Vastned Retail N : Minutes (ENG)

Annual General Meeting of shareholders of Vastned Retail N.V. held on Thursday 20 April 2023 at 1:00pm at the Rosarium, Amstelpark 1 in Amsterdam

Please note that the meeting was held in the Dutch language, the minutes were therefore drawn up in Dutch. The minutes are translated into English and placed on Vastned's website. In the event of any uncertainty, the Dutch version will prevail.

Chairman:	J.G. Blokhuis, Chairman of the Supervisory Board of
	Vastned Retail N.V. ('Vastned' or 'company')
Secretary	R.P.O. Kramer, Company Secretary

1. Opening and announcements

The chairman: Good afternoon, ladies and gentlemen. The clock has just gone 1, a perfect time to start. Welcome to Vastned's Annual General Meeting of shareholders for the 2022 financial year. I hereby open the meeting. I note that the meeting has been convened in accordance with the law and the company's articles of association. The agenda with the items and appendices to be discussed have been available for inspection at the company's offices and through ABN AMRO in a timely manner and have been available on the website since 9 March last. At the table in front of you are CEO Reinier Walta, right next to me, and on the other side are supervisory directors Desiree Theyse and Ber Buschman. My name is Jaap Blokhuis, I am the chairman. I hereby appoint our company secretary Raymond Kramer who is sitting on the far left as secretary of this meeting. Our auditor from EY, Mr Jaap de Jong, is in the room and you will see him at the rostrum shortly. Once we know how many shareholders entitled to vote are present at this meeting, we will let you know. We now turn to the agenda. I would like to give you the opportunity to ask questions at each agenda item. Please use the microphone when you do, and state your name loudly and clearly before you ask your question. Furthermore, I would kindly ask you to check that your phone is muted or switched off, whatever type of phone you have brought along. There are 10 items are on today's agenda. Questions that are not specifically related to any of these agenda items can be raised at 'any other questions' at the end. The text in the presentation at this AGM is mainly in English so that we can show interested parties abroad the same presentation. The working language at this AGM, as you will have noticed, is Dutch. The minutes will be drawn up in Dutch and then also translated into English. The minutes will then appear on Vastned's website within a few weeks. That concludes my general announcements.

2. Report of the Executive Board on the 2022 financial year and discussion of the main points of the corporate governance structure and compliance with the Corporate Governance Code

The chairman: I would now like to formally move to agenda item 2 of the meeting, the report of the Executive Board for the 2022 financial year. As regards the corporate governance structure and compliance with the corporate governance code, you have been able to read in the annual report on page 74 and following that in 2022 Vastned again complied with all provisions of the Code. Vastned

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Minutes AGM Vastned Retail N.V. 20 April 2023

CEO Reinier Walta will comment on the past financial year and give his views on the various developments and how they affect Vastned. He will also elaborate on the effects these developments had on the financial results and the financing structure. I now give the floor to CEO Reinier Walta.

Mr Walta: Thank you, Jaap. I once again feel honoured to be able to update you today on a number of topics. Let me first review some of the highlights of the year 2022, followed by our operational and financial performance. Next, I will discuss the implementation of our strategy in 2021 and the economic developments as they affected Vastned and its stakeholders. I will conclude my review of 2022 with a discussion of our current financing structure. I will then proceed to the strategic reorientation that we announced at the publication of the annual results in February. I would like to use this meeting to explain the rationale for the strategic reorientation and the process behind it. Finally, I will give our views on the 2023 outlook, after which there will be an opportunity to ask questions. 2022 was a good year for Vastned in terms of operational and financial performance. Vastned is satisfied with the results achieved. They once again confirmed the quality of the property portfolio, which also translated into only a limited write-down of 1.2% on the value of the property in a challenging market. The increase of the occupancy rate to 98.6% as at year-end 2022 and a collection rate of 98.2% confirm the quality of our tenant base. During 2022, Vastned's property portfolio hardly changed; five targeted divestments and one targeted investment had no material impact on the value of the portfolio. The number of new leases was more limited than in previous years with all new leases concluded near or above market rent. Like-for-like rental development increased by 7.5% and was driven by the higher occupancy rate, rent indexation and fewer rent discounts related to the fact that the COVID-19 pandemic had run its course. With few vacancies, and tourism in the largest cities recovering, Vastned is confident that the operating base for high-street retail properties is robust. This translated into an improvement in the direct result to € 2.05 per share in 2022, which was at the upper end of our 2022 forecast. We are also pleased that later in the meeting we can propose to declare a dividend of € 1.85 per share. With the interim dividend of €

