability, well-being and comfort.
The intended customer experience aims to make customers feel
welcome, connected, truly supported and energized.
One of our distinguishing strengths is our hospitality approach. Our
staff is well trained to deliver the right customer experience. Another
distinctive asset is our ability to genuinely incorporate sustainability in
all our activities, as we are both operator and owner of the building.
We can control all sustainability efforts and can proactively meet the
increasing demands from our customers – a key differentiating feature
that arguably very few other serviced-office operators can offer.
PROGRESS IN 2023
Providing the right services is a key element in the recent rebranding
strategy of HNK. Accessibility (location), sustainability, smart solu
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tions, and hotel-like amenities and aesthetics are key. We opened HNK
Sloterdijk In the fourth quarter of 2023, in which the HNK rebranding is
fully Implemented. The proposition already proves its success; HNK
Sloterdijk already reached an occupancy level of 96% as per year-end
2023. HNK Sloterdijk serves as a blueprint not only for our next HNK
upgrades but also for the rollout of services to our wider multi-tenant
portfolio, which should in turn be a driver to broader ERV growth.
OPERATIONAL EXCELLENCE
driven decisions. Furthermore, we have strong inhouse asset manage-
ment and technical asset management teams being able to act closely
to our customers and assets. Only with the right teams, culture, and
processes we will be able to deliver outstanding results in an optimal
and cost-efficient way. The right team is a diverse team that embraces
an inclusive culture of open debates, professionalism, relevant exper
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tise and the will to push boundaries.
PROGRESS IN 2023
Our 2023 results show solid operational performance, showing
healthy leasing activity driving record occupancy, solid like-for-like
rental growth and new leases signed ahead of ERV.
Being In control of our energy and waste data through the rollout
of our sustainability data warehouse has been pivotal in moni-
toring and improving our non-financial performance. NSI remains
committed to staying below the CRREM reduction pathway
for Dutch Offices. In 2023 NSI remained well below the Dutch
average and reduced its energy intensity by ca 4% vs. 2022.
CUSTOMER EXCELLENCE
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In our ambition to become the leading Dutch real estate company,
operational excellence is a key enabler. We continuously explore how
to make the best use of existing information technology solutions and
introduce innovative applications. A best-in-class data warehouse and
business intelligence system provides data-analytics and manage
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ment information to support multi-functional collaboration and data-
Customer Excellence is about putting the customer's perspective first,
gaining a deep understanding of what our customers need to thrive,
and how we can best support them. Our tenants' focus is shifting more
towards productivity, meaning that providing the right mix of spaces,
services and comfort is essential to helping their business grow. The
customer journey is central to this.
The customer excellence team constantly strives to develop and inno
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vate on the overall offering to exceed customer expectations and works
with the right partners to further strengthen the service. We consider all
aspects that determine the intended experience, including the level of
service and the layout, but also the personal approach of trained hosts.
Results are measured regularly through NPS and customer satisfac
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tion surveys, in our quest to continuously improve the experience we
provide.
PROGRESS IN 2023
NSI achieved a significant improvement in its Net Promoter Score
(NPS) In 2023. This substantial improvement was the result of actively
addressing feedback obtained from previous surveys. Sustainability
emerged as a key concern among our tenants, prompting us to
enhance our level of communication in this area. Moreover, we also
Improved our communication and follow-up procedures regarding
technical issues and other customer reports.
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GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
12 NSI ANNUAL REPORT 2023
SUSTAINABILITY
Sustainability is an integral part of NSI’s long term value creation
strategy. Our business model is geared towards decarbonising
our portfolio by reducing energy usage, owning and developing
flexible and adaptive buildings, and creating inspiring, flexible
working environments articulated around the health and well-
being of our occupants.
We are pleased about our 5-star GRESB rating, for a fourth year
running, and our second EPRA sBPR gold award. 2023 marked
the first year in our journey towards aligning our portfolio with the
1.5c Paris Agreement and we are satisfied with our reduction in
energy intensity over the year.
We have also performed an analysis of our portfolio to determine
its alignment with the EU Taxonomy for sustainable investments
which we view as the key guideline for the inevitable alignment of
economic and environmental interests.
‘The Future is here’ encapsulates our sustainability strategy which
reflects the urgency to act now, our commitment to do what is
necessary, and our appreciation for the challenges of today that
will shape the industry tomorrow. In light of the secular changes
brought on by the last couple of years, more convinced than
ever that a robust, ambitious and comprehensive sustainability
strategy will be a key differentiator for our business’ long term
success.
MATERIALITY MATRIX
The success of our sustainability strategy and efforts depends
on ongoing dialogue and engagement with internal and external
stakeholders, through which NSI continuously validates and
examines the relevance of the ESG topics on which NSI focuses.
The basis for our strategy was an initial extensive assessment
performed in 2018, which was recalibrated in 2020. To align with
this timeframe, NSI has updated the materiality assessment again
in 2022.
The 2022 update of the materiality matrix included a revision of the
topics assessed. As the field of climate change is ever-evolving,
some topics might have become more urgent or significant to NSI
as others. NSI has therefore updated the list of ESG topics in the
2022 revision, to better reflect the topics that are relevant, now
and in the future.
In the 2022 update, a survey was held amongst investors
(external stakeholders, vertical axis) and NSI’s management and
employees (internal stakeholders, horizontal axis). The resulting
materiality matrix indicates the ranking of importance of the ESG
topics, comparing the external and internal focus. The top-right
corner of the materiality matrix indicates the ESG topics that are
most material to both stakeholder groups, and will receive the
additional focus from NSI. The assessed topics are categorised
following NSI’s existing ESG strategy and corresponding themes:
Future-proof investments, Energy & Carbon, Health & Wellbeing,
and transcending topics (which focus on issues related to govern-
ance).
A notable result of the assessment is the high importance of the
topic Net Zero Carbon according to both internal and external
stakeholders. This underlines the urgency and importance of
reducing our carbon footprint and to support the transition to a
net zero carbon economy. The materiality matrix also shows a
focus on the reduction of the carbon footprint – topics such as
material use, our impact on natural systems, as well as climate
change related risks, are considered material to both stakeholder
groups.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
13 NSI ANNUAL REPORT 2023
In 2023 NSI started its CSRD readiness process. A double materiality matrix assessment has been initiated and its findings are expected
to be published in the 2024 Annual Report.
FUTURE-PROOF BUILDINGS
HEALTH & WELL-BEING
ENERGY & CARBON
TRANSCENDING
IMPORTANCE TO STAKEHOLDERS
IMPORTANCE TO NSI
OUR AMBITION
In line with our revisited strategy, we have also sharpened our existing pillars ‘Energy and carbon’ and ‘Future-proof buildings’, while we
have expanded and renamed our third pillar, ‘Social engagement’, to encompass a broader social component. This has allowed us to
articulate our commitments more concretely:
ENERGY AND CARBON FUTURE-PROOF BUILDINGS SOCIAL ENGAGEMENT
We are committed to aligning our
portfolio to a Paris-compliant
decarbonisation trajectory and
striving towards net-zero:
We aim to own buildings that are
resilient, adaptative and aligned with
the EU Taxonomy, now or in time.
We strive to be a long-term positive
influence on our clients, employees
and communities.
OUR COMMITMENT
We are committed to decreasing our
energy intensity in line with the 1.5c
scenario decarbonisation pathway.
100% of procured energy from
renewable sources.
Offset where not economically viable
to reduce emissions through energy
efficiency gains / renewable energy
procurement.
OUR COMMITMENT
Own assets that are aligned with the EU
Taxonomy, now or in time.
Strive for a minimum BREEAM rating for
assets is “Very Good”.
Focus on Climate resilience: physical
risk assessment with a mitigation plan
for every asset.
OUR COMMITMENT
Make health and wellbeing a priority:for
our employees: and for our clients
Strive to have a diverse and inclusive
workforce.
Give back to our communities and
respect our surroundings.
1
2
3
1
2
3
1
2
3
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
14 NSI ANNUAL REPORT 2023
We are committed to aligning our portfolio to a Paris-compliant
decarbonisation trajectory and striving towards net-zero:
We are committed to decreasing our energy intensity in line
with the 1.5c scenario decarbonisation pathway (as per the
CRREM methodology)
All electricity procured by NSI is obtained from renewable
sources
We will offset remaining carbon emissions only after all other
financially viable measures have been exhausted.
1
2
3
OUR COMMITMENT TO PORTFOLIO DECARBONISATION
In 2023 we unveiled our roadmap to decarbonising our portfolio.
While the decarbonisation process is unlikely to be linear, as incre
-
mental impact of improvements declines at higher efficiency levels,
we aim to remain below the CRREM Dutch office average. The
graph below shows NSI already is and is set to remain significantly
below the sector and country target.
2023 marked the first year of the implementation and monitoring of
our Paris-alignment investment plan, which has already translated
into a decrease in energy usage: At year-end 2023 the total (tenant
+ building-related) average energy consumption of our portfolio was
113kWh/m
2
for 2023, down from117 kWh/m2
1
in 2022. For 2024,
the planned sustainability CAPEX totals circa €8m.
1
NSI is using the Carbon Risk Real Estate Monitor’s (CRREM)
decarbonisation pathways as a point of reference to set energy
reduction targets for our portfolio. CRREM is the leading global
initiative for operational decarbonisation of real estate assets in
order to avoid stranding risk, address transition risk and comply
with climate-science and Paris-aligned decarbonisation targets.
CRREM establishes country and asset-specific energy and GHG
reduction pathways.
According to CRREM, for Dutch offices to be compliant with the
1.5c Paris scenario, buildings must achieve 85 kWh/m
2
/year by
2034, as per the pathway below.
1 This figure excludes the Leiden Biopark lab and lab adjacent offices, which have a much higher
consumption profile, given the nature of the activities carried out there. Including these, the
enegy intensity was 131 kWh/m2/year down from 137 kWh/m2/year . Given that our CRREM
references is Dutch Offices, it is coherent to exclude non-office assets.
ENERGY AND CARBON
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
GOING BEYOND EPC LABELS
Formally the only sustainability regulatory requirement in the
Netherlands for the renting out of commercial space is to have
an EPC label of at least C as of 1 Jan 2023. At NSI we are already
well ahead of that target (95% at label A, only 1% at C, no assets
below C) and we consider a more ambitious goal to be necessary
both from the perspective of climate urgency as well as from a
client demand and, eventually, a regulatory point of view. Indeed,
EPC does not sufficiently represent a Paris-aligned solution as it
focuses on theoretical versus actual usage. Given the urgency
in adopting a science-based solution to climate mitigation plus
increased energy costs, we see more benefits in choosing a more
complete approach. That said, the evolution of NSI’s portfolio
accurately depicts part of NSI’s multi-year journey to sustainability.
0
50
150
100
200
2020 2025
2035
2030
kgCO
2
e/m
2
/year
173
164
155
128
116
112
85
0
10
40
2020
30
60
2025 2045 20502035 20402030
CRREM
NSI
!
!
"!
#!
$!
%!
&!
'!
#!#!
!"#$%&'(
!
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20
50
kgCO
2
e/m
2
/year
NSI VS. CRREM ENERGY INTENSITY PER YEAR
2
NSI VS. CRREM GREEN HOUSE GAS EMISSIONS PER YEAR
2
100% OF PROCURED ELECTRICITY SHOULD COME
FROM RENEWABLE SOURCES
All electricity procured by NSI is 100% green, procured from
renewable sources (European wind) . The total average share of
renewable energy used is 58.9% (European wind grid energy +
solar panel generation of electricity + geothermal energy).
WE WILL OFFSET REMAINING CARBON EMISSIONS
ONLY AFTER ALL OTHER FINANCIALLY VIABLE
MEASURES HAVE BEEN EXHAUSTED.
We aim to reduce our carbon footprint through an increase in
energy efficiency and the procurement, where possible, of energy
from renewable sources. Offsets are therefore only a measure
of last resort, after all other solutions have been exhausted.
Currently, natural gas procurement is fully compensated using
Gold Standards CO
2
.
EPC LABELS 2023
3
CRREM A++
AA+NSI
B
C D
E
F & G
2017 2018 2020 2021 202320222019
29%
23%
29%
7%
6%
6%
44%
26%
15%
5%
6%
4%
61%
16%
15%
3%
3%
2%
74%
12%
12%
2%
80%
7%
10%
2%
2%
65%
8%
4%
10%
13%
kgCO2e/m2/year kgCO2e/m2/year
NL TAGET
NSI ACTUEL
NSI FORECAST
2
3
15 NSI ANNUAL REPORT 2023
2 Excluding development, sold assets and Leiden Bio Science Park 3 Excluding development
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
16 NSI ANNUAL REPORT 2023
FUTURE PROOF BUILDINGS
We aim to own buildings that are resilient, adaptative and
aligned with the EU Taxonomy
Own assets that are aligned with the EU Taxonomy, now or
in time
Strive for a Minimum BREEAM “Very Good” rating for assets is
Focus on Climate resilience: physical risk assessment with a
mitigation plan for every asset.
1
2
3
Of the 6 environmental objectives, EPRA’s analysis indicates that
only the objectives of the ‘Climate Change Mitigation’, ‘Climate
Change Adaptation’ and ‘Transition to a Circular Economy’ have a
focus on the Real Estate sector. Only Climate change mitigation
and Climate Change adaptation
have been in force since 2022.
The other four remaining objectives were adopted by Commission
Delegated Regulation (not in force until publication in the Official
Journal) of 27 June 2023 of the European Parliament and are in
force since 2024.
NSI’S TAXONOMY ELIGIBILITY AND ALIGNMENT
•
Eligibility: An analysis was performed on NSI’s portfolio based
on the Taxonomy-recognised activity of “Acquisition and Owner
-
ship of buildings” as defined by the EU taxonomy of sustainable
activities.
• The objective to which this activity contributes is “Climate
change mitigation” defined as “contributing to the stabilisation
of greenhouse gas emissions by avoiding or reducing them or by
enhancing greenhouse gas removals”. To prove this, the activity
must comply with specific Technical Screening Criteria (TSC) - a
set of conditions specific to this activity.
AIM TO OWN ASSETS THAT ARE ALIGNED WITH THE EU TAXONOMY OF SUSTAINABLE ACTIVITIES, NOW OR IN TIME
We aim to own assets that are aligned, now or in time, with the EU
taxonomy, the classification system that translates the EU’s climate
and environmental objectives into criteria for specific economic
activities for investment purposes. In order to determine alignment
to the EU Taxonomy, the economic activity of the company must
first be eligible. If the activity is not defined in the screening criteria,
it is not eligible under the EU Taxonomy and therefore, it cannot
be considered as environmentally sustainable. Second, once the
economic activity has been deemed eligible, it must be determined
that it makes a substantial contribution to at least one of the EU’s
climate and environmental objectives, while at the same time not
significantly harming (DNSH – do no significant harm) any of the
other objectives and meeting minimum social safeguards.
The taxonomy defines 6 environmental objectives.
• Climate change mitigation
• Climate change adaptation
• The sustainable use and protection of water and marine resources
• The transition to a circular economy
• Pollution prevention and control
• The protection and restoration of biodiversity and ecosystem
1
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
• The TSC for substantial contribution for the economic activity
“Acquisition and ownership of buildings”, largely depend on the
type of buildings in scope (residential vs non-residential), the date
in which the building was built (different conditions for buildings
built before or after 31 December 2020) and on the energy perfor
-
mance certificates.
• In order to ensure that the activity does no significantly harm to
the other objectives, it should be verified that adaptation solutions
are put in place to tackle the climate risk hazards which have been
assessed as “material”.
• The analysis was performed on each individual asset based on
the TSC for the acquisition and ownership of buildings as defined
by the EU taxonomy. Through a climate risk hazard and mitiga
-
tion plan the DNSH condition was assessed. The Do No Significant
Harm (DNSH) criteria were evaluated through two assessments.
This examination involved a comprehensive assessment of climate
risk and vulnerability at the asset level. Based on these outcomes,
a tailored climate adaptation strategy was developed to mitigate
each asset identified as being at risk. Implementation of the adap
-
tation plans is scheduled to be executed over the next five years.
• In this analysis, all our assets were assessed against the activity
“acquisition and ownership of buildings”. As a result, investment
properties under construction and renovations are not aligned with
the EU taxonomy based on this activity. We will explore in 2024
alignment against other EU taxonomy-eligible relevant activities for
these buildings.
• NSI adheres to international standards for human rights as the
OECD Guidelines for Multinational Enterprises and the UN Guiding
Principles on Business and Human Rights, including the principles
and rights set out in the eight fundamental conventions identified in
the Declaration of the International Labour Organisation on Funda
-
mental Principles and Rights at Work and the International Bill of
Human Rights.
• Based on this, the proportion of the portfolio would be EU taxonomy
aligned based on the Climate Change Mitigaton:
2023 eligibility 2023 alignment 2023 alignment
4
Turnover 100% 0% 93.3%
Capex 100% 0% 95.5%
Opex 100% 0% 90.4%
The EU Taxonomy guidelines expect a bundle of coherent processes
aimed at identifying negative impacts on the four pillars of minimum
social safeguards (human rights & labour rights, bribery and corrup
-
tion, taxation and fair competition), identifying how these can be
prevented or reduced, the implementation of these actions, the
monitoring of the results and the method of communicating how
negative impacts are addressed in relation to the company's own
operations, the value chain and other business relationships. NSI
does not have all these process steps in place to meet the require
-
ments of the minimum social safeguards. Additional efforts will be
made in 2024 and beyond to ensure to meet these conditions for
alignment.
NSI made subsequent progress on EU Taxonomy alignment
throughout 2023. Alignment based on the technical assessment
points increased compared to last year on Revenue, Capex and
Opex. Progress was also realized with respect to minimum social
safeguard requirements including the adoption of relevant policies.
Additional steps will be made in 2024 and beyond to ensure compli-
ance with the minimum social safeguard requirements can be verified.
The extensive EPRA taxonomy eligibility and alignment analysis and
the associated table can be found on page 132-137.
STRIVE FOR A MINIMUM BREEAM “VERY GOOD” RATING
FOR ASSETS
We value BREEAM’s multifaceted contribution to the definition of
sustainability and consider the label to be a recognizable sign of
validation in terms of sustainability. BREEAM seeks to improve the
operational performance of buildings through sustainable improve
-
ments, which should ultimately help drive value at the asset level.
The BREEAM assessment method involves nine areas: manage
-
ment, health, energy, transport, water, materials, waste, land use,
ecology and pollution.
In 2023 NSI continued to make progress in its ambition to obtain an
at least “Very good” label for its standing assets: a majority of our
assets (73%, up from 66% in 2022) now have either a Very Good or
Excellent Label.
BREEAM BY SQM
5
NO LABEL ACCEPTABLE PASS GOOD VERY GOOD EXCELLENT
9%
6%
13%
35%
38%
0%
73%
FOCUS ON CLIMATE RESILIENCE: PHYSICAL RISK ASSESS-
MENT WITH A MITIGATION PLAN FOR EVERY ASSET.
Assessing and mitigating climate change and the associated risks are
an integral part of our approach towards a future-proof portfolio. A
further analysis was not only required in view of complying with the EU
taxonomy (DNSH assessment), it also increasingly weighs on invest
-
ment and portfolio decisions. NSI performed an assessment of the
net risks of climate change related heat stress and flooding of its port
-
folio, also taking individual asset characteristics into consideration.
The assessment included which measures can be taken to mitigate
these risks.
This assessment was performed in 2022 and it identified that from
NSI’s 49 assets at the times 9 assets are potentially exposed to a
higher risk of heat stress and 12 assets to a higher risk of flooding.
Following disposals, of the 46 assets owned at end 2023 9 assets
are potentially exposed to higher risk of heat stress and 11 to higher
flooding risks. Measures to mitigate these risks have been integrated
in the asset plans and will be executed in the coming 4 years. More
details on climate risk analyses can be found on page 18-19.
17 NSI ANNUAL REPORT 2023
2
3
5 Excluding development
4 Alignment if minimal social safeguards would have been fully met. See page 132 for more
information
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
18 NSI ANNUAL REPORT 2023
CLIMATE RISKS
Both physical- and transitional risk analyses provide additional
insight into the overall risk profile of NSI’s portfolio.
We are using Carbon Risk Real Estate Monitor (CRREM) for
assessing and addressing transitional risk. More details about
our plans to decrease our energy intensity in line with the 1.5c
scenario decarbonisation pathway can be find on page 14 -15.
A detailed climate risk assessment was undertaken in recent
years, focusing on the most apparent climate-related physical
risks in the Netherlands (pluvial flooding, flooding, drought and
heat) as well as taking socio-economic consequences and tran-
sitional risks (related to the transition to a low-carbon economy)
into account.
CLIMATE RISKS ANALYSIS
DROUGHT
Drought is measured according to the potential lack of rainfall
over a longer period. As our climate changes, the Netherlands
is expected to experience longer periods of warmer weather
and a lack of precipitation.
While increased droughts can greatly affect the Dutch
ecosystem and the agricultural sector, buildings can also
be severely affected through land subsidence and rotting of
wooden pile foundations as groundwater levels decrease.
HEAT
Heat stress is commonly defined as a physiological condition
provoked by extreme heat, causing humans and animals to be
unable to shed their heat and thereby overheating. There are
several methods to approximate heat stress using geographic
modelling. One such method is describing heat using the
number of tropical days (≥ 30ºC) experienced per year. By
2050, the Netherlands is likely to experience temperatures
higher than 35ºC at least once or twice a year. Since people
spend on average 90% of their time indoors, managing the
impact of these heatwaves on the indoor environment and a
building’s ability to retain a productive working climate and
temperature will be crucial.
PLUVIAL FLOODING (HEAVY RAINFALL)
It is expected that the amount of rainfall and the intensity of
rainfall events in the Netherlands will increase significantly in
the coming 30 years. Increase in heavy rainfall increases the
risk of pluvial flooding. Pluvial flooding causes risks because of
inflow of water to buildings as well as potential problems with
accessibility of buildings.
SOCIO-ECONOMIC RISKS
The physical hazards that result from climate change, can and
will continue to have a significant effect on the quality of human
life. In addition to the physical hazards which could potentially
affect the resilience and accessibility of assets, there are related
socio-economic issues that need to be taken into consideration
which could have an impact on an asset’s value.
NSI can mitigate and adapt to these impacts through ensuring
their assets are well connected and surrounded by green
(space) and blue infrastructure (water elements). These meas-
ures can not only enhance the workability and usability of
their assets but can also help reduce their vulnerability to the
physical impacts of climate change. These measures should
be taken in cooperation with local governments whenever
possible.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
19 NSI ANNUAL REPORT 2023
3 - 4
4 - 5
5 - 6
1 - 2
2 - 3
AMOUNT OF DAYS WITH ≥ 25 MM
OF PRECIPITATION
DROUGHT 2023 DROUGHT 2050
HEAT 2023 HEAT 2050
NUISANCE BY PRECIPITATION 2050
3 - 4
4 - 5
5 - 6
1 - 2
2 - 3
AMOUNT OF DAYS WITH ≥ 25 MM
OF PRECIPITATION
180 - 210
210 - 240
240 - 270
270 - 300
120 - 150
150 - 180
POTENTIAL MAXIMUM
PRECIPITATION DEFECT (IN MM)
180 - 210
210 - 240
240 - 270
270 - 300
120 - 150
150 - 180
POTENTIAL MAXIMUM
PRECIPITATION DEFECT (IN MM)
6 - 9
9 - 12
12 - 15
15 - 18
0 - 3
3 - 6
AMOUNT OF TROPICAL DAYS
(MAX ≥ 30
0
C)
> 18
6 - 9
9 - 12
12 - 15
15 - 18
0 - 3
3 - 6
AMOUNT OF TROPICAL DAYS
(MAX ≥ 30
0
C)
> 18
NUISANCE BY PRECIPITATION 2023
PHYSICAL CLIMATE RISKS IN MORE DETAIL
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
20 NSI ANNUAL REPORT 2023
ENERGY EFFICIENCY
Solar panels
Roof and facade insulation
Automatic blinds
Sensor controlled LED-lighting
Insulating and solar control glass
Energy-efficient equipment
Charging for electric cars and
e-bikes
Procurement European wind
Energy-saving installations /
ATES or air heat pump
Gas free
Ground floor insulation
1
2
3
4
5
6
7
8
9
11
10
WATER EFFICIENCY
Water-saving sanitary
Reuse of rainwater
Water buffertank
1
2
3
WASTE MANAGEMENT
Sustainable sourcing and
materials
Informing tenants
Recycling waste
Seperate waste collection
Reduce, reuse, recycle
Monitoring waste
1
2
3
4
5
6
HEALTH AND WELLBEING
Active work stations
Greening
Measuring quality of indoor climate
Green roofs
Adaptable lighting and climate
systems
Healthy food & beverage
AEDs
Optimising daylight
Centrally located staircase
Access to public transport
Bicycle facilities
1
2
3
4
5
6
7
8
9
11
10
THE SUSTAINABLE OFFICE
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
21 NSI ANNUAL REPORT 2023
We strive to have a long-term positive influence on our clients,
employees and communities
.
Make health and wellbeing a priority for our customers and
for our employees
Strive to have a diverse and inclusive workforce.
Give back to our communities and respect our surroundings.
SOCIAL ENGAGEMENT
1
2
3
MAKE HEALTH AND WELLBEING A PRIORITY FOR OUR
EMPLOYEES
We believe that the well-being of our employees plays a critical
role in fostering a productive and thriving work environment. We
provide a nutritious and healthy lunch for our employees and offer
fresh fruit throughout the day. In addition, we actively encourage our
employees to participate in sports events and adopt a lifestyle that
promotes fitness.
Read more on page 45-46 (Great Place to Work) about our employee
engagement activities.
MAKE HEALTH AND WELLBEING A PRIORITY FOR OUR
CUSTOMERS
ENGAGE ACTIVELY WITH CUSTOMERS THROUGH A YEARLY
CUSTOMER SATISFACTION SURVEY
In 2023 NSI achieved a Net Promoter Score (NPS) of + 19.9 from
its tenants, significantly up from + 10.3 a year ago. HNK’s NPS was
23.9 vs 19.9 in 2022. The NPS is calculated using the answer to a
key question, using a 0-10 scale e.g. How likely is it that you would
recommend NSI to a friend or colleague?
6
In NSI’s case + 19.9 is a positive score which means more promoters
than detractors.
This significant improvement was achieved by following up the
feedback from previous surveys. Sustainability appeared to be an
important topic to our clients as well and we have intensified our
communication on this by creating a brochure per asset in which we
explain general and asset-specific sustainability initiatives. In addi
-
tion, we have improved the communication and follow-up regarding
technical issues or other customer reports. Furthermore, we
addressed some of the general customer feedback, like increasing
greenery and adding charging stations.
1A
1B
6 Respondents are grouped as follows: Promoters (score 9-10) are loyal enthusiasts who will
keep buying and refer others, fueling growth; Passives (score 7-8) are satisfied but unenthusi
-
astic customers who are vulnerable to competitive offerings; Detractors (score 0-6) are unhappy
customers who can damage your brand and impede growth through negative word-of-mouth.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
22 NSI ANNUAL REPORT 2023
STRIVE TO HAVE A DIVERSE AND INCLUSIVE
WORKFORCE
NSI is committed to fostering a fair and inclusive working environ-
ment. NSI aims to foster a culture where people are respected
and appreciated, and perceive equality and fairness of opportuni-
ties in their workplace. NSI recognises the benefits of diversity
and inclusion, and is fully committed to providing equal opportu-
nities and treatment when it comes to recruitment and selection,
training and development, performance reviews and promotion.
Our culture is based on the principles of mutual respect and non-
discrimination irrespective of nationality, age, disability, gender,
religion or sexual orientation.
At NSI we currently have 42% male and 58% female workforce.
NSI established a Diversity and Inclusion policy in 2023 (see page
56 for more information). NSI has set diversity targets for the
Management Board, the Supervisory Board and Senior Manage
-
ment (see page 56 for more information in Corporate Governance).
These target were met in 2023 (or did not apply due to vacancy).
GIVING BACK TO OUR COMMUNITIES
Creating a positive socio-economic impact in local communities
in and around our assets is important to us. We aim to play an
active role in our communities by building lasting relationships
with local stakeholders and by supporting organizations with a
social purpose.
A non-exhaustive list of initiatives we support include:
JINC
Jinc is an organisation that aims to give children a better starting
position in the labour market. They particularly focus on children
growing up in an environment with high levels of poverty and
unemployment. NSI supports this initiative, among other things by
giving lectures and offering insight into what working in different
areas of expertise in real estate entails.
WELCOMING HIGH SCHOOL STUDENTS
NSI welcomed second grade students from Open School
Community Bijlmer in 2023, a high school located in the imme-
diate vicinity of NSI’s headquarters, for company visit. NSI
employees gave tours and master classes on working in in the
field and asset- and leasing management, and the importance of
sustainability and safety in property management.
PHILIPS INNOVATION AWARDS | SPONSORSHIP TO
STIMULATE INNOVATION AMONG STUDENTS
It is important to NSI to promote innovation and contribute to
Dutch society. That is why HNK is a partner of the Philips Innova-
tion Award since 2017. The Philips Innovation Award is an entre-
preneurship prize awarded to students with an innovative start-up
concept.
DONATION TO RONALD MCDONALD KINDERFONDS
NSI made a donation to the Ronald McDonald Children's Fund.
One of the Ronald Mc Donald locations, where hospitalised chil-
dren and their families can be close to each other, is in Amsterdam
Southeast, close to NSI’s head office. NSI donates one euro for
every completed survey of the customer satisfaction survey.
GREEN BUSINESS CLUB ZUIDAS
NSI participates in the Green Business Club Zuidas. This network
organization creates impact by initiating sustainable projects in
the Amsterdam Zuidas area and aspires to make the Zuidas the
most sustainable, livable and workable area in the Netherlands. The
network aims to realize this by collaborating in partnerships and
sharing best practices and knowledge.
ZUIDAS BUSINESS RIDE
The Zuidas Businessride consists of several bicycle racing
distances, with the start and finish of the ride at the business
district Zuidas (South Axis). The ride is organized by Werel-
dOuders, non-profit organization aimed at breaking the cycle of
poverty in Latin America. In 2023, proceeds from this event went
to healthy food for families living in poverty. A team of NSI partici-
pated in this race and raised money for this charity.
UPTOWN SLOTERDIJK
NSI participates with nine other parties in UPTown Sloterdijk
to help promote the transformation of this area into an attrac-
tive urban district. All participants (APG, BPD, CBRE, EDGE, the
municipality of Amsterdam, Heijmans, Synchroon and TMG) are
actively linked to the area and have an interest in the development
of the neighbourhood.
One of the initiatives worked on in 2023 is placemaking; strength-
ening the connections between people and places. For example,
promoting routes through greenery or suggesting a route passing
retail or cafes.
ONDERNEMERSFONDS UTRECHT
NSI made a donation to Ondernemersfonds Utrecht (Entrepre-
neurs Fund Utrecht). This fund connects local entrepreneurs,
various sectors and organizations with the aim of promoting the
quality of business in Utrecht.
2
3
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23 NSI ANNUAL REPORT 202323 NSI ANNUAL REPORT 2023
INCOME, COSTS AND RESULT
INTRODUCTION
EPRA earnings in 2023 amount to € 40.4m compared to € 42.7m
in 2022 (- 5.5%). The decrease in EPRA earnings is the result
of lower net rental income, higher administrative and financing
costs, and corporate income tax as a result of the restructuring in
preparation of the legislative changes in the FBI regime as from
2025. EPRA EPS is € 2.01, 6.6% lower than last year.
EPRA NTA is at € 35.30, down 20.1% or € 8.87 per share compared
to the end of 2022, primarily due to the negative revaluation of the
investment portfolio in 2023.
RENTAL INCOME
Compared to last year gross rental income is flat, at € 71.2m. The
positive effect of indexation was offset by the effect of disposals
in the past two years (- € 2.7m) and the transfer of Laanderpoort
to the development portfolio in February 2023 (- € 2.2m). On a
like-for-like basis gross rental income increased by € 4.9m (7.4%),
mainly due to lease indexation in H2 2022 and 2023.
Non-recoverable service costs are € 0.6m higher than in the same
period last year, which is the result of higher vacancy in the first
half of 2023 and of caps on charges to some tenants.
Operating costs are € 0.2m (1.8%) higher compared to 2022, with
lower letting costs (- € 0.2m) and lower costs for technical consul-
tancy (- € 0.4m) being offset by higher property taxes (+ € 0.2m)
and maintenance (+ € 0.5m) costs.
Net rental income amounts to € 58.4m, down € 0.9m (- 1.8%) versus
2022. The NRI margin is 82.1%, down 1.1 bps versus last year.
Net rental income increased by 4.6% on a like-for-like basis; the
increases in Amsterdam, Other G4 and Other Netherlands were
respectively 3.8%, 6.0% and 4.3%.
ADMINISTRATIVE COSTS
Administrative expenses are € 0.6m higher compared to 2022,
entirely due to one-off costs in relation to the announced change
in tax regime.
NET FINANCING COSTS
The direct net financing costs increased by 4.0% (€ 0.3m)
compared to last year, caused by higher interest costs (€ 1.3m),
reflecting higher interest rates, and higher capitalised interest
related to development projects (€ 1.0m).
INDIRECT RESULT
The investment portfolio incurred a negative revaluation of €
224.0m (- 17.4% at market value) compared to the end of 2022.
The result on sales concluded in 2023 amounts to € 5.4m.A nega-
tive mark-to-market effect on interest rate swaps (- € 2.8m) and
other indirect costs (- € 0.1m) result in an indirect result before tax
of - € 226.7m.
CORPORATE INCOME TAX
To limit the negative impact of the changes to the FBI-regime per
2025, NSI has restructured the business in 2023. As a result €
0.6m in tax will be paid on the direct result of 2023.
The tax on the indirect result amounts to € 38.7m, which has been
added to deferred tax assets in the balance sheet. The total indi-
rect result amounts to € 182.8m negative.
POST-CLOSING EVENTS
On 24 January the sale and transfer of Laanderpoort to ING was
completed, for a total amount of € 24.0m. This is in line with the
year-end valuation of the asset.
INCOME SEGMENT SPLIT
2023
2022Amsterdam Other G4
Other
Netherlands Corporate TOTAL
Gross rental income 35,600 24,185 11,415 71,199 71,309
Service costs not recharged -1,083 -864 21 -1,926 -1,322
Operating costs -5,182 -3,966 -1,704 -10,852 -10,663
Net rental income 29,335 19,355 9,731 58,421 59,325
Administrative costs -9,120 -9,120 -8,566
Earnings before interest and taxes 29,335 19,355 9,731 -9,120 49,301 50,759
Net financing result -8,349 -8,349 -8,024
Direct investment result before tax 29,335 19,355 9,731 -17,469 40,953 42,735
Corporate income tax -550 -550 -2
Direct investment result / EPRA earnings 29,335 19,355 9,731 -18,019 40,402 42,733
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
24 NSI ANNUAL REPORT 2023
DUTCH PROPERTY MARKET OVERVIEW
ECONOMIC CONDITIONS
Following two years of strong growth (6.2 % in 2021 and 4.3
percent in 2022), Dutch GDP growth was flat at 0.1% in 2023.
Following a frantic 12 months in 2022, Dutch inflation (CPI) stabi-
lised at 3.8% (6.5% excluding energy) in 2023 and is expected to
decrease in 2024 and 2025. Whilst in 2022 inflation was mainly
led by an increase in energy prices, in 2023, the lion’s share of
inflation was owed to another essential good, food, resulting in
further ramifications on households and a dent on consumer
confidence.
While unemployment remains at close to historical lows at 3.6%,
the marked deterioration in purchasing power, tighter credit
conditions and the ongoing geopolitical tensions have contrib-
uted to a subdued but still resilient economic climate.
OCCUPATIONAL MARKET
Two years into the post-pandemic era the “office vs WFH” debate
has fully transitioned into a hybrid working model, the conse-
quences of which are slowly becoming visible. While factors such
as labour market shortages, the economic outlook, sustainability
credentials of buildings and the scarcity of Grade A space, in
general, inject nuance into the debate, the reality is that in 2023,
take-up of office space for the overall market was around half of
the volume of the pre-pandemic years 2018 and 2019.
Having said that, bifurcation is now a confirmed reality: due to
the tight market situation in prime office locations, prime rents
are rising for the best space, especially in Amsterdam, whilst
secondary assets in secondary locations are increasingly falling
by the wayside.
Dutch office take-up in 2023 was 24% lower compared to the same
period in 2022, confirming the adjustment. The vacancy rate for the
overall market has remained stable at 8.4% (2022: 8.2%).
Though this trend could lead to reduced office occupancy rates in
certain cities, the broader national outlook would rather suggest
a shift in demand towards specific types of offices: high-quality,
sustainable buildings in prime city center locations, with a strong
emphasis on amenities and well-being. It goes beyond a space-
reducing exercise; there is also a focus on utilising that space
differently and concentrating on better locations.
