Vastned Retail N.V., - Vastned: Half-Year Report 2021

1 VASTNED RETAIL N.V. HALF-YEARREPORT 2021

PRESS RELEASE

HALF-YEAR REPORT 2021

Vastned shows relatively good performance despite lockdowns; focus on strategy execution, taking advantage of new retail trends

Highlights H1 2021

• Direct result of € 0.88 per share (€ 0.85 in H1 2020)
• Indirect result of € 1.38 negative per share (€ 2.09 negative in H1 2020)
• Total earnings per share of € 0.50 negative (€ 1.24 negative in H1 2020)
• Collection rate of approximately 90%
• Occupancy rate up compared with end of Q1 2021 to 96.2%
• Like-for-likegross rental income decreased by 3.2%
• Value of property portfolio decreased by 1.9% compared with 31 December 2020
• General expenses decreased by € 0.4 million in H1 2021
• Loan-to-valueratio of 44.2% as at 30 June 2021
• Good liquidity position; Vastned remains well within bank covenants
• Focus on strategy execution: improving our retail tenant mix by adding tenants that benefit from new retail trends, including retailers combining physical and digital stores like Coolblue and My Jewellery
• Interim dividend of € 0.53 euro per share; 60% pay-out ratio in line with dividend policy
• Outlook: Barring unforeseen circumstances and assuming no reintroduction of national lockdowns in Vastned's key geographies in the second half of 2021, the expected range of direct results is between € 1.80 and € 1.90 per share

Amsterdam, 29 July 2021 - Vastned, the listed European retail property company, has reported a relatively good performance despite the continued impact of COVID-19-related lockdowns and restriction measures in all of its portfolio countries. Vastned reports a direct result for H1 2021 of € 0.88 euro per share, which is higher than the € 0.85 per share reported in H1 2020.

Despite a still challenging retail environment, the collection rate remains strong at approximately 90%, and the occupancy rate remains relatively stable at 96.2%. The value of the property portfolio decreased 1.9% during H1 2021, including the full effect of the higher Dutch transfer tax as per 1 January 2021. Our focus continues to be on executing our strategy, improving our tenant mix with an increased focus on digital retailers and strong urban brands, and creating more mixed-use spaces by adding residential units and small offices.

Reinier Walta, Vastned CEO: "A direct result per share of € 0.88, a collection rate of approximately 90% and occupancy at 96.2% are all indicators of relatively good performance, especially in the context of continued subdued conditions due to the lockdowns across all our geographies in the first half of 2021. The value of our total property portfolio fell by only 1.9% over this period.

This limited decrease clearly indicates the quality and resilience of both our portfolio and our tenant's businesses. While certain renewals have put pressure on the average rent levels, the overall impact on rental income from our portfolio has been minimal. As part of our new strategy announced earlier this year, we are engaging more actively with existing and new tenants, while looking at opportunities to both protect and expand future gross rental income. This will include an increased focus on tenants that benefit from new retail trends, facilitating the successful digital retailers that seek a greater physical presence and leveraging the strong phygital shift in retail markets. Vastned's unique portfolio of high street retail properties also leaves us well positioned to benefit from increased demand from suburban retailers for high street locations, as well as from supermarkets for smaller stores in historic inner-city areas. At the same time, and in line with our strategy, Vastned will continue to look at creating more mixed-use assets by adding residential units and small offices to properties. These various developments will serve to future-proof our tenant mix and our properties. Over time, optimising our portfolio with a focused letting strategy, redevelopment, selective investments and targeted divestments should unlock the intrinsic value of Vastned's real estate portfolio."

	Vastned Retail N.V.	De Boelelaan 7	PO BOX 2276	Tel: [phone]
		1083 HJ Amsterdam	1100 CG Amsterdam	[e-mail]	www.vastned.com

2 VASTNED RETAIL N.V. HALF-YEARREPORT 2021

PRESS RELEASE

COVID-19 impact

During the first half of 2021, the portfolio was significantly impacted in the Netherlands due to the long lockdown period and the restrictions on non-essential retail locations, restaurants and bars. From 5 June 2021, retailers were allowed to receive customers again without appointments, and on 26 June most COVID-19-related restrictions were lifted for retailers. Currently, mainly bars and restaurants in the Netherlands continue to face restrictions on the number of guests they may cater to as well as regarding opening hours. The 1.5-metre social distancing measures in the Netherlands and the equivalent restrictions still in place in Vastned's portfolio countries continue to negatively affect some of Vastned's tenants, which is only partly compensated for by economic relief measures.

