Jaarverslag 2015 Annual report 2015

Jaarverslag 2015Annual report 2015

Table of contents

Jaarverslag 2015

2 Voorwoord van de voorzitter

4 Rabo Vastgoedgroep in 2015

4 Kerncijfers

4 Bestuur en toezicht

5 Organogram

6 Kerngegevens

8 Bericht van de raad van commissarissen

10 Marktontwikkelingen in 2015

14 Interne ontwikkelingen in 2015

18 Hoofdactiviteiten Rabo Vastgoedgroep

22 Financieel beleid en resultaat

23 Risicobeheersing

25 Marktvooruitzichten in 2016

25 Toekomst

26 Contactgegevens

28 Jaarrekening 2015

30 Geconsolideerde winst-en-verliesrekening

31 Geconsolideerd overzicht van gerealiseerde

en niet-gerealiseerde resultaten

32 Geconsolideerde balans

33 Geconsolideerd vermogensoverzicht

34 Geconsolideerd overzicht van kasstromen

36 Toelichting op de geconsolideerde jaarrekening

52 Toelichting op de geconsolideerde winst-

en-verliesrekening

62 Toelichting op de geconsolideerde balans

82 Overige informatie

97 Enkelvoudige jaarrekening

98 Verkorte enkelvoudige winst-en-verliesrekening

99 Enkelvoudige balans (na resultaatbestemming)

100 Toelichting op de enkelvoudige balans

101 Belangrijkste deelnemingen in

groepsmaatschappijen

102 Controleverklaring van de onafhankelijke

accountant

103 Statutaire bepalingen inzake de

winst-en-verliesbestemming

Annual Report 2015

2 Preface by the Chairman

4 Rabo Real Estate Group in 2015

4 Highlights

4 Management and supervision

5 Organisational chart

6 Key figures

8 Report by the Supervisory Board

10 Market developments in 2015

14 Internal developments in 2015

18 Main activities of Rabo Real Estate Group

22 Financial policy and results

23 Risk management

25 Market outlook for 2016

25 Future

26 Contact details

Jaap Gillis Walter de Boer

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Preface by the Chairman

Rabo Real Estate Group went through a metamorphosis in 2015, with organisational change taking place on a large scale. In addition to the phase-out of MAB Development and KP Investments, the most conspicuous changes were the decision to integrate FGH Bank within Rabobank and the demerger of Fondsenbeheer Nederland/SVn. These changes are logical steps towards the objective of making Rabo Real Estate Group future-proof. What’s more, FGH Bank’s incorporation into Rabobank is in line with the bank’s strategy of developing into One Rabobank, and Fondsenbeheer Nederland and SVn are delighted to go their own way.

Due to the changes, Rabo Real Estate Group now comprises the BPD and Bouwfonds Investment Management (Bouwfonds IM) divisions and a considerably optimised Rabo Real Estate Group Holding – two robust divisions that made big strides in 2015. Following three loss-making years, Rabo Real Estate Group ended 2015 back in the black. BPD profited considerably from developments in the Dutch, French and German residential markets. The Dutch market is clearly recovering, house buyers are slightly less hesitant in France and the German residential market is still booming. BPD acquired the development activities of P&P Gruppe

in Fürth to enable further growth there in line with its strategic course. As a result, BPD now operates in Germany from seven offices.

The strategic reorientation at Bouwfonds IM that began in 2014 was completed. The focus of Bouwfonds IM’s activities lies on European growth in real asset investment funds in residential property, commercial real estate, parking, communications infrastructure and agriculture & farms. Partly thanks to low interest rates and a positive economic situation, all funds – except commercial real estate – grew in 2015. Many existing commercial spaces no longer meet market requirements. Our new way of living, working and shopping requires new buildings or rigorous modification of existing buildings. As this cannot be done without substantial investments, it offers opportunities to investors who have an eye for future-proofing properties.

In 2016, Rabo Real Estate Group will relentlessly continue to prepare its activities for the future. As stated, in 2015 great progress was made in this respect with the phasing out of MAB Development and KP Investments, the start of the integration of FGH Bank within Rabobank and the demerger of Fondsenbeheer Nederland/SVn. Necessitating the

Rabo Vastgoedgroep Jaarverslag 2015Rabo Real Estate Group Annual Report 2015

Jos van Lange

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departure of many employees in recent years, these changes had considerable consequences for staff. We are pleased that many of them have found other work by now. The economic upturn was obviously a contributing factor, but it also shows that the job market regards the knowledge and experience gained at Rabo Real Estate Group as valuable.

Board of Directors colleagues Peter Keur (Chairman of the FGH Bank Management Board and Vice Chairman of Rabo Real Estate Group’s Board of Directors) and Carolina Wielinga (CFRO of Rabo Real Estate Group) left Rabo Real Estate Group at the beginning and end of 2015, respectively. We thank them for their collegiality, dedication and their commitment to the developments taking place in our organisation.

We are especially indebted to the colleagues who have helped Rabo Real Estate Group get to where it is now. Despite the challenging period, they buckled down and initiated the upward trend. We look to 2016 with confidence, a year in which we will continue to future-proof Rabo Real Estate Group and its divisions.

The balance sheet total has now been reduced to more than four billion euros, and we aim to reduce it even further. We will achieve this objective, for example, by selling a number of large completed projects such as De Rotterdam, Rotterdam First and Rotterdam Cool 63 and strict balance sheet management by the divisions.

At the same time, we are working towards further growth in profits. There are no more obstacles in our path – as the company is now in order following the completion of internal organisational changes in 2015, BPD and Bouwfonds IM are well on their way and the economic prospects for

2016 are positive. As Rabo Real Estate Group’s results are set to improve further this year, we entered the new year in good spirits. Now that the difficult years are behind us, there is optimism in the air and it is our firm ambition to make the year a successful one.

Hoevelaken, On behalf of the Board of Directors

Jos van Lange, Chairman of the Board of Directors, Rabo Real Estate Group

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Rabo Real Estate Groupin 2015

Highlights

Net result € 26 million

Return on equity 2.4 %

Number of housing transactions in the Netherlands and abroad 8,386

Assets under management € 6.3 billion

Board of Directors

J.H.P.M. (Jos) van Lange, Chairman

W.P. (Walter) de Boer, BPD

J.C.M.A. (Jaap) Gillis, Bouwfonds IM

C. (Carolina) Wielinga, CFRO (until 1 December 2015)

P.C. (Peter) Keur, Vice Chairman of FGH Bank (until 1 February 2015)

Supervisory Board

L.C. (Elco) Brinkman, Chairman

J.L. (Jan) van Nieuwenhuizen

L.M.J. (Ludo) van Halderen

Management and supervision


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Organisational chart as at 31 December 2015

Organisational developments

• MAB Development’s office in The Hague was closed on 31 March 2015. The remaining projects are now managed elsewhere within Rabo Real Estate Group.

• Following an announcement on 20 January 2015 and the legal transfer of shares on 31 March 2015, FGH Bank ceased to be a member of Rabo Real Estate Group. According to IFRS guidelines, control over FGH Bank passed to Rabobank on 1 February 2015.

• Fondsenbeheer Nederland/SVn became stand-alone companies on 1 June 2015 and now no longer form part of Rabo Real Estate Group.

• The strategic reorientation at Bouwfonds IM that began in 2014 was completed. • Transforming Rabo Real Estate Group Holding into a smaller and more efficient organisation – a financial holding company

– is the preferred positioning following from the developments mentioned above. As such, Rabo Real Estate Group Holding is still essential for the shareholder to achieve its ambition and for the strategies of the Rabo Real Estate Group divisions.