AMSTERDAM
Office take-up in Amsterdam in 2023 was circa 211.000 m
2
(vs
same period 2022: 234.000 m2), confirming the trend of limited
grade A space availability and a sluggish economy.
The office vacancy rate in Amsterdam as of Q4 2023 was 8.3%, up
120bps from 2022. The vacancy in the prime South-axis market is up
70bps to 3.2%, Southeast saw the biggest increase at 10.6% (was
8.4% in 2022, surpassing the Dutch average of 8.4%). The vacancy in
Sloterdijk is up by 160 bps to 8.0%. The bifurcation is clearly visible,
with prime office rents on the South-axis reaching a new record at
€555/m
2
, even with significant availability in the wider Amsterdam
market.
OTHER G4
In 2022 take-up in Utrecht was flat at around 60.000 m2, in line with
the period 2020 - 2022. Vacancy decreased by 30bps to 4.7% in
2023, while prime rents increased to €325/m2 (2022: €305/m2).
In Rotterdam prime rents remained flat at 300/m2 and the vacancy
was flat at 7.6% (2022: 7.4%).
In The Hague, where Government is the largest occupier, the overall
vacancy remains 4.5% (2022: 4.5%).
OTHER NETHERLANDS
The vacancy rate in Eindhoven increased to 8.0% from 6.6%. Take up
decreased by 9.1% from 2022.
Vacancy at the Bio Science Park in Leiden remains at 0%.
INVESTMENT MARKET
The magnitude of the interest rate hikes has dramatically impacted
market valuations, as the investment market effectively came to a
standstill.
According to CBRE, the total transacted of €1.3 billion marks a
decrease of c70%% compared to 2022. They cite a 40% average
decline in values since the peak. The move has been swift and severe
as appraisers take a conservative stance to the rise in rates and
heightened economic uncertainty. They expect 2024 to be another
difficult investment year for office real estate, with an expected
volume of €1.6 billion.
That said, opportunities may be present as anticipated forced sales
finally occur. Fund redemptions brought on by pressure on return
requirements and the more stringent credit conditions have yet to
materialise. CBRE estimates that out of some 100 properties trans-
acted between 2017 and 2020, of over €20m, circa 10-15 of these
may encounter challenges. This is likely to bring €500 to €750 million
worth of office real estate to the market in 2024.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
25 NSI ANNUAL REPORT 202325 NSI ANNUAL REPORT 2023
REAL ESTATE PORTFOLIO
Three assets were sold during 2023: HNK Den Bosch, HNK Ede
and Donauweg, Amsterdam. The combined proceeds of these
disposals were € 33.9m (before transaction costs) reflecting on
average a 19.8% premium over December 2022 book values. No
acquisitions were made in 2023.
PORTFOLIO BREAKDOWN – 31 DECEMBER 2023
# Assets Market value
(€ m)
Market value
(%)
Amsterdam 22 588 56%
Other G4 14 301 29%
Other Netherlands 10 154 15%
TOTAL 46 1,043 100%
VACANCY
The EPRA vacancy at the end of 2023 is 5.2%, down from 6.2% at the
end of 2022. On a like-for-like basis the vacancy decrease was -0.3%.
The vacancy rate at year-end includes 0.7% strategic vacancy for
Alexanderpoort, Rotterdam, part of which is being kept vacant ahead
of a refurbishment. Adjusted for this, the vacancy rate at year-end of
2023 is 4.5%.
The total tenant retention rate for 2023 was lower than usual, at circa
57%.
EPRA VACANCY
31 Dec.
2022
L-f-l Other
31 Dec.
2023
Amsterdam 7.0% 0.1% -1.3% 5.8%
Other G4 6.1% -0.2% 0.0% 6.0%
Other Netherlands 4.1% -2.0% -0.5% 1.5%
TOTAL 6.2% -0.3% -0.7% 5.2%
RENTS
On a like-for-like basis, gross rents are up by 7.4% in 2023.
Indexation accounted for most of the increase (6.4%).
LIKE-FOR-LIKE GROWTH GROSS RENTAL INCOME
2023 2022 L-f-l
Amsterdam 35.5 33.3 6.8%
Other G4 24.0 22.1 8.3%
Other Netherlands 11.3 10.5 7.2%
TOTAL 70.8 65.9 7.4%
Net rents increased by 4.6% on a like-for-like basis in 2023. The
more limited increase was mainly a result of higher scheduled
maintenance costs in 2023.
5.2%
2019
2020
0.8%
2021
3.0%
2022
7.4%
2023
4.6%
CHANGE IN NET RENTS (LIKE-FOR-LIKE)EPRA VACANCY RATE TOTAL PORTFOLIO
2018
13.8
21.4
2016
18.4
2017
2019
7.1
2021
5.9
2020
7.0
2022
6.2
2023
5.2
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26 NSI ANNUAL REPORT 2023
LIKE-FOR-LIKE GROWTH NET RENTAL INCOME
2023 2022 L-f-l
Amsterdam 29.8 28.7 3.8%
Other G4 19.0 17.9 6.0%
Other Netherlands 9.2 8.8 4.3%
TOTAL 58.0 55.5 4.6%
REVERSIONARY POTENTIAL / ERV BRIDGE
In 2023 ERVs increased by 1.9%. In Amsterdam the highest
increase in ERVs was recorded in the more inner city locations
(2.5%). In Other G4, Utrecht had the highest increase with 2.5%
and in Other NL, Leiden ERV’s were up most at 5%.
LIKE-FOR-LIKE GROWTH ERV (€M)
31 Dec.
2023
31 Dec.
2022
L-f-l
Amsterdam 44 43 1.4%
Other G4 26 26 2.1%
Other NL 13 13 3.2%
TOTAL 83 81 1.9%
As per 2023 the investment portfolio is 2.4% reversionary, down
from 6.1% at year-end 2022. This is mainly the result of higher
contract rent levels, mostly attributable to indexation. Amsterdam
remains the most reversionary segment (5.2%).
New lease contracts were signed on average at approximately
2% above ERV in 2023.
REVERSIONARY POTENTIAL
31 Dec.
2023
31 Dec.
2022
Amsterdam 5.2% 11.0%
Other G4 -3.0% -0.6%
Other NL 4.1% 3.6%
TOTAL 2.4% 6.1%
The WAULT of the portfolio is 3.7 years. Contracts representing
an annualised rental income of € 12.2m (16% of total annualised
rental income) are set to expire in 2024. This includes €3.8m in
flexible lease contracts with maturities of one to three months,
which typically are just rolled over.
EPRA YIELDS
The EPRA net initial yield is up by 70bps to 5.3% in 2023. This
reflects both yield expansion and the impact of higher rents.
The higher interest rate environment has resulted in a dearth of
liquidity in the investment market prompting appraisers to take a
more conservative stance to reflect this.
PORTFOLIO YIELDS
EPRA net initial
yield
Gross initial
yield
Reversionary
yield
Dec.
2023
Dec.
2022
Dec.
2023
Dec.
2022
Dec.
2023
Dec.
2022
Amsterdam 5.2% 4.4% 7.4% 5.9% 8.3% 7.0%
Other G4 5.7% 4.9% 8.6% 7.2% 8.9% 7.6%
Other NL 5.0% 4.6% 8.1% 7.0% 8.6% 7.5%
TOTAL 5.3% 4.6% 7.9% 6.4% 8.5% 7.3%
60
65
70
75
80
85
Net Effective
Rent
Rent
incentives
Contracted
rent
Positive
reversion
Negative
reversion
ERV
Vacant space
Total
ERV
Contracted rent Reversion ERV
72
6
77
4
-3
4
84
BRIDGE CONTRACTED RENT TO ERV - 31 DECEMBER 2023
2019
6.4%
7.1%
2018
2020
6.7%
2022
6.4%
2021
5.9%
2023
7.9%
GROSS INITIAL YIELD
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
27 NSI ANNUAL REPORT 2023
VALUATIONS
The portfolio valuation is down by 17.4% over the 12-month period
(-16.9% excluding development properties.). H1 saw a revaluation
of -9.1%, with H2 seeing the remainder of the decline to reflect
deteriorated market conditions and continued lack of liquidity.
The valuation decline is almost entirely attributable to yield expan-
sion as a result of higher interest rates and the collapse in invest-
ment volumes. The largest capital value decline was seen in
Amsterdam (-20.7%), given the lower starting yields.
The weakness in the investment market extends beyond offices,
as our Leiden Bio-Science Park assets contributed most to the
valuation decline in “Other G4”, with a 13% decline in capital
values in 2023.
REVALUATION
Market
value (€ m)
Revaluation
Positive Negative TOTAL %
Amsterdam 588 -154 -154 -20.7%
Other G4 301 -45 -45 -13.1%
Other NL 154 -26 -26 -12.8%
TOTAL 1,043 -225 -225 -17.4%
CAPITAL EXPENDITURE
Capex is € 19.5m of which € 2.4m is defensive. The € 15m of
offensive capex includes € 5.5m for the development projects.
CAPITAL EXPENDITURE
Offensive Defensive TOTAL
Amsterdam 12.3 2.7 15.1
Other G4 3.1 1.0 4.1
Other NL 0.2 0.2 0.3
TOTAL 15.6 3.8 19.5
AMSTERDAM
Vacancy decreased from 7.0% to 5.8% as a result of the disposal
of Donauweg in Q3 2023, which was entirely vacant, as well as
occupancy gains in HNK Zuidoost and Centerpoint II.
The tenant retention rate during 2023 was 57%.
KEY METRICS AMSTERDAM
2023 2022 Change
Number of properties 22 23 -4.3%
Market value (€ m) 588 730 -19.5%
Market value asset (€ m) 27 32 -15.9%
Lettable area (sqm k) 161 178 -9.7%
Ann. contract rent (€ m) 39 40 -1.7%
Average rent / sqm 259 243 6.7%
ERV (€ m) 44 47 -8.1%
EPRA vacancy 5.8% 7.0% -1.2 pp
EPRA net initial yield 5.2% 4.4% 0.8 pp
Gross initial yield 7.4% 6.0% 1.5 pp
WAULT 4.1 4.1 -0,5 pp
0.0
20.0
40.0
60.0
80.0
100.0
2024 2025 2026 2027 2028 >2028 Total
Contract rent 12.2 14.3 14.4 10.8 5.5 18.8 76.1
ERV 12.4 15.0 14.4 11.1 5.5 19.5 77.9
# Contracts 239 63 60 76 45 56 539
Rev. Potential 1.4% 5.4% -0.1% 2.0% -0.7% 3.7% 2.4%
ANNUAL EXPIRATIONS AND REVERSIONARY POTENTIAL
TOTAL PORTFOLIO
0.0
5.0
10.0
15.0
25.0
30.0
35.0
45.0
2024 2025 2026 2027 2028 >2028 Total
Contract rent 4.8 5.8 9.4 5.0 3.7 9.8 38.7
ERV 4.8 6.8 9.3 5.3 3.8 10.8 40.7
# Contracts 68 19 20 40 19 25 191
Reversion -0.8% 16.2% -1.1% 4.8% 1.3% 9.4% 5.2%
40.0
20.0
ANNUAL EXPIRATIONS AND REVERSIONARY POTENTIAL
AMSTERDAM
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28 NSI ANNUAL REPORT 2023
OTHER G4
The EPRA vacancy rate for Other G4 is 6.0%, down from 6.1% at
year-end 2022. The vacancy includes 2.2% in strategic vacancy
for Alexanderpoort, where several floors are being held vacant as
part of a major refurbishment.
Alexanderhof was let to the Rotterdam Municipality in 2023 and is
now reclassified as investment property.
The retention rate for 2023 amounts to 42.7%.
KEY METRICS OTHER G4
2023 2022 Change
Number of properties 14 14
Market value (€ m) 301 342 -12.0%
Market value asset (€ m) 21 24 -12.0%
Lettable area (sqm k) 125 122 2.6%
Ann. contract rent (€ m) 26 24 6.9%
Average rent / sqm 220 213 3.6%
ERV (€ m) 27 26 4.4%
EPRA vacancy 6.0% 6.1% -0.1 pp
EPRA net initial yield 5.7% 4.9% 0.8 pp
Gross initial yield 8.6% 7.2% 1.5 pp
WAULT 3.5 4.0 -13.5%
OTHER NETHERLANDS
The vacancy rate was 1.5%, down from 4.1% at year-end 2022.
The vacancy in Life Sciences assets in Leiden remains 0%.
The retention rate in this segment is 83.7%.
KEY METRICS OTHER NETHERLANDS
Dec. 2023 Dec. 2022 Change
Number of properties 10 12 -16.7%
Market value (€ m) 154 203 -24.1%
Market value asset (€ m) 15 17 -8.9%
Lettable area (sqm k) 65 82 -21.0%
Ann. contract rent (€ m) 12 14 -11.9%
Average rent / sqm 195 180 8.6%
ERV (€ m) 13 15 -13.7%
EPRA vacancy 1.5% 4.1% -2.5 pp
EPRA net initial yield 5.0% 4.6% 0.4 pp
Gross initial yield 8.1% 7.0% 1.1 pp
WAULT 2.9 3.3 -11.5%
0.0
5.0
15.0
25.0
30.0
2024 2025 2026 2027 2028 >2028 Total
Contract rent 3.7 7.0 3.1 3.6 0.8 6.9 25.1
ERV 3.5 6.8 3.0 3.5 0.7 6.8 24.3
# Contracts 161 36 33 28 11 22 291
Reversion -5.3% -2.6% -2.9% -3.2% -4.6% -1.8% -3.0%
10.0
20.0
ANNUAL EXPIRATIONS AND REVERSIONARY POTENTIAL
OTHER G4
0.0
2.0
8.0
12.0
14.0
2024 2025 2026 2027 2028 >2028 Total
Contract rent 3.7 1.5 2.0 2.2 1.0 2.0 12.4
ERV 4.1 1.5 2.1 2.3 1.0 1.9 12.9
# Contracts 10 8 7 8 15 9 57
Reversion 10.7% 0.1% 9.1% 4.1% -5.0% -5.4% 4.1%
4.0
10.0
6.0
ANNUAL EXPIRATIONS AND REVERSIONARY POTENTIAL
OTHER NL
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29 NSI ANNUAL REPORT 2023
DEVELOPMENT AND RENOVATIONS
In line with the prevailing difficult overall market conditions, NSI
has revisited the risk/return prospects of its developments and
decided to scale back its near-term initiatives.
Laanderpoort was sold to ING in January 2024 for € 24m, which
is the price for the existing Laanderpoort buildings, along with the
plans, permits and agreements for its redevelopment.
Vitrum has been leased on a flexible basis to generate some rental
income, whilst the legal process to obtain permits for the redevel-
opment continues to be pursued.
The decision to postpone the Well House project was made in
late 2022 and the project remains suspended until further notice.
At year-end 2023 both the Laanderpoort and Vitrum assets were
included in IPUC, as well as the accumulated capitalised costs
for Well House.
MOVEMENT TABLE INVESTMENT PROPERTY UNDER CONSTRUCTION
TOTAL
Balance 1 January 2023 59.1
Capital expenditure (Investments) 5.5
Capitalised interest 2.4
Revaluation -31.2
Transfer from / to operation 23.5
Balance 31 December 2023 59.2
Market value 31 December 2023 59.0
SUSTAINABILITY
The share of Label A Energy Performance certificates increased to
95%, from 88% in 2023. The percentage Breeam ‘Very Good’ and
‘Excellent’ labels increased to 73% from 66% in 2023.
NSI was awarded 5 stars in the GRESB sustainability assessment
for the third year running and achieved 94 points, its best score to
date, making it ‘sector leader at the Global and Regional levels’.
NSI also obtained EPRA’s sBPR Gold award.
NSI remains committed to staying below the CRREM reduction
pathway for Dutch Offices. In 2023 NSI remained well below the
Dutch average and reduced its energy intensity by ca 3% vs.
2022. As higher levels of efficiency are approached, marginal
reductions become more difficult to achieve.
0
50
150
100
200
2020 2025
2035
2030
NL target
NSI Actual
NSI Forecast
kgCO
2
e/m
2
/year
173
164
155
128
116
112
85
STAYING BELOW THE CRREM PATHWAY 85 KWH/M2/YEAR BY 2035
38%
Excellent
Very good
Good
Acceptable
Pass
No label
35%
13%
6%
0%
9%
EPC ENERGY PERFORMANCE CERTIFICATES BY VALUE
A++
AA+
B
C D
E
F & G
29%
23%
29%
7%
6%
6%
2017
44%
26%
15%
5%
6%
4%
2018
74%
12%
12%
2%
2020
80%
7%
10%
2%
2%
2021 2023
65%
8%
4%
10%
13%
2022
61%
16%
15%
3%
3%
2%
2019
BREEAM BY SQM
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
30 NSI ANNUAL REPORT 2023
Net debt is down by € 21.0m compared to the end of December
2022. This is primarily due to disposals totalling € 33.9m (net of
transaction costs) and partly offset by investments totalling € 19.5m.
At the end of 2023 NSI has circa € 290m of committed undrawn
credit facilities at its disposal. The average loan maturity is 4.5
years (December 2022: 4.7 years), with no loans maturing until
2026. This ensures sufficient flexibility and capacity.
At year-end 83.6% of debt drawn is unsecured (91.2% of avail-
able debt) due to a repayment of ca € 10m at the extension of
the secured loan in June (from € 65m to € 55m). The average
cost of debt has increased from 2.0% to 3.2% in 2023 due to the
expiration of swaps and the closing of new swap contracts, and
increased (short term) interest rates.
LEVERAGE AND HEDGING
The LTV is 33.0% at the end of 2023, 4.3 percentage points higher
compared to December 2022 (28.7%), driven by negative revalua-
tions of assets in 2023 and partly offset by lower net debt.
The ICR stands at 5.5x at the end December 2023, compared to
6.3x at the end of December 2022. This is the result of higher net
financing expenses and a slightly lower NRI during 2023, due to
disposals. The ICR remains firmly above the 2.0x covenant.
COVENANTS
Covenant Dec. 19 Dec. 20 Dec. 21 Dec. 22 Dec. 23
LTV ≤ 60.0% 27.4% 29.2% 28.2% 28.7% 33.0%
ICR ≥ 2.0x 6.8x 7.2x 6.5x 6.3x 5.5x
NSI is using swaps to hedge interest rate risk on variable rate
loans. Due to the expiration of € 148m of swaps and closing only
€ 55m of new swaps, the volume hedge ratio has decreased to
82.1% (target range: 70-100%) from 104.0% in December 2022.
The weighted average maturity for the derivatives and fixed rate
loans is 4.9 years at the end of December 2023. The maturity
hedge ratio is 107.7% (target range 70-120%)
BALANCE SHEET, NTA AND FINANCING
In 2023 NSI has executed a necessary restructuring to limit the nega-
tive impact of the forthcoming changes in the applicable corporate
tax legislation in 2025. As a result NSI has transferred assets into
(wholly-owned) separate legal entities in order to operate a model
whereby NSI NV acts as an FBI with indirect investments in property.
The various property owning subsidiaries are subject to normal
corporation tax as per 2023. The capital structures of the subsidiaries
are comparable with the financing structure of the group. Moreover,
following IFRS guidelines, the balance sheet now includes a €38.7m
deferred tax asset reflecting temporary differences between the book
value of assets and liabilities and their values for tax purposes.
NET TANGIBLE ASSETS
EPRA NTA per end of December 2023 is € 711m, down 19.7%
compared to the end of 2022 (€ 886m), largely as a result of a
negative revaluation of the investment portfolio. Due to a small
rise in the number of shares following the issuance of the stock
dividend, EPRA NTA per share decreased by 20.1% from € 44.17
at the end of 2022 to € 35.30 at the end of 2023.
FUNDING
During the first half of 2023, NSI renewed its secured loan with
Berlin Hyp for an amount of € 55m, whereby the maturity has
been extended by four years from June 2023 to June 2027. An
interest rate swap matching the maturity and outstanding amount
on the loan has been closed at 3.3%, impacting the cost of debt.
NET DEBT
31 Dec 2023 31 Dec. 2022 Change
Debt outstanding 335.0 353.2 -18.2
Amortisation costs -1.4 -1.6 0.2
Book value of debt 333.6 351.6 -18.0
Cash and cash equivalents -0.2 -0.2 0.0
Debts to credit institutions 11.0 14.0 -3.0
Net debt 344.4 365.5 -21.0
46.0
42.0
38.0
36.0
34.0
32.0
30.0
44.17
44.0
2.01
-11.13
31 Dec. 2022
Dividend
EPRA
Earnings
Revaluation
Result
on sales
Corporate
income tax
Other
Effect
stock div.
31 Dec. 2023
40.0
-1.87
0.27
1.92
0.00 -0.06
35.30
BRIDGE EPRA NTA PER SHARE (IN €) GROSS INITIAL YIELD
50
40
50
40
50
40
55
290
2023 2024 2025 2026 2027 2028 2029 2030 2031
10
RCF undrawn
RCF
Term Loan
BerlinHyp
Athene
Athene (2)
Metlife
Barings
Pricoa
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
31 NSI ANNUAL REPORT 2023
CREATING A LANDMARK
BUILDING TOGETHER WITH
ITS FUTURE OCCUPIER
Over the past years, NSI has worked closely with ING to
design a future-proof office that meets the changing needs
and demands of their organisation and its employees. The
current Laanderpoort building will be redeveloped into a
new, state-of-the-art and sustainable multi-purpose building,
as part of an increasingly vibrant mixed-use submarket of
Amsterdam. From the initial collaboration and lease agree-
ments to the ultimate sale of the building, the entire process
has been marked by a spirit of cooperation and innovation
between the parties involved.
Towards the end of 2019 NSI signed a cooperation agreement and
lease agreement with ING for the redevelopment of Laanderpoort in
Amsterdam Southeast.. Positioned adjacent to ING's recently estab
-
lished headquarters and strategically located near the Amsterdam
Bijlmer Arena train station, Laanderpoort forms an integral part of the
Amsterdam South East area—an emerging collaborative innovation
district with ambitious growth prospects in the years ahead.
BREEAM AND WELL AS BUILDING BLOCKS FOR THE
DESIGN
The design for the building emerged from an integrated design
process, with NSI overseeing a multidisciplinary team responsible
for the overall design. From the early start, there was an ambitious
aim to create a highly sustainable building. Guided by the princi-
ples of BREEAM and WELL, these frameworks not only provided
direction but also served as a wellspring of inspiration. The focus
extended beyond mere energy efficiency, encompassing the
broader spectrum of the building's technical excellence, the well-
being of its eventual occupants, and the construction process.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
EMBEDDING SUSTAINABILITY AND FUTURE-PROOF
FACILITIES
The outcome is a structure that achieves Paris-Proof status,
demonstrating resilience to climate challenges while adhering to
the most stringent sustainability standards in its design .It will have
an energy label A++++, BREEAM Outstanding label, Combined
Heat and Power installation (CHP), climate ceiling, climate class
A, and PV panels. To collect rainwater, retention crates have been
placed on the site, linked to an irrigation system. This also helps in
capturing large amounts of water during large rainfall events to be
climate resilient and better cope with changing weather conditions.
The building will feature an accessible, transparent plinth with
a restaurant and sports facility. The facilities can be visited by
ING employees, local residents and students from neighbouring
schools. In addition, much attention has been paid to the public
space. The surrounding park will be extended from ING's head
office Cedar and decorated with special planting to enhance
biodiversity in the area.
CLOSE COOPERATION LED TO RESULTS
In close collaboration with ING and the Municipality of Amsterdam,
NSI has obtained the irrevocable building permit, finalised the
leasehold agreement and successfully concluded the tender
phase for construction in 2023. With this, NSI has completed the
development phase and prepared the building for the construc-
tion phase. Sustainable demolition and construction choices,
like circular demolition of the current building, were made in the
process to minimise the negative impact of the works on the envi-
ronment.
32 NSI ANNUAL REPORT 2023
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
33 NSI ANNUAL REPORT 2023
SALE OF BUILDING
Early 2024, NSI announced the sale of the current building, inclu-
sive of plans, permits, and redevelopment agreements, to ING for
a total consideration of €24 million. This transaction ensures the
construction of this iconic building by its future occupier
The redevelopment of Laanderpoort attests to the soundness of
NSI’s development vision, wherein development initiatives provide
exceptional opportunities to enhance office quality for our clients.
The delivery of a 'ready to start' project, not only underscores the
credentials of NSI's development team but also aligns seamlessly
with NSI’s commitment to capital discipline.
Whilst NSI has scaled back development in response to the
distinctive and challenging circumstances that unfolded in 2023
development remains a core competency to the business. The
team will continue to explore opportunities still embedded in the
portfolio to add value and increase the overall quality and attrac-
tiveness of the NSI portfolio.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
RISK AND CONTROL FRAMEWORK
POLICY AND PROCEDURES
RISK ACCEPTANCE
RISK SECTORS
STRATEGY
STRATEGIC
– Macro-economic environment
– Market value of property
– Changes in tenant demand
– Cost of capital
– Concentration
– Competition
– Sustainability - Transition
– Sustainability - Physical risk of
climate change
OPERATIONAL
– Quality of employees
– Fraudulent transactions
–
Execution development projects
– Maintenance
– Supply chain
– Tenant satisfaction
– Data and cyber security
– Calamities
– Pandemic diseases
COMPLIANCE
– Integrity code and rules
– Fraudulent transactions
– Sustainability / health and safety
legislation
– Fiscal regulations
FINANCIAL
–
Reporting
–
Liquidity
–
Interest rate volatility
–
Credit / counterparty
RISK ASSESSMENT AND MONITORING
GOVERNANCE
The Management Board is responsible for the organisation, imple-
mentation and functioning of the internal risk management and
control systems that are geared to NSI’s business activities. NSI
has an adequate risk management and internal control system
in place. The Board is however aware that risk management
and control systems cannot provide an absolute guarantee with
respect to achieving the business objectives and preventing signi-
ficant errors, losses, fraud or the violation of laws or regulations.
RISK MANAGEMENT AND INTERNAL
CONTROL
The scope of the Supervisory Board’s supervision includes the
design and operation of the internal risk management and control
systems. The Audit Committee supports the Supervisory Board in
the performance of this supervision. The Management Board and
the Supervisory Board consider effective risk management to be
a critical success factor whereby the ‘tone at the top’ is crucial.
Ownership and management of all (identified) risks is assigned to
the Management Board and is managed and monitored during
the year in cooperation with senior management.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
34 NSI ANNUAL REPORT 2023
STRATEGY
NSI has a long-term investment strategy for its real estate invest-
ments and monitors the risks associated with its investment
policy. Control measures have been implemented with regard to
this policy and the monitoring of the ensuing results and effects.
A system safeguarding the policy, guidelines, reporting systems
and segregation of duties has been set up and put into opera-
tion in order to execute these control measures. The organisa-
tional structure and corporate strategy are focused on maximising
shareholder returns with a conservative risk appetite.
Sustainability is an integral part of NSI’s long term value creation
strategy. Our business model is geared towards minimising our
carbon footprint, offering and developing future-proof buildings
and create healthy, inspiring and flexible working environments
for our clients and employees
RISK ACCEPTANCE AND RISK APPETITE
In general, the total risk appetite of NSI is low to medium, in line
with the company’s objective to generate consistent long-term
results for its shareholders and other stakeholders such as its
employees, tenants and suppliers.
NSI has a clear strategy whereby it is active in high-growth Dutch
locations in selected key cities in The Netherlands, with its primary
focus on Amsterdam, in line with the global trend of urbanisation,
with a well-defined asset strategy using clear acquisition and divest
-
ment criteria. During the past years, NSI increased investments in
development of properties, which lead to a change in its risk profile.
Inevitably, the implementation of the strategy involves incurring risk.
Within this framework NSI is prepared to accept risks associated
with doing business in the currently changing property market
environment in a responsible and well-considered way, as well
as in line with the interests of its stakeholders. Operational risks
must be kept under control as well as possible, and NSI regu-
larly reviews the effectiveness and efficiency of its operational
processes for this purpose.
The risk appetite regarding financial risks is low. NSI’s financial
policy can be described as conservative, as evidenced by the
conservative financing objectives stated in the strategy chapter.
With regard to the risks associated with its assets and cash flows,
NSI aims to be insured in a conservative way and in line with
market practice where possible and financially responsible.
The risk appetite in terms of compliance is zero, meaning that all
laws and regulations must be adhered to. NSI and its employees
must act with integrity, honesty and in compliance with laws and
regulations. NSI has also formulated clear principles for this which
are laid down in various codes and regulations.
RISK AND CONTROL FRAMEWORK
The NSI risk and control framework is based on the Enterprise
Risk Management (ERM) model and the related COSO frame-
work (developed by the Committee of Sponsoring Organizations
of the Treadway Commission). The risk and control framework is
assessed regularly; changes are made if required.
NSI has an adequate risk management and internal control
system In place. An important element of the internal control
system is a management structure that enables effective deci-
sion-making. Strict procedures are followed for the preparation
of monthly, quarterly and annual reporting of results based on the
company’s accounting principles. Annual and quarterly budgets
and forecasts are prepared and set by the Management Board
and approved by the Supervisory Board. Based on an integrated
ERP system combined with a data warehouse, Business Intel-
ligence tools and other applications, the internal management
reporting system is designed to track developments in all relevant
parts of the financial and operational results, as well as monitoring
company performance using key performance indicators.
A back-up and recovery plan is in place, making use of external
data centres, to ensure that data is not lost in the event of a cala-
mity or cyberattack.
The Audit Committee discusses the findings of the external
auditor regarding the company’s internal control environment
with the Management Board and the external auditor, and moni-
tors compliance with recommendations and follow-up action on
comments made by the external auditor. Throughout the year, the
findings of the internal audits were also discussed with the Audit
Committee.
In the year under review all important decisions with regard to
the acquisition, redevelopment and divestment of properties were
discussed and assessed during regular meetings of the Super-
visory Board. Real estate transactions valued below € 20.0m
may be entered into by the Management Board without the prior
approval of the Supervisory Board. Transactions valued above €
20.0m require approval from the Supervisory Board.
In 2023 the risk and control framework was reviewed by the
Management Board. Based on this review, the assessment of
impact and likelihood was adjusted in some instances. Other
risks have been redefined to better reflect the actual risk. The
completeness of the identified risks was discussed with the Audit
Committee.
RISK ASSESSMENT AND MONITORING
NSI measures and assesses risks using tools including scenario
analysis models in which the impact of variables can be set. The
outcome of these models results in more awareness of the sensi-
tivity of our business model and strategy. In addition, budgets and
the periodically updated forecasts are based on the actual state of
affairs in order to generate scenarios containing the most up-to-
date information.
High-impact risks are risks that could have a material impact on
NSI’s income statement and / or the balance sheet, the compa-
ny’s financing covenants or its reputation.
Low impact risks have a limited impact on the company’s results
or financial position. Risks that have an average impact could
have a large enough impact to require an explanation should they
occur, although not large enough to have a material impact on
results.
The likelihood of a risk occurring may be low but the possible
impact may be high, as may be the case in the event of a large
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
35 NSI ANNUAL REPORT 2023
calamity. For this reason, NSI attaches equal importance to risks
that are less and more likely to occur. NSI monitors the high-
impact risks more frequent. By monitoring throughout the year,
NSI assesses whether the estimated impact of all identified risks
is still in line with the actual situation.
RISK MANAGEMENT AND CONTROL IN 2023
As a result of changed market conditions and lack of liquidity
in the market, the valuation of NSI’s properties was significantly
adjusted downwards in 2023. At the same time, borrowing costs
went up.
Balance sheet management is however well installed. In 2023 NSI
scaled back developments by pausing the Well House project.
After closing date, in January 2024, the development project
Laanderpoort, Amsterdam, was sold to ING.
In June 2023, NSI renewed its secured loan with BerlinHyp,
whereby maturity has been extended to June 2027. The first loan
set to expire is now in January 2026, the average loan maturity is
4.5 years at 31 December 2023.
At the end of 2023 NSI reported an LTV of 33.0% (31.5% after
the sale of Laanderpoort in 2024) and an ICR of 5.5x, well within
the covenants of respectively maximum 60.0% for LTV and higher
than 2.0x for ICR.
In 2023 a strategic review was done, of which the outcome was
presented in the H1 results.
Key elements of the revised strategy were:
• Increased focus on the Amsterdam market;
• Increased commitment to sustainability
• A disposal programme to support further concentration of our
capital where it can work best for shareholders;
• Exploring partnerships where beneficial; and
• Utilising retained earnings as a balance sheet management
tool.
During 2024 this strategy will be further rolled-out.
INTERNAL AUDIT
NSI appointed a third party for a three-year period to assist
(co-sourcing) in fulfilling the internal audit function. The Company
has not appointed an internal auditor as specified in best practice
provision 1.3.1 of the Dutch Corporate Governance Code.
At the end of 2021 a new internal audit plan was drawn for the
period 2022 to 2024. The plan is based on a high-level risk
assessment of NSI’s primary and supporting processes. The risk
factors applied are based on qualitative factors like sensitivity to
fraud, manual input, nature of the process, possible impact and
number of transactions. This internal audit plan was discussed
with and approved by the Audit Committee.
For key and / or high-risk processes, this was a full scope review,
aimed at the effectiveness of the design of the process as well as
the effectiveness of the control measures. For a full scope audit,
extensive testing of control measures and transactions took place.
For medium or low risk processes a limited scope review was
done, with a focus on reviewing the design of the control measures
with limited testing of these measures.
Based on the outcome, an action plan was made to make adjust-
ments or improvements to the internal control procedures. Follow-
up audits were performed on an annual basis to review whether
prior year management actions were indeed taken.
In 2023, the following processes were reviewed:
• Real estate rental (full scope);
• IT (full scope);
• Valuation of investment property (limited scope);
• Financing and liquidity management (limited scope).
Overall, no significant findings were found in the audit of the
design, implementation and operational effectiveness of the
internal controls of the respective processes. Furthermore, a
review of fraud risks in relation to the above-mentioned processes
is also in scope of these audits. Also, no significant findings came
out of this review process.
A follow-up audit on the findings and recommendations of the
processes which were reviewed in 2021 and 2022 was also
performed. The progress with respect to the follow-up of the prior
year audits was: 74% of the recommendations were completed,
18% is in progress, whereas for 8% follow-up still needs to be
started. None of the recommendations that are still pending are
considered significant.
The results and findings of the audits were discussed with the
Audit Committee, after which the outcome was assessed by and
shared with the external auditor.
FRAUD RISK ASSESSMENT
The management of fraud risks is an integral part of NSI's risk
management. In 2023, NSI has conducted a separate fraud
risk analysis in order to assess whether potential fraud risks are
adequately mitigated or controlled within NSI's internal control
environment, to identify if there are any risks that are not (yet)
adequately mitigated, and if there are shortcomings for which
additional measures should be taken. Amongst others, for the
fraud risk analysis, NSI used the information as presented in the
publication by IVBN ‘Beheersing van frauderisico’s in de vast-
goedsector’ (February 2018).
For each process/activity, the potential fraud risks that could
apply, and the control measures that are already in place, were
identified. Activities were categorized in three main categories for
this purpose;
• General: Culture and Governance
• Primary processes/activities (including acquisitions and dispo-
sitions of assets, commercial and technical asset management
and development of real estate);
• Supporting activities.
The main potential fraud risks related to our business are: anti-
bribery and corruption (e.g. money laundering), transactions with
fraudulent parties, self-enrichment and manipulation risk. This
fraud risk analysis shows that, to the best of our knowledge,
adequate mitigating measures are in place with respect to several
fraud risks. The deeply implemented separation of duties and
the way in which decision-making and power of attorney are
embedded in a small organisation like NSI contribute significantly
to this. Furthermore, the assignment of external appraisers in
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
36 NSI ANNUAL REPORT 2023
the valuation process and the standardisation of processes and
formats in general are also important mitigating measures in this
regard.
The outcome and conclusions of the fraud risk assessment have
been discussed in both the management board as the audit
committee. As a result of this fraud risk assessment no major
issues were observed.
INTEGRITY CODE AND RULES
In 2022, the existing Code of Conduct (based on the Code of
Conduct published by the IVBN) was updated. All new employees
receive the Code of Conduct, for which they have to sign-off. All
employees need to (re-)confirm the integrity code and rules on an
annual basis.
The Code of Conduct of NSI is also applicable to suppliers with
respect to chain responsibility.
There have been no known incidents in relation to fraud or inte-
grity in 2023.
SUSTAINABILITY, HEALTH AND SAFETY
Sustainability is an integral part of NSI’s long term value crea-
tion strategy. As a real estate company, our business is exposed
to both transition and physical risks and opportunities related to
climate change. NSI deems that both climate change risks could
become more material due to rapidly changing (compliance and
reporting) legislation. As part of our risk assessment process
these climate risks are fully integrated and NSI has identified the
possible mitigating measures to implement to control the climate
and financial consequences of those risks.
Our sustainability ambitions are geared towards minimising our
carbon footprint, offering and developing future-proof buildings
and create healthy, inspiring and flexible working environments
for our clients and employees.
TRANSITION RISKS
For each individual asset the level of sustainability has been
assessed, including the identification of further required impro-
vements (including the financial impact) in line with our ambition.