The table below shows the rent arrangements made in H1 2021 for H1 2021 and for FY 2020. In the portfolio in the Netherlands, Vastned waived € 1.1 million over H1 2021, including € 0.2 million in rent that was waived over 2020. In Belgium and France, government measures were more lenient towards retailers compared with the Netherlands and typically involved temporary curfews and the closure of non-essential stores. In France it was € 0.3 million related to H1 and € 0.2 million related to 2020, that in total amounted to 0.5 million recorded in H1 2021. In Belgium, almost all waivers agreed in H1 2021 were related to the 2020 period.

	H1 2021 effect			FY 2020 effect			Total waivers H1 2021
Rent arrangements (€ million)	Rent waivers 1, 2			Rent waivers 1, 2			Rent waivers 1, 2
Netherlands	0.9	0.2	1.1
France	0.3	0.2	0.5
Belgium	0.0	0.5	0.6
Spain	< 0.1	< 0.1	< 0.1
Total	1.2	0.9	2.2

1. Including acquisitions and divestments
2. Excluding VAT

Part of the total value of the waivers concerns 2020 rent (€ 0.9 million of the total € 2.2 million). These waivers are accounted for (as negative rent) in H1 2021, though are provided for in 2020 by means of the provision for expected credit losses. These provisions have been released in H1 2021 and therefore have no net effect on the H1 2021 results.

In the first half of the year, Vastned continued to discuss and agree tailored arrangements with tenants. The payment arrangements include tenants paying in monthly rather than quarterly instalments, paying in arrears instead of in advance, deferred payment of the entire rent or part thereof, and partial rent waivers. Further, new agreements were reached with tenants on contract extensions, removal of break options or future rent rises.

The arrangements made with tenants have the following implications for the H1 2021 result:

• € 2.2 million in rent waivers in total in H1 2021, excluding VAT, with € 1.2 million related to waivers in H1 2021 and € 0.9 million related to FY 2020. This has been deducted directly and fully from the gross rental income in H1 2021.
• Vastned has allocated € 0.6 million to the provision for expected credit losses due to the elevated risk of uncollectible rent receivables due to COVID-19.

The account balance for 'debtors and other receivables' decreased to € 13.0 million as per 30 June 2021 (30 June 2020: € 20 million). Of this amount, € 6.4 million is related to rent invoiced in advance for Q3 2021.

The rent collection rate for H1 2021 was 90% as at 30 June 2021. This was calculated as follows: all amounts received were divided by all amounts invoiced for H1 2021 (including rent, service charges and deposits). The waivers and the deferred amounts were not deducted from the amounts invoiced in this calculation.

	Vastned Retail N.V.	De Boelelaan 7	PO BOX 2276	Tel: [phone]
		1083 HJ Amsterdam	1100 CG Amsterdam	[e-mail]	www.vastned.com

3 VASTNED RETAIL N.V. HALF-YEARREPORT 2021

PRESS RELEASE

With the lifting of lockdowns in its portfolio countries, Vastned is now seeing improved footfall on the high street. However, the number of tourists visiting historic city centres has yet to return to previous levels and a full recovery is expected to take time to materialise. The ratio of visitors that make a purchase (conversion ratio) is higher than before the pandemic, which bodes well for retailers' sales. 

