Annual Report • Apr 9, 2024
Annual Report
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Calculated based on the weighted average number of shares amounting to ,, shares as at December . The total issued shares at year-end and for the full year were ,, shares VGP Park Nijmegen, The Netherlands Letter to the share– and bond– holders PAGE 010 VGP NV ANNUAL REPORT 2023 LETTER TO THE SHARE– AND BONDHOLDERS Dear fellow share– and bondholders of VGP, 2023 has been in many ways a remarkable year and before I summarize some of our achievements, I would like to take you back to the first half of 2022. During that time, it became evident that the construction inflation, which had begun already in 2021, would significantly impact the real estate sector. It then culminated further by the measures of the central banks to counter inflation. Real estate, being sensitive to the interest rate environment, did not escape from a strong correction following a period of high liquidity at low cost. It was clear that the sector was up for a significant shake-up, as it turned out to be. Considering all these factors back then– the prospects of a declining economy, ECBs rate policy, rising input costs, and substantial corrections in the financial markets, including a notable correction in the bond markets– we opted to reduce our speculative developments to nearly zero. Our focus shifted to delivering on excellent asset management performance, safeguarding liquidity and focussing exclusively on land plots and (pre-let) developments with established business cases, aligning with our profit assumptions and disregarding optimis- tic rental growth scenarios. Institutional investors in the meantime shifted rather towards debt financing and we observed a similar stance from our JV partner Allianz, choosing not to extend beyond the commitments already made before, albeit that neverthe- less it turned out to be a record year in transactions with them anyhow. Simultaneously, we anticipated and still anticipate a restructuring of the European industry which brought and potentially will bring many attractive brown field opportunities to the market. This led us to believe that those with a strong balance sheet and adamant liquidity would be able to execute on interesting opportunities. In anticipation, we executed a rights issue of € million to position ourselves for and the opportunities that we saw ahead. Twelve months later, I am pleased to say that this strategy has paid off. We have been able to secure the strategic Stellantis land plots in Vélizy, Rüsselsheim, and now recently also Mulhouse. These projects mark a crucial milestone in VGP's portfolio and long-term growth strategy. Besides these, we also made first steps in securing a land plot in Vejle, Denmark, our inaugural land plot with plans for further expansion, and the swift com- mencement of our first, pre-let, construction in France. Addi- tionally, the strong demand in Eastern Europe fuelled by the shift to electric cars and some iconic developments in West- ern Europe have contributed to the growth of our contracted annual rental income (cara) by % to well over € million. COMPANY REPORT 2023 PAGE 011 LETTER TO THE SHARE– AND BONDHOLDERS Over the past year a steep decline in construction prices in almost all of the markets we are active in, combined with a healthy demand, has given us the confidence to increase new start-ups of buildings in our development pipeline. Though we remain prudent on our pre-let levels, but if necessary we can be very aggressive as we are competing mostly with buildings which have been developed at a far higher construction cost. Thanks to all this, we foresee a considerable increase in the yield on cost for our newly started projects. Our portfolio of standing assets is currently % let and has only an average age of . years. Vacancy remains low in Europe and new supply has reduced now significantly, which favours at least a stable outlook on rental price evolution and occupation for our assets. Our standing assets have a healthy wault of . years and are inflation protected. Our ESG targets and ambitions are moving all the time upwards as we are dedicated to contribute to our European Green Deal, understanding that we need to think about future generations and our heritage for them and we want to do our part of the effort to decrease our dependency on energy supply from other regions of this world. Hence we have sig- nificantly grown our renewable energy business unit and deliv- ered many Breeam excellent, even one platinum building over the year, our total portfolio is now already for .% certified. Our JV model has always been tailored around being less dependent on the capital markets, allowing us to recycle our working capital by partly divesting our development projects, once completed, into a long-term Joint Venture with a strong institutional partner. Despite a sluggish investment climate in the sector in ‘, we have set the pace in the market by exe- cuting new Joint venture transactions totalling over € billion. Our Rheingold X transaction in January ' and Aurora IV in June ', both with Allianz, along with two new joint ventures – one with Deka (RED) and another with Areim (SAGA) show that there is demand for our product, high end industrial and logistic assets on top locations. The SAGA joint venture, similar to the Allianz setup, ear- marked a portfolio of assets across five countries for future transaction into the joint venture once completed. The goal is to grow that vehicle to € . billion gross asset value in the next few years, with an already defined pipeline. All of these transactions have been executed at an agreed pricing which was above the fair value at year end ’. This gives me some comfort that the valuations should stabilize. With robust joint venture partnerships, my optimism for a soft landing in our economy (though there is still some work to do on the inflation), and expectations of a gradual easing in the ECB's interest regime, we look forward to a bright mid to long term future. Even if economic challenges persist, we are confident that VGP is well-positioned to weather any storms that may lure ahead. I extend my gratitude to all of you for your confidence in VGP. Rest assured, myself, my family and all of our VGP employees are dedicated each day to making a difference by trying to build a better future today. Jan Van Geet VGP Park Nijmegen, The Netherlands VGP Park Belgrade, Serbia COMPANY REPORT 2023 PAGE 013 PROFILE Profile VGP (www.vgpparks.eu) is a pan-European pure-play logistics real estate group specialised in the acquisition, development, and management of logistic real estate, i.e. buildings suitable for logistical purposes and light industrial activities. The Group focuses on strategically located plots of land in Germany, the Czech Republic, Spain, the Netherlands, Denmark, Slovakia, Hun- gary, Romania, Austria, Italy, Latvia, Portugal, Serbia, France and Croatia, suitable for develop- ment of logistic business parks of a certain size, so as to build up an extensive and well-diversi- fied land bank on top locations. The Group has a track record of successful land acquisitions being converted into fully opera- tional business parks consisting of high-end logistic real estate and ancillary offices. The Group constructs and develops such parks for its own account and for its Joint Ventures, which are subsequently rented out to reputable clients by means of long-term commercial lease contracts. The Group had an in-house team of . people as at December which manages all the activities of the fully integrated business model: from the identification and acquisition of the land to the conceptualisation and design of the project, the supervision of the construction works, the contacts with potential tenants and the asset- and property management of the real estate portfolio. VGP focuses on top locations in the vicinity of highly concentrated living and/ or production centres, with an optimal access to transport infrastructure. In addition to its real estate activities, VGP has launched a VGP renewable energy business line to provide renewable energy solutions to its tenants or other stakeholders. For more infor- mation, please refer to section Strategy– Renewable Energy. VGP owns a property portfolio of € ,.million (in full ownership including assets deve- loped on behalf of the Joint Ventures) as at December which consists of completed buildings with a total lettable area of over ,, m² (€ ,.million), buildings under construction representing , m² of lettable area (€.million) and remaining deve- lopment land in the amount of €.million. The Joint Ventures own a property portfolio of € ,.million as at December which consists mainly of completed buildings with a total lettable area of over ,, m². As at December , VGP (own and Joint Ventures’ portfolio) has a remaining secured i.e. owned and committed development land bank of .million m², having a development poten- tial of circa .million m² of future lettable area, and which is % in full ownership. For further details please refer to section Business review– Land bank evolution. On a Full Time Equivalent (FTE) basis. PAGE 014 VGP NV ANNUAL REPORT 2023 PROFILE Sustained growth in committed annualised leases … Evolution of the Group’s committed annualised rent income and number of lease contracts (Including Joint Ventures at %) over the past years of committed annualised leases €350.8 million As at 31December 2023 Number of contracts Increase in rental income Rolling rental income Annualised Rent income– In (million €) Number of contracts 0 50 100 150 200 250 300 350 0 100 200 300 400 500 600 COMPANY REPORT 2023 PAGE 015 PROFILE … driving resilient portfolio growth … The historical evolution of the Group’s completed gross leasable area (including assets divested and sold into the Joint Ventures a %) during the past years has been as follows: of new lettable area developed 5.0 million m² Since 2017 Projects divested Projects held directly by VGP Projects held by Joint Ventures in 000 m² 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 719 446 831 900 288 1,333 900 146 1,765 900 205 2,236 900 766 2,326 900 2,142 2,974 900 2,183 3,956 1,996 3,992 2,522 6,016 2,811 7,040 3,342 2023 Incl. under construction PAGE 016 VGP NV ANNUAL REPORT 2023 PROFILE Resulting in diversified investment portfolio … Investment Portfolio breakdown by Country (incl JV at 100%) 31 December 2023 (in € mm) Investment Portfolio breakdown by status (incl JV at 100%) 31 December 2023 (in € mm) Austria € 204 mm– 3% Czech Republic € 847 mm– 12% Croatia € 6 mm– 0% Denmark € 2 mm– 0% France € 97 mm– 1% Germany € 3821 mm– 53% Hungary € 263 mm– 4% Italy € 139 mm– 2% Latvia € 100 mm– 1% The Netherlands € 515 mm– 7% Portugal € 66 mm– 1% Romania € 249 mm– 3% Slovakia € 263 mm– 4% Serbia € 68 mm– 1% Spain € 553 mm– 8% Constructed € 5,524 mm– 77% Under construction € 711 mm– 10% Development Land € 959 mm– 13% VGP Park Hochhstadt, Germany VGP Park Magdeburg, Germany COMPANY REPORT 2023 PAGE 019 STRATEGY Strategy VGP’s goal is to be a leading pan-European logistics real estate group specialised in the acqui- sition, development, and management of logistic real estate, i.e. buildings suitable for logistical purposes and light industrial activities. The Group focuses on (i) strategically located plots of land suitable for development of logis- tic business parks of a certain size, so as to build up an extensive and well-diversified land bank and property portfolio on top locations; (ii) striving to optimise the operational performance of the portfolio and the activities of our tenants through dedicated teams which provide asset- property and development management services; (iii) growing the different strategic partner- ships entered into with Allianz Real Estate, Deka, Areim or with other local partners (see below) and (iv) implementation of its ESG strategy, by amongst others, offering solutions and acting as an enabler to help the Group’s tenants and other stakeholders in their green energy transition through the roll-out of the renewable energy business line. These elements should allow the Group to provide attractive return for our shareholders through progressive dividend and net asset value growth over time. PAGE 020 VGP NV ANNUAL REPORT 2023 STRATEGY Development activities and portfolio ancillary services Development activities Greenfield and brownfield developments are the core activ- ity of the VGP Group. Brownfield developments are gradu- ally becoming more important as greenfield developments in some targeted prime locations become increasingly scarce. Developments are undertaken primarily for the Group’s own account and to a lesser extent for the Joint Ventures. The Group pursues a growth strategy in terms of develop- ment of a strategic land bank which is suitable for the develop- ment of turnkey and ready-to-be-let logistic projects. The plots are zoned mainly for logistic or semi-industrial activities. The management of VGP is convinced that the top location of the land and the high-quality standards of its real estate projects contribute to the long-term value of its portfolio. The Group concentrates on the sector of logistics and light industrial accommodation projects situated across Continen- tal Europe. The Group operates in European countries, of which the Group already carries out development activities or holds a development pipeline for future development activities. High quality projects are always developed on the basis of VGP building standards, with adaptations to meet specific requirements of future tenants but always ensuring multi- ple purpose use and easy future re-leasability. In their initial phase of development, some projects are being developed at the Group’s own risk (i.e., without being pre-let). The constructions, which respond to the latest modern qual- ity standards, are leased under long-term lease agreements to tenants which are active in the logistic, semi-industrial or e-commerce sector, including storing but also assembling, reconditioning, final treatment of the goods before they go to industrial clients or retailers. The land positions are located in the vicinity of highly concentrated living and/or production centres, with an optimal access to transport infrastructure. Portfolio ancillary services The Group provides property management, asset manage- ment and facility management services to its portfolio and the Joint Ventures (see below). Property management services are exclusively provided to the Group’s own portfolio and the Joint Ventures whereby the respective Group property management company is responsi- ble for managing the proper and undisturbed operation of the buildings. As part of its offered services the VGP property man- agement companies also provide project management ser- vices and leasing services. The asset management services entail giving advice and recommendations to the Joint Ventures on the Joint Ventures’ asset management and strategy, thereby optimising the value of the Joint Ventures’ assets. As part of the provided services, VGP is responsible for standard corporate administration, financing, business planning, reporting, budg- eting, management of tax and legal affairs, controlling, etc. Facility management services are carried out in the local countries by specific dedicated teams which are focused on managing the proper and undisturbed operation of the buildings and performing or manage all actions such as maintenance services, waste management services, mainte- nance greenery that may be necessary in this respect. Other services include providing green energy generated through roof-fixed solar panels, smart energy management and green electric charging facilities and infrastructure. (see below) Renewable Energy VGP Renewable Energy offers a broad array of renewable energy solutions for warehouses, including solar, wind and thermal, as well as integrators for storage and distribution. We offer green energy to our tenants, produced on site or off site, with our own photovoltaic systems. This is provided via lease or Power Purchase Agreements. We aim to offer our clients a tailormade green energy solution, which is typically offered with photovoltaic systems at our VGP Parks, yet also with the ability to offer green energy which is sourced elsewhere, with green power generation assets near our parks. We are actively exploring these ways of sourcing local tailored opportunities, adapted to local tenant energy needs. Since January our energy business in Germany is a registered utility and we will imminently expand this activity into Romania. These endeavors allow us to harness the full potential of our existing photovoltaic projects to distribute clean energy more efficiently to our tenants and beyond. Our commitment to renewable energy has propelled us to surpass a significant milestone– MWp in operational solar capac- ity. With an ambitious pipeline of projects, we will be able to exceed the energy needs of our tenants. Next to photovoltaic systems, we also aim to offer other current technologies of renewable energy production and storage relevant to the cli- ents of VGP, such as wind turbines or geothermal heating. Next to this, we provide green e-mobility charge facilities for electric trucks and cars, and we are currently exploring qualitative methods for energy storage with battery installa- tion and load management. Furthermore, we support our ten- ants to identify green energy usage optimization and flexible energy consumption with energy control methods for divers processes to optimize the photovoltaic consumption poten- tial, amongst others. COMPANY REPORT 2023 PAGE 021 STRATEGY Key principles of VGP’s investment strategy Strategically located plots of land 1 Focus on business parks with a view to realising economies of scale 2 High quality standardised and sustainable logistic real estate 3 In-house competences enabling a fully integrated business model 4 Primary focus on long term fundamentals 5 DEVELOPMENT PAGE 022 VGP NV ANNUAL REPORT 2023PAGE 022 VGP NV ANNUAL REPORT 2023 STRATEGY Fully integrated model with in-house capabilities and competences Land Identification of top locations directly connectable to existing infrastructure Evaluate potential projects, technical due diligence Obtain the zoning and building permit Concept and design In-house design of buildings based on strict guidelines for multi-purpose utilisation Strategic alliance with architecture firms, in close cooperation with local authorities Some adaptation according to tenants‘ requirements but within VGPs own standard building parameters Construction High quality logistics projects constructed by external contractors in close cooperation with future tenants Acting as a general contractor on asignificant part of the construction pipeline High technical and quality standards ASSET MANAGEMENT RENEWABLE COMPANY REPORT 2023 PAGE 023 STRATEGY Rent Mainly long term lease agreements Officers responsible for monitoring of the tenants’ requirements until the handover of the premises Working together with local real estate brokers Portfolio Long term developer/ investor (own portfolio or sale to one of the JVs) Portfolio management Asset management Property management Centralised maintenance of properties Ancillary services Assisting clients with transitioning towards sustainable energy usage in acost-effective way Offering includes: green energy (produced on or off-site), smart energy management, green electric and hydrogen charging facilities and infrastructure PAGE 024 VGP NV ANNUAL REPORT 2023 STRATEGY In order to sustain its growth over the medium term, VGP entered into several : joint ventures with well-known institutional investors. These joint venture structures allow VGP to partially recycle its initial invested capital when com- pleted projects are acquired by the respective joint ventures and allow VGP to re-invest the sales proceeds in the contin- ued expansion of the development pipeline, including the fur- ther expansion of the land bank, thus allowing VGP to concen- trate on its core development activities. Partnership with Allianz First Joint Venture — Rheingold The First Joint Venture was established in May with an objective to build a platform of new, grade A logistics and industrial properties with a key focus on expansion in core German markets and high growth CEE markets (of Hungary, the Czech Republic and the Slovak Republic) with the aim of delivering stable income-driven returns with potential for cap- ital appreciation. The First Joint Venture aimed to increase its portfolio size (i.e. the gross asset value of the acquired income generating assets) to circa €. billion by May at the lat- est, via the contribution to the First Joint Venture of new logis- tics developments carried out by VGP. The First Joint Venture’s strategy is therefore now primarily a hold strategy. Following the reaching of the expanded investment tar- get in , both VGP and Allianz agreed during the month of December to amend the JVA resulting in the follow- ing main changes: (i) extension of the current term of the First Joint Venture with years i.e. from May to May (ii) implementation of a comprehensive ESG strategy, and (iii) agreeing to an additional tenth closing in respect of newly completed buildings in (partly) new VGP parks. On th of January , VGP concluded a tenth transaction with the First Joint Venture. The transaction comprised logis- tic buildings, which are located in Germany (one) and in the Czech Republic (two). The gross asset value of the completed assets amounted to €.million and the net proceeds from this transaction amounted to €.million. As at December , the First Joint Venture’s property portfolio consists of completed buildings representing a total lettable area of over ,, m². Although the First Joint Venture reached its expanded investment target, some add-on closings related to existing tenant extension options may still occur in the future. The First Joint Venture will maintain its existing portfolio with VGP, continuing to act as property, facil- ity and asset manager. Second Joint Venture — Aurora The Second Joint Venture was established in July with the objective to build a platform of core, prime logistic assets in Austria, Italy, the Netherlands, Portugal, Romania and Spain with the aim of delivering stable income-driven returns with potential for capital appreciation. The Second Joint Venture aims to increase its portfolio size to circa €. billion by July at the latest, via the contribution to the Second Joint Venture of new or recently built logistics developments car- ried out by VGP. The Second Joint Venture’s strategy is there- fore primarily a hold strategy. The Second Joint Venture has the exclusive right of first refusal in relation to acquiring the income generating assets located in Austria, Italy, the Nether- lands, Portugal, Romania, and Spain. During , VGP completed a fourth and currently last clos- ing whereby, the Second Joint Venture (“VGP European Logis- tics S.à r.l.”) acquired, on June , logistic buildings, including buildings in new VGP parks and another newly completed buildings (in parks which were previously trans- ferred to the Second Joint Venture), for an aggregate trans- action value in excess of € million and resulting into net aggregate cash proceeds of €.million. As at Decem- ber , the Second Joint Venture’s property portfolio con- sists of completed buildings representing a total lettable area of over , m². The development pipeline and future development of other new projects within its geographical scope will continue to be developed at VGP’s own risk to be subsequently acquired by the Second Joint Venture if the right of first refusal is exercised subject to pre-agreed completion and lease parameters. The acquisition of any building by the Second Joint Venture will always occur on the basis of the prevailing market rates at the moment of such acquisition. VGP carries % of the develop- ment risk of the Second Joint Venture. Third Joint Venture — Ymir The Third Joint Venture was established in June with an objective to develop VGP Park München. Once fully devel- oped, VGP Park München will consist of five logistic build- ings, two stand-alone parking houses and one office building for a total gross lettable area of approx. , m². The park is entirely pre-let. Since its establishment, three closings with the Third Joint Venture have occurred. The financing of the development capex of the Third Joint Venture occurs through shareholder loans and/or capital con- tributions by the shareholders in proportion to their respective shareholding. Upon completion of the respective building(s), a closing with the Third Joint Venture occurred which allowed the Group to receive the proportional share price allocated to Aggregate transaction value is composed of the purchase price for the completed income generating buildings and the net book value of the development pipeline which is transferred as part of a closing but not yet paid for by the joint venture. Strategic partnerships COMPANY REPORT 2023 PAGE 025 STRATEGY the building(s) from Allianz and to partially/totally recycle its initially invested capital in respect of the building(s) included in such closing through the refinancing of such invested capi- tal by external bank debt. The tenant KraussMaffei has been gradually relocating its head offices, during the first half of , to the new business park. This relocation is marked as the largest relocation pro- ject in Greater Munich since the relocation of Munich Airport in . The move by KraussMaffei follows the announce- ment by BMW of the opening of a Battery Competence Centre in the same park in May . Together, KraussMaffei– with , m² gross lettable area– and BMW– with , m² gross lettable area– occupy the existing park. The last remain- ing building, which is to be completed by will provide , m² gross lettable area and is an extension option for KraussMaffei. Once fully developed, VGP Park München will consist of five logistics buildings, two stand-alone parking houses and one office building for a total gross lettable area of ca. , m². VGP received an outstanding cash considera- tion in an amount of €.million from Allianz in Q ’, with a remaining consideration of €.million (in respect of the office building) to be received, subject to the fulfilment of some clos- ing conditions. These have been fulfilled and the remaining amount of €.million has been received in July ’. Finally, VGP Park Munich drew its available credit facility of €.million. Following the refinancing, the entity initiated a distribution of excess cash available to their shareholders, amounting to € million. Out of this amount, € million was allocated to VGP in July ’. The entity expects to draw another €.million on an available credit facility within the first half of . Fourth Joint Venture — Europa As the First Joint Venture reached its investment capacity, Alli- anz and VGP entered into a new joint venture agreement in December with a view to establish a new Fourth Joint Venture. This Joint Venture’s objective was to build a platform of new, grade A logistics and industrial properties with a key focus on expansion within the same geographical scope as the First Joint Venture, i.e. core German markets and high growth CEE markets (of Hungary, the Czech Republic and the Slovak Republic), with the aim of delivering stable income- driven returns with potential for capital appreciation. The Fourth Joint Venture targeted the implementation of a com- prehensive ESG strategy on a best-efforts basis. Criteria have been defined around the Carbon Risk Real Estate Monitor (“CCREM”) Assessment Tool, the EU Sustainable Finance Tax- onomy, achieving most efficient EPC or similar rating, sustain- able certification of buildings, photovoltaic systems, green lease and ESG portfolio data and reporting. The Fourth Joint Venture aimed to increase its portfolio size (i.e. the gross asset value of the acquired income generating assets) to ca. €. billion by at the latest, via the contribu- tion to the Fourth Joint Venture of new logistics developments carried out by VGP and it had the exclusive right of first refusal (in accordance with the conditions of the Fourth JVA) in rela- tion to acquiring the income generating assets located in Ger- many, the Czech Republic, the Slovak Republic and Hungary. The Fourth Joint Venture was due to become effective at the moment of its first closing, which was initially expected to occur in November . However, in view of the limited trans- parency on pricing of the seed portfolio in the current volatile market environment, Allianz decided not to proceed with the first initial pipeline portfolio closing of the Fourth Joint Ven- ture. To this end Allianz formally waived the exclusivity obliga- tion in respect of the initial pipeline portfolio allowing VGP to sell the initial pipeline portfolio to one or multiple third parties, including through the establishment of a new alternative joint venture(s). As no further transactions were envisaged on the short to midterm with the Fourth Joint Venture, the Joint Ven- ture has been terminated and replaced by two new joint ven- tures (see sections “Partnership with Deka” and “Partnership with Areim”). VGP Park Munich, Germany PAGE 026 VGP NV ANNUAL REPORT 2023 STRATEGY Partnership with Deka Fifth Joint Venture — RED VGP has signed July a new joint venture agreement with Deka Immobilien, a prominent real estate investment company. The joint venture endeavoured that two of Deka Immobilien’s public funds, Deka Westinvest InterSelect and Deka Immobilien Europa, acquire a % stake in five project companies owned by VGP. The project companies own and operate five strategically located parks in Germany, namely Gießen– Am alten Flughafen, Laatzen, Göttingen , Magde- burg and Berlin Oberkrämer. These parks boast a portfolio of buildings, generating a total annualized rental income of €.million at the time of the transaction. The agreed gross asset value of all assets stands at over €.billion. The transaction was foreseen to be executed in three closings, with the first closing effectuated in Q . Pricing has been agreed for the full portfolio, thus including the remaining two closings which are set to materialize in H and H of ’. To facilitate the joint venture, parties have agreed to refi- nance the joint venture with an approximative LTV of %. Con- sequently, VGP is set to recycle over € million of cash from all closings. The first closing, encompassing of the build- ings, generated € million in net proceeds (€ million gross). The remaining closings are set for H (two buildings) and Q (one building), once the construction of the respective assets are completed. These closings expect to generate minimum € million of gross cash proceeds. This joint venture has been established with a long-term horizon. VGP retains asset management services in a similar scope to its existing partnerships with Allianz Real Estate. In conclusion, the partnership between VGP and Deka Immobilien marks a significant milestone in the European real estate market. Through this joint venture, both companies are well-positioned to capitalize on the strong performance of the German property sector, fostering growth and maximizing returns for their stakeholders over the long term and recycling cash for VGP in the short term. Partnership with Areim Sixth Joint Venture — SAGA As per December VGP entered into a new Joint Ven- ture agreement with AREIM Pan-European Logistics Fund (D) AB, or Areim, on a : basis, with the purpose of invest- ing into VGP developed assets in Germany, Czech Republic, France, Slovakia and Hungary. The venture will utilize debt up to a loan-to-value of %. The investor, Areim, has committed a € million equity investment. The investment period lasts until December , with possibilities to extend the Joint Venture by mutual agreement. A seed portfolio has been defined and is set to transition in H , comprising of developed properties in Germany, Czech Republic and Slovakia for a total gross asset value of more than € million, resulting in expected gross cash pro- ceeds of more than € million. In many ways the Joint Ven- ture is similar to the Allianz Joint Ventures, being that the Sixth Joint Venture has a right of first refusal, but limited to all build- ings of a specific development pipeline within the target coun- tries over the investment period. The joint venture targets a comprehensive ESG strategy, with criteria defined around EU taxonomy compliance, EPC, BREEAM standards, and more. As is the case with similar Joint Ventures, VGP will act as the asset, property and development manager of the Joint Venture. Along with the Fifth Joint Ven- ture, VGP has as such replaced the investment commitment of the terminated Fourth Joint Venture with Allianz. VGP Park Bratislava, Slovakia COMPANY REPORT 2023 PAGE 027 STRATEGY Development Joint Ventures To allow VGP to acquire land plots on prime locations for future development, the Group has entered into three strate- gic partnerships, i.e. (i) a : joint venture with Roozen (the LPM Joint Venture), (ii) a : joint venture with VUSA (the VGP Park Belartza Joint Venture), and (iii) a : joint venture with Revikon (the VGP Park Siegen Joint Venture) (together, the Development Joint Ventures). The Group considers these Development Joint Ventures as an add-on source of land sourcing for land plots which would otherwise not be acces- sible to the Group. Similar to the Third Joint Venture, the Development Joint Ventures allow the Group to partially recycle its initial invested capital when buildings are completed by the Development Joint Ventures through refinancing of the invested capital by external bank debt and allows the Group to re-invest these monies in the continued expansion of the development pipe- line, including the further expansion of the land bank, thus allowing VGP to concentrate on its core development activ- ities. Currently, the development of the buildings within the Development Joint Ventures has not yet started. LPM Joint Venture The LPM Joint Venture was established in November with an objective to develop Logistics Park Moerdijk (Nether- lands) together with the Port Authority Moerdijk on a : basis. Logistics Park Moerdijk is situated in between the Port of Rotterdam (the Netherlands) and the Port of Antwerp (Bel- gium) and is one of the few locations in the Netherlands where large-scale value-added logistics and value-added services distribution centres can be developed and built. During , the preparatory works, pre-loading of the land and necessary legal steps in ownership to initiate the first developments have been on-going. In February , VGP agreed on selling the project in its current status and recycled gross proceeds of ca € million. VGP Park Belartza Joint Venture The VGP Park Belartza Joint Venture is set up as a : joint venture with VUSA. The objective of this joint venture is to pro- vide an additional source of land to the Group for land plots which would otherwise not be accessible to it. The VGP Park Belartza Joint Venture aims to develop ca. , m² of logis- tics lettable area. The project is currently proceeding well with obtaining the necessary zoning permits. The VGP Park Belartza Joint Ven- ture focuses on the development of a mixed (logistics/com- mercial) park whereby VGP will lead the logistic development and VUSA will lead the commercial development. The VGP Park Belartza Joint Venture has the right to sell and VGP the right to acquire the logistics income generating assets devel- oped by VGP Park Belartza Joint Venture. VUSA has the right to acquire the commercial income generating assets developed by VGP Park Belartza Joint Venture. VGP Park Siegen Joint Venture The VGP Park Siegen Joint Venture is set up as a : joint venture with Revikon. The objective of this joint venture is to provide an additional source of land to the Group for land plots which would otherwise not be accessible to it. The VGP Park Siegen Joint Venture aims to develop ca. , m² of letta- ble space. The VGP Park Siegen Joint Venture focuses on the development of a land plot located in Siegen, Germany. The VGP Park Siegen Joint Venture has the right to sell and VGP the right to acquire the income generating assets developed by the VGP Park Siegen Joint Venture. During , following the successful partial sale of its pro- ject last year, an equity distribution of €.million has been paid to VGP NV. The brownfield has been undergoing further demolishment works in , which will continue in . PAGE 028 VGP NV ANNUAL REPORT 2023 STRATEGY Faced with the urgency of climate change, VGP is a com- mitted partner to both the transformation of business to the efficiency of Industry ., as well as the regeneration of brownfield industrial estates by accelerating their urban envi- ronmental transformation. Sustainability is at the very heart of VGP’s business strategy. In , the Group launched its updated ESG Strategy which combines both an ambitious objective to reduce VGP’s environmental footprint, increase community engagement, and integrating sustainability into the Group’s entire value chain. The Group’s ambitions are aligned with the objectives of the Paris Agreement and adapted to the challenges and opportunities of the industry and specific nature of its operations. The Group relies on both the quality of its assets and collective power of its employees and stakeholders to raise awareness, mobilise and provide practical solutions that will facilitate the transition towards a low-carbon economy. The Group is actively involved in the communities in which it operates. The Group’s commitment to address climate change across its value chain goes beyond its own direct operations (Scope & ) and tenant operations (Scope ) to be reduced in half but also includes a commit- ment to address the carbon footprint in the entire supply chain through effective ESG management and transparency in car- bon pricing. The Group ESG Strategy also tackles challenges like biodiversity, environmentally friendly transport and the cir- cular economy. The ESG Strategy is based on pillars: — Sustainable Properties. Through the Group’s Environ- mental Management System we aim to reduce the envi- ronmental impact of our assets at every stage of their life cycle, from their initial design to daily operation as well as future fungibility. Reference is made to Corporate Respon- sibility Report – paragraph . Sustainable properties — Strengthen communities. Input from and consultation with local stakeholders shapes the design, purpose and tenant occupational mix of VGP Parks. The Group is com- mitted to meeting the distinct interests of each municipal- ity and creating mutually beneficial outcomes including local connectivity, a compelling business mix and direct employment for local residents, and long-term project success. Reference is made to Corporate Responsibility Report – paragraph . VGP in the community — Empowering our workforce. The Group is committed to offering employees a working environment that fos- ters diversity and equal opportunities to offer to each employee the experience needed to build an exciting career that creates value for the Group. Reference is made to Corporate Responsibility Report – paragraph . Empowering our workforce — Protect and improve biodiversity. VGP actively pro- tects and improves the biodiversity value of its assets by assessing biodiversity impacts and mitigation measures in accordance with BREEAM Excellent/DGNB Gold level standards, and, in addition, by implementing biodiversity action plans based on the Group’s own Biodiversity Strat- egy that accounts for unique local conditions. Reference is made to Corporate Responsibility Report – paragraph . Protect and improve biodiversity — Improve eco-efficiency. The eco-efficiency of our port- folio is improved through daily optimization of opera- tions, by making use of technical improvement of the equipment, including installing LED lighting at refurbish- ment, offering renewable energy solutions to our tenants, including tailor-made roof-fitted photovoltaic installations for self-consumption and off-site green energy contracts offered through our own energy trading activities lever- aging photovoltaic installations elsewhere in the group and improving the intrinsic quality of our new develop- ments, including the installation of heat pumps instead of gas-powered heating where feasible. Reference is made to Corporate Responsibility Report – paragraph . Improve eco-efficiency Sustainability COMPANY REPORT 2023 PAGE 029 STRATEGY Since January our energy business in Germany is a registered utility and we will imminently expand this activity into Romania. These endeavors allow us to harness the full potential of our existing photovoltaic projects to distribute clean energy more efficiently to our tenants and beyond. Our commitment to renewable energy has propelled us to sur- pass a significant milestone– MWp in operational solar capacity. With an ambitious pipeline of projects, we will be able to exceed the energy needs of our tenants. In Septem- ber we have established the VGP Academy– a platform designed to empower our employees with the knowledge and skills needed to drive innovation and sustainability within our organization. VGP’s strategy has been recognized and rewarded: The DGNB Platinum certification for our project in VGP Park Laatzen underscores our dedication to constructing environ- mentally friendly and resilient structure as the first as such warranted to a developer owned semi-industrial facility. As a Group, we are garnering the second-highest score for Euro- pean developer ranking according to GRESB. In addition, the Group’s climate targets have been recognised by the Science Based Targets initiative, as they are aligned with the . °C trajectory. VGP Park Hrádek na Nisou, Czech Republic VGP in 2023 VGP in 2023 VGP Park Prostějov, Czech Republic PAGE 032 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Summary A net profit of €.million, an increase of €.million versus FY ’. Executed three joint venture closings resulting in a strong net cash recycling of €.million. All transactions, including those that are committed to close in ’ have been realized or agreed at a premium versus the recognized fair value at year-end ’, resulting in a realized gain of € million in ’ on the effectuated transactions. Established two new joint ventures with Deka and Areim for a total gross asset value of over €. billion. Together with two closings with Allianz in H ’, VGP has transacted and/or secured a future pipeline of transactions of € billion gross asset value. Upcoming closings in ’ expect to recycle minimum € million of gross proceeds at pre-agreed pricing. €.million of new and renewed leases signed year-to-date bringing the annualized committed leases at year-end to €.million (+€.million compared to December , which is +% y-o-y). ,, m² of new development land acquired and ,, m² of development land deployed to support the developments started up during the year. Total secured land bank stands at .million m² at the end of representing a development potential of over .million m². Pro forma announced sale of LPM in ’, the total secured land bank lowers to .million m². Total acquisitions represent a capex of €.million and include the purchase of some iconic land plots in the vicinity of Paris and Frankfurt. projects delivered during the year representing , m², or €.million in additional annual rent (of which projects totalling , m² delivered during the H ), currently % let. As a result, net rental income, on alook through basis, grew %, from €.million to €.million, knowing that at year-end € million (€+million y.o.y), or €.million on a proportional look through basis, has become cash generative. COMPANY REPORT 2023 PAGE 033 SUMMARY projects under construction representing , m² (of which projects totalling , m² started up during the year) and €.million in additional annual rent once fully built and let. The pipeline under construction is .% pre-let. Pre-let ratio lowered as a result of certain speculative assets that initiated construction in Q ’ following amongst others a decline in construction costs. Property portfolio virtually fully let with occupancy at % (compared to % as at December ). .% of the portfolio is certified, amongst other a DGNB Platinum has been awarded for VGP Park Laatzen, the first German property developed and owned by a developer. Photovoltaic (PV) capacity grew .% YoY with operational capacity passing the MWp-mark at . MWp (vs. . MWp in Dec-). . MWp PV projects under development and a further . MWp being planned. The ongoing transition to green energy consumption in our buildings, as well as other eco-efficiency measures contributed to the four-star GRESB developer rating, the second highest among peers in the European logistics segment. Solid balance sheet with € million undrawn credit facility availability and lower debts of € million following repayment of two bonds in April and September. Finally, VGP was able to obtain a credit facility of the European Investment Bank of € million to support its renewable energy business unit. As per February , VGP has drawn € million of the facility at an interest rate of .% on a ten-year period. Certain important events occurred after the balance sheet date. Itconcerns the sale of VGP’s stake in the LPM Joint Venture in Q’, whereby VGP recycled approximately € million of gross proceeds. VGP also acquired its First Danish land plot located in Vejle. The board of directors proposes an ordinary dividend of €.million (+.%versus last year), as well as an extraordinary €.million top-up following the record net cash recycling with the existing and new Joint Ventures in ’. This brings the total annual gross dividend to € million, or €. per share. VGP Park Arad, Romania COMPANY REPORT 2023 PAGE 035 BUSINESS REVIEW Business review Rental activity As at December , the signed and renewed rental income amounted to €.million , bring- ing the total committed annualized rental income to €.million (equivalent to .million m² of lettable area), a % increase since December . On a proportional look through basis, the total committed annualized rental income amounts to € million, an increase of €.million, or % since December . The increase was driven by , m² of new lease agreements signed, corresponding to €.million of new annualized rental income , whilst during the same period for a total of , m² of lease agreements were renewed and extended, corresponding to €.million of annualized rental income (of which €.million related to the joint ventures ). Indexation accounted for €.million in (of which €.million related to the joint ventures ). Terminations represented a total of €.million or , m², of which €.million within the joint ventures’ portfolio. From a geographic perspective, Eastern Europe, mainly driven by Romania, Slovakia, the Czech Republic and Hungary, accounted for % of the incremental new lease agreements. Within seg- ments, light industrial remained the biggest driver and accounted for % (€.million, of which €.million in the own portfolio) of all new lease agreements. Of which €.million in JV’s and €.million in the own portfolio Including Joint Ventures at % Of which , m² (€.million) related to the own portfolio “Joint ventures” refers to VGP European Logistics, VGP European Logistics and VGP Park München, all three : joint ventures with Allianz Real Estate and the Fifth Joint Venture with Deka Based on square meters Committed annualized rental income in €-million bridge Dec-22 to Dec-23 Segmentation of new lease agreements FY23 (based on annualized rent) Ownership of new lease agreements FY23 (based on annualized rent) E-commerce– 1% Light industrial– 57% Logistics– 40% Other– 2% Joint Ventures– 10% Own portfolio– 90% 303.2 44.4 -7.2 350.8 Committed annualized rental income 12/22 New Leases Indexation Terminations Committed annualized rental income 12/23 10.3 PAGE 036 VGP NV ANNUAL REPORT 2023 VGP IN 2023 The weighted average term of the leases stands at . years for the full portfolio, . years in the own portfolio and . years in the Joint Venture portfolio. Over , VGP has successfully renewed €.million of annualized rental income. At year-end , €.million, or % of the annualized rental income has become cash generative as the leased space has been handed over to the respective tenants. Over the next twelve months another €.million will become effective as summarized in the table below. in €mln Annualized rental income effective before 31. 12. 2023 Annualized rental income to start within 1 year Annualized rental income to start between 1–5 years Annualized rental income to start between 5–10 years Joint Ventures 223.4 1.7 — — Own 80.8 39.6 4.1 1 Total 304.3 41.3 4.1 1 The top ten customers of VGP, including those of the Joint Ventures, represent €.million of annualized rental income, or % of the total annualized rental income. They consist of a mix of our three segments, but the largest are represented by the light industrial and e-commerce cat- egory. The weighted average lease term of the top ten customers stands at . years. Opel and Siemens are tenants currently occupying a brownfield site, which will, in time, be reconverted into a newly state of the art industrial park. Until final maturity. The weighted average term of the leases until first break stands at . years for the full portfolio, . years for own and . years for Joint Ventures portfolio €.million on behalf of Joint Ventures Top 10 Ownership Top ten customers represent % of total portfolio and have a combined WAULT of . years Top 10 Segmentation Top 10 Geography Kraus Maffei Amazon Rhenus Zalando Ahold Delhaize Group Opel Drylock Technologies BMW Siemens MediaMarkt 7.95% 4.53% 4.19% 4.03% 2.37% 2.32% 2.13% 1.53% 1.52% 1.42% 0 5 10 15 20 25 30 Joint Ventures– 67% Own portfolio– 33% Austria– 2% Czech Republic– 7% Spain– 2% Germany– 82% The Netherlands– 4% Serbia– 3% E-commerce– 31% Light industrial– 43% Logistics– 21% Other– 5% COMPANY REPORT 2023 PAGE 037 BUSINESS REVIEW Construction activity A total of projects, located in different VGP parks, are under construction which will create , m² of future lettable area, representing €.million of annualized leases once built and fully let– the portfolio under construction is .% pre-let as of the st of December . This is lower than previous reporting periods but is affected by a number of developments ini- tiated in the second half of whom are at year-end % pre-let, the assets that have been under construction longer than months (for a total of , m²) have a pre-let ratio of .%. The group, after a period of low speculative development, felt comfortable to increase such developments on the back of decreasing construction costs allowing for attractive yield on cost returns. All projects are earmarked for at least “BREEAM Very Good” or “DGNB Gold”. Projects under construction Own portfolio VGP Park m² Austria VGP Park Ehrenfeld 33,000 Austria VGP Park Laxenburg 49,500 France VGP Park Rouen 1 39,000 Germany VGP Park Koblenz 32,000 Germany VGP Park Wiesloch-Walldorf 55,000 Hungary VGP Park Budapest Aerozone 30,000 Hungary VGP Park Gyor Beta 38,000 Hungary VGP Park Kecskemét 38,000 Italy VGP Park Valsamoggia 2 (Lunga) 19,000 Portugal VGP Park Montijo 32,000 Romania VGP Park Brașov 53,000 Romania VGP Park Timisoara 3 33,000 Serbia VGP Park Belgrade– Dobanovci 77,000 Slovakia VGP Park Bratislava 40,000 Slovakia VGP Park Zvolen 8,000 Spain VGP Park Córdoba 7,000 Czech Republic VGP Park Prostějov 10,000 Czech Republic VGP Park Ústí nad Labem City 29,500 Total own portfolio 623,000 Destined for the Sixth Joint Venture (Saga) and reported as held for sale as per 31December ’23 On behalf of JV VGP Park m² Czech Republic VGP Park Olomouc 3 9,000 Germany VGP Park Gießen Am alten Flughafen 68,000 Germany VGP Park Magdeburg 74,000 Total JV 151,000 Total under construction 774,000 During a total of projects, in different VGP Parks, were completed delivering , m² of lettable area, representing €.million of annualized committed leases, % let. Within the own portfolio it concerns buildings for a total surface of , m², fully let (of which buildings or , m² are destined for the Saga Joint Venture and reported as held for sale) and buildings on behalf of the Joint Ventures totalling , m² and which are also fully let. PAGE 038 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Projects delivered during FY2023 Own portfolio VGP Park m² Austria VGP Park Graz 2 14,000 Czech Republic VGP Park České Budějovice 14,000 Czech Republic VGP Park Ústí nad Labem City 23,000 Germany VGP Park Hochheim 12,000 Hungary VGP Park Budapest Aerozone 14,000 Hungary VGP Park Kecskemét 20,000 Latvia VGP Park Tiraines 29,000 Portugal VGP Park Loures 20,000 Romania VGP Park Brașov 67,000 Romania VGP Park Bucharest 46,000 Germany VGP Park Erfurt 2 42,000 Germany VGP Park Erfurt 3 29,000 Germany VGP Park Halle 2 15,000 Slovakia VGP Park Bratislava 19,000 Total own portfolio 364,000 * assets destined for Saga Joint Venture, reported as held for sale Projects delivered during FY2023 On behalf of JV VGP Park m² Netherlands VGP Park Roosendaal 9,000 Spain VGP Park San Fernando de Henares 28,000 Germany VGP Park Gießen Am alten Flughafen 184,000 Germany VGP Park Magdeburg 45,000 Germany VGP Park Berlin Oberkrämer 11,000 Total on behalf of JV 277,000 Total delivered assets 641,000 It’s expected that the assets under construction at year-end ’ will be delivered during ’. In summary, the total portfolio now contains buildings ( buildings under construction and completed buildings) for a total surface of .million m², spread over countries and is % let. Development activity (in m²) YE'22 to YE'23 Under Construction Year end 2022 Delivered assets Start-up constructions Under Construction Year end 2023 600,000 814,000 -641,000 774,000 COMPANY REPORT 2023 PAGE 039 BUSINESS REVIEW Country Completed assets Assets under construction Total Rentable space (m²) Number of buildings (#) Rentable space (m²) Number of buildings (#) Rentable space (m²) Number of buildings (#) Austria 39,000 3 83,000 3 122,000 6 France — — 39,000 1 39,000 1 Germany 2,901,000 93 229,000 6 3,130,000 99 Hungary 197,000 12 106,000 5 303,000 16 Italy 86,000 7 19,000 1 105,000 8 Latvia 134,000 4 — — 134,000 4 Netherlands 259,000 6 — — 259,000 6 Portugal 50,000 3 32,000 1 81,000 4 Romania 315,000 15 86,000 2 401,000 17 Serbia — — 77,000 2 77,000 2 Spain 389,000 21 7,000 1 397,000 22 Czechia 768,000 49 48,000 3 816,000 52 Slovakia 227,000 9 48,000 2 275,000 11 Total 5,365,000 222 774,000 26 6,139,000 248 Completed assets Assets under construction Total Ownership Rentable space (m²) number of buildings (#) Rentable space (m²) number of buildings (#) Rentable space (m²) number of buildings (#) Own (including on behalf of JV) 1,609,000 52 774,000 26 2,383,000 78 JV 3,756,000 170 — — 3,756,000 170 Total 5,365,000 222 774,000 26 6,139,000 248 Land bank evolution VGP acquired ,, m² of development land and a further , m² has been commit- ted, subject to permits, which brings the remaining total owned and committed land bank for development to .million m², which supports more than .million m² of future lettable area . In February ’, VGP sold its stake in the LPM Joint Venture, which holds , m² of devel- opment land. Including Joint Ventures at % Land bridge (in million m²) Owned 12/22 Acquired Deployed Owned 12/23 Committed 12/23 Owned and Committed 12/23 Sold in 2024 Proforma Land bank 8.0 1.9 -1.3 8.6 0.8 9.4 -0.7 8.6 PAGE 040 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Total acquisitions amounted to €.million in ’. Main acquisitions are located in Germany and France, as anticipated in VGP’s equity raise in Q ’, a number of such opportunities were expected to come on the market in established economies in Europe. VGP has been able to secure main sites such as: — VGP Park Rüsselsheim, Germany, with a total surface of , m² being the biggest acquisition of the year and an unique brownfield redevelopment opportunity. The project, acquired from the Stellantis group, represents one of the largest and most central indus- trial property developments in Germany. VGP’s vision for this acquisition involves the cre- ation of a business park spanning approximately , m² tailored for industrial compa- nies and small and medium-sized value-added businesses. In line with its commitment to responsible development, VGP will operate with care to optimize the benefits of the devel- opment for the local community in close coordination with the responsible authorities. The Stellantis group will lease the main part of the site for three years and a schooling center for years. The annual rent amounts to €.million. During this period VGP will prepare all permitting and ancillary formalities in order to redevelop the site. The purchase price of Rüsselsheim has been fully paid for in ’. — VGP Park Vélizy, France, a brownfield of , m², an iconic plot in the Paris region. This was acquired from the Stellantis group and is located km from the inner city of Paris, boasting an exceptional location with direct access to the outer ring road of Paris (A). VGP plans to develop a business park of around , m² for industrial companies and small and medium-sized value-added businesses. Construction work is due to start in the second half of , with the first buildings due for delivery in . As with all the Group's projects, an ambitious environmental approach will be applied to this park and all buildings will achieve a BREEAM Excellent certification as a minimum. — VGP Park Mulhouse, France, a ha brownfield, acquired from the Stellantis group and is located on part of the Stellantis site in Mulhouse, France. The Group plans to rapidly develop a modern business park of around , m² for industrial and logistics compa- nies. All future buildings will aim for at least BREEAM Excellent certification. — VGP Park Leipzig Flughafen, Germany, with a total land size of , m², allowing for over , m² of development. — VGP Park Wiesloch-Walldorf, Germany, with a total land size of , m², allowing for over , m² of development. Given its location, VGP intends to explore also alternative devel- opments such as smaller and more flexible units. — VGP Park Rouen, France, with a total land size of , m². This acquisition completes the VGP Park Rouen, following earlier acquisitions of , m² at the same location. The com- plete park allows for minimum , m² of development. This was VGP’s first project in France and in the meantime with a first building, fully pre-let, of , m² under construction. In January ’, VGP has also acquired its first site in Vejle, Denmark. The site is located in the northern part of the Triangle Region, a commercially important region in the centre of Denmark. On an area of more than , m² will be developed more than , m² of semi-industrial premises which are suitable for light industry and logistics services. The site is adjacent to the highway E, exit b Vejle Syd. The park will offer full-scale services including photovoltaics, on-site electric car charging and high-quality technical and sustainable features. Finally, in Feb- ruary ’, VGP sold its stake for a consideration of approximately € million in the LPM Joint Venture, which envisages to develop a site of , m² in the vicinity of the Port of Moerdijk in The Netherlands. The land bank is equally geographically spread between Eastern (%) and Western Europe (%) in m². The largest land positions are held in Germany (%), the Netherlands (%) , Romania (%), Serbia (%) and Spain (%). In total % of the land bank is owned or committed by VGP for its own portfolio, whereas % is in co-ownership with various Joint Venture partners. It concerns mainly LPM (, m²) in the Netherlands (sold in February ’), Grekon (, m²) in Germany, Belartza (, m²) in Spain and Ymir (, m²) remaining development land in VGP Park Münich (building D). Including land held by the First, Second, Third and Development Joint Ventures in amount of .million m². Includes LPM with , m² and has been sold in ‘ Geographical spread of land (in m² incl. JV's) Land by ownership incl committed land (in m²) Joint Ventures– 45% Own portfolio– 55% Eastern Euope– 10% Western Europe– 90% 15 countries 9.4 million m² COMPANY REPORT 2023 PAGE 041 BUSINESS REVIEW Renewable Energy The gross renewable energy income over was €.million compared to €.million over FY. This was driven by an increase of .