Message from the CEO

As this is my first annual report message as CEO, I would like to start by expressing my gratitude for the opportunity to lead this amazing company. And, of course, I would like to thank my predecessor Dick van Hal, who led Bouwinvest for no less than 14 years. We are grateful to him for his dedication, enthusiasm and engagement and personally I am thankful for the sound and smooth handover. As I moved into my new role, I was also happy to welcome Marleen Bosma as Chief Client Officer. I look forward to working with Marleen and wish her the best in this new position. On a sad note, in July we received the news that Dick Verhoeven, the co-chairman of bpfBOUW, had passed away. Dick will be remembered as a friendly, supportive and astute person, both on a personal and professional level. I am grateful to him for his continuous support over the past years and he will be sadly missed.

From a market perspective, last year was marked by significant geo-political, financial, social and environmental turbulence. As we emerged from the worst of the Covid-19 pandemic, and economies were showing clear signs of recovery, we were faced with Russia’s invasion of Ukraine. Next to the human tragedy and economic problems that this created, it also led to more uncertainty and ignited inflation. The reaction of the Fed, ECB and other central banks has been a series of rapid and significant interest rate rises, aiming at bringing inflation under control. Consumer and investor confidence deteriorated rapidly, and so, subsequently, did asset pricing. In addition, the impact of climate change has never been more evident with flooding, droughts, bush fires, heat stress and storms becoming more frequent and severe.

This uncertain environment has also had an impact on our investors who are typically long-term oriented and focus on predictability, stability and reliability. The challenge we face is how to provide our investors with that stability and financial returns, in these most uncertain of market circumstances. Investors are becoming more engaged with the world we live in and have translated this into objectives around environmental performance, environmental risk, social impact and solid governance. This is reflected in increasing demands by investors of their real estate asset managers.

Bouwinvest has responded to these demands, and those of the regulators, by further strengthening its capabilities around risk management, ESG, research, data, (financial) reporting and compliance. However, we also realise that Bouwinvest needs to evolve structurally as a real estate investment and asset manager, and adapt to the changing market environment and investor demands.

With this in mind, Bouwinvest has developed a vision for the future and is now drafting an updated strategy to make this a reality, focusing on creating a high performing organisation. We have a clear path for the transformation that Bouwinvest will need to go through in the coming years. This vision is underpinned by the need for further scale and diversification in both investors and products. An operating model adapted to these objectives will enable Bouwinvest to continue to excel in delivering value to the investors in our funds and mandates. A key part of this involves making sure we attract and retain the best talents in the business.

Despite the turmoil of the past year, Bouwinvest was able to realise its main objective, namely delivering stable financial and social returns to its investors. In addition, we made progress in preparing Bouwinvest for the future, including the further implementation of the revised Customer Due Diligence (CDD) policy and new and updated regulatory requirements, such as Sustainable Finance Disclosure Regulation (SFDR), the EU Taxonomy, an ESG Framework, and investor demands including the Dutch Pension Funds Agreement on Responsible Investment (IMVB). We also worked on further developing integrated business planning and reporting systems and invested in Security Operations Center services to have more real-time control over cybersecurity risks.

Following the government’s announcement that Fiscal Investment Institutions (FIIs) will no longer be allowed to invest in directly held real estate from 2025, Bouwinvest also completed preparations to switch to the Fund for Mutual Account (FMA) regime. The Office Fund moved to this new regime on January 1, 2023, and the other funds will most likely follow per January 1, 2025.

Bouwinvest’s financial results were sound although we would have preferred to have been able to grow our team more quickly and invest more in the organisation, at the cost of some operating margin. However, this has proved to be a challenging task, given the ongoing war for talent and tight labour market.

The market outlook for 2023 is challenging. The coming year is likely to bring further instability as the war in Ukraine and geo-political unrest continues, the energy crisis persists, whereby consumer confidence remains under pressure. Other challenges such as rising building costs due to supply chain issues, stricter regulations for residentials rents and CO2 emissions, are adding to the challenges that Bouwinvest faces. Central banks will continue to raise interest rates until inflation reaches an acceptable level and an economic slowdown across all western economies is therefore likely. We expect real estate values to be negatively impacted by these developments.

At the same time, we are positive about the long-term perspective for real estate markets in general and the ability of Bouwinvest to excel as a manager in the future dynamic environment. We will continue to develop our business and are planning to launch a new market proposition, the Dutch Community Impact Fund, and other investment vehicles, potentially including a European Living strategy and a Build-to-Rent strategy. This will enable us to expand our domestic and international investor base and it will also allow us to further strengthen our capabilities and build our team to serve existing investors across our current Dutch funds and International mandates.

There is still a considerable amount of interest in the Dutch real estate market and Bouwinvest is well positioned as a trusted real estate investment manager with a strong track record. We will leverage on our reputation, experience, network and knowledge to continue to drive our growth and deliver the right products and performance to meet our investors’ evolving needs.

Looking back at 2022, I would like to thank our investors for their undiminished confidence in Bouwinvest, our staff for enabling us to deliver on our promises and our Supervisory Board, for their insights and constructive input. Despite current market and operational challenges, Bouwinvest is looking to the future with confidence. I look forward to working with you all in 2023 and in pursuing our purpose - Real Value for Life.

Mark Siezen

CEO

Key figures

_{Due to rounding differences, totals may differ from the sum of the individual figures.}

Distribution invested capital funds and mandates

All amounts in € thousands	2022	2021
Dutch Residential Fund	7,612,690	7,681,103
Dutch Retail Fund	1,055,026	975,551
Dutch Office Fund	1,198,693	1,238,539
Dutch Hotel Fund	372,774	355,647
Dutch Healthcare Fund	460,663	455,796
Europe Mandate	1,496,363	1,480,959
North America Mandate	2,162,043	1,939,321
Asia-Pacific Mandate	1,458,397	1,358,025
Other (The Netherlands)	84,658	170,550
	15,901,308	15,655,491

Total acquisitions

All amounts in € millions	2022	2021
The Netherlands
Dutch Residential Fund	14	140
Dutch Retail Fund	15	66
Dutch Office Fund	24	-
Dutch Hotel Fund	-	-
Dutch Healthcare Fund	126	65
	179	271

International
Europe Mandate	109	173
North America Mandate	292	112
Asia-Pacific Mandate	129	347
	530	632

Total	709	903

Overview responsible investment and business (GRESB scores mandates & funds)

Overview Responsible Investments & Business	Europe Mandate	North America Mandate	Asia-Pacific Mandate	Residential Fund	Office Fund	Retail Fund	Hotel Fund	Healthcare Fund
GRESB participation	85%	85%	89%	yes	yes	yes	yes	yes
GRESB star rating Q4 2022	4	3	4	5	5	5	5	5
(average) GRESB score	82	74	82	91	92	88	89	88
Share of sustainable investments (GRESB 4/5 stars)	43%	32%	55%	100%	100%	100%	100%	100%

Message from the CEO

Message from the CEO

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Distribution invested capital funds and mandates

Total acquisitions

Overview responsible investment and business (GRESB scores mandates & funds)