This also applies to all transformation and renovation projects.
We have improved the BREEAM credentials of our existing assets
over the past years; as per yearend 2023 already more than
73% of the portfolio has a BREEAM score of ‘Excellent’ or ‘Very
Good’. We aim to achieve at least BREEAM ‘Very Good’ for all
existing assets by 2025 and where viable we will upgrade assets
to BREEAM ‘Excellent’.
NSI's portfolio is fully compliant with the energy label C obliga-
tion which has become effective as from 1 January 2023. As per
yearend 2023 95% of NSI's portfolio has energy label A or better.
PHYSICAL RISKS
Based on the risk assessment on property level done in prior
years, existing mitigating measures were mapped and measures
that are needed additionally to mitigate the risks were determined
and prioritised. Additional costs needed are included in the finan-
cial planning for the coming years.
Further detailed information on sustainability can be found on pages
12 to 17 on environmental, social and governance performance.
REPORTING
Similar to in 2021 and 2022, NSI’s auditor PwC has provided a limited
assurance opinion (page 120-121) on the reported sustainability and
non-financial KPIs (pages 126 to 130) for the financial year 2023. This
limited assurance is an intermediate step in the transition to an inte
-
grated annual report, in which the full sustainability information will be
in scope in line with the Corporate Sustainability Reporting Directive
(CSRD), which is applicable for NSI as from reporting year 2025.
After having performed a high level gap analysis on CSRD readi-
ness in 2022, NSI started with the double materiality assessment
to determine its material ESG-topics in 2023. During 2024 this
process is expected to be finalised, after which an in detail gap
analysis will be performed and a planning will be made to close
the gaps. Further details of the outcome of this analysis will be
published in the 2024 annual report.
DATA AND CYBER SECURITY
The key applications supporting our business operation activities
are SaaS solutions. The outcome of our review is that the risk of
business interruption due to system failures is considered as very
low. Given the upgrade to a full cloud based IT-environment and
the absence of any local servers, the added value to perform a
penetration test again is very low.
Therefore, at the end of 2022, NSI selected a SOC / SIEM-provider
(Security Information and Event Management / Security Opera-
tions Center) as a preventive monitoring control for detecting
and reporting any possible ransomware attacks or cyber security
breaches. In 2023 no major issues were reported.
DUTCH REAL ESTATE TAX REGIME - FBI
Legislation has now been passed such that as of 2025 FBI’s can
no longer directly invest in Dutch real estate. In 2023 NSI has
executed a necessary restructuring to limit the negative impact
of this change.
NSI N.V. is set to remain an FBI up to the end of 2024, yet as a
result of the restructuring the group will already start to pay tax in
2023 and in 2024. At the same time, a deferred tax asset has been
accounted for as per December 2023.
Throughout 2024 the implementation of the restructuring has to
be completed by a.o. completing the transfer pricing framework,
strengthening corporate housekeeping. NSI will keep in contact
with tax authorities on further implementation and fiscal regulations.
Losing the FBI regime is perhaps not all negative, as it opens
up new opportunities for NSI to explore. For example, we could
potentially sell development projects; we could set up JVs more
easily to manage our overall capital / risk allocation more effecti-
vely; we could explore fund management; and we could start to
provide more types of services to our customers and potentially
offer these directly (and make a margin).
Currently, preliminary discussions by the Dutch Government to
establish a new REIT regime are ongoing. NSI will closely monitor
further developments in 2024 in relation to this subject.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
37 NSI ANNUAL REPORT 2023
STRATEGIC RISK
Appetite:
NSI pursues focus and growth (in defined locations) with a well-defined portfolio strategy by applying clear acquisition and divestment criteria. Within
the framework, NSI is prepared to take risk inherent in the chosen strategy in a responsible way and in line with the interests of its stakeholders.
Risk category Description of risk Mitigating measure
Assessment
Impact Probability
Macro-economic
environment
Executive responsible:
CEO
The wider macro-economic and geo-political landscape
and outlook has structural and cyclical implications for
overall business activity in the country. Real estate is a
cyclical industry that is impacted by these changes in
business activity, potentially impacting tenant demand
and investment demand.
In turn this may impact property valuations and so our
balance sheet. It may also impact our occupancy rates
and thereby also our earnings and cashflow position.
A structural or temporary imbalance between global
supply and demand dynamics at the macro level in
general could result in high levels of inflation, with a
possible impact on revenues and level of costs.
NSI invests only in the Netherlands, which historically
has been politically and economically stable, and within
the Netherlands NSI invests mostly in the G4 cities
(Amsterdam, Utrecht, Rotterdam and The Hague), Eind
-
hoven and Leiden (life sciences real estate). These cities
are seen as most robust in terms of economic outlook
and tenant demand and generally have the best levels
of transparency and liquidity in the transaction market.
Most of NSI's rental contracts include an indexation
clause. With respect to expenses NSI has fixed price
contracts for electricity and gas.
Below
average
High
Market value of
properties
Executive responsible:
CFO
The market value of properties is fundamental to a
capital intensive business as NSI, in particular in the
calculation of NAV. There is an inherent risk that the
properties in the portfolio are incorrectly valued, which
may result in a misstated equity position, misstated
indirect results, reputational damage and the potential
for claims due to false expectations being generated
among stakeholders.
In the markets in which NSI operates property yields are
lower as a result of which valuations have become more
sensitive to yield shifts.
Appraisals currently hardly reflect any transition costs
(sustainability capex) to Paris-proof. The risk is that this
will increasingly happen the coming years, which for
certain assets may lead to lower valuations.
The NSI property portfolio is externally appraised
twice a year (on 30 June and 31 December) in line with
the RICS valuation standards. NSI uses only a select
number of reputable valuers to appraise its assets.
NSI is focusing predominantly on high-quality proper
-
ties in the G4, Eindhoven and Leiden which are the most
liquid markets, so that relevant and up to date compa
-
rable transaction evidence generally exists.
NSI also ensures its internal asset data information is
up to date so that all the relevant data is available to
support the valuation process.
NSI uses an internal LTV target range of between 35%
- 40%, which is lower than the LTV debt covenant of
60%. This ensures that NSI has the capacity to absorb
sudden adverse movements in asset valuations.
For every asset in its portfolio NSI has calculated the
(financial) impact and has set a realistic timeline to stay
below the CRREM-pathway. This is incorporated in a
long term capex and maintenance plan. The effects
are also included in asset business plans and buy/hold
decisions as part of regular asset rotation.
In the underwriting of potential new property acquisi
-
tions, as part of the due diligence, NSI will perform an
impact analysis of costs and benefits to upgrade the
respective property to Paris proof.
Above
average
High
Change in tenant
demand
Executive responsible:
CEO
Our clients recognise that in addition to facilitating,
where appropriate, working from home, a high quality
and healthy workplace environment is key to attracting
and retaining talent. As a result, the focus is increasingly
on better locations, better services, more flexibility and
adherence to the highest ESG standards.
Working from home may also result in our clients selec
-
tively using less space overall.
Furthermore, continued urbanisation will see tenant
demand structurally concentrate in fewer locations.
Not being able to meet future tenant demand may result
in structurally high vacancy levels, resulting in lower
financial results and lower valuations of NSI's properties.
NSI is constantly evaluating whether its properties
continue to meet the need of (potential) clients and
whether changes are needed.
NSI is focusing on high-quality, larger, efficient and
sustainable properties in vibrant inner-city locations or
near transport hubs, mainly in the G4. We believe this
is where our potential customers want to be located
and can find the relevant talent to run their businesses
and where NSI, because of the multi-functional, vibrant
location and size of the properties is able to provide
relevant services on a profitable basis.
Below
average
Above
average
Cost of capital /
stock exchange
listing
Executive responsible:
CEO
Any listed company, in particular in real estate, is to a
certain extent dependent on its shareholders to provide
it with an attractive cost of capital. There is a risk that
elements of the business are deemed structurally unat
-
tractive or that any small cap discount might be appli-
cable resulting in a structurally high overall cost of
capital, which could impair the ability of the business to
be further developed.
NSI has a clear strategy focussed on long term value
creation for all stakeholders. NSI runs a focussed high
quality portfolio on a cost efficient basis that should result
in an attractive stable dividend. Furthermore NSI looks to
generate value by active asset management, interesting
acquisitions and by pursuing , value-add opportunities and
a pipeline of profitable (re-) development opportunities.
Furthermore, NSI follows an active Investor Relations
strategy and focuses to provide transparency to contribute
to an optimized cost of capital.
High High
38 NSI ANNUAL REPORT 2023
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
Competition
Executive responsible:
CEO
By focussing on selective high-demand economic
growth markets there is a risk that other investors see
the same attractiveness of these locations and that
competition for assets can be fierce.
NSI offers a mix of space and services in locations
where other landlords and serviced office operators are
active. The risk is that the space / product of competi
-
tors is better, or more attractively priced.
NSI has built up an extensive local network in the
industry. This, in combination with our execution power
and strong financing capacity, means we see most to
market opportunities.
NSI believes property is about location, sustainability
and services. We pursue leading positions in all of
these, to make sure our product offering is competi
-
tive. NSI also pursues a strong relationship with its
customers and tracks its NPS score to understand if it
still meets customer needs.
Below
average
Above
average
Concentration
Executive responsible:
CEO
A concentration of assets or activities in one market
segment may result in a high correlation in the perfor
-
mance of these assets or activities.
Whilst concentration can have a significantly adverse
impact on the overall business in certain unforeseen
circumstances, NSI takes the view that concentra-
tion does not have to be a negative. it is better to be
good in a few things in the most promising locations
and develop regional market knowledge than being
moderate in lots of markets.
Whilst NSI’s portfolio has become more concentrated
in terms of location in recent years, there is still plenty
of diversity in terms of micro-locations, tenant profile,
size, lease terms and lease conditions.
Low Low
Sustainability -
Transition
Executive responsible:
CEO
The risk whether a property is and will continue to be
aligned to current and future sustainability require
-
ments, be it customer-led or regulatory-led.
NSI will have to be able to anticipate and respond to
changing legislation and changing needs and expecta
-
tions of our stakeholders with regard to sustainability
standards, although these have not yet crystallised out.
The risk of not being able to meet sustainability require
-
ments could reduce the attractiveness of our properties
(and as such the demand for and value of our proper
-
ties) and impact our reputation, as well as the ability to
attract new employees and the attractiveness of NSI's
shares to (potential) shareholders. Worst case this could
(for specific properties) result in the loss of our ‘license
to operate’.
The cost of sustainability and the transition to Paris
proof is not solely a risk to the business, it is as much
an opportunity. We identified this opportunity some time
ago and sustainability has since been an integral part of
our long-term value creation strategy. Sustainability is
an opportunity for NSI as not all investors will have the
knowledge, team or the capital to successfully transi
-
tion their assets to Paris-aligned, in a way that we have
prepared for this.
Sustainability has many perspectives. Our efforts are
geared towards minimising the energy intensity of our
portfolio andour carbon footprint.
NSI actively tracks the status of its portfolio with respect
to (new) codes and rules in the field of sustainability. For
potential acquisitions (and for all new developments),
the due diligence process includes an assessment of
whether the asset complies with all the relevant codes
and rules.
We operate all properties in line with our ISO 50001
Energy Management system ensuring we measure,
manage and monitor our energy performance.
NSI is has established a roadmap for each individual
property, to stay below the Dutch office CRREM path
-
ways, to reach our ambition of being Paris-aligned by
2035.
NSI uses external parties to set-up and review its ESG
reporting requirements. The external auditor provides
limited assurance on the reported ESG data.
High High
Sustainability -
Physical risk of
climate change
Executive responsible:
CEO
Due to unfavourable climate changes there is an
increasing risk of physical damage to our properties
(which cannot be fully covered by insurance) and the
inability to offer the required quality and comfort level to
the occupiers of the properties.
The risk of not being able to meet the climate chal
-
lenges could reduce the competitiveness and as such
the demand for our properties, which could have a
negative impact on asset valuations and could result in
reputational damage.
NSI regularly performs an assessment of the current
and future impact of the four relevant physical risks
with respect to our real estate portfolio (on an individual
asset level) and the health and wellbeing of the occu
-
piers of these properties.
These physical risks consist of heavy rainfall and
surface level flooding, river flooding and coastal surges,
drought and heat stress.
Based on this assessment to ensure risk mitigation,
we redefine (improve) the building specifications &
requirements (like quality of climate systems and water
management systems) for both all refurbishments and
new developments.
Below
average
Below
average
Risk category Description of risk Mitigating measure
Assessment
Impact Probability
39 NSI ANNUAL REPORT 2023
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40 NSI ANNUAL REPORT 2023
OPERATIONAL RISK
Appetite: NSI is actively managing its real estate portfolio, driving returns for shareholders through income generation and the pursuit of long term value-add.
This comes in a mix of a stable pool of income-generating assets, in combination with asset rotation and the acquisition of potential (re-)development
opportunities to provide potential growth. This implies an average risk appetite.
Risk category Description of risk Mitigating measure
Assessment
Impact Probability
Quality of employees
Executive responsible:
CEO
An active real estate company relies on highly skilled
employees to execute its strategic objectives. The
risk is that NSI is unable to attract and retain talent (in
particular key personnel) to further the business, due
to the business strategy or wider reputation of NSI, but
also due to shortages of qualified employees.
A high employee satisfaction level and a good mental
health of employees is key to the durable success of
NSI.
NSI management recognises recruiting and retaining
the right employees is of the utmost importance.
Management constantly evaluates the level and compo
-
sition of staff in light of its strategy and execution thereof
and takes action if / when needed.
NSI encourages employees to invest in themselves,
offering both in-house and external training programs,
providing regular feedback on performance, and
offering competitive levels of remuneration.
On a regular basis, NSI performs an employee satisfac
-
tion survey to obtain insight on how employees expe-
rience the working environment and culture. Based on
the outcomes, actions for improvement are identified
and rolled-out.
NSI recognises that a healthy work-life balance and
having a meaningful role is the basis to having happy
and productive employees. NSI recognises that selec
-
tive work from home can contribute to this.
Above
average
Above
average
Supply chain /
project sourcing
Executive responsible:
CEO
During execution of development and maintenance activi-
ties, unexpected circumstances in the supply chain may
occur like scarcity of materials, lack of resources (e.g.
labour, advisors and contractors) and increasing market
prices.
Supply chain disruption may also result in the default of
financially weaker (sub)contractors.
This may have a negative consequence in terms of
timing and profitability of these activities.
External advisors / specialists are regularly consulted to
monitor (changing) market conditions.
The financial standing and quality of references of
contractors and subcontractors is reviewed prior to
awarding contract(s).
Within reason NSI aims to build in sufficient margin to
absorb possible price changes or delays in projects or
maintenance.
Above
average
Below
average
Execution
development
projects
Executive responsible:
CFO
This is the risk that NSI may not be able to success
-
fully turn the development plans into profitable, attrac-
tive investment assets on completion related to factors
like project management, stakeholder management,
timing of activities, unidentified issues and / or inap
-
propriate product and service offering to meet evolving
occupier needs (including sustainability expectations
and requirements).
This may result in weak leasing performance, reduced
or delayed property returns and below target asset
values at completion.
NSI has established an internal development depart
-
ment to ensure adequate project development skills,
know-how and experiences.
Before any (re-)development project is started, all
potential project risks are identified and assessed and
- where possible - quantified in a risk budget. This
risk assessment is periodically updated at the end of
each project phase. External advisors / specialists are
consulted as part of this risk assessment.
When the return prospect of a project meets the internal
hurdle rate, taking into account all costs (including a risk
provision) and planning timelines, a project will receive
approval for proceeding to the next phase. NSI could
also decide to pause or to terminate a project before
construction start based on the risk assessment.
For each phase, NSI is evaluating whether the planning
has to be adjusted and what the consequences may
be on quality, timing, execution and profitability of the
project.
During construction, NSI will use an external party for
construction management to monitor timing, quality and
costs of the development project against the planning.
Finally, NSI regularly reviews the medium and long
term development pipeline and prioritises planning and
execution of potential projects based on potential prof
-
itability, complexity and current market circumstances.
Above
average
Below
average
40 NSI ANNUAL REPORT 2023
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
Maintenance
Executive responsible:
CEO
Real estate requires regular maintenance and needs to
be kept up to modern standards to remain attractive for
potential tenants or buyers.
Potentially there is a trade-off between delaying main
-
tenance to drive short term profits and long term value
creation at a short term cost to results, with the risk that
necessary maintenance is delayed.
NSI prepares a multi-year maintenance planning for all
assets. This is based on the input of tenants, suppliers,
inspections (by third parties) and NSI's own technical
department, taking into account NSI’s sustainability ambi
-
tions.
A minimum precondition is that all properties have to
comply with all prevailing laws and regulations. NSI
complies with the minimum C-label EPC requirement as
per January 2023.
NSI is using suppliers with a good reputation in order to
safeguard the quality and reliability of the building works.
Below
average
Below
average
Tenant satisfaction
Executive responsible:
CEO
The risk that rental income is impacted as a result of
tenants not extending their contracts upon expiry, or by
not signing leases to begin with, as a result of a low
tenant satisfaction score that is widely acknowledged in
the industry, increasing the vacancy ratio.
To mitigate vacancy risk, NSI pursues a multi-tenant
strategy, aiming for long term contracts and a stag
-
gering of lease maturities to reduce vacancy risk.
NSI is actively engaging with its customers and timely
anticipates maturing lease contracts, whilst regularly moni
-
toring tenant satisfaction. NSI is investing in its assets and
its services in order to attract, retain and satisfy clients.
When tenants do not renew their lease contract, NSI
aims to have exit interviews to get valuable insights in
the reasons why tenants are leaving.
Below
average
Below
average
Data integrity / cyber
security
Executive responsible:
CFO
Professionally managing and controlling risks associ
-
ated with the continuity, availability, functioning and
security (including compliance with prevailing privacy
legislation) of the internal and external IT infrastructure
and applications is of vital importance to NSI.
T
he implication of not fully controlling IT risks (such as
disruptions due to cybercrime) is that systems supporting
the primary business processes may not be available and
lead to the loss of relevant information or unauthorised
access to information by third parties, with damage to
reputation and image as a consequence. One conse
-
quence is that NSI may not be able to report internally
or externally in a timely or correct way, which may have a
negative impact on the decision-making process.
NSI focuses extensively on the security, continuity,
quality, and availability of its information systems and
data whereby it is advised by external parties.
In the unlikely event of a calamity, there are procedures
in place outlining regularly tested fallback and recovery
scenarios, minimising the impact of disruption on the
organisation. Business continuity and security are
further supported by all core applications being cloud
based.
Below
average
Below
average
Calamities
Executive responsible:
CEO
The risk of a calamity giving rise to extensive damage
to one or more properties or to personal injury of people
in the property, resulting in the potential loss of rental
income, a lower direct and indirect result, and claims
and legal proceedings by tenants. Reputational damage
is also a risk.
Internal processes and procedures have been set up
by NSI which are firstly aimed at preventing calamities.
Regular checks of the processes and procedures by
internal and external experts ensure constant improve
-
ment and reducing the probability of calamities.
Fire protection and access / security procedures are in
place in all of our properties.
Furthermore NSI is insured against damage to its real
estate, liability and loss of rent during periods of recon
-
struction and rental lease terms common in the industry.
Coverage against terrorism, floods and earthquakes is
limited due to current market practice.
The cover of risks is compared against the premium cost
on an annual basis. Local insurance policies on a property
are covered by an overall uniform umbrella insurance policy.
Below
average
Low
Pandemic diseases
Executive responsible:
CEO
Pandemic diseases, such as the Covid-19 outbreak,
could lead to economic recession and affects both
people and assets.
The above risk can threaten the safe operation of NSI’s
properties, cause disruption of business activities and
impact the well-being of our tenants as well as our staff.
This may negatively impact the demand for office
space, or the ability of our tenants to meet their rental
obligations and may also result in a delay in the execu
-
tion of development projects.
As such the risk can have a material adverse effect on
our earnings, cash flow and financial condition.
We seek to obtain the best possible information to
enable us to assess the impact of such threats and
risks.
We conduct assessments for all our properties and
activities, and implement appropriate measures to
avoid, detect and respond to such risks.
Below
average
Above
average
Risk category Description of risk Mitigating measure
Assessment
Impact Probability
41 NSI ANNUAL REPORT 2023
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
COMPLIANCE RISK
Appetite: NSI strives to fully comply with laws and regulations, meaning the risk appetite is zero.
Risk category Description of risk Mitigating measure
Assessment
Impact Probability
Integrity code and
rules
Executive responsible:
CEO
Unethical behaviour and breaches of applicable legis
-
lation and regulations, both by NSI staff as well as in
NSI's supply chain, could result in reputational damage,
claims and legal proceedings, leading to higher costs
and a lower result.
NSI has a general Code of Conduct and related regula
-
tions in place. NSI complies with the Dutch Corporate
Governance Code and the Financial Supervision Act
(Wet op het financieel toezicht).
The Internal codes are updated regularly in line with
new legislation or other relevant changes in the market
place. All employees are regularly trained in the appli
-
cable rules, including the Code of Conduct, the Compli-
ance Code, the regulations applying to the Management
Board and the regulations applying to the Supervisory
Board and its committees. Procedures have been set up
to ensure compliance, including signing an attestation
by all employees on an annual basis.
Below
average
Low
Fraudulent
transactions
Executive responsible:
CEO
The risk of NSI doing business with parties that are
found not to operate in good faith, are fraudulent or
have a bad reputation. It also concerns the risk of our
employees being part of a fraudulent transaction.
Both can have a negative impact on the results and
reputation of NSI.
NSI only wishes to do business with parties of good
standing and reputation. A KYC check is a fixed element
in the due diligence process for acquisitions and divest
-
ments, as well as for new lease contracts, new suppliers
or for entering into new partnerships.
NSI has a Code of Conduct, which periodically has to
be signed by each individual employee. Furthermore
NSI has a whistle-blowers' policy to enable employees
to report any activity that he / she considers dishonest
or illegal.
High Low
Sustainability /
health and safety
legislation
Executive responsible:
CEO
The risk that the portfolio does not comply with
prevailing laws and regulations in the field of Sustain
-
ability and Health and Safety.
This could result in a situation in which properties can
no longer be used (occupied) and/or fines are imposed
resulting in a negative impact on the value and market
-
ability of the real estate properties. It could also result in
reputational damage.
NSI is continuously checking the status of its current
property portfolio with respect to (new) codes and rules
in the field of Sustainability and Health and Safety.
In the case of new acquisitions or developments, the
due diligence process also includes an assessment of
whether the asset complies with all the relevant codes
and rules.
NSI includes a standard provision in its lease contracts
that tenants must obtain owner’s approval before
embarking on internal renovations (so that NSI can
assess if the plans allow it to meet its own obligations
such as fire safety). Lease contracts also stipulate that
the tenant is responsible for any consequences as a
result of these renovation works.
Above
average
Below
average
Fiscal regulations
Executive responsible:
CFO
NSI has the status of a Dutch REIT (known in The Neth-
erlands as an FBI) in accordance with section 28 of
the Dutch Corporate Income Tax Act 1969 (Wet op de
Vennootschapsbelasting 1969).
This means that NSI is subject to corporate income tax
at a rate of 0%, provided that certain conditions are met.
Failure to meet these requirements or a material change
in the FBI regime could have a significant adverse effect
on NSI, its results or financial position.
In September 2023 Government published draft legisla
-
tion to abolish the FBI regime for direct investments in
real estate per 1 January 2025. If this draft legislation
becomes law NSI’s real estate assets would become
subject to a normal corporate income tax rate.
Meeting the requirements of the FBI regime has been
a continuous area of focus for the Management Board
over the years.
In 2023 the FBI focus shifted towards pro-actively
analysing, optimising and preparing a variety of meas
-
ures to be as ready as possible for 2025. This resulted
in a significant internal restructuring in Q4 2023, with
external advisors supporting this process. Pending the
outcome of the final legislation or potential mitigating
measures that may still be enacted in 2024, NSI will
continue to monitor the situation and use the flexibility
as provided by the Q4 2023 restructuring to adjust
where necessary in its pursuit of an optimal business
and fiscal model as per 2025.
It is possible that NSI may exit the FBI regime early if it
is deemed in the best interest of the company and its
shareholders. That said, it is also still a possibility that
NSI NV, the listed holding company, can and will remain
an FBI per 2025 if that is deemed best and appropriate.
High Very high
42 NSI ANNUAL REPORT 2023
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43 NSI ANNUAL REPORT 2023
FINANCIAL RISK
Appetite: NSI has a conservative financial policy, meaning the risk appetite is low.
Risk category Description of risk Mitigating measure
Assessment
Impact Probability
Reporting
Executive responsible:
CFO
The reporting risk relates to the impact of incorrect,
incomplete or untimely available information (internal
and external), amongst others caused by constantly
evolving requirement and legislation, which may impact
decision making or lead to reputational damage and
potential claims due to late or misleading statements to
stakeholders.
NSI prepares and monitors a budget, investment
budget and liquidity forecast, all of which are compared
and updated with actual results on a quarterly basis.
Reports are reviewed by management, as well as by
finance and operational teams. Systems have been
devised in such a way that checks can be performed
on the data to safeguard the consistency and reliability
of information.
The half-year results are assessed by an external
auditor prior and the full annual accounts are audited by
the independent auditor.
NSI employees regularly attend courses and meetings
to be informed of all relevant laws and regulations so
that all information produced by NSI complies with
prevailing laws and regulations.
Low
Below
average
Liquidity
Executive responsible:
CFO
Debt financing carries refinancing risks. The risk is that
there is insufficient liquidity in place to meet the compa
-
ny’s obligations at the moment of interest payment or
repayment, meaning that the company suffers repu
-
tational damage or is subject to potential additional
financing costs, which may lead to a lower direct
result. In the worst case, such a situation may lead to
the default of one or more loans, or bankruptcy of the
company.
Risks related to not meeting financial covenants appli
-
cable to the various debt arrangements.
The risk is also a lack of (re)financing availability due
to increased ESG-requirements as a condition for
providing funding by our financing partners, which NSI
may not be able to meet.
Furthermore the limited depth of the local Dutch finan
-
cial industry in terms of number of actors in connection
with NSI's own relatively small size potentially limits the
possibility to attract new unsecured funding.
To limit liquidity risk, NSI has a strategy to diversify
its external financing in terms of loan types, types of
lenders, the maturity profile of its loans and repayment
dates. NSI also has access to a flexible revolving credit
facility (under which penalty-free redemption and draw
-
down of funds to agreed amounts are permitted). NSI
addresses upcoming (re)financing maturities timely in
order to decrease the risk associated with (re)financing
and maintains a good and transparent working relation
-
ship with its financiers.
NSI prepares a liquidity forecast at least on a quar
-
terly basis, in which it performs stress tests and uses
scenario analyses to closely monitor its performance
and financial indicators in relation to its financial and
non-financial covenants and reports on this by means
of compliance certificates. In extreme cases additional
equity may be issued to deal with impending liquidity
issues.
Below
average
Below
average
Interest rate volatility
Executive responsible:
CFO
Interest rate risks result from fluctuations in market
interest rates. These fluctuations could potentially affect
the interest expense in its financial reports and the
market value of its derivative financial instruments.
NSI, as a long term investor in real estate, is aiming to
secure debt financing on similarly long maturities. NSI
is using hedging instruments to manage the interest
rate risks on variable rate debt. NSI does not intend to
speculate on interest rates.
Above
average
Above
average
Credit / counterparty
Executive responsible:
CFO
Credit/counterparty risk exists when parties which have
a debt to NSI are unable to meet their obligations to
the company.
In general, the risk is mitigated by the fact that NSI has a
large number of tenants throughout a variety of sectors.
For every tenant NSI performs a creditworthiness check
before entering into a lease. NSI is pro-actively moni
-
toring its current tenant roster based on external infor-
mation, on a regular basis, to assess whether changing
circumstances have an impact on the overall tenant risk
profile.
NSI is pro-actively managing its debtor outstanding
balances.
In the case of financial counterparty risk, NSI only works
with reputable financial institutions for its funding and
hedging.
In the case of suppliers a credit check is done in
advance and furthermore NSI only works with reputable
partners.
Low
Below
average
43 NSI ANNUAL REPORT 2023
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
INTERNATIONAL FINANCIAL REPORTING STAND-
ARDS (IFRS)
In accordance with European and Dutch laws and regulations NSI
has prepared its financial statements for the 2023 financial year
based on EU-IFRS. The EU-IFRS result after tax includes unrea-
lised movements in the value of real estate as well as changes in
the fair value of derivatives.
NSI has decided to continue to report both its direct and indirect
investment results in addition to its EU-IFRS result as it believes
that these figures provide an important distinction.
In the view of the Management Board the direct investment result
is relevant information for investors and shareholders which
provides a better insight into structural, underlying results than
the EU-IFRS result which also includes unrealised movements.
Furthermore, NSI reports figures and indicators based on the
guidelines published by the European Public Listed Real Estate
Association (EPRA). These results are included in the overview
that is not a part of the EU-IFRS statements.
MANAGEMENT STATEMENT
The effectiveness and functioning of the internal risk manage-
ment and control systems are discussed each year with the Audit
Committee and the Supervisory Board. Taking into account the
aforementioned risks and the measures designed to manage
them, and in accordance with the best practice provision I.4.3. of
the Dutch Corporate Governance Code, the Management Board
declares that to the best of its knowledge:
• the report provides sufficient insights in the effectiveness of
the internal risk management and control systems and into any
failings thereof;
• the aforementioned systems provide reasonable assurance
that the financial reporting does not contain any material inac-
curacies;
• based on the current state of affairs, it is justified that the finan-
cial reporting is prepared on a going concern basis; and
• the section on risk management in the report states those
material risks and uncertainties that are relevant to the expec-
tation of the company’s continuity for the period of twelve
months after the preparation of the report.”
With reference to Section 5.25c(2c) of the Financial Supervision
Act (Wft), the Management Board declares that to the best of its
knowledge:
• the financial statements give a true and fair view of the assets,
liabilities, financial position and profit of NSI and the companies
included in the consolidation;
• the management report gives a true and fair view of the situ-
ation on 31 December 2023, the state of affairs at NSI and
its affiliated companies during 2023, the details of which are
presented in the financial statements, and that the management
report describes the fundamental risks facing the company.
44 NSI ANNUAL REPORT 2023
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
45 NSI ANNUAL REPORT 2023
GREAT PLACE TO WORK
NSI aspires to be a great place to work. We want our people to
enjoy the best work environment, excellent training, fulfilling and
diverse career opportunities, and all the support they need to
develop to their full potential.
NSI CULTURE AND MINDSET
NSI has an open and inclusive culture in which diversity is consid-
ered to be an added value. NSI aims to be a transparent, disci-
plined, responsible organisation that thinks in terms of oppor-
tunities. Furthermore, we like to keep it simple. We have clearly
defined our core values, as can be found on page 45.
Adhering to these core values will help NSI realise the full potential
of its employees, shareholder investments and assets it acquires
and operates. NSI incorporates these core values into its organ-
isation and processes by hiring the best talent and by holding
itself to the highest standards in an atmosphere of dedicated hard
work, team spirit and fun.
NSI encourages its employees to give feedback and urges the
whole organisation to actively contribute to our ambition of
becoming the leading Dutch real estate company.
Safeguarding our corporate culture has management’s ongoing
attention and is consistently a significant point of attention in
internal meetings. Our ability to live up to these core values is
included in our assessment and appraisal methodology and
discussed in regular and year-end reviews. Moreover, our
core values are integrated in job descriptions and NSI has an
onboarding programme in place to familiarise new hires with the
company’s cultural values.
ORGANISATION STRUCTURE
NSI has a lean and mean organisation in place, aligned with its
focused strategy.
The organisation is headed by a board consisting of the CEO and
CFO (vacancy) and supported by a management team. The disci-
plines represented in the management team are Asset Manage-
ment, Investment Management, Development, Customer Excel-
lence/HNK and Finance & Control.
NSI is characterised by decentralised responsibilities, allowing
the organisation to operate efficiently and empowering individuals
to develop in their role, supported by a robust IT infrastructure
and effective management information systems.
The number of employees (headcount) increased to 67 at 31
December 2023 (NSI: 43, HNK: 24, 2022: 65, NSI: 48, HNK:17).
For the company’s legal structure please refer to ‘The principles of
consolidation’ on page 77:
HEALTHY WORKPLACE
The health and well-being of our employees and tenants is also
one of the important pillars of NSI’s sustainability strategy. NSI’s
efforts and ambitions in this respect are reported in more detail in
the Sustainability chapter ‘The future is here’ (on page 12).
NSI’s culture and mindset, in which employees are used to having
a great deal of flexibility with regard to how they perform their
tasks and taking on responsibilities, is proving to be supportive in
the health and well-being of our employees. The sickness rate at
NSI was 4.2% in 2023 (2022: 3.5%).
NSI’s culture and its commitment to providing a healthy and
inspiring working environment to its employees are reflected in
NSI’s head office; offering a modern, healthy, flexible interior that
perfectly matches the experience we want to offer to our tenants,
including our employees.
A workplace risk analysis was carried out in 2023. Based on this,
improvements were made in lighting, office chairs and in adding
more greenery.
How to increase employee’s health and promote healthy habits in
the workplace will be a key theme in 2024.
EMPLOYEE ENGAGEMENT
To keep employees informed and engaged, the Management
Board regularly hosts sessions to inform the staff on the company’s
performance and to highlight specific topics and projects. These
sessions are being held after each quarter to elaborate on the
quarterly results, and every mid-quarter to discuss other subjects.
In 2023, specific attention was paid to “Shape your office space
sustainable”, “Cybersecurity Awareness” and “AI & Real Estate”.
Internal communications is supported by an active use of the
intranet, where weekly new articles are being released and new
employees are being introduced.
HRM
LEGAL
CORPORATE
SECRETARY
MARKETING
INVESTOR
RELATIONS
CFOCEO
TREASURY
ICT
BUSINESS
ANALYTICS
ASSET INVESTMENT PROJECT
DEVELOPMENT
FINANCE &
CONTROL
CUSTOMER
EXCELLENCE
MANAGEMENT TEAM
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
AGE BREAKDOWN NSI EMPLOYEES
0%
5%
10%
15%
20%
25%
<30 31-40 41-50 >50
YE 2023
YE 2022
YE 2021
YE 2020
YE 2019
46 NSI ANNUAL REPORT 2023
OUR VALUES
We believe that a clear set of values creates a common
feeling of identity. Our values set out the common beha-
viours that support our purpose and define our culture:
WE ARE TRANSPARENT
We recognise that mutual trust can only really exist in an envi-
ronment of openness, clear communication and consistent
actions. Our success as a long-term investor hinges on us
gaining and maintaining the trust of all stakeholders and we
constantly focus on this.
WE ARE DISCIPLINED
Our internal and external procedures are befitting of a small
and flexible organisation. The procedures provide clarity on
how we act and operate. We only make promises we can
keep.
WE TAKE RESPONSIBILITY
Our intrinsic motivation at NSI is to always do the right thing.
We recognise and fully embrace the high level of responsibility
that rests upon our shoulders as a publicly-listed company.
As employees we are fully aware of the need to support our
customers, colleagues and other stakeholders and we treat
them with the utmost respect. We acknowledge and correct
any mistakes we make and we learn from them.
WE THINK IN TERMS OF OPPORTUNITIES
We have a positive mindset and are always seeking solutions
and new opportunities. This makes us versatile and enables
us to add value for our customers, whilst we continue to
develop ourselves. We will always address the risks associ-
ated with an opportunity to come up with well-considered
solutions.
WE LIKE TO KEEP IT SIMPLE
Complexity often confuses, creates uncertainty, a fuzzy
demarcation of responsibilities and generally results in slow-
downs and delays which in turn lead to inefficiency and high
costs. We take decisions after thorough and substantiated
deliberation, making sure our choice of structure, process
and responsibilities are as clear and concise as possible for
us and our stakeholders.
WE ARE HERE TO STAY
Our focus at NSI is on sustainability and the long term,
both when it comes to the relationship with our customer,
the perspective of the building, the location and the ever
changing needs of users, and, but also with regard to the
structure of our organisation and the interests of our share-
holders. We are fully aware of short-term interests but will
always favour the long term.
TRAINING AND DEVELOPMENT
Each individual employee is expected to develop, supported by
HR and their manager, their personal development plan, to guide
training needs and career perspectives.
NSI provides ample training and development opportunities for
all our employees. Employees are encouraged to take externally
recognised courses by granting annual individual training budgets.
NSI offers an online training platform offering all employees the
possibility to strengthen their, mainly soft skills. In total employees
spent 55 hours on this platform in 2023 (2022: 83). Employees
are being encouraged to further exploit the training opportunities
and to increase the hours of training. A campaign to highlight the
importance of self-development will be launched in 2024.
NSI uses the methodology of Profile Dynamics
®
to further develop
teams into even more effective teams. The analysis is a tool to
assess if the profile match the type of work of an individual or
(the composition of) a team, and can serve as starting point for
coaching. A Profile Dynamics
®
chart is also part of the onboarding
tool kit for new employees.