% in the effective production sold in FY to GWh, at a lower average energy price of €/MWh (vs €/MWh in ). The operational solar capacity increased significantly to . MWp , up % year-over-year which should equate to a marketable production potential of circa GWh. As of January , the Group possesses a licence to use the grid and trade energy on behalf of our tenants in Ger- many, which will facilitate distribution of produced renewable energy across our German parks. The Group has applied for a similar licence in Romania. As of Dec , a total of projects representing . MWp are under construction (of which circa half is expected to go into production during first months of pending grid connec- tion approval). Including projects under construction the total solar power generation capac- ity will increase to . MWp spread over roof-projects in eight countries. As at the st of December this represents a total aggregate investment amount of € million (incl. cur- rent commitments for projects under construction). With regards to the pipeline, an additional solar power projects are in contractual/design phase (including in five additional countries) which equates to an added power generation capacity of . MWp. The current total solar portfolio, including pipeline projects, totals . MWp and is well underway towards the MWp target by . Capital and liquidity position Total cash balance as at December stood at €.million and increased further in February with € million drawdown on the new credit facility from the European Invest- ment Bank. The gearing ratio amounts to .%. The Allianz and Deka Joint Ventures, with sta- bilized assets, have an LTV of .%, or .% when taking the Development Joint Ventures also into account, who have only development land and no credit facilities in place. Pro Forma pro- portional LTV amounts to .% — During ’ VGP was able to recycle net €. (gross €.)million from two closings with respectively the First and Second Joint venture as well as a first closing with the Fifth Joint Venture (Deka). Following the new joint venture agreements with the Fifth and Sixth Joint Venture, VGP is currently preparing three transfers in ’, two of which are set to material- ize in the first half of ’ and a third closing with the Fifth Joint Venture is planned to mate- rialize in the second half of ’. These transactions are expected to generate more than € million of gross cash proceeds. — Two bonds that came to maturity, respectively in April ‘ (€ million) and September ‘ (€ million) have been fully repaid. This has lowered the average cost of debt to .% at year-end. The average term of the credit facilities amounts to . years. A dividend of € million has been paid out in May ’ as well. Within ’ and ‘, VGP will see two bonds of respectively € million and € million coming to maturity. It is currently envisaged to not refinance these and repay the bonds from available liquidity. — To date, VGP has also € million of undrawn revolving credit facilities available and as per December , VGP Renewable Energy NV, a wholly owned subsidiary of VGP NV concluded a credit facility agreement with the European Investment Bank (“EIB”) for a total amount of € million. The facility will be made available along VGP’s progress in its renewable energy roll out. As per February , VGP has drawn as such a first tranche of € million. This drawdown will be repaid semi-annually as of February in equal instalments. The interest rate has been fixed at .%. The covenants of the facility are aligned on the conditions of the outstanding bonds. — Finally, Fitch, the credit rating agency, affirmed a BBB- rating with a stable outlook for VGP NV on September ‘. According to Fitch: “The rating reflects VGP's disciplined approach to property development risk from land purchase price, location and quality of product, pre- lets, development profit headroom, to building completion and when assets are monetised into pre-funded, identified joint ventures (JV). Under VGP's financial template, depending on the development profit headroom, it gets its cost-to-build outlay back in cash proceeds from monetisations. These front-end factors support a scenario of successfully attracting other JV partners as the historical Allianz JV exclusivity has changed.” Includes MWp of third-party owned systems Including €.million classified as disposal group held for sale Adjusted for transactions with Deka, Areim, LPM and the new credit facility of EIB. Proportional LTV at December amounts to .% PAGE 042 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Dividend The board of directors proposes to the annual shareholders meeting an ordinary gross dividend distribution of €. per share, or € million, which is composed of an ordinary gross divi- dend of €. per share, or €.million (an increase of .% versus last year) and an extraordi- nary gross dividend of €. per share, or €.million as a result of the record net cash recy- cled with the existing and new Joint Ventures in ’. Progress towards our Sustainable Development Goals In the financial year , VGP has made significant strides in both sustainability initiatives and operational achievements. Here are some highlights: Promoting Green Energy Adoption and Expansion of Renewable Energy Initiatives VGP has obtained registered utility status in Germany and is anticipating to achieve the same in Romania. This milestone enables the Group to leverage the existing photovoltaic projects more effectively, facilitating the distribution of green energy across VGP Parks. Furthermore, VGP has surpassed the MWp-mark in operational solar capacity. With all projects in the pipeline, the Group will be able to produce more green energy than the tenants’ total annual electricity con- sumption. The new lease contract template requires tenants to procure green energy and building standard is based on air heat pumps (as opposed to gas-powered heating). Addition- ally, the implementation of a group-wide smart meter management system enhances our ability to monitor consumption patterns and identify areas for improvement. Carbon Pricing, Supplier Engagement and CRREM 1 pathway In the Group has introduced in-house carbon pricing for project evaluation purposes whilst supplier engagement regarding embodied carbon improvements has further expanded, reinforcing our dedication to embodied carbon reduction efforts. Several initiatives have been identified to facilitate bringing our entire portfolio CRREM performance into compliance with the .°C pathway, reflecting our proactive approach to addressing climate change risks. Employee Development Initiatives The launch of VGP Academy is to support the development and training of the Group’s employ- ees, ensuring our workforce is equipped with the necessary skills and knowledge to drive our sustainability agenda forward. EU Taxonomy and Enhanced Green Bonds Allocation In VGP has published a biodiversity strategy and implemented additional actions in accord- ance with EU Taxonomy standards, reaffirming our commitment to environmental stewardship. Furthermore, thanks to significant solar investments and certification improvements, the alloca- tion of Green bonds for all €. billion worth of outstanding VGP Green bonds are now allocated to investments in renewables, eco-efficiency measures, and projects meeting at least BREEAM Excellent/DGNB Gold standards (previously the allocation included BREEAM Very Good). Recognition Building A in VGP Park Laatzen has achieved Platinum certification, marking a significant mile- stone as it is the first developer-led industrial property project to receive such recognition from DGNB. At the same time, the Group as a whole achieved a -star developer ranking in GRESB, the second-highest score for a European developer, underscoring our commitment to sustain- ability performance and transparency. As of the th of March , VGP was included in the BEL ESG index by Euronext. This index was designed to meet sustainable investment needs and tracks the twenty Brussels-listed com- panies demonstrating the best Environmental, Social and Governance (ESG) practices. Carbon Risk Real Estate Monitor VGP Park Munich, Germany PAGE 044 VGP NV ANNUAL REPORT 2023 VGP IN 2023 General market overview VGP Park Sordio, Italy COMPANY REPORT 2023 PAGE 045 GENERAL MARKET OVERVIEW 2023 OCCUPATIONAL LOGISTICS MARKET TRENDS Five things to know Demand Down by % YoY in despite more active leasing during H in most markets Rent Growth drops to .% YoY but still above long-term trend Pipeline Slowing development starts with space under construction down % YoY in Q Vacancy .% across Europe, with select markets recording vacancy levels above % Supply New completions down by % YoY, starting to reflect falling pipeline figures since Q Conclusion Temporarily higher supply levels but continued lack of modern, energy efficient space in most markets will keep upward pressure on rents 1 3 5 2 4 PAGE 046 VGP NV ANNUAL REPORT 2023 VGP IN 2023 European logistics take-up 2023 take up levels on par with strong pre-pandemic years Weak macro- economic environment and rising geopolitical tensions in Q add to occupiers’ caution. Total take-up volumes down by around % YoY and % below the -year average. Inquiries still strong for smaller units as occupiers continue to look for both short- and long-term space options. Gradual improving economic and financial conditions this year will not be robust enough to motivate occupiers to be more active. Source: JLL Research, iO Partners Including units of , m and over in Belgium, Czech Republic, Germany, Hungary, Italy, Netherlands, Poland, Romania, Slovakia, Spain and Sweden; ,m and over in France and UK European logistics take-up 0 5 10 15 20 25 30 35 40 Million m² Q1 Q1 Q1 Q1 5 Yrs Av (2018-22) COMPANY REPORT 2023 PAGE 047 GENERAL MARKET OVERVIEW Logistics take-up by sector Manufacturing led space requirements expanding while e-commerce retailers pause Take-up share by sector, FY 2023 Rising share of manufacturing driven demand Including units of , m and over in Belgium, Czech Republic, Germany, Hungary, Italy, Netherlands, Poland, Romania and Spain; , m and over in France and UK Source: JLL, iO Partners 3PL Retail Manufacturing E-commerce 3PL– 42% Retail– 19% E-commerce– 6% Manufacturing– 21% Others– 12% PAGE 048 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Demand Drivers Source: JLL, iO Partners 3PL and manufacturer demand stable during H1 2024 with focus on near-term strategies while positioning for longer-term. Safeguarding against supply chain disruption Implementing supplier diversification, nearshoring production strategies, and strengthening regional supply chains. Upgrading through new built/retrofitted stock Meeting latest sustainability standards including energy-efficiency, renewable energy sources, and EV-charging. New manufacturing Growth of EV and battery production, renewable energy solutions, pharmaceutical development, and advanced manufacturing. E-commerce expansion to return in 2025 Improving last mile delivery efficiency to respond to evolving customer expectations. COMPANY REPORT 2023 PAGE 049 GENERAL MARKET OVERVIEW A persisting supply-demand imbalance Higher vacancy rates give more flexibility to tenants, but suitable space remains limited Europe take-up and completion figures based on units of , m and over in Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Romania, Slovakia, Spain and Sweden & units of , m in the UK; Estimated European vacancy rate comprises Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Romania, Slovakia, Spain, Sweden and UK Source: JLL, iO Partners Take-Up . million m -.% YoY Completions . million m -% YoY Vacancy rate .% FY 2023 Million m² % Take-up Completions Estimated vacancy rate (RHS) PAGE 050 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Vacancy rate at the end of Q4 2023 Higher vacancy rates put non-prime space at a disadvantage Source: JLL, iO Partners European average vacancy rate Amsterdam Gothenburg Stockholm Birmingham London Brussels Antwerp Lyon Milan Rome Barcelona Madrid Prague Bratislava Budapest Bucharest Poznań Warsaw Paris Glasgow Rotterdam Map Key YoY Stable Increase Decrease 8.6 5.8 1.3 0.5 1.0 7.1 8.6 6.6 1.1 3.9 3.4 4.6 1.0 2.0 1.5 4.8 2.3 5.0 9.3 6.5 13.3 0 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% COMPANY REPORT 2023 PAGE 051 GENERAL MARKET OVERVIEW Supply/demand appears more balanced Yet mismatch between available supply and demand requirements persists Including units of , m and over in Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Romania, Slovakia, Spain and Sweden; , m and over in UK * incl. vacant units and space speculatively under construction Source: JLL, iO Partners Available supply at end Q4 2023 compared with 5yr av. take-up (Q1 ‘19– Q4 ‘23) Market Years of available supply Belgium 0.4 Slovakia 1.1 Czech Republic 0.5 Romania 1.0 Hungary 1.2 The Netherlands 0.6 Sweden 1.6 France 0.5 Italy 1.0 Germany 0.4 Spain 1.4 Poland 1.3 UK 1.6 Belgium Slovakia Czech Republic Romania Hungary The Netherlands Sweden France Italy Germany Spain Poland UK Available space end Q4 2023 5yr rolling take-up (Q1 2019-Q4 2023) 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7Million m² PAGE 052 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Space under construction across Europe at the end of Q4 2023 A slowdown in speculative developments elevates BTS/pre-let share Including units of , m and over in Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Romania, Slovakia, Spain and Sweden; , m and over in UK Source: JLL, iO Partners European space under construction end Q4 2023 Speculative space under construction at end of Q4 2023 Speculative BTS/pre-let 5 Yrs Av (2018–2022) Q4 2021 Q4 2022 Q4 2023 0 5 10 15 20 25 27% 25% 29% 34% 43% 42% Belgium Slovakia Czech Republic Romania Hungary The Netherlands Sweden France Italy Germany Spain Poland UK 0 500 1,000 1,500 2,000 2,000In thousand m² Hamburg Frankfurt Oslo Stockholm Helsinki Birmingham London Brussels Münich Lyon Milan Rome Barcelona Madrid Lisbon Prague Bratislava Budapest Bucharest Athens Poznań Warsaw Paris Dublin Rotterdam 79 78 96 69 128 90 66 68 75 70 310 130 140 105 67 67 53 87 57 65 99 91 85 152 99 114 COMPANY REPORT 2023 PAGE 053 GENERAL MARKET OVERVIEW Logistics prime rents at the end of Q4 2023 Rental growth continues but at a slower rate in some markets * € per m Source: JLL, iO Partners Gothenburg Map Key YoY Stable Increase VGP Park Bucharest, Romania COMPANY REPORT 2023 PAGE 055 GENERAL MARKET OVERVIEW INDUSTRIAL & LOGISTICS CAPITAL MARKET TRENDS Higher swap rates put a break on volumes– strong fundamentals but returns are squeezed Volume Investment volumes still low: -% YoY in Yields/Bonds Gap between bond and real estate yields narrows further ESG Green liquidity premiums now clear Prime Yields –bps outward shift QoQ in Q on par with Q with stabilization expected in Q Financing Debt cost stable but expected to remain high through H Outlook Prime yields stabilizing in most markets throughout Equity heavy buyers dominate, institutional investors slowly coming back 1 3 5 2 4 PAGE 056 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Industrial investment remains subdued Lingering economic weakness and high financing costs fuel investor cautiousness Source: JLL, iO Partners Direct Investment Volumes Transaction volumes down by % YoY in and % if compared to the -year (– ) average. Share of total CRE investment remains above pre-Covid levels (%). Transaction activity concentrated in major Western European markets. Lower levels in Nordics and Southern Europe, while activity is limited in CEE and emerging markets. Lack of portfolio deals means majority of transactions are smaller between €– million. Despite financial backdrop, investment capital remain attracted to the sector long-term. JLL’s bid intensity index shows logistics leading the recovery. € billions % share of total CRE Investment Q1 Q2 Q3 Q4 I&L % share of total CRE investment 0 5 10 15 20 25 30 35 40 45 50 55 60 65 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 COMPANY REPORT 2023 PAGE 057 GENERAL MARKET OVERVIEW 2023 investment by geography (€ billion) Geographically diverging investment activity Figures exclude Pan-European portfolio transactions volumes not associated with single country markets and Entity Level transactions (indirect deals) Source: JLL, iO Partners Country Investment in Billion YoY Germany 6.6 -21% UK 4.9 -56% Nordics 4.0 -41% Southern Europe 3.2 -43% France 2.6 -60% Benelux 2.0 -73% CEE 1.3 -55% Transaction volumes up % QoQ in Q supported by increasing deal activity in select markets. Signs point to downward trend slowing in most regions. Germany attracts strong investor appetite, with H volumes -times higher compared to H . Increased H volumes due to improving portfolio and larger-sized (€ m+) single asset transaction activity. Strengthening Q activity in the Nordics and Southern Europe contributes to slower YoY declines. Marginally improving Q volumes in the Benelux and CEE, but still muted compared to . PAGE 058 VGP NV ANNUAL REPORT 2023 VGP IN 2023 Investment activity in 2023 Q4 investor activity point to improving confidence in outlook and commitment to sector Source: JLL, iO Partners European industrial investment volumes– FY 2023 € . bn (exc. entity deals) -50% YoY / -41% 5yr av € . bn (inc. entity deals) -49% YoY / -41% 5yr av Top deals represent % of Q total volume– down from % in Q transactions exceeded € million mark in Q– up from in Q % of total Q trans- action volume were portfolio deals, down from % in Q. Key insight Q4 2023 Capital sourced outside of Europe and globally accounted for % of total Q transaction volumes– marginally up from the previous three quarters. Global investors took the lead in Q with over € . bn, followed by UK investors (€ . bn) and North American investors (€ . bn). Excluding entity deals Including entity deals 0 50 10 15 20 25 COMPANY REPORT 2023 PAGE 059 GENERAL MARKET OVERVIEW Prime logistics yields at Q4 2023 Prime yields moving slowly towards stabilization, European average up by 40 bps YoY Source: JLL, iO Partners European yield movements Q4 2023 yields by market (vs Q3’23 and Q4’22 yields) Bucharest Budapest Bratislava Warsaw Lisbon Oslo Helsinki Manchester Birmingham Stockholm Milan Prague Barcelona Dublin Antwerp London Rotterdam Paris Berlin Frankfurt 3% 4% 5% 6% 7% 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 CEE Europe Western Europe Q4 2022 Q3 2023 Q4 2023 2% 3% 4% 5% 6% 7% 9% 8% VGP Park Velizy, France Report of the Board of Directors PAGE 062 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Corporate governance statement COMPANY REPORT 2023 PAGE 063 CORPORATE GOVERNANCE STATEMENT Principles VGP adopts the Belgian Code on Corporate Governance (hereinafter the “Belgian Corporate Governance Code” or the “Code ”) as its reference code on corporate governance. The Code is available on the website of the Belgian Cor- porate Governance Committee (www.corporategovernance- committee.be). As required by the Code , the Board of Directors has drawn up the VGP Corporate Governance Charter according to the recommendations of the Code published on May and taking into account the provisions of the Code on Companies and Associations (“CCA”) introduced by the law of March . As required by the Code , the Company’s Corporate Governance Charter describes the main aspects of its corpo- rate governance policy. The Corporate Governance Charter was last updated on January and is available on the Company’s website (Corporate– governance– VGP Group vgpparks.eu) However, the Board of Directors is of the opinion that the Company is justified in not adhering to certain principles of the Code , considering the Company’s particular situa- tion. These deviations are explained below: i. The Company does not intend to set up a nomination com- mittee. By doing so, the Company, as a smaller listed com- pany (in terms of employees), deviates from the principles . and further of the Code . Given its relatively small size and the small size of the Company’s Board of Directors, the Company believes setting up a nomination committee would at this stage overly complicate its decision-making processes. ii. The Company deviates from principle . of the Code by not including contractual provisions to delay payment or clawback provisions in relation to the variable remuneration of the Executive Management Team. The Board of Directors is of the opinion that its remuneration policy and practices sufficiently address the underlying objective of this princi- ple, as any payment of variable remuneration is only made following the finalisation of the financial results. In addition, the Board of Directors can reduce the amount of short-term variable remuneration of an Executive Management Team member based on its individual performance. With regards to long term variable remuneration, the LTIP also includes certain malus provisions. Finally, the Company may in cer- tain events use legal remedies that may be available to it under applicable law to withhold payment or reclaim varia- ble remuneration. iii. The Company deviates from principle . of the Code by not requiring its non-executive directors to receive part of their remuneration in the form of shares in the Company and by not setting a minimum holding period for shares in the Company held by such persons. Considering that the Chairman of the Board of Directors and the CEO are reference shareholders, the Board of Directors is of the opinion that the long-term perspective of shareholders is adequately represented. Not requiring the other three (independent) directors to receive remuneration in shares in the Company allows for an outside perspective during the deliberations of the Board of Directors. The Board of Directors is of the opinion that this balanced composition contributes to long term value creation and is beneficial to the Company. iv. The Company deviates from principle . of the Code by not requiring a minimum threshold of shares to be held by the executive management. The Company believes that its current operational structure and remuneration policy sufficiently incentivises its Executive Management Team to focus on long term value creation, given that: (i) the CEO is the main shareholder of the Company, (ii) the Board of Directors avoids setting performance criteria that could encourage the Executive Management Team to give prefer- ence to short-term goals that influence their variable remu- neration but would have an adverse impact on VGP in the medium and long-term, and (iii) the members of the Exec- utive Management Team (other than the CEO) participate in the LTIP, which is based on the net asset value growth of the Company spread over several years and includes a lock-up of years. v. Following the departure of the Company Secretary during , the Board of Directors currently does not intend to appoint a new Company secretary. By doing so, the Com- pany, as a smaller listed company, departs from the princi- ples . and further of the Code . Given its relatively small size and the small size of the Company’s board of directors, the Company believes appointing a new Com- pany secretary is not necessary at this stage. As long as the Company does not appoint a Company secretary, the func- tions of secretary will be taken up by the Company’s CFO. Governance structure The Company has opted for a monistic governance model with a Board of Directors in accordance with article : and further of the CCA. The Company deems this model to be best suited for the needs and functioning of the Company and its business. The Board of Directors is authorised to perform all opera- tions that are considered necessary or useful to achieve the Company’s purpose, except those reserved to the sharehold- ers' meeting by law or as set out in the articles of association. Board of Directors The Board of Directors consists of five members, who are appointed by the General Meeting of Shareholders. The Chair- man and the Chief Executive Officer are never the same indi- vidual. The Chief Executive Officer is the only Board member with an executive function. All other members are non-execu- tive Directors. Three of the Directors are independent: Mrs Katherina Reiche (first appointed in ), Mrs Vera Gäde-Butzlaff (first appointed in ) and Mrs Ann Gaeremynck (first appointed in ). All three directors have been reappointed on the annual shareholders meeting in for a period of four years, i.e., until the closing of the annual shareholders’ meet- ing which will be held in the year and at which the deci- sion will be taken to approve the annual accounts closed at December . The biographies for each of the current directors (see Board of Directors and Management), indicate the breadth of their business, financial and international experience. This gives the directors the range of skills, knowledge and experience essential to govern VGP. For a detailed description of the operation and responsibil- ities of the Board of Directors we refer to the VGP Corporate Governance Charter, which is published on the company’s website Corporate– overnance– VGP Group (vgpparks.eu). The Board of Directors held board meetings in . The most important points on the agenda were: — approval of the annual accounts and semi-an- nual accounts; — review and discussion on (on multiple occasions) leas- ing activities, development activities, land acquisitions, ESG initiatives and solar power installations as well as the broader evolutions of the logistics market in Europe — approval to enter into a new credit facility with the EIB; PAGE 064 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS — review and discussion on cash flow forecast and available liquidity; — review, discussion and/or approval of the tenth closing with the First Joint Venture, the fourth closing with the Second Joint Venture, along with approval of signing respective facility documents; — Review and approval of the set-up of two new Joint Ventures with Deka and Areim; — review, discussion and approval of the first closing with the Fifth Joint Venture (Deka– RED), along with approval of signing respective facility documents; — Review and discussion of the Development Joint Ventures; — Review and proposal to the annual shareholders’ meeting to reappoint the three independ- ent directors for a new term of four years; — Review and reappointment of the members of the audit and remuneration committee; — Determination of the payment date and all other formalities related to the payment of the dividend; — review and discussion on related party transaction procedure of Article : CCA; — review and approval of press releases on the annual, semi-annual accounts as well as two trading updates; — review and discussion of the property portfolio (i.e. investments, tenant issues etc.); — review, discussion and approval of the investments and expansion of the land bank; — approval of allocations and delegated authorities in respect of the Long-Term Incentive Plan, as well as extending the term of the existing Long-Term Incentive Plan; — review and approval of the financial calendar of . Name Year appointed Next due for re-election Meetings attended Executive director and Chief Executive Officer Jan Van Geet s.r.o. represented by Jan Van Geet 2021 2025 6 Non-executive director VM Invest NV, represented by Bart Van Malderen 2021 2025 6 Independent, non-executive directors GAEVAN BV represented by Ann Gaeremynck 2023 2027 6 Katherina Reiche 2023 2027 5 Vera Gäde-Butzlaff 2023 2027 6 Mrs Katherina Reiche, Mrs Vera Gäde-Butzlaff and Mrs Ann Gaeremynck are independent directors, in accordance with article : of the CCA. The composition of the Board of Directors meets the gender diversity requirement laid down in article : of the CCA. Re-appointments at the annual shareholders’ meeting The annual shareholders’ meeting of May has reappointed the three independent directors expired for a new term of years, until the closing of the annual shareholders’ meet- ing which will be held in the year and at which the decision will be taken to approve the annual accounts closed at December . Committees of the Board of Directors The Board of Directors has also established two advisory committees: an Audit Committee and a Remuneration Committee. Audit Committee The members of the Audit Committee are appointed by the Board of Directors. The Audit Com- mittee is composed of three members who are all non-executive Directors. Two members, Mrs Ann Gaeremynck and Mrs Vera Gäde-Butzlaff, are independent directors. The members of the committee have sufficient relevant expertise, especially in accounting, auditing and financial matters, to effectively perform their functions. The duration of the appointment of a member of the Audit Committee may not exceed the duration of his/her directorship. Committee members’ terms of office may be renewed at the same time as their directorships. The Audit Committee is chaired by one of its members. The chairman of the board of directors may not chair the Audit Committee. For a detailed description of the operation and responsibilities of the Audit Com- mittee we refer to the VGP Corporate Governance Charter, which is published on the company’s website: Corporate– governance– VGP Group (vgpparks.eu). The Audit Committee meets at least four times a year and whenever circumstances require, at the request of its chairman, one of its members, the chairman of the Board of Directors, the CEO or the CFO. It decides if and when the CEO, CFO, the Statutory Auditor(s) or other people should attend its meetings. COMPANY REPORT 2023 PAGE 065 CORPORATE GOVERNANCE STATEMENT The Audit Committee meets at least twice a year with the statutory auditor to consult on mat- ters falling under the power of the Audit Committee and on any matters arising from the audit. The CEO and CFO also attend the meetings of the Audit Committee. Given the size of the Group no internal audit function has currently been created. Name Year appointed Executive or non-executive Independent Next due for re-election Meetings attended GAEVAN BV represented by Ann Gaeremynck (Chairwoman) 2023 Non-executive Independent 2027 4 Vera Gäde-Butzlaff 2023 Non-executive Independent 2027 4 VM Invest NV, represented by Bart Van Malderen 2021 Non-executive — 2025 4 The Audit Committee met four times in . The Chairwoman of the Audit Committee repor- ted the outcome of each meeting to the Board of Directors. The most important points on the agenda were: — discussion on the annual accounts and semi-annual accounts and business updates; — analysis of the recommendations made by the statutory auditor; — the different closings with the Joint Ventures ; — financing structure of the Group; — assessment and discussion on the need to create an internal audit function; — review and approval of accounting policies and procedures in respect of the Fifth Joint Venture; — discussion, review and approval of proposed scope and fees for audit and non-audit work carried out by Deloitte. Remuneration Committee The members of the Remuneration Committee are appointed by the Board of Directors. The Remuneration Committee is composed of three members who are all non-executive Directors. Two members, Mrs Ann Gaeremynck and Mrs Katherina Reiche are independent directors. The members of the Remuneration Committee possess the necessary independence, skills, knowledge, experience, and capacity to execute their duties effectively. The duration of the appointment of a member of the Remuneration Committee may not exceed the duration of his/her directorship. Committee members’ terms of office may be renewed at the same time as their directorships. The Remuneration Committee is chaired by the Chairman of the Board of Directors or by ano- ther non-executive director. For a detailed description of the operation and responsibilities of the Remuneration Commit- tee we refer to the VGP Corporate Governance Charter, which is published on the company’s website Corporate– governance– VGP Group (vgpparks.eu). The Remuneration Committee meets at least two times per year, as well as whenever the committee needs to address imminent topics within the scope of its responsibilities. The CEO and CFO participate in the meetings when the remuneration plan proposed by the CEO for members of the management team is discussed, but not when their own remunerati- ons are being decided. In fulfilling its responsibilities, the Remuneration Committee has access to all resources that it deems appropriate, including external advice or benchmarking as appropriate. Name Year appointed Executive or non-executive Independent Next due for re-election Meetings attended VM Invest NV, represented by Bart Van Malderen (Chairman) 2021 Non-executive — 2025 3 Katherina Reiche 2023 Non-executive Independent 2027 2 GAEVAN BV represented by Ann Gaeremynck 2023 Non-executive Independent 2027 3 The Remuneration Committee met three times in . The most important points on the agenda were: — assessment and determination of the achievement of the performance criteria and making recommendations to the Board of Directors in respect of the performance targets and criteria for the CEO, other members of the Executive Committee and senior managers for the financial year ; — allocation of variable remuneration; — allocations under the long-term incentive plan; — assessing changes in the remuneration of board and committee members. PAGE 066 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS In order to maintain a flexible remuneration policy that enables it to attract, reward, incenti- vize and retain the necessary talent, the Company departs from the following principles of the Code in the framework of its remuneration policy: — by not requiring its non-executive directors to receive part of their remuneration in the form of shares in the Company and by not setting a minimum holding period for shares in the Company held by such persons, if any, the Company departs from principle . of the Code ; — by not setting a minimum threshold of shares to be held by the executive management as part of their remuneration, the Company departs from principle . of the Code . Nomination Committee The company has not set up a Nomination Committee. The Company does not intend to set up a nomination committee. By doing so, the Company, as a smaller listed company, departs from the principles . and further of the Code . Given its relatively small size and the small size of the Company’s Board of Directors, the Company believes setting up a nomination committee would at this stage overly complicate its decision-making processes. Evaluation of the Board of Directors and its committees In accordance with the VGP Corporate Governance Charter, the Board of Directors shall, every three years, conduct an evaluation of its size, composition and performance, and the size, com- position and performance of its Committees, as well as the interaction with the executive man- agement. The Board of Directors and its Committees carried out a self-assessment lastly in February with satisfactory result. Remuneration report Introduction This remuneration report has been drafted in accordance with the provisions of article :, § of the Code of Companies and Associations and the VGP Corporate Governance Charter (Annex ), and takes into account the VGP Remuneration Policy, which is available at the Company’s website https://vgpparks.eu/en/investors/corporate-governance. VGP Park Berlin, Germany COMPANY REPORT 2023 PAGE 067 CORPORATE GOVERNANCE STATEMENT The VGP Remuneration Policy was submitted to and approved by the annual shareholders’ meeting of May with a large majority (.% of the votes present gave their approval). This new remuneration policy took effect on January . This remuneration report must be read together with the VGP Remuneration Policy which, to the extent necessary, should be regarded as forming part of this remuneration report. The remuneration granted to the direc- tors, the CEO and the other members of the Executive Management Team with respect to finan- cial year is in line with the VGP Remuneration Policy. The remuneration report for the performance year was also approved by a large major- ity of .% of the votes present at the Annual Shareholders’ Meeting held on May , and there were no specific comments to be taken into account in the remuneration for perfor- mance year . VGP 2023 highlights In , VGP recorded a solid business growth across its property portfolio with signed and renewed rental income of €.million bringing total signed annualised committed leases increased to €. million at the end of December (compared to €.million at the end of ) (+€.million) During , buildings were completed totalling , m² of lettable area which repre- sent an annualised rent income of €.million. These buildings were % let. At year-end projects were under construction representing , m² of future lettable area, which, once delivered and fully let, will generate €.million of annualised committed rental income; the portfolio under construction at year-end was % pre-let. The weighted average term of the annualised committed leases of the combined own and Joint Ventures’ portfolio stood at . years at the year-end (. years as at December ) and the occupancy rate (own and Joint Ventures’ portfolio) reached % at year-end (compared to % at the end of ). The land further expanded with the acquisition of ,, m² of new development land with a further , m² of committed land plots, pending permits, bringing the total secured (own and committed) land bank to ,, m² having circa .million m² development potential. In respect of the Joint Ventures, there were closings, two with the Allianz Joint Ventures resulting in net cash proceeds totalling €.million and one with a the Fifth Joint Venture (newly established in ) resulting net cash proceeds of € million. A Sixth Joint Venture with Areim has been established, which targets a closing in H and has a total equity com- mitment of € ,million by both Joint Venture partners. As of December , the roofs of VGP’s building portfolio enabled a photovoltaic power generation capacity of .MWp installed or under construction (compared to .MWp as at the end of December ). At the end of the year .% of the portfolio, was certified (from which % at least BREEAM “Very Good” or equivalent) or having its certificate pending. Finally, The net valuation of the property portfolio as at December showed a net val- uation gain of €.million against a net valuation loss of €.million per December . Despite some devaluations on the portfolio, on the back of a turbulent market, the strong oper- ating performance, margins on disposals, management fee income, net rent and renewable energy income and first time valuations resulted in a reported net profit for the year of €.mil- lion for the financial year ended December compared to a net loss of €.million for the financial year ended December . Total remuneration Total remuneration of the directors The remuneration paid to non-executive directors consists solely of an annual fixed compo- nent plus the fee received for each meeting attended. These fees were approved by the annual shareholders’ meeting of May and remained unchanged for . The non-executive directors receive an annual fixed remuneration of € ,. The chairman does not receive any additional fixed remuneration for its chair. The non-executive directors also receive an attend- ance fee of € , for each meeting of the board of directors and € , for each meeting of the Audit Committee or the Remuneration Committee they attend. Non-executive directors do not receive any variable compensation linked to results or other performance criteria. They are not entitled to stock options or shares (see Corporate Govern- ance Statement– Principles regarding the deviation from Principle of the Belgian Cor- porate Governance Code), nor to any supplementary pension scheme. Including the Joint Ventures at %. As at December the annualised committed leases for the Joint Ventures stood at € . million (: € . million). Calculated based on the contracted rent and estimated market rent for the vacant space. PAGE 068 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS 2023 remuneration (in €) Table A– Remuneration of the Board of Directors for the reported financial year 2023 Fixed remuneration Variable remuneration Extra- ordinary items Pension Total remune- ration Proportion of fixed and variable remuneration Base salary Attendance Fees Other benefits One- year variable Multi- year variable Fixed Variable Non-executive directors VM Invest NV represented by Bart Van Malderen Chair of the board of directors and Remuneration Committee 75,000 26,000 n.a. n.a. n.a. n.a. n.a. 101,000 100% 0% GAEVAN BV represented by Ann Gaeremynck Independent director and chair of the Audit Committee 75,000 26,000 n.a. n.a. n.a. n.a. n.a. 101,000 100% 0% Katherina Reiche Independent director 75,000 14,000 n.a. n.a. n.a. n.a. n.a. 89,000 100% 0% Vera Gäde-Butzlaff Independent director 75,000 20,000 n.a. n.a. n.a. n.a. n.a. 95,000 100% 0% Executive directors Jan Van Geet s.r.o., repre sented by Jan Van Geet, Executive director 1 75,000 12,000 n.a. n.a. n.a. n.a. n.a. 87,000 100% 0% Total 375,000 98,000 n.a. n.a. n.a. n.a. n.a. 473,000 100% 0% Total remuneration of the Executive Management Team General The Executive Management Team consists of Jan Van Geet (Chief Executive Officer), Piet Van Geet (Chief Financial Officer), Tomas Van Geet (Chief Commercial Officer), Miquel-David Martinez (Chief Technical Officer – Western Europe), Matthias Sander (Chief Operating Officer– Eastern Europe), Jonathan Watkins (Chief Operating Officer– Western Europe) and Martijn Vlutters (Vice President– Business Development & Investor Relations). Dirk Stoop (former Company Secretary) left the Executive Management Team upon his retirement as of July . Rolf Carls will join the executive management team as of January in the role of Chief Technical Officer – Eastern Europe. The remuneration for the Executive Management Team consists of: — A fixed remuneration: the base salary is determined in function of the individual responsibilities and skills of each member of the Executive Management Team. The CEO receives a base salary in his capacity as CEO as well as in his capacity as executive director. — A short-term variable remuneration: linked to the performance criteria as described below. The criteria for the bonus of the CEO and their weights are the same as those for the Executive Man- agement Team whereby specific targets for the CEO relate to the VGP Group. In case there is a deviation in performance criteria and payment level between the CEO and the other members of the Executive Management Team then this is separately disclosed in the below Performance Criteria table. — A long-term variable remuneration: through participation to the long-term incentive plan (the “LTIP”). The CEO does not participate in the LTIP. — A contribution for retirement benefits: although the members of the Executive Management Team are, in principle, responsible for their own pension arrangements, some members (depending on status and function) benefit from a pension allowance. The CEO does not bene- fit from any pension contribution. — Other benefits in kind (such as, amongst others, car allowance and related expenses) The remuneration that Jan Van Geet s.r.o. receives in his capacity of CEO is reflected in tables B and C below. The natural persons listed here are the respective permanent representatives of (i) Jan Van Geet s.r.o., (ii) Urraco BV, (iii) Dirk Stoop BV, (iii) Tomas Van Geet s.r.o., (iv) Matthias Sander s.r.o., (v) Havbo Consulting Ltd. and (vi) MB Vlutters BV. VGP Park Chomutov, Czech Republic PAGE 070 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Performance criteria short-term variable remuneration For financial year , the performance of the Executive Management Team was appraised on the basis of the following performance criteria: Performance criteria Relative weighting of the performance criteria a) Minimum performance target and b) corresponding award payment level a) Maximum target performance and b) corresponding award payment level a) Measured performance and b) corresponding award payment level Jan Van Geet s.r.o., represented by Jan Van Geet, CEO Net profit of the Group 20% a) 75% a) 125% a) 100% b) 0.15 b) 0.75 b) 0.40 Growth in committed anualised lease agreements 30% a) 75% a) 125% a) 137% b) 0.15 b) 0.25 b) 0.25 — Cash flow from operations and divestments to joint ventures 30% — Occupancy rate — Buildings completed and started-up a) 75% a) 125% a) 156% — Pre-lets under construction b) 0.10 b) 0.20 b) 0.20 — Land acquisition — Other ESG 15% a) 75% a) 125% a) 97% b) 0.07 b) 0.20 b) 0.09 Other non-financial and organisational objectives 5% a) 75% a) 125% a) 100% b) 0.10 b) 0.06 Total bonus payment level 0.50 1.50 1.00 Total variable remuneration 2023 € 600,000 Performance criteria Relative weighting of the performance criteria a) Minimum performance target and b) corresponding award payment level a) Maximum target performance and b) corresponding award payment level a) Measured performance and b) corresponding award payment level Other members of Executive Management Team Net profit of the Group 20% a) 75% a) 125% a) 100% b) 0.15 b) 0.36 b) 0.20 Growth in committed anualised lease agreements 30% a) 75% a) 125% a) 137% b) 0.16 b) 0.55 b) 0.55 — Cash flow from operations and divestments to joint ventures 30% — Occupancy rate — Buildings completed and started-up a) 75% a) 125% a) 156% — Pre-lets under construction b) 0.20 b) 0.55 b) 0.55 — Land acquisition — Other ESG 15% a) 75% a) 125% a) 97% b) 0.07 b) 0.20 b) 0.15 Other non-financial and organisational objectives 5% a) 75% a) 125% a) 100% b) 0.03 b) 0.08 b) 0.05 Total bonus payment level 0.61 1.74 1.45 Total vaiable remuneration 2023 € 1,530,000 The Company does not disclose the actual targets per criterion, as this would require the disclosure of commercially sensitive information. COMPANY REPORT 2023 PAGE 071 CORPORATE GOVERNANCE STATEMENT Reported financial year Taking into account the achievement of the abovementioned performance criteria in respect of the short-term variable remuneration, as well as the other aspects of the total remuneration package, the Board of Directors awarded the Executive Management Team with the following total remuner- ation for the financial year : 2023 remuneration (in €) Table B– Remuneration of the Executive Management Team for the reported financial year 2023 Fixed remuneration Variable remuneration Extraor- dinary items Pension Total remune- ration Proportion of fixed and variable remuneration Base salary Fees Other benefits One-year variable Multi- year variable 1 Fixed Variable Executive Management Team Jan Van Geet s.r.o., represented by Jan Van Geet, CEO 2 600,000 n.a. 41,133 600,000 n.a. n.a. n.a. 1,241,133 52% 48% Other members of Executive Management Team 1,655,785 n.a. 225,094 1,530,000 3,565,571 n.a. 38,198 7,014,648 27% 73% Total 2,255,785 n.a. 266,227 2,130,000 3,565,571 n.a. 38,198 8,255,781 31% 69% Conclusion The total amount of remuneration as set out above is in line with the VGP Remuneration Policy. More in particular, the remuneration package allows the Group to attract, retain and motivate selected profiles, taking account of the Group’s characteristics and challenges, while maintaining coherence between the remuneration of the members of the Board of Directors, the Executive Management Team and of all staff, properly and effectively managing risk and keeping the costs of the various remunerations under control. The total amount of remuneration, and more in particular, the variable fraction of the total remu- neration package, contributes to the long-term performance of the Group by setting performance criteria that focus on the long-term objectives of the Group. Share-based remuneration For the financial year , no share-based remuneration was granted. Severance payments For the financial year , no severance payments were made in relation to the termination of man- agement or employment agreements of any members of the Executive Management Team. Claw-back The Company deviates from principle . of the Code by not including contractual provisions to delay payment or clawback provisions in relation to the variable remuneration of the Executive Management Team. The Board of Directors is of the opinion that its remuneration policy and prac- tices sufficiently address the underlying objective of this principle, as any payment of variable remu- neration is only made following the finalisation of the financial results. In addition, the Board of Directors can reduce the amount of short-term variable remuneration of an Executive Management Team member based on its individual performance. With regards to long term variable remunera- tion, the LTIP also includes certain malus provisions. Finally, the Company may in certain events use legal remedies that may be available to it under applicable law to withhold payment or reclaim var- iable remuneration. Relates to the LTIP variable remuneration vested during the financial year. The remuneration that Jan Van Geet s.r.o. receives in his capacity of executive director is reflected in table A above. PAGE 072 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Derogations from the remuneration policy For the remuneration in respect of financial year , VGP did not derogate from its existing remuneration practices. Comparative information on the change of remuneration and company performance With a view to increasing transparency of past, current and future remuneration programs and in alignment with investor interest and the legislative framework, the following table demon- strates the annual change, over a period of years, in (i) the remuneration of members of the Board of Directors and the Executive Management Team, (ii) the performance of the Group on a consolidated basis and (iii) the average remuneration of the employees of VGP NV. Table C– Comparative information on the change of remuneration and company performance 2018 2019 2020 2021 2022 2023 Remuneration of non-executive directors Total annual remuneration 182,000 1 396,500 2 412,000 396,000 412,000 386,000 Year-on-year difference (%) — 118% 4% -4% 4% -6% Number of non-executive directors under review 4 4 4 4 4 4 Remuneration of CEO and executive director Total annual remuneration as executive director 16,000 93,000 91,000 91,000 93,000 87,000 Year-on-year difference (%) 7% 481% -2% 0% 2% -6% Total annual remuneration as CEO 336,380 837,212 1,234,936 1,235,987 636,933 1,241,133 Year-on-year difference (%) 0% 149% 48% 0% -48% 95% Remuneration of the Executive Management Team Total annual remuneration 1,621,658 5,739,044 3 4,467,293 3,275,630 3,575,084 7,014,648 4 Year-on-year difference (%) 33% 254% -22% -27% 9% 96% Number of EMT members under review 6 7 7 7 7 6.5 5 Company performance Net profit attributable to shareholders ('000 €) 121,106 205,613 370,939 650,055 (122,542) 87,292 Year-on-year difference (%) 26% 70% 80% 75% n.m. n.m. Average remuneration per employee Average salary per employee 6 72,715 76,065 74,512 79,565 72,871 70,375 Year-on-year difference (%) 23% 5% -2% 7% -8% -3% As requested by the Belgian Code of Companies and Associations, VGP reports the pay ratio of the CEO remuneration versus the lowest FTE employee remuneration (in its legal entity VGP NV). The pay ratio is .. The annual shareholders’ meeting of May approved the payment of an extraordinary fee of € , to all independent directors to reflect to reflect their contribution to the further growth of the Group. The increase in financial year is due to (i) the increase in base salary from € , to € , and (ii) a one-off extraordinary fee, granted to all members of the board of directors to reflect the contribution of the directors to the further growth of the Group and to ensure that their total remuneration for financial year was aligned to a more market-based remuneration. This increase and additional remuneration was approved by the annual shareholders meeting of May . The increase was mainly due to the early termination of the VGP Misv incentive plan which resulted in the early vesting of the long-term incentives under this plan. The early termination of the VGP Misv plan had also some spill over effects on as for certain managers new allocations were granted under the new LTIP for a corresponding number of Units and with a lock-up period reflecting the remaining initial lock up period as applicable under the initial VGP MISV Plan. This resulted in a further vesting at the end of . For more detailed information, please see table B included in the Annual Report of – page . Includes multi year variable payment of € ,,. During , , units have vested, of which , units relate to members of the executive management team. The total pay-out of the , units amounts to € . million, which has been paid for €.million in . The remainder is expected to be paid out in . As of July only members in EMT The average remuneration of employees is calculated on the basis of the “total annual gross wages” excluding company cars, divided by the number of employees of VGP NV on year over year bases for continues operations. These numbers do not take into account the remuneration of employees of the other Group companies. COMPANY REPORT 2023 PAGE 073 CORPORATE GOVERNANCE STATEMENT Conduct and Compliance Code of Conduct During a formal Code of Conduct was introduced, which has been updated in July . The Code of Conduct describes the key principles of conduct for the business environment, in which the Group operates. At the same time, a training pro- gram has been rolled out throughout the countries in which the Group operates in order to preserve the compliance cul- ture across the Group. The Code of Conduct sets out the shared values of integ- rity, compliance with local and international law, protection of human rights, respect for employees and customers, the will- ingness to accept social responsibility, environmental aware- ness and an unequivocal stand against bribery and corruption. The Code of Conduct describes in clear terms the principles which the VGP Group must adhere to and provides a number of examples of potential violations as well as good practice. The Code of Conduct as well as the Group’s compliance pol- icies and procedures are made available to all VGP staff. VGP uses in-person training to familiarise employees with its con- tents and application in everyday scenarios. This training is mandatory for all employees having managerial responsibili- ties and is carried out progressively throughout the countries, in which VGP operates. There are a number of channels for reporting possible violations of the Code of Conduct, includ- ing a compliance hotline, see below. Whistleblowing platform: compliance hotline All employees and contractors are invited to report cases or suspicions of criminal activities, violations of national and international laws, and any serious threat or harm to the gen- eral interest of VGP, or breaches the Group Code of Conduct, by using the Group’s whistleblowing platform. The compli- ance hotline is available / from any location worldwide in all () spoken languages within the Group (https://vgp.speakup. report/en-GB/compliance/home). The whistleblowing plat- form allows anonymous reporting and ensures strict confiden- tiality of the identity of the reporter. The Group policy is to guar- antee to not discipline, discriminate or retaliate against any employee or other person who in good faith reports informa- tion related to a violation. The Group head of legal and compli- ance investigates reported incidents, but the directors are ulti- mately responsible for taking the appropriate actions. Anti-corruption The Group aims at combatting and preventing corruption, bribery and influence peddling and has created various mech- anism in order to comply with applicable laws. The Group General Counsel, checks the various operations in the differ- ent countries where the Group is active, such as the regula- tory landscape, transactions and relationships with business partners. Management strictly enforces the Group’s zero tol- erance principle regarding violations of the Code with regards to the Anti-corruption principle. VGP Park San Fernando de Henares, Spain PAGE 074 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Code of Conduct The code of conduct and commitment to fight against corrup- tion and influence peddling has been included in a dedicated section of the Group’s Code of Conduct. The code of conduct stresses on the “zero tolerance” principle for breaches of the anti-corruption principle and any violation will be sanctioned. Internal Alert System The Group has an externally based whistleblowing platform (the VGP Compliance Hotline), which enables all staff as well as contractors to confidentially, and anonymously, report inci- dents to the Group General Counsel. The whistleblowing pro- cedure and platform are accessible at https://vgp.speakup. report/en-GB/compliance/home. Third party due diligence The Group has a “Know Your Supplier” procedure which con- sists of tailored due diligence to assess business partners’ risk of exposure to corruption before entering into contrac- tual relationships. The due diligence may consist of question- naires, internal and/or external background checks and inves- tigations. Under certain circumstances the Group General Counsel reports due diligence findings to the relevant coun- try manager or if required to the responsible COO or Group CEO to discuss the risk profile and provide recommendations. As part of the Group’s Supplier Code of Conduct, the Group seeks to include anti-corruption provisions in contracts with business partners, to remind the contracting party that cor- ruption and/or unethical behaviour will not be tolerated. Accounting checks The Group has a collective decision-making process regard- ing investment, divestment and procurement. The Group applies a “four eyes” principle when processing invoices and staff expenses reimbursement. There is also a segregation of duties in the payment process. Manual entries in accounting are systematically reviewed by Group finance and accounts are reviewed by statutory auditors. Training To raise awareness and entrench the compliance culture within the Group, employees are required to participate to an annual e-training covering ethics and the prevention of cor- ruption and influence peddling. In addition to the online train- ing, new joiners can attend dedicated classroom or online trainings. Several training