• In this setting, Rabo Real Estate Group is positioned under the Rabobank organisation as the centre of real estate expertise in area development and investment management, in which respect Rabo Real Estate Group Holding’s key role is to support these divisions and help them achieve this ambition.

Development Residential Investment Management

H O L D I N G

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Result* 2015 2014Total net result 26 (186)Net result from continued operations € million 26 40Net result from discontinued operations € million - (226)

Financial positionShareholders’ equity € million 862 1,040

RatiosReturn on equity % 2.4 (17.8)Tier 1 ratio % 15.1 6.9BIS ratio % 15.1 6.9RAROC % 2.7 (9.6)

ProductionHousing transactions (including third-party projects) number 8,386 7,064

PortfolioAssets under management € million 6,298 6,429

Development portfolioResidential number 74,000 75,000

PersonnelFTEs number 1,047 1,656– The Netherlands 475 1,133– Other countries 572 523

Total number of employees number 1,127 1,809– The Netherlands 520 1,250– Other countries 607 559

Key figures

* FGH Bank is no longer part of Rabo Real Estate Group. Control passed to Rabobank on 1 February 2015. FGH Bank’s result is therefore presented

as a ‘discontinued operation’.


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We are pleased to present the 2015 Annual Report of Rabo Vastgoedgroep Holding N.V. The financial statements have been prepared by the Rabo Real Estate Group Board of Directors and audited by Ernst & Young Accountants LLP (EY). Based on EY’s report, we recommend that the shareholder adopt the financial statements and appropriate the result in accordance with the recommendations made.

The upward trend in results that commenced in 2014 gained momentum in 2015, which led to a profit. We are pleased to observe that Rabo Real Estate Group now finds itself in calmer waters than in 2014 and the years before that. BPD saw continued recovery of the Dutch residential market in 2015, which triggered a further increase in the number of transactions. In Germany, too, the residential market was dominated by positive sentiment. The number of transactions concluded in France was satisfactory. At Bouwfonds IM, the year was marked by a strategic reorientation that resulted in the preferred scenario of selling Bouwfonds IM. In September 2015, however, it was decided to halt the selling process. FGH Bank is no longer part of Rabo Real Estate Group. At the end of March, the FGH Bank shares were legally transferred to Rabobank as a result of the decision to integrate FGH Bank into Rabobank. According to IFRS guidelines, the shares were effectively transferred on 1 February 2015. The Supervisory Boards of Rabo Real Estate Group and FGH Bank used to share the same members. In view of the FGH Bank integration into Rabobank, the members of the Rabo Real Estate Group Supervisory Board have met solely in their capacity as members of the Rabo Real Estate Group Supervisory Board since April 2015.

The Vice Chairman and CFRO of Rabo Real Estate Group’s Board of Directors resigned in the year under review. Mr Keur stepped down in February 2015, leaving a new Chairman of the FGH Bank Management Board in charge of FGH Bank’s integration into Rabobank. Ms Wielinga resigned as CFRO of Rabo Real Estate Group as from 1 December 2015 in connection with her appointment as a registered director of FGH Bank. We are grateful to both of them for their contributions to the activities of Rabo Real Estate Group.

The Supervisory Board members attended virtually all meetings. In view of its limited size, the Supervisory Board does not avail itself of separate committees such as an audit, compliance or remuneration committee.

In 2015 we met six times in total, in the presence of the Board of Directors. The year was dominated by numerous organisational changes. The MAB organisation was phased out and the remaining work was transferred to BPD and Rabo Real Estate Group holding. As noted above, Rabobank obtained control of FGH Bank in early 2015, following its integration into Rabobank.

In June 2015, Fondsenbeheer Nederland/SVn demerged from Rabo Real Estate Group and Rabo Real Estate Group transferred the depositary receipts for the shares to a new foundation Fondsenbeheer Nederland. SVn was split off from Fondsenbeheer Nederland during this process. All Rabo Real Estate Group staff who performed work for Fondsenbeheer

Nederland/SVn are now employed by Fondsenbeheer

Nederland or SVn as a result of the demerger. We wish Fondsenbeheer Nederland and SVn the best of luck in this new phase of their existence. Business unit KP Investments and the German asset management organisation were discontinued in October 2015 and the remaining work was transferred to Rabo Real Estate Group Holding. Finally, the above changes resulted in the decision to structure Rabo Real Estate Group Holding more efficiently and to transform it into a financial holding company step by step. The consequence is that many colleagues have left or will leave the company. We thank them for their commitment to Rabo Real Estate Group and we are aware of the challenge they are facing or will face in finding a new workplace. We wish them every success. In 2015 we met three times in the presence of the external auditor to discuss the 2014 annual figures (including the 2014 auditor’s report), the 2015 audit plan, the 2014 findings report and the 2015 interim figures. At five and four meetings, respectively, the Head of Internal Audit and the Head of Compliance attended the discussions of their quarterly reports, their annual plans and other relevant topics.

Report by theSupervisory Board


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We addressed the update of the risk management policy and decided that there should be more room for differentiation, considering BPD’s and Bouwfonds IM’s specific operations. BPD’s and Bouwfonds IM’s business activities were discussed at length. In the year under review, approval was given at BPD for the acquisition of a German residential property developer in the vicinity of Nuremberg. The future of BPD as part of Rabo Real Estate Group/Rabobank was on the agenda. This item will be discussed in more detail in the future. We were also informed of the developments in a specific region at BPD, which was followed by a guided tour of a project in this region. We received detailed information about the progress made in the strategic reorientation of Bouwfonds IM, as well as about the current status of three Rotterdam projects, whose final development and optimisation are being managed by Rabo Real Estate Group Holding. The process of selling these projects has commenced. We took note of the discontinuation of KP Investments’ operations and the German asset management organisation.

The Supervisory Board assesses members of the Board of Directors on the basis of a performance contract that incorporates the company’s strategic objectives. The Supervisory Board discussed the annual remuneration process and compliance in that regard. We decided not to pay any regular variable remuneration for 2014 to either employees – subject to the Collective Labour Agreement – or executives in the Netherlands. A limited number of employees were awarded a bonus.

In 2015, we also discussed changes in respect of adjustments made to the remuneration policy applicable to Rabo Real Estate Group. These changes ensue from amended external and internal rules, such as CRD IV guidelines, AFM legislation, AIFMD legislation and the Dutch Remuneration Policy (Financial Companies) Act (Wet beloningsbeleid financiële

ondernemingen; Wbfo).

The Supervisory Board also assessed its own performance in the year under review. The year 2015 marked a turning point for the organisation, as it divested several divisions in the manner described above. Since two business units now remain – BPD and Bouwfonds IM – this process triggered a transition to a more efficiently structured Rabo Real Estate Group Holding. Rabo Real Estate Group’s results are positive and we expect this trend to continue in the years ahead. We thank the Board of Directors and employees of Rabo Real Estate Group for their loyalty and drive!