Strategy execution

The retail landscape is changing, as Vastned has been indicating for some time, and the outbreak and spread of COVID-19 has accelerated this development. In line with its strategy, which was updated in February 2021, Vastned is concentrating its unique portfolio of high street retail and inner-citymixed-use properties within winning cities. We are also improving our retail tenant mix by adding tenants with strong digital brands and retailers that prioritise phygital (the combination of physical and digital) and 'buy online pick up in store' solutions (JD Sports, Sézane, Nespresso, Rituals, My Jewellery, Coolblue) but also strong (sub)urban brands (Heytens Décor) seeking a high street presence as well as supermarkets looking for smaller inner-city stores or pedestrian drives like Carrefour and Jumbo. Further, Vastned will continue to look to create more mixed-use by adding residential units and small offices and realising potential redevelopment opportunities. By optimising our portfolio in this way, including with selective investments and targeted divestments, we expect to unlock the intrinsic value of our real estate portfolio.

Sustainability

Sustainability is an important core value for Vastned in creating long-term value for its stakeholders. There are three areas that need to be highlighted looking at Vastned's sustainability performance in H1 2021.

Preservation of cultural heritage:

Vastned continues to invest in properties situated in historic city centres and increasingly invests in improving the sustainability ratings. Thereby contributing to the preservation, the lifespan and the attractiveness of cultural heritage of historic city centres.

Increasing housing stock within historic city centres:

By converting empty spaces above shops into residential units, city centers are becoming livelier, after closing time while housing stock increases. These investments also aim to improve the sustainability ratings of our properties. We have realized 7 renovations / creations of apartments in H1 2021, which compares with 17 in total in FY2020.

Green financing:

Under its green finance framework, Vastned secured a committed € 40 million Green Revolving Credit Facility ('Green RCF') as of 31 December 2020 and has drawn approximately 10 million under this new agreement in H1 2021.

Key parameters

The direct result per share in H1 2021 was € 0.88 compared with € 0.85 in H1 2021. The increase was caused by lower operating expenses and financing costs, which compensated for lower net rental income. The net rental income was negatively impacted by rent waivers of € 2.2 million (excluding VAT) and the € 0.6 million allocation to the provision for expected credit losses. The value of the portfolio fell by 1.9% in H1 2021 compared with a decrease of 2.5% in H1 2020. The occupancy rate increased from 95.2% to 96.2% compared with Q1 2021. This represents a decrease compared with the H1 2020 occupancy rate, which stood at 97.4%.

Results	H1 2021		H1 2020
Occupancy rate as at 30 June (%)	96.2	97.4
Like-for-like gross rental growth (%)	(3.2)	(6.3)
Value movements 1 (%)	(1.9)	(2.5)
Total appraisal value of the portfolio 2 (€ million)	1,440	1,533
Direct result per share (€)	0.88	0.85
Indirect result per share (€)	(1.38)	(2.09)
Result per share (€)	(0.50)	(1.24)

1. Excluding acquisitions and divestments
2. Including assets held for sale

	Vastned Retail N.V.	De Boelelaan 7	PO BOX 2276	Tel: [phone]
		1083 HJ Amsterdam	1100 CG Amsterdam	[e-mail]	www.vastned.com

4 VASTNED RETAIL N.V. HALF-YEARREPORT 2021

PRESS RELEASE

NOTES TO THE PROPERTY PORTFOLIO

Occupancy rate

The occupancy rate of the full portfolio rose compared with Q1 2021 and decreased slightly compared with 31 December 2020. The occupancy rate in France decreased due to the departure of NYX on Rue Sainte-Catherine 39 in Bordeaux and Le Coq Sportif on Rue des Rosiers 19 in Paris. In Belgium, the occupancy rate increased due to new lettings in Wilrijk with Coolblue and with Vanden Borre Kitchen in Wavre and Korbeek-Lo. The portfolio in Spain remained fully let.

Occupancy rate (%)	30 June 2021		31 March 2021		31 December 2020		30 June 2020
Netherlands	96.1	93.8	95.2	96.0
France	94.1	95.4	98.5	99.8
Belgium	97.5	96.9	96.2	97.5
Spain	100.0	100.0	100.0	100.0
Total	96.2	95.2	96.5	97.4

Leasing activity

In the first six months of 2021, Vastned concluded 54 leases for a total annual amount of € 6.2 million, or 8.6% of the total theoretical annual gross rental income. On the 54 leases, Vastned realised a 4.4% rent decrease, caused mainly by the lease renewal with Massimo Dutti on Steenstraat 38 in Bruges and the new letting of Clinadent on Rue Faidherbe 32-34 in Lille. In the Netherlands, Vastned concluded new leases with Domino's Pizza and My Jewellery. In Belgium, leases were concluded with Coolblue, Vanden Borre Kitchen and Vandermaesen Viswaren, while new leases were agreed with Clinadent and Sinéquanone in France.