sessions were held throughout the Group. Disciplinary sanctions Disciplinary sanctions may be taken in cases of corruption, bribery or breaches of the Anti-corruption policy based on the Group’s zero tolerance principle. Gift, meals and entertainment The gift and entertainment policy states that hospitality, pro- motional or other business expenditure, received as well as given, need to be given or received in other forms than cash or cash equivalent, reasonable in value, infrequent, permit- ted under local laws, directly related to the promotion of the Group’s assets, know-how, products or services, the execu- tion of a contract, or to develop and maintain cordial business VGP Park Braov, Romania COMPANY REPORT 2023 PAGE 075 CORPORATE GOVERNANCE STATEMENT relations out of any tendering phase or in the frame of the Group’s ESG policy, approved (as the case may be), properly recorded in accounting and not given for any corrupt purpose or with the intent of receiving anything in return. Sponsoring and charitable contributions Donations to charities, non-profit initiatives or social pro- jects comprise a risk of having funds or assets of value being diverted for the personal use or benefit of a public official or a private party. Particular caution needs to be observed if a potential contribution is directed towards a company having an affiliation with a public official. Any contributions must be prior validated by the respective Chief Operating Officer or Chief Executive Officer. Prevention of money laundering and terrorism financing The procedure for prevention of money laundering and ter- rorism financing (AML) requires employees and managers to be vigilant and perform due diligences before entering into certain business relationships. These due diligences include identifying the partner company, evaluating the risk profile of the partner/operation, performing sanctions list screening and identifying potential ultimate beneficial owners and polit- ically exposed persons through background checks via public databases. Transparency of transactions involving shares of VGP The Board of Directors has adopted a Dealing Code on Jan- uary which has been updated by the Board of Directors of the Company on December to prevent the illegal use of inside information by VGP staff members and connected persons, and further updated on May to implement changes following the adoption of the new Code on Compa- nies and Associations. The purpose of this Dealing Code is to ensure that such per- sons do not abuse, nor place themselves under suspicion of abusing, and maintain the confidentiality of information that may be considered as Inside Information, especially in periods leading up to an announcement of financial results or of price sensitive events or decisions. Reference is also made to Annex Rules preventing market abuse (Dealing Code) of the VGP Corporate Governance Char- ter on www.vgpparks.eu/investors/corporate-governance/. Duty to report effective dealings VGP staff members must inform the Compliance Officer immediately within three () business days after they or a connected person have dealt in any of the Company’s finan- cial instruments, mentioning the date of the transaction, the nature of the dealing (purchase, sale, etc), the amount of finan- cial instrument and the total price of the dealing. Simultaneously, a notification has to be made to the FSMA by an executive staff member or connected person thereof by way of a form that is available on the website of the FSMA (www.fsma.be) and that can also be requested from the Com- pliance Officer. Closed dealing periods During so-called “closed” periods (being calendar days before the announcement of an interim financial report or a year-end report which the Company is obliged to make pub- lic), directors, members of the Executive Management Team and employees may not trade in VGP financial instruments. As defined in Annex – Rules preventing market abuse (Dealing code) of the Company’s Corporate Governance Charter Insider transactions during There were no insider transactions in If any, these transactions were made public on the website of the FSMA (www.fsma.be) Transparency notifications There were no transparency declarations in , however on January , the Company received a transparency notifi- cation, by virtue of the merger of Alsgard SA with Little Rock S.a.r.l (formerly Little Rock SA), which occurred on Decem- ber . For further details we refer the Company’s website. Shareholding– VGP Group (vgpparks.eu). For further details on the Company’s shareholder structure as at December as well as the description of authorisa- tion in respect of authorised capital, delegated to the Board of Directors, we refer to the section Information about the Share. Conflict of interest In accordance with Article : of the new Code on Compa- nies and Associations, a member of the Board of Directors should give the other members prior notice of any agenda items in respect of which he has a direct or indirect conflict of interest of a financial nature with the Company. There were no conflicts of interest reported in . Data protection The code of conduct and commitment to protect personal data and confidential information has been included in a dedicated section of the Group’s Code of Conduct. VGP safeguards the confidential information it receives from its clients as well as any other commercially sensitive information developed by VGP or available to it. Personal data are protected in accord- ance with VGP Personal Data Protection Policy. VGP estab- lishes IT procedures to protect such information. All team members are required to comply with the policies related to protection of confidential and sensitive information and to ensure that their handling of IT does not lead to any avoidable security risks. As a part of its business, VGP acquires signifi- cant amount of confidential information from its suppliers, cli- ents and other business partners, which are often protected by non-disclosure or similar agreements. All team members are required to strictly follow policies put in place to ensure compliance with such agreements. The Personal Data Protection policy can be found here: https:// www.vgpparks.eu/en/personal-data-protection-policy/. In addition, significant efforts are made in terms of awareness and training on the management of personal data: each employee receives online GDPR training, and the teams most exposed to data protection issues are provided with additional support. The Group aims to only use subcontractors that provide guarantees as to their appropriate technical and organiza- tional measures to ensure that processing and processing methods meet GDPR requirements and guarantee the protec- tion of the data subject’s rights. Specific country requirements Beyond the European Regulation on the Protection of Per- sonal Data, each Member State of the European Union has interpreted the provisions of the GDPR by the enactment of national standards and by the jurisprudence developed by its national authorities (courts and local data protection author- ities). For example, the most important legislation governing data protection in Germany is the Federal Data Protection Act (Bundesdatenschutzgesetz, or BDSG), which implements the EU's General Data Protection Regulation (GDPR) in the coun- try. The GDPR sets a high standard for data protection through- out the EU, but Germany has gone further by adding its own additional provisions, such as stricter rules on employee data PAGE 076 VGP NV ANNUAL REPORT 2023 SECTION protection, the need for explicit consent in certain cases, and additional requirements for data processing by public author- ities. In addition to the BDSG, Germany also has several other laws that govern specific areas of data protection. Compliance awareness The Group is committed to conducting business in an ethical and fair manner and the Group has a “zero tolerance” mindset against all forms of unethical practices, such as inappropriate, disrespectful or unlawful behaviour, corruption, bribery, influ- ence peddling and human rights violations. The Group’s com- pliance procedures are based on the principle of allocation of duties and responsibilities as well as promotion of compli- ance awareness through a “tone from the top” approach and active training programs to ensure accountability and strict and effective compliance within the Group. Compliance governance framework Aiming to ensure appropriate sharing of information, right level of accountability, due and effective support and promo- tion, VGP has set up a compliance organisation matching its footprint. Board The Board, with delegated execution to the CEO, is responsi- ble for compliance with all laws and regulations applying to the Group. Promoting compliance awareness from the top on a recurring basis is part of the Group’s compliance target. Compliance organizational framework The compliance environment is managed by the CEO, the Group General Counsel, and CFO. The responsibilities include: — Making recommendations on compliance, due diligences and the business ethics environment — Participating in the crisis management in case of a mate- rial compliance breach; and — Making recommendations or taking any decision related to any compliance related matters including internal pro- motion of compliance. Group General Counsel The Group General Counsel supervises the Group’s regulatory compliance Compliance Officer The Group Compliance Officer function is fulfilled by the Group General Counsel for legal compliance. The Compliance Officer’s scope of responsibility includes: — Designing and monitoring the implementation of the Compliance Program (including the Code of Conduct, Anti-Bribery and Anti-Corruption Program, Anti-Money Laundering Procedures and Whistleblowing Policy); — Promoting compliance awareness for all employees and managers through classroom trainings and information sessions from time to time — Investigating possible compliance breaches, including breaches reported through the Compliance Hot Line, the Group’s confidential whistleblowing platform; Group General Counsel and Compliance have support from a Local Legal support functions to fulfill their tasks. They may also request support and/or input from external advisors. A network of local legal and compliance correspondents assist in promoting compliance awareness as well as to monitor and provide support for local implementation of compliance procedures. Risk management and internal controls VGP is exposed to a wide variety of risks within the context of its business operations that can result in the objectives being affected or not achieved. Controlling those risks is a core task of the Board of Directors, the Executive Management and all other employees with managerial responsibilities. The risk management and control systems have been set up to achieve the following objectives: — achievement of operational goals and strategy; — operational excellence; — reliability of and timely financial reporting, and; — compliance with applicable laws and regulations. The principles of the Committee of Sponsoring Organisations of the Treadway Commission (“COSO”) reference framework has served as a basis in the set-up of VGP’s risk management and control system. Control Environment VGP strives for an overall compliance and a risk-awareness attitude by defining clear roles and responsibilities in all rele- vant domains. This way, the company fosters an environment in which its business objectives and strategies are pursued in a controlled manner. This environment is created through the implementation of different policies and procedures, such as: — Adoption of a Corporate Governance Charter and Code of Conduct; — Decision and signatory authority limits; — Quality management and financial reporting system Given the size of the company and required flexibility these policies and procedures are not always formally documented. The Executive Management ensures that all VGP team members are fully aware of the policies and procedures and ensures that all VGP team members have sufficient under- standing or are adequately informed in order to develop suffi- cient risk management and control at all levels and in all areas of the Group. Risk Management System Risk management process and methodology All employees are accountable for the timely identification and qualitative assessment of the risks (and significant changes to them) within their area of responsibility. Within the different management, review, and supporting processes, the risks associated with the business are identi- fied, analysed, pre-evaluated and challenged by internal and occasionally by external assessments. In addition to these integrated risk reviews, periodic assess- ments are performed to check whether proper risk review and control measures are in place and to discover unidentified or unreported risks. These processes are driven by the CEO, COOs and CFO which monitor and analyse on an on-going basis the various levels of risk and develop any action plan as appropriate. In addition, control activities are embedded in all key processes and systems in order to ensure proper achieve- ment of the company´s objectives. Any identified risks, which could have a material impact on the financial or operational performance of the Group are reported to the Board of Directors for further discussion and assessment and to allow the Board to decide whether such risks are acceptable from the point of view of the level of risk exposure. COMPANY REPORT 2023 PAGE 077 SECTION Most important risk factors VGP has identified and analysed all its key corporate risks as disclosed in the ‘Risk Factors’ section in this annual report. These corporate risks are communicated throughout VGP’s organisation. Statutory auditor DELOITTE Bedrijfsrevisoren BV having its offices at Gate- way Building, Luchthaven Nationaal J, Zaventem, Bel- gium represented by Mrs. Kathleen De Brabander has been appointed as Statutory Auditor. The Statutory Auditor’s term of office expired immediately after the annual shareholders’ meeting held in and at which the decision has been taken to approve the annual accounts closed on December . The Board of Directors approved that Deloitte Bedrijfsrevi- soren/Réviseurs d’Entreprises BV/SRL was re-appointed as the Statutory Auditor for a new period of three years taking effect after the conclusion of the annual shareholders’ meet- ing of May and to set the fees at € , per year. This fee will be subject to an annual review reflecting the changes in audit scope which might be required in order to ensure that such audit scope is kept in line with the evolution of the VGP Group and is subject to indexation. The audit fees for VGP NV and its fully controlled subsidiaries amounted to €.k for the year-end . Additional non-audit services were performed during the year by Deloitte for which a total fee of €.k was incurred. These fees were mainly paid for the obtained ESG limited assurance report. Audit fees for jointly controlled entities amounted to €.k. Additional non-audit services for jointly controlled entities amounted to €.k Since the maximum statutory term of Deloitte's tenure as statutory auditor of the company as provided in Article : of the Companies and Associations Code will have been reached at that time, the company expects Deloitte to ten- der its resignation as statutory auditor of the Company at the Annual General Shareholders' Meeting to be held in the year at which it will be resolved to approve the financial state- ments closed as at December . For further details we refer the section Financial Review– note included in this annual report. VGP Park Riga, Latvia PAGE 078 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Risk factors COMPANY REPORT 2023 PAGE 079 RISK FACTORS The following risk factors that could influence the Group’s activities, its financial status, its results and further develop- ment, have been identified by the Group. The Group takes and will continue to take the necessary measures to manage those risks as effectively as possible. The Group is amongst others exposed to: 1 Risks related to the Group’s growth strategy 1.1 The Group may not be able to continue its development activities in a sustained and profitable way, for which it depends on its ability to execute new lease agreements and dispose its real estate assets to the Joint Ventures The Group’s revenues are determined by the ability to sign new lease contracts and by the disposal of real estate assets, in particular to the Second Joint Venture and Sixth Joint Ven- ture. The Group’s short-term cash flow may be affected if it is unable to continue successfully signing new lease contracts and successfully disposing real estate assets, which could have an adverse effect on the Group’s business, financial con- dition and results of operations. As a result, the Group’s solvency depends on its ability to create a healthy financial structure in the long term with (i) a sufficiently large recurring income stream from leasing agreements for the developed logistic properties (at both the Group’s and the Joint Ventures’ level) vis-à-vis the debt that is issued for financing the acquisition and the development of that logistic properties, and (ii) the Group’s ability to continue its development activities in a sustained and profitable way in order to produce income generating properties which once they have reached a mature stage can be sold to the Joint Ven- tures or eventually to a third party. The Group is largely dependent on the income stream from the Joint Ventures.. As a result, the Group receives fee and dividend income from the Joint Ventures instead of leasing income from mature assets. Hence it is important that a suf- ficiently large recurrent income at the Joint Ventures’ level is created in order to upstream cash to the Group. Those divi- dend streams, as well as the proceeds of the disposal of the assets to the Joint Ventures, are important for the liquidity and the solvability of the Group for the purpose of cash recycling. The Group’s current income stream from the Joint Ventures as well as fee income from the Joint Ventures is rapidly increas- ing but still relatively limited compared to the considerable amount of debt (at both the Group’s as well as Joint Ventures’ level), as (i) the First Joint Venture has reached its investment capacity, (ii) the Second Joint Venture is still in its initial -year investment phase, (iii) the Fourth Joint Venture– which was intended to replace the investment capacity of the First Joint Venture has been terminated, (iii) the Fifth Joint Venture has partially acquired the targeted assets in Germany in and is set to acquire the remaining portfolio in (iv) the Sixth Joint Venture will become effective as from its first closing– which is planned for the first half of , (v) the Third Joint Venture has for a large part completed its initial investment phase of VGP Park München in December and (v) the Development Joint Ventures are progressing in their develop- ment planning. Please also refer to the following risk factors, which are related hereto and which deal with certain aspects in more detail: risk factor . “The Group’s development projects require large initial investments and will only start to gener- ate income after a period of time”, risk factor . “The Group’s business, operations and financial conditions are significantly affected by (i) the underlying operational, financial and organ- isational risks of the Joint Ventures and (ii) the continuation of the acquisition of the completed assets from the Group”, risk factor . “The Group’s debt levels have substantially increased over the last years and the Group is exposed to a (re)financing risk” and risk factor . “The Group is exposed to risk of (re)financing from its Joint Ventures”. For more information on the relationship with the Joint Ven- tures, please see section Strategy– Strategic partnerships. 1.2 The Group may not have the required human and other resources to manage growth or to adequately and efficiently monitor its portfolio The Group’s success depends in part on its ability to man- age future expansion and to identify attractive investment opportunities, and to manage and monitor its portfolio. These requirements can place significant demands on management, support functions, accounting and financial control, sales and marketing and other resources, which involves a number of risks, including: the difficulty of assimilating operations and personnel in the Group’s operations, the potential disruption of ongoing business and distraction of management. We refer to Corporate Responsibility Report paragraph “ESG risks and opportunities” for further information. As at December , the Group has . employees ( employees as at December ). The Group aims to have a sufficiently large team to support the current growth rate of the Group. 1.3 The Group may not be able to locate, secure and execute new opportunities for land acquisition, which are crucial for the implementation of the Group´s growth strategy VGP´s growth up to date has been based on the ability to acquire appropriate land plots in strategic locations with suf- ficient size and other characteristics to allow for the develop- ment of the logistic and semi-industrial buildings. Currently, these are mainly old industrial brownfields. Such land plots remain scarce and competition for their acquisition is fierce. If the Group is not able to continue its track record of acquiring strategic land plots, it will have material adverse effect on the Group´s future growth and financial performance. As at December , the Group has a remaining devel- opment land bank in full ownership of ,, m² which allows the Group to develop ca. ,, m² of future letta- ble area. This includes the remaining ,, m² develop- ment land bank held by the Joint Ventures with a development potential of circa , m² of new lettable area on which VGP has the development exclusivity. In addition, the Group has another , m² of committed land plots which allow for the development of ca. , m² of new projects. It is expected that these remaining land plots will be purchased during the next to months, subject to obtaining the nec- essary permits. The total owned and committed land bank (including Joint Ventures at %) for development is therefore ,, m² which represents a remaining development potential of ca. ,, m². On a Full Time Equivalents basis. Of which % is located in the Netherlands through the LPM Joint Venture. PAGE 080 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS 2 Risks related to the Group’s business activities and industry 2.1 The Group’s development projects may experience delays and other difficulties, especially in respect of receiving necessary permits and increases in construction costs The strategy of the Group is focused on the development of income generating logistic properties and on the potential disposal of such properties once they has reached a mature stage. Development projects tend to be subject to a variety of risks, each of which could cause late delivery of a project and, consequently, increase the development period leading up to its contemplated sale to or completion by the Joint Ven- tures, trigger a budget overrun, cause a loss or decrease of expected income from a project or even, in some cases, its actual termination. The Group adopts a “first mover” strategy in respect of securing or acquiring land plots on strategic locations with- out necessarily having already identified a specific future tenant. The Group typically contractually secures land plots to develop its projects prior to the granting of the required permits. The secured land plots are only acquired once the necessary permits have been obtained. The Group’s projects are therefore subject to the risk of changes in the relevant urban planning regulations and environmental, zoning and construction permits being obtained in a form consistent with the project plan and concept. The realisation of any pro- ject may, therefore, be adversely affected by (i) the failure to obtain, maintain or renew necessary permits, (ii) delays in obtaining, maintaining or renewing relevant permits and (iii) the failure to comply with the terms and conditions of the per- mits. Furthermore, a permit may be subject to an appeal by an interested party. Any such procedure could further delay the development and, ultimately, the sale of a project to or com- pletion by the Joint Ventures and negatively impact the finan- cial condition of the Group. Over the past months, the Group has experienced a sig- nificant lengthening of the period required for receiving zon- ing permits. This is due to strong construction activity in all asset classes and local authorities which are unable to timely process all the permit requests. It can currently take between to months in order to receive the necessary permits. Other factors which may have an adverse effect on the devel- opment activities of the Group are, amongst others, unfamili- arity with local regulations, contract and labour disputes with construction contractors or subcontractors, accidents and nat- ural hazards, construction and design defects, unforeseen site conditions which may require additional work and construc- tion delays or destruction of projects during the construc- tion phase (e.g. due to fire or flooding). We refer to Corporate Responsibility Report paragraph “ESG risks and opportuni- ties” for further information. VGP Park Hochheim, Germany COMPANY REPORT 2023 PAGE 081 RISK FACTORS In addition, when considering property development invest- ments, the Group makes certain estimates as to the economic, market and other conditions, including estimates relating to the value or potential value of a property and the potential return on investment. These estimates may prove to be incor- rect, rendering the Group’s strategy inappropriate with con- sequent negative effects on the Group’s business, results of operations, financial conditions and prospects. Finally, the Group is exposed to an increase in construction costs and organisational problems in the supply of the nec- essary raw materials or materials. In this respect, VGP is to a large extent subject to macro-economic developments, such as the volatility of raw material pricing (which is affected by the volatility in energy prices) – which after a period of signifi- cant increases has recently seen a declining trend (also on the back of recent decreasing energy prices)– and building mate- rials and disruptions in the supply chain. Taking into account all the aforementioned risks, the Group may not be able to complete all of its development projects in the expected time frame or within the expected budgets. If any of the risks highlighted above materialise and adversely impact the successful development of the development pro- jects, this could have a material adverse effect on the Group’s future business, financial condition, operating results and cash flows. Completion of plot acquisitions and conclusion of leases may also be subject to certain conditions, including public law approvals, waivers and consents. Plots acquired by the Group may be subject to delays in registration of transfers and other formalities. Plots may also be subject to rights and encum- brances, including easements, repurchase and pre-emptive rights in certain circumstances, special rights of use by third parties, protection orders and expropriation proceedings, as well as minor defects, remediation works and requirements to obtain use exemptions and permits, all of which could impact development, lease or transfer plans and result in unforeseen delays and costs for the Group. In addition, in certain cases, properties may be subject to complex division and transfer proceedings or the Group may only own a portion of a site. In these circumstances, the ability of the Group to develop, lease or transfer the property may be adversely affected, for exam- ple, if registration of the Group's ownership is delayed or if the Group does not have sufficient access or if the allocation of properties or rights is imprecise or subject to challenge. 2.2 The Group’s development projects require large initial investments and will only start to generate income after aperiod of time During the first phase of the development of a new project, no income will be generated by the new development until such project is completed and delivered to a tenant. During such phase, the Group already makes significant investments in relation to the development of such project. The develop- ment phase of a VGP park typically takes between to months and depends on the size of the park and its develop- ment potential. Once the construction of a building is initiated, it takes about to months to complete, with longer periods applying to large (> , m²) and more complex buildings in terms of fit-out. The size of the park might also impact the timing of a future sale to the Second Joint Venture. The tim- ing of a future sale to the Sixth Joint Venture also depends on the letting and development status of the income generating assets: a building needs to be % leased prior to such build- ing being acquired by the Sixth Joint Venture. VGP retains the right to decide when to offer the park to the Sixth Joint Ven- ture, but shall do so no later than upon completion of % of the lettable area of the respective park included in the devel- opment pipeline of the Sixth Joint Venture. Given the scale of the developments undertaken by the Third Joint Venture and the anticipated developments by the Development Joint Ven- tures, the buildings being constructed by these Joint Ventures will take between to months to complete, once the neces- sary permits are obtained. Any delay in the development of such projects or the lease thereof could have an adverse effect on the Group’s business, financial condition and results of operations. As at December , the Group had contractual obliga- tions to develop new projects which were not yet rent income generating for a total amount of €.million (compared to €.million as at December ). Any delay in the development of such projects or the lease thereof could have an adverse effect on the Group’s business, financial condition and results of operations. 2.3 The fair market value of the Property Portfolio might not be realised and is subject to competition The Group’s revenues depend on the fair market value of its real estate projects. The results and cash flows of the Group may fluctuate significantly depending on the number of pro- jects that can be developed and sold to the Joint Ventures and their respective fair market values. The own Property Portfolio, excluding development land but including the assets being developed on behalf of the Sec- ond Joint Venture and Fifth Joint Venture, is valued by a valua- tion expert at December based on a weighted average yield of .% (compared to .% as at December ) applied to the contractual rents increased by the estimated rental value of unlet space. A .% variation of this market rate would give rise to a variation of the total portfolio value of €.million. The markets in which the Group operates are also exposed to local and international competition. Competition among property developers and operators may result in, amongst others, increased costs for the acquisitions of land for devel- opment, increased costs for raw material, shortages of skilled contractors, oversupply of properties and/or saturation of cer- tain market segments, reduced rental rates, decrease in prop- erty prices and a slowdown in the rate at which new property developments are approved, any of which could have a mate- rial adverse effect on the Group’s business, financial condition and results of operations. 2.4 The Group could experience alower demand for logistic space due to fluctuating economic conditions in regional and global markets The Group’s revenues depend to a large extent on the volume of development projects. Hence the results and cash flows of the Group may fluctuate significantly depending on the num- ber of projects that can be developed and sold to the Second or Sixth Joint Ventures or developed by the Third Joint Venture and the Development Joint Ventures. The volume of the Group’s development projects depends largely on national and regional economic conditions and other events and occurrences that affect the markets in which the Group’s Property Portfolio and development activities are located. The Group is currently active in Germany, the Czech Republic, Spain, the Netherlands, Denmark, Slovakia, Hun- gary, Romania, Austria, Italy, Latvia, Portugal, Serbia, France and Croatia. A change in the general economic conditions of the coun- tries where the Group is present or will be present in the near future could result in lower demand for logistics space, ris- ing vacancy rates and higher risks of default by tenants and other counterparties. For further information on the potential impact of such changes on the Group’s portfolio, please refer to the sensitivity analysis included in notes , . and (v) of PAGE 082 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS the Annual Report. The Group’s main country exposure is Germany, with % of the Group’s Property Portfolio and projects under construction (own and Joint Ventures at % combined) located there as at December (compared to % as at December ). 2.5 The Group may lose key management and personnel or fail to attract and retain skilled personnel The Group continues to depend to a large degree on the expertise and commercial qualities of its management, com- mercial and technical team and in particular on its Chief Exec- utive Officer, Jan Van Geet. In particular, if Jan Van Geet, as Chief Executive Officer of the Group, would no longer devote sufficient time to the devel- opment of the portfolio of the Allianz Joint Ventures, Allianz can stop the acquisition process of income-generating assets (in relation to the Second Joint Venture) and/or suspend the delivery period (in relation to the Third Joint Venture) until he has been replaced to the satisfaction of Allianz. Similarly, if any person other than the Reference Shareholders gains con- trol of the Group, this may constitute an event of default under certain of the Group's financing arrangements. Experienced technical, marketing and support personnel in the real estate development industry are in high demand and competition for their talent is intense. In order to attract and retain personnel, a long-term incentive plan is in place for selected VGP Group executives and key managers. Further details regarding the long-term incentive plan are available in the Group’s remuneration policy (Annex of the Group’s corporate governance charter, as available on the Group’s website) as well as note in the Annual Report and paragraph . Empow- ering our workforce of our Corporate Responsibility Report. The loss of services of any members of the management or failure to attract and retain sufficiently qualified personnel may have a material adverse effect on the Group’s business, finan- cial condition, operating results and cash flows. 2.6 Risks and uncertainties linked to major events or business disruption Unexpected global, regional or national events could result in severe adverse disruption to VGP Group, such as sustained asset value or revenue impairment, solvency or covenant stress, liquidity or business continuity challenges, in particu- lar through the impact such events may have on the Group’s tenants. A global event or business disruption may include but is not limited to a financial crisis, health pandemic, civil unrest, war, act of terrorism, cyberattack or other IT disruption. Events may be singular or cumulative, and lead to acute/systemic issues in the business and/or operating environment. Given the fact that VGP Group has activities neither in Russia nor in Ukraine, the Group´s operations have not been materi- ally directly affected by the war in Ukraine. The indirect effects resulting from volatility of energy and raw material prices and the increase in interest rates have been significant, as reflected elsewhere in this report. Should such price volatility return, it may again materially affect the Group´s operations. The Group is active in certain neighbouring countries (Slo- vakia, Latvia, Romania and Hungary), but the activities in these countries have not experienced significant specific negative effects due to the ongoing war in Ukraine to date. However, in case that the war continues or proliferates, it may impact the Group´s operation also directly. The war may also directly or indirectly affect the tenants of the Group and thereby also the Group´s financial performance. To date, however, no such material effects have been identified by the Group. Based on m². The current global and European sanction packages intro- duced in response to Russia´s aggression have also not had a direct effect on the Group, as it had no significant commer- cial relationships with companies subject to such sanctions. The Group has introduced policies required to ensure compli- ance with applicable sanctions and screening of commercial counterparties. Should, however, the sanction policy of the European Union be significantly extended, it may affect some of the suppliers or customers of the Group and thereby mate- rially affect the financial position of the Group. Currently, the Group does not foresee such event taking place. 2.7 Risks related to natural hazards and other events The Group manages a large portfolio of standing assets. Such assets may be subject to natural hazards or other events, such as fire, explosions, collapse, burglary. While the Group subscribes market standard insurance to cover against such events, which are in the Group´s view reasonable, such insur- ance policies are subject to limits and exclusions and may not cover all the damages that the Group or a Joint Venture may sustain as a result of such events. We refer to Corporate Responsibility Report paragraph “ESG risks and opportuni- ties” for further information. 3 Risks related to the Group’s Joint Ventures 3.1 The Group’s business, operations and financial conditions are significantly affected by (i) the underlying operational, financial and organisational risks of the Joint Ventures and (ii) the continuation of the acquisition of completed assets from the Group In order to enable the Group to continue to invest in its devel- opment pipeline whilst at the same time being adequately financed, the Group has currently entered into four (of which three still active) : joint ventures with Allianz (the Allianz Joint Ventures), two : joint ventures with Deka and Areim and three : joint ventures with other partners (the Devel- opment Joint Ventures). The first two Allianz Joint Ventures (the First Joint Venture and the Second Joint Venture) are mainly focused on acquiring income generating assets which are being developed by the Group, knowing that the First Joint Venture has reached the holding stage, but has some equity reserved for remaining development land within the First Joint Venture. The Fourth Joint Venture has been terminated and was intended to replace the First Joint Venture. The third Allianz Joint Venture (the Third Joint Venture) relates to the development of VGP Park München. There is one building left to be developed. The Devel- opment Joint Ventures consist of (i) the : joint venture with Roozen (the “LPM Joint Venture”), which relates to the develop- ment of VGP Park Moerdijk, which has been sold in February ’ (ii) the : joint venture with VUSA (the “VGP Park Belartza Joint Venture”), which relates to VGP Park Belartza and (iii) the : joint venture with Revikon (the “VGP Park Siegen Joint Venture”), which relates to VGP Park Siegen. These Joint Ventures allow the Group to recycle in part its initial invested capital when completed projects are acquired by the Second or Sixth Joint Venture or when buildings are completed by the Third Joint Venture or the Development Joint Ventures through refinancing of the invested capital by exter- nal bank debt and allow the Group to re-invest these monies in the continued expansion of the development pipeline, includ- ing the further expansion of the land bank, thus allowing VGP COMPANY REPORT 2023 PAGE 083 RISK FACTORS to concentrate on its core development activities. The Fifth Joint Venture still has to acquire three buildings, which are set to transfer in the course of . The Group may be significantly affected by the Joint Ven- tures, which are subject to additional risks such as: — the Second Joint Venture and Sixth Joint Venture may dis- continue acquiring the completed assets from the Group as these Joint Ventures have no contractual or legal bind- ing obligation to acquire the income generating assets offered by the Group; — the Group may be unable to develop assets complying with certain ESG performance metrics, which evolve over time and which may result in a reduced attractiveness of such assets offered to the Joint Ventures. Further insights in such ESG performance metrics can be found We refer to Corporate Responsibility Report paragraphs“ESG risks and opportunities” and “Group ESG Strategy” for further information; — Allianz and VGP have an obligation to develop the remain- ing development asset of the Third Joint Venture; how- ever, in case of material changes, Allianz can decide not to proceed with the completion of the development; — the Fifth Joint Venture has an obligation to acquire the economic ownership of the three remaining assets in the course of . In case of material deviations, this obliga- tion may no longer be legally binding; — the Group recognises the risk to which it is exposed in case of financial difficulties of any of the Joint Ventures, in particular in case of a default under a facility agreement; while the Group has no legal obligation to contribute addi- tional capital to cure any such default, it has recognized, from a pragmatic point of view, a “constructive obligation” to ensure the financial stability of the Joint Ventures ; — the sale of properties to the Second Joint Venture and Sixth Joint Venture could result in a decrease of the reported gross rental income of the Group as some of the sold properties may make a significant contribution to the income of the Group prior to their sale and their respec- tive deconsolidation; — Allianz and/or Areim may stop the acquisition process of proposed income-generating assets, and the Joint Venture Agreements may be amended or terminated in accordance with the provisions thereof; — the Group may incur additional liabilities as a result of cost overrun on developments made on behalf of the Joint Ventures; — the Group may be unable to provide funds to the Allianz Joint Venture which were previously committed under the terms of the relevant Allianz Joint Venture Agreement, which may result in the dilution of the Group; — changes in consolidation rules and regulations may trig- ger a consolidation obligation at the level of Allianz which may result in the dilution of the Group; — in case of a material breach by the Group, the Joint Ven- ture Partner may terminate the Joint Venture Agreement for the respective Joint Venture and VGP may have to sell VGP shares in the Joint Venture at a discounted purchase price (or acquire the partner´s shares with a surcharge); — in case the participation that Jan Van Geet holds in the Group would fall below %, Allianz can terminate the First, Second or the Third Joint Venture; and — the Joint Ventures or any of their subsidiaries may be in default under the development and construction loans granted by the Group which may have a negative impact on the Group. For example, the Fourth Joint Venture was scheduled to become effective at the moment of its first closing, which was initially expected to occur in November . However, in view of the limited transparency on pricing of the seed portfolio and in the current volatile market environment, Allianz and VGP announced on September that they were postponing the seed portfolio closing of the Fourth Joint Venture until such time both partners expect that a calmer environment will have returned. To this end Allianz has formally waived the exclusiv- ity obligation in respect of the initial pipeline portfolio allowing VGP Park Loures, Portugal PAGE 084 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS VGP to sell the initial pipeline portfolio to one or multiple third parties, including through the establishment of a new alterna- tive joint venture(s). As no transaction pursuant to the agree- ment on the establishment of the Fourth Joint Venture took place in and consequently two new Joint Ventures (the Fifth and Sixth) were established, the agreement on the estab- lishment of the Fourth Joint Venture has been terminated. The occurrence of any or all such risks could have a mate- rial adverse effect on the Joint Ventures’ business, financial condition and results of operations, which in turn could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, the Joint Ven- tures are exposed to many of the risks to which the Group is exposed, including amongst others the risks for the Group as described in the following sections: risk factor . “The Group may not be able to continue its development activities in a sus- tained and profitable way, for which it depends on its ability to execute new lease agreements and dispose of its real estate assets to the Joint Ventures” (but only in relation to the ability to execute new lease agreements, not the ability to dispose of assets), risk factor . “The Group’s development projects may experience delays and other difficulties, especially in respect of receiving necessary permits and increases in construction costs” and risk factor . “The Group could experience a lower demand for logistics space due to fluctuating economic con- ditions in regional and global markets”, all as in this section Risk Factors. 3.2 The Group is a holding company with no operating income and is dependent on distributions made by, and the financial performance of, the Joint Ventures and the members of the Group The Group is a holding company of which the sole activity is the holding, financing and management of its assets, i.e. its participations in the Subsidiaries and in the Joint Ventures. The real estate portfolios of the Group are owned through spe- cific asset companies which are subsidiaries of the Group or which are subsidiaries of the Joint Ventures. Accordingly, the Group depends on the cash flows from the members of the Group, proceeds for the disposal of the Group´s assets to the Joint Ventures and the distributions paid to it by members of the Group or the Joint Ventures. The abil- ity of the Subsidiaries and the Joint Ventures to make distribu- tions to the Group depends on the rental income generated by their respective portfolios. The Joint Ventures generated €.million in manage- ment fee income for the year ending December , com- pared to €.million for the year ending December . Profit distributions by the Joint Ventures for the period end- ing December amounted to € million (compared to € million for the year ending December ). VGP Park Hrádek nad Nisou, Czech Republic COMPANY REPORT 2023 PAGE 085 RISK FACTORS The financing arrangements of the Joint Ventures and the Subsidiaries are subject to a number of covenants and restric- tions which could restrict the ability to upstream cash to the Group. The bank facilities require the Joint Ventures and the Subsidiaries to maintain specified financial ratios and meet specific financial tests. A failure to comply with these cove- nants could result in an event of default that, if not remedied or waived, could result in a Joint Venture or the members of the Group being required to repay these borrowings before their due date, which would adversely impact their capacity to upstream cash to the Group. 3.3 The Group and the Group may be unable to recover the loans granted to the Joint Ventures and their subsidiaries The Group has granted significant loans to the Joint Ven- tures and to the Joint Ventures’ subsidiaries, amount- ing to €.million as at December (compared to €.million as at December ). These outstanding loans carry the risk of late, partial or non-repayment in the event of underperformance by any of the Joint Ventures or their subsidiaries. In addition, in respect of the loans made to the Joint Ventures´ subsidiaries to finance the development of buildings on behalf of the Joint Ventures, the loans may not be repaid in case that the respective Joint Venture partner refuses to acquire the development building. For more details on the effects of the performance of the Joint Ventures, please also refer to risk factor . “The Group’s business, operations and financial conditions are significantly affected by (i) the underlying operational, financial and organ- isational risks of the Joint Ventures and (ii) the continuation of the acquisition of completed assets from the Group” and risk factor . “The Group is a holding company with no operating income and is hence solely dependent on distributions made by, and the financial performance of, the Joint Ventures and the members of the Group”. 4 Risks related to the Group’s financial situation 4.1 The Group’s debt levels have substantially increased over the last years and the Group is exposed to a (re)financing risk In view of the geographic expansion, accelerated growth of the Group and more generally, the sustained growth of the demand for logistics warehouse space, the Group has incurred significant borrowings in recent years. VGP expects that debt levels in (nominal terms) will continue to increase but is convinced that it will be able to execute its growth strat- egy within a Gearing Ratio of %. VGP is continuously optimising its capital structure with an aim to maximise shareholder value while keeping the desired flexibility to support its growth. Between and , VGP successfully completed four share placements resulting in a net increase of the Group’s equity with €.million result- ing in the issuance of ,, of new shares. In , VGP successfully completed two share placements resulting in a net increase of the Group’s equity with €.million. In November , VGP successfully completed share place- ment resulting in a net increase of the Group’s equity with €.million. In November successfully completed another share placement, through a rights issue, resulting in a net increase of the Group’s equity with €.million. As at December , the net debt of the Group amounted to € ,.million (compared to € ,.million as at December ). The Gearing Ratio was .% (com- pared to .% as at December ). As at December , the Group had bonds outstanding for a total amount of € ,million (all being unsecured bonds) and had a remaining financial debt of €.million , of which €.million related to Schuldschein Loans and €.million related to accrued interest. The weighted average maturity of the debt stands at . years as at December , with a weighted average interest rate of .% per annum. Please also refer to the maturity profile financial debt which can be found in section “Business Review: Capital and financial position” Considering the model of the Joint Ventures, additional short-term bank debt might occasionally be needed to cover temporary cash shortfalls due to timing of recycling of develop- ment shareholder loans granted to the Joint Ventures or to the subsidiaries developing the Group´s properties. These share- holder loans are repaid when projects are acquired by the Sec- ond, Fifth or Sixth Joint Venture or when adequate bank credit facilities (or accumulated operating cash flows) are available to allow partial refinancing of invested equity in respect of the Third Joint Venture or the Development Joint Ventures. The Group is currently constructing a considerable amount of assets and has a number of large developments which have recently been or will shortly be initiated and which will require some time before being sold to the Second or Sixth Joint Ven- ture or being eligible for refinancing through bank debt in respect of the Third, Fifth or the Development Joint Ventures. As a result, higher peak funding needs may arise between the various Joint Venture closings. In order to allow the Group to comfortably bridge these periods the Group has arranged additional revolving credit facilities. For a detailed overview of the evolution of the Group’s cur- rent financing arrangements, please refer to section “Busi- ness Review: Capital and financial position”. Given its accelerated growth strategy, the Group may not be able to refinance its financial debt or may be unable to attract new financing or to negotiate and enter into new financing agreements on terms which are commercially desirable. If the Group is unable to receive financing at all or at favourable terms, this may have an impact on the Group’s cash flow and results and, thus, the Group may be unable to proceed with or to execute certain developments and may have to delay the initiation of certain projects. 4.2 The Group is exposed to risk of (re)financing from its Joint Ventures VGP depends on the ability of each of the Joint Ventures to have sufficient long-term financing in place to allow the Sec- ond Joint Venture and Sixth Joint Venture to acquire income generating assets developed by VGP and to allow the Third Joint Venture and the Development Joint Ventures to refi- nance the development costs incurred when developing the respective parks of these Joint Ventures. The funding required for the re-financing of the assets developed by the Group on behalf of the Fifth Joint Venture is committed sub- ject to appropriate conditions. The First Joint Venture has -year committed credit facilities (all maturing at the end of May ), in Germany, the Czech Republic, the Slovak Republic and Hungary. As at December , the aggregate outstanding credit facilities amounted to €.million which were fully drawn. The investment period of the First Joint Venture has ended in May . The Loan to Value Ratio stood at .% as at December . The Second Joint Venture has a -year € million com- mitted credit facility (maturing at the end of July ), in respect of the assets to be acquired in Spain, Austria, Italy and the Netherlands and a -year €.million committed credit facility (maturing in June ) in respect of the assets to be acquired in Romania. As at December , the aggregate Including € . million of capitalised finance costs. Including € . million of capitalised finance costs. PAGE 086 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS outstanding credit facilities were fully drawn and have an out- standing balance of €.million. The Loan to Value Ratio stood at .% as at Decem- ber . The Third Joint Venture drew a €.million com- mitted credit facility (maturing on June ) in respect of the financing of the first two completed buildings in VGP Park München during . As at December , addi- tional bank financing in an amount of €.million is available to re-finance the buildings which were completed in Decem- ber . It is currently expected that this credit facility will be fully drawn during . The Fifth Joint Venture, which executed its first closing in , has a committed credit facility of € million maturing at August . These facilities are drawn for € million at December . Its planned that the remainder will be fully drawn in ’. The Loan to Value Ratio stood at .% as at December . Finally, as at the December , no bank debt or credit facilities were outstanding in respect of the Sixth Joint Venture and the Development Joint Ventures. The Joint Ventures may not be able to refinance their finan- cial debt or may be unable to attract new financing or to nego- tiate and enter into new financing agreements on terms which are commercially desirable. If the Joint Ventures are unable to receive financing at all or at favourable terms, which in turn may have an impact on the Group’s cash flow and results. In such circumstances, the Group may be unable to proceed with or to execute certain developments and may have to delay the initiation of certain projects. 4.3 The Group’s borrowings are subject to certain restrictive covenants Under the terms of the bonds, Schuldschein Loans and bank credit facilities, the Group needs to ensure that it complies at all times with the respective covenants set forth therein. Failing to do so will result in the Group being in default under several (if not all) of the outstanding bonds, Schuldschein Loans and/or bank credit facilities. This may lead to an obligation of the Group to repay in full all outstanding financial indebtedness thereun- der, which might have a material adverse effect on the Group’s business, financial condition, operating results and cash flows. While the Group monitors its covenants on an on-going basis in order to ensure compliance and to identify any poten- tial problems of non-compliance for action, there can be no assurances that the Group will at all times be able to comply with these covenants. During , the Group remained well within its covenants. The terms and conditions of the the Jul- Bond, the Mar- Bond, the Mar- Bond, the Apr- Bond, the Jan- Bond, the Jan--Bond and the Schuldschein Loans all have the same financial covenants. As at December , the Consolidated Gearing stood at .% (compared to .% as at December ) against a maximum covenant ratio of %. The Interest Cover Ratio was . as at December compared to . as at Decem- ber ) against a minimum covenant ratio of .. The Debt Service Cover Ratio was . as at December (com- pared to . as at December ) against a minimum covenant ratio of .. Calculated by reference to the terms and conditions of the bonds and Schuldschein Loan documentation. 4.4 The Company’s's public financial rating may be suspended, reduced or withdrawn The Group has a public financial rating determined by an inde- pendent rating agency. On March , Fitch gave the Com- pany a long-term investment grade rating of ‘BBB-’ (stable out- look). This rating was affirmed by Fitch on September and on September , however, it may be suspended, reduced or withdrawn at any time. Following the announcement of the postponement of the initial closing of the Fourth Joint Ven- ture through a press release by the Group dated September , Fitch issued a press release on October , in which it reaffirmed the Company’s credit rating of ‘BBB-‘ on October , commenting that it considered the postponement of the seed portfolio closing of the Fourth Joint Venture as a market induced pause, not a cessation of transfers to the Joint Ventures. A rating downgrade would have a direct effect on the Group's cost of financing. A rating downgrade could also have an indi- rect effect on the appetite of credit providers to deal with the Company or an indirect effect on its financing cost or on its ability to finance its growth and activities. If the Group is una- ble to receive financing or financing against favourable terms, this may have an impact on the Company’s cash flow and results and, thus, the Group may be unable to proceed with or to execute certain developments and may have to delay the initiation of certain projects. 