Composition of the Supervisory Board in the year under review with personal details, principal and other positions

L.C. (Elco) Brinkman, Chairman

(1948, Dutch nationality)Supervisory Board member since: 2007Current term of office: 2015 – 2019Other positions: • CDA Chairman in the Dutch

Senate

• Member of the Supervisory

Board of Van Nieuwpoort


Board of BMC


Board of Movares


Board of Emesa

• Chairman of the Supervisory

Board of Struik Food


Board of Triodos Cultuurfonds


Council of the Naturalis

Biodiversity Center

J.L. (Jan) van Nieuwenhuizen(1961, Dutch nationality) Supervisory Board member since: 2014Current term of office: 2014 – 2018Principal position: • Member of the Executive

Board of Rabobank

Other position:• Chairman of the Supervisory

Board of FGH Bank

L.M.J. (Ludo) van Halderen(1946, Dutch nationality)Supervisory Board member since: 2009Current term of office: 2013 – 2017Member of the Supervisory Board of: • Rabobank IJsseldelta

(Chairman)

• Prysmian Nederland Holding

• Van Gelder Groep

• Brink Groep

• Wavin

Member of the Board of:• Stichting Kameroperahuis

• Rabobank regional

management for

Oost-Nederland

• Rabobank Central Delegates

Assembly

• Chairman of DIF II, DIF III and

DIF IV Advisory Committee

Hoevelaken, 12 April 2016

Supervisory BoardL.C. Brinkman, Chairman

J.L. van NieuwenhuizenL.M.J. van Halderen

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Market developments in 2015

Residential market

The Netherlands: further recoveryIn 2015, the transaction volume was up 16% from a year earlier as the total number of existing homes sold last year climbed to nearly 180,000. An indicator of the strong market upturn is the lower housing supply, with some 160,000 existing homes for sale at the end of 2015 – 21% down on the year before.

Although not every region in the Netherlands benefited from the recovery at the same time, prices rose even further, by 3.2% on average. The strongest growth was seen in the northern part of the Randstad conurbation; in the final quarter annual prices in Amsterdam rose by 11% and by 7% in Utrecht.

The restoration of trust was also felt in the sale of new-build houses, even more so than in the market for existing homes. In 2015 over 30,000 new homes were sold, an increase of more than 10% relative to 2014. The number of building permits issued also rose by nearly 40% in 2015 but, with 36,000 permits for owner-occupied homes, still lagged behind the expected increase in demand.

The recovery of the Dutch residential market is expected to continue in 2016, mainly driven by stronger economic growth, tax relief and low interest rates. The number of transactions will keep growing, although pre-crisis levels will not be reached. Housing supply will continue to fall in the

wake of this development, creating further price rises that reflect a tighter market.

Germany: residential market still boomingThe positive sentiment in the residential markets in Germany’s main cities continued to prevail. Demand for apartments by owner-occupiers and private and institutional investors outstripped supply in nearly all urban regions, fuelling further price rises. Rents for new homes increased despite government measures to regulate rents. Mortgage rates are low and owner-occupied homes are affordable for middle-income groups as well.

Land prices, which rose even further – in Berlin, for example, by 30% – make it impossible to construct affordable and social homes that still break even. Pressure on this part of the residential market has become much more severe since the summer due to the influx of refugees (in Berlin, 65,000 people over a period of six months), most of whom are eligible for a home.

There are major regional differences in absolute sales prices: a new-build apartment costs approximately € 7,750/m2 in Munich, € 5,000/m2 in Düsseldorf, € 4,700/m2 in Berlin and € 4,000/m2 in Nuremberg. The market for ground-oriented homes in the metropolitan areas is developing soundly with slowly rising prices.

The rebound of the residential market gained strong momentum in 2015. Overall, low interest rates, increased confidence in the economy and – possibly even more importantly – growth in the residential market boosted the number of transactions. The lower National Mortgage Guarantee maximum and reduced borrowing capacity for buyers on the back of more stringent NIBUD criteria apparently did not weigh heavy on buyers. Also, rising house prices reduced the number of underwater mortgages and improved housing circulation.


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France: economic reforms, slight economic recoveryAlthough France slightly underperformed in the European Union (EU) zone, the French economy recovered to a limited extent, too. As a result, consumer confidence improved slightly and fears of unemployment abated. Employment is a controversial issue in France, as unemployment rates are still as high as ever. The new Valls Cabinet has started economic reforms, including liberalisation of shop opening hours and deregulation of a few sectors, such as bus transport and the notarial profession. During 2015, the number of transactions in the market for existing homes rose to approximately 790,000 on an annual basis. After a mediocre first half, prices of existing homes were also up in the second half of the year, but ultimately just failed to reach the level of 2014 (-1.5%). As always, the residential market in the Paris region proved the strongest, as prices hardly dropped throughout the year.

Developments in the new-build market reflected the market for existing homes. The number of homes sold in the first three quarters of 2015 was approximately 18% higher than in 2014. The estimate for 2015 as a whole is some 100,000 homes, which was also the level reached in 2011. As with the market for existing homes, however, prices were a shade below the level of 2014. France’s market for newly built homes consists mainly of apartments (more than 90% of all transactions). Single-family homes are constructed primarily on the instructions of private commissioners.

Regional differences are, and will remain, extreme in France. The strongest residential market area par excellence, Île-de-

France, lagged in terms of sales, although prices climbed even further to nearly € 4,800/m2 on average. The economy is expected to pick up further this year and the residential market is expected to improve correspondingly.Although many reforms are still in store for France, its starting position is favourable as homeowners find themselves in a healthy financial position and the French strongly prefer an owner-occupied home.

Commercial real estate

The NetherlandsOffice market: no recovery of demand as yet The office market has been under severe pressure for quite some time now, driven by a combination of excessive office stock, a declining number of office jobs and the use of less office space per employee. Office users’ accommodation behaviour is changing too, with the consequence that purely functional office parks are losing ground. Users are moving more to inner-city locations, offering a greater mix of functions that are easily accessible by public transport. Buildings are, however, adapted to modern preferences of tenants and employees alike. The take-up figures are almost flat on the same period last year and vacancies are stabilising at a high level. Market dynamics largely originate from a demand for replacement space and less from expansions and new branches. A supply-demand mismatch is putting increasing pressure on rents for modern buildings in prime locations, in which respect it is striking that investments in offices are surging.

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Retail market: vacancy level steadily risingIn 2014 Dutch consumer confidence returned to pre-crisis levels and disposable income was slightly higher, but still total consumer spending hardly showed any growth in 2015. Several retail companies found themselves in a tight corner in 2015, whereas other companies expanded or entered the market. Retail chain V&D, along with a number of other large retailers, ran into financial difficulties at the end of 2015. Ultimately, at the beginning of 2016, this resulted in the bankruptcies of retail chain V&D and other companies, translating into more than 350,000 m2 of additional vacant space in the retail landscape, which was becoming smaller anyway. Retail market vacancies totalled 2.4 million square metres last year, which is 7.9% of the total retail floor space in the Netherlands, up from 6.9% in 2014. At the same time, the share of online spending once again gained ground at the expense of physical shops. Following the example of non-food shops, supermarkets are also increasingly focusing on serving customers digitally. Totalling approximately 800,000 m2, the take-up of retail space improved slightly last year, representing over 2.5% of the total retail volume in the Netherlands. In 2015 the retail market take-up pattern still showed high demand for space, which is striking given the subdued economic developments. The vacancy level also rose, despite the increase in take-up. At the end of 2014, 7.5% of retail space in the Netherlands was unoccupied, against 6.9% at the end of 2013. On average, this translates into approximately 100 new vacant shops per month. However, the positive development of demand also shows that a high vacancy rate in fact creates demand. New businesses are established especially in locations where rents are now at affordable levels.

The logistics real estate market picked up, with demand being high and many projects being developed at the request of future end users. The demand for modern logistics spaces remained sound, resulting in a take-up that was substantially higher than last year. Activity focuses mainly on the logistics hubs in the Provinces of Brabant and Limburg. Here, too, part of the existing stock is outdated and does not meet today’s needs.

