The Supervisory Board hereby presents the Bouwinvest Real Estate Investors B.V. (Bouwinvest) 2022 annual report, which includes the financial statements for 2022. The Bouwinvest Management Board prepared the annual report, Deloitte Accountants B.V. has audited the financial statements and provided an unqualified auditor’s report (see the auditor’s report chapter).

The Supervisory Board discussed the annual report with the Management Board, in the presence of the external auditor. The Supervisory Board concluded that the annual report meets all the rules and requirements in the field of governance and transparency, partly on the basis of these discussions. The report provides an accurate and complete picture of the results, risks and events which fall under the Supervisory Board’s remit.

The financial statements will be submitted to the Annual General Meeting of shareholders (AGM) for adoption on 12 April 2023, as part of the 2022 annual report. The Supervisory Board proposes that the meeting adopts the financial statements and, as proposed by the Management Board, to add € 5.4 million to Bouwinvest’s shareholders’ equity. The Supervisory Board proposes that the AGM discharge the Management Board for their management and the Supervisory Board for their supervision of said management, and that the AGM adopt the financial statements.

1. Supervision

The Supervisory Board supervises and advises the Management Board in the setting and realisation of it strategic targets and is responsible for the employment of the statutory directors. In this report, the Supervisory Board explains how it fulfilled its role in the year under review.

Given changes in the organisation, the Management Board has decided to extend the Strategic Plan 2020-2022 for a year, with which the Supervisory Board agrees. The strategic targets for 2023 are set down in the Bouwinvest Annual Business Plan 2023, which was approved by the Supervisory Board on November 14, 2022. A new long-term strategy plan will be developed during 2023 which will form the basis for annual business plans from then on.

The core of the strategy is the evolution of Bouwinvest from a real estate investor to a broad real estate investment manager with a broad client base. Anchor investor bpfBOUW’s target allocation for real estate investments has now reached its limits. Further growth is needed to enable Bouwinvest to invest in the breadth and depth of skills, competencies and experience that are required from a real estate investment manager going forward. Expanding client and regulatory demands require an ever more flexible and high performing organisation to address these.

This will require the expansion of the client base and continued professionalisation and strengthening of the organisation. The focus is shifting to one of being ‘in control’ through risk management, the implementation of ESG, greater efficiency and compliance. The organisation has conducted a review of potential areas to further optimise going forward, and the Management Board has started a project to revise the operating model and to develop Bouwinvest into a High Performance Organisation. The approach and steps to achieve this have been discussed with the Supervisory Board and the Supervisory Board is involved in the continuation of the project (since renamed to #invest).

Bouwinvest has translated its strategy into strategic objectives, KPIs and milestone planning. The Management Board as a whole is responsible for the realisation of the strategy, and a member of the Management Board bears primary responsibility for the individual strategic objectives. The strategic goals are laid down in clear targets and the Management Board regularly reports to the Supervisory Board on progress.

The Supervisory Board discussed the extensive quarterly reports, enabling it to form a complete picture of the realisation of the strategic objectives, stakeholder value and the finances of the Bouwinvest management company. One area of concern which was discussed intensively was the staffing situation. Staffing levels have not increased as intended and this has added to the pressure on the current workforce and on the strategic targets. Proper execution of the fund and mandates plans, and good client service, are key to Bouwinvest’s success.

This year was characterised by a strong first half of the year followed by deteriorating real estate market conditions. The war in Ukraine, the sharp rise in interest rates and inflation all played an important role in this.

The declining markets and the denominator effect also impacted on institutional investors’ real estate allocation. The dynamic changed, and for the first time Bouwinvest had to deal with fund redemption requests. The market volatility does not seem to have come to an end yet and the Supervisory Board regularly discusses the impact on the portfolios and the organisation with the Management Board. At the same time, the current market conditions also offer opportunities, and several investors are already looking at the medium-term possibilities.

The development of new real estate investment products is also important to the organisation’s future growth. The Supervisory Board discussed the business plan for the Bouwinvest Dutch Community Impact Fund: a new product that gives substance to Bouwinvest's investors’ sustainability ambitions. Under Sustainable Finance Disclosure Regulation article 9 it is particularly important for pension funds to be able to demonstrate the result of impact investing. At the same time, this product meets society’s needs for real estate focused on lower mid-market rentals in core parts of the Netherlands.    

The Supervisory Board also discussed the results of backtesting Bouwinvest’s Dutch and international investments, in terms of process, methodology, performance measurement and indices.

The issues of social safety and in appropriate behaviour were also discussed extensively in the HR committee and within the Supervisory Board. The Supervisory Board is clear that an open culture and accountability are essential for a socially safe working climate.

Recruitment is another issue requiring further attention and it remains difficult to attract the right talent for the organisation in the current tight labour market.

Mark Siezen succeeded Dick van Hal as CEO as of 1 September 2022. Under the leadership of Dick van Hal Bouwinvest grew into an international asset manager with a broader customer base and the Supervisory Board would like to thank Dick van Hal for his efforts and involvement. Mark Siezen was replaced as Chief Client Officer by Marleen Bosma, who was appointed to the position on 1 November 2022. Marleen Bosma was Head of Research & Strategic Advisory until early 2022, when she was appointed as Head Business Development within the Client Management Department. The Supervisory Board wishes Mark Siezen and Marleen Bosma every success in their role.