5 Legal and regulatory risks 5.1 The Group has to comply with a broad and diverse regulatory framework As the Group is active and intends to further develop business in the mid-European countries (whereby the Group’s current focus is on Germany, the Czech Republic, Spain, the Nether- lands, Slovakia, Hungary, Romania, Austria, Italy, Latvia, Por- tugal, Serbia, France, Croatia and Denmark), the Group is subject to a wide range of EU, national and local laws and reg- ulations. These include requirements in terms of building and occupancy permits (which must be obtained in order for pro- jects to be developed and let), as well as zoning, health and safety, environmental, monument protection, tax, planning, foreign ownership limitations and other laws and regulations. Because of the complexities involved in procuring and main- taining numerous licenses and permits, there can be no assur- ance that the Group will at all times be in compliance with all of the requirements imposed on properties and the Group’s busi- ness. Any failure to, or delay in, complying with applicable laws and regulations or failure to obtain and maintain the requisite approvals and permits could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. In this respect, please also refer to risk factor . “The Group’s development projects may experience delays and other difficulties, especially in respect of receiving neces- sary permits and increases in construction costs”. Furthermore, changes in laws and governmental regula- tions, or their interpretation by agencies or the courts, could occur. Such regulatory changes and other economic and political factors, including civil unrest, governmental changes and restrictions on the ability to transfer capital in the foreign countries in which the Group has invested, could have a mate- rially adverse effect on the Group’s business, financial condi- tion, operating results and cash flows. COMPANY REPORT 2023 PAGE 087 RISK FACTORS 5.2 The Group may be subject to litigation and other disputes The Group may face contractual disputes which may or may not lead to legal proceedings as the result of a wide range of events, especially during the construction and development phase. The most likely disputes include: (i) actual or alleged deficiencies in its execution of construction projects (including relating to the design, installation or repair of works); (ii) defects in the building materials; and (iii) deficiencies in the goods and services pro- vided by suppliers, contractors, and sub-contractors. In addition, after the development phase, the Group may become subject to disputes with tenants, commercial con- tractors or other parties in relation to the leasing, for example, in ensuring such parties comply with obligations, regulations and restrictions to which the Group may be subject. As a result, disputes, accidents, injuries or damages at or relat- ing to one of the Group’s ongoing or completed projects result- ing from the Group’s actual or alleged deficient actions could result in significant liability, warranty or other civil and criminal claims, as well as reputational harm. These liabilities may not be insurable or could exceed the Group’s insurance coverage limit. At the December , no governmental, legal or arbitra- tion proceedings have been started or are threatened against the Group which may have, or have had in the recent past, material adverse effects on the Group and/or the Group’s financial position or profitability. 6 Environmental, sustainability and climate change risks 6.1 The Group is subject to certain transitional climate risks and may not be able to meet all ESG related requirements or expectations of investors in this regard Considering the size of its own and joint ventures’ asset port- folios, VGP places sustainability risks at the heart of its strat- egy with an integrated commitment to make sustainability a core part of the VGP business. The Group has developed a sustainability strategy based on environmental best prac- tices, social fairness and transparent governance. VGP’s ESG Strategy (for more information please refer to section Group ESG Strategy in the Corporate Responsibility Report) aims to address the main challenges faced by the Group with its oper- ational activities in all geographies. As a developer and opera- tor of semi-industrial and logistics assets, VGP has identified a broad range of sustainability risks and opportunities which are related to several departments and activities within the busi- ness such as energy efficiency/ transition, asset resilience to climate change, evolving taxonomy and environmental regu- lations, supply chain due diligence, green financing and soci- etal risks– all of which are integrated into the Group’s risk management framework. The ESG Risks– which are further discussed in section ESG risks and opportunities of the Cor- porate Responsibility Report– are categorised in seven cate- gories: (i) ESG commitments, (ii) business ethics, (iii) Health, safety and well-being of people in our properties, (iv) human capital, (v) local municipal anchoring, (vi) protect environment and (vii) responsible supply chain. Sustainability risks are long term risks, leading to direct or indirect impacts on VGP: (a) Direct impacts: change in weather patterns impacting our assets, energy efficiency regulations being implemented in our countries of operations, etc.; and (b) Indirect impacts: municipalities requiring high level of environmental performance in our development projects, regulations impacting our upstream supply chain and the cost of raw materials and energy (e.g. increased price of carbon emissions for energy producers and large emitters such as cement manufacturers and steel manufacturers), financial institutions integrating ESG risks in their portfolio management strategies, etc. VGP Park Göttingen, Germany PAGE 088 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Summary of the accounts and comments COMPANY REPORT 2023 PAGE 089 SUMMARY OF THE ACCOUNTS AND COMMENTS Consolidated Income Statement For the year ended December Income Statement (in thousand of €) 31. 12. 2023 31. 12. 2022 Revenue 1 113,723 84,784 Gross rental and renewable energy income 69,003 51,230 Net property operating expenses (5,534) (8,223) Net rental and renewable energy income 63,469 43,007 Joint venture management fee income 26,925 21,537 Net valuation gains / (losses) on investment properties 2 87,958 (97,230) Administration expenses (48,863) (33,956) Share in result of Joint Ventures (10,715) (45,927) Other expenses — (3,000) Operating result 118,774 (115,569) Financial income 34,076 17,329 Financial expenses (40,107) (44,337) Net financial result (6,031) (27,008) Result before taxes 112,743 (142,577) Taxes (25,451) 20,035 Result for the period 87,292 (122,542) Attributable to: Shareholders of VGP NV 87,292 (122,542) Non-controlling interests — — Earnings Per Share 3 (in €) 31. 12. 2023 31. 12. 2022 Basic earnings per share 3.20 (5.49) Diluted earnings per share 3.20 (5.49) Revenue is composed of gross rental and renewables income, service charge income, property and facility management income and property development income. Includes realized gains on disposals of subsidiaries of € million in ’ and €.million in ‘ Calculated based on the weighted average number of shares amounting to ,, shares as at December . The total issued shares at year-end and for the full year were ,, shares PAGE 090 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Net rental income The net rental income of VGP’s own portfolio, increased to €.million for the full year compared to €.million for the full year primarily due to full impact of income generat- ing assets delivered during and . During the year €.million of annualized rental income including the Joint Ventures at %, have been activated. Another €.million is still to be activated (upon delivery of assets), of which €.million is expected to become cash generative in the next twelve months. Including VGP’s share of the joint ventures on a “look-through” basis net rental income increased by € million, or % compared to full year (from €.million for the period ending December to €.million for the period ending December ) . Net renewable energy income — The gross renewable energy income over was €.million compared to €.mil- lion over FY. This was driven by an increase of .% in the effective production sold in FY to GWh, at a lower average energy price of €/MWh (vs €/MWh in ). — The operational solar capacity increased significantly to . MWp , up % year-over- year which should equate to a marketable production potential of circa GWh. — As of January , the Group possesses a licence to use the grid and trade energy on behalf of our tenants in Germany, which will facilitate distribution of produced renewable energy across our German parks. The Group has applied for a similar licence in Romania. — As of December a total of projects representing . MWp are under construction (of which circa half is expected to go into production during first months of pending grid connection approval). — Including projects under construction the total solar power generation capacity will increase to . MWp spread over roof-projects in eight countries. As at the st of December this represents a total aggregate investment amount of € million (incl. current commitments for projects under construction). — With regards to the pipeline, an additional solar power projects are in contractual/design phase (including in five additional countries) which equates to an added power generation capacity of . MWp. The current total solar portfolio, including pipeline projects, totals . MWp and is well underway towards the MWp target by . Income from joint ventures The joint venture management fee income increased by €.million to €.million. The increase was mainly due to the growth of the joint ventures’ portfolio, following an annualized effect of the transactions in ’ and the transactions effectuated in ’. As part of the joint venture management fee, the property and facility management fee income increased from € million for the period ending December to €.million for the period ending December and the development management fee income during the period amounted to €.million, an increase of .million in comparison to the period ending December . Of which €.million on the own portfolio See attached section ‘Supplementary notes’ for further details Includes MWp of third-party owned systems Lease activation (in € million) Dec '22 Net activated Rental income New activated leases FY '23 Signed leases to be activated FY '23 committed annualized rental income Dec '23 Net activated rental income 238.2 € 72.7 million Own portfolio € 165.6 million JV portfolio 66.1 304.3 € 80.8 million Own portfolio € 223.4 million JV portfolio 46.5 350.8 € 125.6 million Own portfolio € 225.1 million JV portfolio COMPANY REPORT 2023 PAGE 091 SUMMARY OF THE ACCOUNTS AND COMMENTS Net valuation gains on the property portfolio As at December the net valuation gains on the property portfolio reached €.million compared to a net valuation loss of €.million for the period ended December . The net valuation gain was mainly driven by: (i) €.million unrealized valuation gain on the own and disposal group held for sale portfolio, and (ii) € million realized valuation gain on assets transferred as part of the first close with the Fifth Joint Venture, the fourth close with the Second Joint Venture and the tenth close with the First Joint Venture. All transactions in ’ have been concluded at a premium value versus the property portfolio fair value as at December . The own property portfolio, excluding development land but including the buildings being constructed on behalf of the Joint Ventures, is valued by the valuation expert at December based on a weighted average yield of .% (compared to .% as at December ) applied to the contractual rents increased by the estimated rental value on unlet space. The real estate valuations were adversely impacted by the rising interest rate which resulted in increasing yields. However, VGP’s portfolio surpassed this effect by the impact on the valua- tions by rental growth, its development margin on newly constructed assets as well as realized gains on transactions with the Joint Ventures. Finally, the remaining assets earmarked for the Fifth Joint Venture and the seed portfolio for the Sixth Joint Venture have been aligned on the agreed fair market valuation, net of ancillary corrections as part of the purchase price calcula- tion between both parties. The (re)valuation of the own portfolio was based on the appraisal report of the property expert IO Partners, preferred partner of Jones Lang LaSalle. Administrative expenses Administrative expenses increased with €.million to €.million, of which main variance is related to the LTIP program with an increase of €.million, noting that in ’ such provi- sion was reversed with € million. As at December the group employed . full-time equivalents, a decrease of . FTE versus ’. Share in net profit of the joint ventures VGP’s share of the joint ventures’ loss for the period came in at €.million from €.million of loss for the period ending December , the increase is the result of higher net rental income as well as lower negative valuation adjustments on the Joint Venture portfolio. Net rental income at share of the Joint Ventures increased to €.million for the period end- ing December compared to €.million for the period ended December . The increase reflects the underlying growth of the joint ventures’ portfolio net rental income result- ing from organic rental growth as well as the different closings made with the First, Second and Fifth Joint Venture and the a full year effect of the deliveries and transactions of assets with the Joint Ventures in ’. At the December , the joint ventures (% share) account for €.million of annu- alized committed leases representing ,, m² of lettable area compared to €.million of annualized committed leases representing ,, m² at the end of December . The net valuation losses on investment properties at share decreased from €.million for the period ending December to a loss of €.million for the period ending Decem- ber . The portfolio of the joint ventures, excluding development and the buildings being constructed by VGP on behalf of the Joint Ventures, was valued at a weighted average yield of .% as at December (compared to .% as at December ). The (re)valuation of the First, Second, Third and Fifth Joint Ventures’ portfolios was based on the appraisal report of the property expert IO Partners, preferred partner of Jones Lang LaSalle. The net financial expenses of the joint ventures at share for the period ending December increased to €.million (compared to .million as per December ). Other expenses Other expenses included €.million contribution to the UNHCR as per December . VGP has not made any contribution to its VGP Foundation in . Net financial result For the period ending December , the financial income was €.million (€.mil- lion for the period ending December ) driven by €.million interest income on loans granted to the joint ventures (€.million for the period ending December ) and €.million bank interest income from depositary accounts. PAGE 092 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS The reported financial expenses as at December of €.million (€.million as at December ) are mainly made up of €.million expenses related to financial debt (€.million as at December ) and other financial expenses of €.million (compared to €.million as at December ), partially offset by €.million of capitalized interests (€.million as at December ). As a result, the net financial costs amounted to € million for the period ending December compared to € million at the end of . A bond of € million, carrying .% inter- est, and a bond of € million, carrying .% interest have been repaid in . The average cost of the credit facilities currently amounts to .% with an average term of . years. Consolidated Balance Sheet For the period ended December Assets (in thousand of €) 31. 12. 2023 31. 12. 2022 Intangible assets 1,000 1,200 Investment properties 1,508,984 2,395,702 Property, plant and equipment 107,426 73,280 Investments in joint venture and associates 1,037,228 891,201 Other non-current receivables 565,734 359,644 Deferred tax assets 8,304 3,839 Total non-current assets 3,228,676 3,724,866 Trade and other receivables 79,486 122,113 Cash and cash equivalents 209,921 699,168 Disposal group held for sale 892,621 299,906 Total current assets 1,182,028 1,121,187 Total Assets 4,410,704 4,846,053 Shareholders' Equity And Liabilities (in thousands of €) 31. 12. 2023 31. 12. 2022 Share capital 105,676 105,676 Share premium 845,579 845,579 Retained earnings 1,263,162 1,250,920 Shareholders’ equity 2,214,417 2,202,175 Non-current financial debt 1,885,154 1,960,464 Other non-current liabilities 38,085 46,419 Deferred tax liabilities 23,939 79,671 Total non-current liabilities 1,947,178 2,086,554 Current financial debt 111,750 413,704 Trade debts and other current liabilities 84,075 110,676 Liabilities related to disposal group held for sale 53,284 32,944 Total current liabilities 249,109 557,324 Total liabilities 2,196,287 2,643,878 Total Shareholders’ Equity And Liabilities 4,410,704 4,846,053 COMPANY REPORT 2023 PAGE 093 SUMMARY OF THE ACCOUNTS AND COMMENTS Balance sheet Investment properties Investment properties relate to completed properties, projects under construction as well as land held for development. As at December the investment property portfolio consists of completed buildings representing ,, m² of lettable area with another buildings under construction representing , m² of lettable area. During the year buildings were completed totaling , m² of lettable area. For its own account VGP delivered buildings representing , m² of lettable area. The Investment Property decreased to €. billion, influenced by transactions executed in ' and the reclassification of assets designated for the Sixth Joint Venture to assets held for sale. The own Investment Property portfolio, excluding development land is valued at an average weighted yield of %. The total capital expenditure (capex) on investment property, inclusive of assets held for sale, reached €.million. This expenditure breakdown includes €.million on assets, €.million on acquisitions, and €.million on interests and capitalized rent-free compo- nents. Including assets held for sale, the total investment property accounts for € ,million in completed assets, €.million assets under construction, and €.million land. Property, plant and equipment Property, plant and equipment increased with €.million which mainly relates to investments in renewable energy assets (€.million) and are accounted for at cost and depreciated over years. Completed installations amount to €.million, whereas €.million refers to acquisition costs of renewable installations currently under construction. Photovoltaic capacity grew .% YoY with operational capacity passing the MWp-mark at . MWp (compared to . MWp in Dec-). Photovoltaic projects under development amount to . MWp, with a further . MWp being planned. Investment in joint ventures and associates At the end of December , the investments in the joint ventures and associates increased to € ,million from €.million as at December . The investments in joint ventures and associates as at the end of reflect the Allianz Joint Ventures, the Deka Joint Ventures and the Development Joint Ventures, all of which are accounted for using the equity method. The increase is mainly related to equity contributions of transactions with Joint Ventures in amount of €.million, a dividend from the First Joint Venture (€ million) and an equity repayment from the development joint venture Grekon (€.million), as well as share in the loss of the Joint Ventures of €.million Disposal group held for sale The balance of the Disposal group held for sale increased from €.million as at Decem- ber to €.million as at December . This balance relates to (i) the assets under construction and development land (at fair value) which are being / will be developed by VGP, on behalf of the First and Second Joint Venture, (ii) assets held for sale and related to upcoming closings in ’ with the Fifth Joint Venture as well as (iii) the assets and development land des- tined to the Sixth Joint Venture. The assets held for sale and destined to the Fifth and Sixth Joint Venture have been valued at the agreed fair market value, taking into account ancillary corrections and transaction costs, with the Joint Venture partners. Total non-current and current financial debt The financial debt decreased from € ,.million as at December to € ,million as at December . The decrease was mainly driven by the repayment of two bonds for a total amount of € million. VGP concluded on a credit facility of the European Investment Bank of € million to sup- port it’s renewable energy business unit in December ‘. As per February , VGP has drawn € million of the facility at an interest rate of .% on a ten year period. The gearing ratio of the Group as of December amounted to .% compared to .% as at December . PAGE 094 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Cash flow statement In thousands of € 31. 12. 2023 31. 12. 2022 Cash flow from operating activities (27,331) (70,637) Cash flow from investing activities (8,078) (566,150) Cash flow from financing activities (450,050) 1,116,401 Net increase/(decrease) in cash and cash equivalents (485,459) 479,614 The changes in the cash flow from investing activities was mainly due to: (i) € million (: € .million) of expenditure incurred for the development activities and land acquisition; (ii) €.million cash recycled resulting from the fourth closing with the Second Joint Venture (€.million), the tenth closing with the First Joint Venture (€.million) (iii) the first clos- ing with the Fifth Joint Venture (€ million) and some final settlements of previous closings (€.million). The changes in the cash flow from financing activities were driven by: (i) € million dividend paid out in May (: € million); (ii) € million repayment from the Apr- and Sep- Bonds. Events after the balance sheet date As per January ’, the group acquired its first site in Denmark, which is located in the north- ern part of the Triangle Region, a commercially important region in the centre of Denmark. On an area of more than , m² will be developed more than , m² of semi-industrial premises which are suitable for light industry and logistics services. The site is adjacent to the highway E, exit b Vejle Syd. The park will offer full-scale services including photovoltaics, on-site electric car charging and high-quality technical and sustainable features. As per February ’, the group divested its stake in the LPM Joint Venture for a consideration of ca € million. VGP Park San Fernando de Henares, Spain PAGE 096 VGP NV ANNUAL REPORT 2023 REPORT OF THE BOARD OF DIRECTORS Information about the share Listing of shares Euronext Brussels VGP share ISIN BE0003878957 Market capitalisation 31 Dec-23 2,865,587,760 € Highest capitalisation 2,914,712,203 € Lowest capitalisation 2,018,192,441 € Share price 31 Dec-22 77.80 € Share price 31 Dec-23 105 € Shareholder structure As at December the share capital of VGP was represented by ,, shares. Ownership of the Company’s shares is as follows: Shareholders 1 Number of shares % of total shares Number of voting rights 2 % of total voting rights Little Rock S.a.r.l. 8,092,390 29.65% 14,566,303 36.71% Tomanvi SCA 629,714 2.31% 1,113,919 2.81% Sub-total Jan Van Geet Group 8,722,104 31.96% 15,680,222 39.52% VM Invest NV 5,186,463 19.00% 9,335,634 23.53% Public 13,382,745 49.04% 14,661,163 36.95% Total 27,291,312 100.00% 39,677,019 100.00% Little Rock S.a.r.l. and Tomanvi SCA are companies controlled by Mr. Jan Van Geet. VM Invest NV is a company controlled by Mr. Bart Van Malderen. The Extraordinary General Shareholders’ Meeting of May approved the introduction of the double voting right. A double voting right is therefore granted to each VGP share that has been registered for at least two years without interruption under the name of the same shareholder in the register of shares in registered form, in accordance with the procedures detailed in article of the Articles of Association. In accordance with Belgian law, dematerial- ised shares do not benefit from the double voting right. VGP has not issued any other class of shares, such as non-voting or preferential shares. In accordance with Article of the law of May regarding the publication of major shareholdings (“transparency law”) VGP must publish, its (i) total share capital, (ii) the total num- ber of securities granting voting rights and (iii) the total number of voting rights, at the latest by the end of each month during which these numbers have increased or decreased. As at December , on the basis of transparency declarations, information received from the shareholders or press releases issued by the Company in respect of Voting rights and denominator published on the Company’s website. VGP NV has received a transparency notification dated January that by virtue of the merger of Alsgard SA with Little Rock S.à.r.l. (formerly Little Rock SA) which occurred on December , that (i) Little Rock S.à r.l. now holds .% of the voting rights of VGP NV COMPANY REPORT 2023 PAGE 097 INFORMATION ABOUT THE SHARE Authorised capital The Board of Directors has been authorized by the Extraordinary Shareholders’ Meeting held on May to increase the Company's subscribed capital in one or more times by an aggre- gate maximum amount of € ,,. (before any issue premium). The authority is valid for five years from May and can be renewed in accordance with the applicable statutory provisions. Pursuant to this authorization, the Board of Directors may, among others, effect a capital increase under the authorized capital by means of issuing ordinary shares, subscription rights or convertible bonds and may limit or disapply the preferential subscription right of the Company's shareholders. Furthermore, the Board of Directors has been authorized, for a period of three years from May , to make use of the authorized capital upon receipt by the Company of a notice from the FSMA of a public takeover bid for the Company’s securities. Liquidity of the shares To improve the liquidity of its shares VGP NV concluded a liquidity agreement with KBC Bank. This agreement ensures that there is increased liquidity of the shares which should be to the benefit of the Group in the future as more liquidity allows new shares to be more easily issued in case of capital increases. Financial calendar 2024 first quarter trading update 10 May 2024 Annual shareholders’ meeting 10 May 2024 Ex-date dividend 2023 22 May 2024 Record date dividend 2023 23 May 2024 Payment date dividend 2023 24 May 2024 2024 half year results 23 August 2024 2024 third quarter trading update 8 November 2024 VGP Park Nijmegen, The Netherlands COMPANY REPORT 2023 PAGE 099 OUTLOOK 2024 Outlook 2024 VGP believes to have set several milestones in that will enable solid growth in ’ and beyond. The acquisition of some very iconic land plots, on top of already a prime land bank across the regions in which VGP operates, allows to offer attractive propositions to our clients. VGP expects to activate another €.million of annualized rental income in ’, supporting substantial growth in net rental income. The two new Joint Ventures will ensure continuous cash recycling to finance the develop- ment pipeline and will grow our joint venture asset management services further. A minimum of € million of gross cash proceeds are expected based on commitments from our new Joint Venture partners in the Fifth and Sixth Joint Venture. In ’ VGP repaid € million of debts, but has only one bond of € million that comes to maturity in ’. Moreover, VGP has come to an agreement in February ’ to divest its LPM Joint Venture, which generated ca € million of cash proceeds. This brings the total minimum expected gross cash proceeds for ’ already to € million, including the € million drawdown on the new credit facility of the Euro- pean Investment Bank. This covers all outstanding commitments in our property and renewable energy developments, land acquisitions, debt repayments and dividend for ’. As always, we look forward to updating you on our progress along the way. Board of Directors and Management VGP Park Giessen am Alten Flughafen, Germany PAGE 102 VGP NV ANNUAL REPORT 2023 BOARD OF DIRECTORS AND MANAGEMENT Board of Directors Board of Directors Composition on 31December 2023 Name Year appointed Executive or non-executive Independent Next due for re-election Chairman VM Invest NV represented by Bart Van Malderen 2021 Non-executive and reference shareholder — 2025 CEO Jan Van Geet s.r.o. represented by Jan van Geet 2021 Executive and reference shareholder — 2025 Directors Gaevan BV, represented by Ann Gaeremynck 2023 Non-executive Independent 2027 Katherina Reiche 2023 Non-executive Independent 2027 Vera Gäde Butzlaff 2023 Non-executive Independent 2027 VGP Park Nijmegen, The Netherlands COMPANY REPORT 2023 PAGE 103 BOARD OF DIRECTORS Bart Van Malderen Bart Van Malderen founded Drylock Technologies in . Drylock Technologies is an hygienic disposable products manufacturer which intro- duced the revolutionary flufless diaper in . Prior to this, Bart Van Malderen held different management positions at Ontex, a leading European manu- facturer of hygienic disposable prod- ucts where he became CEO in and Chairman of the Board in , a man- date which he occupied until mid-July . Jan Van Geet Jan Van Geet is the founder and CEO of VGP. He has overall daily as well as strategic management responsi- bilities of the Group. He started in the Czech Republic in and was man- ager of Ontex in Turnov, a producer of hygienic disposables. Until , he was also managing director of WDP Czech Republic. Ann Gaeremynck Ann Gaeremynck is full profes- sor of Accounting and Governance at the KULeuven, Faculty of Economics and Business Administration. Since April she is member of the board and the audit committee of Retail Estates, a Belgian listed company which invests mainly in retail properties located in the periphery of residential areas or along access roads to urban centres. She cur- rently is also a member of the board of directors and chair of the audit commit- tee of Vives, a university college of the Association KULeuven. In the past she fulfilled a position as an external mem- ber of the Audit Committee at the hos- pital AZ Delta. Katherina Reiche Katherina Reiche is Chairwomen of the Management Board of Westener- gie AG, Germany's leading energy infra- structure company, since . Prior to this Katherina Reiche chaired the board of the Association of Municipal Enter- prises (VKU) in Germany from to and chaired the European Asso- ciation of Public Employers and Enter- prises (CEEP) since June . She was a member of the German Bundestag from to . She served as State Secretary in the German Federal Min- istry of Environment from to and as State Secretary in the Federal Ministry of Transport and Digital Infra- structure from to . In she was appointed by the German federal cabinet as Chairwoman of the National Hydrogen Council. Vera Gäde-Butzlaff Vera Gäde-Butzlaff is a mem- ber of several boards a.o. Supervisory board member Gröner Group AG, Chair- woman of the Bürgerstiftung Berlin and was a Supervisory board member of Berliner Volksbank until mid-. Prior to this Vera Gäde-Butzlaff was Deputy State Secretary for Environment and Agriculture at the Ministry of Regional Planning, Agriculture and Environment of Saxony-Anhalt from to . From to , she was a member of the Board of Directors and since CEO of Berlin’s city cleaning and waste management companies (BSR). From to she was CEO of GASAG AG, one of Germany’s largest regional energy suppliers. From to , she has chaired the Supervisory Board of Vivantes, the hospital group. PAGE 104 VGP NV ANNUAL REPORT 2023 BOARD OF DIRECTORS AND MANAGEMENT Composition on 31December 2023 Jan Van Geet 1 Chief Executive Officer Piet Van Geet 2 Chief Financial Officer Dirk Stoop 3 Company Secretary Tomas Van Geet 4 Chief Commercial Officer Miquel-David Martinez Chief Technical Officer Matthias Sander 5 Chief Operating Officer– Eastern Europe Jonathan Watkins 6 Chief Operating Officer– Western Europe Martijn Vlutters 7 Vice President– Business Development & Investor Relations As permanent representative of Jan Van Geet s.r.o. As permanent representative of Urraco BV as from January . As permanent representative of Dirk Stoop BV as from January until June . As permanent representative of Tomas Van Geet s.r.o. As permanent representative of Matthias Sander s.r.o. As permanent representative of Havbo Consulting Ltd. As permanent representative of MB Vlutters BV. Executive Management Team COMPANY REPORT 2023 PAGE 105 EXECUTIVE MANAGEMENT TEAM Mr. Piet Van Geet Joined VGP in and was appointed CFO in January . He is responsible for all finance matters of the VGP Group. Prior to joining VGP, Piet Van Geet has been years the CFO of Drylock Technologies, a leading dispos- able hygiene manufacturer with opera- tions in Europe, Russia, USA and Brazil. After his studies he joined VGP as a pro- ject manager in the Baltics and Roma- nia and continued his career at VGD in auditing and finance consulting prior to joining Drylock Technologies. Piet holds degrees at the University of Antwerp of Applied economical sciences and a Master of Tax law and holds a number of board seats, amongst other as chair- man of Truncus Wealth. Mr. Dirk Stoop Joined VGP in and held the position of CFO until January whereafter he was appointed Company Secretary. Prior to joining VGP Dirk worked at Ontex for years as Group Treasurer where he was also respon- sible for tax and insurance matters. Prior to this he worked at CHEP Europe based in London as Treasurer Europe, South America & Asia. Dirk holds a Master’s Degree in Financial and Com- mercial Sciences from VLEKHO (HUB) in Belgium. Dirk Stoop left VGP as of July . Mr. Tomas Van Geet Joined VGP in . He takes responsibility for all commercial strate- gic matters and commercial co-ordina- tion of VGP’s key accounts. Prior to join- ing VGP, Tomas held several positions in the planning and logistics departments of Domo in Germany, Spain, Czech Republic and South Africa, Associated Weavers and Ontex. Mr. Miquel-David Martinez He is civil engineer and joined VGP’s team in . He took responsibil- ity for technical concepts and contract execution and has been appointed as technical director for Western Europe in . Prior to this position, Miquel-Da- vid was the technical director and part- ner in Inel Group, a construction man- agement and engineering company mainly focused on building projects for the tertiary sector. Mr. Matthias Sander He is a mechanical and eco- nomic bachelor and joined VGP in . He takes responsibility for the expan- sion into new countries, sourcing land plots across Europe and coordinating of the development pipeline. Matthias spent the last years in several leading roles with Knorr Bremse (a leading Ger- man industrial Group) and was its Man- aging Director in the Czech Republic. Mr. Jonathan Watkins Joined VGP in December . Mr Watkins was previously head of UK and German Ops Real Estate at Ama- zon. Prior to this he held several leading roles in acquisition and construction of new stores and warehouses at Lidl Denmark, UK and Germany. Jon holds a Master’s Degree, Surveying of the Uni- versity College of Estate Management and a BSc Surveying from Sheffield Hal- lam University. Mr. Martijn Vlutters Joined VGP in . He takes responsibility for business development and investor relations. Prior to joining VGP, Martijn worked years at J.P. Morgan based in London and New York in various roles in Capital Markets and Corporate Finance. Within this period, he spent years in New York as Investor Relations for J.P. Morgan Chase. Martijn holds a Master degree in Civil Engineer- ing from Delft University and Business Administration from Erasmus/Rotter- dam School of Management Mr. Rolf Carls He is a civil engineer and joined VGP’s team in . He took responsibil- ity for technical concepts, contract exe- cution and for the transfer of expertise to the newly established national VGP companies. He has been appointed as technical director for Eastern Europe as of January . Prior to this posi- tion, Rolf Carls was Managing Director of an engineering and consulting com- pany mainly focused on industrial pro- jects for the automotive and chemical sectors. The curriculum vitae of the members of the executive management (except for the CEO– cf. supra) may be summarised as follows: Corporate Responsibility Report PAGE VGP NV ANNUAL REPORT CONTENT Content Introduction . CEO letter: Charting a Sustainable Tomorrow– Our Year in Review — page . Summary of the Group’s ESG achievements — page . About this report — page . Company at a glance — page Group ESG Strategy . ESG Strategy: Building Tomorrow Today Together — page . Governance of ESG — page Green financing of the Group activities . EU Taxonomy — page . Green bonds — page . VGP External Review of Green Finance Reporting — page CORPORATE RESPONSIBILITY REPORT PAGE CONTENT Commitments . Address Climate Change — page . Sustainable Properties — page . Improve eco-efficiency — page . Protect and improve biodiversity — page . Empowering our workforce — page . Sustainable Supply Chain Management — page . VGP in the community — page . VGP Foundation — page Additional information . VGP Reporting methodology — page . Independent third-party’s ESG assurance report — page Corporate Directory Introduction VGP Park Nijmegen, The Netherlands Introduction PAGE VGP NV ANNUAL REPORT INTRODUCTION . CEO letter: Charting a Sustainable Tomorrow– Our Year in Review Dear stakeholders, Meeting our goals, and achieving measurable results, for climate and nature will require innovation, working together in partnerships across the value chain, engagement with communities and a science-based approach. Our ESG Strategy is based on our motto “Building Tomorrow Today Together” and is underpinned by a threefold ambition: We transform ourselves. By creating more sustainable assets and helping our tenants to shift to better sustainable operating habits. We empower our stakeholders. By mobilizing our ecosystem to collectively improve our model and share growth with our communities. We contribute to solving the challenges of our time. By supporting initiatives that are developing solutions to climate change, the need for enhanced circularity, protecting biodiversity and social progress. Address climate change Among our Group’s sustainability highlights for was our progress on the first pillar of our ESG strategy: address cli- mate change. We reduced our GHG emissions intensity per employee by percent since our base year , and helped our tenants reduce or avoid emissions through our efforts to enhance our building’s eco-efficiency, as well as by enabling sustainable transport and the green energy transition. We also refined our embodied carbon reduction efforts, involving our supply chain, covering suppliers that account for nearly percent of our procurement spending. Finally, our photo- voltaic roll-out has continued with our renewable energy pro- duction surpassing the annual electricity consumption of our tenants once all our PV pipeline projects are completed. This report contains many examples of how we are contributing to a low-carbon society and supporting the Paris Agreement’s target of limiting the rise in global temperatures to . degrees Celsius. One that stands out is a project in Germany, where we CORPORATE RESPONSIBILITY REPORT PAGE CEO LETTER: CHARTING A SUSTAINABLE TOMORROW have been able to obtain alicense to trade energy on the grid for our tenants which will help us distribute our solar power more effectively and thereby reduce annual carbon emissions by , tons, equivalent to taking , conventional cars off the road. By taking a closer look at the case studies we have included throughout the report you will see how we are using technology to shrink VGP’s environmental footprint while working with our tenants and suppliers to reduce and avoid emissions across our value chain. Circularity, biodiversity and social progress While we are particularly proud of our progress on the first pil- lar of our ESG strategy, we also continued to advance on the other pillars: build Sustainable Properties which preserve resources, improve eco-efficiency of our existing buildings, supporting communities, promoting biodiversity, and creating a workplace culture of integrity and transparency along the extended value chain. In , we strengthened VGP’s circu- larity approach by defining a new key performance indicator (KPI) for new projects taking into account every stage of the building’s life cycle, from design to end-of-life. In the “Sustain- able Properties” section, you can find more examples of how we are putting circularity into practice in our buildings and management processes and the interaction with our tenants. One other important initiative was the launch of our enhanced green lease template, which we aim to include in all new leases signed and which provides a framework for transpar- ency into the environmental impact of a building’s usage and ensures green electricity procurement. The report’s section on protecting and improving biodi- versity details the strides we have made toward our goals of enhancing biodiversity through preserving and enhancing natural ecosystems surrounding our projects. This includes education within the community and training to keep aware- ness high. When it comes to social progress, we achieved many con- crete gains, including increasing gender diversity across the organization as well as management, and enhancing our human rights in our suppliers due diligence process. At the same time, by setting up the VGP Academy we have estab- lished a platform designed to empower our employees with the knowledge and skills needed to drive innovation and sus- tainability within our organization. Technical competence Technical competence cannot solve all of the world’s chal- lenges. But our experience at VGP shows that, with clear goals in mind, and engaged and motivated people with the right skills and expertise, we can develop and deploy solutions that will take us a long way toward creating a sustainable society. I want to thank our people for their contributions to our sus- tainability goals and for the work they have done, not just as employees but also in a private capacity, to support the shift to a sustainable society. And I want to thank all our stakehold- ers for your collaboration, support and trust. Together, we are Building Tomorrow Today and thereby leading the way to a sustainable future. Sincerely, Jan Van Geet CEO VGP Park München, Germany PAGE VGP NV ANNUAL REPORT INTRODUCTION . Summary of the Group’s ESG achievements CORPORATE RESPONSIBILITY REPORT PAGE SUMMARY OF THE GROUP’S ESG ACHIEVEMENTS Address climate change % Scope and emissions intensity reduction since .°C Scope and climate strategy approval by SBTi % Scope - embodied carbon intensity reduction since % Scope - portfolio use intensity reduction since Sustainable buildings GRESB Developer score .°C CRREM pathway (including identified improvement measures) Implemented Internal carbon reference pricing .% Circular economy – recycled waste from construction sites PAGE VGP NV ANNUAL REPORT INTRODUCTION Strengthen communities , Volunteering hours by VGP employees Charitable projects supported by VGP Foundation Empowering our workforce % of employees offered to participate in community days bps Increase in women in the Group .% Employees satisfied with Group training and VGP Academy +. Net promoter score given by employees CORPORATE RESPONSIBILITY REPORT PAGE SUMMARY OF THE GROUP’S ESG ACHIEVEMENTS Protect and improve biodiversity , m Total size of biotopes created in or around VGP Parks , Additional trees planted in in existing parks % of projects started in with an ecology plan .% of projects with meaningful biodiversity stakes implemented a biodiversity action plan Improve eco-efficiency .% of green leases among total active leases % Solar power generation (including pipeline) as % of tenant electricity consumption % Renewable energy of VGP offices .% Parks with public transport access EV chargers placed in VGP Parks , tCO Annual carbon emissions savings through eco-efficiency measures PAGE VGP NV ANNUAL REPORT INTRODUCTION .. Results of non-financial ratings and indices Non-financial evaluations The Group’s ESG assessments by extra-financial rating agencies were updated in : GRESB: in , with a score of / for its development activities, the Group received a “ Star” rating and recognises VGP as the second highest performance in its European peer group. The score for Standing Investments improved year over year to a score of /, equivalent to a “Star” rating. CDP (formerly the Carbon Disclosure Project): VGP was highlighted as a global leader on supplier engagement by global environmental impact non-profit CDP: — Being awarded a position in the Supplier Engagement Leaderboard in with an A- ranking recognising the Group as a global leader for engaging with its suppliers on cli- mate change (more details in section . Sustainable Supply chain management); — Score climate change: B Sustainalytics: VGP received an ESG Risk Rating of . and was assessed by Sustainalytics to be at “Negli- gible” risk of experiencing material financial impacts from ESG factors. VGP’s ESG Risk Rat- ing by Sustainalytics places the Group at the rd rank and in the th percentile of the Real Estate Industry group assessed by Sustainalytics, as well as at the rd rank in the global rated universe (,+ companies). VGP’s management score of ESG issues assessed by Sustainalytics is strong (/) (last update in February ). S&P’s ESG solutions: As of March , our company performed in the top decile in the Real Estate Manage- ment & Development Industry in the S&P Global Corporate Sustainability Assessment . Our company scored (out of ), reflecting an improvement of points over , with full scores in the following criteria: for Environmental, for Social and for Governance & Economic. Non-financial indices On March , VGP was included in the BEL® ESG Index (for more details please see Euronext’s website). The BEL® ESG Index is a free float market capitalisation weighted index that reflects the performance of the companies with the best ESG risk rating selected among the best in their subindustry from the BEL Index and BEL Mid Index. CORPORATE RESPONSIBILITY REPORT PAGE ABOUT THIS REPORT . About this report VGP communicates regularly about how we manage and conduct our business. We share information about our ESG performance through a number of channels — including our Annual Report, various other reports and presentations, reg- ulatory filings, press releases and direct conversations with stakeholders. We maintain a dedicated sustainability section on our website to facilitate access to information that we pub- lish on these topics. This Annual Report is designed to consolidate and summa- rize our work on key topics that are important to our business and stakeholders, and guide readers to where they can access more detailed information about specific topics of interest. All data in this report are as of Dec. , , unless otherwise noted. For the CO2 emissions and energy consumption data of our tenants within our portfolio full-year data has been used (as referenced in the respective tables). .. Alignment with ESG reporting standards and frameworks VGP’s non-financial statement consists mainly of the present Chapter “Corporate Responsibility” of the Group’s Annual Report, completed with elements in Chapters “Profile”, “Strategy”, “the Report of the Board of Directors” and the “Remuneration Report”. In , in compliance with the anticipated EU “Taxonomy” regulation, VGP has published the share of its eligible and aligned activities. The EU Taxonomy aims to establish a uni- fied classification system for economic activities to determine whether these activities can be considered “environmentally sustainable” (or “green”). The eligible and aligned share of turnover, CAPEX and OPEX from VGP activities are presented in section . EU Taxonomy regulation. The VGP Annual Report also complies with the Best Practices Recommendations on Sustainability Report- ing (“sBPR”) established by the European Public Real Estate Association (“EPRA”). VGP received the EPRA “Most improved” and “Bronze” Awards in for completing its reporting in accordance with the EPRA Sustainability BPR. Since , VGP follows the GRI guidelines. The Annual Report has been prepared in accordance with the GRI Standards: Core option. The Group’s non-financial statement is also in line with the recommendations of the TCFD. VGP is an official supporter of the Financial Stability Board’s (“FSB”) TCFD since , recognising the importance of increasing trans- parency of climate-related risks and opportunities, promot- ing more informed financial decision-marking and building a more resilient financial system. The following table includes cross-referencing between the information published by VGP in this document and the main (European and Global) reporting standards for non-financial information: the Non-Financial Reporting Directive, the GRI standards and TCFD recommendations. Complete cross-references tables of the Group’s sus- tainability reporting with EPRA and GRI frameworks, as well as with the TCFD’s core elements of climate-related finan- cial disclosures, are available in the sustainability section of the Group’s website (https://www.vgpparks.eu/en/investors/ environmental-disclosures/). Links between the UN SDGs and ESG risks and opportuni- ties can be identified in the graphics included in section .. ESG risks and opportunities. Cross-reference table of the management report Topic Annual Report section Description of the business model Page 20–23 Description of the principal non-financial risks relating to the Group’s business Page 78–87 Description of the policies to identify, prevent and mitigate non-financial risks and their outcomes including key performance indicators Page 78–87 Respect for human rights Page 73 Anti-corruption measures Page 73 Climate change (contribution and adjustments) Page 87 Circular economy Page 28 Waste Page 174 Collective bargaining agreements and their impacts Page 189 Measures taken to combat discrimination and promote diversity Page 73 Societal commitments Page 75 .. External assurance In compliance with the applicable frameworks on the disclo- sure of non- financial information (see Section .... Align- ment with ESG reporting standards and frameworks), the Scope , Scope and Scope concerning tenant energy con- sumption data key performance indicators of the Group’s non-financial statement are audited by an independent third- party verifier; see the assurance report in Section . Inde- pendent third-party’s ESG assurance report. A third-party verifier was also commissioned to carry out an audit on the annual reporting for the Green Bonds issued by the Group. This audit consists of verifying the compliance of funded assets with the set of eligibility criteria, concern- ing both their development and operation phases, which are defined in the Green Bonds Use of Proceeds (see Section .. Current allocation of green bond proceeds). The detailed reporting and assurance report are disclosed in Section .. (Independent third party’s report on green bond criteria and indicators). All the portfolio energy data as well as the related carbon emission calculations used in this report have been audited based on PAS and the GHG protocol. PAGE VGP NV ANNUAL REPORT INTRODUCTION .. Reporting on the EUTaxonomy The European Union has established a taxonomy (the “EU Taxonomy”) to help direct invest- ments towards sustainable projects and activities. From the viewpoint of companies, the tax- onomy is a classification system meant to provide investors and policymakers with appropri- ate definitions for which economic activities can be considered environmentally sustainable according to the following six environmental objectives: 1. Climate change mitigation; 2. Climate change adaptation; 3. The sustainable use and protection of water and marine resources; 4. The transition to a circular economy; 5. Pollution prevention and control; and 6. The protection and restoration of biodiversity and ecosystems. As of the publication date of this non-financial statement, the full set of regulations pertain- ing to the EU Taxonomy had not yet been passed. In accordance with the ones applicable to disclosures , in section . EU Taxonomy VGP reports only on the proportion of its eco- nomic activities that are “taxonomy-eligible” and “taxonomy-aligned” with respect to the first two objectives above. See Regulation (EU) / and Article . of Commission Delegated Regulation (EU) / of July , VGP Park České Budějovice, Czech Republic CORPORATE RESPONSIBILITY REPORT PAGE COMPANY AT A GLANCE . Company at a glance VGP is a pan-European owner, manager and developer of high-quality logistics and semi-industrial properties as well as a provider of renewable energy solutions. VGP has a fully integrated business model with extensive expertise and many years of experience along the entire value chain. VGP was founded in as a family-owned Belgian property devel- oper in the Czech Republic and today operates with around full-time employees in European countries directly and through several : joint ventures. In December , the gross asset value of VGP, including the % joint ventures, amounted to € . billion and the company had a net asset value (EPRA NTA) of € . billion. VGP is listed on Euronext Brussels (ISIN: BE). .. Asset Management VGP is a long-term real estate investor with its own rental port- folio owned and managed. Part of the portfolio is held in joint ventures for which VGP is responsible for the portfolio and asset management. .. Development activities Through the acquisition of a strategic land bank and with an in-house team with capabilities across the value chain VGP develops new business parks. In most developments VGP acts as general contractor and imposes strict pre-letting require- ments. VGP safeguards continuous site supervision and developments to a high standard of environmental and health and safety policies. .. Renewable Energy Predominantly by engaging with tenants on self-consumption of renewable energy the Group has developed a third business line offering renewable energy solutions based on renewable energy generation in and around business parks. .. Financial and operational highlights (FY ) Financial Revenues € 113.7 million Operating result € 118.8 million Capital Expenditure € 858 million Earnings per share € 3.20 Equity base € 2.21 billion Financial debt (of which green bonds) € 2.00 billion (€ 1.6 billion) Gearing ratio 40.3% Cash available € 0.2 billion Operating metrics Total FTE 368 Completed building portfolio 1 (#/m) 219/4,943,537 Buildings under construction (#/m) 26/774,000 Portfolio performance Total AuM € 7.19 billion Net property income € 63.5 million Leases committed € 350.8 million Capital expenditure € 693 million Occupancy ratio 98.9% Renewable Energy business unit Renewable energy income € 4.4 million Solar capacity installed 101.8 MWp Solar capacity under construction 69.0 MWp Committed solar capacity 99.7 MWp Number of EV charging stations installed 545 Chargers Rent roll, including Joint Ventures at %: buildings (,, m); main adjustment is exclusion of existing Russelsheim facilities (brownfield warehouses) Group ESG Strategy VGP Park Munich, Germany with new biotope corridor developed along the length of the park Group ESG Strategy PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY . ESG Strategy: Building Tomorrow Today Together .. Priorities of the Group ESG Strategy Since , VGP has redefined its ESG strategy. Between and , VGP had already achieved a cumulative reduction of % of its carbon intensity of own operations per employee and with regards to the portfolio a % reduction in energy intensity per square meter leased since . In doing so, the Group incorporated ESG in its entire value chain and aims to address the wide scope of indirect carbon emissions resulting from development activities, tenants’ energy consumption and employees’ transport and office use. While VGP’s agenda on fighting climate change remains central, the ESG strategy also onboards environmental and societal challenges like the circular economy and environmentally friendly transport, but also critical social responsibilities on diversity and inclusion and employee well-being. VGP’s ESG strategy relies on an efficient ESG governance structure allowing decision making at the appro- priate level within the organisation and covering all countries (presented in Section . Govern- ance of ESG), and ESG-related risks are included into the Group’s risk management framework. Our ESG strategy builds on the conclusions of the materiality analysis and the analysis of ESG risks. It addresses the main challenges facing semi-industrial and logistics real estate: mov- ing towards a low-carbon economy and sustainable mobility, fully integrating the Group’s busi- ness activities within local communities, and empowering teams on sustainability and diversity. VGP’s ESG strategy rests on five main pillars as outlined in the chart and as used as the ESG challenges and opportunities. VGP’s current approach to Environmental Social and Governance (“ESG”) has been struc- tured on solid grounds, going way beyond regulation. In order to define its ESG strategy, the Group has identified key areas of work, representing challenges and opportunities related to its activities. Two complementary approaches were used to that end: — A materiality analysis, which is a mapping tool used to identify and order the important ESG issues for the Group from an internal as well as an external stakeholder perspective; and — A risk analysis, which is a framework used to highlight the ESG issues likely to negatively impact the Group. CORPORATE RESPONSIBILITY REPORT PAGE ESG STRATEGY: BUILDING TOMORROW TODAY TOGETHER Integrated ESG risk management and governance Sustainable properties Improve eco-efficiency Strengthen communities Protect and improve biodiversity Empowering our workforce Protect ecosystem and address climate change BUILDING TOMORROW TODAY TOGETHER VGP Park Laatzen, Germany CORPORATE RESPONSIBILITY REPORT PAGE ESG STRATEGY: BUILDING TOMORROW TODAY TOGETHER .. Materiality matrix In , VGP updated its materiality matrix in order to align and identify its current ESG-re- lated priorities. This work was done on the basis of an analysis of the main ESG reporting stand- ards (taking into account Global Reporting Initiative Construction and Real Estate Disclosure recommendations), investor expectations (including GRESB questionnaire), underlying market trends, best practices observed in the real estate industry and beyond. The business impact of each ESG topic has been assessed across value levers (value pro- tection, revenue increase, cost reductions, improved valuation, preferred financing and new revenue sources) and by appraising the magnitude of the impact. The importance for external stakeholders (regulator, investor, municipality and tenant expectations) takes into account the current or upcoming regulation and the following market trends used as proxies: renewable energy integration, circular economy practices, urban logistics and the electrification of fleet and climate change. Executive Management validated the updated materiality matrix, which confirmed the main priorities identified through the previous analysis. These priorities, in line with the parallel work done on risks (see section .. ESG risks and opportunities), reconfirmed the focus areas for the Group sustainability strategy (see introduction of Section . ESG Strategy: Building Tomor- row Today Together). .. ESG risks and opportunities In , in response to the TCFD, VGP identified and assessed its main ESG risks, using the Group risk assessment methodology taking into account three impact criteria: financial, legal and reputational. In line with the spirit of the regulation, the analysis provided presents gross risks (before the implementation of management measures). The Group ESG risk universe was defined on the basis of both the ESG priorities highlighted by the Group’s materiality analysis (see Section .. Materiality matrix) and the sector based ESG risk universe established by the work done in . In total, risks were identified and classified into categories, among which were identified as main ESG risks due to their level of impact. The risk analysis and ranking work was undertaken jointly by the Group’s ESG team and Group Finance Department, with the involvement of the local teams. The results were shared with the members of the Group Management Board overseeing Group resources and ESG. Subse- quently these climate change and ESG risks have been identified as a risk factor in the Group’s risk management framework (see Environmental, sustainability and climate change risks in the Section Risk Factors for more details). The following sections summarise the main ESG risks, and the policies, action plans, perfor- mance indicators and opportunities associated with their management. Climate change risks for the Group (physical and transitional) form a core part of the ESG risks analysis and are inte- grated in the following summary of main ESG risks and their management policies. A more detailed overview of climate risk management and in particular of the resilience of assets to physical climate risks is provided in Section ... Related policies and action plans described reflect the latest updates made by the Group to mitigate these risks, as do all associated performance indicators disclosed. 