GermanyWhereas Dutch commercial real estate is still going through difficult times almost across the board, German real estate has grown into a robust market offering many opportunities. This applies to both commercial and residential real estate. The divide between growing and shrinking cities is increasing and the drift to the cities is a more and more prominent trend, which is why new-build developments will increasingly be found in inner-city locations. In general, the current price hikes can be said to be underpinned by strong economic foundations. However, investors should guard


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against investing in segments where price growth may cause overvaluations. Total returns exceed the long-term average in the medium term, in particular as a result of rents rising more than inflation and a positive development in values.

Attractive shopping cities, including prominent secondary locations, are hit by e-commerce to a lesser extent relatively. International retailers still seek to set up businesses in the main shopping locations in Germany, but are confronted by a shortage of prime retail property. As a result, secondary locations are being considered as an alternative in the best shopping cities. The expected rental growth rate for prime shopping locations is expected to be between 2% and 3.5% per year in the period 2014-2018.

FranceInhabited by some 66 million people, France is the second largest country in the EU in terms of population. Partly because of a birth surplus, this number will rise to nearly 69 million by 2030. This means that the French consumer market will remain one of the main European markets, including in the long term. In line with higher total consumption, retail spending showed a clear increase. Experiencing a 29% increase in recent years, France is among Europe’s fastest-growing countries. Despite the growth of population (mentioned above), consumption and retail sales, regional differences in France are increasing. Outside of the capital Paris, the northern part of France is clearly lagging behind, whereas the southern regions display above-average growth in economic and demographic terms. What’s more, France – already one of the most urban countries in the world – is experiencing a persistent move of people from rural areas to cities.

Following subdued demand for investments in recent years, initial yields are still at a relatively high level outside of Paris. Expectations are that these will drop even more as the economy recovers and arbitrage occurs in relation to lower yields in other major European shopping cities.

Investing in real estate

The Netherlands2015 was a year of strong continued recovery for the property investment market, which attracted great interest from foreign investors in particular. The Amsterdam region was the most popular area, where the total transaction volume for 2015 more than doubled compared to 2014, according to preliminary figures. It is mainly Anglo-Saxon investors who are looking for opportunities in the market and who are now doing so in other countries because of high price levels. Both core investments and portfolios that create more added value are in high demand. However,

the divide in the investment market is becoming more and more apparent, with the top product being sold at record highs partly because of increasingly lower interest rates and with distressed investments only being marketable at extreme discounts. Average yields for the office market were almost flat, unlike in the retail market, where a further drop was observed. Residential investments are still much sought after, with price levels rising in the Randstad conurbation in particular.

GermanyInvestors’ great enthusiasm for the German market was surpassed once again in 2015 as both foreign and local investors purchased more real estate than a year earlier. This good news applies right across the property investment market: the residential market, the office market and the retail market.However, initial yields are subject to persistent downward pressure. A striking aspect is that the transaction volume is under pressure in some cities, reflecting the limited availability of attractive investment options. For example, the transaction volume of office investments dropped in Munich. In all big cities, however, there has been a further increase in residential investments.

FranceHere, too, investor interest was greater in 2015 than in 2014. This improvement was much more limited than in some other Western European countries, which was caused in part by a minor decline in interest shown by foreign investors. Prices soared in the Paris region – a very dominant region – in particular, and the slightly weaker performance of the French economy may also have played a significant role. The Paris office market is still by far the most important investment category.

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BPD

Changing customer behaviour led the BPD sales organisation to opt for a far-reaching digital approach in customer relations. BPD’s ambition is to offer the entire customer journey – the process from orientation to purchase – online, through personal contact, or by a combination of the two within two years. These adjustments to the selling process entail changes to the sales organisation as well. The resulting consequences for staff were described in a request for advice in March 2015.

Also in 2015 the decision was made to sell subsidiary Brummelhuis, a specialist in custom-built private homes, primarily because the intended collaboration between the regions and Brummelhuis failed to properly materialise. As a result, objectives were not fully achieved, either. In line with the proposed sale of Brummelhuis, BPD also decided to combine the Northeast and Central regions into one big regional organisation. This merger will probably take place in the first quarter of 2016.

BPD’s German subsidiary, BPD Immobilienentwicklung GmbH, acquired the property development activities of P&P Gruppe of Fürth in 2015, adding around 1,100 homes to its current portfolio. Both divisions have now been combined and have moved to a new location in Nuremberg, as part of BPD’s growth strategy in Germany. From 2016, BPD aims to use this new regional office to contribute 300 to 400 units annually in the region of Franconia to the growth strategy it has defined for Germany. With this addition, BPD Immobilienentwicklung GmbH now has seven offices in Germany.

Bouwfonds IM

A strategic reorientation commenced in 2014, and this was completed in the reporting year 2015. The final outcome of this reorientation was that Bouwfonds IM would continue the roll-out of the existing strategy, under the umbrella of Rabo Real Estate Group. In this respect, investing in the

people and the business will be key, while increasing scale through further growth in the years to come. Bouwfonds IM will continue to focus on institutional funds in Europe. Late in 2014, Bouwfonds IM completed a reorganisation as part of the strategic reorientation, confirming its commitment to focus on real assets. This was followed by projects to improve the efficiency, synergy and coherence of the business units. This efficiency programme included the optimisation and implementation of processes and IT tools. The organisation is now compliant with the requirements of the AIFMD.

FGH Bank

As FGH Bank’s shares were legally transferred to Rabobank Group effective 31 March 2015, FGH Bank ceased to be part of Rabo Real Estate Group. This means that all functional collaboration with FGH Bank has been discontinued, except for the demerger work. However, Rabo Real Estate Group Holding still supports FGH Bank in a variety of areas (for example work related to Compliance, IT, HR and Risk) and will likely continue to do so for the time being.

MAB Development

The MAB organisation had been in the process of being phased out since 2013. The remaining projects that were still ongoing in 2015 related to finalisation, also for the purposes of after-sales and warranty periods. Bearing responsibility for these projects, BPD and Rabo Real Estate Group Holding will ensure their further completion.

Fondsenbeheer Nederland and SVn

Continuing as stand-alone companies, Fondsenbeheer

Nederland and SVn ceased to be part of Rabo Real Estate Group, effective 1 June 2015. Employees who were already working for Fondsenbeheer Nederland at Rabo Real Estate Group entered the employ of either Fondsenbeheer

Nederland or SVn. Following an intensive process, these organisations are now going their own way, and are ready for the future.

Internal developments in 2015


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Personnel

The past year (2015) was marked by various organisational changes. The business units KP Investments and MAB Development were phased out during the year under review, while Rabo Eigen Steen was transferred to FGH Bank. The strategic reorientation at Bouwfonds IM was completed. In January 2015, it was announced that FGH Bank would be integrated into Rabobank in the context of Rabobank’s One Bank Strategy. The FGH Bank shares were transferred to Rabobank in March 2015. FGH Bank’s staff will remain in the employ of Rabo Real Estate Group for the time being. Subsequently, a project was initiated to give shape to the integration, including staff changes. This project, which is ongoing, will be continued in 2016.

The BPD division streamlined its sales organisation in the year under review. In addition, BPD decided in late 2015 to sell the business unit Brummelhuis and to combine the Central and Northeast regions. As a result of the organisational changes in the year under review, Rabo Real Estate Group Holding will be transformed into a financial holding company of limited size. Work on this transformation will continue in 2016. In the run-up to this development, a number of staff became redundant in the year under review and a request for advice was drafted.