GENDER BREAKDOWN NSI AT 31 DECEMBER 2023
MALE
41.8%
FEMALE
58.2%
Female Male
# % # %
Management Board 1 100.0%
Senior Management 4 33.3% 8 66.7%
Operations 29 74.4% 10 25.6%
Support Staff 6 40.0% 9 60.0%
TOTAL 39 58.2% 28 41.8%
Supervisory Board 2 50.0% 2 50.0%
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47 NSI ANNUAL REPORT 2023
NSI TEAM
HNK TEAM
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48 NSI ANNUAL REPORT 2023
Successful grand opening of
HNK Amsterdam Sloterdijk
You're Welcome
to a new way
of working
In September 2023, HNK Amsterdam Sloterdijk was
unveiled, marking the inaugural HNK location that
embodies NSI's refreshed vision for the flexible
office concept. Centered on principles of hospitality,
sustainability, well-being, and convenience, it sets the
standard for the workspace of the present and future.
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49 NSI ANNUAL REPORT 2023
This new location has been developed in line with HNK's
renewed vision: crafting workspaces singularly dedicated to
fostering optimal growth for individuals and organizations. At
the core of HNK's philosophy is the belief that enhanced well-
being translates into improved work performance. This
principle is reflected in the interior design of this location,
where sustainability and comfort take centre stage.
Space
at your
service
Robert Sparreboom, Head of HNK: 'The landscape of the office
market has undergone a profound transformation in recent
years. In a time when you can work anywhere, he expectations
placed upon a workplace have evolved significantly. Elements
such as sustainability, flexibility, and individual preferences have
assumed greater significance for employees, while organizations
are avidly striving to maintain consistently engaged, motivated,
and productive workforce. In today’s environment, we might not
need an office, but that doesn't mean we don't want one. It is
crucial to cultivate a demand that transcends the conventional,
and in doing so, provide a level of hospitality that transcends
expectations, delivering an experience that is truly unforgettable.
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50 NSI ANNUAL REPORT 2023
The focal point of the office is the lush greenery-filled lobby,
reminiscent of a hotel entrance adorned with a towering
5-meter-high tree. The design, featuring natural and organic
shapes, provides tenants and their guests with inviting spaces
for both casual gatherings and quiet retreats. By contrasting the
zones in a soft and colourful manner, the design provides an
intuitive experience. The concept is activity-based, with each
zone possessing its own identity.
In 2023, new leases at HNK Amsterdam Sloterdijk were signed
13% above ERV. The building is now 96% let. In March 2024, the
very first HNK location, dating back to 2012, HNK Rotterdam
Scheepvaartkwartier, will be delivered to the new blueprint,
following a comprehensive interior redesign, integrating all
additional facilities that align with HNK's innovative vision.
In response to these discerning insights, we proudly introduce
HNK Amsterdam Sloterdijk – a location that integrates all the
elements we deem essential and aligns perfectly with the
evolving needs of forward-thinking organizations. It is a place
where you instantly feel welcome and can work in a way that
suits you. By facilitating all forms of work and interaction, HNK
Sloterdijk establishes itself as an ideal flexible framework for
modern organisations.'
Enhancements have been made to facilitate and promote
diverse working styles, including the introduction of a co-
working space equipped with curved screens and revamped
Herman Miller chairs, a library featuring a fireplace, a dedicated
podcast studio, a wellness area, and a comprehensive
restaurant with a bar. The meeting rooms are thoughtfully
designed to cater to various purposes, whether it's a creative
brainstorm, a board meeting, or an unforgettable event.
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51 NSI ANNUAL REPORT 2023
Our design approach is people-centered to
ensure our buildings and spaces not only
support office activities, but also support
the well-being of its users and allow people
to thrive.
GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATIONMANAGEMENT BOARD REPORTINTRODUCTION
52 NSI ANNUAL REPORT 2023
In all HNK locations, music is played to suit the space and
time of day, and a special fragrance has been developed to fit
the HNK brand. Music stimulates our brain, including areas
associated with emotions, it reduces stress and induces a
feeling of relaxation. It has been demonstrated that the subtle
presence of music has a positive impact on creativity and
productivity. Smell has a significant impact on the perception
and memory of a place.
This is because smell is the only sense directly connected
to the limbic system, the part of the brain responsible for
motivation, emotion, and long-term memory. Scent can enhance
productivity and creativity while reducing absenteeism. it is
not wonder that scent marketing which has been increasingly
utilised by hotels, in retail has found its way to the office
industry.
The meeting rooms are thoughtfully designed
to cater to various purposes, whether it's a
creative brainstorm, a board meeting, or an
unforgettable event.
The focal point of the office is the lush greenery-
filled lobby, reminiscent of a hotel entrance
adorned with a towering 5-meter-high tree.
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53 NSI ANNUAL REPORT 2023
The food & beverage concept ‘The Social’
is offering great hospitality with a focus on
sustainability, well-being and comfort.
Let’s get
social
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54 NSI ANNUAL REPORT 202354 NSI ANNUAL REPORT 2023
GOVERNANCE
CONTENT
Corporate Governance 55
ESG Governance 60
Details Management Board 62
Report of the Supervisory Board 63
Details of the Supervisory Board 69
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55 NSI ANNUAL REPORT 202355 NSI ANNUAL REPORT 2023
CORPORATE GOVERNANCE
INTRODUCTION
In this section NSI sets out a broad outline of the company’s corpo-
rate governance and publishes detailed information about the
matters specified in Article 10 section 1 a- k of the EU Takeover
Directive.
CORPORATE GOVERNANCE CODE
As a public limited liability company in the Netherlands, NSI is
subject to the Dutch Corporate Governance Code. The current
Code was published on December 20
th
, 2022.
A detailed overview of the manner in which NSI complies with the
provisions of the Dutch Corporate Governance Code and an expla
-
nation why or where NSI derogates from best practice provisions
is published on the company website. NSI complies with all best
practice provisions of the Dutch Corporate Governance Code, apart
from best practice provision 1.3.1.
The following section gives a broad outline of the company’s corpo
-
rate governance following the principles stated in the Dutch Corpo-
rate Governance Code.
OUTLINE OF NSI’S CORPORATE GOVERNANCE
NSI N.V. is a Dutch public limited liability company listed on Euronext
Amsterdam and has its registered seat in Amsterdam, the Nether
-
lands. NSI has a two-tier structure, with a Management Board and a
non-executive Supervisory Board. The company’s highest authority
is the General Meeting of Shareholders which is held at least once
a year.
1. SUSTAINABLE LONG-TERM VALUE CREATION
1.1 SUSTAINABLE LONG-TERM VALUE CREATION
The management board is responsible for the continuity of the
company and its affiliated enterprise and for sustainable long-term
value creation by the company and its affiliated enterprise. The
management board takes into account the impact the actions of
the company and its affiliated enterprise have on people and the
environment and to that end weighs the stakeholder interests that
are relevant in this context. The supervisory board monitors the
management board in this regard.
In the management report, the management board gives a more
detailed explanation of its view on sustainable long-term value crea
-
tion and the strategy for its realisation, as well as describing which
contributions were made to sustainable long-term value creation in
the past financial year.
1.2 RISK MANAGEMENT
The company has adequate internal risk management and control
systems in place which are described in more detail in the chapter
Risk management and control. The Management Board is respon
-
sible for complying with relevant laws and regulations, for identifying
and managing the risks associated with the company’s strategy and
activities and for financing the company.
The Management Board reports to the Supervisory Board and the
General meeting of Shareholders.
1.3 INTERNAL AUDIT FUNCTION
The task of the internal audit function is to assess the design
and the operation of the internal risk management and control
systems. The management board is responsible for the internal
audit function. The supervisory board oversees the internal audit
function and maintains regular contact with the persons fulfilling
this function.
NSI has a comprehensive Internal Audit program and yearly
executes several Internal Audits that are conducted by BDO
accountants and reported to and discussed with the Audit
committee. As is the case with many small, listed companies in
the Netherlands, NSI has no separate department for the internal
auditor function as specified in best practice provision 1.3.1. The
Supervisory Board assesses annually whether the alternative
set up and measures that have been taken by the Company are
adequate, partly on the basis of a recommendation issued by the
audit committee and considers whether it is necessary to estab-
lish an internal audit department and includes the conclusions,
along with any resulting recommendations and alternative meas-
ures, in the report of the Supervisory Board.
1.4 RISK MANAGEMENT ACCOUNTABILITY
The management board discusses the effectiveness of the
design and operation of the internal risk management and control
systems with the Audit committee and renders account of this to
the Supervisory Board.
1.5 ROLE OF THE SUPERVISORY BOARD
The primary duty of the Supervisory Board is to supervise the
policies carried out by the management board and the general
affairs of the company and its affiliated enterprise, as well as to
advise the Management Board. In the performance of its duties,
the Supervisory Board focuses on the interests of the company
and its affiliated enterprise and on the effectiveness of the compa-
ny’s internal risk management and control systems and the integ-
rity and quality of the financial reporting.
1.6 APPOINTMENT AND ASSESSMENT OF THE FUNCTIONING
OF THE EXTERNAL AUDITOR
The external auditor is appointed by the General Meeting of
Shareholders and attends the meeting of the Supervisory Board
at which the financial statements are discussed and adopted
in the presence of the Management Board. With respect to the
financial year 2023 NSI publishes audited annual figures and
reviewed semi-annual figures. NSI publishes a trading update for
the first and third quarters, neither of which is reviewed or audited
by the external auditor.
PricewaterhouseCoopers Accountants N.V. was appointed as
NSI’s external auditor in 2016.
1.7 PERFORMANCE OF THE EXTERNAL AUDITOR’S WORK
The audit committee and the external auditor discuss the audit
plan and the findings of the external auditor based on the work
the external auditor has undertaken. The management board and
the supervisory board maintain regular contact with the external
auditor.
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56 NSI ANNUAL REPORT 2023
2. EFFECTIVE MANAGEMENT AND SUPERVISION
2.0 POLICY ON DIVERSITY & INCLUSION (D&I)
The company has a D&I policy for the enterprise. The D&I policy
sets targets in order to achieve a good balance in gender diver-
sity and the other D&I aspects of relevance to the company with
regard to the composition of the management board, the supervi-
sory board, and senior management.
For the degree of diversity in gender and gender identity in the
Management Board, NSI applies a target of 50%. The target is
that at least 50% of the Management Board consists of women
or persons who identify themselves as women in terms of gender
and that at least 50% of the Management Board consists of men
or persons who identify themselves as men in terms of gender.
This target is based on the current target size of the Executive
Board of two people.
In the event of a vacancy in the Management Board, when the
Management Board consists of one person, the target figure
does not apply.
From January 1
st
, 2023, until November 15
th
, 2023, the target was
achieved because the management board was 50% female and
50% male. As from November 15
th
, 2023, there is a vacancy for
the CFO position and the Management Board consists of one
member only. Therefore the target figure currently does not apply.
During the search process the Supervisory Board has been
specifically looking for female candidates for the CFO position
with the aim of again achieving the target in the first half year of
2024.
For the degree of diversity in gender and gender identity in the
Supervisory Board, NSI applies a target of 33.3%. The target is
that at least 33.3% of the Supervisory Board consists of women
or persons who identify themselves as women in terms of gender
and that at least 33.3% of the Supervisory Board consists of men
or persons who identify themselves as men in terms of gender.
This target is achieved. From January 1
st
, 2023, until June 16
th
,
2023, the supervisory board was 40% female and 60% male.
Since June 19
th
, 2023, the supervisory board is 50% female and
50% male.
For the degree of diversity in gender and gender identity in Senior
Management, NSI applies a target of 25%. The target is that at
least 25% of Senior Management consists of women or persons
who identify themselves as women in terms of gender and that
at least 25% of Senior Management consists of men or persons
who identify themselves as men in terms of gender. This target is
achieved. As per 31
st
December 2023 Senior management was
33.3% female and 66.6% male.
2.1 MANAGEMENT BOARD COMPOSITION, SIZE AND DIVISION
OF DUTIES
The Management Board consists of two directors: a CEO and a
CFO. Since 15 November 2023 there is a vacancy for the CFO
position.
Directors are appointed by the General Meeting.
The procedure for appointment and reappointment is specified in
section (h) below.
The division of duties within the Management Board as well as
the Board’s operating procedures are set out in the Articles of
Association and the Management Board regulations which are
made available on the company’s website. The functioning of the
Management Board as a collective and the functioning of indi-
vidual members is evaluated yearly.
2.2 SUPERVISORY BOARD COMPOSITION AND SIZE
In accordance with the company’s Articles of Association, the
Supervisory Board consists of at least three members. Members
are appointed by the General Meeting of Shareholders. The
Supervisory Board currently comprises four members. The proce-
dure for appointment and reappointment is specified in section
(h) below.
The profile of the Supervisory Board specifies the size, diver-
sity and independence of the board and the desired expertise
and background of the Supervisory Board members and which
competencies should be represented in the Board. The profile
is published on the company’s website. The Supervisory Board
strives to achieve a situation in which the experience and exper-
tise of its members are appropriate in relation to the strategy and
business activities of NSI, and cover specific areas of expertise,
like financial management, sustainability and IT. The experience
and expertise of the individual Supervisory Board members is
detailed on pages 69 and 70 of this annual report.
The Supervisory Board is composed in such a way that its
members can operate independently and critically with regard to
each other, the Management Board and any interests involved. All
Supervisory Board members are currently independent within the
meaning of best practice provisions 2.1.7 and 2.1.8 of the Dutch
Corporate Governance Code.
2.3 SUPERVISORY BOARD ORGANISATION AND DIVISION OF
DUTIES
The division of duties within the Supervisory Board as well as its
operating procedures are laid down in the company’s Articles
of Association and the Supervisory Board regulations, both of
which are made available on the company’s website. The Super-
visory Board has appointed an Audit Committee, a Remuneration
Committee and a Selection and Appointment Committee from
within its ranks. The regulations of these committees can also be
accessed via the website.
2.4 DECISION-MAKING AND FUNCTIONING
In its monitoring, the Supervisory Board focuses on the strategy
for realizing sustainable long-term value creation which has been
established for this purpose, as well as on the targets derived from
this strategy. The Supervisory Board also monitors the process
of acquiring, divesting, and investing in real estate, the financial
reporting process, and compliance with laws and regulations.
The Supervisory Board monitors the internal control structure and
procedures and the assessment of the risks faced by the company
and its subsidiaries. During 2023 the systems and procedures
functioned in accordance with their intended purpose and there
were no issues that raised doubt as to whether the internal control
structure and procedures functioned adequately.
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57 NSI ANNUAL REPORT 2023
The Supervisory Board reports to the General meeting of Share-
holders.
The functioning of the Supervisory Board as a collective and the
functioning of theindividual members is evaluated yearly.
2.5 CULTURE
NSI has a mature, open culture that encourages employees to
speak up. The culture is aimed at sustainable long-term value
creation for the company and its affiliated enterprise.
The NSI Code of Conduct outlines the core values, the main
integrity risks NSI may encounter in its business and the way it
wishes to deal with these risks. The Code of conduct is published
on the company’s website.
2.6 COMPLIANCE
The Code of Conduct contains a procedure for reporting actual or
suspicion of misconduct or irregularities. The management board
monitors the effectiveness and compliance with the Code and
reports about this in every meeting with the Audit Committee.
2.7 PREVENTING CONFLICTS OF INTEREST
In accordance with its regulations, the Supervisory Board is
responsible for decision-making in dealing with existing or poten-
tial conflicts of interest between Management Board members,
Supervisory Board members and the external auditor, on the one
hand, and the company, on the other. Under the provisions of the
Dutch Financial Supervision Act (Wet op het financieel toezicht or
Wft) and EU-IFRS, the item ‘related parties’ in the annual finan-
cial statements specifies transactions between the company and
related parties, including members of the Management Board and
the Supervisory Board, as well as transactions involving one or
more related parties. The item also states to what extent such
transactions were entered into at market conditions. No such
transactions between the company and related parties took place
in the 2023 financial year.
3. REMUNERATION
3.1 REMUNERATION POLICY – MANAGEMENT BOARD
The General Meeting determines the remuneration policy for the
Management Board, in accordance with the relevant statutory
provisions. The Supervisory Board makes a proposal to that end.
The remuneration policy focusses on sustainable long-term value
creation for the company and its affiliated enterprise and takes
into account the internal pay ratios within the enterprise. The
‘Remuneration Policy for Members of the Management Board of
NSI’ is published on the website.
3.2 DETERMINATION OF MANAGEMENT BOARD REMUNERATION
The Supervisory Board establishes the remuneration and other
terms of service for members of the Management Board in accord
-
ance with the remuneration policy for the Management Board.
3.3 REMUNERATION – SUPERVISORY BOARD
The Supervisory Board members receive a remuneration in
accordance with the ‘Remuneration Policy for Members of the
Supervisory Board of NSI’ which is published on the company’s
website. The General Meeting determines the remuneration policy
for the Supervisory Board, in accordance with the relevant statu-
tory provisions.
3.4 ACCOUNTABILITY FOR IMPLEMENTATION OF REMUNERA-
TION POLICY
In the remuneration report, the Supervisory Board renders
account of the implementation of the remuneration policy. The
report is posted on the company’s website.
4. THE GENERAL MEETING
At least one General Meeting is held every year within six months
of the end of the company’s financial year. General Meetings of
Shareholders are convened by the Management Board or the
Supervisory Board. A legal term of at least 42 days applies between
the convocation date of a General Meeting of Shareholders and the
actual date of the meeting. The agenda of the general meeting shall
list which items are up for discussion and which items are to be
voted on. Listed items that are mentioned in best practice provi
-
sion 4.1.3 of the Governance Code shall be dealt with as separate
agenda items. The topics mentioned in article 23 section 3 of the
Articles of Association are discussed when applicable.
Extraordinary General Meetings are held as often as the Manage-
ment Board or the Supervisory Board deems necessary. Extraordi-
nary General Meetings will also be held if the Management Board
or the Supervisory Board is requested to that effect in writing by
one or more holders of shares individually or jointly representing
one-tenth or more of the issued capital, specifying in detail the
subjects to be discussed.
The 2023 Annual General Meeting of Shareholders took place
on 21 April. The agenda specifying the topics addressed by this
meeting, the explanatory notes and the minutes of this meeting
are published on the company’s website.
INFORMATION SPECIFIED IN ARTICLE 10
SECTION 1 A - K OF THE EU TAKEOVER DIRECTIVE
EU Directive 2004/25/EC of 21 April 2004 (Takeover Directive)
requires that companies the securities of which are admitted to
trading on a regulated market publish detailed information in their
annual report about the matters listed in paragraph 1 of Article 10 of
the Directive. The following section contains this information about
NSI.
a Capital structure, classes of shares, rights and obligations
attached to shares
The authorised capital of the company is EUR 99,568,556.46 and
is divided into 27,056,673 ordinary shares, each with a nominal
value of EUR 3.68). At 31 December 2023, 20,155,221 shares
were issued and fully paid up. The capital does not include secu-
rities which are not admitted to trading on a regulated market in
a Member State.
Classes of shares
There are no different classes of shares. All shares have equal en-
titlement to the company’s profit and reserves. Shareholders have
the right to cast one vote for each ordinary share held;
Rights attached to shares
The rights vested in the shares are laid down in the Company’s
Articles of Association, which may be inspected on NSI’s website.
All shareholders shall be authorised – either in person or through
a person with a written proxy – to attend the General Meeting,
speak at the meeting and vote at the meeting.
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58 NSI ANNUAL REPORT 2023
Shareholders who individually or jointly represent at least three
percent (3%) of the company’s issued share capital may request
that items be added to the agenda of the General Meeting of Share
-
holders. Such a request is granted if it is received in writing at least
60 days before the meeting, stating the reasons for said request.
Obligations attached to shares
Unless the provisions of article 2:80 of the Dutch Civil Code apply,
the nominal amount shall be paid on a share when subscribing for
that share, as well as the difference between the nominal amount
and a higher amount if the share is subscribed for that higher
amount.
Payments on shares must be made in cash unless an alternative
contribution has been agreed upon. Payments in another curren-
cy than in which the nominal value of the shares is denominated
can only be made upon approval by the company.
b Restrictions on the transfer of shares
NSI has not placed any restrictions on the transfer of its shares.
c Significant shareholdings
Notifications pursuant to the Dutch Disclosure of Major Holdings
and Capital Interests in Securities-Issuing Institutions Act were
received from holders of ordinary shares representing more than
3% of the company’s capital. According to the most recent notifi-
cations, these interests were as follows:
31 December 2023 31 December 2022
ICAMAP Investments SARL 10.0% 10.0%
BlackRock, Inc. 5.6% 5.8%
Clearance Capital Ltd. 5.1% 3.1%
Ameriprise Financial < 3.0% 5.1%
d Securities with special control rights
No securities with special control rights have been issued
e The system of control of employee share schemes
There is no employee share scheme granting rights to employees
to acquire shares in the company or any of its subsidiaries.
f Restrictions on voting rights, such as limitations of the voting
rights of holders of a given percentage or number of votes,
deadlines for exercising voting rights, or systems whereby, with
the company’s cooperation, the financial rights attaching to
securities are separated from the holding of securities;
Shareholders may cast their votes in person or by proxy. All reso-
lutions of the General Meeting of Shareholders are passed with
an absolute majority of the votes cast, unless a larger majority is
required by law or under the Articles of Association.
Deadlines for attending and exercising voting rights in General
Meetings of Shareholders
Shareholders – and those deriving their right to attend or to attend
and vote from shares for other reasons – shall notify the Manage-
ment Board of their intention to attend no later than the date
stated in the notice convening the meeting and in the manner
stated in that notice in order to be allowed to attend the General
Meeting and (to the extent that they have a vote) to be allowed to
participate in voting.
The notice convening the meeting shall state the date by which the
Management Board must have received the notification and the
manner in which this notification must be given; this date may not be
earlier than on the seventh day before the day of the General Meeting.
NSI does not cooperate with the issuance of depositary receipts for
its shares.
g Shareholder agreements resulting in transfer or voting restrictions
The company is not aware of any agreements between shareholders
that may result in restrictions on the transfer of shares or restric
-
tions on the exercise of voting rights within the meaning of Directive
2001/34/EC.
h The rules governing the appointment and replacement of board
members and the amendment of the articles of association;
Appointment and replacement of management board members
The company is managed by a Management Board consisting of
two members.
The General Meeting shall appoint and dismiss the members of the
Management Board. Each member of the Management Board will
be appointed for a term of not more than four (4) years, and shall be
eligible for re-election.
The General Meeting may suspend or dismiss a member of the Man
-
agement Board at any time, providing the resolution to that effect is
passed with a majority of at least two thirds of the votes cast that
also represents more than half of the issued capital.
The Supervisory Board shall be authorised to suspend any member
of the Management Board at any time.
Appointment and replacement of supervisory board members
The members of the Supervisory Board shall be appointed by the
General Meeting. A supervisory board member is appointed for a
period of four years and may then be reappointed once for another
four-year period. The supervisory board member may then be reap
-
pointed again for a period of two years, which appointment may be
extended by at most two years.
At the General Meeting only candidates whose names are stated
on the agenda of the meeting can be voted on for appointment as
member of the Supervisory Board.
Each member of the Supervisory Board can at all times be
suspended or removed from office by the General Meeting. A reso
-
lution to suspend or remove a member of the Supervisory Board
requires a majority of two thirds of the votes cast, representing more
than one half of the issued capital of the company.
Amendment of the articles of association
If a proposal to amend the Articles of Association is put to the Gen
-
eral Meeting, that proposal shall always be stated in the notice con-
vening the General Meeting.
The shareholders shall be given the opportunity to obtain a copy of
the proposal, from the day when the proposal is filed at the com
-
pany’s offices until the day of the General Meeting. These copies
shall be provided free of charge.
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59 NSI ANNUAL REPORT 2023
A resolution to amend the Articles of Association may only be
passed by a simple majority of the votes cast at a General Meeting.
i The powers of board members, and in particular the power to
issue or buy back shares
The Management Board is tasked with managing the company,
in accordance with the law and the articles of association which
may require the management board to obtain prior approval of
the general meeting or of the Supervisory Board before making a
decision or perform legal actions. The Management Board shall
represent the company, unless Dutch law provides otherwise.
Issuing of shares in general
Shares can only be issued pursuant to a resolution of the General
Meeting if the General Meeting has not designated this author-
ity to another corporate body of the company for a period not
exceeding five years. Unless otherwise decided, the designation
cannot be revoked. The designation may be extended from time
to time, for periods not exceeding five years. A resolution of the
General Meeting to issue shares or to designate another corpo-
rate body of the company authorised to do so can only take place
at the proposal of the Management Board and after prior approval
of the Supervisory Board.
The resolution to issue shares shall stipulate the price and further
conditions of the issue of the relevant shares.
Upon the issue of shares, each holder of shares shall have a pref-
erential right to subscribe for shares being issued in proportion to
the aggregate nominal amount of his existing shares, unless such
right is withheld by mandatory provisions of the law.
The preferential right can be limited or excluded by the General
Meeting subject to the formalities prescribed by law or by the
corporate body of the company authorised to issue shares if it
has been given this authority.
Buyback of shares in general
The company may acquire shares in its own share capital for no
consideration. The company may also acquire shares in its own
share capital for valuable consideration if and in so far as:
a
its shareholders equity less the purchase price for these shares
is not less than the aggregate amount of the paid up and called
up capital and the reserves which must be maintained pursuant
to the law;
b
the aggregate par value of the shares in its capital which the
company acquires, already holds or on which it holds a right of
pledge, or which are held by a subsidiary company, amounts
to no more than one-tenth of the aggregate par value of the
issued share capital; and
c
the General Meeting has authorized the Management Board to
acquire such shares, which authorization may be given for no
more than eighteen months on each occasion,
Any acquisition by the company of partly paid-up shares in its
own capital or depositary receipts for those shares shall be null
and void, notwithstanding the provisions of article 2:98 paragraph
6 of the Dutch Civil Code.
Powers of board members, to issue or buy back shares
In the General Meeting of Shareholders of 21 April 2023 the Man-
agement Board was authorized to:
• issue ordinary shares including the granting of rights to acquire
ordinary shares after having obtained approval from the Super
-
visory Board limited to a maximum of 10% of the outstanding
number of shares on the date of issue. This authorisation was
limited to a period of 18 months, which period can be extended
at a meeting of shareholders at the request of the Management
Board and Supervisory Board. the Management Board was also
designated as the body authorised to limit or exclude the pre-
emptive rights that take effect upon the issue of ordinary shares
or granting of rights to acquire ordinary shares (after having
obtained approval to do so from the Supervisory Board).
• buy back the company’s own shares on the stock market or
otherwise, up to a maximum of 10% of the outstanding number
of shares, on condition that the company may not hold more
than 10% of the issued capital (after having obtained approval
for this from the Supervisory Board). Ordinary shares can be
acquired for a price that lies between the nominal value of a
share and 10% above the average closing price of the share
calculated over five trading days prior to the day of purchase.
This authorisation was limited to a period of 18 months, which
period can be extended at a meeting of shareholders at the
request of the Management Board and Supervisory Board.
j Change of control agreements
The agreements that NSI has with its financiers include the
provision that in the event of a change in the control of NSI, the
financiers have the possibility of demanding that the loans be
redeemed early. This could for instance come into effect after a
successful public offer for the NSI shares.
k Agreements between the company and its board members
or employees providing for compensation if they resign or are
made redundant without valid reason or if their employment
ceases because of a takeover bid.
The Company has made no agreements with members of the
Executive Board or employees that provide for remuneration upon
termination of employment resulting from a public bid within the
meaning of Article 5:70 of the Financial Supervision Act.
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60 NSI ANNUAL REPORT 2023
ESG – GOVERNANCE
The oversight of ESG matters is critical. ESG is overseen princi-
pally by the Management Board.
Our strategy and targets for energy consumption and carbon emis-
sions are set and monitored by the Management Board. The respon-
sibility for overseeing the day-to-day management is delegated to
the management team. NSI has formed a dedicated sustainability
committee who meets twice a month to address targets, imple
-
mentation and reporting of our ESG strategy. We have created an
ESG coordinator role which is entrusted to the Investor Relations
officer. Both members of the Management Board are part of this
committee as well as key personnel from different disciplines in
(technical) asset management, finance and reporting.
For 2023 the focus of the ESG committee was:
• Monitor progress ESG strategy and improve where necessary
• Monitor the implementation of the Paris aligned investment plan
• Completing ESG accounting manual
• Monitoring non-Financial KPIs
• EU taxonomy analysis and implementation
• Advancing readiness for implementation CSRD
ALIGNMENT OF PERFORMANCE TARGETS
NSI aims to continuously improve our internal sustainability
governance. This standard will help NSI implement a holistic envi-
ronmental management system and improve our general sustain-
ability performance.
ESG ASSURANCE
NSI’s independent auditor PricewaterhouseCoopers Accountants
N.V. has provided a limited assurance on a selection of the reported
sustainability and non- financial KPIs for the financial year 2023. In
scope are 19 KPI’s in the field of Energy, Water, Waste, Greenhouse
Gas Emissions, Certification and Social (full list outlined in the glos
-
sary on page 143-144). This limited assurance is an intermediate
step in the transition to an integrated annual report, in which the
full sustainability information will be in scope in line with the Corpo
-
rate Sustainability Reporting Directive (CSRD), which will come into
effect for NSI on 1 January 2025.
NSI started with the CSRD double materiality assessment in 2023,
which will be finalised in 2024. Based on the outcome, a gap anal
-
ysis will be performed and further actions will be planned in prepa-
ration to implementation during 2025.
OTHER NON-FINANCIAL DISCLOSURE
DIVERSITY AND INCLUSION
NSI established a diversity and inclusion policy in 2023. See page
57 for more information.
COGNITIVE DIVERSITY
NSI welcomes diverse talents and is keen on including multiple
perspectives, thereby leveraging inclusion on a cognitive level. NSI
strongly believes that collaboration between people with different
thinking styles, habits and perspectives brings about better outcomes.
NSI has incorporated the ‘Profile Dynamics’ methodology to measure
how different perspectives, competences and value systems are repre
-
sented in the organization. The Profile Dynamics
®
tool is also being
used as a reference point in appointments and recruitment activities.
EQUAL PAY
NSI aims for a balanced gender breakdown and is committed to
provide equal pay for equal work. The current gender pay gap is
largely driven by the structure of our workforce, including the higher
representation of men in senior management roles and a higher repre
-
sentation of women in operations (HNK hosts), varieties in tenure, job
level and specific expertise. NSI aims to improve the gender balance
at all levels of the organisation, and the related gender pay ratio, and
explicitly takes this into account when filling vacancies.
Female Male
Gender
pay ratio*
# % # %
Management Board 1 100.0% 1.18
Senior Management 4 33.3% 8 66.7% 1.33
Operations 29 74.4% 10 25.6% 2.44
Support Staff 6 40.0% 9 60.0% 1.17
TOTAL 39 58.2% 28 41.8% 2.03
Supervisory Board 2 50.0% 2 50.0%
* Male average pay/ Female average pay
Management board
ESG committee (drives policy)
Execution in all operations
Personal and corporate sustainability targets are embedded into
the annual performance goals of each employee at NSI. The board
of directors also have these annual performance ESG goals.
Some of the sustainability goals include further improvement
of ESG knowledge of our employees. NSI also encourages
employees to contribute and share knowledge through specific
knowledge sharing events.
DISCLOSURE AND REPORTING
Progress on sustainability is fully disclosed to all stakeholders in
the Annual Report and online in our sustainability report. NSI’s
non-financial performance is measured and communicated
considering the following standards, regulation and bench-
marking tools:
• GHG Protocol Corporate Standard
• GRI Standards
• EPRA
• GRESB methodology
• CRREM
• EU Taxonomy
The gender split is calculated as per year end. The gender pay ratio is based on all employees
who were employed at NSI for more than 6 months in the reporting period.
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61 NSI ANNUAL REPORT 2023
HUMAN RIGHTS
NSI supports the principles laid down in the Organisation for
Economic Co-operation and Development (OECD) Guidelines
for Multinational Enterprises. We believe that human rights, as
defined by the United Nations in its Universal Declaration of
Human Rights, are a common standard that all employers should
uphold, and we encourage our employees as well as our contrac-
tors and suppliers to respect these rights by committing to our
Code of Conduct and business integrity principles as part of our
general terms and conditions.
No issues involving human rights were reported in 2023.
ANTI-CORRUPTION
NSI and its employees must act with integrity, honesty and in
compliance with the laws, as stipulated in the company’s Code
of Conduct. The Code of Conduct also defines how employees
should act when presented with gifts and provides guidance on
how to prevent conflicts of interest.
The Code of Conduct is available on the company website.
NSI’s whistle-blower procedure allows employees to report
suspected irregularities of various kinds within NSI without jeop-
ardising their employment. There were no issues reported in 2023.
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62 NSI ANNUAL REPORT 2023
DETAILS MANAGEMENT BOARD
Mr B.A. Stahli (1971)
CEO of NSI
Nationality Dutch
Previous positions Head of European Real Estate and member
of the Management Team at Kempen & Co Securities, Head of
European Real Estate Research at Merrill Lynch London, Head
of Global Real Estate Securities Fund at Aegon, Analyst US and
Portfolio Manager Asia Real Estate Securities at APG
Education Economics at the Vrije University Amsterdam,
CFA Charterholder, CFA Institute
First appointment 1 September 2016
Current term To 31 August 2024
Mrs A.A. de Jong (1975)
CFO of NSI (until 15 November 2023)
First appointment 15 September 2017
Current term Mrs de Jong resigned as per 15 November 2023
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63 NSI ANNUAL REPORT 2023
REPORT OF THE SUPERVISORY BOARD
TO THE GENERAL MEETING OF SHAREHOLDERS
We, the Supervisory Board of NSI N.V. (NSI), hereby present you
with the annual report prepared by the Management Board for the
2023 financial year. PricewaterhouseCoopers Accountants N.V.
has audited the financial statements and has issued an unquali-
fied opinion (page 113-119. We will recommend that the financial
statements be adopted at the General Meeting of Shareholders
on Friday 19 April 2024. The discharge of the Management Board
in respect of the policy pursued in 2023 and of the Supervisory
Board from the supervision it provided in 2023 will be addressed
as separate agenda items at this General Meeting of Share-
holders.
COMPOSITION OF THE SUPERVISORY BOARD
At the start of 2023 the Supervisory Board consisted of five
members.
On June 19th 2023 Mr Harm Meijer has stepped back from his
position as Supervisory Board member.
The Supervisory Board is very grateful for Mr. Meijer’s support
and for the many contributions he has made to the transformation
of NSI since 2016.
From 19th June until 31 December 2023 the Supervisory Board
consisted of four members.
A search for a new member was initiated which has resulted in the
appointment of Mrs. Marlies Janssen in the EGM of 28 February
2024.
From 28 February until 19 April 2024 the Supervisory Board will
temporarily consist of five members.
At the AGM of that day Mrs. Karin Koks will have served two
terms as member of the Supervisory Board and will rotate off as
member of the Supervisory Board.
The Supervisory Board intends to propose to the AGM of 19 April
2024 to decrease the number of members of the Supervisory
Board from five to four.
INDEPENDENCE
In the opinion of the Supervisory Board the independence require-
ments referred to in best practice provisions 2.1.7 to 2.1.9 of the
Dutch Corporate Governance Code have been fulfilled. In relation
to best practice provision 2.1.8.vi it is noted that Mr. Meijer is a
shareholder in ICAMAP Investments SARL, which is holding more
than 10% of the shares in NSI. Mr. Meijer has decided to step back
from his position as Supervisory Board member as per June 19th
2023 to ensure that his positions as Supervisory Board member
of NSI and managing director of NSI’s largest shareholder would
not give cause for any potential or perceived conflict of interest.
RESIGNATION ROTA FOR SUPERVISORY BOARD MEMBERS
First
appointment
End of
current term
End of
Second term
Jan Willem de Geus 2021 2025 2029
Karin Koks- Van der Sluijs 2016 2024 2024
Margreet Haandrikman 2017 2025 2025
Jan Willem Dockheer 2020 2024 2028
Marlies Janssen 2024 2028 2032
DUTIES
The role and responsibilities of the Supervisory Board, its compo-
sition and how it carries out its duties are specified in the Super-
visory Board regulations which are posted on the company’s
website. A summary of the duties of the Supervisory Board can
be found in the Corporate Governance section (pages 55-59).
MEETINGS AND ATTENDANCE
The Supervisory Board physically met on ten occasions during
the year under review and held four calls. The attendance (rate) at
these meetings and calls was as follows:
Attendance
during 2023
De Geus Koks Haandrikman Meijer* Dockheer
Supervisory
Board meetings
88,1% 88,1% 100% 100% 97,6%
Committee
meetings
100% 100% 100% 100% 100%
*The 2023 Attendance percentage of Mr Meijer was calculated on the basis of the meetings
during which he was a member.