1. Safety and security 2. Workforce well-being and engagement 3. Inclusive and innovative culture 4. Talent attraction and retention 5. Community engagement and development 6. Operational eco-efficiency 7. Sustainable building design/certification 8. Construction materials & waste 9. Green financing 10. Corporate governance 11. Resilience 12. Ethics and compliance 13. Sustainable procurement practices 14. Nature and biodiversity 15. Climate change 16. Facilitating sustainable mobility 17. Philanthropy and volunteering PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY ESG COMMITMENT Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Failure to take into account stakeholders’ growing expectations regarding sustainability Medium — employees — tenants — local communities — suppliers — investors — public authorities — Execute on ESG Strategy: transparency on actions and results — Dialogue with stakeholders — Response to non-financial rating agencies — ESG performance indicators — Stakeholder engagement survey responses — Ratings from external benchmarks/ agencies — Revenue growth — Employee/tenant satisfaction and retention rate — ESG chapter 2 — Green financing of the Group activities– section 4 BUSINESS ETHICS Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Bribery and corruption risk, money laundering and financing of terrorism or non-compliance with regulations High — employees — public authorities — tenants — suppliers — The Group Code of Conduct includes a compulsory yearly e-learning module and Code attestation — Code of Conduct includes specific procedures (e.g. gifts and invitations) — Whistleblowing procedures are accessible 24/7 to all employees and contractors with a guarantee against retaliation — Clear procedures for screening business partners — Insider Trading Rules procedure — Number of sanctions imposed by regulators in 2023 linked to corruption incidents (# 0) — Monetary value of such sanctions imposed (€ 0) — Percentage of new joiners trained on corruption prevention (40%) — Percentage of employees trained in 2023 on the Group Code of Conduct, business ethics and corruption prevention (73%) — Section Conduct and compliance in the Chapter Report of the Board of Directors Non-transparency in reporting of lobbying activities Low — employees — public authorities — investors — Political Activity Policy: VGP has a principal policy of no political engagement and participating in political activities — If any activities would occur they require CEO approval and have to be reported. — The Group is committed to declare applicable lobbying activities annually to ensure these are available on the Belgian register for Transparency in Public Affairs platform (“Lobbyregister” www.dekamer.be). — Number of reported lobbying actions (#: 0) — Political donations and lobbying expenditures (€ 0 — Section Conduct and compliance in the Chapter Report of the Board of Directors Breach of personal data and cyber security Low — employees — tenants — local communities — suppliers — investors — public authorities — Data Privacy Protection programme compliant with EU and relevant member states regulations — VGP has a data protection governance framework at corporate level in place to ensure preventative processes and internal alerts — The main MIS and operating system which the Group uses for email and file exchange is compliant with ISO 27001 — The Group only uses reputable service providers for network maintenance — The Group uses group-wide employee training and specific business people training on data protection awareness and cybersecurity — The Group’s new ERP, operating metrics, billing and payment system is fully compliant to ISO 27001 and ISO 27018 — Percentage of employees trained on cyber security and data protection: 100% — Section Conduct and compliance in the Chapter Report of the Board of Directors HEALTH, SAFETY AND WELLBEING OF PEOPLE IN OUR PROPERTIES Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Failure to provide a safe and healthy environment for employees, tenants and contractors Low — employees — tenants — local communities — suppliers — public authorities — The EMS elaborates how Health and Safety risks are addressed in both development projects and standing assets portfolio — The Group makes use of dedicated Health & Safety management frameworks at development projects, where the work site is always monitored by aHealth & Safety Coordinator, supplemented with procedures that comply with local regulations — Contractual requirements for contractors are overseen by the construction management contractor to make the necessary provisions for site safety and comply with the relevant Health & Safety legislation — Maintenance and inspection is conducted for all relevant equipment subject to regulation — Third-party audits of Health & Safety risks are conducted at asset level. Health & Safety audits are conducted on a continuous basis — Routine property tours are organized to identify hazardous conditions and implement corrective actions — The number of incidents is monitored as well as sanctions for non- compliance related to building health and safety. — Section 3.5.6 Occupational Health and Safety Key: decreasing stable increasing CORPORATE RESPONSIBILITY REPORT PAGE ESG STRATEGY: BUILDING TOMORROW TODAY TOGETHER ESG COMMITMENT Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Failure to take into account stakeholders’ growing expectations regarding sustainability Medium — employees — tenants — local communities — suppliers — investors — public authorities — Execute on ESG Strategy: transparency on actions and results — Dialogue with stakeholders — Response to non-financial rating agencies — ESG performance indicators — Stakeholder engagement survey responses — Ratings from external benchmarks/ agencies — Revenue growth — Employee/tenant satisfaction and retention rate — ESG chapter 2 — Green financing of the Group activities– section 4 BUSINESS ETHICS Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Bribery and corruption risk, money laundering and financing of terrorism or non-compliance with regulations High — employees — public authorities — tenants — suppliers — The Group Code of Conduct includes a compulsory yearly e-learning module and Code attestation — Code of Conduct includes specific procedures (e.g. gifts and invitations) — Whistleblowing procedures are accessible 24/7 to all employees and contractors with a guarantee against retaliation — Clear procedures for screening business partners — Insider Trading Rules procedure — Number of sanctions imposed by regulators in 2023 linked to corruption incidents (# 0) — Monetary value of such sanctions imposed (€ 0) — Percentage of new joiners trained on corruption prevention (40%) — Percentage of employees trained in 2023 on the Group Code of Conduct, business ethics and corruption prevention (73%) — Section Conduct and compliance in the Chapter Report of the Board of Directors Non-transparency in reporting of lobbying activities Low — employees — public authorities — investors — Political Activity Policy: VGP has a principal policy of no political engagement and participating in political activities — If any activities would occur they require CEO approval and have to be reported. — The Group is committed to declare applicable lobbying activities annually to ensure these are available on the Belgian register for Transparency in Public Affairs platform (“Lobbyregister” www.dekamer.be). — Number of reported lobbying actions (#: 0) — Political donations and lobbying expenditures (€ 0 — Section Conduct and compliance in the Chapter Report of the Board of Directors Breach of personal data and cyber security Low — employees — tenants — local communities — suppliers — investors — public authorities — Data Privacy Protection programme compliant with EU and relevant member states regulations — VGP has a data protection governance framework at corporate level in place to ensure preventative processes and internal alerts — The main MIS and operating system which the Group uses for email and file exchange is compliant with ISO 27001 — The Group only uses reputable service providers for network maintenance — The Group uses group-wide employee training and specific business people training on data protection awareness and cybersecurity — The Group’s new ERP, operating metrics, billing and payment system is fully compliant to ISO 27001 and ISO 27018 — Percentage of employees trained on cyber security and data protection: 100% — Section Conduct and compliance in the Chapter Report of the Board of Directors HEALTH, SAFETY AND WELLBEING OF PEOPLE IN OUR PROPERTIES Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Failure to provide a safe and healthy environment for employees, tenants and contractors Low — employees — tenants — local communities — suppliers — public authorities — The EMS elaborates how Health and Safety risks are addressed in both development projects and standing assets portfolio — The Group makes use of dedicated Health & Safety management frameworks at development projects, where the work site is always monitored by aHealth & Safety Coordinator, supplemented with procedures that comply with local regulations — Contractual requirements for contractors are overseen by the construction management contractor to make the necessary provisions for site safety and comply with the relevant Health & Safety legislation — Maintenance and inspection is conducted for all relevant equipment subject to regulation — Third-party audits of Health & Safety risks are conducted at asset level. Health & Safety audits are conducted on a continuous basis — Routine property tours are organized to identify hazardous conditions and implement corrective actions — The number of incidents is monitored as well as sanctions for non- compliance related to building health and safety. — Section 3.5.6 Occupational Health and Safety PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY HUMAN CAPITAL Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Non-engagement of employees Medium — employees — managers — Strict policies on inclusion, diversity and human rights, the Group is implementing people-oriented policies designed to make VGP a great place to work, including in order to promote work-life balance — A sustainable work environment is implemented as part of initiatives related to managing scope 1 and scope 2 carbon footprint, as well as ergonomics policies — The Group aims to provide permanent learning and develop- ment opportunities: The setup of the VGP Academy in 2023 will further support these possibilities and the Group continues to foster cross-border learning and development opportunities — To encourage a healthy lifestyle, use of bicycles is encouraged, gym and sport memberships are sponsored, and healthy food alternatives are offered in office canteen and kitchens — Participation in the Group’s local volunteering programs is encouraged as well as participation in the annual employee satisfaction survey — Employee turnover rate — Annual employee satisfaction survey — Percentage of VGP countries and offices that implement employee wellbeing and green office programs — The employee engagement in the Group volunteering program — VGP Community Day Section 3.7.2 — Chapter 3.5 Empowering our workforce Lack of key competencies High — employees — Group’s recruitment, retention and succession planning is included in formalised HR policies relating to recruitment, compensation and benefits, talent review and learning and development — The Group’s Diversity policy and Human Rights policy is a commitment to improvement of employee engagement on diversity and inclusion — The development of the international group culture and “cross fertilisation of knowledge” is further supported by a matrix reporting structure with strong international ties across local organizations, cross-border cooperation, and mobility — The Group has a strong partnership with reputable head- hunting firms to map and target best external talent — VGP Academy (setup in 2023) will further support continuous learning and development — The Group is enhancing its graduate recruitment — Training rate — Average tenure of key people — Employee recruitment rate — Chapter 3.5 Empowering our workforce Lack of profile diversity Medium — employees — managers — VGP’s equal opportunity statement is included in HR policies relating to recruitment practices, compensation and benefits, talent review, and learning and development — The Human Rights policy sets the commitment to and improve employee engagement on diversity and inclusion — The Group Code of Conduct and whistleblowing procedure are in-line with zero tolerance principle for discrimination or harassment — The diversity of the members of the board of the Group– with at least 60% women since 2019– sends a strong signal about the importance of female leadership — International Group culture (e.g. international activities, mobili- ty, cross-functional mobility, group-wide learning programs) — Since 2024, VGP is signatory of a European Diversity Charter to support the fight against all forms of discrimination — Female representation in management levels — Pay ratio based on gender — Chapter 3.5 Empowering our workforce LOCAL MUNICIPAL ANCHORING Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Inadequate contribution to local social and economic developments Medium — local authorities — local communities — tenants — For new developments public consultations are held — By building long-term partnerships with local stakeholders (residents, public authorities and associations) an enhancement of the socio-economic impact of the Group’s assets can be accomplished by supporting business creation (e.g. provision of land plots) for specific locally anchored tenancies, often focused on creating employment in manufacturing and technical jobs and which support local taxes and social contributions paid — The increasing emphasis on brownfield developments also leads towards more environmentally friendly and visually attractive sites that often benefit the broader community as well — Anchored in the local areas where it operates, each of the Group’s existing parks has built a network of local partnershi- ps, working together to identify and tackle issues for the local population and businesses — Proportion of VGP Parks using local service providers for facility management services — Proportion of VGP Parks promoting local employment and generating local tax revenues — Proportion of VGP Parks offering leasing space to locally anchored tenants — Section 3.7 VGP in the Community Risk of local protest and local unacceptability of activities Low — local authorities — local communities — tenants — For new developments public consultations are held — By building long-term partnerships with local stakeholders (residents, public authorities and associations) an enhancement of the socio-economic impact of the Group’s assets can be accomplished by supporting business creation (e.g. provision of land plots) for specific locally anchored tenancies, often focused on creating employment in manufacturing and technical jobs and which support local taxes and social contributions paid — The increasing emphasis on brownfield developments also leads towards more environmentally friendly and visually attrac- tive sites that often benefit the broader community as well — Proportion of VGP Parks using local service providers for facility management services — Proportion of VGP Parks promoting local employment and generating local tax revenues — Proportion of VGP Parks offering leasing space to locally anchored tenants — Section 3.7 VGP in the Community CORPORATE RESPONSIBILITY REPORT PAGE ESG STRATEGY: BUILDING TOMORROW TODAY TOGETHER HUMAN CAPITAL Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Non-engagement of employees Medium — employees — managers — Strict policies on inclusion, diversity and human rights, the Group is implementing people-oriented policies designed to make VGP a great place to work, including in order to promote work-life balance — A sustainable work environment is implemented as part of initiatives related to managing scope 1 and scope 2 carbon footprint, as well as ergonomics policies — The Group aims to provide permanent learning and develop- ment opportunities: The setup of the VGP Academy in 2023 will further support these possibilities and the Group continues to foster cross-border learning and development opportunities — To encourage a healthy lifestyle, use of bicycles is encouraged, gym and sport memberships are sponsored, and healthy food alternatives are offered in office canteen and kitchens — Participation in the Group’s local volunteering programs is encouraged as well as participation in the annual employee satisfaction survey — Employee turnover rate — Annual employee satisfaction survey — Percentage of VGP countries and offices that implement employee wellbeing and green office programs — The employee engagement in the Group volunteering program — VGP Community Day Section 3.7.2 — Chapter 3.5 Empowering our workforce Lack of key competencies High — employees — Group’s recruitment, retention and succession planning is included in formalised HR policies relating to recruitment, compensation and benefits, talent review and learning and development — The Group’s Diversity policy and Human Rights policy is a commitment to improvement of employee engagement on diversity and inclusion — The development of the international group culture and “cross fertilisation of knowledge” is further supported by a matrix reporting structure with strong international ties across local organizations, cross-border cooperation, and mobility — The Group has a strong partnership with reputable head- hunting firms to map and target best external talent — VGP Academy (setup in 2023) will further support continuous learning and development — The Group is enhancing its graduate recruitment — Training rate — Average tenure of key people — Employee recruitment rate — Chapter 3.5 Empowering our workforce Lack of profile diversity Medium — employees — managers — VGP’s equal opportunity statement is included in HR policies relating to recruitment practices, compensation and benefits, talent review, and learning and development — The Human Rights policy sets the commitment to and improve employee engagement on diversity and inclusion — The Group Code of Conduct and whistleblowing procedure are in-line with zero tolerance principle for discrimination or harassment — The diversity of the members of the board of the Group– with at least 60% women since 2019– sends a strong signal about the importance of female leadership — International Group culture (e.g. international activities, mobili- ty, cross-functional mobility, group-wide learning programs) — Since 2024, VGP is signatory of a European Diversity Charter to support the fight against all forms of discrimination — Female representation in management levels — Pay ratio based on gender — Chapter 3.5 Empowering our workforce LOCAL MUNICIPAL ANCHORING Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Inadequate contribution to local social and economic developments Medium — local authorities — local communities — tenants — For new developments public consultations are held — By building long-term partnerships with local stakeholders (residents, public authorities and associations) an enhancement of the socio-economic impact of the Group’s assets can be accomplished by supporting business creation (e.g. provision of land plots) for specific locally anchored tenancies, often focused on creating employment in manufacturing and technical jobs and which support local taxes and social contributions paid — The increasing emphasis on brownfield developments also leads towards more environmentally friendly and visually attractive sites that often benefit the broader community as well — Anchored in the local areas where it operates, each of the Group’s existing parks has built a network of local partnershi- ps, working together to identify and tackle issues for the local population and businesses — Proportion of VGP Parks using local service providers for facility management services — Proportion of VGP Parks promoting local employment and generating local tax revenues — Proportion of VGP Parks offering leasing space to locally anchored tenants — Section 3.7 VGP in the Community Risk of local protest and local unacceptability of activities Low — local authorities — local communities — tenants — For new developments public consultations are held — By building long-term partnerships with local stakeholders (residents, public authorities and associations) an enhancement of the socio-economic impact of the Group’s assets can be accomplished by supporting business creation (e.g. provision of land plots) for specific locally anchored tenancies, often focused on creating employment in manufacturing and technical jobs and which support local taxes and social contributions paid — The increasing emphasis on brownfield developments also leads towards more environmentally friendly and visually attrac- tive sites that often benefit the broader community as well — Proportion of VGP Parks using local service providers for facility management services — Proportion of VGP Parks promoting local employment and generating local tax revenues — Proportion of VGP Parks offering leasing space to locally anchored tenants — Section 3.7 VGP in the Community PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY PROTECT ENVIRONMENT Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Water, soil and air pollution linked with development projects and standing assets Medium — local authorities — local communities — contractors — tenants — employees — Brownfield projects may contain contaminated soil for which soil decontamination during works on development is required — In order to minimize pollution for the contractors working on- site, the neighbouring area, and the natural environment, the Group’s Considerate Construction Charter is applicable to all new development projects — Inspections are regularly conducted — Continuous maintenance and improvement of existing buildings and technical equipment liable to have an impact on the environment or on personal safety — For development projects, third-party HSE audits are conducted on a continuous basis in order to monitor and update the associated action plans as required — Number of assets subject to EMS(245) — Number of reported EMS compliance issues (0) — Number of non-monetary sanctions imposed by regulators in 2023 linked to environmental breaches (0) — Monetary value of fines for environmental breaches € 0 — Section 3.2.1 Environmental management system Not identifying existing pollution in acquired development projects and standing assets High — local authorities — local communities — contractors — tenants — employees — The Group is specialised in the acquisition of brownfield projects and for many such projects, the historical industrial usage and occupation of the site has resulted in significant soil contamination — To avoid unknown pollution risks an extensive due diligence process is conducted which includes environmental risks and soil pollution analysis — The contamination is analysed in detail to be able to precisely budget the decontamination works required — In addition to budgeted works for known contamination, additional risks can be embedded for which additional soil decontamination activities are budgeted (so unforeseen expenses can also be considered pre-acquisition) — Site controlling decontamination (€ 2.3 million FY23) — Volumes of soil concerned (3,723 metric-tonnes) — Section 3.2.1.1.3 Pollution Prevention Not addressing opportunities and changing expectations to landscaping and nature-based solutions Low — local communities — local authorities — contractors — tenants — employees — We are reviewing more strategic use of estate landscaping to plant additional trees and shrubs to act as long-term carbon capture while improving the local environment for the benefit of our tenants and communities — Biodiversity Policy has been rolled-out in 2023, providing a framework for assessing opportunities and risks with regards to biodiversity in our parks in operation as well as in new developments — Costs of landscaping are incorporated within development and refurbishment capex and is immaterial compared to overall spend — % Parks with biodiversity risk and mitigating measures — Square meters of green roof or space in existing parks — Chapter 3.4 Protect and Improve Biodiversity RESPONSIBLE SUPPLY CHAIN Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Non-compliance of Group supply chain actors with environmental or social regulations and standards Medium — suppliers — employees — tenants — local communities — authorities — VGP screens its business partners in order to minimize the risk that the Group contracts with service providers, suppliers or subcontractors not complying with regulations, standards of their profession (e.g. fundamental human and labour rights) or having a negative ESG image/performance — Business partners are subject to the Group Supplier Code of Conduct and comply with the ILO conventions and local labour laws in Europe (with sanctions in case of non-compliance according to severity eg, formal notice, penalties, dismissal) — The Group’s Considerate Construction Charter and 10 Golden Rules for circular development are applicable for all development projects — Whistleblowing procedures are accessible 24/7 to all employees and contractors with a guarantee against retaliation — The Group engages with its main suppliers on the Group’s sustainability engagement and in order to explore product innovations to enhance building circularity and sustainable performance — The Group has a policy to use 100% timber from certified, sustainably managed forests with FSC or PEFC certification in development and refurbishment projects — Target to develop a supplier responsible purchasing charter — Number and percentage of assets in compliance with the charter — Section 3.2.1.1 Sustainable Construction Sustainability-related controversies related to tenant activities Medium — tenants — local communities — authorities — employees — The Group aims to strengthen communication with tenants (e.g. sustainability meetings with tenants, satisfaction surveys including ESG satisfaction related questions to improve their sustainability perception, etc.) — VGP screens its tenants in order to minimize the risk that the Group leases premises to a corporation active in a controversial industry or not complying with regulations or standards of their profession (e.g. fundamental human and labour rights) — Since three years the Group is signing voluntary and contractual agreements on sustainability issues with its tenants and the group is also pro-actively reaching out to tenants to support transition towards renewable energy consumption as part of green lease concept — The percentage of green leases signed among new leases and active leases — Section 3.3.2 Green leases and tenant commitments CORPORATE RESPONSIBILITY REPORT PAGE ESG STRATEGY: BUILDING TOMORROW TODAY TOGETHER PROTECT ENVIRONMENT Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Water, soil and air pollution linked with development projects and standing assets Medium — local authorities — local communities — contractors — tenants — employees — Brownfield projects may contain contaminated soil for which soil decontamination during works on development is required — In order to minimize pollution for the contractors working on- site, the neighbouring area, and the natural environment, the Group’s Considerate Construction Charter is applicable to all new development projects — Inspections are regularly conducted — Continuous maintenance and improvement of existing buildings and technical equipment liable to have an impact on the environment or on personal safety — For development projects, third-party HSE audits are conducted on a continuous basis in order to monitor and update the associated action plans as required — Number of assets subject to EMS(245) — Number of reported EMS compliance issues (0) — Number of non-monetary sanctions imposed by regulators in 2023 linked to environmental breaches (0) — Monetary value of fines for environmental breaches € 0 — Section 3.2.1 Environmental management system Not identifying existing pollution in acquired development projects and standing assets High — local authorities — local communities — contractors — tenants — employees — The Group is specialised in the acquisition of brownfield projects and for many such projects, the historical industrial usage and occupation of the site has resulted in significant soil contamination — To avoid unknown pollution risks an extensive due diligence process is conducted which includes environmental risks and soil pollution analysis — The contamination is analysed in detail to be able to precisely budget the decontamination works required — In addition to budgeted works for known contamination, additional risks can be embedded for which additional soil decontamination activities are budgeted (so unforeseen expenses can also be considered pre-acquisition) — Site controlling decontamination (€ 2.3 million FY23) — Volumes of soil concerned (3,723 metric-tonnes) — Section 3.2.1.1.3 Pollution Prevention Not addressing opportunities and changing expectations to landscaping and nature-based solutions Low — local communities — local authorities — contractors — tenants — employees — We are reviewing more strategic use of estate landscaping to plant additional trees and shrubs to act as long-term carbon capture while improving the local environment for the benefit of our tenants and communities — Biodiversity Policy has been rolled-out in 2023, providing a framework for assessing opportunities and risks with regards to biodiversity in our parks in operation as well as in new developments — Costs of landscaping are incorporated within development and refurbishment capex and is immaterial compared to overall spend — % Parks with biodiversity risk and mitigating measures — Square meters of green roof or space in existing parks — Chapter 3.4 Protect and Improve Biodiversity RESPONSIBLE SUPPLY CHAIN Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Non-compliance of Group supply chain actors with environmental or social regulations and standards Medium — suppliers — employees — tenants — local communities — authorities — VGP screens its business partners in order to minimize the risk that the Group contracts with service providers, suppliers or subcontractors not complying with regulations, standards of their profession (e.g. fundamental human and labour rights) or having a negative ESG image/performance — Business partners are subject to the Group Supplier Code of Conduct and comply with the ILO conventions and local labour laws in Europe (with sanctions in case of non-compliance according to severity eg, formal notice, penalties, dismissal) — The Group’s Considerate Construction Charter and 10 Golden Rules for circular development are applicable for all development projects — Whistleblowing procedures are accessible 24/7 to all employees and contractors with a guarantee against retaliation — The Group engages with its main suppliers on the Group’s sustainability engagement and in order to explore product innovations to enhance building circularity and sustainable performance — The Group has a policy to use 100% timber from certified, sustainably managed forests with FSC or PEFC certification in development and refurbishment projects — Target to develop a supplier responsible purchasing charter — Number and percentage of assets in compliance with the charter — Section 3.2.1.1 Sustainable Construction Sustainability-related controversies related to tenant activities Medium — tenants — local communities — authorities — employees — The Group aims to strengthen communication with tenants (e.g. sustainability meetings with tenants, satisfaction surveys including ESG satisfaction related questions to improve their sustainability perception, etc.) — VGP screens its tenants in order to minimize the risk that the Group leases premises to a corporation active in a controversial industry or not complying with regulations or standards of their profession (e.g. fundamental human and labour rights) — Since three years the Group is signing voluntary and contractual agreements on sustainability issues with its tenants and the group is also pro-actively reaching out to tenants to support transition towards renewable energy consumption as part of green lease concept — The percentage of green leases signed among new leases and active leases — Section 3.3.2 Green leases and tenant commitments PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY CLIMATE CHANGE Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Closure or deterioration of VGP Parks due to weather events Medium — tenants — local communities — insurance — investors — The Group has conducted a climate change risk assessment covering all standing assets and development pipeline, in line with the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations, covering both transitional and physical risks (acute and chronic) — In land purchasing climate change risk is taken into account as part of the purchasing criteria (full CRA due diligence is conducted, include 100-year probability heavy rainfall models) — The Group has adequate insurance cover for natural disasters for all its assets and is in compliance with regulatory requirements in each country or region with regards to flooding risk, water management and drainage systems for exceptionally heavy rains — The Group is certifying its asset portfolio based on EU Taxonomy compliance– as part of the asset compliance requirements additional mitigating measures may be required (also the environmental certification policy for all assets, through BREEAM or DGNB, provides assesments of physical resilience and energy aspects) — The Group and local teams are kept up to date with new insights, laws and regulations as they become relevant through regular presentations and training (VGP Academy) — % of assets at risk in CRA assessment — % of assets compliant with EU Taxonomy — Section 3.1.1 Climate Change Strategy Regulatory tightening in building energy efficiency requirements Medium — tenants — public authorities — investors — The Group has invested in energy efficiency measures in the majority of the standing portfolio and makes such investments standardized in development projects — Energy management action plans are being rolled out in all standing assets, involving energy optimisation actions as well as investments in renewable energy production — The Group’s EMS aims to improve the environmental performance of assets and the Group engages with stakeholders to improve energy efficiency, including with tenants and service providers (e.g. green leases, and energy performance contracts with maintenance providers) — Energy intensity per area of use (KWh/m²) — Financial impact of variations in energy price and energy source alternative scenarios — Asset CRREM stranding year from energy intensity perspective — Percentage of lease contracts with green energy procurement requirement — Percentage of lease contracts with annual energy efficiency and consumption review — Section 3.3.3 Energy Management — Section 3.3.4 Decarbonisation scenarios (CRREM) — Climate related financial disclosures section 3.1.3.4 Increase of CapEx & OpEx, including tension on the price of energy High — tenants — public authorities — investors (incl joint venture partners) — Energy efficiency targets and energy management action plans are increasingly being rolled out in standing assets, involving energy consumption optimisation actions as well as investments in energy efficient equipment in new construction projects — The EMS of the Group supports the objective to improve environmental performance of all standing and development assets of the Group — Shift towards sourcing electricity from renewable energy sources for all assets, driven by the development of on-site renewable energy production capacity — The Group is actively engaging with stakeholders to improve energy efficiency and source renewable energy, including tenants and suppliers — The Group’s energy unit, VGP Renewable Energy, successfully applied for electricity grid-utility status (“netzbetrieber”) in Germany and soon similar status in Romania is anticipated. This will allow the Group to offer green electricity more effectively to our tenants — Energy intensity per square meter of use (kWh/m²) — Carbon intensity linked with energy consumption of standing assets (Scope 3 “portfolio in use”: Category 13: downstream leased assets) — Section 3.2 Sustainable Properties — The refurbishment program which aims to enhance the eco-efficiency of the existing portfolio is explained in section 3.3.3 Energy Management and 3.3.4. Decarbonization scenarios (CRREM) Changing tenant needs towards EV charging infrastructure Low — tenants — community — public authorities — investors (incl joint venture partners) — ESG policy requires for all existing parks as well as for new developments EV chargers at tenant parking spaces — The cost of EV chargers (sufficient to comply with VGP’s policy) is factored into all new development and refurbishment budgets — Number of parks with EV chargers — KWh charged at EV chargers — Section 3.3.7 Develop connectivity and sustainable mobility CORPORATE RESPONSIBILITY REPORT PAGE ESG STRATEGY: BUILDING TOMORROW TODAY TOGETHER CLIMATE CHANGE Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Closure or deterioration of VGP Parks due to weather events Medium — tenants — local communities — insurance — investors — The Group has conducted a climate change risk assessment covering all standing assets and development pipeline, in line with the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations, covering both transitional and physical risks (acute and chronic) — In land purchasing climate change risk is taken into account as part of the purchasing criteria (full CRA due diligence is conducted, include 100-year probability heavy rainfall models) — The Group has adequate insurance cover for natural disasters for all its assets and is in compliance with regulatory requirements in each country or region with regards to flooding risk, water management and drainage systems for exceptionally heavy rains — The Group is certifying its asset portfolio based on EU Taxonomy compliance– as part of the asset compliance requirements additional mitigating measures may be required (also the environmental certification policy for all assets, through BREEAM or DGNB, provides assesments of physical resilience and energy aspects) — The Group and local teams are kept up to date with new insights, laws and regulations as they become relevant through regular presentations and training (VGP Academy) — % of assets at risk in CRA assessment — % of assets compliant with EU Taxonomy — Section 3.1.1 Climate Change Strategy Regulatory tightening in building energy efficiency requirements Medium — tenants — public authorities — investors — The Group has invested in energy efficiency measures in the majority of the standing portfolio and makes such investments standardized in development projects — Energy management action plans are being rolled out in all standing assets, involving energy optimisation actions as well as investments in renewable energy production — The Group’s EMS aims to improve the environmental performance of assets and the Group engages with stakeholders to improve energy efficiency, including with tenants and service providers (e.g. green leases, and energy performance contracts with maintenance providers) — Energy intensity per area of use (KWh/m²) — Financial impact of variations in energy price and energy source alternative scenarios — Asset CRREM stranding year from energy intensity perspective — Percentage of lease contracts with green energy procurement requirement — Percentage of lease contracts with annual energy efficiency and consumption review — Section 3.3.3 Energy Management — Section 3.3.4 Decarbonisation scenarios (CRREM) — Climate related financial disclosures section 3.1.3.4 Increase of CapEx & OpEx, including tension on the price of energy High — tenants — public authorities — investors (incl joint venture partners) — Energy efficiency targets and energy management action plans are increasingly being rolled out in standing assets, involving energy consumption optimisation actions as well as investments in energy efficient equipment in new construction projects — The EMS of the Group supports the objective to improve environmental performance of all standing and development assets of the Group — Shift towards sourcing electricity from renewable energy sources for all assets, driven by the development of on-site renewable energy production capacity — The Group is actively engaging with stakeholders to improve energy efficiency and source renewable energy, including tenants and suppliers — The Group’s energy unit, VGP Renewable Energy, successfully applied for electricity grid-utility status (“netzbetrieber”) in Germany and soon similar status in Romania is anticipated. This will allow the Group to offer green electricity more effectively to our tenants — Energy intensity per square meter of use (kWh/m²) — Carbon intensity linked with energy consumption of standing assets (Scope 3 “portfolio in use”: Category 13: downstream leased assets) — Section 3.2 Sustainable Properties — The refurbishment program which aims to enhance the eco-efficiency of the existing portfolio is explained in section 3.3.3 Energy Management and 3.3.4. Decarbonization scenarios (CRREM) Changing tenant needs towards EV charging infrastructure Low — tenants — community — public authorities — investors (incl joint venture partners) — ESG policy requires for all existing parks as well as for new developments EV chargers at tenant parking spaces — The cost of EV chargers (sufficient to comply with VGP’s policy) is factored into all new development and refurbishment budgets — Number of parks with EV chargers — KWh charged at EV chargers — Section 3.3.7 Develop connectivity and sustainable mobility PAGE VGP NV ANNUAL REPORT SECTION NATURAL RESOURCES AND CIRCULAR ECONOMY Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Inadequate performance on waste management operations Low — tenants — service providers — Review with tenants waste services and collection to enhance data collection and waste performance (sorting, recovery, etc.) — The percentage of assets certified (BREEAM/DGNB) — The percentage of recovered waste — The percentage of tenant contracts engaged in a circular economy approach — Sections Waste Management section 3.3.6 and 3.2.2 Environmental certifications Tensions over materials needed for development projects Medium — suppliers — contractors — public authorities — For development projects, a life-cycle assessment is being conducted which will help the Group to identify opportunities to reduce the amount of materials used and their carbon footprint — For development activities, an internal pricing mechanism for embodied carbon supports calculating and like-for-like comparing the carbon saving versus the investment costs — BREEAM/DGNB New Construction certification (level: Excellent / Gold) — Carbon intensity linked with development activities per sqm delivered — Sections 3.2.2 Environmental certifications and section 3.1.2.4 Focus on embodied carbons in development projects GOVERNANCE Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Lack of resources to manage ESG risks Low — employees — tenants — local communities — suppliers — investors — public authorities — The Group ESG agenda has been defined and overviewed at the highest governance levels: Group CEO, Management Team, and the Board — The Group has integrated the ESG agenda into the core business processes both for standing assets as well as development projects: due diligence process, environmental management system for both development projects and existing assets, ESG information integrated in asset budget reviews — ESG objectives set for all country teams in the assessment process of individual performance and ESG training module rolled-out to all employees. — The Group set up a dedicated ESG team responsible for overseeing and supporting the implementation of the Group ESG strategy. The Group is aligning initiatives, action plans and targets with the ESG program in all countries and departments (sales, development/technical, etc.), with the dedicated ESG team responsible for overseeing and supporting the implementation of the Group ESG strategy with a specific governance involving top management and operational managers in all country teams. — ESG performance indicators — Stakeholder engagement survey responses — Ratings from external benchmarks/ agencies — Revenue growth — Employee/tenant satisfaction and retention rate — Section 2.2 Governance of ESG CORPORATE RESPONSIBILITY REPORT PAGE SECTION NATURAL RESOURCES AND CIRCULAR ECONOMY Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Inadequate performance on waste management operations Low — tenants — service providers — Review with tenants waste services and collection to enhance data collection and waste performance (sorting, recovery, etc.) — The percentage of assets certified (BREEAM/DGNB) — The percentage of recovered waste — The percentage of tenant contracts engaged in a circular economy approach — Sections Waste Management section 3.3.6 and 3.2.2 Environmental certifications Tensions over materials needed for development projects Medium — suppliers — contractors — public authorities — For development projects, a life-cycle assessment is being conducted which will help the Group to identify opportunities to reduce the amount of materials used and their carbon footprint — For development activities, an internal pricing mechanism for embodied carbon supports calculating and like-for-like comparing the carbon saving versus the investment costs — BREEAM/DGNB New Construction certification (level: Excellent / Gold) — Carbon intensity linked with development activities per sqm delivered — Sections 3.2.2 Environmental certifications and section 3.1.2.4 Focus on embodied carbons in development projects GOVERNANCE Associated risk Risk level Change in risk level Stakeholders Management approach Key Performance Indicators Reference section Lack of resources to manage ESG risks Low — employees — tenants — local communities — suppliers — investors — public authorities — The Group ESG agenda has been defined and overviewed at the highest governance levels: Group CEO, Management Team, and the Board — The Group has integrated the ESG agenda into the core business processes both for standing assets as well as development projects: due diligence process, environmental management system for both development projects and existing assets, ESG information integrated in asset budget reviews — ESG objectives set for all country teams in the assessment process of individual performance and ESG training module rolled-out to all employees. — The Group set up a dedicated ESG team responsible for overseeing and supporting the implementation of the Group ESG strategy. The Group is aligning initiatives, action plans and targets with the ESG program in all countries and departments (sales, development/technical, etc.), with the dedicated ESG team responsible for overseeing and supporting the implementation of the Group ESG strategy with a specific governance involving top management and operational managers in all country teams. — ESG performance indicators — Stakeholder engagement survey responses — Ratings from external benchmarks/ agencies — Revenue growth — Employee/tenant satisfaction and retention rate — Section 2.2 Governance of ESG PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY . Governance of ESG .. Ethics and integrity VGP’s corporate governance, ethical conduct and risk management policies provide the nec- essary stability and reliability required for sustainable growth and performance. As a signa- tory to the UN Global Compact since , the goal of which is to promote ESG, the Group is committed to adopting, upholding and enacting within its sphere of influence the ten univer- sally recognised principles relating to human rights, labour laws, environmental protection and anti-corruption. VGP’s governance structure is presented in the Chapter Corporate Governance Statement of this annual report. VGP’s Compliance policy, Code of Conduct and Anti-corruption programme are presented in Section ‘Conduct and Compliance in the Chapter ‘Report of the Board of Directors. .. ESG team/governance The Group ESG team, which is cross-functional and includes members from key departments including technical, innovation, sustainable buildings and finance, reports directly to the CEO and is built around two priorities: () Monitoring ESG performance by ensuring that the Group’s ESG objectives are fully inte- grated into the Group’s business and decision-making processes; and () Engaging all stakeholders and employees of the Group in order to collectively achieve the objectives of the ESG strategy. As a key topic of ESG program, climate change is fully inte- grated in the ESG governance (as described below). The ESG team leverages several key components of the Group organisation: — The Chief Operating Officers (COOs) of each region support the implementation of the ESG strategy at country level — The Group relies on ESG local correspondents in each country to help following country ESG performance and coordinate with the Group ESG team; and — Key transversal functions, in charge of providing relevant guidelines and functional support to countries to implement areas of the ESG program, like the Legal and Compliance team and Finance and Risk Sustainable buildings and practices Communities Human Capital Land acquisition Facility management New leases Asset management New developments Human resources Board Once a year Management Team Several times a year ESG in-country correspondents Continuous Group ESG team Transversal management CORPORATE RESPONSIBILITY REPORT PAGE GOVERNANCE OF ESG .. Integration within core processes The ESG approach is fully embedded into the key processes of VGP, in line with the Group’s strategic priorities and operational concerns. Relevant management processes have been set up at each stage of the business cycle, along with appropriate key performance indicators. For example: — The VGP due diligence process for new land acquisitions includes a complete audit of regulatory, climate change and environmental and Health and Safety risks, including soil contamination; — The Group’s risk management framework includes climate change and ESG risks: identified among the main risk factors, they are integrated in the risk management programme over- viewed by the management team, which reports regularly to the Board (see Section “Risk management and internal controls” of the Remuneration Report for more details); — Development projects are regularly reviewed in light of ESG targets; — Managed assets have an environmental action plan, with annual performance reviews; — The internal compliance team conducts regular assessments of the management and com- pliance processes in accordance with the rules set by VGP; — HR processes ensure the promotion of diversity and inclusion and consider employee well-being as well as employee learning and development opportunities; — The training path of new joiners as well as specific functions includes relevant ESG content; — The annual incentive plan of management and of all eligible Group employees specifically integrate ESG-related performance criteria (see the remuneration section of this annual report for more details); and — Standing assets and development projects integrate ESG components to ensure alignment with ESG targets. VGP Park Laatzen, Germany VGP in dialogue Media Press releases, Information events on new parks, Trade fairs Business and Joint Venture Partners New initiatives and Existing partnerships Local Stakeholders Personal meetings, Park visits, Neighborhood conversations Capital Markets Conferences, meetings, calls with investors and analysts Suppliers Joint projects, Supplier due diligence, Forums and conferences Civil Society and NGOs One-on-one meetings, Answering questions Networks and associations Meetings and conferences as member of local and pan-European associations Employees Idea Management, Internal Media Clients Meetings, Social Media, Trade Fairs PAGE VGP NV ANNUAL REPORT GROUP ESG STRATEGY .. Stakeholder engagement We maintain an open dialogue with our stakeholders, including our investors, customers, employees, suppliers and the communities in which we operate. VGP reports to investors on its ESG strategy and achievements via regular publications (annual and corporate responsibility reports, semi-annual report, trading updates and news), answers to information requests, interaction with ESG rating and ranking providers, and through dedicated meetings. These meetings also enable VGP to learn more on key areas of interest for investors on ESG topics. The Group’s position in the various ESG ratings and evaluations is out- lined in Section .. Results of non-financial ratings and indices. As a listed commercial real estate company, VGP is a member of the European Public Real Estate Association (“EPRA”). At country level, VGP is a member of professional organisations such as Bundesvereinigung Logistik (BVL) in Germany. VGP Park Ceske Budejovice, Czech Republic Commitments VGP's Sustainable Building Standard Commitments PAGE VGP NV ANNUAL REPORT COMMITMENTS . Address Climate Change VGP Park Giessen am Alten Flughafen, Germany CORPORATE RESPONSIBILITY REPORT PAGE ADDRESS CLIMATE CHANGE .. Climate Change Strategy As part of its ESG strategy, the Group commits to cutting car- bon emissions across its value chain. This commitment cov- ers, in addition to its Scopes and emissions, the Group’s Scope emissions, including: — Greenhouse gas (GHG) emissions generated in the con- struction of its development projects; and — GHG emissions due to the private energy consumption of its tenants. The Group’s carbon reduction target between and breaks down into the following complementary objectives: — Reduce emissions from construction by -% by ; — Reduce emissions from other own activities by -% by ; and — Reduce emissions from energy consumption in buildings by -% by . The carbon reduction targets of the Group cover all its activi- ties, and all countries where the Group operates. In , the Group’s GHG emissions reduction targets have been submit- ted to the Science Based Targets initiative (SBTi), except the one for construction. SBTi confirmed our targets as consistent with levels required to meet the goals of the Paris Agreements. — The targets covering GHG emissions from the Group’s operations (Scopes and ) are consistent with reductions required to limit warming to .°C, the most ambitious goal of the Paris Agreement; and — The targets for the emissions from the Group’s value chain (Scope ) meet the SBTi’s criteria for ambitious value chain goals, meaning they are in line with current best practices. Science-based targets are emissions reduction targets in line with what the latest climate science says is needed to meet the goals of the Paris Agreement: to limit global warming to well-below °C above preindustrial levels and pursue efforts to limit warming to .