The Supervisory Board considers the information made available to it to be sufficient.

2. Composition of the Supervisory Board and evaluation

Composition of the Supervisory Board

In 2022, the Supervisory Board consisted of two female members and two male members. With four members, the Supervisory Board is of adequate size. At year-end 2022, the Management Board consisted of two female member and three male members. More personal details on each member of the Supervisory Board are in the next section of this annual report.

Composition of the Supervisory Board and its committees

Division of the areas of expertise of the Supervisory Board

All the members of the Supervisory Board are independent according to the criteria laid down in the regulations of the Supervisory Board.

Evaluation

In February 2022, the Supervisory Board carried out a self-evaluation and the results were included in the 2021 annual report. Given that the composition of the Management Board changed in the second half of 2022 with the appointment of Mark Siezen as CEO and Marleen Bosma as CCO, the Supervisory Board has decided to carry out an external self evaluation in the first half of 2023.

3. Other matters

Appointments

Members of the Management Board

Two new appointments were made to the Management Board in 2022. Mark Siezen was appointed CEO from 1 September, when Dick van Hal stepped down as CEO and statutory director. Dick van Hal's contract ended on 1 November 2022. Mark Siezen has been a member of the Management Board since 2020 when he joined as Chief Client Officer. He was succeeded in that role by Marleen Bosma from 1 November 2022.

Members of the Supervisory Board

There were no appointments or reappointments of members of the Supervisory Board in 2022.

Meetings of the Supervisory Board

Meetings

Supervisory Board

The Supervisory Board met a total of five times in 2022. The members of the Management Board attended all of these meetings. Prior to the regular meetings, the Supervisory Board held its own consultations. Above you will find an overview of the number of meetings of the Supervisory Board and its committees, together with the attendance record of the members of the Supervisory Board. As the year progressed, more meetings of both the full Supervisory Board and its committees were held face to face.

In addition to these meetings, the chair and the other members of the Supervisory Board consulted regularly with the members of Bouwinvest’s Management Board.

Last year there were regular consultations involving the chair of the Supervisory Board, the chair of Audit, Risk & Compliance committee, the CEO and CFRO of the Management Board, the chairs of the Board of Stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid (bpfBOUW) and the director of the management committee of bpfBOUW, and the Bouwinvest CEO and CFRO.

As the member appointed on the nomination of the Works Council, Supervisory Board member Wendy Verschoor acts as the liaison between the Supervisory Board and the Works Council.

Audit, Risk & Compliance committee

The Audit, Risk & Compliance committee consists of Jos van Lange (chair) and Wendy Verschoor. The committee met a total of five times in 2022.

The committee discussed the budget, the annual results, the reports of the external auditor and the management letter. The committee also met the external auditor without the Management Board being present. The committee also advised the Supervisory Board on the performance of the external auditor which it considered to be good.

The committee paid particular attention to the rapidly changing market conditions and the impact of these on both the portfolios and the organisation.

The committee also discussed the Risk Management, Compliance, Internal Audit reports, ISAE reports and the SIRA 2021-2022. The committee continued to devote a great deal of attention to the development of the Bouwinvest risk management framework. The implementation of the risk management road map was completed and an external risk maturity assessment was carried out. The committee was satisfied with the results. The external auditor also carried out a deep dive into valuations and market developments, with an emphasis on regulation and eventual changes. The Audit, Risk & Compliance Committee devoted attention to IT and Cyber security. Also in 2022, an extensive cybersecurity program was executed within Bouwinvest.   

The committee also discussed the reorganisation of the audit function at Bouwinvest. Checks under the auspices of the ISAE 3402 were placed with a new Quality Control department, which falls under the responsibility of the CFRO. A new head of internal audit was also appointed.

HR committee

The HR committee met a total of four times in 2022. The committee’s name was changed from selection and remuneration to HR committee to better represent its wider role.

The committee discussed the theme of social safety and the way it is anchored within the organisation. An open culture in which staff feel free to speak out has a key role in this. Bouwinvest has appointed both an internal and external confidential counsellor whom staff can approach with problems. The results of the staff satisfaction survey and consequences for the Management Board were also discussed. The committee also considers it important to increase the visibility of ‘real value for life’ and to ensure innovation remains high on the agenda.

The transformation of Bouwinvest into a High Performance Organisation includes a concrete HR strategy to support its growth ambitions. This was also discussed by the committee and the design and implementation of a new job structure, job descriptions, working conditions, and talent and performance management, will be discussed in the coming year.

The commission also discussed the new make-up of the Management Board extensively. A CEO switch and the appointment of a new COO has brought the Management Board back up to full strength.

The committee discussed the performance of the Management Board and the targets for 2023. The HR committee conducted evaluation interviews with all members of the Management Board. The evaluation interview with the CFRO was also in the presence of the chair of the Audit, Risk & Compliance Committee. Additional details are in the renumeration report. And finally, an update of the Supervisory Board profile was discussed.

A word of thanks

The Supervisory Board would like to thank the members of the Management Board and all Bouwinvest employees for their commitment and engagement and for the results achieved last year for both the investment portfolios and the organisation.

Amsterdam, 28 March 2023

The Supervisory Board

Jos Nijhuis

Jos van Lange

Gabriëlle Reijnen

Wendy Verschoor