REPORT OF THE ACTIVITIES OF THE SUPERVISORY BOARD
Ten meetings were regular Supervisory Board meetings which
commence with a preparatory meeting which is held without the
Management Board being present, after which the members of
the Management Board attend the rest of the meeting. During
these regular meetings the general state of affairs and the compa-
ny’s financial position were discussed.
STRATEGY
The Supervisory Board engaged on several occasions in discus-
sions with the Management Board regarding the implementa-
tion of the sustainable long-term value creation strategy. These
discussions encompassed various aspects, such as the ambi-
tion to reduce the actual energy intensity of all our buildings in
line with the aims of the Paris agreement, the implementation of
the business plan, the budget and targets, shareholder relations,
proposals for acquisitions and disposals, development projects
and the main risks associated with the company and the meas-
ures taken to mitigate them. Market developments and the effects
on the composition of the real estate portfolio as well as the
occupancy rate were frequently discussed and assessed. Matters
including the value of real estate and valuation methodologies,
the system of internal controls and risk control procedures, and
corporate governance also had the Supervisory Board’s constant
attention.
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64 NSI ANNUAL REPORT 2023
During meetings on 24 January, 17 and 18 April, 12 July and 11
October as well as during calls on 25 January, 19 April, 13 July
and 12 October , the Supervisory Board convened to monitor the
implementation of the company’s strategy, to approve the quar-
terly, half year or full year results and (interim)dividends and to
discuss the pertaining press releases, making sure our share-
holders and the broader market were adequately informed about
the state of affairs and financial position of the company and
about its outlook.
STRATEGIC REVIEW
The Supervisory Board has been closely involved in the strategic
review process that was initiated In Q4 2022 in view of the poten-
tially significant implications of the likely forthcoming FBI abolish-
ment and of several other important changes in the market condi-
tions.
A range of strategic options that had been identified by the
Management Board as well as the outcome of feasibility studies
and expert advice about the various options have been presented
to the Supervisory Board and subsequently discussed in various
meetings during the year.
The Supervisory Board appreciates the careful process that the
management Board has followed during this review in which
major investors and other important stakeholders were given the
opportunity to give their view.
The revised strategy that has been developed for realising sustain-
able long-term value creation has our full support.
EVALUATIONS; CONCLUSIONS AND ACTIONS
On 24 January 2023 the Supervisory Board convened to discuss
the functioning of the Management Board as a whole and of the
individual members of the Management Board. The conclusions
drawn from these evaluations were shared with the Management
Board, used to assess the attainment of personal targets under
the Short-Term Incentive for the CEO and CFO and used as input
for setting targets for the Management Board for 2023 under the
Short-Term Incentive plan.
On 10 October the Supervisory Board evaluated the functioning
of the management board as a whole and that of the individual
management board members in light of the succession planning
of the Management Board and the search for a new CFO.
On 12 July the Supervisory Board conducted an evaluation of
its own performance, along with the functioning of the various
committees of the Supervisory Board, in particular the supervi-
sion of Real Estate matters and the functioning of the Real Estate
Committee.
The following points were taken into consideration:
• Historically – especially during the execution of the asset rota-
tion programme between 2017 and 2021 - a significant portion
of the Real Estate Committees activities consisted in evalua-
ting and approving numerous small and medium sized divest-
ment and reinvestment decisions.
• The regulations of the Real Estate Committee delegated
Supervisory Board decisions about divestments, acquisitions
and investments with a value between €5mio and €20mio to
the Real Estate Committee.
• Moving into 2022 the committees agenda shifted more towards
the advisory role on large scale development projects and on
NSI’s strategy, especially with regards to the composition of
the portfolio and the transformation thereof to become fully
aligned with the Paris Agreement in 2035.
• Consequently, in March 2022 the Supervisory Board had already
decided to extend the size of the Real Estate Committee from
two to three persons by appointing the chairman of the Super-
visory Board as an additional member.
• Throughout the remainder of 2022 and the first HY of 2023,
there were hardly any small (<€20 million) purchase and sale
transactions that fell within the delegated jurisdiction of the
Real Estate Committee.
• During this period, it became increasingly clear that not only
Real Estate Committee members needed continuous access
to the state of affairs of the portfolio and the large and complex
Development projects but other Supervisory Members also
needed this information on a continuous basis to fulfill their
supervisory responsibilities effectively On 8 June 2023 the
Meetings of the Real Estate Committee and the Supervisory
Board had already been combined for this reason.
The Supervisory Board concluded that following the resignation of
Harm Meijer as a member of the Supervisory Board and as chair
of the Real Estate Committee in June merely filling his vacancy
would not be adequate but that in fact the size of the Real Estate
Committee would have to be increased further to the size of the
entire Supervisory Board.
Instead, to reduce complexity, the Supervisory Board has decided
to dissolve the Real Estate Committee and let the tasks of the
Real Estate Committee flow back to the (full) Supervisory Board.
This also allowed for a decrease in remuneration fees for separate
Committee memberships.
The regulations of the Real Estate Committee further charged
this Committee with annually discussing a portfolio strategy
and investment plan submitted by Management Board based
on the Asset Business Plans for each asset, as a preparation
for the Business Plan and Budget. This task has been taken
up by the Supervisory Board.
To properly redistribute the role and responsibilities of the Real
Estate Committee to the Supervisory Board and the Management
Board the Supervisory Board meeting of 29 September adopted
revised Regulations thereby increasing the mandate of the
Management Board for individual transactions and investments.
The annual discussion of the Asset Business Plans, portfolio
strategy and investment plan with the Management Board
now takes place in the Supervisory Board, with the partici-
pation of the relevant members of the Asset Management,
Development and Investment Teams. In this meeting, the
Management Board discusses and agrees with the Super-
visory Board on plans for the investment portfolio including
preferred investments in sustainability, required maintenance
and options for property divestments.
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On 3 November 2023 a separate Supervisory Board meeting
was held for this purpose.
In its meeting of 12 July, the Supervisory Board also looked into its
succession planning in view of current and future vacancies and eval
-
uated the existing and required composition, competencies exper-
tise, experience and diversity of the Board as defied in its profile.
Based upon this evaluation a profile for a new Supervisory Board
member was drawn up that would allow the Supervisory Board to
propose to the AGM of 19 April 2024 to decrease the number of
members of the Supervisory Board from currently five to four.
At the meeting of 8 December 2023, the Supervisory Board
discussed any other positions held by the members of the
Management Board and Supervisory Board.
DUTCH CORPORATE GOVERNANCE CODE 2022
The Supervisory Board and the Management Board have
discussed the new Dutch Corporate Governance Code 2022 and
assessed where, compared with the Code adopted in 2016, the
principles and best practice provisions in the new Code required
changes to rules, regulations, procedures or other written records.
On 8 December 2023 the Supervisory Board adopted revised
regulations specifying the role and responsibilities of the Supervi-
sory Board, the Audit Committee, the Remuneration Committee
and the Selection and Appointment Committee.
On 8 December 2023 the Supervisory Board and the Manage-
ment Board jointly adopted an updated Diversity & Inclusion
Policy for the Company.
On 8 December 2023 the Supervisory Board approved, and the
Management Board adopted a revised regulation specifying the
role and responsibilities of the Management Board.
All regulations are posted on the company's website.
In accordance with the recommendation of the Monitoring
Committee Corporate Governance Code the chapter in the
Report of the Management Board broadly outlining the corporate
governance structure and compliance with this Code (see pages
55-59) will be submitted as a separate agenda item to the General
Meeting of Shareholders of 19 April 2024.
FBI & CORPORATE RESTRUCTURING
On several occasions the Supervisory Board has discussed with
management the announced intent of Government to exclude
Real Estate from the Dutch Investment Trust regime (FBI) as per
1 January 2025.
Given the uncertainty surrounding the implementation of this
measure the discussions centred on both management’s efforts
to lobby for a reversal, and on preparations in case the exclu-
sion would materialize. Meanwhile legislation has been enacted
such that, as of 2025, FBI’s can no longer directly invest in Dutch
real estate. The Management Board has executed the necessary
restructuring to mitigate the negative impact of this legislative
change with the approval of the Supervisory Board. As a result,
the number of subsidiaries has substantially increased as each
asset is now owned by a separate legal entity.
BUSINESS PLAN & BUDGET
On 3 November the Supervisory Board discussed the Asset
Business Plans of the Company, and the Portfolio Strategy put
forward by management.
These discussions lead to an update of the five-year Business
plan (period 2024-2028) and the Budget for the following year
(2024) which were discussed in the meeting of 8 December of the
Supervisory Board.
In these discussions about the strategy the Board focussed on
the implementation of the strategy and feasibility of different
scenario’s, the company’s operational, financial and ESG goals
and their impact on NSI’s future position in the real estate market,
the interests of stakeholders and other aspects important to the
company, such as sustainability and integrity.
In the meeting of 8 December of the Supervisory Board has
approved the 2024 – 2028 Business plan and the Budget 2024.
The Business plan is based on a total return and cost efficiency
approach, focusing on the “as-is” real estate portfolio, on the (re)-
Development of existing locations and on the implementation of
the Paris Aligned investment roadmap. The budget for 2024 is in
accordance with this plan.
RISK MANAGEMENT, INTERNAL AND EXTERNAL AUDITING
Throughout 2023 the Supervisory Board maintained regular
contact with the external auditor, primarily during the meetings of
the Audit Committee.
In the meeting of 8 December 2023, the Audit Committee reported
on the draft 2023 management letter of the external auditor and
the Risk-and Control framework of the company, in particular the
analysis of the identified risks associated with the strategy and
activities of the company, the risk appetite and the mitigating
measures that have been put in place to manage the risks.
In the same meeting the audit committee reported on the func-
tioning of, and the developments in the relationship with the
external auditor. The discussion of the effectiveness of the internal
risk management and control systems during the year was post-
poned and took place on 22 January 2024.
INTERNAL AUDIT FUNCTION
The Internal Audit Function is established by, and positioned
independently under, the Management Board. The Internal Audit
Function is part of the portfolio of the Chief Financial Officer,
the execution of the Internal Audit Function is outsourced to a
qualified service provider. The Management Board reviews the
services provided by the external service provider and appoints
the external service provider after obtaining advice from the Audit
Committee The Chief Financial Officer is the delegated principal
for the Internal Audit Function on behalf of the Management
Board. The Internal Audit Function (external service provider as
executor of the Internal Audit Function) has a functional (escala-
tion) reporting line towards the Audit Committee.
NSI has no separate department to perform the internal audit
function. The Supervisory Board assesses annually whether
adequate alternative measures have been taken and whether it is
necessary to establish an internal audit department.
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In the Supervisory Board meeting of 8 December 2023, the Audit
Committee reported about the effectiveness of the internal and
external audit function. In line with a recommendation by the Audit
Committee issued in consultation with the external auditor and the
Management Board, the Supervisory Board has considered that
NSI has a compact organization, no activities outside the Nether
-
lands, and operates in a very limited number of market segments.
Given the fact that NSI uses external expertise to conduct internal
audits based on an internal audit plan that is composed in consul
-
tation with the Audit Committee, the Supervisory Board is of the
opinion that adequate alternative measures have been taken and
that there is therefore no need to establish an internal audit depart
-
ment for this purpose. In accordance with an internal audit plan
approved by the Supervisory Board a number of internal audits will
be conducted under the supervision of the CFO in 2024.
PRIOR APPROVAL OF DECISIONS BY THE MANAGEMENT
BOARD
Important decisions above a certain threshold require prior
approval from the Supervisory Board. Decisions on acquisitions,
investments and disposals up to a threshold of €20 million are
made solely by the Management Board.
During the approval process the Supervisory Board assesses
whether the proposed decision contributes to the implementation
of the strategy including the ESG ambitions and criteria. In various
meetings during the year the Supervisory Board dealt with acqui-
sition opportunities of offices and with various development and
redevelopment opportunities.
DEVELOPMENT
In 2023 the Development projects moved further towards reali-
sation and entered the phase of building permit applications,
tendering and contract negotiations.
Several Supervisory Board meetings this year focussed exclusively
on the Development projects to allow a broader, more holistic
reflection and control. These concerned both the construction cost
and land price development of the projects themselves, the impact
of general market developments (e.g. yields and rent levels) and
consequences for the balance sheet and effective leverage.
“Phase”-documents prepared by the Development department
were submitted for discussion and approval of the budgets by the
Supervisory Board, and functioned as a basis for entering into the
next phase of the specific Development project.
LAANDERPOORT
The status and progress of the Laanderpoort project has been
extensively discussed during several Supervisory Board meetings
during the year.
In the meeting of 24 January, the Supervisory Board gave
approval to the DO design and the financial business case, as
well as the budget for the application of a building permit and the
selection of a contractor.
In the meeting of 8 March, the Supervisory Board was briefed on
the status of the selection process.
During meetings in June and July the Management Board and
Supervisory Board reviewed the business case of the project and
ways for optimization in view of declining end of project valuation
due to yield expansion.
In all our meetings during the second HY the Supervisory Board
has discussed the progress of the project towards final design
and realisation as well as the status of the efforts to optimize and
derisk the project. These efforts have ultimately led to a sale of the
project to ING in January 2024.
VITRUM
The status and progress of the Vitrum project has also been exten-
sively discussed during several Supervisory Board meetings during
the year, especially after the The Dutch High Court ruled in Q1 – in
a case not related to Vitrum - that owner-associations need a 100%
vote in favour to ratify certain decisions also relevant for the Vitrum
project. During the remainder of 2023 the Supervisory Board has
discussed on several occasions how to deal with the new situation
and have evaluated together with Management several possible
measures and alternatives.
The Supervisory Board supported the decision of the Manage-
ment Board to partner temporarily with a dedicated operator to
generate income for the asset until all the approvals are obtained
and the project is deemed economically feasible.
EDUCATION
In a number of meetings during the year the Supervisory Board
has been instructed about the new Corporate Governance Code.
On 29 September the Supervisory Board attended a presentation
about various topics of company law. During 2023 the members
of the Supervisory Board further attended individual trainings
in the context of their permanent education on matters such as
governance, finance, and real estate.
DIVIDEND POLICY
The current dividend policy, adopted by the General Meeting of
Shareholders in 2014, stipulates that:
• at least 75% of the direct result is distributed.
• for practical reasons a dividend is distributed twice a year: an
interim divided after the first six months and a final dividend
following adoption by the General Meeting of Shareholders.
On 19 April 2023 the Supervisory Board authorised the issuance
of shares for those shareholders who opted for distribution of the
final dividend for 2022 in shares.
The General Meeting of Shareholders approved the final dividend
for 2022 on 21 April 2023.
On 12 July 2023 the Supervisory Board approved the interim divi-
dend for 2023.
2023 FINAL DIVIDEND PROPOSAL
In line with the applicable dividend policy (i.e. a pay-out of at least
75% of the direct result), NSI is proposing a final dividend for 2023
of € 0.77 per share. That brings the total dividend for 2023 to €
1.52 per share, of which € 0.75 per share was distributed as an
interim dividend in August 2023.
Provided that the General Meeting of Shareholders approves this
dividend proposal, the final dividend will be payable in May 2024.
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SUPERVISORY BOARD COMMITTEES
From 1 January to until 12 July 2023 the Supervisory Board
had four committees in place to optimise the operation of the
Board: a Remuneration Committee, a Selection and Appointment
Committee, an Audit Committee and a Real Estate Committee.
The Real Estate Committee was abolished on 12 July 2023.
REMUNERATION COMMITTEE
During 2023 the Remuneration Committee consisted of Jan
Willem Dockheer (Chair) and Jan Willem de Geus (member).
The role and responsibilities of the Remuneration Committee, its
composition and how it carries out its duties are specified in the
Remuneration Committee regulations which are posted on the
company's website.
The Remuneration Committee had one joint meeting with the
Selection and Appointment Committee in the year under review
to discuss the performance of the members of the Management
Board with respect to their individual targets for 2022 under the
Short-Term Incentive for the CEO and CFO.
The Remuneration Committee had one joint meeting with the
Selection and Appointment Committee in the year under review
to discuss the establishment of collective and individual targets
for 2023 linked to the Short-Term Incentive of the members of
the Management Board. The applicable performance measures
were set to foster short-term results needed for sustainable value
creation with respect to the most important achievement areas of
the company. The targets and the performance levels were based
on the business plan and budget and included a mix of financial
and nonfinancial KPI’s including ESG related targets. The targets
were aligned with the targets set for the employees and fixed after
scenario planning’s had been carried out to ensure a proper rela-
tion between performance and remuneration levels.
REMUNERATION POLICY
The Remuneration Committee had two joint meetings with the
Selection and Appointment Committee to review the Remunera-
tion Policy of the Management Board.
Following the implementation of the EU SRD-2 Directive into
Dutch law, companies are required to submit their remuneration
policy for a binding vote at least every four years. The current
Policy was proposed to and adopted by the General Meeting of
Shareholders of 24 April 2020. This means the Policy is set for a
renewal of the binding vote in the 2024 AGM.
During 2023 the Remuneration Committee has continued the
review of the policy. This has led to a number of changes that will
be put forward in the 2024 AGM.
REMUNERATION REPORT
For a detailed overview of the Remuneration Policy and the way
this has been executed in the year under review please refer to the
separate Remuneration Report 2023.
The remuneration report (dated 7 March 2024) is posted on the
company’s website. The report will be presented to the AGM of
19 April 2024 for an advisory vote.
SELECTION AND APPOINTMENT COMMITTEE
During 2023 the Selection and Appointment Committee
consisted of Jan Willem Dockheer (Chair) and Jan Willem de Geus
(member).
The role and responsibilities of the Selection and Appointment
Committee, its composition and how it carries out its duties are
specified in the Selection and Appointment Committee regula-
tions which are posted on the company's website.
The Selection and Appointment Committee had four joint meet-
ings with the Remuneration Committee in the year under review.
During these meetings the committees discussed the Remunera-
tion Policy of the Management Board, the achievement of the
2022 individual targets of the members of the Management Board
linked to their Long-Term Incentive and Short-Term Incentive Plan,
the establishment of the 2023 individual targets for the members
of the Management Board linked to their Long-Term Incentive and
Short-Term Incentive and a revision of the Remuneration Policy of
the Management Board.
On 13 July 2023 it was announced that Alianne de Jong had
tendered her resignation as CFO and as Board Member of NSI NV
to take up a new role.
The Supervisory Board is very grateful
for the many contributions Alianne de Jong has made to the
further professionalization of the Company and its Finance
function since she joined the Management Board in 2017.
She
has stayed on until 15 November to facilitate a smooth transition
of her responsibilities. Per 23 October 2023 the services of an
interim CFO were secured.
During 2023 the Selection and Appointment Committee had
several selection meetings and calls.
The main topics discussed during these meetings and on sepa-
rate conference calls were drafting a profile for the recruitment and
selection procedure of a new Supervisory Board member, the prog
-
ress made in the recruitment and selection process with regard to
the longlist and shortlist of candidates drafted by the executive
search firm and speaking to individual candidates. The focus here
was on finding a candidate who could help maintain the compa
-
ny’s level of diversity and complement the existing members of the
Supervisory Board. This search has resulted in the appointment of
Marlies Janssen by the EGM of 28 February 2024.
The Selection and Appointment Committee further discussed the
profile for the recruitment and selection for a new CFO, discussing
the progress made in the recruitment and selection procedure and
with regard to the longlist and shortlist of candidates drafted by
the executive search firm, and spoke to individual candidates. The
focus here too was on finding a candidate who could help main-
tain the company’s level of diversity and complement the existing
member of the Management Board. This search has resulted in
the selection of a candidate that will be proposed for appoint-
ment in the AGM of 19 April 2024. . We refer to the Agenda and
Explanatory Notes of this AGM for further details.
AUDIT COMMITTEE
During 2023 the Audit Committee consisted of Margreet Haan-
drikman (Chair) and Karin Koks-Van der Sluijs (member). The
Audit Committee met on five occasions in the year under review.
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The role and responsibilities of the Audit Committee, its compo-
sition and how it carries out its duties are specified in the Audit
Committee regulations which are posted on the company’s
website.
Audit Committee meetings pay special attention to the opportuni-
ties and risks that the company faces.
The Audit Committee regularly conferred with the external auditor,
of which once without the presence of the Management Board.
The Audit Committee made a recommendation to the Supervisory
Board to enable the supervisory board to assess – as there is
no separate department for the internal audit function- whether
adequate alternative measures have been taken and whether it is
necessary to establish an internal audit department.
In 2023 the Audit Committee discussed and was particularly
involved in the assessment and/or monitoring of:
a the operation and effectiveness of the internal risk management
and control systems, as well as the probability and impact of
certain risks;
b risk and reporting requirements in relation to development
activities;
c the fraud risk analysis;
d compliance with relevant legislation and regulations as well as
compliance with the internal regulations;
e the provision of financial information by the company, including
the discussion of position papers on the proper application of
accounting standards;
f ESG reporting, in particular reporting on Sustainability KPI’s
and the preparation of the implementation of the CSRD;
g the yearly evaluation of the internal audit charter, the evaluation
of the internal audit plan for 2023 which was approved in the
Supervisory Board meeting of 8 March 2023 and the internal
audit findings; in 2023 the internal audits focussed on IT and
Treasury;
h evaluation of the functioning of the external accountant and
the relationship with the external auditor, reporting the results
of the evaluation to the Supervisory Board and informing the
external auditor about the main topics of the evaluation;
i the selection of a new partner of PWC to lead the audit engage-
ment team. As a result, Anke Meijer has succeeded Sidney
Herwig who had reached the end of the maximum allowed
term;
j discussions with the external auditor about the 2023 audit
plan, the audit report and the management letter of the external
auditor, compliance with recommendations from and the
follow-up of remarks by the external auditor, also with regard to
ICT systems;
k the application of information and communication technology
and measures to improve cybersecurity;
l the extension of the secured Financing with BerlinHyp for a
4-year period.
REAL ESTATE COMMITTEE
From 1 January to 19 June 2023 the Real Estate Committee
consisted of Harm Meijer (Chair), Jan Willem de Geus (member)
and Karin Koks-Van der Sluijs (member).
From 19 June to 12 July 2023 the Real Estate Committee
consisted of Willem de Geus (member) and Karin Koks-Van der
Sluijs (member).
On 12 July the Supervisory Board dissolved the Real Estate
Committee. The reasoning for this decision is detailed in the
section about Evaluations.
The role and responsibilities of the Real Estate Committee, its
composition and how it carries out its duties were specified in the
Real Estate Committee regulations. Real Estate Committee meet-
ings paid special attention to the feasibility of the strategy, the
implementation of the business model, and the real estate market.
In 2023 the Real Estate Committee was particularly involved in:
a meeting with management to discuss the portfolio strategy,
hold/sell analyses, market updates, occupancy, retention and
new leases;
b evaluating proposed management decisions, specifically with
regard to real estate transactions (acquisitions, disposals and
investments);
c deciding on or advising the Supervisory Board on real estate
transactions and Development projects;
d discussing the status and progress of the Development
projects, in particular the Laanderpoort development in
Amsterdam South East and the Vitrum development in the
Amsterdam Southaxis area;
e improvement of the portfolio with regard to sustainability.
The Real Estate Committee had two regular meetings with the
Management Board.
During the first meeting which took place in April 2023 the Real
Estate Committee discussed the status and a detailed action
Plan for the Vitrum project, the status of the other development
projects, the sustainability of the Portfolio and a reporting tool
for energy intensity and other sustainability KPI’s and attended
a presentation by the Investment Department about the Life
Science Real Estate Asset Class.
The second meeting took place in June. This was a joint meeting
with the full Supervisory Board.
IN CONCLUSION
2023 was in many ways a challenging year for the Management
Board and employees of NSI requiring creativity, hard work and
resilience. The Supervisory Board wishes to express its gratitude
for the efforts the entire team has made and the successes they
realised in the year under review.
Amsterdam, 7 March 2024
The Supervisory Board
Jan Willem de Geus, Chair
Karin Koks-Van der Sluijs, Vice Chair
Margreet Haandrikman
Jan Willem Dockheer
Marlies Janssen
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DETAILS OF THE SUPERVISORY BOARD
Mr J.W.A. de Geus (1966)
Chairman
Nationality Dutch
Current position Senior Advisor Proprium Capital Partners
Additional positions
Non-Executive Board member of AVID Property Group
First appointment 2021
Current term To 2025
Mrs K.M. Koks - Van der Sluijs (1968)
Vice Chairman
Nationality Dutch
Current position Managing Director, Portfolio Management Greystar Europe
Additional positions Member of the Supervisory Board of Annexum – Super Winkel
Fonds NV
First appointment 2016
Current term To 2024
Mr J.W. Dockheer (1973)
Nationality Dutch
Current position Managing Director BMN Groep Netherlands
Additional positions Member of the Supervisory Board of 2theLoo
First appointment 2020
Current term To 2024
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Mrs G.M. Haandrikman (1965)
Nationality Dutch
Current position Independent supervisory board member and advisor
Additional positions Chair of the Supervisory Board of Onderlinge van 1719 UA, Chair
of the Supervisory Board of Lemonade NV., , Member of the Supervisory Board NV
Schade, Member of the Supervisory Board Monuta Holding and Monuta Verzekeringen NV,
Member of the Supervisory Board and chair of the Audit Committee Stichting RADAR Inc,
Member of the Board Stichting for the holding and administration of shares under the RDS
employee shareplans, External member of the audit committee of the Dutch Ministry of
Justice and Security.
First appointment 2017
Current term To 2025
Mrs M. Janssen (1973)*
Nationality Dutch
Current position Director Finance & Control at Royal Van Oord
Additional positions Member of the Supervisory Board of Erasmus Q Intelligence BV
First appointment 2024
Current term To 2028
* Appointed in the EGM of 28 February 2024
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FINANCIAL
STATEMENTS
CONTENT
Consolidated Statement of Comprehensive Income 72
Consolidated Statement of financial position 73
Consolidated Cash Flow Statement 74
Consolidated Statement of changes in shareholder’s equity 75
Notes to the Consolidated Financial Statements 76
Company Balance Sheet 105
Company Income Statement 106
Notes to the Company Financial Statements 107
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
( x € 1,000)
Note 2023 2022
Gross rental income 2 71,199 71,309
Service costs recharged to tenants 13,475 11,020
Service costs -15,402 -12,343
Service costs not recharged 2 -1,926 -1,322
Operating costs 2, 3 -10,852 -10,663
Net rental income 58,421 59,325
Revaluation of investment property 4 -223,959 -76,826
Net result on sale of investment property 5 5,388 32
Net result from investments -160,150 -17,470
Administrative costs 6 -9,120 -8,566
Other income and costs 7 -81 -210
Financing income 37 278
Financing costs -8,385 -8,302
Movement in market value of financial derivatives -2,771 2,902
Net financing result 8 -11,120 -5,122
Result before tax -180,471 -31,368
Corporate income tax 9 38,101 -2
Total result for the year -142,370 -31,370
Other comprehensive income / expense 0
Total comprehensive income / expense for the year -142,370 -31,370
Total comprehensive income / expense attributable to:
Shareholders -142,370 -31,370
Total comprehensive income / expense for the year -142,370 -31,370
Data per average outstanding share:
Diluted as well as non-diluted result after tax (€) 17 -7.08 1.58
The notes on pages 76 to 104 form an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2023
( x € 1,000)
Note 31 December 2023 31 December 2022
Assets
Investment property 10 1,028,801 1,259,235
Intangible fixed assets 11 32 72
Tangible fixed assets 12 3,835 4,063
Financial fixed assets 0 0
Deferred tax assets 13 38,654
Other non-current assets 14 12,069 13,659
Non-current assets 1,083,389 1,277,027
Debtors and other receivables 15 3,963 1,403
Derivative financial instruments 22 1,163
Deferred tax assets 13 70
Cash and cash equivalents 16 202 196
Current assets 4,235 2,763
Total assets 1,087,625 1,279,790
Shareholders' equity
Issued share capital 17 74,171 73,800
Share premium reserve 17 915,068 915,447
Other reserves 17 -136,988 -70,868
Total result for the year -142,370 -31,370
Shareholders' equity 709,882 887,008
Liabilities
Interest bearing loans 18 333,632 285,984
Derivative financial instruments 22 1,608 0
Deferred tax liabilities 13 2
Other non-current liabilities 19 4,533 3,744
Non-current liabilities 339,775 289,727
Redemption requirement interest bearing loans 18 65,656
Debts to credit institutions 20 11,012 14,037
Creditors and other payables 21 26,956 23,361
Current liabilities 37,968 103,054
Total liabilities 377,743 392,782
Total shareholders' equity and liabilities 1,087,625 1,279,790
The notes on pages 76 to 104 form an integral part of these consolidated financial statements.
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CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
( x € 1,000)
Notes 2023 2022
Result from operations after tax -142,370 -31,370
Adjusted for:
Revaluation of investment property 4 223,959 76,826
Net result on sale of investment property 5 -5,388 -32
Net financing result 8 11,120 5,122
Corporate income tax 9 -38,101 2
Depreciation and amortisation 6 638 739
Movements in working capital:
Debtors and other receivables -626 1,667
Creditors and other payables 3,403 -1,894
Cash flow from operations 52,635 51,061
Financing income received 37 278
Financing costs paid -11,012 -8,545
Tax paid -15 6
Cash flow from operating activities 41,645 42,800
Purchases of investment property and subsequent expenditure 10 -19,469 -12,682
Proceeds from sale of investment property 10 34,052 17,067
Investments in intangible fixed assets 11 0 -31
Investments in tangible fixed assets 12 -104
Disinvestments in tangible fixed assets 12 4
Cash flow from investment activities 14,583 4,255
Dividend paid to the company's shareholders 17 -34,757 -30,078
Proceeds from interest bearing loans 18 10,000 5,000
Transaction costs interest bearing loans paid -242 -339
Repayment of interest bearing loans 18 -28,200 -43,200
Cash flow from financing activities -53,199 -68,617
Net cash flow 3,030 -21,563
Cash and cash equivalents and debts to credit institutions -
balance as per 1 January
-13,840 7,723
Cash and cash equivalents and debts to credit institutions -
balance as per 31 December
-10,810 -13,840
The notes on pages 76 to 104 form an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
( x € 1,000)
2023
Issued share
capital
Share premium
reserve
Other reserves Result for the
year
Shareholders'
equity
Balance as per 1 January 2023 73,800 915,447 -70,868 -31,370 887,008
Total result for the year -142,370 -142,370
Total comprehensive income / expense for the year -142,370 -142,370
Profit appropriation - 2022 -31,370 31,370
Distribution final dividend - 2022 372 -379 -19,633 -19,640
Interim dividend - 2023 -15,116 -15,116
Contributions from and to shareholders 372 -379 -66,120 31,370 -34,757
Balance as per 31 December 2023 74,171 915,068 -136,988 -142,370 709,882
2022
Issued share
capital
Share premium
reserve
Other reserves Result for the
year
Shareholders'
equity
Balance as per 1 January 2022 72,489 916,768 -161,762 120,961 948,457
Total result for the year -31,370 -31,370
Total comprehensive income / expense for the year -31,370 -31,370
Profit appropriation - 2021 120,961 -120,961
Distribution final dividend - 2021 398 -403 -17,464 -17,470
Interim dividend - 2022 913 -918 -12,603 -12,608
Contributions from and to shareholders 1,310 -1,321 90,894 -120,961 -30,078
Balance as per 31 December 2022 73,800 915,447 -70,868 -31,370 887,008
The notes on pages 76 to 104 form an integral part of these consolidated financial statements.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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COMPANY BALANCE SHEET
(BEFORE PROPOSED PROFIT APPROPRIATION)
FOR THE YEAR ENDED 31 DECEMBER 2023
( x € 1,000)
Note 31 December 2023 31 December 2022
Assets
Intangible fixed assets 32 72
Tangible fixed assets 904 1,035
Financial fixed assets 1 1,053,066 1,257,092
Non-current assets 1,054,001 1,258,199
Debtors and other receivables 7,792 457
Derivative financial instruments 1,163
Cash and cash equivalents 5 133
Current assets 7,797 1,753
Total assets 1,061,798 1,259,952
Shareholders' equity
Issued share capital 2 74,171 73,800
Share premium reserve 2 915,068 915,447
Participations reserve 2 103,835 206,861
Retained earnings 2 -240,823 -277,729
Total result for the year 2 -142,370 -31,370
Shareholders' equity 709,882 887,008
Liabilities
Interest bearing loans 333,632 285,984
Derivative financial instruments 1,608
Other non-current liabilities 275 151
Non-current liabilities 335,515 286,135
Redemption requirement interest bearing loans 65,656
Debts to credit institutions 11,012 14,037
Creditors and other payables 5,389 7,116
Current liabilities 16,401 86,809
Total liabilities 351,916 372,944
Total shareholders' equity and liabilities 1,061,798 1,259,952
The notes on pages 107 to 110 form an integral part of these company financial statements.
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COMPANY INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
( x € 1,000)
Note 2023 2022
Administrative costs 3 -4,563 -8,558
Other income and costs -12
Financing income 4 1,763
Financing costs 4 -10,703 -9,574
Movement in market value of financial derivatives 4 -2,771 2,902
Net financing result -11,711 -6,672
Corporate result before tax -16,273 -15,242
Corporate income tax
Corporate result after tax -16,273 -15,242
Result from participations -126,097 -16,128
Total result for the year -142,370 -31,370
The notes on pages 107 to 110 form an integral part of these company financial statements.
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
GENERAL
NSI N.V. exclusively performs holding activities. NSI’s structure as described in the notes to the consolidated financial statements also
applies to the company financial statements.
The company financial statements have been prepared in accordance with the provisions of Title 9, Book 2 of the Dutch Civil Code
regarding financial reporting. In the preparation of its financial statements, the company has also applied the provisions for the contents
of financial reporting by investment institutions pursuant to the Dutch Financial Super- vision Act.
PRINCIPLES OF DETERMINATION OF THE RESULT
The company financial statements have been prepared in accordance with Article 362 Paragraph 8 Book 2 of the Dutch Civil Code. This
means that the principles for the processing and valuation of assets and liabilities and the determination of the result as described in
the disclosure to the consolidated financial statements also apply to the company financial statements, unless stated otherwise. These
principles also include the classification and presentation of financial instruments, being equity instruments or financial liabilities. For
a description of these principles, please refer to pages 86 to 91. If required notes have been incorporated in the consolidated financial
statements these notes have not been incorporated here.
FINANCIAL FIXED ASSETS
Shares in group companies are valued at net asset value. In determining the net asset value, all assets, liabilities and profits and losses
are subject to the accounting principles used for the consolidated financial statements, in accordance with the provisions of Article 362
Paragraph 8 (final sentence) of Book 2 of the Dutch Civil Code.
All receivables from group companies are considered as an extension of net investments in group companies.
1. FINANCIAL FIXED ASSETS
31 December 2023 31 December 2022
Balance as per 1 January 1,257,092 1,337,336
Result from participations -126,097 -16,128
Changes in receivables from group companies -77,930 -64,116
Balance as per 31 December 1,053,066 1,257,092
2. SHAREHOLDERS EQUITY
2023
Issued share
capital
Share premium
reserve
(Statutory)
participations
reserve
Retained
earnings
Result for the
year
Shareholders'
equity
Balance as per 1 January 2023 73,800 915,447 206,861 -277,729 -31,370 887,008
Total result for the year -142,370 -142,370
Other comprehensive income / expense
Total comprehensive income / expense for the year -142,370 -142,370
Profit appropriation - 2022 -31,370 31,370
Distribution final dividend - 2022 372 -379 -19,633 -19,640
Interim dividend - 2023 -15,116 -15,116
Subtraction from participations reserve -103,026 103,026
Contributions from and to shareholders 372 -379 -103,026 36,906 31,370 -34,757
Balance as per 31 December 2023 74,171 915,068 103,835 -240,823 -142,370 709,882
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2022
Issued share
capital
Share premium
reserve
(Statutory)
participations
reserve
Retained
earnings
Result for the
year
Shareholders'
equity
Balance as per 1 January 2022 72,489 916,768 271,047 -432,809 120,961 948,457
Total result for the year -31,370 -31,370
Other comprehensive income / expense
Total comprehensive income / expense for the year -31,370 -31,370
Profit appropriation - 2021 120,961 -120,961
Distribution final dividend - 2021 398 -403 -17,464 -17,470
Interim dividend - 2022 913 -918 -12,603 -12,608
Subtraction from participations reserve -64,186 64,186
Contributions from and to shareholders 1,310 -1,321 -64,186 155,080 -120,961 -30,078
Balance as per 31 December 2022 73,800 915,447 206,861 -277,729 -31,370 887,008
Both the retained earnings reserve and the share premium reserve are available for distribution as dividend.
For further details on movements in shareholders’ equity, please refer to the consolidated financial statements (see disclosure 17 to the
consolidated financial statements).
STATUTORY RESERVES
The statutory reserves in the company balance sheet are reserves which must be retained pursuant to the Dutch Civil Code and
consist of the participation reserve and the reserve for foreign currency translation.