In the context of our male/female diversity policy, one woman served as a member of the Board of Directors of Rabo Real Estate Group until December 2015. She resigned

from the Board of Directors in December 2015. This vacancy has not been filled at the level of the Board of Directors and her duties have been reallocated, mostly to the Finance Director of Rabo Real Estate Group.

As from 1 January 2015 Rabo Real Estate Group implemented a revised remuneration policy for employees in executive positions, which emanated from a policy review prompted by the introduction of the Dutch Remuneration Policy (Financial Companies) Act (Wet beloningsbeleid financiële

ondernemingen; Wbfo) in 2015. Part of the Dutch Financial Supervision Act (Wet op het financieel toezicht; Wft), the Wbfo further tightens remuneration policies in the Dutch financial services industry. In the year under review, attention was also paid to the further details of the renewed remuneration policy for Bouwfonds IM in an AIFMD context.

In view of the fact that the Rabo Real Estate Group Collective Labour Agreement was valid until 31 December 2015, few changes were made to the employment conditions of employees working at the Collective Labour Agreement level in the year under review. Still, it was decided to use the ROIC return indicator for the variable remuneration system, with retroactive effect as from performance year 2015. In the context of the lease plan, maximum carbon emissions were reduced to 145 grams per kilometre in 2015. In addition, necessary adjustments were made in response to amended laws and regulations.

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Legislative changes necessitated an adjustment of the pension scheme in 2015. The tax allowance of the Choice Budget (Keuzebudget) scheme made it possible to maintain the annual pension accrual at 2%, up to a maximum pensionable income of € 94,600 (also referred to as capping). Employees affected by this capping will receive a monthly Additional Choice Budget of 24% for the amount in excess of € 94,600. The employer took out group insurance that, upon death, will distribute a net amount to surviving dependants totalling three times the amount in excess of € 94,600.

Banking Code

The Banking Code was adopted in September 2009. At Rabo Real Estate Group, the Code officially only applied to FGH Bank, which is an institution with a banking licence under the Dutch Financial Supervision Act. However, Rabo Real Estate Group has opted to apply the Banking Code to all its majority interests, with due observance of the specific characteristics of a real estate company. The main topics of the Banking Code are listed below, and any deviations are explicitly mentioned.

Supervisory BoardThe composition of the Rabo Real Estate Group Supervisory Board is diverse; its members complement each other. The Supervisory Board assessed its own performance in the year under review. Within the context of lifelong learning, all members increased their knowledge of current property market conditions. In accordance with the Banking Code, profiles of its members have been drawn up. In view of its limited size, the Supervisory Board does not avail itself of separate committees such as an audit,

compliance or remuneration committee. In 2015, Mr Brinkman was reappointed for a period of four years.

DirectorsThe members of the Management Board of Bouwfonds IM signed a moral and ethical conduct declaration based on the Banking Code. The other members of the Board of Directors are not designated as directors of a financial institution in line with the Banking Code. All employees signed the Code of Conduct.

Risk managementThe members of the Board of Directors and the Supervisory Board periodically receive comprehensive reports describing the group-wide developments of financial and non-financial risks. These reports ensure that both corporate bodies are aware of the material risks that Rabo Real Estate Group is running. The Board of Directors is responsible for adopting, pursuing, monitoring and adjusting risk policy and risk appetite. The Balance Sheet & Risk Management Committee advises the Board of Directors on policy decisions. A key focal point in the adoption of Rabo Real Estate Group’s risk profile is the Risk Appetite Statement, which lays down Rabo Real Estate Group’s risk appetite in explicit standards.

Product approval processRabo Real Estate Group uses a product approval policy based on the principle that Rabo Real Estate Group clients and employees should be able to rely on the quality and suitability of the products offered by Rabo Real Estate Group. Products are only introduced to the market and distributed after a careful weighing of risks from the client’s perspective, based on the duty of care that Rabo Real Estate Group has


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towards its clients. In addition, all products in the range are subjected to periodic product reviews. The Risk Management, Compliance and Legal Affairs departments advise the Product Approval Committee on the necessary decision-making.

Audit functionWe have an independently positioned audit function which reports to the Chairman of the Board of Directors and the Chairman of the Supervisory Board. A risk analysis is performed to identify audit issues, which are discussed with the divisions, Board of Directors, Supervisory Board, Audit Rabobank and the external auditor. Reviews are performed throughout the year to examine whether internal control measures are effective in terms of their organisation, presence and functioning. The Internal Audit department and the Board of Directors, Supervisory Board and external auditor frequently exchange information. The internal and external auditors’ risk analysis, findings and audit plan are discussed in aggregate terms with DNB (the Dutch Central Bank) at Rabobank Group level.

RemunerationRabo Real Estate Group subscribes to the ‘View on Remuneration’ (‘Visie op belonen’), the Group Remuneration Policy and policy documents drawn up by Rabobank Group. In deviation from the Banking Code, the shareholder determines the remuneration of members of the Board of Directors, subject to the Supervisory Board’s approval. The Board of Directors and the Supervisory Board aim for a median position in the relevant remuneration market, in which respect Rabo Real Estate Group – in line with the Banking Code – is, in essence, a trend follower in the market. Variable pay awarded to the Board of Directors is capped at a percentage of their fixed income and includes a long-term component that partly depends on profitability and continuity. The remuneration results are balanced and the performance criteria do not encourage taking irresponsible risks. Performance is adjusted for (estimated) risks and the cost of capital, based on predetermined performance criteria. The average variable pay of individuals working at the company whose remuneration does not follow exclusively from a Collective Labour Agreement is no more than 20% of their fixed income, in line with the Wft requirement.

Rabobank tests the total amount of variable pay against the Group’s capital position at Group level. The performance management process has been set up and it meets the requirements of Rabobank’s Group Remuneration Policy.

In principle, retention, exit and welcoming fees are not permitted within Rabo Real Estate Group. If these are

nevertheless necessary in isolated cases, they are subject to approval as laid down in the rules of Rabobank’s Group Remuneration Policy. In 2015 a number of exit packages were granted, which were all in line with Rabobank’s Group Remuneration Policy.

Corporate Social Responsibility

Real estate should contribute to the quality of today’s and tomorrow’s society. That is why Corporate Social Responsibility (CSR) is common practice at Rabo Real Estate Group. Our CSR Charter states how we wish to collaborate with our stakeholders and society in a broad sense. Our ambition is to be a leader in sustainability in the real estate industry. The main issues for our Group were translated into four pillars: sustainable real estate, ethical business practices, responsible operations, and social commitment. Based on these pillars, five Group themes were defined: energy consumption, mobility, staff & leadership, vital communities, and circular economy.

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DevelopmentA market leader in the construction of integrated residential areas, BPD develops larger districts and neighbourhoods at extension locations and small-scale mixed-use projects, including through restructuring and change of function, in and around city centres. BPD is active in the Netherlands, Germany and France. Since its establishment in 1946 the organisation has enabled the construction of some 310,000 homes, with over a million Europeans now living in residen-tial areas on which BPD has left its mark.

BPD stands for the creation of living environments: neigh-bourhoods that are alive and where the built environment and nature meet in harmonious ways. Places that offer peace, space and security and, as focal points, encourage street activities. Places that welcome residents and visitors alike, where everyone can live – and live together with great enjoyment.