0.59 that was already paid in August, the final dividend will reach € 1.26 per share. This equates to a payout ratio of 90.2% of our direct result. Our property portfolio has proven to be robust and we are seeing shoppers returning to high streets. Even so, we remain vigilant; after all, Vastned is not immune to rising interest rates, geopolitical tensions and other economic uncertainties. We are expected to issue an outlook at our Q1 trading update on 11 May next. I now turn to operational and financial performance. Our occupancy rate remains high and rose steadily to 98.6% over the past period; the upward trend was visible in all countries where we operate. This high occupancy rate demonstrates the quality of Vastned's property portfolio, for which Vastned was able to attract high- quality tenants who managed to successfully deal with the uncertainties of recent years. Tenant quality also translated into a in a high collection rate of 98.2% at year-end 2022. Meanwhile, as of the end of March, we were at 98.6% for 2022, and that could go up to 99%, because we have also had a couple of minor bankruptcies and still provided some rent reductions. In 2022, Vastned concluded 43 new leases totalling € 6.4 million, which was significantly lower than the previous year. The negative rent adjustment on these 43 new leases related in particular to two large leases in The Hague and Antwerp that had been let to other tenants at significantly above market rent. However, Vastned is delighted that two highly suitable tenants have been found for these properties in JD Sports in The Hague and ETAM in Antwerp, with whom we have reached long-term rental agreements that are still above the market rent. We prefer to show the rent development on a like- for-like basis, but especially in recent years, this has not always been easy due to COVID-19 lockdowns with rent reductions and also rent deferrals. The like-for-like rental development shown here is adjusted for investments and divestments. The rental development over the past year showed strong growth of 7.5%. It was mainly driven by higher occupancy, indexation of existing rent

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Minutes AGM Vastned Retail N.V. 20 April 2023

and also because we provided fewer rent discounts for the brief COVID-19 lockdown early in 2022. Where occupancy remains high, it is worth noting that indexation of rents will always follow at some point. The effect depends on the timing of annual indexations and agreements on passing on inflation, which may also vary from country to country. My next topic is property valuations. After Vastned faced property write-downs in recent years in connection with the COVID-19 pandemic and the associated lockdowns, initially we expected a slight recovery in valuations in the first half of 2022. However, the uncertainties that entered the market after the Russian invasion of Ukraine and the consequent sharp rise in energy prices and interest rates caused a limited 1.2% fall in property values in the second half of the year compared to the previous year. These charts show the degree of diversification within Vastned's portfolio. Diversification is important to us because it ultimately lowers the risk profile. In the graph on the left, our main cities are plotted along with their proportion of the total value of the property portfolio. As you can see, Amsterdam is the biggest at 22%, followed by Paris at 16% and Utrecht at 7%. If we look at the segmentation by type of retail business or tenant, we see that 45% of annual rental income came from fashion, 17% from supermarkets, 10% from sports and finally 5% from residential. The proportion of residential has been rising slowly but steadily over the past few years, and this is ultimately because, of course, we are still trying to convert the floor space above shops into housing, and twelve new or renovated flats were added in the past year. In the fashion segment, we saw a strong recovery after COVID lockdowns in the past year compared to previous years. Consumer confidence surged until summer 2022 and along with it, so did spending. However, after the rise in energy prices and also inflation and the consequent decrease in disposable income caused a decline after the summer of 2022, we did see an upturn in the first three months of 2023. To achieve diversification, Vastned has been focusing for several years on reducing the share of fashion, as we stated in 2021, from the current 45% to 30%. However, in order to approach diversification sensibly while maintaining a stable rental income, we do so very gradually. Let us now turn to the implementation of our strategy as presented to you in 2021. In doing so, we will address the latest state of affairs whereby I will also touch on general economic developments, discuss our current financing structure and finally move on to the announced strategic reorientation. In 2022, we continued the implementation of our strategy based on three strategic pillars. With this strategy, we respond to market developments in the best possible way. We explained it in detail when we announced our annual figures, but it makes sense to go over it again here. We are seeing a gradual improvement in the tenant mix: the share of fashion/clothing was down to 45% at year-end 2022. We have sold a number of properties in some smaller cities and expanded our Zuidplein cluster in Rotterdam by one property. We also continued to develop flats above city centre retail locations and upgraded another twelve new apartments. With the apartments, I should point out that even under the pressure of the government's policy, we are looking very carefully at the future, at how we will proceed with this over time. We are quite cautious right now and we are constantly reviewing our project calculations to check that they will eventually yield the desired returns. The number of FTEs in the company remained stable at 32 and despite the difficult labour market, Vastned managed to fill four vacant positions over the course of the year. In view of the requirements of the stock exchange listing, Vastned believes that, with the current size of the fund, there are no longer easy pickings to achieve further significant reductions in FTEs. We managed to stabilise our cost levels in a high inflationary pressure environment.