PARTICIPATION RESERVE
The participation reserve relates to a revaluation reserve on the investment properties in the subsidiaries and consists of the cumula-
tive positive (unrealised) revaluations of these investments. This statutory reserve is a non-distributable reserve in accordance with the
Dutch Civil Code. The revaluation reserve was determined at individual property level in 2022 and 2023, before appropriation of profits.
DIVIDEND
Taking into consideration the interim dividend of € 0.75 per share already distributed (2022: € 1.04; adjusted for stock consolidation), a
final dividend of € 0.77 per share has been proposed (2022: € 1.12).
PROPOSED PROFIT APPROPRIATION
The Articles of Association of NSI N.V. stipulate that the allocation of the result after tax for the financial year is determined by the
General Meeting of Shareholders. For the 2023 financial year the Management Board, with the approval of the Supervisory Board
and in line with the applicable dividend policy (i.e. a pay-out of at least 75% of the direct result), has proposed a final dividend of
€ 0.77 per share.
This puts the total dividend for 2023 at € 1.52 per share, of which € 0.75 per share was already distributed as an interim dividend in
August 2023.
Based on the number of outstanding shares eligible for dividend (20,155,221), the total amount of the final dividend is € 15.5m and will
be withdrawn from the retained earnings (excluding dividend paid in shares).
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Provided that the General Meeting of Shareholders approves this dividend proposal, the final dividend will be made payable in the
second quarter of 2024.
2023
Total result for the year - 2023 -142,370
Interim dividend - 2023 -15,116
Proposed final dividend - 2023 -15,520
On balance subtracted from the reserves -173,006
In anticipation of a decision on the matter by the General Meeting of Shareholders the non-allocated result after tax for the financial year
is accounted for separately in equity as the result for the financial year.
3. ADMINISTRATIVE COSTS
2023 2022
Salaries and wages -5,293 -5,195
Social security -624 -620
Pensions -367 -336
Depreciation right of use tangible fixed assets -267 -284
Other staff costs -1,274 -1,182
Staff costs -7,825 -7,618
Compensation supervisory board -252 -251
Depreciation and amortisation -348 -445
Other office costs -1,373 -1,476
Office costs -1,721 -1,920
Audit, consultancy and valuation costs -1,772 -1,269
Other administrative costs -1,053 -1,332
Administrative costs -12,624 -12,390
Allocated administrative costs 8,061 3,833
Administrative costs -4,563 -8,558
4. NET FINANCING RESULT
2023 2022
Interest income 1,763
Financing income 1,763
Interest costs -10,211 -9,115
Other financing costs -492 -459
Financing costs -10,703 -9,574
Movement in market value of financial derivatives -2,771 2,902
Net financing result -11,711 -6,672
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5. OFF-BALANCE SHEET COMMITMENTS AND CONTINGENCIES
NSI N.V. has issued guarantees for its 100%-owned subsidiary companies in accordance with Article 403, Book 2 of the Dutch Civil
Code.
NSI N.V. is part of a tax group for Dutch sales tax, and is therefore jointly and severally liable for the tax payable by the sales tax group
as a whole.
6. AUDIT FEES
PricewaterhouseCoopers Accountants N.V. charged the following fees to NSI and its subsidiaries:
2023 2022
Audit financial statements -356 -172
Other audit related services -93 -55
Audit fees -449 -227
In the 2023 financial year, an amount of € 356k for audit fees was charged by PricewaterhouseCoopers Accountants N.V. to the result in
accordance with article 382a Title 9 Book 2 of the Dutch Civil Code (2022: € 172k).
The audit fees charges in 2023 are related to the audit of 2022 accounts (€ 186k) and the audit of 2023 accounts ((€ 171k). Other audit
fees in 2023 consists of ESG-audit fees for 2022 (€ 60k) and 2023 (€ 33k).
7. EVENTS AFTER BALANCE SHEET DATE
The sale of the investment property under construction Laanderpoort, Amsterdam was completed in January 2024 for a total of
€ 24.0m (before transactions costs).
Amsterdam, 7 March 2024
THE MANAGEMENT BOARD
Bernd Stahli, CEO
THE SUPERVISORY BOARD
Jan-Willem de Geus, Chairman
Jan-Willem Dockheer
Margreet Haandrikman
Karin Koks - Van der Sluijs
Marlies Janssen
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OTHER
INFORMATION
CONTENT
Statutory Provision in respect of profit appropriation 112
Independent Auditor’s report 114
Assurance report of the Independent Auditor 120
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STATUTORY PROVISION IN RESPECT OF PROFIT
APPROPRIATION
The provisions in respect of the appropriation of profit are provided for in Article 21 of the Articles of Association of the company. The profit
is at the disposal of the General Meeting of Shareholders. The company may only make distributions to shareholders to the extent that
shareholders’ equity exceeds the amount of paid-up and called-up capital, plus the reserves that must be held by law or in accordance
with the Articles of Association. Insofar as possible and justified by law, the company may distribute an interim dividend as proposed by
the Management Board and subject to the approval of the Supervisory Board.
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PricewaterhouseCoopers Accountants N.V., Thomas R. Malthusstraat 5, 1066 JR Amsterdam, P.O. Box 90357, 1006 BJ Amsterdam, the Netherlands, T: +31 (0) 88 792 00 20, F: +31 (0) 88 792 96 40, www.pwc.nl
‘PwC’ is the brand under which PricewaterhouseCoopers Accountants N.V. (Chamber of Commerce 34180285), PricewaterhouseCoopers Belastingadviseurs N.V. (Chamber of Commerce 34180284), PricewaterhouseCoopers Advisory N.V. (Chamber of
Commerce 34180287), PricewaterhouseCoopers Compliance Services B.V. (Chamber of Commerce 51414406), PricewaterhouseCoopers Pensions, Actuarial & Insurance Services B.V. (Chamber of Commerce 54226368), PricewaterhouseCoopers B.V.
(Chamber of Commerce 34180289) and other companies operate and provide services. These services are governed by General Terms and Conditions (‘algemene voorwaarden’), which include provisions regarding our liability. Purchases by these companies
are governed by General Terms and Conditions of Purchase (‘algemene inkoopvoorwaarden’). At www.pwc.nl more detailed information on these companies is available, including these General Terms and Conditions and the General Terms and Conditions
of Purchase, which have also been filed at the Amsterdam Chamber of Commerce.
INDEPENDENT AUDITOR’S REPORT
TO: THE GENERAL MEETING AND THE SUPERVISORY BOARD OF NSI N.V.
REPORT ON THE FINANCIAL STATEMENTS 2023
OUR OPINION
In our opinion:
• the consolidated financial statements of NSI N.V. together with its subsidiaries (‘the Group’) give a true and fair view of the financial position of the Group as at
31 December 2023 and of its result and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the
European Union (‘EU-IFRS’) and with Part 9 of Book 2 of the Dutch Civil Code;
• the company financial statements of NSI N.V. (‘the Company’) give a true and fair view of the financial position of the Company as at 31 December 2023 and of
its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
WHAT WE HAVE AUDITED
We have audited the accompanying financial statements 2023 of NSI N.V., Amsterdam. The financial statements include the consolidated financial statements of
the Group and the company financial statements.
The consolidated financial statements comprise:
• the consolidated statement of financial position as at 31 December 2023;
• the following statements for 2023: the consolidated statements of comprehensive income, changes in shareholders’ equity and cash flow; and
• the notes, comprising a summary of the significant accounting policies and other explanatory information.
The company financial statements comprise:
• the company balance sheet as at 31 December 2023;
• the company income statement for the year then ended; and
• the notes, comprising a summary of the accounting policies applied and other explanatory information.
The financial reporting framework applied in the preparation of the financial statements is EU-IFRS and the relevant provisions of Part 9 of Book 2 of the Dutch Civil
Code for the consolidated financial statements and Part 9 of Book 2 of the Dutch Civil Code for the company financial statements.
THE BASIS FOR OUR OPINION
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. We have further described our responsibilities under those
standards in the section ‘Our responsibilities for the audit of the financial statements’ of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of NSI N.V. in accordance with the European Union Regulation on specific requirements regarding statutory audit of public-interest entities, the
‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assuranceopdrachten’
(ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands.
Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
OUR AUDIT APPROACH
We designed our audit procedures with respect to the key audit matters, fraud and going concern, and the matters resulting from that, in the context of our audit
of the financial statements as a whole and in forming our opinion thereon. The information in support of our opinion, like our findings and observations related to
individual key audit matters, the audit approach fraud risk and the audit approach going concern was addressed in this context, and we do not provide a separate
opinion or conclusion on these matters.
OVERVIEW AND CONTEXT
NSI N.V. is a real estate company, primarily focussing on offices. The investment property is held to generate rental income or to benefit from an increase in value, or
a combination of both. The Group is comprised of several components and therefore we considered our group audit scope and approach as set out in the section
‘The scope of our group audit’. We paid specific attention to the areas of focus driven by the operations of the Group, as set out below.
The Group continued to sell some properties of their existing investment property portfolio. No acquisitions took place in 2023. NSI N.V. has classified three projects
as investment property under construction, which might require significant investments by NSI N.V. The correct accounting of the capital expenditure and sales
relating to investment properties have been addressed as part of our audit. Another area of focus, that is not considered as key audit matter, is the rental income
which is a key performance indicator for the Group.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered
where the management board made important judgements and significant accounting estimates. Refer for further details to our key audit matters. In the section
‘Basis for preparation’ in the consolidated financial statements, the Company describes the areas of judgement in applying accounting policies and the key sources
of estimation uncertainty.
Given the significant estimation uncertainty and the related higher inherent risks of material misstatement in the valuation of investment property, we considered this
matter as key audit matter as set out in the section ‘Key audit matters’ of this report.
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Materiality
Audit scope
Key audit
matters
Due to a change in FBI legislation NSI has undergone a restructuring in which most of the properties are now in separate entities, which are subject to corporate
income tax. As result of the restructuring a Deferred tax asset was recognised. The Deferred tax assets are subject to significant risk of misstatement either through
error or management bias (fraud). We therefore considered this area as a key audit matter.
The management board assessed the possible effects of climate change on its financial position, refer to the section ‘Risk management and internal control’ in the
management board report where the client disclosed the climate-related risks. We discussed management board’s assessment and governance thereof with the
management board and evaluated the potential impact on the financial position including underlying assumptions and estimates underlying the valuation of invest-
ment property. We addressed climate related risk in evaluating the assumptions underlying the valuation of investment property, but did not identify climate related
risks as a separate key audit matter.
We ensured that the audit team included the appropriate skills and competences which are needed for the audit of a real estate company. We therefore included
experts and specialists in the areas of amongst others real estate valuation, sustainability, tax and IT in our team.
The outline of our audit approach was as follows:
Materiality
• Overall materiality: €5,324,000
• Specific materiality: €2,047,000
Audit scope
• We conducted the audit work centrally, given the fact that the group audit team was able to
conduct all audit procedures.
Key audit matter
• Valuation of investment property;
• Valuation of Deferred tax assets
MATERIALITY
The scope of our audit is influenced by the application of materiality, which is further explained in the section ‘Our responsibilities for the audit of the financial statements’.
Based on our professional judgement we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a
whole as set out in the table below. These, together with qualitative considerations, helped us to determine the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and to evaluate the effect of identified misstatements, both individually and in aggregate, on the financial
statements as a whole and on our opinion. We evaluated our materiality benchmark compared to prior year and determined a change in our materiality by determining
an overall materiality and specific materiality based on the best practices of other listed real estate companies.
Overall materiality Specific materiality
Materiality level
€5,324,000 €2,047,000
Basis for determining materiality
We used professional judgement to determine overall
materiality. We used 0.75% of shareholders’ equity as
included in the statement of financial position for the
year ended 31 December 2023.
We used 5% of the result before tax, adjusted for the net
result on the sale of investment property, revaluation of
investment property, movement in market value of finan-
cial derivatives and other income and costs.
Rationale for benchmark applied
We have applied this benchmark based on our analysis
of the common information needs of users of the finan-
cial statements. This benchmark best fits the nature of the
Company’s operations and equity is deemed most relevant
for the investors and other users of the financial statements.
We have applied this benchmark as it is an important
measure for the financial performance of the Company’s
investment property portfolio and is therefore deemed
relevant for the investors and other users of the financial
statements.
We also take misstatements and/or possible misstatements into account that, in our judgement, are material for qualitative reasons.
We agreed with the supervisory board that we would report to them misstatements identified during our audit above €266,000 as well as misstatements
below that amount that, in our view, warranted reporting for qualitative reasons.
THE SCOPE OF OUR GROUP AUDIT
NSI N.V. is the parent company of a group of entities. The financial information of this group is included in the consolidated financial statements of NSI N.V.
For NSI N.V. and all its subsidiaries, the group audit team was able to conduct the audit procedures centrally from the head office of NSI N.V. and no use has been
made of other auditors. The audit team has determined per financial statement line item which audit procedures needed to be performed in relation to the audit of
the consolidated financial statements.
For the ERP system, the management board makes use of an external service provider. As part of our audit procedures, we evaluated the SOC 1 assurance reports
that include the scope and the results of the procedures performed rendered by the independent auditor of the external service provider. Furthermore, we assessed
the objectivity and competence of the independent auditor of the service organization and we evaluated the design and tested the operating effectiveness of the
internal controls in place at NSI N.V. over the outsourced services. In addition to the reliance on the SOC1 report we have performed substantive testing procedures.
We are of the opinion that we have been able to obtain sufficient and appropriate audit evidence regarding the financial information of the Group as a whole to provide
a basis for our opinion on the consolidated financial statements.
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AUDIT APPROACH FRAUD RISK
We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an understanding of the Group
and its environment and the components of the system of internal control, including the risk assessment process and management board’s process for responding to
the risks of fraud and monitoring the system of internal control and how the supervisory board exercises oversight, as well as the outcomes. We refer to section “Risk
management and internal control” of the management board report for management board’s fraud risk assessment.
We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, as well as among others the code of
conduct, whistle blower procedures and incident registration. We evaluated the design and the implementation and, where considered appropriate, tested the opera-
tional effectiveness of internal controls designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud, misappropriation of assets and bribery
and corruption. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present. We identified the following fraud risks and
performed the following specific procedures:
IDENTIFIED FRAUD RISK AUDIT WORK AND OBSERVATIONS
The risk of management override of controls
The management board is in a unique position to perpetrate fraud because
of management’s ability to manipulate accounting records and prepare
fraudulent financial statements by overriding controls that otherwise
appear to be operating effectively. That is why, in all our audits, we pay
attention to the risk of management override of controls, including risks
of potential misstatements due to fraud based on an analysis of potential
interests of the management board. This includes the risk of bias by the
management board when setting assumptions.
In this respect, we gave specific consideration to:
• the appropriateness of journal entries and other adjustments made in the
preparation of the financial statements;
• possible management bias in management board’s estimates; and
• significant transactions, if any, that are outside the normal course of
business for the entity.
Where relevant to our audit, we evaluated the design of the internal control
measures that are intended to mitigate the risk of management over-
ride of controls and tested the operational effectiveness of the measures in
the processes of generating and processing journal entries, recognition and
accounting for estimates. We also paid specific attention to the access safe-
guards in the IT system and the possibility that these lead to violations of the
segregation of duties. We concluded that we, in the context of our audit, could
rely on the internal control procedures relevant to this risk.
We have selected journal entries based on risk criteria and conducted specific
audit activities for these entries.
In relation to possible management bias in management board’s estimates, we
paid specific attention to significant assumptions in the valuation of investment
property, for which we included a Key Audit Matter is this report.
Our audit procedures did not lead to specific indications of fraud or suspicions
of fraud with respect to management override of controls.
The risk of fraudulent financial reporting through overstating rental income
As part of our risk assessment and based on a presumption that there are
risks of fraud in revenue recognition, we evaluated which types of revenue
transactions or assertions give rise to the risk of fraud in revenue recognition.
Where relevant to our audit, we assessed the design and tested the operational
effectiveness of the internal control measures related to revenue reporting and in
the processes for generating and processing journal entries related to the rental
income. We also paid specific attention to the access safeguards in the IT system
and the possibility that these lead to violations of the segregation of duties.
Because rental income is a key performance indicator for the Group, we
have identified an inherent risk in overstating revenue by the manage-
ment board, especially in recognising fictitious rental income or improper
accounting of lease incentives.
We concluded that we, in the context of our audit, could rely on the internal
control procedures relevant to this risk.
We have performed analytics on the rental income per property and per
month.
We tested a sample of the rental income transactions by tracing the trans-
actions back to the rental contracts and indexation letter to assess if it is
recorded accurate and occurred. We also assessed the accounting policy
for the accounting of lease incentives, tested for a sample the accuracy and
occurrence of the lease incentive amount recognised by tracing the lease
incentive back to the rental contracts and recalculated the amount of straight-
lined rent recognised in the rental income.
Our audit procedures did not lead to specific indications of fraud or suspicions
of fraud with respect to the accuracy and occurrence of the rental income.
The risk of kickbacks paid to the management board or employees when
selling investment property
As part of our risk assessment, we have identified an inherent risk that
kick-backs could be paid to the management board and/or employees in
exchanges for unfavourable transaction prices in the purchase or sale of
investment properties.
During 2023 only sales took place.
Where relevant to our audit, we assessed the design and tested the oper-
ational effectiveness of the internal control measures related to sales of
investment properties, in which we have paid attention to the third party due
diligence process (background checks regarding purchasers of investment
properties). We concluded that we, in the context of our audit, could rely on
the internal control procedures relevant to this risk.
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Furthermore, we performed the following procedures:
• verified for all sales of investment properties that agreements are signed by
two employees of NSI N.V., in line with the approved authorisation matrix;
• obtained for all transactions the final notary statements and deeds of
delivery;
• verified with Land Registry information if for sales transactions have taken
place within one year (or as far as possible within one year) after the sale
by NSI N.V.;
• tested a sample of the cost incurred in relation to sales and evaluated the
reasonableness of expenses incurred;
• compared the sales price to the book value based on the latest valuation
report for financial reporting.
Our audit procedures did not lead to specific indications of fraud or suspi-
cions of fraud with respect to the acquisitions and sales.
We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit procedures and evaluated whether any findings were
indicative of fraud. We considered available information and made enquiries of relevant executives and the supervisory board. We performed an assessment of
matters reported on the Company’s whistleblowing and complaints procedures, obtained legal letters and, when applicable, results of management board’s inves-
tigation of such matters.
AUDIT APPROACH GOING CONCERN
The management board prepared the financial statements on the assumption that the entity is a going concern and that it will continue its operations for the fore-
seeable future. Our procedures to evaluate management board’s going concern assessment include, amongst others:
• Considering whether management board’s liquidity and solvency assessment includes all relevant information of which we are aware as a result of our audit, such
as the expected capital expenditure in the development projects and the (re)financing of external loans on maturity date;
• Inquire with the management board regarding management board's most important assumptions, such as the start date and expected capital expenditure of the
development projects and the terms and conditions of (re)financing of external loans, underlying their going concern assessment and considering whether the
management board identified events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern (hereafter: going concern
risks);
• Analysing the financial position per balance sheet date in relation to the financial position per prior year balance sheet date to assess whether events or circum-
stances exist that may lead to a going concern risk;
• Performing inquiries of the management board as to their knowledge of going concern risks beyond the period of management board’s assessment.
Our procedures did not result in outcomes contrary to management’s assumptions and judgments used in the application of the going concern assumption.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements. We have communicated
the key audit matters to the supervisory board. The key audit matters are not a comprehensive reflection of all matters identified by our audit and that we discussed.
In this section, we described the key audit matters and included a summary of the audit procedures we performed on those matters.
As the key audit matter is related to the nature of the operations of NSI N.V. and there are no significant changes in the strategy and business of NSI N.V., we have
no changes in the key audit matters to report compared to prior year.
IDENTIFIED FRAUD RISK AUDIT WORK AND OBSERVATIONS
KEY AUDIT MATTER OUR AUDIT WORK AND OBSERVATIONS
Significant assumption in the valuation of investment property
[reference to note 10 in the annual report]
The Group’s investment property portfolio comprises mainly offices. At 31
December 2023 the carrying value of the Group’s investment property port-
folio was €1,029 million (2022: €1,259 million).
Investment properties are valued at fair value at reporting date using the
income capitalisation approach as the applied valuation method. The fair
value of investment properties is on the one hand depending on the data
input into the valuation models, such as: rental income, duration of the
contract and square meters.
On the other hand, and most important to our audit, given the sensitivity
and impact on the outcome, the valuation is depending on a significant
assumption, being the capitalisation rate.
For the external valuation experts appointed by the management board, which
we have identified as management experts in our audit, we have assessed
the competence and capabilities of the external valuation experts by amongst
others checking the registration of the qualification of the external valuation
experts and checking the membership of a professional association for the
external valuation expert organisations.
We furthermore read the terms of engagements and discussed with the external
valuation experts the context and environment in which they have worked with
the persons within the Group responsible for the valuation process, to deter-
mine whether there were any matters that might have affected their objectivity or
may have imposed scope limitations upon their work. We also considered other
engagements, which might exist between the Group and the external valuation
experts’ organisations.
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KEY AUDIT MATTER OUR AUDIT WORK AND OBSERVATIONS
Primary factors, which influence this significant assumption, are general
market conditions and the individual nature, condition and location of each
property.
At the end of each reporting period, the management board determines
the fair value of its investment property portfolio in accordance with the
requirements of IAS 40 and IFRS 13. All properties are bi-annually externally
appraised by an external valuation expert, appointed by the management
board.
As the valuation of investment property is inherently judgmental in nature,
due to the use of assumptions that are highly sensitive, any change in
assumptions may have a significant effect on the outcome given the relative
size of the investment property balance.
This also effects the revaluation gains that directly impact the statement of
comprehensive income. As a result, the valuation of investment property is
subject to significant risk of misstatement either through error or manage-
ment bias (fraud). We therefore considered this area as a key audit matter.
In relation to the significant assumption in the valuation of investment property
we have:
• evaluated that the management board has designed and implemented appro-
priate internal controls on the valuation process;
• evaluated the valuation methods as applied by the management board and
management experts, as included in the valuation reports;
• evaluated the significant assumption made by the management board and the
management expert by assessing the movements of the significant assump-
tion in the valuation reports based on the overall shifts in the market conditions
in which the group invests, based on the latest public property market data;
• for a risk-based selection of valuation reports, we have challenged the (signi-
ficant) assumptions used (including the capitalisation rate and market rent
levels) against available market data. We have involved our internal real estate
valuation experts in these assessments.
Furthermore, we have:
• reconciled the final valuation reports with the fair value in the Group’s accoun-
ting records;
• checked for each management expert the mathematical accuracy of the valu-
ation model used;
• checked for a sample of leases, that the standing data included in the valua-
tion report such as rental income, the duration of lease contracts and square
metres was supported by audit evidence;
• discussed with the management’s experts the incorporation of energy labels
in their assessment of the market value of the investment properties;
• verified that all investment properties in operation have the minimum required
energy label that office buildings need to have per 1 January 2023 to be able
to operate; and
• assessed and corroborated the adequacy and appropriateness of the disclo-
sure, including the sensitivity disclosures, made in the consolidated financial
statements.
Based on the work performed, we found that investment property related data
and the significant assumptions were supported by available evidence.
In addition, we evaluated whether the information received from the management
board and the audit evidence obtained, provided indications of management
bias. We found no such indication.
Significant assumption in the Deferred tax assets
[reference to note 13 in the annual report]
Due to a change in legislation, as from 2025 FBI’s can no longer directly
invest in Dutch real estate. In 2023, NSI has undergone a restructuring in
which most of the properties are now in separate entities, which are subject
to corporate income tax. NSI N.V. intends to remain an FBI at least to the end
of 2024. As result of the restructuring a Deferred tax asset was recognised.
Deferred tax assets are recognised as income tax to be reclaimed in future
periods relating to offsetable temporary differences between book value and
the fiscal value of assets and liabilities.
They also relate to the carry forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to the extent that it is probable
that future taxable benefits will be available against which unused tax losses
and tax credits can be utilised.
Deferred tax assets are only recognised if it is likely that the temporary diffe-
rences will be settled in the near future and sufficient taxable profit will be
available for settlement.
The carrying amount of deferred tax assets is reviewed at each reporting
date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to
be utilised.
The basis of the deferred tax asset is the differences between the book value
ad. €1,005 million and their fiscal book value ad. €1,178 million. Based on
the assessment of management a Deferred tax asset has been formed ad.
€38.654 million.
This also effects the Corporate income tax that directly impact the statement
of comprehensive income. As a result, the Deferred tax assets are subject
to significant risk of misstatement either through error or management bias
(fraud). We therefore considered this area as a key audit matter
.
In relation to the significant assumption in the deferred tax asset we have:
• evaluated that the management board has designed and implemented appro-
priate internal controls on the valuation process (book value and fiscal value),
refer also to Significant assumption in the valuation of investment property;
• evaluated the calculation methods as applied by the management board;
• evaluated the significant assumption made by the management board by
assessing the cashflow forecast of the standalone entities in the deferred tax
asset calculation;
• evaluated the applied tax rates for calculating the deferred tax asset.
• for the deferred tax asset calculation, we have challenged the (significant)
assumptions used (including the book value, fiscal value and tax rate used)
against normal market practice. We have involved our internal tax experts in
these assessments.
Based on the work performed, we found that investment property related data
and the significant assumptions were supported by available evidence.
In addition, we evaluated whether the information received from the management
board and the audit evidence obtained, provided indications of management
bias. We found no such indication.
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118 NSI ANNUAL REPORT 2023
REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
The annual report contains other information. This includes all information in the annual report in addition to the financial statements and our auditor’s
report thereon.
Based on the procedures performed as set out below, we conclude that the other information:
• is consistent with the financial statements and does not contain material misstatements; and
• contains all information regarding the management board report and the other information that is required by Part 9 of Book 2 and regarding the remu-
neration report required by the sections 2:135b and 2:145 subsection 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and the understanding obtained in our audit of the financial statements or otherwise, we
have considered whether the other information contains material misstatements.
By performing our procedures, we comply with the requirements of Part 9 of Book 2 and section 2:135b subsection 7 of the Dutch Civil Code and the
Dutch Standard 720. The scope of such procedures was substantially less than the scope of those procedures performed in our audit of the financial
statements.
The management board is responsible for the preparation of the other information, including the management board report and the other information in
accordance with Part 9 of Book 2 of the Dutch Civil Code. The management board and the supervisory board are responsible for ensuring that the remu-
neration report is drawn up and published in accordance with the sections 2:135b and 2:145 subsection 2 of the Dutch Civil Code.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS AND ESEF
OUR APPOINTMENT
We were appointed as auditors of NSI N.V. on 29 April 2016 following the passing of a resolution by the shareholders at the annual meeting. Our appoint-
ment has been renewed annually representing a total period of uninterrupted engagement appointment of eight years.
EUROPEAN SINGLE ELECTRONIC FORMAT (ESEF)
NSI N.V. has prepared the annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory
technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion, the annual report prepared in XHTML format, including the (partially) marked-up consolidated financial statements, as included in the repor-
ting package by NSI N.V., complies in all material respects with the RTS on ESEF.
The management board is responsible for preparing the annual report, including the financial statements in accordance with the RTS on ESEF, whereby
the management board combines the various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ‘Assuranceopdrachten inzake het voldoen aan de criteria
voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting).
Our examination included amongst others:
• Obtaining an understanding of the entity’s financial reporting process, including the preparation of the reporting package.
• Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and performing
further assurance procedures responsive to those risks to provide a basis for our opinion, including:
• obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance docu-
ment and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the RTS on ESEF;
• examining the information related to the consolidated financial statements in the reporting package to determine whether all required mark-ups have
been applied and whether these are in accordance with the RTS on ESEF.
NO PROHIBITED NON-AUDIT SERVICES
To the best of our knowledge and belief, we have not provided prohibited non-audit services as referred to in Article 5(1) of the European Regulation on
specific requirements regarding statutory audit of public-interest entities.
SERVICES RENDERED
The services, in addition to the audit, that we have provided to the Company and its controlled entities, for the period to which our statutory audit relates,
are disclosed in note 6 to the company financial statements.
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
RESPONSIBILITIES OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD FOR THE FINANCIAL STATEMENTS
The management board is responsible for:
• the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 of Book 2 of the Dutch Civil Code; and for
• such internal control as the management board determines is necessary to enable the preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
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119 NSI ANNUAL REPORT 2023
As part of the preparation of the financial statements, the management board is responsible for assessing the Company’s ability to continue as a going
concern. Based on the financial reporting frameworks mentioned, the management board should prepare the financial statements using the going-concern
basis of accounting unless the management board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do
so. The management board should disclose in the financial statements any event and circumstances that may cast significant doubt on the Company’s
ability to continue as a going concern.
The supervisory board is responsible for overseeing the Company’s financial reporting process.
OUR RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence to provide
a basis for our opinion. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high but not absolute
level of assurance, which makes it possible that we may not detect all material misstatements. Misstatements may arise due to fraud or error. They are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
of the financial statements.
Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A more detailed description of our responsibilities is set out in the appendix to our report.
Rotterdam, 7 March 2024
PricewaterhouseCoopers Accountants N.V.
A.A. Meijer MSc RA
APPENDIX TO OUR AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS 2023 OF NSI N.V.
In addition to what is included in our auditor’s report, we have further set out in this appendix our responsibilities for the audit of
the financial statements and explained what an audit involves.
THE AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
We have exercised professional judgement and have maintained professional scepticism throughout the audit in accordance with Dutch Standards on Auditing,
ethical requirements and independence requirements. Our audit consisted, among other things of the following:
• Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit proce-
dures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepre-
sentations, or the intentional override of internal control.
• Obtaining an understanding of internal control relevant to the audit 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 Company’s internal control.
• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the manage-
ment board.
• Concluding on the appropriateness of the management board’s use of the going-concern basis of accounting, and based on the audit evidence obtained,
concluding whether a material uncertainty exists related to events and/or conditions that may cast significant doubt on the Company’s ability to continue as
a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report and are made in the context of our opinion on the financial statements as a whole. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and evaluating whether the financial state-
ments represent the underlying transactions and events in a manner that achieves fair presentation.
Considering our ultimate responsibility for the opinion on the consolidated financial statements, we are responsible for the direction, supervision and performance
of the group audit. In this context, we have determined the nature and extent of the audit procedures for components of the Group to ensure that we performed
enough work to be able to give an opinion on the financial statements as a whole. Determining factors are the geographic structure of the Group, the significance
and/or risk profile of group entities or activities, the accounting processes and controls, and the industry in which the Group operates. On this basis, we selected
group entities for which an audit or review of financial information or specific balances was considered necessary.
We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify during our audit. In this respect, we also issue an additional report to the audit committee in accor-
dance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in this additional
report is consistent with our audit opinion in this auditor’s report.
We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related actions taken to eliminate
threats or safeguards applied.
From the matters communicated with the supervisory board, we determine those matters that were of most significance in the audit of the financial statements of
the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.
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120 NSI ANNUAL REPORT 2023
LIMITED ASSURANCE REPORT OF THE INDEPENDENT
AUDITOR
TO: THE GENERAL MEETING AND THE SUPERVISORY BOARD OF NSI N.V.
LIMITED ASSURANCE REPORT ON THE SELECTED NON-FINANCIAL INDICATORS IN THE
ANNUAL REPORT 2023
OUR CONCLUSION
We have examined the selected non-financial indicators marked with symbol in the Annual Report 2023 of NSI N.V. Based on the procedures performed
and evidence obtained, nothing has come to our attention that causes us to believe that the selected non-financial indicators marked with symbol
in the
Annual report 2023 of NSI N.V. over 2023 is not prepared in all material respects, in accordance with NSI N.V.'s reporting criteria.
WHAT WE HAVE EXAMINED
The object of our assurance engagement concerns the selected non-financial indicators marked with symbol included in the section ‘ESG (non-financial)
performance measures 2023’ in the Annual Report 2023 of NSI N.V. (hereafter: the indicators).
1. Total landlord- and tenant-obtained fuels, including its coverage on properties and applicable sqm.
2. Total landlord- and tenant-obtained heating and cooling, including its coverage on properties and applicable sqm.
3. Total landlord- and tenant-obtained electricity consumption, including its coverage on properties and applicable sqm.
4. (Sum of) annual kWh energy consumption and the building energy intensity.
5. (Sum of) annual GHG emissions, including its coverage on properties and applicable sqm, and the building carbon intensity.
6. Total water consumption, including its coverage on properties and applicable sqm, and building water intensity.
7. Total waste created, including its coverage on properties and applicable sqm.
8. BREEAM In-use: Asset Performance, including its coverage on properties and applicable sqm.
9. Diversity – Employee gender diversity.
10. Diversity – Gender pay ratio total (not for the individual categories).
11. Employee training and development.
12. Employee performance appraisals.
13. New hires & turnover (headcount).
14. Employee health and safety, absentee rate, injury rate and # of work-related fatalities.
15. Asset health and safety assessments.
16. Asset health and safety compliance.
17. EU taxonomy eligibility & alignment: revenue, capex and opex.
18. EU EPC label: meaning the label issued by a certified advisor in accordance with the rules set by the RVO or any other governmental or regulatory
authority or similar body measuring energy performance of real estate including the percentage of Dutch real estate portfolio of the Group compared
to the total market value of the Group’s real estate.
19. GRESB score: meaning the Global Real Estate Sustainability Benchmark measuring environmental, social and governance performance of real estate
of NSI.
THE BASIS FOR OUR CONCLUSION
We conducted our examination in accordance with Dutch law, including the Dutch Standard 3000A Assurance engagements, other than audits or reviews
of historical financial information (attestation-engagements). This engagement is aimed to provide limited assurance. Our responsibilities under this
standard are further described in the section ‘Our responsibilities for the examination’ of our report.
We believe that the assurance information we have obtained is sufficient and appropriate to provide a basis for our conclusion.
INDEPENDENCE AND QUALITY CONTROL
We are independent of NSI N.V. in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance opdrachten’ (ViO, Code
of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence requirements in the Netherlands.
Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Code of Ethics for Professional Accountants, a
regulation with respect to rules of professional conduct).
PwC applies the ‘Nadere voorschriften kwaliteitssystemen’ (NVKS, Regulations for quality systems) and accordingly maintains a comprehensive system
of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and other appli-
cable legal and regulatory requirements.
APPLICABLE CRITERIA
The indicators need to be read and understood together with the reporting criteria. The reporting criteria used for the preparation of the indicators are the
NSI N.V.’s reporting criteria, as included in the section ‘Measurement methodology and assumptions ESG (non-financial) performance measures’ of the
Annual Report 2023. The absence of an established practice on which to draw, to evaluate and measure non-financial information allows for different, but
acceptable, measurement techniques and can affect comparability between entities, and over time.
PricewaterhouseCoopers Accountants N.V., Thomas R. Malthusstraat 5, 1066 JR Amsterdam, P.O. Box 90357, 1006 BJ Amsterdam, the Netherlands, T: +31 (0) 88 792 00 20, F: +31 (0) 88 792 96 40, www.pwc.nl
‘PwC’ is the brand under which PricewaterhouseCoopers Accountants N.V. (Chamber of Commerce 34180285), PricewaterhouseCoopers Belastingadviseurs N.V. (Chamber of Commerce 34180284), PricewaterhouseCoopers Advisory N.V. (Chamber of
Commerce 34180287), PricewaterhouseCoopers Compliance Services B.V. (Chamber of Commerce 51414406), PricewaterhouseCoopers Pensions, Actuarial & Insurance Services B.V. (Chamber of Commerce 54226368), PricewaterhouseCoopers B.V.
(Chamber of Commerce 34180289) and other companies operate and provide services. These services are governed by General Terms and Conditions (‘algemene voorwaarden’), which include provisions regarding our liability. Purchases by these companies
are governed by General Terms and Conditions of Purchase (‘algemene inkoopvoorwaarden’). At www.pwc.nl more detailed information on these companies is available, including these General Terms and Conditions and the General Terms and Conditions
of Purchase, which have also been filed at the Amsterdam Chamber of Commerce.
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121 NSI ANNUAL REPORT 2023
RESPONSIBILITIES FOR THE INDICATORS AND THE EXAMINATION THEREOF
RESPONSIBILITIES OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD
The management board of NSI N.V. is responsible for the preparation of the indicators in accordance with the NSI N.V.'s reporting criteria, including the
identification of the intended users and the criteria being applicable for the purpose of these users. Furthermore, the management board is responsible
for such internal control as it determines is necessary to enable the preparation of the indicators that is free from material omission, whether due to fraud
or error.
The supervisory board is responsible for overseeing the company’s reporting process on the indicators.
OUR RESPONSIBILITIES FOR THE EXAMINATION
Our responsibility is to plan and perform our examination in a manner that allows us to obtain sufficient and appropriate evidence to provide a basis for
our conclusion.
Our conclusion aims to provide limited assurance. The procedures performed in this context consisted primarily of making inquiries with officers of the
entity and determining the plausibility of the information included in the indicators. The level of assurance obtained in a limited assurance engagement is
substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
PROCEDURES PERFORMED
We have exercised professional judgement and have maintained professional scepticism throughout the examination in accordance with the Dutch
Standard 3000A, ethical requirements and independence requirements.