°C. In , the Group introduced a commitment to cutting car- bon emissions across its value chain by -% between and . Although it may appear a minor reduction, achiev- ing these objectives involves the active participation of all the Group’s employees within their areas of responsibility and the contribution of the Group’s stakeholders in driving change, mainly tenants, suppliers and contractors. It relies on strong partnerships with established suppliers and start-ups in order to accelerate the pace of transformation, particularly in the fields of low-carbon construction and new sustainable mobility solutions. In , the Group has been working on updating and securing all its carbon reduction trajectories and associated levers to consider, among other topics, both the latest internal methodologies and processes for carbon emissions calculations, and external decarbonation hypothe- ses (for transport, construction and operations). This work has been supported by external experts. Changes in carbon per- formance with regard to the targets is presented in section . Summary of the Group’s ESG achievements. ... Reduce emissions from construction by % VGP is committed to significantly reduce its carbon emissions from construction on a broad scope. In concrete terms, reduc- ing its carbon intensity by % between and means dropping from an average, of kgCO2 eq/m² constructed in to . kgCO2 eq/m² on average based on a similar vol- ume of square meters delivered by the end of . In order to be better able to track the impact of actions required to deliver progress, the internal tool to calculate carbon emissions has been updated. Comparing the LCA calculations provided as part of BREEAM studies in various countries has shown that the BREEAM LCA guidelines are implemented differently in each country, this makes it difficult to compare achievements. Given the Group has a uniform building standard, in the new approach the weight is put more on specific improvement measures to reduce embodied carbons as opposed to be impacted by idiosyncratic location specifics for a certain pro- ject. The framework makes certain improvements for exam- ple a bearer structure built from wooden beams or columns (grown from responsible forestry), use of green steel or Eco- pact concrete as building materials to reduce impact of con- struction materials, or specific renewable energy initiatives to reduce the lifetime operating carbons. The new framework is based on the following three principals: — Carbon Reference Pricing; — Lean Building approach; and — Circular economy solutions. The Carbon reference pricing has been used on a mark-to- market reference price and allows the Group to assess the economic implications or trade-offs for such things as risk impacts, net present value of new projects and the cost-bene- fit of various design alternatives and initiatives. For more infor- mation please refer to section .. Construction materials. ... Reduce emissions from tenant operations by % When it comes to standing assets, VGP’s carbon footprint consists mainly of GHG emissions from energy consumed by its tenants as part of the operation of its buildings. Achieving its ambitious target of reducing carbon emissions from oper- ations by % between and draws on levers simultaneously: — Improving energy efficiency of the Group’s assets. The Group pursues the objective of improving the energy effi- ciency of its assets by % (in kWh/m²) between and . To achieve this improvement in efficiency, all of the Group’s assets are to design and implement an energy effi- ciency action plan (see section .. Energy management); and — Completing a fast transition to renewable energies. VGP is committed to using % electricity from renewable energy sources (“green electricity”) for the electricity con- sumption of its assets and push for this transition of its tenants. Achieving this target, which has been approved by the SBTi in , requires strong involvement of tenants. To accomplish this, the levers of improving energy efficiency and transition- ing to low-carbon energy sources are implemented, in coop- eration with the tenants (specific green terms are added in lease contracts– see section .. Green leases and tenant commitments). VGP’s carbon performance with regard to the operations target is presented in section . Summary of the Group’s ESG achievements. Aligned with EU ETS as per Dec Eur./tCO PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Reduce emissions from own operations by % The target to reduce absolute GHG emissions from Scopes and (emissions from operations under the Group’s control) by % between and reflects the Group’s ambition to decarbonate its direct operations. This target is approved by the SBTi with a .°C pathway alignment, the most ambi- tious goal of the Paris Agreement. The levers identified to reach the Group’s carbon reduction target from operations are described in section ... Focus on emissions from ten- ant operations. VGP’s carbon performance with regard to the Scopes and target is presented in section .. Carbon assessment. ... VGP contributes to Global Carbon Neutrality In addition to the Group’s ambitious science-based targets, VGP is committed to contributing towards global carbon neu- trality. EU Green Deal has set binding reduction targets for and announced a recommended % reduction target for as announced in February . The Group is imple- menting initiatives across its value chain in order to achieve this objective, an integral part of this effort is the path towards carbon neutrality in the standing portfolio which is monitored through the CRREM tool (see section .. Decarbonisation scenario’s (CRREM)), but the group is also monitoring decar- bonisation accross its suppliers’ value chain, specifically through quantifying and increasing “avoided emissions” for its partners, including carbon removals as close as possible to the Group’s business. Delivering the European Green Deal– European Commission (europa.eu) and Recommendation for emissions reduction target (europa.eu) VGP Office Prague, Czech Republic CORPORATE RESPONSIBILITY REPORT PAGE ADDRESS CLIMATE CHANGE .. Carbon assessment ... Methodology The method used for quantifying Group emissions is in line with the ISO standard, the GHG protocol guidelines and the Bilan Carbone® methodology of ADEME (Agence de l’En- vironnement et de la Maîtrise de l’Énergie, or French Environment and Energy Management Agency). The sources of emissions included in the Group’s total carbon footprint are broken down per Scope and influence level in the table hereafter. The Group calculates its carbon foot- print on an extended Scope basis, which is outlined in this table, measuring the major indirect emissions across its entire value chain. To reflect the Group’s business activities in the most accurate manner, including the interactions between the company and its stakeholders, Scope has been further broken down into three categories: — Scope own offices and employees (under VGP’s operational control); — Scope related to portfolio “in use”: Responsibility of tenants that VGP can influence but does not control directly. — Scope related to development activities through embodied carbon Scope 1 — Direct emissions from stationary combustion: gas and fuel consumption in VGP offices — Direct emissions from mobile combustion: fuel used for company vehicles — Direct fugitive emissions including leaks of refrigerant gas Scope 2 — Indirect emissions linked to electricity and district heating in VGP offices and used to charge company vehicles (linked to energy production only) Scope 3– Own offices and employees Scope 3: Category 1 (purchased goods & services) — Indirect emissions from paper usage in VGP offices (other purchased goods & services not considered) Scope 3: Category 3 (indirect energy) — Upstream emissions of purchased fuels and energy (extraction, production and transport of fuel, electricity) Scope 3: Category 5 (waste on-site) — Indirect emissions from waste at offices Scope 3: Category 6 (business travel) — Indirect emissions from employees’ business travel (excluding company vehicles) Scope 3: Category 7 (employee commuting) — Indirect emissions from employees’ commute from home to work (excluding company vehicles) Scope 3– Portfolio “in use” (tenant activities) Scope 3: Category 13: downstream leased assets — Indirect emissions from energy consumption and fugitive emissions due to leaks of refrigerant gas/fluid in tenant’s operations in VGP’s standing portfolio Scope 3– embodied carbon in development activities (life cycle analysis) Scope 3: Category 1 (developments) — Emissions caused over the life-time use of the assets created by the development activities, including materials used and indirect emissions caused by transport to site, as well as future usage of the building Scope 3: Category 11 (Use of sold products– Life time maintenance) — Emissions from the use of goods and services sold by the reporting company in the reporting year. A reporting company’s scope 3 emissions from use of sold products include the scope 1 and scope 2 emissions of end users. End users include both consumers and business customers that use final products. Scope 3: Category 11 (Use of sold products– Energy) — Emissions from the use of goods and services sold by the reporting company in the reporting year. A reporting company’s scope 3 emissions from use of sold products include the scope 1 and scope 2 emissions of end users. End users include both consumers and business customers that use final products. Scope 4 (total avoided emissions elsewhere) — Emissions avoided elsewhere when renewable energy is injected into the grid and therefore used as a substitute for grey energy elsewhere, fulfilling the same functions but with a lower carbon intensity GHG emissions are expressed according to the “Market based” and “Location-Based” method. PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Results: Group carbon footprint GHG emissions are preferably expressed according to the “Market-Based” method (suppliers’ emissions factors) in order to high- light the efforts made in selecting the Group’s energy suppliers. However, to take into account the expectations of various stake- holders, results are also expressed according to the “Location-Based” approach (countries’ emissions factors) in this section. Further in the document, all results related to GHG emissions are presented according to the “Market-Based” method, unless explicitly stated otherwise. The carbon footprint for is the baseline for tracking the carbon-related objectives of the Group’s own operations as well as tenant operations and development activities. Emissions: market/location based (in tCO2) FY 2020 FY 2021 FY 2022 FY2023 1 Scope 1 841 852 926 2 924 3 tCO2/FTE 3.5 2.7 2.5 2.5 Scope 2– market-based 105 127 8 17 4 tCO2/FTE 0.4 0.4 0.0 0.0 Scope 2– location-based 127 107 113 144 tCO2/FTE 0.4 0.3 0.4 Total Scope 1 and 2 946 979 934 942 tCO2/FTE 3.9 3.2 2.6 2.6 Scope 3– own offices and employees 1,039 942 1,302 1,063 tCO2/FTE 4.3 3.1 3.6 2.9 Category 1 (paper use) 4.9 2.7 3.0 2.7 Category 3 (indirect energy) 39.4 235.9 230.0 231.3 Category 5 (waste) 4.7 2.0 2.0 0.7 Category 6 (business travel) 210.6 541.9 861.0 682.4 Category 7 (employee commuting) 98.4 159.3 206.0 145.5 Total Own offices and employees 1,984 1,921 2,238 2,004 tCO2/FTE 7.9 6.3 6.1 5.5 Scope 3– portfolio “in use” (category 13: downstream leased assets) 67,456 68,251 87,261 104,863 5 kgCO2/m² 27.6 22.1 20.3 21.2 Scope 3– embodied carbon developments (cat. 1 + cat. 11) 269,223 297,686 538,260 313,172 kgCO2/m² 507 457 472 489 Total Scope 3 337,718 366,879 626,823 419,097 Total GHG emissions 338,663 367,858 627,757 420,039 Total avoided emissions (so called “Scope 4”) (4,305) (6,314) (7,328) (21,083) The underlined values were subject to limited assurance Change compared to prior reported figure due to entities that had wrongly been allocated a grossed up heating fuel amount. Considerations for the evaluation of the scope emissions: Scope is set up in accordance with the GHG protocol and reflects the fuel use and district heating used for the heating of VGP offices and the fuel use of the company cars. The Scope emissions that come from fuels used for heating and are calculated in accordance with the GHG protocol. For Austria, Denmark, France, Latvia, Luxembourg, Serbia and Slovakia the fuel use has been based on extrapolation. The extrapolations were made by making an average between Romania’s, Belgium’s and The Netherlands's VGP office surface and natural gas consumption. The remainder of Scope emissions come from the emissions of company cars. To calculate the emissions from company cars the KM's driven (estimates derived from lease contracts or employee statements) and the used liters of fuel consumed were used. One extrapolation was made to come to the fuel use of the company cars in the Seville office in Spain. The extrapolation was made by multiplying an average of other sites that have evidence, and the number of employees of the respective site. The ,% decrease y-o-y on the one hand reflects the transition in the car fleet from a fuel based fleet to an electrical or hybrid car fleet. This effect is offset by the increase of emissions that come from office heating, this increase is mainly caused by increase of % surface area of the offices. Considerations for the evaluation of the scope emissions (Market based & Location based): Scope is set up in accordance with the GHG protocol and reflect the emissions from the electricity consumption in the offices and the electricity used to charge the electric company cars. The Scope emissions that reflect the energy consumption of offices are calculated in the following manner: For the calculation of the total emissions, extrapolations were made for the offices in Austria, Denmark, France, Latvia, Luxembourg, Portugal (Lisbon) Serbia, and Spain (Madrid, Sarragosse, Seville). The extrapolation was made based on surface area of the offices multiplied by an average that was calculated based on all the other offices that have evidence for their consumption. The Scope emissions that reflect the electricity used for electric vehicles have been calculated without the use of extrapolations. In VGP saw a significant increase in the amount of EV's in the company’s fleet. As the VGP Offices have a PPA for green energy, the KWh amounts charged at office charging facilities have been included under this arrangement and are considered to use green energy. The % y-o-y increase in the location based scope emissions is explained by the % increase in energy usage compared to the period (the % increase in office size being a main driver together with office charging of the EV fleet). Another minor driver for the increase in location based emissions are the y-o-y changes in emission factors. The % increase in market based scope emissions is caused by the increase electric vehicles and their charging outside of the office facilities. The KWh’s charging are considered to be grey energy. Considerations for the evaluation of the Scope , Category emissions: The emissions in this category consist of Indirect emissions from energy consumption and fugitive emissions due to leaks of refrigerant gas/fluid in tenant’s operations in VGP’s standing portfolio. The % YoY increase of emissions can be explained due to a ca. % growth of the m in the portfolio combined with part of the portfolio that was delivered at the end of FY being taken in full use over FY‘. The total amount of buildings considered in the sample was and in there were buildings considered. From this , buildings used full or partial extrapolations for the Fuel use and buildings used full or partial extrapolation for the Electricity use. The extrapolations are based on the averages per industry segment that have been determined out of the available data for the applicable year. We have identified the following segments: Industrial: Non-refrigerated warehouse, Industrial: Refrigerated warehouse, Industrial: Manufacturing, Office: Corporate: Low-Rise Office, Other: Parking (Indoors). For further details on the evolution of the tenant in – use emissions please refer to section ... CORPORATE RESPONSIBILITY REPORT PAGE ADDRESS CLIMATE CHANGE Scope and emissions’ intensity has reduced by % since : Due to the significant growth of the organisation since the total emissions have only reduced by 4 tCO2e despite the intensity reduction of 34%. Scope 1 and 2 emissions per employee (tCo2/FTE) Total Scope 1 and 2 emissions (in tCO2) Breakdown of the Group's carbon footprint by activity Own offices and operations– 0% Tenant's energy– 25% Development activities– 75% Target Target 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 1,200 1,000 800 600 400 200 0 PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Focus on emissions from tenant operations The Group has a target of reducing GHG emissions from its tenants’ operations by % between and . To manage the carbon performance of the operational activities in VGP parks, the Group has set indicators to measure the intensity of GHG emissions per area (m) for each of its operated VGP Parks. The Group has been able to collect % of the relevant electricity and fuel consumption data from its tenants, and for the remainder of the areas the data has been grossed-up, taking into account the type of occupation/tenant activity for its warehouse. This makes it possible to analyse a building’s overall carbon efficiency on a comparable basis, depending on its purpose and scope. Due to an acceleration of the data collection process, the percentage of data collected was lower than in previous years (see section .. Energy Man- agement for further information). In , the carbon intensity linked to the energy consumption (Scope ) of the Group’s standing portfolio (CO2 eq/m²) decreased by % compared with even though compared to the carbon intensity increased by % on a like-for like basis. This increase was mainly due to a significant increase in the grey electricity intensity factor. The weighted average grey electricity intensity factor across Europe increased by % year-over-year (see table below) driven by grey electricity intensity factors for being based on spike in coal and fossil fuel use, even though some of this reversed during . For the VGP portfolio, this increase was partially offset by lower gas usage (due to transition to heat pumps) and transition to renew- able energy sources. GHG emissions from energy consumption of standing assets (Tonnes of CO Eq) 2 Change vs 2020 base year (22) % 2023 Total 104,863 Like-for-like change 2023 (72,763 tCO eq)/2022 (54,022 tCO eq) 27 % For reference: 2023/2022 grid electricity carbon intensity change 3 29 % The grid factor is expected to adjust downward over the year and the transition towards electricity between renewable sources under the photovoltaic investment plan is expected to continue contributing to a reduction in grid consumption, with newly delivered warehouses typically at least partially powered by electricity from renewable energy generated on site (see Section .. Energy management). Other than GHG emissions from the energy consumption of its buildings, the main item of the Group’s direct GHG emissions related to the operation of its buildings is from the leakage of refrigerants from cooling appliances maintained by the property managers of sites owned and/ or managed by the Group. GHG emissions from energy consumption of standing assets (Tonnes of CO Eq) 2023 GHG emissions linked with refrigerant losses 1,357 Germany’s coal power production drops to lowest level in years in | Clean Energy Wire These emissions are expressed based on emission factors for each source of energy using the “market-based” method of the GHG protocol, according to which these factors depend on the type of energy consumed (electricity, natural gas, etc.), the country, the supplier and the nature of the energy product (energy from fossil fuels or renewable sources). These are specific factors associated with the contractual commitments between the supplier and property manager which do not necessarily reflect emissions from energy delivered by the grid but valorise and focus on the production and purchase of energy that is certified as generated from renewable sources. Based on VGP portfolio weighted variation of estimation factors for grey electricity over the whole portfolio– using grid mix data from IEA and estimation factor from Ecoinvent (source: Southpole). CORPORATE RESPONSIBILITY REPORT PAGE ADDRESS CLIMATE CHANGE ... Focus on embodied carbons in development projects In the embodied carbon calculations have been recalibrated based on a broader sam- ple methodology, where previously the Group reported embodied carbons for in total of , tCO2, this has been recalculated to , tCO2. As a result, the intensity reduced from kgCO2/m to kgCO2. Given the base line has been reduced the target for the Group for has also been reduced accordingly: where previously the Group needed to reduce to kgCO2/m is now a reduction required to kgCO2/m, assuming the same level of construction activity. Since , the Group has achieved a reduction of % in terms of intensity. Due to the higher levels of construction completions in compared to has resulted in an absolute increase in emissions of %. The year saw the lowest level of carbon intensity which was driven by efficient buildings delivered including buildings delivered in VGP Park Laatzen, VGP Park Magdeburg, VGP Park Göttingen and VGP Park Nijmegen. The year benefited from efficient carbon projects delivered in VGP Park Graz (part wooden bearer structure), VGP Park Laatzen (including now DGNB Platinum certified building “GERLAA– A”), buildings in VGP Park München and additional buildings in VGP Park Magdeburg. saw, whilst carbon reduc- tion initiatives get more broadly implemented (example projects in VGP Park Giessen am Alten Flughafen, VGP Park Erfurt and VGP Park Roosendaal) also a mix shift skewed towards Eastern European buildings which on average still have a higher carbon footprint. FY 2020 FY 2021 FY 2022 FY2023 Scope 3– embodied carbon developments (cat. 1 + cat. 11) 269,223 297,686 538,260 313,172 kgCO2/m² 507 457 472 489 Category 1 109,680 140,258 245,218 134,327 kgCO2/m² 207 215 215 210 Category 11 159,543 157,428 293,042 178,845 kgCO2/m² 300 241 257 279 VGP Park München, Germany PAGE VGP NV ANNUAL REPORT COMMITMENTS .. Climate risk management and adaptation to climate change The Group’s Risk Management Framework is presented in Chapter “Risk Factors”. Sustaina- bility risks were identified at Group level (see section “Risk Factors”); this section presents a detailed analysis of the climate change risks for the Group. On top of addressing climate change mitigation (see section .. Climate change strategy), the Group’s ESG Strategy also addresses climate change adaptation through the resilience of VGP’s assets to climate change. The Group targets % of its development projects to include long-term climate risk assessment and planning, and for % of its standing assets to include a climate change risk plan. The effects of climate change on VGP’s portfolio will vary depending on the region and the asset. The scale and severity of changes will determine the extent of the impact, as will factors such as age, location, construction methods, asset operational efficiency, local infrastructure quality and capacity. In , the Group commissioned its first climate change risk assessment study covering all standing assets as well as the development pipeline. In line with TCFD recommendations, this study covered both transitional (policy and legal, technology, market) and physical risks (chronic ones: precipitation, temperature, drought and sea level rise) and was based upon IPCC sce- narios RCP. and RCP., with different time horizons: Short term , Medium term and Long term . The methodology for physical risks was based on assessing each existing asset with exposure, sensitivity and adaptive capacity grades to end up with a final physical vul- nerability score. The methodology for transition risks was based on local surveys and data col- lection from specific asset locations. VGP Park Magdeburg-Sülzetal, Germany CORPORATE RESPONSIBILITY REPORT PAGE ADDRESS CLIMATE CHANGE ... Physical risks In , the Group completed a study of both its standing assets and development projects using the Blue Auditor’s Climate Risk tool which is based on Moody´s Real Assets Physical Cli- mate Risk & Corporate Facility Operations Risk product to assess exposure to physical risks. The study is compliant with the EU Taxonomy requirements (see “Adaptation to climate change” paragraph in section .. VGP Share of aligned activities) and brought to the Group an updated perspective of the risk level, relying on state-of-the-art climate modelling. In addition, assets’ visits have been conducted on the most exposed assets to evaluate more precisely the impact curves of the potential risks considering the details of the asset (topography, localisation of the technical equipment, existing resilience solutions already in place, etc.). Climate change physical exposure risk at asset level based on RCP 8.5 and RCP 4.5 by 2050 Hazard Metric Scenario # Parks GLA (JVs at 100%) GAV (JVs at 100%) Regions most affected Fluvial (River) and pluvial (Rainfall) flooding 1 in 100-year return period > 0 8.5, 2050 (undefended) 10 4.6 % 6.6 % Asset specific, including broader Ruhr/Rhine area, Po river delta Sea level rise “High” and “Very High” Risk 8.5, 2050 0 0 % 0 % Sea level flooding risk low/no risk across regions Drought Stress “High” and “Very High” Risk 8.5, 2050 19 9.7 % 9.3 % Iberia, Romania Heat Stress “High” and “Very High” Risk 8.5, 2050 25 15.4 % 12.9 % Hungary, Italy, Spain, Romania, Croatia, Serbia Wildfire risk “High” and “Very High” Risk 8.5, 2050 2 0.7 % 0.7 % Asset specific The table above shows the modelled climate change physical exposure risk metrics and out- comes based on percentage of floor area and rental value at risk based on the worst-case sce- nario (RCP ., ). The assessment report and data above do not consider any asset specific development or refurbishment mitigation cycles. As part of our sustainable development objec- tives, assessments are carried out prior to development and adaptation measures, including but not limited to those listed below, are carried out accordingly. The map below highlights the average climate risk assessment (CRA)-score (-/low-high) based on a “desktop” assess- ment per park with average scores based on the summary findings per hazard category as listed in the table above. PAGE VGP NV ANNUAL REPORT COMMITMENTS Implemented adaptation measures to address these risks include the incorporation of green spaces, rainwater harvesting and sustainable drainage systems to reduce the risk of flooding, access to natural light in the buildings, and the provision of infrastructure for active mobility and public transport. Additionally, measures to improve the energy efficiency of buildings and the use of renewable energy sources can also help to reduce the risk of heat stress– in Spain and Italy all new buildings are therefore fitted with photovoltaic installations and heat pumps which help to provide additional cooling in summer. The buildings are designed to provide a comfort- able and healthy indoor environment, taking into account factors such as ventilation, thermal comfort, and indoor air quality. It is important to note that climate risk analysis and adaptation measures are an ongoing pro- cess, as the impacts of climate change are constantly evolving and new risks may arise over time. Therefore, it is important for companies to regularly review and update their climate risk analysis and adaptation measures to ensure that they are effectively addressing the latest cli- mate-related risks. This includes monitoring the performance of the building, gathering feed- back from tenants and evaluating the effectiveness of the adaptation measures, and making adjustments as necessary. Risk Adaptation Technique Drought Stress and Heat Stress — Rainwater harvesting systems for building use and landscaping — Water efficient fixtures in line with EU Taxonomy regulations — Thermal modelling undertaken and orientation/ window positioning of the building reviewed — Onsite renewable energy generation installed in combination with heat pumps (which can be used for additional cooling) — External planting to provide shade, brise soleil, louvers, window tinting Fluvial (River) and pluvial (Rainfall) flooding — Flood risk assessment to be carried out on development or retrospectively — Wadi’s, ponds or basins (retention measures) This update of the climate change risk assessment enabled VGP to have a clear view on the future risks of climate change for its portfolio. ... Transition risks We work with our stakeholders (see section .. Stakeholder Engagement) to monitor, assess and prioritise emerging climate change transition risks. We judge materiality with reference to two main risks: the environmental and reputational risk of failing to meet our carbon emission reduction targets and the financial risk of building redundancy or being unable to lease our buildings. We believe that there are three main climate change transition risks with the potential to impact the Group financially: — Environmental legislation: legislation surrounding the sustainability performance of com- mercial and non-commercial real estate is likely to tighten in the future as the EU pursues its commitments under the European Green Deal and Paris Agreement. We expect this to take the form of regulations but also increasingly some form of carbon tax to encourage the use of lower carbon materials and processes. The primary financial risk relates to our ability to rent out our buildings if they fall below emerging environmental legislation. This drives our determination to improve the energy performance of our portfolio both in new development and through refurbishment, measured primarily by increasing the floorspace rated B or bet- ter by Energy Performance Certificates. — Client behaviour and preference: our tenants, particularly our largest, international clients, increasingly expect their premises to display high levels of energy efficiency. Energy effi- ciency not only reduces the operating costs of the building but also helps them with their own environmental and carbon reduction targets. The primary financial risk relates to the appeal of our buildings to tenants if they are below acceptable levels of energy efficiency and wider environmental sustainability. We are addressing this risk through improving the EPC ratings of our portfolio, increasing the amount of on-site renewable energy generation, offer- ing off-site renewable energy through our regulated renewable energy utility business units, and improving the sustainability credentials of our developments. — Access to capital: investors are increasingly discriminating between investment opportuni- ties based on sustainability credentials. The primary financial risk relates to reduced availa- bility and higher cost of capital for companies which do not show strong performance and/or progress in this area. Through our joint venture model, the Group is continuously “in the mar- ket” for selling assets to its own joint ventures. The appeal of our assets rests on an adherence to the latest ESG standards of the entire portfolio. Furthermore, under our Green Finance Framework, we have issued €. billion of Green “Use of Proceeds” bonds since . CORPORATE RESPONSIBILITY REPORT PAGE ADDRESS CLIMATE CHANGE ... Climate change strategic planning and decision making In terms of decision making, we consider climate-related issues within the following time horizons: — Short term: up to months, in line with the annual budget setting carried out; — Medium term: up to years, in line with the Medium-Term Planning carried out by the Group; — Long term: up to years, in line with capital investment appraisal cash flows. For the LCA calculation we also assume a -year life span for our newly developed properties. VGP performed its update of the CRREM study (Carbon Risk Real Estate Monitor) in to analyse stranding risks across its portfolio and mitigating measures. The results are presented in section .. Decarbonisation scenarios (CRREM). Furthermore, and on the short time hori- zon, the Group complies with regulatory requirements in each country regarding flooding risks, water management, and drainage systems for exceptionally heavy rainfall. Regarding development projects, specific requirements including the realisation of a study on adaptation to climate change covering physical risks, comfort and energy efficiency topics are already integrated in the Sustainability Brief (see section .. Environmental Management System (“EMS”)). VGP’s due diligence process for acquisitions and greenfield/brownfield development pro- jects covers the analysis of risks and opportunities related to financial and operational issues. For example, the process includes a complete audit of technical, regulatory, environmental and health and safety performance. The potential financial impact of identified risks is taken into account during the due diligence phase. Issues covered include risks associated with climate change, soil pollution, protection of wetlands, asbestos, etc. VGP Park Pilsen, Czech Republic PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Climate-related financial disclosures To enable our stakeholders to consider and compare our reporting, we contribute to a number of externally recognised initiatives including GRESB and CDP, and we also disclose metrics in line with externally-recognised frameworks including Global Report- ing Initiative (GRI) and the EPRA Best Practices Recommendations on Sustainability Reporting (see section .. Alignment with ESG reporting standards and frameworks for further details). In order to ensure that we also report on those issues that we can have a direct impact upon, we use our materiality assessment to identify the key metrics that are material to the business. Below are the climate-related metrics and targets which we monitor. Those in bold are incorporated into the ESG factor of the annual bonus of all employees. Financial item Climate- related Metric 2023 Narrative Section reference Assets Physical– operational Portfolio at risk of 1 in 100-year flood (% of GAV with JVs at 100%) 6.6 % New metric based on analysis conducted in 2023 3.1.3.1 Physical risks Assets Transition– operational EPCs rated below E (based on gross lettable area) 0 % Since 2023 no asset with EPC score of below E 4.2.5.2 Green buildings EPCs un-rated (based on number of assets) 20.6% Un-rated space does not necessarily mean low rating; various have PV roof (will require new EPC rating); also includes parking houses and buildings in development with EPC certificate pending EPCs rated B or better (based on number of assets) 48.3% Indicative anticipated CAPEX investment of Assets Transition– development & market risk Portfolio with high environmental certification (BREEAM Excellent or better (or equivalent)) (“Green portfolio”)– € amount € 1.86 billion Comprises the building portfolio which is allocated to the Green Financing Framework (under Framework eligible portfolio also includes BREEAM Very Good assets and comprises €3.7 billion) 3.2.2 Environmental certifications Liabilities Transition– development & market risk Percentage of net borrowings (incl JVs at share) classed as Green Financing under the Green Finance Framework 56 % VGP issued € 1.6 billion in green bonds under the Green Finance Framework 4.2 Green bonds Green finance instruments as % of the green portfolio (including joint venture assets at share) 41 % Green finance instruments should not exceed the total green portfolio CAPEX Strategic risk/ GHG emissions Visibility: % of portfolio for which energy data is available 67 % New lease template since 2021 includes green clause for data sharing; many existing clients have no obligation to share data 3.3.2 Green leases and tenant commitments, 3.3.3 Energy Management Visibility: % of completed developments for which LCA analysis is available 78% Growing use of Life Cycle Assessment within the business ensure that we have good visibility of embodied carbon in development and we can target areas for reduction 3.2.1.1.2 Considerate construction charter Embodied carbon intensity (kgCOe per sq m of development space) 489 Based on updated embodied carbon assessment– based on life cycle of the buildings 3.1.2 Carbon assessment Photovoltaic investments– spent or committed on projects completed or under construction € 108 million A further €63 million to be spent on pipeline projects– total 270.5 MWp 3.3.3.5 Renewable energy procurement and production. 4.2.3 Current allocation of green bond proceeds Revenues Transition– market risk Solar power generation– FY2023 (GWh) 46 GWh Includes circa 2 GWh of solar energy not generating income. Production for 2024 is expected to exceed 85GWh 3.3.3.5 Renewable energy procurement and production Solar power generation– annualised incl. pipeline (GWh) 244 MWh Solar power generation as percentage of tenant electricity consumption 23 % Including PV pipeline projects the coverage increases to 109% Gross revenues from renewable energy € 4.4 million Revenue generated from selling renewable energy to tenants of VGP Parks, energy sold into the grid or PV installations leased by tenants CORPORATE RESPONSIBILITY REPORT PAGE SUSTAINABLE PROPERTIES . Sustainable Properties .. Environmental management system The Group’s environmental Management System (EMS) aims at reducing the environmental impact of our assets at every stage of their life cycle, from initial design to daily operation as well as future fungibility. Sustainable Design Framework BREEAMDGNB Sustainable Management Framework BREEAMDGNB in-use Review Analyse and review performance with tenants and stakeholders Land sourcing Sustainable check-list and environmental due diligence Track performance Annual reporting Project review Detailed design guidelines Action plan Environmental action plan Construction Green certification Policy & targets Leasing Green leases 2 1 3 4 6 7 8 5 STANDING ASSETS NEW PROJECTS PAGE VGP NV ANNUAL REPORT COMMITMENTS The Group has defined and monitors several indicators to manage the environmental performance of its standing assets and development projects, in line with the objectives of our ESG strategy. Some of these indicators are incorporated into the budget review processes for standing assets and develop- ment projects to ensure alignment between ESG objectives and business decisions. For more information on the Group’s Environmental Management System (EMS) please follow the link to VGP ESG policies and guidelines on: https://www.vgp- parks.eu/en/sustainability/ ... Sustainable Construction .... Transition to a circular economy in construction projects From the materials sourced to construct the building to the water required for bathroom facilities and greenery, logistics and semi-industrial sites use natural resources. Predomi- nantly, today’s logistics real estate sector is designed on the linear “take-make-waste” concept. VGP wants to change this. In order to be compliant with the EU Taxonomy Do No Sig- nificant Harm– Transition to Circular Economy criterium the Group is transforming its approach to circular economy con- cepts defined by principles, see also the following VGP Cir- cular Economy chart. With regards to the “Continuous Material Cycles”, in the Group introduced a target in-line with the applicable DNSH requirement for Construction of New Buildings under EU Tax- onomy of at least % (by weight) of the non-hazardous con- struction and demolition waste generated at site to be pro- cessed for reuse or recycled or otherwise recovered. This requires strict waste monitoring at construction sites, as well as an implementation of improvement opportunities and exe- cute best practice activities in order to: eliminate final waste and pollution, keep products and materials in use, and reduce the primary material consumption. The Group is leveraging its relationships with construction materials suppliers to raise their awareness of sustainable construction and influence behaviour change towards circular economy practices. In , the Group reached its target of recovering % of waste in % of the construction sites monitored. In , VGP will work towards more projects being monitored, more ambitious waste management and continue to engage its suppliers in sustainable practices. 2023 Share of waste monitored development projects that have at least 70% of waste recycling (material recovery) 88% Number of development projects that comply with at least 70% of waste recycling material recovery (% of all projects delivered in 2023) 7 (29%) In addition to limiting the waste generation and facilitating reuse and high-quality recycling during construction works, the Group also aims to ensure the building design and con- struction technology support the circular economy by mak- ing the building resource efficient, adaptable, flexible and dismantlable. When considering products and materials, VGP applies the BREEAM or DGNB certification standard to promote resource efficiency and lower emissions. The products are easier to maintain, reuse and recycle and must have an eco-label and/ or lower environmental impact (such as PEFC™ or FSC®-cer- tified timber). Throughout all stages of the building life cycle, preference is always given to suppliers with certified environ- mental management systems. See also the section .... Considerate Construction Charter. .... Considerate Construction Charter Since the Group’s Considerate Construction Charter is applied to all greenfield/brownfield construction projects. It describes the Group’s requirements and recommendations intended to optimise its worksites’ environmental quality while minimising pollution for the contractors working on site, the neighbouring area and the natural environment. The Consider- ate Construction Charter includes the following requirements: — Using % of timber for development, extension and reno- vation projects from certified, sustainably managed forests with PEFC™ or FSC® certification, including for works; — Providing information to people living nearby and limiting traffic disruptions; — Informing contractors and employees of construction com- panies of applicable HSE rules; — Ensuring proper management of risk; — Managing and limiting noise and visual pollution, as well as the risk of soil, water and air pollution; and — Monitoring resources to reduce resource consumption. 2023 Number of development projects that implement aConsiderate Construction Charter 100% Share of development projects that implement aConsiderate Construction Charter 100% Delivered projects completed a life cycle embodied carbon assessment (LCA) 78% .... Pollution prevention Moreover, the Group ensures that the action plans and pre- ventative measures are implemented by contractors dur- ing construction. The table below lists the annual monetary expenses for soil decontamination/site remediation and vol- umes that have been detoxified. Soil pollution and site remediation 2022 2023 Monetary expenses for soil decontamination/ site remediation (€-million) 5.1 2.3 Volume that has been detoxified/handled (metric-tonnes) 14,900 3,723 .... Health and safety on work sites The construction contractors are contractually required to make the necessary provisions for site safety and comply with the relevant Health and Safety legislation. The contrac- tor’s teams develop the technical requirements provided to contractors within the tendering process. These include spe- cific safety requirements, as well as the applicable Health and Safety standard a successful bidder must comply with. Tender submissions that do not comply with the technical require- ments and the applicable Health and Safety standards are disqualified from the tendering process. During the construc- tion phase, site health, safety and security is continuously monitored by the construction contractor’s teams. Health and Safety Coordinators are appointed in all countries where the Group is active. They are employed by the contractor, with a principal function of coordinating health and safety matters between the various stakeholders. Health, Safety and Environ- ment (HSE) audits are conducted on a continuous basis. GUIDED BY SYSTEMS THINKING HOLISTIC URBAN PLANNING LEVERAGED BY DIGITAL TECHNOLOGY DESIGN FOR MAINTENANCE AND DECONSTRUCTION FLEXIBLE PRODUCTIVE BUILDINGS SUPPORT HUMAN WELLBEING AND NATURAL SYSTEMS CONTINUOUS MATERIAL CYCLES INTEGRATED INFRASTRUCTURE SYSTEMS PAGE VGP NV ANNUAL REPORT COMMITMENTS .. Environmental certifications VGP, as part of its strategy for development projects, targets an environmental certification for all of its new greenfield/brownfield construction projects: DGNB (Deutsche Gesellschaft für Nachhaltiges Bauen) in Germany and Austria and BREEAM for the other countries. VGP aims to achieve a minimum level of “Gold” (DGNB) for its development projects in Germany and Aus- tria, and for the other countries “Excellent” (BREEAM) versus minimum required BREEAM Very Good. Higher environmental certifications are obtained, when relevant to the tenant. In addition to securing the “Excellent”/“Gold” level under BREEAM/ DGNB respectively, all projects need to undertake a technical and economic feasibility study to reach the BREEAM “Excellent” or DGNB “Gold” level respectively. Coverage of BREEAM and DGNB environmental certification of standing assets and assets under construction in number of assets and gross lettable area: Certification coverage 1 2023 Number of assets certified Number of assets in process of obtaining certificate % (in number) % (in m² GLA) Total certified warehouses 76 88 66.1% 75.9% of which at least Excellent/Gold 24 42 26.9% 33.9% Excludes recently acquired brownfield sites identified for demolition New construction– 61.4% In use– 14.5% Not certified– 24.1% Breakdown of the Group assets by environmental certification level (in m of gross lettable area) Coverage of environmental certifications in operation and development within the Group’s total standing assets and assets under construction (in m² of gross lettable area) Good/Bronze Very Good/Silver Excellent/Gold Outstanding/Platinum 1.9% 43.1% 52.7% 2.3% CORPORATE RESPONSIBILITY REPORT PAGE SUSTAINABLE PROPERTIES .. Construction materials ... Reducing carbon impact of construction materials As part of its commitment to reducing its construction carbon footprint by % between and , the Group focusses on the choice and use of the materials for its development pro- jects. In order to be better able to track the impact of actions required to deliver progress, the internal framework to evaluate carbon emission reduction initiatives has been updated. The new framework aims to make certain improvements easier to evaluate from a cost and carbon perspective, for example a bearer structure built from wooden beams or columns (grown from responsible forestry), use of green steel or Ecopact concrete as building materials to reduce impact of construction materials, or specific renewable energy initiatives to reduce the lifetime operating carbons. The new framework is based on the following three principals, Carbon Ref- erence Pricing, Lean Building approach and Circular economy solutions: Carbon Reference pricing Carbon reference pricing in new project yield calculations. The Internal Carbon Pricing scheme is a shadow price which allows the Group to apply carbon prices in its strategic and operational decision making around new projects. It enables the Group to assess the economic implica- tions or trade-offs for such things as risk impacts, net present value of new projects and the cost-benefit of various design alternatives and initiatives. In project evaluations the pricing was aligned with EU ETS as per Dec € ./tCO VGP Park Hochheim, Germany PAGE VGP NV ANNUAL REPORT COMMITMENTS Lean Building approach To achieve the Group’s reduction targets it is critical to provide project management the levers to implement viable low-car- bon alternatives through a “lean building” approach from the design phase using fewer materials, through optimised design choices: structure, fixtures and fittings, façades, ceil- ings, number of parking spaces, etc. This can be achieved by using new solutions for construc- tion and choosing alternative and low-carbon materials, such as low-carbon concrete and cement, wood and recycled prod- ucts, as well as selecting suppliers and products based on their location and place of manufacture, respectively. Our procurement and our innovation team are developing tar- geted partnerships with construction firms and manufactur- ers of building materials for the implementation of innovative solutions To secure the ESG Strategy commitments regarding construc- tion activities, the Group has created a Sustainability briefing package for development projects, to lead the development teams from the very beginning of the design phase to the delivery of development projects. It contains three parts: — The Group Sustainability Brief, gathering all the specific requirements for development projects (brownfield, green- field, refurbishments, renovations and extensions) to be in line with the Group’s ESG Strategy; and — The Golden Rules for sustainable construction, which set the right mindset and directions for the development teams to integrate sustainability topics in projects. The Sustainability guidelines for development projects have been approved in and are rolled out throughout the Group. The sustainability performance of the development projects is closely monitored during key project reviews thanks to a dedicated assessment tool and focuses on the Group’s commitments towards low-carbon construc- tion and the compliance with the EU Taxonomy criteria for building development (see section .. VGP Share of aligned activities). — The Group also offers specific trainings for the development and construction managers to help them better under- stand the technical requirements of the Group’s Sustain- ability guidelines and new regulations around low-carbon buildings. VGP’s carbon performance with regard to the construction target is presented in section . Summary of the Group’s ESG performance. Specifically, it involves: — Adopting a “lean material construction” approach right from the design phase (structure, façade, false ceilings, fix- tures and fittings, etc.); — Using new solutions and optimised low-carbon materials (low-carbon cement and concrete, bio-sourced materials, recycled materials, etc.). For example, at a building deliv- ered last year in VGP Park Graz, Glulam timber beams were installed with a span of to metres for the roof, allowing for an , square metre building. This choice guarantees a reduction in material transport costs by assembling the beams on site and a more sustainable building. — Asking subcontractors to put forward alternative solutions with low carbon content; and — Adopting a purchasing policy that includes criteria for the carbon content of products and construction materials (requiring environmental and Health and Safety certifica- tion– Environmental Product Declarations). Circular economy building materials solutions Circular economy solutions can also lead to carbon savings, through material reuse for example as defined in the VGP Golden Rules for sustainable construction which is, together with the Considerate Construction Charter, part of the VGP Building White Book and shared with our contractors. See also section .... Transition to a circular economy in construc- tion projects. VGP Park Laxenburg, Austria CORPORATE RESPONSIBILITY REPORT PAGE SUSTAINABLE PROPERTIES ... Responsible supply chain Further to the research project as described in the previous section for which discussions were held with various suppliers to better understand and reduce the embodied carbon foot- print of materials used, VGP is committed to ensuring respon- sibility in its upstream supply chain (development activities). The Considerate Construction Charter specifies that % of timber used in development, extension and renovation pro- jects must be from certified, sustainably managed forests with FSC or PEFC certification. Besides, as part of the certification process (prerequisite for BREEAM and optional for DGNB), the sourcing of wood used during construction is verified and validated. The Group aims to obtain “post-construction” final certification according to the BREEAM or DGNB standards for all projects. All contractors are asked to abide by the terms of the Con- siderate Construction Charter. Also, in all its contracts, the Group requires the contractors to do their best efforts to reduce the carbon footprint of the project and the design pro- ject managers are asked to pay closer attention to this con- tractual requirement. .. Comfort, health, well-being and productivity for users of buildings Comfort and well-being issues are a determining factor in our technical and architectural choices for development of the office as well as warehouse spaces (e.g. façades, sky lights, interior finishes of offices, canteens and other amenities, heat- ing, ventilation and air-conditioning equipment, lighting, occu- pant control methods, etc.). The VGP Environmental Manage- ment System (available on our website) and VGP Building White Book provide steps on how to achieve comfortable and safe spaces, based on thermal comfort, visual comfort, acous- tic comfort and interior air quality. Construction works at VGP Park Riga, Latvia PAGE VGP NV ANNUAL REPORT COMMITMENTS . Improve eco-efficiency VGP Park Hrádek nad Nisou, Czech Republic CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY .. Environmental management system for existing assets The EMS is implemented across the whole owned and joint venture portfolio. This pragmatic and dynamic EMS, based on an environmental continuous improvement approach (ISO ), ensures that the Group is able to meet its annual and long-term targets and supports VGP’s continuous improve- ment for each area covered by the Group’s ESG policy. This includes climate change adaptation and sustainable resource use. It completes the development projects’ EMS, as part of the overall policy of managing the environmental quality of the Group’s assets throughout their life cycle. For more informa- tion on the Group’s EMS see section .. Environmental Man- agement System. .. Green leases and tenant commitments Since a clause has been added to the first version of Green leases which includes, in particular, the obligation to sign a supply contract guaranteeing that electricity is pro- cured from renewable sources. This clause was updated from the green lease clause which has been included in all stand- ard new lease contracts since . This initial policy of pro- moting “Green leases” already aimed at improving tenants’ ESG performance during the operation phase through a set of requirements, including fit-out, operation and reporting requirements. The approach continues to be based on dia- logue, information, and sharing of best practices, encourages the tenants to play a role in the environmental performance of the assets which they occupy. As well as contributing to lower operating costs through decreasing energy and utilities con- sumption and improving waste management, this change in behaviours is helping the Group and its stakeholders to pre- pare for increased constraints on resource management (reg- ulation, availability, etc.). In that respect, already since and ahead of all existing regulations, all new leases and renewals signed with tenants have had environmental clauses. These first versions of Green leases cover those aspects that are most relevant to improve tenants’ environmental behaviours and performances, such as commitment to sharing energy consumption data, com- mitment to reviewing ways to improve energy efficiency and reduce net dependency through photovoltaic developments, and intention to discuss measures to save energy and water and sort waste. Indeed, meeting the Group’s reduction target of its carbon footprint from operations requires strong involve- ment of tenants, given the scale of their electricity use (see Section .. Carbon assessment). To accomplish this, the two Group levers of improving energy efficiency and transitioning to renewable energy sources are implemented across the portfolio, in cooperation with the ten- ants. The table hereafter shows the penetration rates of the latest applicable green lease version across the Group assets, both for standing assets and pipeline projects. The penetra- tion rate of green leases signed in is .