BPD projects

Alkmaar, Veneetse KadeThe Municipality of Alkmaar is creating a new gateway into the city with the area Het Schermereiland that is situated alongside the canal Noord-Hollands Kanaal. BPD is developing the Veneetse Kade project here, an urban living environment comprising mostly apartments (231) that express the atmosphere of the surrounding buildings. The south-facing orientation of the homes along with the fast, short connection to the town centre offered by the foot-passenger ferry offer a high quality of living. In addition, renewable energy sources will be used, with the heat for the homes being provided by a nearby waste recycling plant.

Bonn-Plittersdorf, Rheinauer GärtenIn Bonn – the former capital of West Germany and nowadays the home of major groups of companies (such as T-Mobile and Telekom) – BPD operates as an integrated area developer. As part of the Rheinauer Gärten project, BPD is building close to 300 homes on the site of a former US military base in a mix of ground-oriented and stacked homes. The homes are being constructed in attractive, small-scale clusters surrounded by lush greenery, adding to the pleasant atmosphere of the immediate surroundings, close to the large park Rheinaue and the luxurious villas along the Rhine embankment promenade. Bonn city centre is located seven kilometres away and the local amenities of the municipal district Bad Godesberg are easily accessible by car or bicycle in a few minutes. The complete public space is being developed as well as all residential buildings, including infrastructure and all utilities.

Lyon, Faubourg 7At the 8-hectare site of a former inner-city dairy plant, ‘le Bon Lait’, BPD is developing a subproject (Faubourg) consisting of two blocks of flats containing 52 homes in total. The urban designer’s main purpose for this area was to create a garden town, in view of the prominent presence of nature and scenic beauty. It is compliant with the high sustainability requirements that need to be met for the NF Logement démarche HQE® certificate (Haute Qualité Environnementale) and the BBC Effinergie® label (Bâtiment de basse

consommation énergétique). For example, the communal heating system, double insulation and solar collectors ensure that this project is being built to a very high level of sustainability. The two buildings share a large garden that serves as an entrance, meeting place and playground.

Main activities of Rabo Real Estate Group


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Alkmaar, Veneetse Kade

Number and type of homes 36 terraced owner-occupied single-family houses and 195 owner-occupied and rented apartments

Facilities Mixed-use centre within walking distance; Alkmaar city centre with all amenities a 10-minute walk away

Architects Roy Gelders architecten

Urban designer Municipality of Alkmaar

Start of development 1999

Start of construction 1st part in 2009

Completion 1st part in 2011, 2nd part from 2013 onwards, final part early in 2016

Bonn-Plittersdorf, Rheinauer Gärten

Number and type of homes 289 ground-oriented and stacked homes: two- to six-room apartments (49-155 m2), terraced houses, semi-detached houses

Facilities Five retail spaces with floor spaces of 50 to 1,750 m2 (approx. 1,960 m2 in total)

Architects a + m Architekten, Planquadrat Elfers-Geskes-Krämer, Pilhatsch Partner Architekten

Landscape architects PMP Landschafts-Architekten, Willems Ingenieursgesellschaft für Strassen- und Tiefbau

Start of development 2006 (first subplan), 2013 (final subplan)

Start of construction 2007 (first subplan), 2014 (final subplan)

Completion 2008-2016

Lyon, Faubourg 7

Number and type of homes 52 apartments

Architect Atelier Verra et Barrand

Start of development 2009

Start of construction 14 April 2010

Completion 2012

Award won Nominated for the Grand Prix Régional and Pyramide d’Or of the Rhône-Alpes Federation of Property Developers

Eindhoven, Philips Lighting

Fund Bouwfonds European Residential Fund, Bouwfonds European Student Housing Fund and a German single account

Project Philips Lighting Eindhoven

Assets Homes for young professional

Target group Institutional investors

Fund volume € 900 million – € 1 billion. Target volume € 400 million, anonymous

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Investment Management: focus on real assetsBouwfonds IM offers investors distinctive real asset investment products in the residential property, commercial real estate, parking, communications infrastructure and agriculture & farms sectors. Knowledge of the local situation near the assets under management is a prerequisite for sustainable returns. That is why Bouwfonds IM works with specialised teams from local offices in the Netherlands, Germany, France, Poland and Romania. Below are some of the projects constructed in 2015.

Bouwfonds IM projects

Eindhoven, ‘Philips Lighting’Philips Lighting is a former office building and laboratory consisting of three seven and eight-storey towers that are linked together. Around 33,000 m2 of usable area will be added to the residential market in Eindhoven, with a total of 616 lofts and penthouses and 2,800 m2 of commercial space

on the ground floor. Measuring 47 m2 on average, the lofts will be given an industrial look with a ceiling height of 3.90 metres and one big 14 m2 window with a view of the city. This project is designed to serve young professionals and expats, who are a growing target group in Eindhoven. The lofts will be let fully furnished. The building is located at around 500 metres’ distance from the city centre, at Mathildelaan, between ‘de Witte Dame’ and the PSV football stadium. A park incorporating the river Gender will be created behind the building. The total investment volume is approximately € 82 million, and the Bouwfonds European Residential Fund, the Bouwfonds European Student Housing Fund and the single account have each bought one tower.

Utrecht, PapendorpsewegSituated in one of the most centrally located office areas of the Netherlands – Papendorp in Utrecht – a 9,700 m2 office building was completely renovated for the open market by Bouwfonds IM. Based on a design by BFAS architecten, the former single-tenant office building has been transformed into a multi-tenant building by the addition of a shared meeting centre, an enlarged entrance lobby with more daylight (partial removal of floors above), a restaurant and


Utrecht,Papendorpseweg

Fund Rietveld West B.V.

Project Papendorpse-weg Utrecht

Assets Office buildings


Fund volume > € 350 million

Manchester,Spinningfields Car Park

Fund Bouwfonds European Real Estate Parking Fund II

Project Spinningfields Car ParkAssets Car parks



Rabo Bouwfonds Communication Infrastructure Fund

Fund Rabo Bouwfonds Communication Infrastructure Fund

Assets Radio masts, data centres and networks (including fibre-optic networks)



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a coffee bar. A BREAAM “very good” rating was achieved thanks to LED lighting with motion sensors, an improved climate control system, charging stations and lift upgrades, among other measures. Starting in early 2015, construction was virtually complete at the end of 2015.

Lease activities were undertaken simultaneously with the renovation. The office building has now largely been let to reputable tenants UTC (Benelux head office), KPMG and Eli Lilly. It is expected that the remaining 10% will be let by mid-2016.

Manchester, Spinningfields Car ParkSpinningfields Car Park is located in Manchester, in an area also referred to as the ‘Candy Wharf ’ of the North. Ideally situated for visitors to the area, the car park is surrounded by new office buildings rented by tenants including Barclays, Regus, Deloitte, HSBC Bank and RBS. In addition, high-grade (owner-occupied) apartments and the Civil Justice Centre are within walking distance. Bouwfonds IM acquired this car park on behalf of BEREPF II as part of a larger portfolio. The tenant – and operator – of this car park is NCP, the UK’s largest car park operator.

Rabo Bouwfonds Communication Infrastructure Fund (CIF)Investing in networks, data centres and radio masts, the Rabo Bouwfonds Communication Infrastructure Fund increased its assets under management from € 720 million to € 830 million in 2015. This growth was partly due to successful demand aggregation in Tubbergen and the commencement of the project for the outlying areas, in which the entity Cogas Kabel Infra Buitengebied B.V. will connect 20,000 households in the Cogas outlying areas to a fibre-optic network. The total asset value is € 35 million. In addition, various refinancing transactions took place, including BT data centres in SMS Exploitatie B.V. with NIBC for a total value of € 15 million.