Our examination consisted, among other things of the following:
• Assessing the suitability of the criteria used, their consistent application and related disclosures to the indicators.
• Obtaining an understanding of the reporting processes for the indicators, including obtaining a general understanding of internal control relevant to our
review.
• Identifying areas of the indicators with a higher risk of material misstatement, whether due to fraud or error. Designing and performing assurance proce-
dures aimed at determining the plausibility of the indicators, responsive to this risk analysis. These procedures consisted amongst others of:
– interviewing management and/or relevant staff at corporate level responsible for the sustainability strategy, policy and results;
– interviewing relevant staff responsible for providing the information for, carrying out internal control procedures on, and consolidating the data of the
indicators;
– determining the nature and extent of the review procedures for the group components and locations. For this, the nature, extent and/or risk profile of
these components are decisive. Our procedures were performed from the head office;
– obtaining assurance evidence that the indicators reconcile with underlying records of the company;
– reviewing, on a limited test basis, relevant internal and external documentation;
– performing an analytical review of the data and trends of the indicators submitted for consolidation at corporate level.
• Reading the information other than the indicators in the Annual Report 2023, which is not included in the scope of our review, to identify material incon-
sistencies with the indicators.
We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the review and significant findings that we
identify during our review.
Rotterdam, 7 March 2024
PricewaterhouseCoopers Accountants N.V.
A.A. Meijer RA
partner
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122 NSI ANNUAL REPORT 2023
SUPPLEMENTARY
INFORMATION
CONTENT
Other Data 123
NSI Share 124
Property List 125
ESG (non-financial) Performance Measures 126
EU Taxonomy eligibility and alignment 132
EPRA Key Performance Measures 138
Five Year Overview 140
Glossary Key Performance Indicators 141
Glossary Sustainability Performance Measures 143
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
123 NSI ANNUAL REPORT 2023
OTHER DATA
Appraisers
All investment properties in the portfolio have been appraised externally in June and December by qualified international firms Colliers,
JLL and Cushman & Wakefield. Appraisal methods are compliant with international standards and guidelines as defined by RICS
(Royal Institution of Chartered Surveyors).
% assets % value
Colliers
31.8% 35.3%
Cushman & Wakefield
31.8% 34.8%
JLL 36.4% 29.9%
Total
100.0% 100.0%
Top 10 tenants
# lease contract % total contracted rent
Goverment 10 13.8%
Spaces 3 10.2%
KPN 5 7.2%
Janssen Vaccines & Prevention 3 5.3%
WeWork 1
4.5%
Airbus Defence and Space 1
2.0%
ABN AMRO Bank 1 1.6%
Federatie Nederlandse Vakbeweging 1 1.1%
Seres 1 1.0%
BDO Holding 1 1.0%
27 47.5%
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
124 NSI ANNUAL REPORT 2023
INVESTOR RELATIONS
NSI strives for a high degree of transparency and continuous
communication with existing and potential shareholders, as well
as other stakeholders. NSI is committed to providing informa-
tion through means of road shows, presentations, press releases,
quarterly reports, annual reports and other publications, as well
as via the Company’s website. All relevant publications are placed
on the Company’s website.
SHARE CAPITAL
At 1 January 2023 NSI had 20,054,240 ordinary shares outstanding.
During 2023, in total 100,981 shares have been issued and distrib-
uted in relation the distribution of stock dividend (final 2022 divi-
dend and interim 2023 dividend). At 31 December 2023 NSI had
20,155,221 ordinary shares outstanding.
SHARE LISTING
The NSI share is listed on Euronext (registered under code 29232;
ISIN code: NL0000292324; Ticker symbol: NSI). The NSI share
has an option listing on Euronext Liffe, the derivatives stock
exchange of the Euronext (Ticker symbol: NSI).
MAJOR SHAREHOLDERS
Pursuant to the Dutch Financial Markets Supervision Act (Wet
op het Financieel toezicht) the Netherlands Authority Finan-
cial Markets (Autoriteit Financiële Markten) was notified of the
following statement of interest of 3% or more in NSI up to 31
December 2023.
31 December 2023
ICAMAP Investments SARL
10.0%
BlackRock, Inc.
5.8%
Clearance Capital Ltd.
5.1%
Ameriprise Financial < 3.0%
FINANCIAL CALENDAR
Publication trading update Q1 2024 14 April
Annual General Meeting 19 April 2024
Publication annual half year results 2024 17 July 2024
Publication trading update Q3 2024 16 October 2024
DIVIDEND POLICY AND DIVIDEND DISTRIBUTION
NSI’s dividend policy is to distributes at least 75% of the direct
result. The dividend is distributed in cash or optional in stock at
the discretion of the Management Board. NSI distributes dividend
twice a year.
Ex-dividend date (final dividend 2023) 23 April 2024
Record date 24 April 2024
CHANGES TO DUTCH REIT (FBI) REGIME
In its tax plan for 2023 the Dutch Government announced plans
to abolish the FBI regime. Legislation has now been passed such
that as of 2025 FBI’s can no longer directly invest in Dutch real
estate. NSI NV intends to remain an FBI at least up to the end of
2024. NSI has executed the necessary restructuring in 2023 to
limit the negative impact of this legislative change.
PERFORMANCE OF THE NSI SHARE
Share price low €16.62
Share price high €25.50
Closing price on 31 December 2023 €18.76
Proposed dividend per share for Total €1.52
Interim
€0.75
Final
€0.77
# outstanding shares outstanding
at 31 December 2023
20,155,221
Market capitalisation at 31 December 2023
€378 million
NSI SHARE
COMPARATIVE SHARE PRICE DEVELOPMENT
NSI
EPRA DEVELOPED EUROPE
the 2023 financial year
0
20
40
60
80
100
120
140
31-12-22
31-01-23
28-02-23
31-03-23
30-04-23
31-05-23
30-06-23
31-07-23
31-08-23
30-09-23
31-10-23
30-11-23
31-12-23
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
125 NSI ANNUAL REPORT 2023
PROPERTY LIST
AMSTERDAM
Property Property adress City Form
ownership
NEN-area
Year construction /
major renovation
Year acquisition
1 Atlanta Building Stadhouderskade 5-6 Amsterdam Freehold 6,542 1928 2021
2 Centerpoint I Hoogoorddreef 60 Amsterdam Leasehold 8,952 2007 2015
3 Centerpoint II Hoogoorddreef 62 Amsterdam Leasehold 6,224 1988 2015
4 Cruquiusweg Cruquiusweg 111 Amsterdam Freehold 3,278 2006 2007
5 Glasshouse Changiweg 130, Teleportboulevard 121-133 Amsterdam Leasehold 22,981 2009 2016
6 Hettenheuvelweg I Hettenheuvelweg 37-39 Amsterdam Leasehold 2,474 1987 1997
7 Hettenheuvelweg II Hettenheuvelweg 41-43 Amsterdam Leasehold 2,480 1988 1997
8 HNK Amsterdam Houthavens Van Diemenstraat 20-200 Amsterdam Leasehold 10,323 2014 1999
9 HNK Amsterdam Schinkel Anthony Fokkerweg 1 Amsterdam Freehold 5,373 2018 1997
10
HNK Amsterdam Sloterdijk Radarweg 60 Amsterdam Leasehold 16,011 2023 2018
11 HNK Amsterdam Zuidoost Burgemeester Stramanweg 102-108 Amsterdam Freehold 11,468 2016 1997
12 Hogehilweg I Hogehilweg 6 Amsterdam Leasehold 3,144 2008 2021
13 Hogehilweg II Hogehilweg 12 Amsterdam Leasehold 3,143 1985 1997
14 Koningin Wilhelminaplein Koningin Wilhelminaplein 18 Amsterdam Leasehold 5,090 1995 1997
15 Laanderpoort Bijlmerdreef 100 Amsterdam Leasehold 12,739 2013 2017
16 One20 Teleportboulevard 120 - 142 Amsterdam Leasehold 9,743 2001 2020
17 Q-Port Kingsfordweg 43-117 Amsterdam Leasehold 12,771 2001 2018
18 Solaris Eclips Arlandaweg 98 Amsterdam Leasehold 4,151 2001 2001
19 Trivium Derkinderenstraat 2-24 Amsterdam Leasehold 8,315 2000 2019
20 Vitrum Parnassusweg 101, 103, 126, 128 Amsterdam Leasehold 11,612 2013 2017
21 Vivaldi Offices I Barbara Strozzilaan 201-229 Amsterdam Leasehold 9,493 2009 2015
22 Vivaldi Offices II Barbara Strozzilaan 101-125 Amsterdam Leasehold 8,778 2009 2015
OTHER G4
Property Property adress City Form
ownership
NEN-area
Year construction /
major renovation
Year acquisition
1 Bentinck Huis Lange Voorhout 7 Den Haag Freehold 6,066 2020 2018
2 De Rode Olifant Zuid-Hollandlaan 7 Den Haag Freehold 9,993 1993 2007
3 HNK Den Haag Oude Middenweg 3E, 11-19 Den Haag Freehold 14,360 2014 2008
4 Alexanderhof Marten Meesweg 141-145 Rotterdam Freehold 3,095 1987 2015
5 Alexanderpoort Marten Meesweg 93-121 Rotterdam Freehold 9,324 2010 2015
6 HNK Rotterdam Centrum Westblaak 180 Rotterdam Leasehold 8,395 2016 2001
7 HNK Rotterdam Scheepvaartkwartier Vasteland 42-110 Rotterdam Freehold 21,532 2012 2008
8 Veerhaven Veerhaven 16-18 Rotterdam Freehold 1,641 2002 1996
9 Veerkade Veerkade 1-9C Rotterdam Freehold 5,783 1915 2000
10 Westblaak Westblaak 155-189 Rotterdam Freehold 6,163 1978 2021
11 HNK Utrecht Centraal Station Arthur van Schendelstraat 650-698, 700-748 Utrecht Leasehold 8,884 2015 2006
12 HNK Utrecht West Weg der Verenigde Naties 1 Utrecht Leasehold 2,947 2013 2007
13 Jacobsweerd Sint Jacobsstraat 200-499 Utrecht Freehold 14,781 1987 2018
14 Uniceflaan Uniceflaan 1 Utrecht Leasehold 12,083 1989 2017
OTHER NETHERLANDS
Property Property adress City Form
ownership
NEN-area
Year construction /
major renovatio
n
Year acquisition
1 Het Binnenhof Magistratenlaan 156-186 Den Bosch Freehold 10,436 2005 2015
2 Fellenoord Fellenoord 310-370 Eindhoven Freehold 4,183 1987 1996
3 Hooghuisstraat / Keizersgracht Hooghuisstraat 18-30, Keizersgracht 3-11 Eindhoven Freehold 10,908 1970 2008
4 Kennedyplein Kennedyplein 101 Eindhoven Freehold 6,643 2000 2017
5 Beukenhaghe Neptunusstraat 15-37 Hoofddorp Freehold 4,754 1991 1991
6 Archimedesweg Archimedesweg 17 - 25 Leiden Leasehold 2,522 2001 2001
7 Archimedesweg I Archimedesweg 6 Leiden Leasehold 7,207 2000 2017
8 Archimedesweg II Archimedesweg 30 Leiden Leasehold 2,686 1999 2019
9 Mendelweg Mendelweg 30 Leiden Leasehold 6,198 2008 2021
10 Newtonweg Newtonweg 1 Leiden Leasehold 9,408 1993 2015
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
126 NSI ANNUAL REPORT 2023
ESG (NON-FINANCIAL) PERFORMANCE MEASURES 2023
Energy GRI
Standard
302-1
ENV29 Fuels-Abs,
Fuels-LfL
annual kWh Fuels Total fuels purchased by
landlord
B 4,902,028 7,260,436 -32.5% 4,642,211 5,491,965 -15.5%
ENV30 Proportion of fuels
purchased by land-
lord from renewable
resources
- - - - - -
ENV31 Total fuels purchased
by tenant
C 2,749,891 2,882,537 -4.6% 2,749,891 2,612,892 5.2%
Proportion of fuels
purchased by tenant from
renewable resources
- - - - - -
Total landlord- and
tenant- purchased fuels
7,651,919 10,142,973 -24.6% 7,392,101 8,104,857 -8.8%
Proportion of landlord-
and tenant- purchased
fuels from renewable
resources
- - - - - -
ENV32 No. of applicable properties Fuels disclosure
coverage
22 out
of 22
26 out
of 27
- 20 out
of 20
20 out
of 20
-
Covered applicable sqm Fuels disclosure
coverage - %
100.0% 98.7% 1.6% 100.0% 100.0% 0.0%
% Proportion of fuels
estimated - PCAF
- - - - - -
GRI
Standard
302-1/302-2
ENV33 DH&C-Abs,
DH&C-LfL
annual kWh District
heating and
cooling
Total district heating and
cooling purchased by
landlord
C 9,459,150 9,310,981 1.6% 9,241,186 9,300,418 -0.6%
ENV35 Total district heating
and cooling purchased
by tenant
C 3,673,197 4,130,300 -11.1% 3,673,197 4,130,300 -11.1%
Total landlord- and
tenant- purchased
heating and cooling
C
13,132,347 13,441,275 -2.3% 12,914,383 13,430,718 -3.8%
ENV35 No. of applicable properties District heating and
cooling disclosure
coverage
22 out
of 23
22 out of 23 - 21 out
of 21
21 out
of 21
-
Covered applicable sqm District heating and
cooling disclosure
coverage - %
93.7% 95.2% -1.5% 100.0% 100.0% 0.0%
% Proportion of district
heating and cooling
estimated - PCAF
- - - - - -
GRI
Standard
302-1/302-2
ENV37 Elec-Abs,
Elec-LfL
annual kWh Electricity Total electricity
purchased by landlord
B+C 16,410,622 18,200,793 -9.8% 16,104,394 16,699,471 -3.6%
ENV11 Total generated off-
site electricity and
purchased by landlord
15,914,219 17,593,480 -9.5% 15,607,991 16,215,815 -3.7%
ENV8 Generated and
consumed on-site
electricity purchased by
landlord from renewable
resources
496,403 607,312 -18.3% 496,403 483,656 2.6%
ENV38 Proportion of on-site
landlord-obtained elec-
tricity from renewable
resources of electricity
purchased by landlord
3.0% 3.3% -9.3% 3.1% 2.9% 6.4%
ENV9 Generated on-site and
exported by landlord
60,460 - - 60,460 - -
ENV38 Proportion of off-site
electricity purchased by
landlord from renewable
resources of electricity
purchased by landlord
97,0% 96,4% 0.6% 96,9% 96,8% 0.1%
ENV39 Total electricity
purchased by tenant
C+D 13,579,246 14,130,181 -3.9% 13,141,985 13,773,211 -4.6%
ENV12 Total generated off-site
and purchased by tenant
13,563,446 14,077,305 -3.7% 13,126,185 13,720,335 -4.3%
ENV10 Generated and
consumed on-site by
third party or tenant
15,800 52,876 -70.1% 15,800 52,876 -70.1%
Proportion of on-site
tenant or third party-
obtained electricity from
renewable resources of
electricity purchased
by tenant
0.12% 0.37% -68.9% 0.1% 0.4% -68.7%
Proportion of off-site
electricity purchased by
tenant from renewable
resources of electricity
purchased by tenant
99.9% 99.6% 0.3% 99.9% 99.6% 0.3%
Total landlord- and
tenant- purchased elec-
tricity consumption
29,989,867 32,330,973 -7.2% 29,246,379 30,472,682 -4.0%
Absolute
performance (Abs)
Like-for-like
performance (LfL)
Impact area GRI
Standard
INREV
Indicator ID
Abbre viation
(EPRA)
Units of
measure
Indicator Notes 2023 2022 % change 2023 2022 % change
Refers to the limited assurance report of the independent auditor (see page 120). The limited assurance applies to the absolute performance only (excluding like for like performance).
A up to and including D refers to Measurement Methodology and Assumptions (see page 131)
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
127 NSI ANNUAL REPORT 2023
Absolute
performance (Abs)
Like-for-like
performance (LfL)
Impact area GRI
Standard
INREV
Indicator ID
Abbre viation
(EPRA)
Units of
measure
Indicator Notes 2023 2022 % change 2023 2022 % change
Energy GRI
Standard
302-1/302-2
ENV10 Elec-Abs,
Elec-LfL
annual kWh Electricity Proportion of on-site
landlord- and tenant-
purchased electricity
from renewable
resources of total
electricity
1.7% 2.0% -16.4% 1.8% 1.8% -0.5%
Proportion of off-site
landlord- and tenant-
electricity from rene-
wable resources of total
electricity
98.3% 98% 0.5% 98.2% 98.1% 0.2%
ENV40 No. of applicable properties Electricity disclosure
coverage
46 out
of 46
51 out of 51 - 43 out
of 43
43 out
of 43
-
Covered applicable sqm Electricity disclosure
coverage - %
100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
% Proportion of electricity
estimated - PCAF
- - - - - -
Solar panels On-site solar panels -
No.Applicable Assets
12 out
of 12
13 out of 14 - 12 out
of 12
11 out
of 11
-
No. of solar panels 2,318 2,678 -13.4% 2,318 2,318 0.0%
GRI
Standard
302-3
ENV1 Energy-Int
(all assets)
kWh Energy
consumption
Total energy consump-
tion purchased by
landlord
30,771,799 34,772,210 -11.5% 29,987,791 31,491,854 -4.8%
ENV2 Total energy consump-
tion purchased by tenant
20,002,334 21,143,018 -5.4% 19,565,073 20,516,403 -4.6%
ENV3 Estimated energy
consumption purchased
by landlord - PCAF
- - - - - -
Estimated energy
consumption purchased
by tenant - PCAF
- - - - - -
ENV4 annual kWh
/ sqm
Energy
Intensity
(sum of) annual kWh
energy consumption
50,774,133 55,915,222 -9.2% 49,552,864 52,008,257 -4.7%
(sum of) floor area (m
2
)
- Energy
A 406,141 427,197 -4.9% 380,001 380,562 -0.1%
ENV6, ENV7 Building energy intensity
125 131 -4,5% 130 137 -4,6%
No. of applicable properties Energy and associated
GHG dislosure coverage
46 out
of 46
52 out
of 52
- 43 out
of 43
43 out
of 43
-
Covered applicable sqm Energy and associated
GHG dislosure coverage
- %
98.4% 100.0% -1.6% 99.6% 99.7% -0.1%
ENV19 Covered
applicable
sqm
Total
operational
energy and
associated
GHG data
coverage
Common area - Energy
coverage
- - - - - -
Shared Services -
Energy coverage
- - - - - -
Tenant space - Energy
coverage
- - - - - -
Whole building - Energy
coverage
98.4% 100.0% -1.6% 99.6% 99.7% -0.1%
% Proportion of energy
estimated - PCAF
- - - - - -
% Proportion energy from
renewables resources
59.1% 57.7% 2.3% 59.0% 58.5% 0.9%
ENV13 Covered
applicable
sqm
Renewable
energy data
coverage
Common area - Rene-
wable Energy coverage
- - - - - -
Shared Services - Rene-
wable Energy coverage
- - - - - -
Tenant space - Rene-
wable Energy coverage
- - - - - -
Whole building - Rene-
wable Energy coverage
100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
Green-
house gas
emissions
- Location
based
GRI
Standard
305-1
ENV14 GHG-Dir-Abs annual kg
CO2e
Direct LB: Scope 1 897,855 1,329,822 -32.5% 850,267 1,005,908 -15.5%
ENV17 LB: estimated - PCAF
emissions Scope 1
- - - - - -
GRI
Standard
305-2 and
305-3
ENV15 GHG-Indir-
Abs
Indirect LB: Scope 2 8.090.807 9.045.782 -10.6% 7,765,329 8,361,441 -7.1%
ENV17 LB: estimated - PCAF
emissions Scope 2
- - - - - -
ENV16 LB: Scope 3 6.006.116 6.618.942 -9.3% 5,857,711 6,428,911 -8.9%
ENV17 LB: estimated - PCAF
emissions Scope 3
- - - - - -
GRI
Standard
305-4
ENV18 GHG-Int (all
assets)
kg CO2e /
sqm / year
GHG
emissions
intensity
LB: (sum of) annual
GHG emissions - Total
operational carbon
14,994,778 16,994,546 -11.8% 14,473,307 15,796,260 -8.4%
LB: (sum of) floor area
(m2) - GHG
A
406,141 427,197 -4.9% 380,001 380,562 -0.1%
ENV20, 21 LB: Building operational
carbon intensity
37 39 -7.0% 38 42 -8.2%
% LB: Proportion of GHG
estimated - PCAF
- - - - - -
Refers to the limited assurance report of the independent auditor (see page 120). The limited assurance applies to the absolute performance only (excluding like for like performance).
A up to and including D refers to Measurement Methodology and Assumptions (see page 131)
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
128 NSI ANNUAL REPORT 2023
Absolute
performance (Abs)
Like-for-like
performance (LfL)
Impact area GRI
Standard
INREV
Indicator ID
Abbre viation
(EPRA)
Units of
measure
Indicator Notes 2023 2022 % change 2023 2022 % change
Green-
house gas
emissions
- PCAF
Location
Based
GRI
Standard
305-4
ENV20, 21 GHG-Int (all
assets)
annual kg
CO2e
1a LB: Score 1 - - - - - -
1b LB: Score 2 14,827,001 16,767,996 -11.6% 14,473,307 15,796,260 -8.4%
2a LB: Score 3 - - - - - -
2b LB: Score 4 - - - - - -
3 LB: Score 5 - - - - - -
Green-
house gas
emissions
- Market
based*
GRI
Standard
305-1
ENV14 GHG-Dir-Abs annual kg
CO2e
Direct MB: Scope 1 897,855 1,329,822 -32.5% 850,267 1,005,908 -15.5%
ENV17 MB: estimated - PCAF
emissions Scope 1
- - - - - -
GRI
Standard
305-2 and
305-3
ENV15 GHG-Indir-
Abs
Indirect MB: Scope 2 853,215 839,850 1.6% 833,555 838,898 -0.6%
ENV17 MB: estimated - PCAF
emissions Scope 2
- - - - - -
ENV16 MB: Scope 3 834,992 900,519 -7.3% 834,992 851,130 -1.9%
ENV17 MB: estimated - PCAF
emissions Scope 3
- - - - - -
GRI
Standard
305-4
ENV18 GHG-Int (all
assets)
kg CO2e /
sqm / year
GHG
emissions
intensity
MB: (sum of) annual
GHG emissions - Total
operational carbon
2,586,063 3,070,191 -15.8% 2,518,815 2,695,936 -6.6%
MB: (sum of) floor area
(m2) - GHG
406,141 427,197 -4.9% 380,001 380,562 -0.1%
ENV20, 21 MB: Building operational
carbon intensity
6 7 -11.4% 7 7 -6.4%
% MB: Proportion of GHG
estimated - PCAF
- - - - - -
Green-
house gas
emissions
- PCAF
Market
Based
annual kg
CO2e
1a MB: Score 1 - - - - - -
1b MB: Score 2 2,586,063 3,070,191 -15.8% 2,518,815 2,695,936 -6.6%
2a MB: Score 3 - - - - - -
2b MB: Score 4 - - - - - -
3 MB: Score 5 - - - - - -
Water GRI
Standard
303-5
ENV24 Water-Abs,
Water-LfL
annual cubic
metres (m3)
Water Total purchased by land-
lord water consumption
B 55,213 49,723 11.0% 50,981 44,549 14.4%
ENV54
Total purchased by tenant
water consumption
C 22,005 34,221 -35.7% 20,590 13,257 55.3%
ENV56 Total water consumption
77,219 83,944 -8.0% 71,571 57,806 23.8%
Water-Int (all
assets)
annual m3 /
sqm
Water
Intensity
(sum of) floor area (m
2
)
- Water
A 391,469 420,300 -6.9% 353,936 353,936 0.0%
ENV57 Building water intensity
0,20 0,20 -1.2% 0,20 0,16 23.8%
ENV59 No. of applicable properties Water disclosure
coverage
43 out
of 46
50 out of 51 - 39 out
of 39
39 out
of 39
-
Covered applicable sqm Water disclosure
coverage - %
94,8% 97,4% -2,7% 100,0% 100,0% 0.0%
ENV55 % Proportion of water
estimated - PCAF
- - - - - -
Waste GRI
Standard
306-3 /
306-4 /
306-5
ENV63 Waste-Abs,
Waste-LfL
annual
tonnes
Waste type Hazardous waste - - - - - -
Non-Hazardous waste 750 938 -20.0% - - -
ENV62 Total waste created 750 938 -20.0% - - -
ENV25 Total landlord controlled
waste generated
699 938 -25.5% - - -
ENV65 proportion
by disposal
route (%)
Disposal
routes
Landfill (with of without
energy recovery)
- - - - - -
Incineration (with or
without energy recovery)
0.6% - 0.6% - - -
Diverted (total) 94.2% 94% 0.2% - - -
Diverted - Reuse - - - - - -
Diverted - Waste to
energy
63.3% 66% -4.1% - - -
Diverted - Recycling 30.9% 28% 10.4% - - -
Other / Unknown 5.2% 6% -13.5% - - -
ENV66 No. of applicable properties Waste disclosure
coverage
29 out
of 46
29 out of 51 - - - -
Covered applicable sqm Waste disclosure
coverage - %
65,7% 79,7% -17,6% - - -
ENV61 % Proportion of waste
estimated - PCAF
- - - - - -
Refers to the limited assurance report of the independent auditor (see page 120). The limited assurance applies to the absolute performance only (excluding like for like performance).
A up to and including D refers to Measurement Methodology and Assumptions (see page 131)
*Absolute data 2022 deviates from last year's annual report due to applying another emission factor.
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
129 NSI ANNUAL REPORT 2023
Absolute
performance (Abs)
Like-for-like
performance (LfL)
Impact area GRI
Standard
INREV
Indicator ID
Abbre viation
(EPRA)
Units of
measure
Indicator Notes 2023 2022 % change 2023 2022 % change
Certification ENV26 Cert-Tot % of m2 Percentage
of assets
with a
certificate
Common area - %
Certificate
- - - - - -
Shared Services - %
Certificate
- - - - - -
Tenant space - %
Certificate
- - - - - -
Whole building - %
Certificate
91.1% 86.7% 5.2% 97.7% 97.7% 0.0%
Green Buil-
ding Certifi-
cation
Covered
applicable
properties
Certified by at least one
Green Building Certi-
fication
42 out
of 46
46 out
of 49
- 41 out
of 46
41 out
of 46
-
Covered
applicable
sqm
Certified by at least one
Green Building Certifica-
tion - %
91.1% 94.0% -3.0% 97.7% 97.7% 0.0%
BREEAM
New
Construc-
tion -
Level of
certification
New Construction -
Outstanding
- - - - - -
New Consxtruction -
Excellent
- - - - - -
New Construction - Very
Good
- - - - - -
New Construction -
Good
- - - - - -
New Construction -
Pass
- - - - - -
BREEAM In
Use -
Level of
certification
In Use - Outstanding - - - - - -
In Use - Excellent
38% 36% 4.9% 40.8% 40.8% 0.0%
In Use - Very Good
35% 30% 15.7% 37.5% 37.5% 0.0%
In Use - Good
13% 14% -6.2% 14.2% 14.2% 0.0%
In Use - Pass
6% 10% -44.8% 5.1% 5.1% 0.0%
In Use - Acceptable
0% 4% -100.0% - - -
GPR
Gebouw -
Level of
certification
Design & Construction - - - - - -
Operational - - - - - -
Energy
Ratings
ENV27 % of m2 Percentage
of assets
with an
energy rating
Common area - %
Energy Rating
- - - - - -
Shared Services - %
Energy Rating
- - - - - -
Tenant space - %
Energy Rating
- - - - - -
Whole building - %
Energy Rating
100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
EU EPC Covered
applicable
properties
Certified EU EPC
46 out
of 46
49 out of 49 - 43 out
of 46
43 out
of 46
-
% of asset
value
Certified EU EPC - %
100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
Level of
certification
A+++++
- - - - - -
A++++
- - - - - -
A+++
- - - - - -
A++
15% 13% 16.3% 16.3% 16.3% 0.0%
A+
12% 10% 18.9% 12.9% 12.9% 0.0%
A
68% 65% -9.7% 63.5% 63.5% 0.0%
B
4% 8% 5.8% 4.8% 4.8% 0.0%
C
1% 4% 45.8% 2.5% 2.5% 0.0%
D
- - - - - -
E
- - - - - -
F
- - - - - -
G
- - - - - -
Refers to the limited assurance report of the independent auditor (see page 120). The limited assurance applies to the absolute performance only (excluding like for like performance).
A up to and including D refers to Measurement Methodology and Assumptions (see page 131)
GRESB
Score
94 out of
100
93 out of
100
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
130 NSI ANNUAL REPORT 2023
ENVIRONMENTAL SUSTAINABILITY PERFORMANCE
MEASURES
Note 2023 eligibility 2023 alignment 2023 alignment*
Turnover 100% 0% 93.3%
Capex 100% 0% 95.5%
Opex 100% 0% 90.4%
SOCIAL PERFORMANCE MEASURES
Note 2023 2022
Diversity - Emp Employee gender diversity Female 58.2% 52.3% Percentage of employees
Male 41.8% 47.7%
Diversity-Pay Gender pay ratio Management Board 1.18 1.23 Ratio
Senior Management 1.33 1.36
Operations 2.44 2.07
Support Staff 1.17 1.00
Total 2.03 1.74
Emp-Training Employee training and development 55 83
Emp-Dev Employee performance appraisals 100.0% 100.0%
Emp- Turnover New hires and turnover New hires 15 20 New hires headcount
22.4% 30.8% New hires percentage
Leavers -13 -15 Leavers headcount
-19.4% -23.1% Leavers percentage
H&S-Emp Employee health and safety Absentee rate 4.2% 3.5%
Injury rate 0.0% 0.0%
Work related fatalities 0 0
H&S-Asset Asset health and safety assessments 14 out of 46 33 out of 49
H&S-Comp Asset health and safety compliance Number of incidents 3 2
Comty-Eng Community engagement, impact
assessment and development programs
9 out of 46 10 out of 49 HNK office app in all HNK’s
EU TAXONOMY
2023 2022
Gov-Board Composition of the highest governance body Page 55-59 Page 64-68 See composition and total number
Gov-Selec
Process for nominating and selecting the highest governance body
Page 55-59 Page 64-68 Narrative on process
Gov-CoI Process for managing conflicts of interest Page 55-59 Page 64-68 Narrative on process
GOVERNANCE PERFORMANCE MEASURES
refers to the limited assurance report of the independent auditor (see page 120)
* Alignment if minimum social safeguards would have been fully met. See page 132 for more information.
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
131 NSI ANNUAL REPORT 2023
MEASUREMENT METHODOLOGY AND ASSUMPTIONS ESG
(NON-FINANCIAL) PERFORMANCE MEASURES
NSI reports environmental, social and governance performance in
accordance with the EPRA Sustainability Best Practice Recom-
mendations (sBPR). This reporting is split into several sections
consisting of the overarching EPRA recommendations, the envi-
ronmental performance indicators, the social performance indica-
tors and the governance performance indicators.
REPORTING PERIOD AND ORGANISATIONAL BOUNDARIES
The reporting period for this report is the same as for the annual
financial report. NSI includes its ESG performance in its annual
report since 2017, and publishes a separate sustainability report
since 2020. The analysis includes data of the portfolio as per 31
December 2023. Assets that were acquired (not applicable in
2023) or disposed during 2023 were excluded from the Like-for-
like performance analysis.
MEASUREMENT SCOPE AND COVERAGE
In 2023, 100% of the total portfolio value belonged to the measure-
ment scope, which corresponds to 46 properties, including the
NSI head office. The consumption data were collected using our
invoice data, invoice data obtained from tenants, combined with
smart meters and data obtained from tenants. In the event of
incomplete or missing data, the data was extrapolated in accor-
dance with EPRA guidelines or the asset was excluded.
With regard to the measurement of electricity, the following apply:
• The energy generated by the solar panels has not been
deducted from the total electricity consumption
• The consumption of the electric charging stations is excluded
in the total electricity consumption.
• The electricity consumption of the tenant is based on renew-
able energy. The calculation of the ‘building energy intensity’ is
based on all buildings for which data is available for at least 9
months. In case of missing data, the data is extrapolated to a
whole year. On page 138 to 139 you can find the EPRA tables
with the various performances, including the share of buildings
in scope for each of the performance indicators and the extent
of data coverage/ extrapolation.
In addition, there has been a change in the methodology and
presentation of GreenHouseGas emissions. In the Annual Report
2023, the emissions are presented on a market-based and loca-
tion-based basis.
Finally, there has been a change in the methodology used to
convert energy consumption into CO
2
emissions. The meth-
odology has changed from CO
2
emissiefactoren.nl to CRREM
(Carbon Risk Real Estate Monitor's) emission factors.
ESTIMATION AND EXTRAPOLATION OF CONSUMPTION DATA
At the time of publication of this report, not all data are available
for the measurement year 2023 yet. If data for at least ten months
is available, it has been extrapolated in accordance with EPRA
guidelines. If the data of one of the meters in a building is missing,
the square meters of the building will be adjusted pro-rata for the
purpose of determining the energy-, CO
2
- and water intensity
and calculating the data coverage. In accordance with the EPRA
guidelines, a like for like analysis was carried out for several envi-
ronmental indicators. The analysis enables NSI to observe evolu-
tions in consumption, irrespective of the fact that new assets are
added to the scope of measurement.
EXPLANATORY NOTES TO SUSTAINABILITY PERFORMANCE
MEASURES
The like for like (LfL) calculation reflects consumption of the
portfolio that has been consistently in operation during the
most recent two full reporting years, in line with the EPRA sBPR
definition. As a result, assets sold in the reporting period are not
included in this calculation.
This means that:
• 3 assets are excluded from Like-for-Like Performance as these
assets were not fully operational during the reporting period of
2023.
Furthermore, the Notes in the table refer to the following:
A Square meters based on CRREM methodology (Gross floor
area minus internal parking garage minus outer façade).
B Normalization (as a consequence of Acquisitions and Disposi-
tions during the year):
• When a property is in the portfolio for less than 9 months (< 274
days), the property will be excluded.
• When a property is in the portfolio for 9 months or longer (=>
274 days), the property will be included. For these properties,
the consumption for the remaining part of the year should be
estimated/extrapolated and explained in the report.
C Reported consumption changes compared with last year due
to additional data availability. This results in a higher data
coverage.
D Data of last year was not accurate due to a double counting.
This is corrected.
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
132 NSI ANNUAL REPORT 2023
OWN ASSETS THAT ARE ALIGNED WITH THE EU TAXONOMY
OF SUSTAINABLE ACTIVITIES, NOW OR IN TIME
We aim to own assets that are aligned, now or in time, with the EU
taxonomy, the classification system that translates the EU’s climate
and environmental objectives into criteria for specific economic
activities for investment purposes. In order to determine alignment
to the EU Taxonomy, the economic activity of the company must
first be eligible. If the activity is not defined in the description of the
EU taxonomy compass, it is not eligible under the EU Taxonomy
and therefore, it cannot be considered as environmentally sustain-
able. Second, once the economic activity has been deemed eligible,
it must be determined that it makes a substantial contribution to at
least one of the EU’s climate and environmental objectives, while
at the same time not significantly harming (DNSH – do no signifi-
cant harm) any of the other objectives and meeting minimum social
safeguards.
The taxonomy defines 6 environmental objectives.
• Climate change mitigation
• Climate change adaptation
• The sustainable use and protection of water and marine resources
• The transition to a circular economy
• Pollution prevention and control
• The protection and restoration of biodiversity and ecosystem
Of the 6 environmental objectives, EPRA’s analysis indicates that only
the objectives of the ‘Climate Change Mitigation’, ‘Climate Change
Adaptation’ and ‘Transition to a Circular Economy’ have a focus on
the Real Estate sector. Only Climate change mitigation and Climate
Change adaptation have been in force since 2022. The other four
remaining objectives were adopted by Commission Delegated Regu-
lation (not in force until publication in the Official Journal) of 27 June
2023 of the European Parliament and are in force since 2023.
EU TAXONOMY
CONSTRUCTION AND RENOVATION
OF BUILDINGS
INSTALLATION, MAINTENANCE AND
REPAIR ACTIVITIES
ACQUISITION AND
OWNERSHIP OF
BUILDINGS
KEY ACTIVITIES OF THE TSC FOR CONSTRUCTION AND REAL ESTATE
STAND-ALONE TRANSITIONAL ENABLING ENABLING ENABLING ENABLING STAND-ALONE
Constructionof
newbuildings
Renovationof
existing buildings
Individual reno-
vation measures
consistingof Instal-
lation, maintenance
and repairof energy
efficiency equip-
ment
Installation, main-
tenance and repair
of charging stations
for electric vehicles
in buildings (and
parking spaces
attached to
buildings)
Installation, main-
tenance and repair
of instruments and
devices for measu-
ring, regulating and
controlling energy
performance of
buildings
Installation, mainte-
nance and repair of
renewable energy
technologies
Acquisition and
ownership of buil-
dings
Note: Construction
and civil enginee-
ring works or prepa-
ration thereof.