% Group-wide. Green lease clause 2023 Number of new lease contracts signed with green lease clause 48 % of rental income of total new leases signed during the year 90.7% % of green leases among total active leases at year end 23.3% Tenants are also being onboarded on the topic of responsible resource consumption through the organisation of periodic on-site reviews, during which environmental performances of an asset are presented and discussed with the tenants, to raise awareness and encourage behavioural changes as well as the implementation of operational improvements. .. Energy management The Group targets, in its ESG strategy, to improve the carbon emissions caused by the tenants’ usage of its warehouses by % by , compared with a baseline. As part of its operational management process of environmental perfor- mance, the Group measures improvements in its energy effi- ciency by tenant industry segment against these targets: pro- gress and results are disclosed in Section . Summary of the Group’s ESG achievements. To reach its targets in terms of energy efficiency, the Group has formalised a dedicated energy management policy, whereby assets are required to define their energy manage- ment action plan, setting the operational path towards reach- ing the objective, with levers identified at country as well as asset level to improve energy efficiency and their gradual implementation schedule. This policy also underlines energy optimisation best practices and sets the approach to define renewable energies action plans as well as sets requirements on green electricity purchasing. As a result, in the follow- ing steps have been taken: — green clause in new lease contracts has been updated to include a green electricity procurement requirement to tenants (see section .. Green leases and tenant commitments), — implementation of a new group-wide energy consumption and production monitoring system (see section .... Energy consumption– portfolio), — advancement of the roll-out of smart meters (see section .... Energy consumption– portfolio), — the application of local renewable energy subsidiaries for status as a regulated energy trader to be able to more effectively offer green electricity to our tenants (see sec- tion ... CRREM retrofit and improvement actions), and — investments in the existing portfolio to improve energy effi- ciency (see section .... Energy consumption– portfolio). ... Energy consumption Energy consumption data have been quality reviewed as well as carbon emissions calculations presented below have been third-party validated by CO2Logic based on GHG protocol and compliant ISO . PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Energy consumption– own organisation Energy consumption within the own organisation Energy Data 2019 2020 2021 2022 2023 % change YoY Gas (GJ) 166 187 293 404 462 15% Grey Electricity (MWh) 276 286 244 — — — Renewable Electricity (MWh) 135 130 191 380 478 26% Fuels (diesel and gasoline) GJ 23,226 15,164 12,880 13,846 13,508 -2% E-Charging (MWh) n/a n/a 13 21 76 264% Total energy GJ 24,386 16,848 13,905 15,693 15,963 2% Total energy MWh 6,774 4,680 3,863 4,359 4,434 2% Total energy consumption per FTE (MWh/FTE) 33.9 19.4 13.2 12.4 11.8 -4% Energy consumption efficiency of the Group’s own operations has undergone significant changes over the course of the last years. Whilst the organisation has grown from employ- ees at the start of to employees in December , the total energy consumption per employee has decreased over the same period by % to an average energy consumption of . MWh/FTE. This is predominantly driven by a shift to more clean and efficient gasoline powered vehicles and plug-in hybrid vehicles and since to full battery-powered vehicles. Since FY the Group has switched to renewable electricity for the use of its own offices. The impact of this switch is discussed in the Carbon Assessment (section ..). As of January , a pan-European power purchase agreement (PPA) went into effect allowing the entire VGP office portfolio to switch to renewable electricity. The PPA purchases renewable electricity from the .MWp photovoltaic installation on VGP Park Roosendaal and makes this green electricity available to the various entities within the Group across its oper- ations– either by delivering this electricity directly or through the transfer of the green certifi- cates of origin. Renewable Electricity Grey Electricity Electricity mix of VGP own offices 100% 80% 60% 40% 20% 0% CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY ... Energy consumption– portfolio Optimisation strategy The energy consumption optimisation strategy for the portfolio is built upon selective eco-effi- cient retrofits, green leases, energy management and renewable energy policies based on the following pillars: — Daily optimization of operations. Digital technology and changing consumer expectations have set the stage for new solutions. A key development in has been the deployment of Deepki energy optimization platform across the countries of operations. Deepki facilitates emissions monitoring and management to reduce the carbon footprint of real estate assets — Technical improvement of the equipment, including retrofit from gas-powered heating to electrical heat pumps, installing smart meters and LED lighting at refurbishment — Offering renewable energy solutions to our tenants, including tailor-made roof-fitted photo- voltaic installations for self-consumption and off-site green energy contracts offered through our own energy trading activities leveraging photovoltaic installations elsewhere in the group — Improving the intrinsic quality of our new developments, including the installation of heat pumps instead of gas-powered heating as standard where feasible Annual portfolio energy consumption reporting In order to be able to more accurately assess energy efficiency improvements as well as com- pare year-over-year changes in energy consumption it is important to understand the actual tenant activity. The table below reflects the utility data for the VGP portfolio over FY. The classification system used is aligned with the GRESB segment reporting. The majority of our buildings have a logistics, non-refrigerated usage with limited to no manufacturing activities (classification “Industrial non-refrigerated warehouse”). For assets where manufacturing activi- ties do take place (classification “Industrial: manufacturing”) the electricity and water consump- tion is typically .x as much and gas usage x higher. A warehouse for logistics purposes but with cooling facilities typically performs in between these two categories (see table below for details). The classification office (“Office: Corporate: Low-Rise Office”) is only used for those buildings which have a dedicated pure office usage. For offices inside warehouses no separate consumption is reported (consumption is included as part of the warehouse data). VGP extrapolates known data for the reporting year to ensure completeness and provide a more accurate carbon intensity figure. Due to current data collection processes, it is not always possible to collect a full months of data from all the tenants and estimation is required using extrapolation techniques. Data coverage for utility data is % for electricity, % for fuel and % for water. For not all utility bills have yet been collected and at date of publication of this report the data coverage is % for electricity, % for fuel and % for water. Utility consumption in portfolio (split by segmentation according to GRESB ) Standing and Completed portfolio Electricity consumption (kWh/m²) Fuel consumption (kWh/m²) Water consumption (litre/m²) Property occupational use (GRESB) Number of assets Gross floor area (m²) Average Median Average Median Average Median Industrial: Non-refrigerated Warehouse 133 3,045,188 17.29 14.09 8.40 9.69 50.00 40.79 Industrial: Refrigerated Warehouse 18 394,371 66.00 62.15 15.27 17.39 102.21 87.9 Industrial: Manufacturing 62 1,369,468 102.32 38.01 14.31 21.85 118.14 82.57 Office: Corporate: Low-Rise Office 3 79,387 54.38 46.86 n/a n/a 395.89 261.34 Other: Parking (Indoors) 3 55,123 6.55 7.93 n/a n/a n/a n/a Total 219 4,943,537 45.20 16.97 10.36 14.71 78.03 54.52 See Appendix a of the GRESB reference guide– The GRESB property type structure follows a three-level hierarchy where a Property Sector is composed of multiple Property Types, further refined into multiple Property Sub-Types. The Property Sub-Type (level ) is used for benchmarking purposes (https://documents.gresb.com/generated_files/ real_estate//real_estate/reference_guide/complete.html#property_types_classification) Green lease contracts– annual consumption and efficiency improvement review Installing heatpumps instead of gas- powered heating Offer renewable energy through roof- fitted photovoltaic installations Retrofitting of standing portfolio PAGE VGP NV ANNUAL REPORT COMMITMENTS Average Energy & GHG intensity per country and asset class Country AT CZ ESP DE HU IT LAT NED PT RO SK Total Standing and Completed portfolio 3 49 21 90 12 7 4 6 3 15 9 219 Data coverage 84% 98% 83% 41% 82% 100% 100% 100% 100% 94% 96% 68% Industrial: Non-refrigerated Warehouse Energy intensity (kWh/m²) 19.2 25.6 23.2 21.8 26.5 35.1 40.5 18.5 9.4 50.6 27.5 25.7 Carbon intensity (kgCO2 eq/m²) 3.6 10.1 3.2 7.2 5.9 10.1 6.3 5.6 0.0 16.0 4.9 7.5 Industrial: Refrigerated Warehouse Energy intensity (kWh/m²) n/a 109.6 78.5 65.6 177.4 n/a n/a 80.8 n/a 70.8 n/a 81.3 Carbon intensity (kgCO2 eq/m²) n/a 51.7 11.8 26.2 43.4 n/a n/a 14.3 n/a 17.4 n/a 26.2 Industrial: Manufacturing Energy intensity (kWh/m²) 36.6 244.1 132.8 34.2 175.3 n/a 67.0 n/a n/a 86.6 88.7 116.6 Carbon intensity (kgCO2 eq/m²) 4.4 123.7 24.1 14.0 42.0 n/a 11.2 n/a n/a 27.3 15.9 49.8 Office: Corporate: Low-Rise Office Energy intensity (kWh/m²) n/a n/a n/a 55.9 n/a 38.2 n/a n/a n/a n/a n/a 54.4 Carbon intensity (kgCO2 eq/m²) n/a n/a n/a 26.5 n/a 10.1 n/a n/a n/a n/a n/a 25.2 Total Energy intensity (kWh/m²) 26.6 149.0 43.5 29.2 109.7 35.3 47.6 34.7 9.4 56.2 51.4 55.6 Carbon intensity (kgCO2 eq/m²) 6.9 185.6 9.0 17.9 59.3 10.9 10.4 10.6 0.0 21.3 15.1 34 Energy consumption within the portfolio Total energy consumption– portfolio (MWh) FY 2020 FY 2021 FY2022 FY 2023 % change YoY Total renewable energy produced on-site 14,894 24,156 27,662 50,712 83.3% Of which renewable energy consumed on-site 1 3,646 3,858 4,539 Green energy purchased from grid — 4,169 9,610 4,672 Total green energy consumed 1 7,815 13,468 9,211 (31.6)% Total grey electricity purchased from grid 137,501 161,904 214,345 214,727 Total electric energy consumed 138,412 169,719 227,814 223,938 (1.7)% KWh/m² 57 55 53 45 Kilo CO2/KWh 0.37 0.31 0.33 0.42 Grey electricity emissions (tCO2) 50,871 53,435 75,806 94,295 24.4% Gas– Total fuel consumed from grid 83,695 73,643 58,281 51,805 (11.1)% KWh/m² 34 24 14 10 Fuel emissions (tCO2) 15,499 13,624 10,782 9,584 (11.1)% Total energy consumption 222,107 243,362 286,095 275,743 KWh/m² 91 79 67 56 Renewable Energy: produced and sold to grid 13,983 20,510 23,804 46,173 94.0% tCO2 “elsewhere avoided” (scope 4) 1 4,305 6,314 7,328 19,442 Assuming the same carbon intensity as the average VGP-weighted carbon intensity for grey electricity for the year CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY Like for like energy consumption FY2020 FY2021 FY2022 FY2023 Change YoY 2020 base year Electricity 110,638,126 118,137,794 6.8% Gas 37,465,023 37,585,975 0.3% 2021 base year Electricity 146,376,023 158,234,854 8.1% Gas 52,036,372 43,533,754 (16.3)% 2022 base year 1 Electricity 164,547,921 171,132,099 4.0% Gas 46,258,518 37,300,737 (19.4)% Energy intensity (kWh/m²) 74.25 73.41 (1.1)% The energy consumption both in absolute level as well as intensity have decreased in FY compared to FY. The overall energy intensity of the comparable assets decreased by .% year over year. Particularly the gas consumption in the portfolio has decreased (.% like-for-like YoY). The decrease in the consumption of gas is supported by the implementation of the heat pump instead of gas-powered heating and by a general consciousness and willingness to reduce gas consumption due to price volatility. Electricity consumption remained relatively stable– slight decrease (.%) in total consumption and increase in like-for-like consumption (.%). The elec- trification in general and heat pumps particularly are contributing to increasing electricity con- sumption. Low energy consumption in the buildings delivered in also contributed, as well as impact of classification of buildings without energy consumption data available– the effect of classification is visible in table “Energy and GHG Intensity per country and asset class”. The initiatives to invest in moving sensors in tenants’ offices, refurbish existing portfolio through a switch towards LED-lighting and smart metering investments are well underway and are expected to help reduce like-for-like electricity consumption (see section .. Green leases and tenant commitments for additional details and section .. Current allocation of green bond proceeds for further financial information on this initiative). ... Renewable energy procurement and production Renewable energy procurement Following the transition of the Group’s own offices to % renewable energy as of January , the Group is aiming to accelerate the transition of its tenant-controlled energy contracts towards sourcing electricity derived from renewable sources (“green electricity”). In Germany, the Group started to provide own produced green electricity or alternatively green electricity purchased from wind farms through PPA contracts since January , as a result for all German assets for which VGP is contractually in control of energy delivery are all transitioning towards green electricity, in first instance this will transition circa GWh, or .% of total electricity consumption, from grey to green electricity. A similar model will be intro- duced in Romania later this year and other countries will follow. Since lease contracts signed with tenants include an updated green lease clause requiring tenants to procure green electricity for their operations. For those lease contracts that do not benefit from such clause, VGP can still influence the decision indirectly through (i) providing insight into CO footprint, (ii) providing energy saving options which are economically viable and (iii) offering renewable energy generated through own facilities at economically attractive terms. Gross lettable area available for ’/’ like-for-like: ,, m (% of total completed portfolio as of Dec-) PAGE VGP NV ANNUAL REPORT COMMITMENTS VGP recognized as first real estate company in Germany to receive the status of a regulated energy supplier Magdeburg, Germany / January At the inauguration of Germanys second largest single-roof solar system at VGP Park Magdeburg-Sülzetal, Prof. Dr. Armin Willingmann, Deputy Prime Minister of the state of Saxony-Anhalt and Minister for Science, Energy, Climate Protection and the Environment and VGP CEO Jan Van Geet came together to recognize the achievement of obtaining a regulated energy supplier status which enables VGP to allocate green energy more efficiently to the needs of its tenants and on a national scale throughout Germany. The initial implementation of the green electricity contract involves German assets supplied with green PPA for an estimated annual volume of GWh. Prof. Dr. Armin Willingmann, Deputy Prime Minister of the state of Saxony-Anhalt and Minister for Science, Energy, Climate Protection and the Environment and VGP CEO Jan Van Geet on the roof of VGP Park Magdeburg-Sülzetal. The single-roof solar system measures 10.27 MWp CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY As such, the Group targets, as part of its ESG strategy, to: — Multiply its installed capacity of on-site renewable energy by , compared to and offer the energy generated preferably to tenants at attractive terms; — Source % electricity from renewable sources for those assets the Group is in control; and — Intensify the green lease campaign with older lease contracts being adjusted to the version of the green lease contract (requiring green electricity procurement). The share of renewable electricity in the overall tenant electricity consumption was % in and % in . Including the self-consumption PV pipeline projects the share of renewable electricity consumption in would increase to %. The tenant portfolio will gradually tran- sition to green electricity procurement at the latest upon the inclusion of the enhanced green lease clause at contract renewal. Production of renewable energy Since , the Group has been rolling out a solar photovoltaic installation program across its port- folio to generate electricity on site. The installed capacity of the Group’s systems has continued to increase. In , new solar panels were installed across the portfolio. In total, there are solar panel installations operational across the portfolio. The total installed renewable energy capacity of the Group’s assets in is . MWp (compared to . MWp at Dec ) with a further projects with a power of . MWp under construction and projects, with . MWp power, in pipeline projects. The renewable electricity produced by the Group is either self-consumed to meet our tenant’s energy needs or sold to the grid. In FY, the total solar energy production equalled % of total electricity consumed but once the photovoltaic projects currently under con- struction are fully operational the solar power production capacity will equal % of total electricity consumption. Once the target of PV projects is considered the additional renewable energy gen- erated equals % of total electricity consumed. This would in theory mean that VGP should be able to operate all tenants at % renewable electricity however due to discrepancy in time (when solar power is generated vs when tenants consume energy) and location (some parks have more photovoltaic installation than needed for their tenant consumption, others less) the dependency on external renewable energy delivery contracts will remain imperative. Furthermore, due to con- tractual obligations (some tenants may prefer to continue to use an existing grey-energy providing utility) the Group within its portfolio is expected to continue to consume grey energy for the fore- seeable future, with on-site produced renewable energy sold into the grid instead. The total on site production of renewable electricity at the Group’s assets and breakdown between energy sold and self-consumed is as follows: Includes the envisaged production of VGP Park Moerdijk which has been sold after YE Renewable energy produced as % of total electricity consumption Renewable energy production (GWh) -120 -100 -80 -70 -60 -40 0 -20 2020 2021A 2022A 2023A B C D 2021 2022 2023 2023 incl. U/C projects 2023 incl. pipeline 1 Target 0 50 100 150 200 250 300 B Annualised production of assets operational and under construction C Annualised production of assets operational under construction and in pipeline D Annualised production based on 300 MWp 2025 target Self consumption Grid injection Total Electricity consumption all tenants FY2023 PAGE VGP NV ANNUAL REPORT COMMITMENTS Renewable energy production (MWh) Self-consumption Grid injection Total 2021A 3,646 20,510 24,156 2022A 3,858 23,753 27,611 2023A 4,539 46,173 50,712 Annualized production of assets operational and under construction 51,640 101,016 152,656 Annualized production including projects in pipeline 62,039 183,319 245,358 Annualized production based on 300 MWp 2025 target 260,000 PV roll out (KWp) Country Existing UC Pipeline Sub-total Austria 0.0 0.0 2.6 2.6 Croatia 0.0 0.0 0.0 0.0 Czech Republic 0.0 3.8 0.4 4.2 France 0.0 0.0 12.1 12.1 Germany 78.1 58.0 55.1 191.3 Hungary 0.0 0.0 0.6 0.6 Italy 0.5 5.1 9.7 15.3 Latvia 0.0 0.0 0.5 0.5 Netherlands 22.5 0.0 9.0 31.5 Portugal 0.0 0.0 0.2 0.2 Romania 0.1 2.0 1.6 3.7 Serbia 0.0 0.0 1.2 1.2 Slovakia 0.0 0.0 1.5 1.5 Spain 0.6 0.0 5.1 5.7 Total 101.8 69.0 99.7 270.5 .. Decarbonisation scenarios (CRREM) The Carbon Risk Real Estate Monitor (CRREM), an EU-funded research project established in , is helping real estate owners like VGP understand the financial risks to our portfolio in relation to various decarbonisation scenarios. Since , VGP has conducted an annual CRREM analysis of its entire portfolio in order to understand stranding profile of the various sub-portfolios across countries and analyse improvements scenarios, including energy efficiency operations, switch to electric heating (heat pumps) instead of gas-powered heating and optimisation of investments into renewable energy production facilities. The latest CRREM as conducted in was completed based on the following assumptions: — Results based on CRREM Tool v . (as published April ) — Results are based on actual energy consumption data of VGP portfolio over FY — For those assets energy consumption data is not available for full year the results are based on extrapolation — Extrapolations and GHG factors obtained limited assurance from auditor review — Buildings under construction have been excluded — Grid consumption and injection has been adjusted for current photovoltaic projects under construction and annualized contractually agreed renewable energy consumption by ten- ants based on the assumption that only % of energy can be provided for by photovoltaic (simultaneity analysis of production vs consumption) Based on the FY reported utility data only % of the portfolio is above the pathway with a projected stranding year of . If the planned photovoltaic roll-out is completed the portfolio, based on gross asset value, is majority .C-compliant until , with a GHG strand- ing year of . CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY ... CRREM retrofit and improvement actions Several portfolio improvements effect on the stranding year have been analysed further: — Since the Group invested significantly in energy saving LED lighting, heat pumps, mov- ing detectors and sun protection for offices and smart meters. — Since Jan , implementation of the green electricity contract for German assets sup- plied with green PPA for an estimated annual volume of GWh which is effective. — No more gas powered heating with effective refit of existing portfolio gas heating installa- tions (replaced with heat pumps): .C-pathway stranding year improves to — Green energy procurement requirement in new or renewed lease contracts: a majority of portfolio assets is .ºC-compliant until and GHG compliance improves to (no effect on energy intensity). The portfolio will gradually improve to this score over time as new contracts are signed or existing contracts are being renewed — Combination of all measures, results in a portfolio which is fully GHG .C-compliant CRREM– stranding year 2022 2023 GRESB submission (based on actual renewable energy production in reporting year) 2027 2029 Based on renewable energy contracted projects 2040 2033 1 Implementation of all retrofit and portfolio improvements actions 1.5C-compliant Improve buildings’ energy efficiency Since the Group invested significantly in energy saving LED lighting, heat pumps, mov- ing detectors and sun protection for offices and smart meters. These refurbishments and new investments in buildings have amounted to ca. € million in spending. These investments have resulted in energy consumption savings amounting to . GWh or . tCO. Avoided energy consumption and emissions 2023 Avoided energy consumption (MWh) 35,317 Emission factor (tCO2/MWh) 0.058 Avoided emissions (tCO2) 2,054 Since , the energy action plans are also integrated in the CRREM Group portfolio analy- sis. This allows the Group to benchmark and compare energy actions proposed by the Group’s countries and to allocate resources efficiently on the most impactful actions to reduce the energy impact and optimize the CRREM score of the portfolio. Year over year the score has been negatively impacted by a change in the CRREM Tool calculation method. The CRREM Tool version . (published April ; SBTi-aligned) no longer gives GHG stranding benefit to assets for excess renewable energy exported (instead of used for self-consumption) Once contracted renewable energy projects are developed, the VGP portfolio stranding year is expected to extend to . CRREM performance reflecting current PV projects in pipeline Average Portfolio GHG Intensity vs. Paris Targets (GHG Intensity [kgCO2e/m²/yr]) Portfolio GHG intensity with retrofits 1.5°C-target all GHG Target 0 5 10 15 20 25 30 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 PAGE VGP NV ANNUAL REPORT COMMITMENTS Heat pumps roll-out and retrofit The Group has implemented a new construction policy for heat pumps as standard means for heating (as opposed to gas powered heating) since the beginning of . As of today circa % of assets has heat pumps installed and circa three-quarter of the portfolio still use gas powered heating. For these assets to be converted to air heat pump based heating system atotal investment of circa € million would be required. Green energy procurement and VGP as regulated energy provider The Group is since January a regulated energy company in Germany. The Group is soon expected to receive a similar status in Romania. In these markets the Group will be able to use its own photovoltaic installations to supply green electricity to its assets, albeit applicable only for those assets where VGP is controlling the energy procurement or for those assets where tenants decide to participate. The implemented PPA in Germany results in effected assets becoming .C-compliant and the overall portfolio .C-pathway stranding year improving by circa years once all German assets (for which VGP delivers energy) are fully electricity provided for through the aforemen- tioned PPA. Furthermore, based on lease contracts expirations with renewals and new leases containing the Group green lease clause the overall portfolio will over time shift to only green energy procurement. The green lease clause and energy provider status have thus far not been required for capex investments although though require ongoing operational support by facil- ity– and renewable energy management. Improve EPC Class and align with near zero energy building (NZEB) standards For new construction the Group aims to comply with the EU Taxonomy requirements for energy performance. The EU Taxonomy for the construction, acquisition and ownership of buildings refers to Energy Performance Certificates (EPCs) as per the Energy Performance of Buildings Directive (EPBD). For the reporting of alignment of assets to EU Taxonomy, it is needed to refer to the near zero energy building (NZEB) standards and EPC schemes based on the divergent primate energy demand (PEB) thresholds as determined by each of the country’s where those assets are located. For new buildings (or buildings constructed since Jan ), the criterium is to build assets with an PEB of NZEB minus % and with an EPC in place. For buildings built before Dec the building needs to have an EPC Class A or % top performing building. In case of a substantial con- tribution to climate change adaptation or a circular economy an asset needs to comply with the Do No Significant Harm to climate change mitigation by PED performance of NZEB and for buildings built before December with an EPC Class C minimum or % top-performing buildings. With regards to the existing portfolio, based on the Group’s pipeline PV projects the majority of the EPC ratings of our portfolio will improve to either EPC A or EPC B. For those assets for which this is not the case further investments in energy efficiency and renewable energy production will be required. Based on portfolio assessment an investment of circa € million will be required to achieve a minimal EPC B rating in all buildings. As for most of these assets the final improve- ment could be achieved through additional PV investments this could also be economically yield- ing investments. For more general information on the implementation of EU Taxonomy and the EPBD please refer to the factsheet available on www.epra.com. No substantial contribution criteria for a circular economy for the acquisition and ownership of buildings https://www.epra.com/application/files////EPRA__WGBC_Factsheets_on_the_EU_Taxonomy.pdf GHG Intensity (kgCO2e/m²/yr) 0 5 10 15 20 25 30 Portfolio GHG intensity without retrofits Portfolio GHG intensity with retrofits 1.5°C-target all GHG Target Including green lease clause implementation 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY .. Water management The non-financial risk assessment pointed out that water is not a key environmental issue for VGP. Indeed, the tenants within the Group’s portfolio are not considered as being significant water consumers. Nevertheless, VGP acknowledges water as a fundamental resource and upholds the right for everyone to have fair and equitable access to it. Water consumption at the Group’s assets is driven by the occupational tenant usage of the asset and predominantly driven by the number of employees. For further information on the split of the water consumption per tenant segment type, please refer to table “Utility consumption in portfolio (split by segmentation according to GRESB)” in the section ... Energy consumption – portfolio of this report. Water consumption within the portfolio is concentrated to a number of large consumers with the top tenants accounting for % of total water consumption, typically related to manufac- turing and warehouses using cooling facilities. Whilst focus on water consumption improve- ment at these sites will be most effective, reducing water consumption is an operational target at all parks as part of the Group’s resource efficiency policy and is tracked and managed at asset and Group levels. Based on environmental best practice, the Group is taking active steps to limit water consumption, reduce water waste and maintain water quality. Special efforts are made to install water-efficient equipment. The group is in the process of analysing the implementing of a real-time monitoring tool that allows to detect leaks so to ensure these can be repaired rapidly. Water monitoring is a key focus for the Group, which also started rolling out water connected submeters in new developments. Additionally, aerators and other low-flowrates water features have been implemented in assets in accordance to BREEAM requirements. As a result, water and cost savings were achieved. In addition to this impact, in order to avoid irrigation need as much as possible drought tolerant landscaping is implemented both in terms of flora selection as well as water retention ability. Since circa € million was invested in water-saving measures. For new developments and refurbishments, the following standards are used across the portfolio: — wash hand basin taps and kitchen taps have a maximum water flow of litres/min; — showers have a maximum waterflow of litres/min; — WCs have a full flush volume of a maximum average flush volume of . litres; — Urinals use a maximum of litres/bowl/hour. Flushing urinals have a maximum full flush volume of litre To optimise water use and leverage-associated cost savings, the Group also prioritises the use of non-drinkable or reused water over drinkable water wherever possible. In , in total , m of rainwater could be collected on site for cleaning and for watering green spaces. At existing parks, the Group relies on a close cooperation with tenants to reduce water con- sumption. Green leases (see section .. Green leases and tenant commitments) and tenants’ discussions on site are used to help raise awareness among tenants about water use and to get them on board with water management. In , water consumption in our parks, including water used for vegetation, increased by % compared with due to growth of the overall portfolio and more rainwater being retained and used in our parks. On a like-for-like basis grid water usage decreased year-over- year by % and grid water usage intensity decreased by % year-over-year, reflecting the effect of more water saving measures (in compliance with EU Taxonomy “Do No Significant Harm”– requirements) being deployed at new developments and refurbishments. Water (cubic metrics) FY 2020 FY 2021 FY 2022 FY 2023 Change YoY Average grid water consumption (litre/m²) 93.0 82.8 83.6 78.9 (6)% Total water consumed from water grid 179,917 256,000 365,000 385,766 5% Total water collected and re-used on site n/a n/a 105,000 180,800 72% Total water consumed/collected 179,917 256,000 470,000 566,566 21% Like-for-Like comparison– 2023/2022 255,163 221,793 (13)% PAGE VGP NV ANNUAL REPORT COMMITMENTS .. Waste management VGP’s waste management approach is designed to maximise recycling and minimise disposal to landfill. In order to manage waste most effectively the Group has tailored its approach and waste management targets to the three main waste generating activities, own operations and offices, at construction sites and in the standing asset building portfolio. ... Waste management of own operations Waste: own organisation Waste (metric tonnes) FY 2022 FY 2023 Comment Total waste recycled/reused 1.4 1.2 (1) Total waste disposed 0.5 0.6 (2) Total waste 1.9 1.9 () Waste emissions for FY are mainly calculated based on an extrapolation of data from offices with known data () Total waste emissions are . tCOe, or ,% of total emissions. % of waste emissions result from residual waste, paper waste caused % of waste emissions and % of waste generation Since , the Group has a Green Office Policy in place which is focused on waste reduc- tion opportunities based on the revised EU Waste Framework Directive (Directive //EC) which sets out five steps for dealing with waste, ranked according to environmental impact– the “waste hierarchy”– with a first and most important focus on prevention and secondly pre- pare for re-use. By implementing these strategies the Group is able to reduce waste of its office operations. Since the implementation of the policy the amount of printed documents has signif- icantly reduced, whilst paper was previously predominantly recycled, the overall waste reduc- tion has reduced the waste production intensity significantly in-line with the waste hierarchy. The amount of waste not recovered is including residual waste for which the incineration or recycling process has not been confirmed, as a result the current number is likely conservative. Furthermore, precise data collection will improve this metric further. PREVENTION If you can’t prevent it then… DISPOSAL Landfill if no alternative available RECOVER OTHER VALUE If you can’t recover value (e.g. energy), then… PREPARE FOR RE-USE If you can’t prepare for re-use, then… RECYCLE If you can’t recycle, then… CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY ... Waste management at construction sites While waste generated across our own offices (where we have control) is monitored, tracked and reported (see table below), the majority of our waste is created as a result of our construc- tion and demolition projects. We aim for % of non-hazardous construction and demolition waste generated on construction site to be prepared for reuse, recycling and other material recovery, including backfilling operations using waste to substitute other materials, in accord- ance with the waste hierarchy and the EU Construction and Demolition Waste Management Protocol. As such, for demolition waste, which makes up the bulk of our total waste, we re-use as much as possible on-site to avoid the carbon emissions related to transportation of waste off-site and the import of new materials from elsewhere. We undertake pre-demolition audits to identify waste materials taking into consideration the quantity and quality of waste to be re-used on site as aggregate. We also re-use on site where materials are non-hazardous and will not have a detrimental effect on the environment. Hazardous waste is treated differently and is not included within these figures. Hazardous waste is dealt with in the appropriate manner, fully in line with relevant regulation. Waste generation construction sites (metric tons) FY 2023 Reported construction waste 5,519 Hazardous waste 188 Recycled waste 4,428 Recycled waste as percentage of total construction waste 80.2% For more information on the compliance with the % recovery target per construction site per EU Taxonomy requirements please refer to section .... Transition to a circular economy in construction projects. Demolition works at VGP Park La Naval, Spain PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Waste management of standing building portfolio The Group has a limited impact on the total volume of waste generated in existing parks. Never- theless, the Group is committed to waste management efficiency measures, such as increasing waste sorting, and raising awareness among tenants, as well as incentivising them to reduce the amount of waste disposed, and implementing innovative waste management solutions. Improving waste sorting in collaboration with tenants Suitable waste segregation facilities are in place in all assets and most assets are equipped with specific sorting facilities and treatment solutions for organic waste, which represents a significant share of the total amount of waste generated by the Group. Tenants are informed and made aware of the Group’s waste management policies and of the importance of sorting waste. This is via, for example, tenants’ on-site discussions and guidelines reminding tenants of what to do with different types of waste. Both supplier purchasing contracts and tenant Green leases establish the minimum requirements to be met for waste sorting and recycling. Tenants are requested to share details of tonnages collected by type of waste and recycling percent- ages achieved. Tenant education includes delivering tenant-level waste sorting guidelines to the facility management’ teams, sharing best practices, highlighting the importance of properly sorting material, and outlining the legal requirements associated with the waste management programs. Waste: portfolio Waste (metric tonnes) FY 2023 Hazardous waste 809 Non-hazardous waste 1 30,204 Total waste produced 31,013 Like-for-like comparison 2022 base year 2022 2023 % Change YoY Hazardous waste 879 809 (8)% Non-hazardous waste 1,690 1,624 (4)% .. Develop connectivity and sustainable mobility As part of its ESG strategy, VGP aims at ensuring access to public transport and sustainable mobility for the tenants and their visitors of our buildings. In addition, the Group only allows the use of battery-powered vehicles or plug-in hybrid vehicles for its own staff with respect to car portfolio leased and own. This is a cornerstone of the plan to reduce Scope and emissions by % by from a baseline (see Section . Address climate change). To further raise awareness of our tenants with respect to the green transition, the Group has introduced a tar- get in of having % of parks equipped with EV charger units and to achieve the target of having % of Group assets offering sustainable means of transport. This engagement cas- cades down through the Group’s development pipeline, in which the Group in addition to the % public transport connectivity target (see section ... Connectivity to public transport for further details) aims for parks to offer facilities for pedestrian (sidewalks where applicable) and bicycle usage promotion (bicycle lanes and racks). See Section . Summary of the Group’s ESG achievements for a summary of the Group results against these strategic targets. By making these commitments, the Group is setting a long-term view on the evolution of mobility trends by working both on asset attractivity and actively encouraging new sustainable transport solu- tions and behaviours by the employees of our tenants. The Group aims to facilitate our tenants in their transition towards a green (forklift-) truck/van fleet by offering green electric and hydro- gen charging facilities and infrastructure at our park. In a pilot project was launched in Germany to offer EV charging facilities at the home of all VGP employees. The other countries within the Group will follow suit. FY 2022 FY 2023 Target % of parks with EV charging facilities 46% 59% 100% Number of associated parking spaces with EV charging 545 Waste emissions for FY are calculated based on an extrapolation of tenant disclosed data (data coverage FY and % respectively based on floor area) CORPORATE RESPONSIBILITY REPORT PAGE IMPROVE ECOEFFICIENCY ... Connectivity to public transport With regards to land selection criteria the Group is focusing on opportunities that are or will be well connected to public transport networks and are located close to major cities. FY 2022 FY 2023 % of parks with public transport accessible 95.8% 97.3% Target % of parks with public transport accessible 100% For the remaining parks adequate solutions are being sought. In addition, the design team usually consults with the local authority on the state of the local cycling network and how the new park development could improve bicycle usage of the park users. When appropriate, the design team consults with the local community in selecting and implementing additional solutions to enhance access to the local bicycle network. At year-end, .% of the Group’s projects are connected to public transport solutions. VGP Park Roosendaal, The Netherlands PAGE VGP NV ANNUAL REPORT COMMITMENTS . Protect and improve biodiversity In the existing parks a total of . million square meter of green surface is managed by VGP. The Group actively pro- tects and improves the biodiversity value of these green sur- faces specifically and its assets in general by assessing biodi- versity impacts and mitigation measures in accordance with BREEAM Excellent/DGNB Gold level standards, and by imple- menting biodiversity action plans based on the Group’s Biodi- versity Policy that account for unique local conditions. Ecol- ogists and landscape architects are involved in design and development activities to guide architects and developers on existing ecosystems and selecting the best strategy to protect local wildlife. In order to assert compliance with EU Taxonomy for land acquisition the Group has enhanced its due diligence require- ments. As a result, the Group predominantly focuses on brownfield development opportunities and aims to avoid new developments to be built on: — greenfield land of recognized high biodiversity value and land that serves as habitat for endangered species (flora and fauna) as listed on the European Red List or IUCN Red List — land matching the definition of protected forest as set out in the national law and used in the national greenhouse gas inventory As well as minimize: — the use of arable land and crop land with moderate to high level of soil fertility and moderate to high below ground biodiversity as referred to in the EU LUCAS survey In addition to enhancement of green areas existing in VGP Parks (in the course of ,additional trees were planted in existing VGP Parks and initiatives undertaken to protect and enhance biodiversity), in eight biotope areas have been created within our parks under construction to enhance or protect specific species and enhance overall local biodiversity, this brings the total biotope areas to . The total size of these biotopes, created within VGP Parks measure , m². .. Implementing Biophilic design Whilst individual biodiversity improvement measures within our parks are increasingly implemented either as part of the design phase or during ongoing retrofits of the green spaces, a distinguishing feature of biophilic design is its emphasis on the overall setting or habitat and not a single or isolated occurrence of nature. When taking into account an integrated design, the ecosystem performs at a level greater than the sum of its individual parts. .. Protection and restoration of biodiversity and ecosystems for development projects In addition to the biodiversity due diligence as part of the land acquisition, all development projects with a biodiversity value need to implement a biodiversity action plan. This action plan is always prepared by a qualified ecologist after the assess- ment of the characteristics of the local biodiversity. Such assessment needs to be completed in accordance with the Group’s Biodiversity Policy. Where an assessment has been carried out, the required mitigation and compensation meas- ures for protecting the environment are to be implemented. This assessment will help safeguard the Do No Significant Harm (DNSH) criterium under EU Taxonomy, and in cases of an substantial biotope investment assist in determining a potential significant contribution under the Taxonomy (of the biotope investment as a single measure). The purpose of project specific assessment is to first avoid and reduce all impacts of the project on the local nature, and second to implement on each project a list of Group recom- mendations like the use of environmentally certified materials or bird-friendly designs for the façades and biodiversity com- pensation zones and initiatives. The commitments and recommendations for the integration of biodiversity in development projects are integrated in the Group’s design process through the Sustainability Brief (see Section Project design and review stage in .. Design sus- tainable buildings). Additionally, for some projects a broader Environmental Impact Assessment is conducted, which includes an envi- ronmental/biodiversity component, as it is a prerequisite for obtaining a building permit and commercial planning permis- sion in some countries. A public consultation may also be car- ried out as part of this process. Biodiversity is also addressed by the development projects through the “Land Use and Ecology” section in the BREEAM certification and for all DGNB projects a biodiversity strat- egy is conducted. For example, the project VGP Park Laatzen, building A in Germany which achieved first of its kind DGNB Platinum certification achieved % of the credits of that section, through a number of biodiversity initiatives includ- ing for example through the support of habitats for birds and insects, and a rainwater retention basin providing biotope for toads and other reptiles. Biodiversity and ecosystems % of projects started in 2023 with an ecology plan 100% Target of projects to have an ecology plan 100% CORPORATE RESPONSIBILITY REPORT PAGE PROTECT AND IMPROVE BIODIVERSITY VGP Hungary looked to biophilic design principles to construct a tree- like installation covered in plants in the central area of new corporate offices in Budapest Detail from the new VGP Building Standard Details from VGP Park München with green roofs and green walls, as well as connecting green spaces and a significant biotope have been integrally designed PAGE VGP NV ANNUAL REPORT COMMITMENTS .. VGP biodiversity strategy and taxonomy for existing parks Although nearly all our parks are certified according to BREEAM or DGNB, which provides basic safeguards for res- toration and protection of biodiversity, the Group developed an additional ecosystem enhancement safety measure. The implementation of this measure is driven by: — the aim to align the portfolio with EU Taxonomy regulation, including the biodiversity and ecosystem protection crite- ria, as well as, — our continuous improvement philosophy within the scope of the Group’s Environmental Management System (which has been based on ISO standards), and — the Group’s Biodiversity assessment framework (see for more information the Group Biodiversity Policy available on the Group website ) As such additional priority improvement measures may be identified in existing portfolio and are already being imple- mented in three of the Group’s existing parks. For those parks, specific measures have been suggested for each based on local tailored ecology studies. This work is now underway in two of the three identified parks and works are expected to start in the third park in the course of . The aim is to increase the use of “green” spaces, either through enhancing existing green structures into biotopes or through enhancements such as green roofs, green walls, green parking lots. VGP biodiversity taxonomy for existing parks Less than 500 meters to natura2000 area and park adjacent to forest or asset location identified by municipality as of ecological importance Less than 1,000 meters to natura2000 site and adjacent to arable land but not recognized as of high biodiversity value Less than 500 meters to natura2000 site but plot itself only bounded by other semi-industrial sites Less than 1,000 meters to natura2000 site or adjacent to arable land but not recognized as of high biodiversity value Other Categorisation of biodiversity initiatives Combined identified initiatives achieve a substantial contribution under EU Taxonomy Biodiversity and ecosystems criterium Combined identified initiatives achieve DNSH under EU Taxonomy Biodiversity and ecosystems criterium Specific ecologically tailored measures have been taken in order to enhance local ecosystems based on a biotope Green roof or green façade Other significant ecological mitigation measures In , in existing VGP Parks , trees were planted to enhance biodiversity. See: https:/vgpparks.eu/media//vgp-biodiversity-strategy-a-en-k.pdf An example of an existing park which is being enhanced is VGP Park Gyor Beta. Previously identified through the Group’s biodiversity monitor as a park with an outsized potential for additional yielding biodiversity initiatives an ecology study conducted in identified several improvement measures which are currently being implemented to enhance and pro- tect the existing ecosystem particularly along the southern border of the park which is adjacent to natural territory. See the case study on the following page for additional information. The Group also works across its regions to raise awareness among its stakeholders and communities about the impor- tance of biodiversity. For example, in , through the VGP Foundation, the NABU campaign “Become an Insect Scout” during which nature enthusiasts and insect fans can apply for training in identification and ambassador role for insect care projects in the community. % of projects with meaningful biodiversity stakes implemented abiodiversity action plan 95.7% target % of projects with a high biodiversity stake implemented a biodiversity action plan 100.0% The score improved % year-over-year and the aim is to achieve a % score by the end of . Once a project has been built and delivered, the Group’s facility management team is responsible for maintaining and monitoring biodiversity. The ESG team monitors the application of the Group’s biodiver- sity policy and provides operating teams with the necessary support. VGP Foundation and NABU initiative started in 2022 “Become an Insect Scout” CORPORATE RESPONSIBILITY REPORT PAGE PROTECT AND IMPROVE BIODIVERSITY An example of an existing park (building B was delivered in ) which is being enhanced as a result of the implementation of the Group Biodiversity Policy is VGP Park Gyor Beta. Identified through the biodiversity monitor in early as a park with an outsized potential for additional yielding biodiversity initiatives an ecology study was commissioned and conducted in the same year which identified several improvement measures. These measures are currently being implemented to enhance and protect the existing ecosystem, particularly along the southern border of the park which is adjacent natural territory. Signs in the park will highlight the various ecosystems present, the initiatives taken to protect these and explain the relevance of such measures to any visitors. Case study– VGP Park Gyor Beta Existing pond at VGP Park Gyor Beta to be enhanced allowing several biodiversity improvements including artificial constructed brooding wall and ideal stepped lake bed and shoreline zonation Top – European toad (Bufo bufo) Bottom – European bee-eater (Merops apiaster) B – sandy oak-juniper C – “C”–type songbird box D – bat house F – swallow hotel G – frog garage H – amphibian and reptile protextion fence K – breeding wall for bank swallow and european bee-eater P – riparian semi natural shrub habitat V – kestrel nest boxes PAGE VGP NV ANNUAL REPORT COMMITMENTS . Empowering our workforce Key figures The group has employees ( FTE) as at December , and an average headcount of people ( FTE) for Employment by Country (People) 2022 2023 0 30 60 90 120 150 Germany Czech Republic Spain Romania Belgium Hungary Slovakia Italy Austria Luxembourg Portugal The Netherlands Latvia France Serbia Denmark Croatia CORPORATE RESPONSIBILITY REPORT PAGE EMPOWERING OUR WORKFORCE VGP Office Prague, Czech Republic Employment by Activity Employment by age Employment by duration of contract Employment by type of contract Technical/on site– 59% Commercial– 9% Support funcions– 32% Permanent Fixed term Part-time Full-time < 30 Years– 9% 30–50 Years– 70% > 50 Years– 21% 70 75 80 85 90 95 100 70 75 80 85 90 95 100 87.9% 89.4% 92.2% 86.8% 12.1% 10.6%7.8% 13.2% PAGE VGP NV ANNUAL REPORT COMMITMENTS .. Attracting the best talent VGP is committed to attracting the best talent by fostering professional development, promot- ing cross-functional and international mobility opportunities and offering exciting career oppor- tunities at all levels. As we continue to focus on recruiting the best candidates we have also intensified our efforts in recruiting experienced profiles. Bringing new sets of capabilities and diversifying our leadership and management styles are key success factors for the Group. The VGP corporate LinkedIn page allows us to maintain our strong digital presence, increase our brand awareness, and build stakeholder relationships. Its audience grew by , in to reach close to , followers by December . Besides stories on our business activi- ties, our parks, and our people, among others, here the Group showcases content to promote our technical expertise, to highlight our ESG initiatives, and to demonstrate the activities to sup- port the communities we are a part of. .. Talent management The Group is committed to offering employees a working environment that fosters diversity and equal opportunities to offer to each employee the experience needed to build an exciting career that creates value for the Group. Employees meet with their managers once a year for year-end evaluations, have the opportu- nity to provide and receive ongoing feedback throughout the year, which gives them the oppor- tunity to discuss their performance, objectives, career advancement and training needs. Career evolution in the Company is strongly linked with the Group’s competency model (see Section . ESG Strategy: Building Tomorrow Today Together). The Group aims to recognise the experience and expertise employees are developing in their position. Internal mobility between functions is encouraged and is conceived as a collaborative process involving employees, country management and Group functions. It gives employees a more in-depth understanding of the Group’s various activities and priorities. International mobility also helps employees to build and consolidate networks and share best practices among the various countries. Departures in by reason for departure Turnover 2019 2020 2021 2022 2023 Turnover rate 14% 10% 12% 13% 17% Voluntary turnover 8% 12% Unvoluntary Turnover 5% 5% New hires 2022 2023 New hire ratio 31% 19% The new hire and employee turnover rates are calculated based on the total employee numbers at the end of the reporting period and expressed as a percentage or ratio. In we had a regrettable voluntary turnover, as measured by voluntary departures during the reporting period as percentage of the number of permanent employees at the end of , of %. Our strong employee engagement survey results validate that our employees are moti- vated and engaged– see also section .. Diversity for a further explanation of the employee survey results. New Hires: Employment by duration of contract New Hires: Employment by type of contract Fixed Term Permanent Part-time Full-time 70 75 80 85 90 95 100 96% 4% 70 75 80 85 90 95 100 84% 16% CORPORATE RESPONSIBILITY REPORT PAGE EMPOWERING OUR WORKFORCE .. Training The year saw the inauguration of the VGP Academy, offering a stimulating learning envi- ronment through knowledge acquisition and skill development by offering business and soft skill training and resources available to all employees. In , in total employees followed a course organized by the VGP Academy. Groupwide and regional trainings are organised to embed the Group’s ESG strategy, ESG pro- cesses and to empower and encourage employees to deliver sustainable actions. The ESG ambition and related action plans are systematically introduced to newcomers in the “VGP new joiners” training. Dedicated technical training is offered to relevant staff members as required, covering topics such as sustainable consumption and the carbon footprint assess- ment methodology for development projects. Training materials related to new ESG topics are also drafted regularly, shared with the relevant teams, and made accessible on the Group’s training platform (for example “EU Taxonomy” and “Renewable Energy and Green Leases” guidelines). Also, for all technical managers across the Group, a symposium is held annually discuss- ing potential improvements to our building standard in order to enhance circularity, ways to enhance the energy transition (including less usage of gas for heating and offering EV chargers) and the implications of EU Taxonomy. Last year the Group reported that, in response to employee survey results, further enhancements to the training program were to be reviewed and accessibility of training to be broadened. As a result the VGP Academy was introduced in . Whilst employees did not yet have a full year benefit from the VGP Academy a notable improvement in appreciation for the Group’s training offering was noted to a total of .% of employees expressing to be satisfied with the Group’s training platform– up .