Leasing activity	H1 2021
Number of leases	54
Rental income (€ million)	6.2
% of total theoretical annual rent	8.6
Rental change (€ million)	(0.3)
% rental change	(4.4)

Appraisal value

The appraisal value of Vastned's total property portfolio was € 1.44 billion as at 30 June 2021; this was only a limited 1.9% decrease compared with year-end 2020.

Portfolio breakdown (€ million)	30 June 2021		% of total
Netherlands	623	43
France	407	28
Belgium	328	23
Spain	82	6
Total	1,440	100

	Vastned Retail N.V.	De Boelelaan 7	PO BOX 2276	Tel: [phone]
		1083 HJ Amsterdam	1100 CG Amsterdam	[e-mail]	www.vastned.com

5 VASTNED RETAIL N.V. HALF-YEARREPORT 2021

PRESS RELEASE

Like for like appraisal value

All properties in operation are appraised at least once per year by independent certified appraisers. As per 30 June 2021, 97.1% of the portfolio has been appraised. The COVID-19 outbreak continues to affect economies and real estate markets globally. Nevertheless, as at the valuation date, property markets are mostly functioning again, with transaction volumes and other relevant evidence at levels where enough market evidence exists to determine valuation opinions.

The like-for-like appraisal value of the property portfolio excluding acquisitions and divestments as at the end of June 2021 fell by 1.9% compared with year-end 2020. The value decreases of the portfolios in the Netherlands, Belgium and Spain were 2.9%, 2.2% and 1.8%, respectively. The French portfolio remained stable compared with year-end 2020.

In the Netherlands, as per 1 January 2021 the transfer tax increased from 6% to 8% for commercial real estate and from 2% to 8%1 for residential units. As per 31 December 2020, the old rates were used to convert the appraised 'purchasing costs payable by the vendor' to the 'purchasing costs payable by the buyer'. As per year-end 2020, the new transfer tax was indirectly incorporated by determining the yield of the appraisals (given that the rate change was already known in September 2020, it was subsumed in subsequent pricing). However, since H1 2021, the new rates have been used to convert the appraised 'purchasing costs payable by the vendor' to the 'purchasing costs payable by the buyer'. The exact effect of the transfer tax change on the appraisals as per H1 2021 cannot be assessed with full certainty, though it did have an impact on the valuations.

Appraisal value

(€ million)	H1 2021		VS FY20		FY 2020		VS FY19		FY 2019
Netherlands	623	(2.9%)	642	(5.9%)	682
France	407	(0.0%)	407	(2.1%)	416
Belgium	328	(2.2%)	335	(6.5%)	358
Spain	82	(1.8%)	84	(8.6%)	91
Total	1,440	(1.9%)	1,468	(5.2%)	1,548

Acquisitions and divestments

In Q1 2021, Vastned sold assets at book value on Calle de Tetuán 19/Calle Carmen in Madrid and parking places on Rue d'Alésia 123 in Paris. In Q2 2021, Vastned sold two properties in Belgium, on Hovensesteenweg 123/127 in Boechout and Rue Servais- Malaise 25 in Grivegnée, respectively. Both properties were sold for € 0.2 million above book value. Further, a property in the Netherlands was sold in Q2 2021 on Westdijk 22-24 in Middelharnis for € 0.1 million above book value. No acquisitions were made during H1 2021. 

1. For residential units, this only holds if the unit was acquired by non-natural persons and if the units are acquired by natural persons who do not use them as their main residence or do so only on a temporary basis.

	Vastned Retail N.V.	De Boelelaan 7	PO BOX 2276	Tel: [phone]
		1083 HJ Amsterdam	1100 CG Amsterdam	[e-mail]	www.vastned.com