At the next slide, I will elaborate a little on how we have implemented the strategic goals in recent years. Let us first look at the investments and divestments made by Vastned in recent years. The proceeds of divestments allow Vastned to repay external debts, thereby reducing our debts and financing costs. However, the COVID-19 pandemic has taken its toll on the property transaction market. Vastned made targeted divestments of properties, which were sold above appraisal value. Post-COVID, we see that due to still relatively low yields on property, there are limited opportunities

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for responsible investments and, in addition, we are currently sitting on higher-than-desired debt and actually need to sell first before considering investments. Vastned has been working in recent years as part of its strategic focus to establish the right organisation for the size and development of our business. This focus led us to consider all possible avenues to bring down costs. For the organisation, the most salient element was that the Executive Board was reduced to one member, namely the one standing before you here, and there was a reduction of 9.3 FTEs. All in all, the bottom line of the €

1.9 million reduction in annual general expenses carries over in a better result of our company and therefore also for you as shareholders. We now come to the subject of the return on Vastned shares. The share buyback programmes between 2017 and 2019, together with the dividends paid, resulted in significant cash flows to you as shareholders in recent years. Under Dutch state and fiscal investment institution legislation, Vastned has an obligation to distribute the returns on the portfolio directly to you as shareholders in the form of dividend. This obligation offers you as shareholders a significant annual cash flow, but also ensures that there is not enough room to use the results achieved to reduce external debt or make additional investments in the portfolio. In addition, we are aware that with share buybacks and the flow of dividends, cash flow does not tell the whole story. After all, as shareholders you know that Vastned's share price has been under considerable pressure during the same period. Market movements and economic uncertainties have magnified this, resulting in our share price quoting at a steep discount to Vastned's equity. On the following slides I will explain which economic developments impacted Vastned in particular. As the chart on this page shows, economic development in recent years has been turbulent; the COVID-19 pandemic with the associated lockdowns caused huge fluctuations in economic growth in the countries in which Vastned operates. The retail segment in which our tenants operate has fluctuated in tandem with these volatile market movements. As we recovered from the COVID-19 pandemic, political turmoil and the Russian invasion of Ukraine caused additional unrest and energy price hikes in Europe. At the same time, almost all Western European economies are currently grappling with serious labour shortages. These shortages seem to be persistent and will not be solved overnight. Economists anticipate that active central bank policies to cool the economy and curb inflation will have a dimming but stabilising effect on economic growth and the labour market. Particularly as unemployment is still very low, current expectations are that there will be no recession. For Vastned, low unemployment also tends to have the effect of affecting our tenants' end-markets relatively little. Consumer confidence is one of the key metrics that can give an indication of future consumer spending. For Vastned, and especially for its tenants, this makes it a good indicator of future consumer spending. After the turmoil we saw in 2022, it is good to see consumer confidence rising again in the Netherlands, Belgium and Spain since December 2022, and stabilising in France. Inflation is a hot topic in today's news reports and with good reason. 2022 inflation levels were unprecedented and historically high. For Vastned, there are two sides to inflation: while it allows us in most cases to adjust our rents for inflation, the central banks' fight against inflation causes rising interest rates and higher financing costs as well as possibly undermining of consumer confidence and future consumer spending. Long-term low interest rates provided Vastned and many other companies with relatively cheap funding in recent years, but soaring inflation has forced central banks worldwide to sharply raise interest rates in order to curb inflation. Here is a picture of the development of the three-month Euribor interest rate, which is an important measure of bank funding rates. As you can see, it has recently gone up from a negative value of minus 0.5% to over 3%. We will show the implications of this in the next section on funding structure. Raising financing in the financial markets enables Vastned to use leverage; borrowed money gives Vastned more financial clout to purchase property. A larger portfolio allows Vastned to make the organisation more efficient, and at the same time further expand its portfolio. Leverage works best if interest payable on the financing is lower than the return earned on the property. The amount of funding on the total