Other activities of Rabo Real Estate Group

In view of the decisions mentioned above, property finance and commercial property development activities no longer qualify as main activities.

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Financial policy

In order to properly serve its clients, Rabo Real Estate Group wants to generate future-proof required returns that are in line with Rabobank’s preferred risk profile. The performance contract contains detailed strategic objectives, both for Rabo Real Estate Group as a whole and for its individual business units. These lead to strategic, operational and financial commitments aimed at value creation.

Financial results

The result from continued operations is € 26 million positive for 2015, down from € 40 million positive (including the one-off profit on the sale of the PalaisQuartier project) for 2014. Including non-recurring income related to commercial real estate in 2014 and non-recurring expenses in connection with organisational changes in 2015, the

normalised operating profit improved significantly. The positive developments in the Dutch residential market helped BPD to conclude 4,407 housing transactions in 2015, compared to 3,985 transactions in 2014. The number of housing transactions in Germany rose to 1,173 (2014: 1,126). Up 44%, the number of homes sold in France was 2,791 (2014: 1,939). A few housing transactions were concluded in countries other than the Netherlands, Germany and France, creating a total of 8,386 realised transactions against 7,064 in 2014, up almost 19%. On balance, the total amount of value adjustments was € 18 million positive in 2015, compared to € 38 million (negative) in 2014.

Bouwfonds IM made several acquisitions for the various funds in 2015 and several fund initiatives are still being prepared. Assets under management dropped by € 131 million to € 6,298 billion in 2015 (2014: € 6,429 billion).

Financial policy and results


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The focus of risk management was widened from financial risks – which required a lot of attention during the crisis – to include non-financial risks. Ethical and controlled operations are a prerequisite for doing business. To this end, Rabo Real Estate Group relies on the ‘integrated business control framework’ implemented at Rabo Real Estate Group in the past year. The effectiveness of the broad set of risk-mitigating operational controls is assessed several times per year. This structured way of controlling operational risks is a valuable contribution to process improvement.

The Board of Directors of Rabo Real Estate Group bears ultimate responsibility for the implementation of risk management policy. Real estate investments that are made or are to be eliminated are submitted to bodies for approval on the basis of a layered approval structure. The risk is tested against a system of limits laid down in the Risk Appetite Statement. The customer’s interest, operational risk and the reputation risk of new products are assessed before products are launched on the market. Existing products are also periodically assessed regarding these risks. The strategies of Rabo Real Estate Group and its divisions were brought further in line with its risk appetite and the risk appetite of its shareholder Rabobank in the past year.

FGH Bank came under the direct responsibility of Rabobank and will be integrated into Rabobank. Fondsenbeheer

Nederland/SVn continued as stand-alone companies halfway through the year and the strategic opportunities for Bouwfonds IM were examined.

Offering a comprehensive view of the risks that the company is running, the risk management report particularly addres-ses the company’s compliance with the risk appetite that has been defined. Rabo Real Estate Group’s risk profile showed considerable improvement in this respect in 2015, partly as a result of the company’s tighter strategy.

The main risks at Rabo Real Estate Group are related to the market risk of real estate (directly and indirectly through interests held and receivables from funds operating in the property segment), in which respect changes of market variables resulting from changes in the general economic climate lead to gains or losses on positions held. In line with its risk appetite, Bouwfonds IM focuses on what are known as real asset investment funds, reducing indirect positions with an increased risk profile that are no longer fully compatible with its current risk appetite. BPD’s risk profile in indirect positions is much lower. A decision to invest in or dispose of

Risk management

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either direct or indirect real estate is taken through a layered approval structure and an assessment made by experienced risk analysts. A Customer Due Diligence (CDD) assessment is part of the risk analysis. Business units and Rabo Real Estate Group may authorise investments that are within their mandate, but Rabobank must approve the largest investments. This approval structure is reviewed annually. Usually, Rabo Real Estate Group’s Risk Management analysed the sensitivity of its assets to a scenario that was extremely negative, but not inconceivable in the medium term. In 2015, it was decided to pay less attention to a downside scenario and instead develop scenarios based on a stabilising and improving market.

The demerger of FGH Bank reduced interest rate and credit risks. The interest rate risk was limited as a result of the greatly improved capital position, which is reflected in the low modified duration of equity and low Income-at-Risk. Strongly connected to market risk, the remaining credit risk is absorbed in part by stipulating security. In addition, the development of credit quality can be monitored closely as loans are almost always extended to entities managed by Rabo Real Estate Group itself. The credit risk concentration in the ‘Residential Property’ and ‘Commercial Real Estate’ sectors is inherent in Rabo Real Estate Group’s activities and market position.

With the market uptrend in 2015, Rabo Real Estate Group was affected by the negative consequences of the market risk of direct property to a relatively small extent. The market risk and credit risk resulting from exposures to indirect property were given additional attention at the end of 2015 due to a few actual and pending bankruptcies and due to declines in the value of commercial real estate. The latter in

particular prompted the formation of several significant provisions for credit losses in 2015, mostly ensuing from indirect positions taken in the past that are no longer compatible with the current risk appetite. More information on risk control can be found in the risk management section of the financial statements from page 87.

ValuationRabo Real Estate Group values land, work in progress and finished goods at cost, less any impairments deemed necessary. An annual assessment is performed to check whether there are any declines in value that call for an adjustment of the carrying amount.

Investment property is valued at fair value: the most likely price reasonably obtainable in the market on the reporting date. This value is regularly determined by independent valuers.

Outstanding loans are reviewed at least once per year, with an opinion being reached about the value of the claim. Loans that have undergone a value adjustment are adjusted to the net realisable value.

In short, the valuation processes are robust and include recommendations made by regulators and professional organisations.


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2016: continued recovery set to persist

According to forecasts, the Dutch economy will continue to develop well in 2016, helped by consumer confidence on the back of increased purchasing power and rising employment, as well as low interest rates. For 2016, we anticipate an increase in GDP volume to a shade above the 2015 level. This means that, on the face of it, economic growth seems to have made a convincing comeback in the Netherlands after several years of crisis, recession and stagnation. What’s more, the increase in economic activity is broadly supported. Exports continue to be the greatest contributor to growth, underpinned by private consumption and private investment. As growth is returning to domestic spending, almost all sectors are benefiting from higher demand for their products and services in 2016, for the third year in a row.

Residential market

The NetherlandsThe recovery of the Dutch residential market is expected to continue in 2016, mainly driven by stronger economic growth, tax relief and low interest rates. The number of transactions will keep growing, although pre-crisis levels will not be reached. Housing supply will continue to fall, contributing to further price rises in a tighter market.

GermanyThe pressure on residential markets in large urban regions as well as in secondary cities will increase further. Not only the housing of hundreds of thousands of refugees but also qualitative demand from, for example, the growing group of senior citizens in Germany are creating enormous challenges for the government and the construction industry. Around 450,000-500,000 homes must be built each year. Selling them will not be a problem: low interest rates make it appealing to many households to acquire property, while investors hardly see any more attractive investment opportunities. Prices are expected to show a limited rise and the Federal Government will decide on new tax deduction options for investors to further boost the rental market.

FranceThe economy is expected to pick up further this year and the residential market is expected to improve correspondingly. Although many reforms are still to come, France’s starting position is very sound as homeowners find themselves in a healthy financial position and the French strongly prefer an owner-occupied home.