Note: Buying real
estate and exerci-
sing ownership of
that real estate.
Note:
Development
of building projects
for residential and
non-residential
buildings by brin-
ging together finan-
cial, technical and
physical means to
achieve the building-
projectsforlatersa-
leand the construc-
tion of complete
buildings,onow-
naccountforsale,
onafeeorcontract-
basis.
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
133 NSI ANNUAL REPORT 2023
NSI’S TAXONOMY ELIGIBILITY AND ALIGNMENT
• Eligibility: An analysis was performed on NSI’s portfolio based on
the Taxonomy-recognised activity of “Acquisition and Ownership
of buildings” as defined by the EU taxonomy of sustainable activi-
ties (see graph on page 132 for the Key activities).
• The objective to which this activity contributes is “Climate
change mitigation” defined as “contributing to the stabilisation of
greenhouse gas emissions by avoiding or reducing them or by
enhancing greenhouse gas removals”. To prove this, the activity
must comply with specific Technical Screening Criteria (TSC)- a
set of conditions specific to this activity.
• The TSC for substantial contribution for the economic activity
“Acquisition and ownership of buildings”, largely depend on the
type of buildings in scope (residential vs non-residential), the
date in which the building was built (different conditions for build-
ings built before or after 31 December 2020) and on the energy
performance certificates. Please see the graph below for a more
detailed explanation.
• The CapEx KPI is defined as Taxonomy-aligned CapEx (numer-
ator) divided by our total CapEx (denominator). The allocation of
our Capital Expenditures (CapEx) towards assets aligned with
the EU Taxonomy offers a transparent insight into NSI's strategic
path. Specifically, channelling a significant portion of our overall
CapEx into assets that align with the EU Taxonomy demonstrates
our commitment to fostering a portfolio that is both sustainable
and resilient to climate change. This approach not only guides
our transition strategies but also provides the necessary finan-
cial support. To ascertain the proportion of our CapEx that aligns
with the EU Taxonomy, we calculate this by dividing the CapEx
invested in EU Taxonomy-compliant assets by the total CapEx
allocated across all assets.
• The proportion of our Operational Expenditure and Turnover
that align with EU Taxonomy is calculated in the same way but
provides us with different insights. Namely, the proportion of
OpEx that is EU Taxonomy aligned, tells us what proportion of
Operational Expenditure goes to EU Taxonomy-aligned assets,
and it is thus invested in assets that meet the according sustain-
ability criteria.
• Finally, the proportion of turnover from EU Taxonomy-aligned
assets provides us with insights into how much turnover comes
from activities that meet the sustainability criteria outlined by the
EU Taxonomy. All in all, these proportions CapEx, OpEx, and turn-
over from EU Taxonomy-aligned assets demonstrate how much
of our current assets are aligned with the sustainable principles
that are required for the EU Taxonomy.
• In order to ensure that the activity does no significantly harm to
the other objectives, it should be verified that adaptation solutions
are put in place to tackle the climate risk hazards which have been
assessed as “material”.
• The analysis was performed on each individual asset based on
the TSC for the Acquisition and ownership of buildings as defined
by the EU taxonomy. Through a climate risk hazard and mitigation
plan the DNSH condition was assessed. The Do No Significant
Harm (DNSH) criteria were evaluated through two assessments.
Initially, Cushman & Wakefield conducted an analysis to identify
climate risks that could significantly affect the financial perfor-
mance of our assets, in alignment with the DGBC Framework
for Climate Adaptive Buildings. Following this analysis, Sweco
further examined specific assets flagged for one or more physical
climate-related risks. This examination involved a comprehensive
assessment of climate risk and vulnerability at the asset level.
Based on these outcomes, a tailored climate adaptation strategy
was developed to mitigate each asset identified as being at
risk. Implementation of the adaptation plans is scheduled to be
executed over the next five years.
• In this analysis, all our assets were assessed against the activity
“acquisition and ownership of buildings”. As a result, investment
properties under construction and renovations are not aligned
with the EU taxonomy based on this activity. We will explore in
2024 alignment against other EU taxonomy-eligible relevant activ-
ities for these buildings.
• NSI adheres to international standards for human rights as the
OECD Guidelines for Multinational Enterprises and the UN
Guiding Principles on Business and Human Rights, including the
principles and rights set out in the eight fundamental conventions
identified in the Declaration of the International Labour Organisa-
tion on Fundamental Principles and Rights at Work and the Inter-
national Bill of Human Rights.
• Based on this, the proportion of the portfolio that would be EU
taxonomy aligned based on the Climate Change Mitigaton:
2023 eligibility 2023 alignment 2023 alignment
*
Turnover 100% 0% 93.3%
Capex 100% 0% 95.5%
Opex 100% 0% 90.4%
The EU Taxonomy guidelines expect a bundle of coherent processes
aimed at identifying negative impacts on the four pillars of minimum
social safeguards (human rights & labour rights, bribery and corrup-
tion, taxation and fair competition), identifying how these can be
prevented or reduced, the implementation of these actions, the
monitoring of the results and the method of communicating how
negative impacts are addressed in relation to the company's own
operations, the value chain and other business relationships. NSI
does not have all these process steps in place to meet the require-
ments of the minimum social safeguards. Additional efforts will be
made in 2024 and beyond to ensure to meet these conditions for
alignment.
NSI made subsequent progress on EU Taxonomy alignment
throughout 2023. Alignment based on the technical assessment
points increased compared to last year on Revenue, Capex and
Opex. Progress was also realized with respect to minimum safe-
guard requirements including the adoption of relevant policies. Addi-
tional steps will be made in 2024 and beyond to ensure compliance
with the minimum safeguard requirements can be verified.
The extensive EPRA taxonomy eligibility and alignment table against
revenue, capex and opex can be found on pages 135 to 137.
* Alignment if minimum social safeguards would have been fully met.
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
134 NSI ANNUAL REPORT 2023
NO
NO
NO
TSC SUBSTANTIAL CONTRIBUTION CHECK
ACQUISITION AND OWNERSHIP OF BUILDINGS
WAS YOUR BUILDING BUILT BEFORE 31 DECEMBER 2020?
NOYES
Does your building have an
EPC class A?
NO
Is your building:
1. Within the top 15% of the national
or regional building stock in terms
of PED?
2. I s this adequately
demonstrated?
3. Does it at least compare the perfor-
mance of the assets to the one
built before 31 December 2020 and
distinguish between residential and
non- residential?
Is the PED at least 10% lower than the
threshold set for NZEB (nearly zero-
energy building)? Is the energy perfor-
mance certified using EPC?
The activity
is not aligned
YES
NOYES
Is your building larger than
5000 m
2
?
Did the building undergo testing for
air-tightness and thermal integrity and
report deviations in level of perfor-
mance? Alternatively, is there a robust/
traceable quality control process during
construction?
The activity
is not aligned
The activity
is not aligned
Has the life-cycle GWP from construc-
tion been calculated for each stage
and disclosed to investors/clients on
demand?
YES
YESYES
YES
Is your building large and non-residential?
Is efficiently operated through energy performance monitoring and assessment?
YES
YES
The activity complies with the substantial contribution TSC,
the alignment assessment can proceed to DNSH check
NO
The activity
is not aligned
NO
As the building is not larger than 5000 m
2
, there are no further checks
There are no further checks
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
135 NSI ANNUAL REPORT 2023
Substantial contribution criteria Do not significant harm criteria
Economic
activity
Codes
Absolute [Turnover]
Proportion of [Turnover] - %
Climate Change Mitigation
Climate Change Adaptation
Water and Marine Resources
Circular Economy
Pollution
Biodiversity and Ecosystem
Climate Change Mitigation
Climate Change Adaptation
Water and Marine Resources
Circular Economy
Pollution
Biodiversity and Ecosystem
Minimum safeguards
Taxonomy Aligned proportion of [Turnover] year N - %
Taxonomy Aligned proportion of [Turnover] year N-1 - %
Category Enabling activity - %
Category Transitional activity - %
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
%
%
%
A. Taxonomy Eligible activities (A1 + A2): %
A.1 Enviromentally sustainable actitivies (Taxonomy aligned)
Activity 1 - Acquisition
and ownership of
buildings (7.7)
L68 71,46
100,0%
93,3% 0,0% 0,0% 0,0% 0,0% 0,0% Y Y N/A N/A N/A N/A Y 93,3% 0,0% N/A N/A
Turnover of environ-
mentally sustainable
activities (Taxonomy-
aligned) (A.1)
100,0%
93,3% 0,0% 0,0% 0,0% 0,0% 0,0% 93,3%
A.2 Enviromentally sustainable actitivies (not Taxonomy aligned)
Activity 1 - Acquisition
and ownership of
buildings (7.7)
L68
Turnover of Taxo-
nomy-eligble but
not enviromentally
sustainable activities
(not Taxonomy-
aligned activities)
(A.2)
Total (A.1 + A.2)
100,0%
93,3% 0,0% 0,0% 0,0% 0,0% 0,0% 93,3%
B. Non-Eligible activities: %
Turnover of non-
Eligble activities
0,0%
Total (A + B)
100,0%
TAXONOMY ELIGIBILITY AND ALIGNMENT
AGAINST TURNOVER, CAPEX AND OPEX
TABLE 1
Table - Proportion of Turnover from products or services associated with economic activities that qualify as enviromentally sustainable
- disclosure covering year N
The alignment would have been as follows if minimal social safeguards would have been fully met:
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
136 NSI ANNUAL REPORT 2023
Substantial contribution criteria Do not significant harm criteria
Economic
activity
Codes
Absolute [CapEx]
Proportion of [CapEx] - %
Climate Change Mitigation
Climate Change Adaptation
Water and Marine Resources
Circular Economy
Pollution
Biodiversity and Ecosystem
Climate Change Mitigation
Climate Change Adaptation
Water and Marine Resources
Circular Economy
Pollution
Biodiversity and Ecosystem
Minimum safeguards
Taxonomy Aligned proportion of [CapEx] year N - %
Taxonomy Aligned proportion of [CapEx] year N-1 - %
Category Enabling activity - %
Category Transitional activity - %
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
A. Taxonomy Eligible activities (A1 + A2): %
A.1 Enviromentally sustainable actitivies (Taxonomy aligned)
Activity 1 - Acquisition
and ownership of
buildings (7.7)
L68
13,99
100,0%
95,5% 0,0% 0,0% 0,0% 0,0% 0,0% Y Y N/A N/A N/A N/A Y 95,5% 0,0% N/A N/A
CapEx of environ-
mentally sustainable
activities (Taxonomy-
aligned) (A.1)
100,0%
95,5% 0,0% 0,0% 0,0% 0,0% 0,0% 95,5%
A.2 Enviromentally sustainable actitivies (not Taxonomy aligned)
Activity 1 - Acquisition
and ownership of
buildings (7.7)
L68
CapEx of Taxonomy-
eligble but not envi-
romentally sustai-
nable activities (not
Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
100,0%
95,5% 0,0% 0,0% 0,0% 0,0% 0,0% 95,5%
B. Non-Eligible activities: %
CapEx of non-Eligble
activities
0,0%
Total (A + B)
100,0%
TABLE 2
Table - Proportion of CapEx from products or services associated with economic activities that qualify as enviromentally sustainable -
disclosure covering year N
The alignment would have been as follows if minimal social safeguards would have been fully met:
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137 NSI ANNUAL REPORT 2023
Substantial contribution criteria Do not significant harm criteria
Economic
activity
Codes
Absolute [OpEx]
Proportion of [OpEx] - %
Climate Change Mitigation
Climate Change Adaptation
Water and Marine Resources
Circular Economy
Pollution
Biodiversity and Ecosystem
Climate Change Mitigation
Climate Change Adaptation
Water and Marine Resources
Circular Economy
Pollution
Biodiversity and Ecosystem
Minimum safeguards
Taxonomy Aligned proportion of [OpEx] year N - %
Taxonomy Aligned proportion of [OpEx] year N-1 - %
Category Enabling activity - %
Category Transitional activity - %
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
A. Taxonomy Eligible activities (A1 + A2): %
A.1 Enviromentally sustainable actitivies (Taxonomy aligned)
Activity 1 - Acquisition
and ownership of
buildings (7.7)
L68
11,18
100,0%
90,4% 0,0% 0,0% 0,0% 0,0% 0,0% Y Y N/A N/A N/A N/A Y 90,4% 0,0% N/A N/A
OpEx of environ-
mentally sustainable
activities (Taxonomy-
aligned) (A.1)
100,0%
90,4% 0,0% 0,0% 0,0% 0,0% 0,0% 90,4%
A.2 Enviromentally sustainable actitivies (not Taxonomy aligned)
Activity 1 - Acquisition
and ownership of
buildings (7.7)
L68
OpEx of Taxonomy-
eligble but not envi-
romentally sustai-
nable activities (not
Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
100,0%
90,4% 0,0% 0,0% 0,0% 0,0% 0,0% 90,4%
B. Non-Eligible activities: %
OpEx of non-Eligble
activities
0,0%
Total (A + B)
100,0%
TABLE 3
Table - Proportion of OpEx from products or services associated with economic activities that qualify as enviromentally sustainable -
disclosure covering year N
The alignment would have been as follows if minimal social safeguards would have been fully met:
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138 NSI ANNUAL REPORT 2023
EPRA KEY PERFORMANCE MEASURES
OVERVIEW KEY PERFORMANCE INDICATORS
2023 2022
€ ' 000 per share (€) € ' 000 per share (€)
EPRA earnings 40,402 2.01 42,733 2.15
EPRA cost ratio (incl. direct vacancy costs) 30.8% 28.8%
EPRA cost ratio (excl. direct vacancy costs) 29.1% 27.8%
EPRA property related capital expenditure 19,425 12,776
31 December 2023 31 December 2022
€ ' 000 per share (€) € ' 000 per share (€)
EPRA NRV 819,913 40.68 987,844 49.26
EPRA NTA 711,460 35.30 885,774 44.17
EPRA NDV 733,561 36.40 918,162 45.78
EPRA LTV 34.4% 29.3%
EPRA net initial yield (NIY) 5.3% 4.6%
EPRA topped-up net initial yield 5.8% 5.0%
EPRA vacancy rate 5.2% 6.2%
EPRA EARNINGS
2023 2022
Gross rental income 71,199 71,309
Service costs not recharged -1,926 -1,322
Operating costs -10,852 -10,663
Net rental income 58,421 59,325
Administrative costs -9,120 -8,566
Net financing result -8,349 -8,024
Direct investment result before tax 40,953 42,735
Corporate income tax -550 -2
Direct investment result / EPRA earnings 40,402 42,733
Direct investment result / EPRA earnings per share 2.01 2.15
EPRA COST RATIO
2023 2022
Administrative costs 9,120 8,566
Service costs not recharged 1,926 1,322
Operating costs (adjusted for municipality taxes) 10,852 10,663
Leasehold 0 -3
EPRA costs (including direct vacancy costs) 21,898 20,548
Direct vacancy costs -1,187 -753
EPRA costs (excluding direct vacancy costs) 20,711 19,795
Gross rental income 71,199 71,309
EPRA gross rental income 71,199 71,309
EPRA cost ratio (incl. direct vacancy costs) 30.8% 28.8%
EPRA cost ratio (excl. direct vacancy costs) 29.1% 27.8%
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139 NSI ANNUAL REPORT 2023
EPRA PROPERTY RELATED CAPITAL EXPENDITURE
2023 2022
Acquisitions -104
Development 5,466 7,233
Like-for-like portfolio 13,244 5,648
Other 715 0
EPRA capital expenditure 19,425 12,776
EPRA NAV
31 December 2023 31 December 2022
EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV
IFRS Equity attributable to shareholders 709,882 709,882 709,882 887,008 887,008 887,008
Hybrid instruments
Diluted NAV 709,882 709,882 709,882 887,008 887,008 887,008
Diluted NAV at fair value 709,882 709,882 709,882 887,008 887,008 887,008
Deferred tax in relation to fair value gains
of investment property 2 2
Fair value of financial instruments 1,608 1,608 -1,163 -1,163
Intangibles as per IFRS balance sheet -32 -32 -72 -72
Fair value of fixed interest rate debt 23,711 31,225
Real estate transfer tax 108,422 101,999
NAV 819,913 711,460 733,561 987,844 885,774 918,162
Fully diluted number of shares 20,155,221 20,155,221 20,155,221 20,054,241 20,054,241 20,054,241
NAV per share 40.68 35.30 36.40 49.26 44.17 45.78
EPRA YIELD
31 December 2023 31 December 2022
Investment property including assets held for sale 1,037,215 1,274,988
Developments -53,730 -58,878
Property investments 983,485 1,216,110
Allowance for estimated purchasers' costs 110,101 109,450
Gross up completed property portfolio valuation 1,093,586 1,325,560
Annualised cash passing rental income 71,835 72,852
Annualised property outgoings -13,725 -11,951
Annualised net rent 58,110 60,901
Notional rent expiration of rent free periods or other lease incentives 5,661 5,940
Topped-up annualised net rent 63,771 66,841
EPRA net initial yield 5.3% 4.6%
EPRA topped-up net initial yield 5.8% 5.0%
EPRA VACANCY
31 December 2023 31 December 2022
Estimated rental value of vacant space 4,320 5,510
Estimated rental value of the whole portfolio 83,516 88,317
EPRA vacancy 5.2% 6.2%
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
140 NSI ANNUAL REPORT 2023
FIVE YEAR OVERVIEW
KEY FINANCIAL METRICS - REVENUES AND EARNINGS
2019 2020 2021 2022 2023
Net rental income 67,227 60,466 63,272 59,325 58,421
Net rental income - like-for-like growth 5.2% 0.8% 3.0% 7.4% 4.6%
Direct investment result 49,439 44,943 46,373 42,733 40,402
Indirect investment result 146,858 -65,357 74,588 -74,103 -182,772
Total investment result 196,297 -20,414 120,961 -31,370 -142,370
EPRA earnings per share 2.64 2.35 2.38 2.15 2.01
Weighted average number of shares outstanding 18,751,178 19,138,717 19,499,825 19,869,975 20,117,872
EPRA cost ratio (excl. direct vacancy costs) 26.3% 28.4% 26.0% 27.8% 29.1%
KEY FINANCIAL METRICS - BALANCE SHEET
31 Dec. 2019 31 Dec. 2020 31 Dec. 2021 31 Dec. 2022 31 Dec. 2023
Investment property 1,278,992 1,240,192 1,338,034 1,259,235 1,028,801
Net debt -352,632 -366,194 -382,073 -365,480 -344,443
Other assets / liabilities -23,052 -19,560 -7,504 -6,746 25,524
Equity 903,308 854,438 948,457 887,008 709,882
EPRA NTA per share 47.95 44.44 48.23 44.17 35.30
Number of shares outstanding 18,917,764 19,291,415 19,698,207 20,054,241 20,155,221
Net LTV 27.4% 29.2% 28.2% 28.7% 33.0%
KEY ESG METRICS
2019 2020 2021 2022 2023
EPC-label (percentage portfolio - label A or better) 61% 74% 81% 88% 95%
GRESB-score 71 88 92 93 94
KEY PORTFOLIO METRICS
31 Dec. 2019 31 Dec. 2020 31 Dec. 2021 31 Dec. 2022 31 Dec. 2023
Number of properties 65 60 52 49 46
Market value (€m) 1,287 1,253 1,355 1,275 1,043
Lettable area (sqm k) 491 473 409 382 351
Annual contracted rent (€m) 81 84 76 78 77
ERV (€m) 92 93 87 88 84
EPRA net initial yield 4.6% 4.5% 4.1% 4.6% 5.3%
Gross initial yield 6.4% 6.7% 5.9% 6.4% 7.9%
EPRA vacancy 7.1% 7.0% 5.9% 6.2% 5.2%
Wault (yrs) 4.2 4.0 4.1 3.9 3.7
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141 NSI ANNUAL REPORT 2023
AVERAGE RENT PER SQM
The total annual contracted rent divided by the total leased square
meters.
CERTIFICATION
The percentage of assets within the portfolio that have formally
obtained sustainability certification, ratings or labelling valid at the end
of the reporting period.
NSI reports on the following certificates:
• BREEAM (based on sqm);
• EPC label (based on market value);
• GRESB-score (expressed as an overall score for total NSI).
COST RATIO (EPRA)
EPRA costs include all administrative costs, net service costs and
operating expenses as reported under IFRS, but do not include ground
rent costs. These costs are reflected including and excluding direct
vacancy costs. The EPRA cost ratio is calculated as a percentage of
gross rental income less ground rent costs.
DUTCH REIT (FBI-REGIME)
NSI qualifies as a Dutch Real Estate Investment Trust (fiscale beleg-
gingsinstelling or FBI) and as such is charged a corporate income tax
rate of 0% on its earnings. The tax regime stipulates certain conditions,
such as a maximum ratio of 60% between debt and the book value of
real estate, maximum ownership of shares by one legal entity or natural
persons, and the obligation to pay out the annual profit by way of divi-
dends within eight months after the end of the financial year.
Before 2014, activities permitted under FBI legislation were limited to
portfolio investments activities only. Effective 1 January 2014, new
legislation that allows FBI’s to perform enterprise-type business acti-
vities within certain limits. These activities must be carried out by a
taxable subsidiary and must support the operation of the FBI’s real
estate business.
EARNINGS (EPRA)
EPRA earnings is a measure of operational performance and repre-
sents the net income generated from operational activities. It excludes
all components not relevant to the underlying net income performance
of the portfolio.
EARNINGS PER SHARE (EPRA)
Indicator for the profitability of NSI; portion of the EPRA earnings attri-
butable to shareholders allocated to the weighted average number of
ordinary shares.
ENERGY INTENSITY (CRREM)
The total energy used by renewable and non-renewable resources
during a reporting period, normalised by the sum of the CRREM floor
area in square meters (gross floor area minus parking garages and
outer façade) for the properties in scope.
EPC-LABEL
Energy Performance Certificates (EPCs) tell you how energy efficient
a building is and give it a rating from A (very efficient) to G (inefficient)
EUROPEAN PUBLIC REAL ESTATE ASSOCIATION (EPRA)
Association of Europe’s leading property companies, investors and
consultants which strives to establish best practices in accounting,
reporting and corporate governance and to provide high-quality infor-
mation to investors.
ESTIMATED RENTAL VALUE (ERV)
The estimated amount at which a property or space within a property, would
be let under the market conditions prevailing on the date of valuation.
G4
G4 refers to the locations Amsterdam, Den Haag, Rotterdam, and Utrecht.
GRESB SCORE
The GRESB Score is an overall measure of ESG performance – repre-
sented as a percentage (100 percent maximum). The GRESB Score
gives quantitative insight into the company’s ESG performance in
absolute terms, over time and against your peers.
HNK
HNK stands for ‘Het Nieuwe Kantoor’, (which means ‘The New Office’).
HNK is NSI’s flexible office concept and offers an inspiring environment
with stylish workplaces, office spaces, meeting areas, catering facili-
ties and various ancillary services. HNK offers different propositions,
including memberships (flexible workstations), managed offices (fully
equipped offices), bespoke offices and meeting rooms.
INTEREST COVERAGE RATIO (ICR)
Debt ratio and profitability ratio used to determine how easily a company
can pay interest on outstanding debt. The interest coverage ratio is calcu-
lated by dividing net rental income during a given period by net financing
expenses during the same period adjusted for capitalised interest.
INVESTMENT RESULT - DIRECT
The direct result reflects the recurring income arising from core opera-
tional activities. The direct result consists of gross rental income minus
operating costs, service costs not recharged to tenants, administrative
costs, direct financing costs, corporate income tax on the direct result,
and the direct investment result attributable to non-controlling interests.
INVESTMENT RESULT - INDIRECT
The indirect result reflects all income and expenses not arising from
day-today operations. The indirect result consists of revaluations of
property, net result on sales of investment, indirect financing costs
(movement in market value of derivatives and exchange rate diffe-
rences, corporate income tax on the indirect result, and the indirect
investment result attributable to non-controlling interests.
INVESTMENT RESULT – TOTAL
The total result reflects all income and expenses; it is the total of the
direct and the indirect investment result.
LEASE INCENTIVES
Adjustments in rent granted to a tenant or a contribution to tenants’
expenses in order to secure a lease. The impact of lease incentives
on net rental income is straight line over the firm duration of the lease
contract under IFRS.
GLOSSARY
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142 NSI ANNUAL REPORT 2023
LIKE-FOR-LIKE RENTAL INCOME
Like-for-like growth figures aim at assessing the organic growth of
NSI. In the case of like-for-like rental income the aim is to compare
the rental income of all or part of the standing portfolio over a certain
period with the rental income for the same portfolio over a previous
period (i.e. year-onyear and/or quarter-on-quarter). In order to calcu-
late like-for-like growth, the nominal increase in rent is adjusted for the
impact of acquisitions, divestments and properties transferred to and
from the development portfolio and between segments (e.g. office to
HNK).
LOAN TO VALUE (LTV, NET)
The LTV-ratio reflects the balance sheet value of interest-bearing
debts plus short term debts to credit institutions, net of cash and cash
equivalents, expressed as a percentage of the total real estate invest-
ments, including assets held for sale.
MARKET VALUE INVESTMENT PROPERTY (FAIR VALUE)
The estimated amount for which a property should change hands on
the date of valuation between a willing buyer and a willing seller in an
arm’s length transaction after proper marketing wherein each party
had acted knowledgeably, prudently, and without compulsion. The
market value does not include transaction costs.
NET ASSET VALUE (NAV)
The net asset value represents the total assets minus total liabili-
ties. At NSI this equates to the shareholders’ equity (excluding non-
controlling interests as stated in the balance sheet). The NAV is often
expressed on a per share basis; in this calculation the number of
shares outstanding at reporting date is used rather than the average
number of shares is used.
NET ASSET VALUE (NAV, EPRA-DEFINITION)
The EPRA NAV metrics make adjustments to the NAV as per the IFRS
financial statements to provide the most relevant information on the
fair value of the assets and liabilities, under different scenario’s.
• EPRA net reinstatement value (NRV): assumes that entities never
sell assets and aims to represent the value required to rebuild the
entity;
• EPRA net tangible assets (NTA): assumes that entities buy and sell
assets, thereby crystallising certain levels of unavoidable deferred
tax;
• EPRA net disposal value (NDV): represents the shareholders’ value
under a disposal scenario, where deferred tax, financial instru-
ments and certain other adjustments are calculated to the full
extent of their liability, net of any resulting tax.
NET MARGIN
The net margin measures operating efficiency; it indicates how effec-
tive NSI is in managing its expense base. It is calculated as net rental
income as a percentage of gross rental income.
NET RESULT ON SALE OF INVESTMENT PROPERTY
The net result on sales of investment property reflects the disposal
price paid by a third party for a property minus the value at which
the respective property was recorded in the accounts at the moment
of sale, net of sales costs made. The sales costs include costs of
real estate agents and legal costs, but can also include internal costs
made which are directly related to transaction.
RENT - EFFECTIVE RENT
The effective rent reflects the contractual annual rent after straight-
lining of rent free periods and rental discounts.
RENT - GROSS RENTAL INCOME (GRI)
Gross rental income reflects the rental income from let properties, after
taking into account the net effects of straight lining for lease incentives
and key money, including turnover rent and other rental income (e.g.
specialty leasing and parking income).
RENT - NET RENTAL INCOME (NRI)
Gross rental income net of (net) costs directly attributable to the opera-
tion of the property (non-recoverable service charges and operating
costs). Income and costs linked to the ownership structure, such as
administrative expenses, are not included.
RENT - PASSING CASH RENT / CONTRACTED RENT
The estimated annualised cash rental income as at reporting date,
excluding the net effects of straight-lining of lease incentives. Vacant
units and units that are in a rent-free period at the reporting date are
deemed to have no passing cash rent.
REVERSIONARY POTENTIAL
This ratio compares the minimum guaranteed rent and the turnover rent
to the estimated rental value and as such indicates whether a unit or
property is underlet or over-rented.
REVERSIONARY RATE / RESULT FROM RELETTING AND
RENEWAL
The reversionary rate measures the rental gain/loss of a deal as the
difference between the new rent (after the deal) and the old rent (before
the deal).
STANDING PORTFOLIO
Standing portfolio is used in like-for-like calculations and concerns the
real estate investments at a specific date that have been consistently in
operation as part of NSI’s portfolio during two comparable periods. Note
that an investment property can be considered both standing and at the
same time non standing, depending on the comparison periods used
(e.g. year-on-year and quarter-on-quarter).
VACANCY RATE (EPRA)
Vacancy rate (EPRA): reflects the loss of rental income against ERV as a
percentage of ERV of the total operational portfolio.
WEIGHTED AVERAGE UNEXPIRED LEASE TERM (WAULT)
This ratio is used as an indicator of the average length of leases in port-
folios. It can be calculated over the full lease term of the contracts either
up to expiration date or up to break option date.
YIELD
Yield can generally be defined as the income or profit generated by an
investment expressed as a percentage of its costs or the total capital
invested.
• Gross initial yield: the passing rent as a percentage of the market
value of an object;
• Net initial yield: the passing rent, net of property related costs, as a
percentage of the market value of an object;
• Net theoretical yield: annualised net theoretical rental income as a
percentage of the real estate investments in operation;
• EPRA net initial yield: annualised net effective cash passing rent
(including estimated turnover rent and other recurring rental income)
net of non-recoverable property operating expenses as a percentage
of the gross market value of the real estate investments in operation;
• EPRA topped-up net initial yield: EPRA net initial yield adjusted for
expiring lease incentives;
• Reversionary yield: the anticipated yield to which the initial yield will
rise (or fall) once the rent reaches the ERV.
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143 NSI ANNUAL REPORT 2023
GLOSSARY ESG (NON-FINANCIAL) PERFORMANCE MEASURES
ASSET HEALTH AND SAFETY ASSESSMENTS
Asset Health and safety assessments refers to the proportion of
assets for which health and safety related assessments have been
performed, reviewed or assessed to determine the impact owith
respect to compliance or further improvement possibilities. Every
assessment will be reviewed every three years.
•
NSI reports on the following assessments:NEN 2767 Inspections
(technical)
•
Inspections carriet out by the Insurance company (technical, health
and safety)
•
Fire safety assessments safety
ASSET HEALTH AND SAFETY COMPLIANCE
Asset Health and safety Incidents refers to the amount of incidents
of non-compliance with regulations and/or voluntary codes concer-
ning Health and Safety within the reporting period.
NSI reports on the following incidents:
•
Incidents of non-compliance with regulations resulting in a fine or
penalty;
•
Incidents of non-compliance with regulations based on a a formal
warning of a third party.
CERTIFICATION
The percentage of assets within the portfolio that have formally
obtained sustainability certifications, ratings or labelling valid at the
end of the reporting period.
NSI reports on the following certificates:
•
BREEAM (based on sqm);
•
EPC-label (based on market value);
•
GRESB-score (expressed as an overall-score for total organisa-
tion).
DISTRICT HEATING AND COOLING CONSUMPTION
The energy consumed from “District heating and cooling” systems
during the reporting period by Landlord (Scope 2) and Tenant (Scope 3).
NSI reports on the following KPI’s:
•
Total amount of district heating and cooling consumption, split by
Landlord obtained and Tenant obtained heating and cooling;
•
The proportion of the total consumption that is from renewable
resources (calculated as percentage of total annual kWh).
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
ELECTRICITY CONSUMPTION
The electricity consumed during a reporting period. It includes elec-
tricity from renewable and non-renewable sources, whether imported
or generated on site. This includes the electricity consumed by the
EV-charging stations.
NSI reports on the following KPI’s:
•
Total amount of electricity consumption, split by Landlord (Scope
2) obtained and Tenant (Scope 3) obtained electricity;
•
The proportion of the total consumption obtained by Landlord from
renewable resources.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
EMPLOYEES
Individuals that are in an employment agreement with NSI, according
to national law or its application (i.e. employees). Employees exclude
temporary staff (not on payroll NSI)
EMPLOYEE HEALTH AND SAFETY
The occupational health and safety performance of the organisation
with relation to its employees.
NSI reports on the following KPI’s:
•
Absentee rate: actual absentee days lost due to illness as a
percentage of total number of days scheduled to be worked by all
employees;
•
Injury rate: the frequency of injuries relative to the total time
worked by all employees during the reporting period;
•
Work related fatalities: this refers to the number of death of
employees during the reporting period while performing work for
the organisation
EMPLOYEE TURNOVER AND RETENTION
The total number and rate of new employee hires and employee
turnover during the reporting period.
EMPLOYEE TRAINING AND DEVELOPMENT
The average hours of (external) training, paid for by NSI, that the orga-
nisation’s employees have undertaken in the reporting period based
on the average hours prescribed for the training as indicated by the
training provider divided by the average number of employees (head-
count) during the reporting period.
ENERGY INTENSITY
The total energy used by renewable and non-renewable resources
during a reporting period, normalised by the sum of the gross floor
area in square meters for the properties in scope.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
ENERGY INTENSITY (CRREM)
The total energy used by renewable and non-renewable resources
during a reporting period, normalised by the sum of the CRREM floor
area in square meters (gross floor area minus parking garages and
outer façade) for the properties in scope.
FUEL CONSUMPTION
The fuel used from direct (renewable and non-renewable) resources
(direct meaning that the fuel is combusted on site) over a reporting
period.
NSI reports on the following KPI’s:
•
Total amount of fuel used from direct resources, split in Landlord
obtained and Tenant obtained fuels;
•
The proportion of the total consumption that is from renewable
resources.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
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144 NSI ANNUAL REPORT 2023
GENDER DIVERSITY
The percentage of male and female employees in the organisation as
per reporting date based on the headcount.
GENDER PAY RATIO
The ratio of the basic annual salary or remuneration, including vari-
able components, of male to female, taking into account the full-time
employee equivalent.
GREENHOUSE GAS (GHG) DIRECT EMISSIONS (SCOPE 1)
The total amount of Landlord induced direct greenhouse gas emis-
sions generated during a reporting period.
“Direct” refers to GHG-emissions that are generated on site through
combustion of the energy source.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
GREENHOUSE GAS (GHG) INDIRECT EMISSIONS
(SCOPE 2)
The total amount of Landlord induced indirect greenhouse gas emis-
sions generated during a reporting period.
“Indirect” refers to GHG-emissions that are not generated on site
through combustion of the energy source, but refers to GHG-emis-
sions induced off site. This includes the GHG-emissions caused by
“District heating and cooling” and/or consumption of “Non-renewable
electricity”.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
GREENHOUSE GAS (GHG) DIRECT & INDIRECT
EMISSIONS (SCOPE 3)
The total amount of Tenant induced both direct and indirect green-
house gas emissions generated during a reporting period.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
GREENHOUSE GAS (GHG) EMISSIONS INTENSITY
The total amount of direct and indirect GHG-emissions (Scope 1, 2
and 3) generated from energy consumption in a building during a
reporting period, divided by the sum of the gross floor area in square
meters for the properties in scope. This includes only data of buil-
dings if data for all GHG-scopes is available.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
LIKE-FOR-LIKE
Like-for-like refers to the part of the portfolio that has been consi-
stently in operation, and not under development, during the most
recent two full reporting periods.
LOCATION-BASED GHG EMISSIONS
Location-based GHG emissions Is emissions that are calculated based
on the average national energy mix.
MARKET-BASED GHG EMISSIONS
Market-based GHG emissions are emissions that are calculated on the
basis of energy purchased by NSI.
PERCENTAGE EMPLOYEE PERFORMANCE APPRAISALS
The percentage of total employees who received annual performance
and career development reviews during the reporting period, inclu-
ding appraisals in the current reporting year over the previous repor-
ting year.
WATER CONSUMPTION
The total amount of water consumed (by Landlord and Tenant)
within the portfolio during a reporting period. The amount of water
consumption includes a portion of estimate (calculated on an extra-
polation based on the average consumption of the specific building)
when data was yet not available for the 12 month period.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
WASTE BY DISPOSAL ROUTES
The amount of waste produced and disposed of via various disposal
methods routes over a reporting period (as calculated by Milieuser-
vice NL).
NSI reports on the following KPI’s:
•
Total amount of waste produced and disposed of, split in hazar-
dous and non-hazardous waste;
•
The proportion of the waste disposed of by disposal route accor-
ding to type (percentage).
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
WATER INTENSITY
The total amount of water consumed during a reporting period,
divided by the sum of the gross floor area in square meters for the
properties in scope.
Both absolute figures as well as a like-for-like comparison with the
prior reporting period are reported.
INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATIONOTHER INFORMATION
COLOPHON
This annual report is a publication by NSI.
NSI
Antareslaan 69-75
Postbus 3044
2130 KA Hoofddorp
T 020 76 30 300
F 020 25 81 123
E info@nsi.nl
www.nsi.nl
Editing and texts
NSI
Lindner & van Maaren
Design and layout
Monter, Amsterdam
Photography
Michiel Poodt
Antareslaan 69-75
PO Box 3044
2130 KA Hoofddorp
T 020 76 30 300
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