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portfolio is expressed as a loan-to-value ratio: the higher the ratio, the higher the degree of external funding. Vastned's long-term target is a loan-to-value ratio of below 40%. This is an internal objective that allows Vastned to absorb any shocks in the market in terms of property valuations as well as financing costs. Interest rates have been especially low in recent years, and Vastned has been able to secure long-term financing during that period at low interest rates while at the same time, in line with our strategy of conservative financing, fixing these low interest rates in financing agreements. The target of two-thirds of the loan portfolio being fixed-rate was met at 72.5%. The increased interest rates have a dual effect on Vastned: our 27.5% unsecured bank loans become significantly more expensive, but if we refinance our entire financing portfolio, we will have to accept a significantly higher interest rate for a considerable number of years. As you can see on this chart, the average maturity of our funding is getting shorter; it came down from 2.9 years to 2.2 years in 2022. A € 200 million extension of our revolving credit facility by one year had a somewhat dampening effect, but you will understand that we now need to start preparing the business for a broad refinancing of our external debt and we will go into this in a bit more detail on the next page. As you can see, the maturities of our financing facility vary over the next few years, but the overall horizon is on the short side. Let's discuss 2023 first. Vastned intends to use its current headroom within the existing facilities to repay the existing loan facilities that will mature in 2023 in full and cancel them. In addition, some financing facilities will mature in September 2024 and September 2025. With interest rates rising, it is appropriate to start thinking carefully now about how we will deal with that, and this will be partly covered in the next few slides on the strategic reorientation process that we have announced. This strategic reorientation was prompted by a number of market developments that we expect Vastned to be exposed to in the next few years. The key question we need to ask ourselves here is whether the current portfolio, which has performed very well in recent years that were very challenging, has the right characteristics to meet the challenges of the future and to also allow value to be extracted from this portfolio for all stakeholders. Next to the characteristics, the composition and size of the portfolio must also be considered. Vastned, like our Dutch peers, was unpleasantly surprised in September 2022 by the government's intention to abolish fiscal investment institution status for listed companies with direct investments in property. In principle, this would mean that Vastned would be subject to the Dutch corporate tax rate of 25.8% instead of the current zero rate. Vastned has previously stated that this would have an impact of between 5% and 10% on our direct result depending on any mitigating measures we can take ourselves. These might include adjustments to the legal structure, for example. Earlier, I discussed rising interest rates and the impact they will have on our business, especially in combination with the upcoming refinancing and the pressure on valuations of our properties. This is why Vastned is analysing all its options to do justice to the value of the current portfolio, regain future opportunities to make targeted investments in properties with the right returns, strike the right balance between the financing to be raised and the cost of financing compared to the return on the portfolio, align investments and divestments to keep the strategic focus right and to adapt the size of the organisation to the size of the portfolio, and generate the right future cash flow for you as our shareholders. For the purpose of this analysis, Vastned has decided to pursue the following process as part of its strategic reorientation. As we pointed out when we presented our annual figures for 2022 and as I now reiterate, our approach is based on the fact that everything is on the table and different options will be explored, and we are already working very hard on this. This might involve selling parts of our portfolio or perhaps even the entire portfolio in a particular country, adjustments to our organisation, our legal structure or our financing structure, or any combination of these options. As you may expect from us, we will carefully map out all the options and consider the feasibility of each one, what the consequences will be for our financing and, of course, the value these options unlock for Vastned and its stakeholders. We will also have to take into account market conditions and

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Minutes AGM Vastned Retail N.V. 20 April 2023