Investing in real estate: opportunities

Demand for investments in real estate is high due to low interest rates and stock market volatility, although the high vacancy rates in the office market as well as in the retail market are still forcing investors to take a critical stance. Investors’ renewed interest in the safe havens of the investment market is expanding further with the search for returns, in which a growing number of investors are expressly looking at alternative sectors such as infrastructure.

It is precisely in those alternative sectors that the opportunities for Bouwfonds IM lie. While large investment managers are increasing their dominance in traditional sectors through market consolidation, Bouwfonds IM offers investors distinctive products in alternative sectors instead.

The futureIn 2016, Rabo Real Estate Group will continue its efforts to future-proof its various business units. Barring unforeseen circumstances, Rabo Real Estate Group’s profits will continue to recover. Rabo Real Estate Group will continue to adjust to internal and external developments within the Rabobank framework.

Market outlook for 2016

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Consolidated statement of profit or loss

For the year ended 31 December(in millions of euros)

Note 2015 2014

Project income 3 1,514 1,484Fee and commission income 3 46 50Revenue 3 1,560 1,534

Cost of sales 4 1,274 1,219Value changes of property inventory 5 (18) 38Fair value changes in investment property 6 (5) (38)Staff costs 7 138 152General and administrative expenses 8 76 65Depreciation, amortisation and other value adjustments 9 4 11Operating expenses 1,469 1,447

Result of joint ventures and associates 10 5 (32)Operating profit 96 55

Result on financial assets and liabilities at fair value 11 11 7Financial income 12 32 43Financial expenses 12 (104) (68)Result before tax from continuing operations 35 37

Income tax 13 (9) 3Result after tax from continuing operations 26 40

Result after tax from discontinued operations 14 - (226)Result after tax including non-controlling interests 26 (186)

Result attributable to non-controlling interests - -Result attributable to equity holder of the parent 26 (186)

See the notes to the Consolidated statement of profit or loss.


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Consolidated statement of financial position

As at 31 December

(in millions of euros)Note 2015 2014

Non-current assetsIntangible assets 15 3 2Property and equipment 16 7 8Investment property 17 195 175Investments in joint ventures and associates 18 197 192Financial assets at fair value 19 168 152Non-current receivables 20 322 453Deferred tax assets 21 48 72

940 1,054Current assetsProperty inventory 22 2,018 1,971Trade debtors 23 169 193Current tax assets 24 217 225Accrued assets 25 253 209Cash and cash equivalents 26 226 109

2,883 2,707

Non-current assets held for sale 27 15 246Assets held for distribution to owner 14 - 16,035Total assets 3,838 20,042

Equity 28 864 1,043

Provisions 29 153 154

Non-current liabilitiesNon-current debt 30 994 1,146Financial liabilities at fair value 19 13 13Deferred tax liabilities 21 36 50

1,043 1,209Current liabilitiesCurrent debt 31 1,346 1,928Current tax liabilities 24 26 32Other current liabilities 32 406 491

1,778 2,451

Liabilities held for distribution to owner 14 - 15,185Total liabilities 2,974 18,999

Total equity and liabilities 3,838 20,042

See the notes to the Consolidated statement of financial position.

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For the year ended 31 December(in millions of euros)

2015 2014

Cash flows from operating activitiesResult from continued operations before tax 35 37Result from discontinued operations before tax 9 (299)Adjusted for:Non-cash items recognised through profit or lossDepreciation, amortisation and other value adjustments 4 11Value changes of property inventory (18) 38Impairment/(reversal impairment) other provisions 7 5Income of joint ventures and associates (5) 32Unrealised value changes in investment property and non-current assets held for sale 12 (14)Value adjustments to receivables 53 3Non-cash items from discontinued operations 41 579

94 654Changes in operating assetsProperty inventory (15) 60Trade debtors 23 (50)Repayments of non-current receivables 83 245Non-current receivables provided - (93)Changes in accrued assets (50) 60

41 222Changes in liabilities related to operating activitiesOther changes in provisions (15) (14)Changes in other liabilities (99) (100)Income tax paid - (9)Other changes related to operating activities (3) 13

(117) (110)

Changes in discontinued operating activities 98 994

Total cash flows from operating activities 160 1,498

See 35 Statement of cash flows for notes to the consolidated statement of cash flows.

Consolidated statement of cash flows


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* The line Investments in and disposals of joint ventures and associates includes the cash inflow in 2015 ensuing from the sale of FGH Bank (see section 14) and the cash

outflow resulting from the purchase of P&P Gruppe (see section 34).

For the year ended 31 December

2015 2014

Cash flows from investing activitiesAcquisition of intangible non-current assets (2) (6)Purchase of property and equipment (2) (2)Purchase of investment property and non-current assets held for sale (5) (86)Sale of investment property and non-current assets held for sale 221 799Investments in and disposals of joint ventures and associates* 914 6

1,126 711

Cash flows from discontinued investing activities 10 17

Total cash flows from investing activities 1,136 728

Cash flows from financing activities (note 35)Financial assets and liabilities at fair value (16) -Non-current and current debt (739) (1,713)Dividends (309) (2)Capital contribution - 450

(1,064) (1,265)

Cash flows from discontinued financing activities (158) (1,298)

Total cash flows from financing activities (1,222) (2,563)

Change in cash and cash equivalents 74 (337)

Cash and cash equivalents at beginning of year 152 489Cash and cash equivalents at end of year 226 152

Cash and cash equivalents of continued operations at end of year 226 109Cash and cash equivalents of discontinued operations at end of year - 43

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Contact details

Head Office

BPD Europe BV

Westerdorpsstraat 66, 3871 AZ Hoevelaken

PO Box 15, 3870 DA Hoevelaken

T +31 (0)88 712 21 22

[email protected]

www.bpdeurope.com

The Netherlands

BPD Ontwikkeling BV



T +31 (0)88 712 21 22

www.bpd.nl

France

BPD Marignan SAS

70, rue de Villiers

F-92532 Levallois-Perret Cedex

T +33 (0)1 49 64 15 15

www.bpd-marignan.com

Germany

BPD Immobilienentwicklung GmbH

Lyoner Strasse 15

D-60528 Frankfurt am Main

T +49 (0)692 197 980

www.bpd-de.de

Head Office

Bouwfonds Investment Management

De Beek 18, 3871 MS Hoevelaken


T +31 (0)33 750 47 50

[email protected]

www.bouwfondsim.com

Germany

Bouwfonds Investment Management Deutschland

Budapester Strasse 48

D-10787 Berlin

T +49 (0)30 59 00 9760

[email protected]

www.bouwfondsim.com

France

Bouwfonds Investment Management France

6, avenue Franklin D. Roosevelt

F-75008 Paris

T +33 (0)175 579 020

[email protected]

www.bouwfondsim.com

Rabo Real Estate Group



T +31 (0)33 253 91 11

[email protected]

www.rabovastgoedgroep.nl

Colofon

Published by

Rabo Real Estate Group Corporate

Communications

Realisation

Volta_thinks_visual, Utrecht

Photographs

Edwin Walvisch

Publication

This publication forms the Annual

Report of Rabo Real Estate Group.

The report is available digitally

and can be downloaded from

www.raborealestategroup.com.

Publishing

After adoption, the 2015 financial

statements, the Annual Report

and the other information will be

filed with the Trade Register of the

Chamber of Commerce under

number 08012222.


AP

RIL

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Jaarverslag 2015 Annual report 2015

Documents

Transcript of Jaarverslag 2015 Annual report 2015