% year-over-year. The Group’s employees are a critical pillar of the Group’s ESG strategy as it focuses on peo- ple topics including Diversity and Inclusion, and Employee Wellbeing. To embed the Group’s Diversity and Inclusion policy in the day to day operations, VGP has committed to % of Group employees to have participated in ESG training, in % of staff participated in such training. ESG training 2023 % of staff trained on ESG topics in 2023 45% % target of staff to be trained on ESG topics 100% .. Diversity Employment by gender 2022 2023 male 65% 63% female 35% 37% Employment by Age 2022 2023 <30 8.5% 9.0% 30–50 70.1% 70.0% >50 21.4% 21.0% Diversity (gender) 2022 2023 Board 60% 60% Management 19% 20% Company 35% 37% EU Women on Boards guideline 33% 33% Diversity (nationality) Nationalities working for VGP 25 Diversity (parental leave) % of VGP employees entitled to parental leave 100% Diversity and inclusion form a key part of the Group’s ESG strategy. With a representation in countries, VGP welcomes employees from diverse cultures and backgrounds to build suc- cessful and inclusive teams. PAGE VGP NV ANNUAL REPORT COMMITMENTS VGP commits to ensuring full equal opportunities (e.g. gender, nationality, sexual orientation) in HR practices and processes Group-wide. This target has been achieved as % of VGP countries ensure full equal opportunities in their HR practices and processes by having the VGP Equal Opportunity statement included in formalised HR policies relating to recruitment practices, compensation & benefits, talent review and learning & development. The VGP Equal Opportunities statement ensures that HR policy and processes are applied without discrimina- tion on the basis of race, colour, religion, sex, sexual orientation, gender identity, marital status, age, disability, national or ethnic origin, military service status, citizenship, or other protected characteristics. In order to measure employee perception of the diversity and inclusivity policy in a new Group Employee Survey was introduced including questions with a focus on Diversity and Inclusion. In , employees participated in the survey, representing % of the work- force, with % of respondents stating that VGP is a socially responsible company. The survey will be rolled out each year to check in with the employee community and help shape effective plans to create an even more inclusive working culture. VGP Diversity, Equality and Inclusion Strategy framework: In addition to the VGP Diversity Policy, since the Group has a Diversity, Equality and Inclu- sion Strategy to drive change within the organization and define actions across key focus areas. The Strategy document is available on VGP corporate governance web portal and the plan is for the actions to be further detailed over the coming period. ... Gender Pay Gap We believe that analysing diversity data and being transparent is an important step towards creating meaningful change. This is why we have decided to voluntarily publish our Gender Pay Gap. In , our Gender Pay Gap for all employees at VGP was %. Gender Pay Gap 2022 2023 Pay Gap for VGP Group 42% 42% Like many other organizations, particularly in the property sector, the reason for our Gender Pay Gap is the fact that we have more men than women in senior roles. In VGP, our employees are paid equally for doing equivalent jobs across our business and our reported Pay Gap is a direct result of our employee profile and does not represent pay discrimination. A core element of our ESG strategy is to improve the diversity of our business. The new Diversity Strategy document as published last year will further help amplify the importance within our organisation at all levels of seniority. This is crucial for the enduring success of our business but should also be reflected in reducing the Pay Gap over time. .. Employee commitments and ESG ... Individual ESG objectives The Group has committed to % of employees having yearly individual ESG objectives to help make all employees accountable for the collective success of the ESG ambition. Appropriate initiatives and targets aligned with the Group’s ESG Strategy are being identified in close coop- eration with each country within the Group and functional departments: Technical, Commer- cial, Land Acquisition, Facility Management, Property and Asset Management, Finance, Mar- keting, Legal and Compliance. A toolkit with key examples of general and functional ESG targets is shared with VGP employees Group-wide. Our actions Building Tomorrow Today TogetherOur purpose 1. People and culture 3. Our leadership 4. Our suppliers 5. Our communities2. Recruitment and career progression A diverse and inclusive workplace where people can achieve their full potentialOur people Make a positive difference to colleagues, communities, our suppliers and clients by taking action to promote equality – considering all areas of diversity Our DEI strategy CORPORATE RESPONSIBILITY REPORT PAGE EMPOWERING OUR WORKFORCE Quantifiable ESG targets are included in the incentives of members of the Group’s manage- ment team. Further details are presented in the Group’s Corporate Remuneration Report. The incentive awards also include % of ESG-related performance conditions, for all eligible Group employees. Volunteering program The VGP Volunteering Program offers all employees the opportunity to dedicate at least one workday per year to support social initiatives developed by the Group including support for local people facing barriers to the job market or supporting local non-profits through VGP Com- munity Days and local partnership activities. Since , the Group has committed to % of Group employees taking part at least one day per year in the VGP Volunteering Program. The Group’s community-oriented activities in were focused on supporting the needs of local communities and events to support and enhance local biodiversity. More information on the results of these initiatives is included in Section . VGP in the community. ... Business travel The Group travel policy aims to reduce its associated carbon footprint. Employees are encour- aged to travel by train when possible and give preference to videoconferencing rather than physical meetings involving travel. The table below shows the CO2 emissions from employees’ business travel by train, plane and car journey. The indicator is given both as an absolute value and as the ratio between CO emissions from business travel and the average number of employees in . Data and meth- odology are verified by CO2Logic/Southpole and provided by referenced travel agencies for each country. In , the Group carbon emissions related to business travels continued to decrease, pre- dominantly due to more conscious travel movements overall. In addition, since , all new company vehicles must either be hybrid or electric. At the end of , % of the Group’s vehi- cle fleet was replaced by plug-in hybrid or fully-electric. We anticipate the percentage to grow significantly in as more cars come to their lease-end period. ... Green offices and working The Group has committed to % of VGP’s countries implementing Work Greener program captured in the VGP Green Offices and working guidelines. The VGP Green offices and working guidelines offer employees the work environment and tools to reduce the environmental impact of their day-to-day work. The program enables employees to make VGP offices more sustain- able and environmentally friendly, implementing eco-friendly initiatives such as tackling waste management, promoting responsible consumption, or sustainable mobility. Since , % of our countries delivered at least one Work Greener initiative. Initiatives from the program should help the Group with improved waste management, eco-friendly mobil- ity, better water- and energy efficiency, reducing paper waste and improving general awareness. Travel emissions (in tCOe) 0 200 400 600 800 1,000 0 0.5 1 1.5 2 2.5 3 Emissions from business travel per employee Emissions from business travel 647 2.7 542 1.8 861 2.3 682 1.8 PAGE VGP NV ANNUAL REPORT COMMITMENTS ... Well-being Employee well-being is a key part of the ESG strategy and Group HR strategy. VGP works to support a healthy working environment with a structured focus on health & well-being to help employees thrive. A gym membership roll-out was initiated in in response to employee requests. The Group’s Well-being framework is based on the WorldGBC’s Health and Wellbeing Framework. ... Healthy culture — Work-life balance: home/flexi working practices are in place in all countries, in addition to continued family-friendly policies. The topic of work-life balance is typically included in per- formance reviews to encourage conversations with managers; — In total employees participated in the version of the Employee Survey, which allowed all employees to easily give feedback on topics such as well-being support and improving ways of working. The survey will be conducted each year to help shape effective plans to create an even better working culture; — On the th of September , VGP organized a Family Day for its employees, their partners and children. On the warmest day of the year, people from all VGP countries gathered together at the Rennbahn site in Düsseldorf, Germany. Lots of different entertainment activ- ities were provided for young and old and all enjoyed a sumptuous BBQ. It was a successful day with an opportunity to get to know each other better, share stories and create new con- nections within the VGP Family. Spanish VGP Team CORPORATE RESPONSIBILITY REPORT PAGE EMPOWERING OUR WORKFORCE ... Healthy bodies — To encourage a healthy lifestyle, use of bicycles is encouraged, gym and sport memberships are sponsored and healthy food alternatives are offered in office canteen and kitchens (fruit free of charge) — Healthcare benefits: health insurance is offered to all employees — Green challenge week took place for the team in Portugal encouraging colleagues to take bicycle or walk to the office for the daily commute .. Occupational health and safety The Group pursued its compliance and HSE risk prevention training strategy in , including a focus on “HR toolbox” training. — Absenteeism is monitored; — Causes of work-related accidents are analysed and measures are taken to prevent them recurring. No loss time due to injuries was reported for VGP employees in . The Total Recordable Injury Frequency and Lost Time Injury Frequency Rate for contractors in was . and . respectively. Health and Safety– VGP Employees 2020 2021 2022 2023 Employees in VGP premises covered byVGP H&S policy 100% 100% 100% 100% Employee loss-time injury frequency rate 1 0 0 0 0 Employee total recordable injury frequency 1 0 0 0 0 Total number of hours worked c. 500,000 c. 600,000 c. 700,000 c. 750,000 Development projects– contractor controlled Number of contractor fatalities 0 0 1 contractor 1 contractor Number and rate lost time injury frequency rate 1 2 contractors 2 contractors 2 contractors 2 contractors Contractor loss-time injury frequency rate 1 n.a. n.a. 0.40 0.58 Total number of contractor hours worked c. 4.4 million c. 5.4 million c. 5.0 million c. 3.4 million Absenteeism 2023 Average absentee rate 2.99% Data coverage 2 81% .. Human rights and labour conditions VGP complies with the labour standards set by the International Labour Organization (“ILO”). The Group only operates in countries where social regulations are well developed through dem- ocratic frameworks. Internally, specific frameworks set up by the Group define and manage additional regulations that reinforce employee rights and strongly endorse respect and ethical conduct in business dealings (Code of Conduct, Anti-corruption program, etc.). Since , VGP has been a member of the UN’s Global Compact, which promotes ethical conduct and fundamental moral values in business. VGP strives to adopt, support and apply in its sphere of influence the ten principles of the Global Compact concerning human rights, labour, environment and anti-corruption. VGP’s commitment to adhere to the principles is laid down in the Group’s Code of Conduct. As of December , , % of employees were covered by a collective agreement. LTIFR: Lost-time injury frequency rate calibrated to one million hours; TRIF: total recordable injury frequency rates are standardised to , hours. As HR-policies are defined decentralized and on a country level– absentee rates are not reported for the entire group. Coverage was % based on EOP FTE counts. PAGE VGP NV ANNUAL REPORT COMMITMENTS . Sustainable Supply Chain Management CORPORATE RESPONSIBILITY REPORT PAGE SUSTAINABLE SUPPLY CHAIN MANAGEMENT The ESG strategy of the Group encompasses a much wider footprint than the Group itself. Being a substantial buyer, VGP is aware of the importance of driving industry standards and our ability to support by pushing for an evolution on the way we can drive suppliers and service providers toward more sus- tainable operations. Given the size and the geographical spread of the portfolio, the Group works with a large number of suppliers and contrac- tors, and ensures it is not exposed to the risk of depending on only a few strategic suppliers. In , the Group designed its Supplier Code of Conduct, followed by a mapping of ESG risks in its supply chain in . VGP became a signatory to the UN Global Compact in , thus committing to adopting, uphold- ing and enacting within its sphere of influence the ten univer- sally recognised principles relating to human rights, labour laws, environmental protection and anti-corruption. .. Purchasing mapping Purchases at VGP can be split into three categories: — Corporate overheads, including office management, busi- ness travel, consultancy and audit fees, corporate commu- nication and public relations costs, ICT and other admin- istrative costs. This covers all Group staff and country offices; — Facility Management costs, services provided to proper- ties for operations, such as maintenance, greening, energy and fluid provision, and marketing expenses (OPEX paid by the property owner and mostly passed onto tenants as ser- vice charges); and — Capitalised construction works invested in properties for three main purposes: new development or enhancement works, maintenance works or reletting works (CAPEX paid by the property owner); these include mainly purchases from contractors, fees for architects, designers and engi- neering firms, and insurance premiums. The varied nature of procurement and the diverse locations of the Group’s properties result in having most of the supply chain being local companies or subsidiaries that support the local economy. In addition, wherever possible, the purchasing policy favours local purchases in the catchment area of the Group’s assets in order to contribute to employment and local economic development. Purchases consist principally of OPEX and CAPEX for the operation and development of properties (overheads being a small part of the overall expenses). Facility management expenses are predominantly spent locally. OPEX and CAPEX costs mostly comprise labour-intensive services and to that extent are purchases that cannot be relocated. Capitalised construction works are non-recurring expenses depending on development activity. VGP Park Montijo, Portugal PAGE VGP NV ANNUAL REPORT COMMITMENTS .. Value chain due diligence/CSDDD Whilst the Corporate Sustainability Due Diligence Direc- tive (CSDDD/CSD) in its current form is not expected to be applicable to VGP due to the turnover and employee thresh- olds of companies in scope, the Group agrees to the princi- pals of what the Directive is aiming to achieve. As part of its aim to help the EU transition toward a more climate-neutral and green economy, the CSDDD would oblige companies to ensure their business models and strategies are compat- ible with the Paris Agreement. Additionally, companies that identify climate change as “a principal risk for, or a principal impact of,” their operations would have to include emissions reduction objectives in their business plans. For human rights due diligence, the CSDDD is expected to align with existing international standards to which the Group already complies. These include the UN’s Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enter- prises, and the OECD Due Diligence Guidance for Responsi- ble Business Conduct. The impact on Directors’ duty of care and remuneration will be further assessed. VGP is committed to protecting human rights, health, safety and the environment in its value chain. To strengthen its approach to responsible procurement, VGP established a map- ping of ESG-related risks in its supply chain in as reported in the Corporate Responsibility Report . This mapping allows VGP to understand and identify key risks related to sus- tainability in its upstream value chain and will allow the Group to define and implement action plans to manage these risks. .. Sustainable procurement VGP’s procurement strategy is designed to comply with the following rules: fairness, focus on quality, long-term partner- ships, reduced risk and the respect for applicable regula- tions. Moreover, the Group must honour the trust placed in it through property management contracts which aim to be transparent and cost-efficient. In addition to the principles and rules detailed in the Group procedures (and specifically in the Code of Conduct and the Anti Bribery and Anti-Corruption policy), all purchases must comply with the applicable local laws and regulations, espe- cially labour and environmental laws. To secure the proper application of these rules, in the case of a tender process and over the term of a contract, the sup- plier can contact the VGP Compliance Officer at any time to raise and submit a complaint, in accordance with the Group’s whistleblowing procedure. The VGP internal audit team can carry out regular audits across the Group to validate the thor- ough application of the Group’s procurement policy. The ESG approach is fully integrated at each step of the sup- plier procurement and referencing process of VGP. In the CDP Supplier Engagement Rating Report , VGP received an A- score for its supplier engagement, which is the leadership band higher than the Europe regional average (B-) and higher than the real estate sector average (B-). VGP Park Rodgau, Germany CORPORATE RESPONSIBILITY REPORT PAGE SUSTAINABLE SUPPLY CHAIN MANAGEMENT ... Selection of suppliers VGP chooses its contractors with great care and ensures they comply with its procurement policy. The Group-wide purchas- ing procedure guarantees an optimised price for the best level of service while securing an equal treatment among provid- ers/suppliers. It states that the suppliers of all goods and ser- vices must be selected fairly on the basis of objective, com- parable criteria and, when relevant, according to procedures relating to invitations to tender. Prospective business partners are screened in line with the onboarding procedure of the Group. These due diligences aim to assess the partner exposure to corruption risk, and identi- fying past international labour law or human rights breaches. Before a new service provider joins the approved list, a sub- stantial amount of information is required, including an over- view of its ESG strategy and practices. These environmental and social factors are of particular importance to the Group’s information in its choice of suppliers and form part of the cri- teria considered in tender processes. Each purchasing step is duly documented for traceability. Built around NetSuite, a web-based solution for purchasing management was launched in . It makes the procedures of VGP more robust, ensures the transparency required for all purchasing decisions, helps operational teams to select pro- viders, and facilitates the sharing of best practices and risks mitigation. This solution secures the administrative manage- ment for the whole purchasing cycle. ... Inclusion of ESG criteria in contractual clauses General purchasing conditions apply for all the countries in which VGP operates, although they vary, according to local requirements. A clause is also automatically included in these conditions, requiring suppliers to abide by the Group’s Code of Conduct provisions, including complying with applicable laws and regulation, prevention of all forms of corruption and discrimination, respect for human dignity and for employees’ work including a commitment to comply with the conventions of the International Labour Organisation (“ILO”) and with local employment legislation, preservation of the environment and reporting practices that are in breach of these principles using the contact procedure provided by the Group. Suppliers are required to comply with all relevant safety (we generally expect our general contractors and health-and- safety coordination partners to comply with ISO ), labour and environment (including but not restricted to waste and water management) legislation. We expect our general con- tractors and engineering partners to have a site environmental management accreditation (ISO ), including operating with best practices. Suppliers are required not to engage in any direct or indirect form of human trafficking, slavery, forced or involuntary labour. Compliance with ISO HSE and environmental management accreditation % of general contractors complying with ISO 45001– Safety Management System (projects under construction and delivered in 2023) 86% % of general contractors complying with ISO 14001– Environmental Management System (projects under construction and delivered in 2023) 86% % of HSE coordinators separately certified by ISO 45001 33% For projects under construction, the contracts signed with suppliers state that the Group and the companies it controls are committed to reducing the carbon footprint of their pro- jects, particularly during the development phase of the assets. A clause indicates that the construction companies involved in the Group’s projects must take the carbon impact into account when selecting construction techniques, mate- rials and technical solutions. After each project review and at all project stages, an arbitration regarding the carbon foot- print impact is to be taken for the proposed solution to be sub- mitted to the Group. The principles and action plans used to select the most sustainable materials with a reduced carbon content are specified in Section .. Construction materials. ... Raising awareness among existing suppliers To encourage existing suppliers and contractors to improve sustainable operating practices and use environmentally sus- tainable materials, the Group is sharing its ESG policy and related environmental and social targets with all its main ser- vice providers Group-wide through official communication letters. These included contents and ambitions of the Group ESG strategy and the announcement of further supplier engagement on ESG topics. With significant material suppli- ers in - a dialogue has been initiated to better under- stand the carbon footprint of materials usage and ways to further improve such footprint. The Group confirmed its will- ingness to work together with its supply chain also in its SBTi submission. Supplier active dialogue 2023 % of significant suppliers having to comply with supplier code of conduct 100% Significant suppliers engaged in ESG dialogue including carbon footprint improvement alternatives 68 (29%) The Group has also introduced initiatives concerning incen- tives for energy savings and waste segregation performance. These site-by-site practices challenge contractors and suppli- ers and serve as a basis to involve them in a process of contin- uous improvement for all assets. ... Improving the ESG performance of suppliers Increasingly supplier assessment of compliance with environ- mental clauses, management modes and service quality are performed on key services. The supplier assessment process allows for the evaluation of supplier compliance with contractual requirements and to anticipate tender needs. Data collected through these assess- ments, once consolidated, are also shared with contractors through project steering meetings. In addition, our procurement team supported by our head of product innovation reaches out to high-impact suppliers to discuss potential improvements to their ESG product footprint. PAGE VGP NV ANNUAL REPORT COMMITMENTS . VGP in the community This is the Hungarian team during their Community day CORPORATE RESPONSIBILITY REPORT PAGE VGP IN THE COMMUNITY Input from and consultation with local stakeholders shapes the design, purpose and tenant occupational mix of VGP Parks. The Group is committed to meeting the distinct inter- ests of each municipality and creating mutually beneficial out- comes including local connectivity, a compelling business mix and direct employment for local residents, and long-term project success. The Group’s economic success is based on a strong relation- ship with its stakeholders: tenants, customers, investors, local communities, suppliers and contractors, as well as employees. These strong relationships are critical to develop and operate Parks meeting stakeholders’ expectations in all respects. VGP is aware of the economic importance of its real estate prop- erties: in addition to being a contributor to urban planning for logistics and semi-industrial zones within cities, providing pub- lic facilities and developing technically advanced and sustain- able buildings and well connected places, VGP plays a key role in the local ecosystem as an economic driver: offering direct employment through construction and operational spending, indirect employment by tenants’ operations and network activ- ities, suppliers’ activities and local taxes. For development projects, a community engagement pro- gram is typically set up at the start of the design phase in order to collect feedback from council, neighbours or other local stakeholders. When construction activities begin the aim is for neighbours to be informed about the anticipated project and provide contact details in case of questions. In , % of development projects had a community engagement program. An example of a project is the annual book collection during the week of Sant Jordi in our Spanish parks. The Day of Books and Roses, April , is celebrated in Catalonia, Spain. On this day, love and literature are celebrated throughout Catalonia. Books and roses are exchanged. Our local facility & property management team organizes a collection of books across the tenants in our Spanish parks and delivers the books to associ- ations working with children. In total books were collected and donated. In the week before Christmas, they collected toys which were donated to several social organisations. .. Expand local economies Be it at a regional or country level, having a clear understand- ing of the economic and social impacts of its activities is key for the Group. VGP assesses the social and economic impact of each development project, which includes both the tempo- rary impacts of the construction phase, as well as the long- term contribution of the asset’s operations to the prosperity of local communities. Throughout the development, the Group not only generates construction-related jobs, but often also contributes to the development of transportation infrastruc- ture, dynamizing the communities in which it operates. Once completed, projects serve as catalysers of local employment (directly and indirectly), economic activity and tax income. The Group’s developments play a key role in revitalising and regenerating areas, attracting additional investment and pro- jects, and unlocking their growth potential. The assessment and enhancement of the socio- economic impact of develop- ment projects supports a constructive dialogue and collabora- tion with the local authorities. Once parks are in operation, the consideration of the socio-economic impact is fully integrated as part of the decision-making procedures; local companies are typically favoured for new space requirements; social and economic criteria are systematically considered and addressed when entering in relationships with stakeholders, particularly with the supply chain during the purchasing process. In 2023 a total of 345 books were collected across VGP Parks in Spain which were donated to children during La Diada de Sant Jordi, April 23 PAGE VGP NV ANNUAL REPORT COMMITMENTS .. VGP Community Day The VGP Community Day is designed to engage a large num- ber of employees in volunteering for a local charity, involving each of the countries where the Group operates. During , our local teams were very productive in organizing a VGP Community Day in their respective coun- tries. Atotal of % of Group employees delivered more than ,volunteering hours in . Some example initiatives: — Our Hungarian VGP team had a very productive and enriching Community Day at a foster home for vulnerable children, near the Budapest office. They repainted exist- ing benches and toys, created new Canadian benches and development toys on asphalt, cleaned the garden, and much more to brighten the environment and to give the children the best possible place to stay. — The entire team of VGP Austria spent a productive Com- munity Day at the forest area of the Heiligenkreuz Abbey, near Vienna. On an area of about , m, silver fir trees were planted by the team. This way, they contributed to the reforestation of the forest areas, with a lot of fun and commitment, and they were able to learn more about eco- logical forestry and forest management. .. VGP for Jobs Logistics real estate can have a significant positive impact on the surrounding community. VGP’s business strategy is to build, own and operate logis- tics facilities close to urban centres. This shortens delivery routes, reduces delivery times and reduces related emissions. VGP’s clients and our clients’ customers (both business and residential) benefit from next-day or even same-day delivery of the goods and services they need. Additional benefits include plentiful logistics jobs, shorter commute times for logistics workers, reclamation and remediation of abandoned or brown- field sites and even enhancement of local parks and transpor- tation. Based on our understanding of employment generated in our parks as of December circa , people go to work under VGP roofs each day (versus c., in Decem- ber and c., in December ). Based on Oxford Economics peer reports the likely direct and indirect impact is closer to , jobs. VGP also aims to help the local community benefit from such job creation, including through internship programs. One example is our participation to the #JovesFutur+ project of the Barça Foundation and Fundació “La Caixa”, a project for the inclusion of young people with less opportunities in the labour market. We gave the opportunity to its participants to visit our Spanish office and our VGP Park Llica d’Amunt. They could also meet our tenants, such as Coats, Districenter, Noa- tum Logistics, Bomi Group, Miscota and Moldstock,S.L. to learn more about the logistics sector, with the aim of prepar- ing them for the labour market. VGP Austria team during local Community Day 2023 planting trees in a forest near Vienna. CORPORATE RESPONSIBILITY REPORT PAGE VGP IN THE COMMUNITY ... Cities of Making– smaller business units diversify city manufacturing potential In line with EU Taxonomy minimum safeguards and OECD guidelines for Enterprises, VGP aims to encourage local capacity building through close cooperation with the local community, including business interests, as well as activities consistent with the need for sound commercial practice. A recent JPI Urban Europe study called “Cities of Making” iden- tified, among other “needs”, the “need” for city business parks to offer “a suitable mix of unit sizes for a diverse range of business types in according to the phase of their develop- ment” . Whereas urban logistics service sectors are typically dominated by multinational players, a high proportion of man- ufacturers are SME (Small and Medium-Sized Enterprises), businesses employing fewer than people, or micro-busi- nesses, employing fewer than . A significant number of these smaller businesses depend on the local market for a large part of their income and play an important role within their local communities. By offering smaller spaces available for rent in our parks, VGP can help support diversity in the local economic framework by supporting businesses of var- ious sizes and financial means to find their place. Our ability to offer smaller working units in our business parks within city limits, albeit at a small scale, will further support this effort. The Group has identified several VGP Parks under develop- ment as potential locations for such smaller units, amongst other in our parks in Wiesloch, Velizy and Ceske Budejovice. COM-BOOK_.pdf (citiesofmaking.com) Local students visiting our tenants in January 2023 at VGP Park Llica d’Amunt organized by VGP in cooperation with the JovesFutur+ project and Fundació “La Caixa” Ceske Budejovice (concept small business units) Snow leopard conservation through environmentally sustainable production of yak wool, Tajikistan, Kyrgyzstan, Mongolia CORPORATE RESPONSIBILITY REPORT PAGE VGP FOUNDATION . VGP Foundation The VGP Foundation strives to encourage nature conservation, have an impact on local com- munities through social projects, and conserve and protect European cultural heritage. During , additional projects were approved bringing the total to projects of which are cur- rently in execution and completed, with € . million in total committed or spent. The VGP Foundation has three focus areas: — Nature conservation: engaging in projects encouraging nature conservation, such as saving and creating permanent biotopes, protecting animals and their natural habitats, or educa- tional programmes raising public awareness about respective issues — Social projects: persuaded that access to education and fundamental care are crucial ingre- dients for their positive development, the VGP Foundation supports social projects around children from disadvantaged environments — Cultural heritage: the VGP Foundation supports projects which define local regional cultural heritage through various cultural domains such as architecture, music, fine art and other forums of cultural heritage An example of a project currently under execution and expected to be completed in March is Villages Go Green, a project encouraging nature protection at a grassroots level. The following page describes the project in more detail. Some examples of other projects currently under execution include: Finding new networks for the Eastern Imperial Eagle, Katra valley bio- diversity project in South Lithuania, Restoration of Transcarpathian Peatlands “Chorne Bagno”, Ukraine, Ukrainian Center in Brno, Czech Republic and a project conducted by Rewilding Europe in the Velebit mountains in Croatia. PAGE VGP NV ANNUAL REPORT COMMITMENTS Social centre BC Capelderij BC Capelderij– a safe and inviting place for young people who need to refuel on their life’s journey. Project coordination by NABU International TAJO: Talent workshops for disadvantaged youngsters TAJO is a non-profit initiative started in Ghent (Belgium) pro- moting a successful educational pathway for disadvantaged youngsters between the age of and years. New Networks for the Eastern Imperial Eagle Improving the conservation measures for the Eastern Impe- rial Eagle by transferring knowledge between existing con- servation projects and closing knowledge gaps. Black Rhino Reintroduction The population of black rhinoceros faced a dramatic decline of % in the second half of the th century. Classified as “critically endangered”, black rhinos are now being reintrodu- ced into the wild in order to avoid their extinction. VGP Foundation projects currently in execution For more information, please visit: www.vgp-foundation.eu/en/projects/ CORPORATE RESPONSIBILITY REPORT PAGE VGP FOUNDATION New International NABU Crane Centre NABU e.V. is aiming to establish a unique International Crane Centre in Germany to provide information on climate protec- tion and biodiversity. The New International Crane Centre will be a travel destination for all crane lovers in Europe. Stage fright A project to make a positive future story possible for under- privileged children who have difficulty finding their way to regular leisure activities or who have problems at school. Green educational bastion The project combines all three focus areas of the Foundation: nature conservation, cultural heritage and education. Bastion IX is an impressive piece of heritage with a piece of unique nature to be integrated into the curriculum of Oscar Romero- college in Dendermonde. Tibur Hof Renovating, bringing to modern ESG standards and occupati- onal use of this late-classicist listed mansion and grounds in Rumst, Belgium. Will house offices for VGP Foundation, offe- ring charitable amenities and head office of VGP NV. Peatland Restoration We are currently identifying a peatland plot suitable for restoration. Monitoring of peatland water levels in Germany Monitoring of peatland water levels as a basis for contro- lled rewetting of partially drained peatlands in the Rotenburg (Wümme) and Stade counties. PAGE VGP NV ANNUAL REPORT COMMITMENTS The Katra river valley Biodiversity The Lithuanian biodiversity spot for many rare birds, plants, and animals. Protection of bats in Transcarpathia region Protecting bats in church towers and public building attics as an affirmation of biodiversity values among religious and local communities. Reorganization of Retezat Biosphere Reserve Reorganization and adjustment of Retezat Biosphere Reserve, in order to fulfil the MAB criteria on Biosphere Reserves Ukrainian Center in Brno The Ukrainian Center in Brno offers social, psychological, and educational services for people from Ukraine seeking refuge from war, mostly women with children. Aristeu Bee project Protection of bees by placing beehives around VGP parks and donating the produced honey to children’s social canteens. Astart-up project to remove in the VGP park Lliça d’Amunt. CESAMM: Centre for Social Action and Music Making The centre is created as part of the Chair Jonet at the Univer- sity and University College of Ghent to develop research as well as to accompany musicians and social workers who pro- pose music practice as a possible way to navigate towards more attractive positions in society. CORPORATE RESPONSIBILITY REPORT PAGE VGP FOUNDATION Villages Go Green VGP Foundation encouraging nature protection at a grassroots level in local villages and schools in Cyprus In work continued on a project to expand public awareness of the importance of nature conser- vation in Cyprus. In March , ÇADER, a non-profit civil society organization in Northern Cyprus, successfully completed an Environmental Protection Project for Northern Cyprus, funded by the VGP Foundation and administrated by NABU International. From the gained experience emerged a new project Villages Go Green aiming to further encourage nature protection at a grassroots level and to expand the awareness-raising activities to more schools and other villages. Dionysos Now! The research, development, producing, performing and recording of the music of Adriaen Willaert – Flemish Polyphony. James by Junior Ballet Antwerp Junior Ballet Antwerp invests in young talent & forms a bridge between the end of studies and the start of a professional ballet career. Green financing of VGP Park Olomouc, Czech Republic the Group activities PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES . EU Taxonomy VGP team receiving EU Taxonomy verification at Expo Real 2023 CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY .. Context The Taxonomy Regulation introduces a unified classification system to determine the sustain- ability level of investments, in order to drive capital towards financing the EU environmental transition. The sustainability of a financial vehicle is determined by the share of sustainable economic activities it finances in its portfolio. Consequently, all economic activities listed in the scope of the Taxonomy Regulation (i.e. “eligible” activities) are to be screened for their environ- mental impacts, based on the environmental criteria (“Technical Screening Criteria”) defined in the Taxonomy Delegated Acts. To be considered environmentally sustainable, an economic activity has to substantially con- tribute to at least one out of the six following “environmental objectives”, while not causing harm to the others and complying with “minimal safeguards” related social and ethical standards: — Climate change mitigation; — Climate change adaptation; — The sustainable use and protection of water and marine resources; — The transition to a circular economy; — Pollution prevention and control; and — The protection and restoration of biodiversity and ecosystems. On June , the European Commission (EC) published The final Environmental Delegated Act, with that the technical screening criteria of all six environmental objectives of the Taxon- omy Regulation (“Environmental Delegated Act”) are defined. The Taxonomy Regulation repre- sents an important step towards the EU’s objective of becoming climate neutral by . The real estate sector is considered eligible to the Taxonomy of these environmental objec- tives. This means that the real estate sector, which plays a vital part in the economy, also has a key role to play in the transition towards a low carbon and climate resilient future. .. VGP share of eligible activities As a real estate player, VGP is committed to meeting the requirements set by this new Taxonomy Regulation and improving its performance in the coming years to contribute to the broader EU environmental transition. As a developer and operator of assets, VGP’s main eligible activities can be split in the following categories: — .: Construction of new buildings: buildings that VGP develops. Example: GEROBK– B pro- ject which VGP developed in VGP Park Oberkrämer, Germany; — .: Renovation of existing buildings: buildings that VGP redevelops exceeding “major reno- vation” thresholds according to local building regulations implementing Directive // EU (works amounting to at least % of total asset value– excluding land– or affecting over % of the surface of the building envelope). Example: none today; and — .: Acquisition and ownership of buildings: buildings that VGP owns and operates for its own account or on behalf of the joint ventures, including those under development or rede- velopment that do not exceed “major renovation” thresholds. Example: The building GER- FRA-A in VGP Park Frankenthal, Germany, owned by the Rheingold Joint Venture. In addition to the above categories, VGP purchases equipment and services relating to the fol- lowing categories, which enable its activities to reduce their GHG emissions: — .: Installation, maintenance and repair of energy efficiency equipment; — .: Installation, maintenance and repair of charging stations for electric vehicles in build- ings (and parking spaces attached to buildings); — .: Installation, maintenance and repair of instruments and devices for measuring, regula- tion and controlling energy performance of buildings; and — .: Installation, maintenance and repair of renewable energy technologies. These activities, qualified as “individual measures” are further described in the paragraph “Indi- vidual measures” of section .. VGP Share of aligned activities. However, revenues from the sale of (green) electricity to end-customers is not covered by the EU Taxonomy. The Commis- sion Delegated Regulation (EU) / of July , supplementing the Taxonomy Regu- lation specifies the scope, methodology and disclosure requirements for financial and non-fi- nancial undertakings concerning the proportion of environmentally sustainable economic activities in their business, investments or lending activities. The work done by VGP to establish its eligibility and alignment KPIs is based on this regulation, and the associated methodology is presented hereafter. In addition to the regulatory review performed by the statutory auditors of VGP’s financial disclosure, some key assumptions in relation to the Group’s EU Taxonomy assessment have been submitted by VGP to the independent third party for examination on a voluntary basis in (eligibility) and in (alignment). PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES .. VGP share of aligned activities As the first step of the Taxonomy application, companies are to determine which of their activi- ties are “eligible”, i.e. covered by the Taxonomy Delegated Acts. Three KPIs are to be disclosed to that end: — the share of eligible activities in the company’s Revenues, — Capital expenditures (“CAPEX”) and — Operational expenditures (“OPEX”) in alignment with the Group’s reported Consolidated Income Statement and Balance sheet and, as an additional reference, VGP also publishes the same metrics based on the proportional con- solidated balance sheet. Eligible activities based on Group’s reported IFRS Consolidated Income Statement and Balance sheet Revenues (€ ’000) 31.12.2023 Eligible activities Non-eligible activities Total Gross rental income 64,642 — 64,642 Service charge income 17,794 — 17,794 Property and facility management income 22,513 — 22,513 Property development income 4,412 — 4,412 Renewable Energy income 4,361 — 4,361 Total reported revenue 113,722 — 113,722 Capital Expenditure (“CAPEX”) (€ 000) 31.12.2023 Eligible activities Non-eligible activities Total CAPEX on investment properties 692,859 — 692,859 Investments in PPE (tangible assets) 32,955 1,191 34,146 CAPEX on intangible assets — — — Total CAPEX assessed for EU Taxonomy alignment 725,814 1,191 727,005 Operating Expenditure (“OPEX”) (€ 000) 31.12.2023 Eligible activities Non-eligible activities Total Net property operating expenses minus service charge income 23,328 — 23,328 Total OPEX assessed for EU Taxonomy alignment 23,328 — 23,328 Eligible activities based on Group’s proportionally Consolidated Income Statement and Balance sheet Revenues (€ 000) 31.12.2023 Eligible activities Non-eligible activities Total Gross rental income 166,715 — 166,715 Service charge income 41,194 — 41,194 Property and facility management income 22,513 — 22,513 Property development income 4,412 — 4,412 Renewable Energy income 4,361 — 4,361 Total reported revenue 239,195 — 239,195 Capital Expenditure (“CAPEX”) (€ 000) 31.12.2023 Eligible activities Non-eligible activities Total CAPEX on investment properties 692,859 — 692,859 Investments in PPE (tangible assets) 32,955 1,191 34,146 CAPEX on intangible assets — — — Total CAPEX assessed for EU Taxonomy alignment 725,814 1,191 727,005 CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY Operating Expenditure (“OPEX”) (€ 000) 31.12.2023 Eligible activities Non-eligible activities Total Net property operating expenses minus service charge income 57,224 — 57,224 Total OPEX assessed for EU Taxonomy alignment 57,224 — 57,224 The change in the share of eligible activities between (figures published in VGP’s Corporate Responsibility Report) and is explained by the following factors: — For eligible revenues: year over year increase driven by increase in total gross revenue growth of the Group (€. million vs €. million over FY); and — For eligible CAPEX: decrease driven by lower capital expenditure (€ million vs € mil- lion over FY ) and €. million non-eligible expenditure (vs €. million over FY ). — For eligible Operating Expenditure: to the reported net operating expenses service change income has been added back .. Methodology of KPI calculation The Commission Delegated Regulation (EU) / of July supplementing the Taxon- omy Regulation specifies the content, methodology and presentation of information to be dis- closed by financial and non-financial undertakings concerning the proportion of environmen- tally sustainable economic activities in their business, investments or lending activities. The preliminary work done by VGP to establish its eligibility KPIs was based on this regulation, the methodology is presented in this section. Allocation rules to the denominators — As defined in the aforementioned Delegated Regulation, total revenues and total CAPEX have been determined in accordance with IFRS accounting standards applied to VGP activ- ities and in line with financial statements: — Total revenues = gross rental income + service charge income + property and facility management income + property development income + renewable energy income; — Total CAPEX = CAPEX on investment properties + CAPEX on tangible assets + CAPEX on intangible assets; and — Only fully consolidated companies are included in the scope, and KPIs are reported on IFRS bases (not under proportionate consolidation) — The Delegated Regulation requires reported OPEX in the denominator to be limited to costs related to building renovation, maintenance and repair, short-term lease, and research and development. VGP’s OPEX are based on the Net property operating expenses. Allocation rules to the numerators: determining eligible activities — To determine the eligible share of Revenues (numerator), a screening of VGP revenue cat- egories was performed according to the Delegated Acts’ qualitative definitions of activi- ties covered: among the revenue categories listed above all are considered eligible to the Taxonomy. — To determine the eligible share of CAPEX (numerator), a screening of VGP’s investment cat- egories was performed according to the Delegated Acts’ qualitative definitions of activi- ties covered: among the investment categories listed above, CAPEX on investment proper- ties and CAPEX on renewable energy technical installations are considered eligible. Other equipment, furniture and intangible assets are excluded from the eligibility scope. — The eligible share of OPEX (numerator) is considered to cover the same scope of OPEX cat- egories as for the OPEX denominator, these being specifically listed in the Delegated Regu- lation scoping the expenses to consider. — The last step for calculating the Revenues, CAPEX and OPEX numerators was to identify, among all VGP activities, asset types or legal entities that would not be considered in the Delegated Acts’ scopes. A preliminary screening of all VGP entities based on NACE codes, an analysis of specific business lines has been performed. As a conclusion of this analysis, a conservative approach was taken, deciding to include all of VGP activities in the eligibility numerators. .. VGP share of aligned activities The second part of the Taxonomy application consists of the screening and activities. Three KPIs are to be disclosed to that end: the share of aligned activities in the company’s Revenues, CAPEX and OPEX. Financial year corresponds to the first year of application for which VGP reports alignment figures. PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES ... Results of VGP’s share of aligned activities Taxonomy alignment figures calculated in accordance with the templates set by the European Commission: based on total activity (including non-eligible activities) and including service charge income lines, in compliance with the IFRS accounting standards, are presented in sec- tion .. “VGP Share of aligned activities”– European Commission reporting templates, given their size and complexity. Taxonomy alignment figures presented in the summary table below have been calculated on the basis of eligible activities only, presented in section .. VGP share of eligible activities. Two consolidation methodologies have been applied: assets consolidated in compliance with the IFRS accounting standards using the equity method, and assets consolidated in the propor- tionate methodology including also joint-controlled entities, in order to valorise the alignment of assets in VGP’s portfolio that are not accounted for in the IFRS methodology as well. In this spe- cific table, revenue lines corresponding to charges reinvoiced to the tenants (service charges income) have been included for numerator and denominator, so the total reported revenue cor- responds to the total reported revenue in the Group’s income statement (see Notes to and form- ing part of the financial statements). For OPEX the service charge income/expenses have been added to the reported Net property operating expenses from the Group’s income statement. All VGP activities aligned presented here below contribute substantially to the objective of climate change mitigation. VGP activity (Taxonomy code) Alignment figures (among eligible activities) to the consolidated IFRS accounts Alignment figures (among eligible activities) to the proportionally consolidated accounts % Revenue % CAPEX % OPEX % Revenue % CAPEX % OPEX Standing assets (7.7) 0.9% n/a 0.0% 3.7% n/a 4.4% Construction of new buildings (7.1) 0.0% 0.1% n/a 0.2% 0.1% 0.2% Major renovations (7.2) n/a n/a n/a n/a n/a n/a Developments for third parties (7.1) 0.0% 0.0% n/a 0.0% 0.0% n/a Individual measures (7.3 to 7.6) 0.1% 0.3% 0.0% 0.1% 0.3% 0.0% Total 1.0% 0.5% 0.0% 4.0% 0.5% 4.6% Alignment figures show that — on a consolidated basis, VGP has .% of its revenues, .% of its CAPEX and % of its OPEX considered as aligned with the EU Taxonomy environmental objectives; — on a proportional basis, VGP has .% of its revenues, .% of its CAPEX and .% of its CAPEX considered as aligned with the EU Taxonomy environmental objectives. is the first year the Group is applying this test. VGP’s CAPEX alignment share is mainly driven by its development projects, of the projects currently under construction or % are under review for EU Taxonomy alignment (of the projects under construction at Dec ), a further projects due to be started up are also under review for alignment. The final alignment confirmation of the project will only be confirmed once the project works are completed. Gen- erally, all development projects in VGP’s pipeline are managed towards contribution to climate change mitigation with regard to Taxonomy criteria. Whilst photovoltaic projects can generally be considered as contributing to climate change mitigation, for one photovoltaic project the contribution, DNSH and safeguard criteria were confirmed adding to the Individual measures category (% of total capital expenditure on photovoltaic projects in ). VGP’s Revenues alignment share is predominantly driven by the standing assets. .% of gross rental revenues and .% of proportional gross revenues (including share of joint ventures) are aligned with the climate change mitigation objective. Nevertheless, the Taxonomy alignment figures need to be analysed carefully in light of the applicable alignment criteria and do not necessarily reflect the absolute environmental performance of VGP’s portfolio. For example, in terms of energy efficiency performance, which is the main criteria for analysing the substantial contribution of standing assets to climate change mitigation according to the Taxonomy regula- tion, it is important to note that many assets that are reported as not aligned are effectively per- forming better than some assets which are reported as aligned. This is due to the fact that the assessment of alignment is to be based on relative comparisons to local regulations and bench- marks, which are more stringent in some countries than in others, rather than on absolute terms of performance values. More information on the translation of the Taxonomy screening criteria to VGP’s portfolio and its limitations is given in the next section. CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY ... Environmental technical screening criteria The Annexes I and II to the Commission Delegated Regulation (EU) / of June, supplementing the Taxonomy Regulation lay down the environmental Technical Screening Criteria (“TSC”) to be complied with for each eligible activity to be considered aligned with: — Climate Change Mitigation (Objective ), and — Climate Change Adaptation (Objective ). The final Environmental Delegated Act, (EU) / and (EU) / define the TSC of the four other environmen- tal objectives of the Taxonomy Regulation, namely: — Sustainable use and protection of water and marine resources (objective ); — Transition to a circular economy (Objective ); — Pollution prevention and control (Objective ), and — Protection and restoration of biodiversity and ecosystems (Objective ). These criteria are twofold: criteria for checking the substantial contribution of activities to each environmental objective, and criteria for making sure these activities do no significant harm to all the other environmental objectives. Since the Delegated Acts have been published, VGP teams have worked on translating the regulatory criteria into appli- cable elements for its own operations across the countries of operation (through the initiation of pilot projects in all coun- tries of operation). Taxonomy-eligible activities cover a very broad scope of VGP activities, but this does not presume the relevance or practicability of the TSC to be applied to all these activities. For example, many of them cannot be screened based on the current published TSC without having recourse to additional information sources (local regulation, industry benchmarks from sectorial private organisations, …) or using proxies. Many examples of this situation can be given particularly due to the lack of availability of some standard elements mentioned by the TSC, such as locally endorsed benchmarks to determine the top % of the building stock for commercial properties, and sectorial benchmarks. Below is a summary of the TSC criteria for substantial con- tribution applied by VGP for each category of its eligible activ- ities, across all its portfolio based on the EPRA Guide for EU Taxonomy : EU Taxonomy Alignment in Listed Real Estate (epra.com) Key activities of the TSC for Construction and Real Estate Note 3 Buying real estate and exercising ownership of that real estate “.. Professional services related to energy performance of buildings” is also considered relevant for Real Estate from a market perspective, though it is not directly included under the related section. Note 2 Construction and civil engineering works or preparation thereof Note 1 Development of building projects for residential and non-residential buildings by bringing together financial, technical and physical means to achieve the building projects for later sale and the construction of complete buildings, on own account for sale, onafee or contract basis Construction and renovation Installation, maintenance and repair activities Acquisition and ownership 7.1 7.2 7.3 7.4 7.5 7.6 7.7 Construction of new buildings (see Note 1) Renovation of existing buildings (see Note 2) Individual renovation measures consisting ofInstallation, maintenance and repair of energy efficiency equipment Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached tobuildings) Installation, maintenance and repair of instruments and devices for measuring, regulating and controlling energy performance ofbuildings Installation, maintenance and repair ofrenewable energy technologies Acquisition andownership ofbuildings (see Note 3) Stand-alone Transitional Enabling Enabling Enabling Enabling Stand-alone PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES ... Do No Significant Harm criteria Adaptation to Climate Change Pursuant to the release of the Climate Delegated Act specify- ing DNSH (Do No Significant Harm) criteria on adaptation to cli- mate change, VGP has updated in its climate risk assess- ment study covering all of the Group’s standing assets and development pipeline (see section .. Climate risk manage- ment and adaptation to climate change). This study confirmed that VGP is compliant with the DNSH criteria of the Taxonomy. The following steps have been followed during and fur- ther during additions in the climate risk assessment: . The Group first performed a screening of the climate-re- lated perils among the ones listed in Appendix A to the Annex I of the Climate Delegated Act to identify the ones most material to the business, based on the type of activ- ities, equipment, materials and the geographical footprint of the portfolio. As a result, the following perils were con- sidered applicable: heat stress, water stress, sea level rise, floods, earthquakes and wildfires; . For the climate-related perils considered as material, experts identified the most representative climate indica- tors. Climate indicator values were retrieved for each asset, based on their location. Climate models were then used to estimate the evolution of such values due to climate change, according to different scenarios aligned with the latest IPCC projections (see below). The climate indicator values were then translated into an impact/damage result ranging from % to %; and . As a follow-up to the risk and vulnerability assessment, site visits have been performed aimed at assessing the adequacy of adaptation measures already in place and at identifying new measures to be implemented. assets have been identified as the ones potentially most at risk from a climate change and business perspective– con- sidering both their multi-peril score and business perfor- mances. For each of those assets, adaptation plans will be designed. Asset specific actions will be considered as required. The climate scenarios selected by the experts to perform the climate change related risk analysis up to mid-century () are the SSP-. (“Middle of the Road”) and SSP-. (“pessimistic”) scenarios: — SSP-. is in line with today’s climate policies and Nationally Determined Contributions targets; and — SSP-. is the most pessimistic scenario which was selected to avoid any unanticipated event impacting the Group’s assets. timeframes have been considered for the analysis, consist- ently with the expected lifetime of the activity and the indica- tions of the EU Taxonomy: — Baseline: average between and values; — : average between and values; and — : average between and values Other DNSH criteria For existing buildings in ownership (.), there are no addi- tional applicable DNSH criteria other than the one on climate change adaptation (see previous section). For construction of new buildings and renovation projects (. and .), the analy- sis of the compliance with other DNSH criteria than climate change adaptation has been done at project-level with sep- arated workstreams depending on the status of the project: VGP Park Olomouc, Czech Republic CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY — For ongoing projects: projects were screened and ana- lysed in their current development stage and, when pos- sible, the technical criteria and/or studies related to the DNSH on water, circular economy and pollution prevention were added to the design specifications of the project to ensure its future compliance. When the projects were too advanced to change their design features, they have been considered as “not aligned” with the EU Taxonomy DNSH criteria if these criteria were not secured; and — For new projects: an update of the Group design guide- lines adding the DNSH criteria on water, circular econ- omy and pollution prevention has been performed. As no CAPEX have been reported to substantially contribute to the objective of climate-change adaptation, the DNSH cri- teria for climate-change mitigation have not been screened in . ... Individual measures The Commission Delegated Regulation (EU) / of July th, translating Article of the Taxonomy Regulation pro- vides for the integration of purchased “Individual measures” in CAPEX and OPEX alignment figures of non-aligned assets. Individual measures correspond to activities purchased that enable the target activities to become low carbon or to lead to GHG reductions, notably activities listed in points . to . of Annex I to the Climate Delegated Act, such as the installation of solar panels on a building rooftop. As part of its ESG strategy and asset-level environmental action plans, VGP plans investments in all the aforementioned categories: energy efficiency equipment, charging stations for EVs in buildings, instruments for measuring and controlling energy performance of buildings, and renewable energy technologies (see sections . Improve eco-efficiency and .. Develop connectivity and sustainable mobility). Related CAPEX spent in have been isolated and screened in accordance with the TSC of Annex I to the Climate Delegated Act for substantial contribution and DNSH where applicable. — Substantial contribution: the compliance of the activities disclosed in category . with the minimum requirements set for individual components. — DNSH: for individual measures installed in assets identi- fied as most vulnerable to physical climate risks (cf. pre- vious “Do No Significant Harm” section), the materiality of the risk for that measure has been assessed (based on equipment location, etc.) as well as the coverage by the mitigation action plan where necessary. In , VGP’s individual measures stand for .% of the Group eligible CAPEX, as presented in the alignment table at the top of this section. ... Minimum safeguards In addition to engaging in activities that are eligible and aligned with the European Taxonomy based on the environ- mental TSC, VGP strictly complies with the aspects of the Minimum Safeguards (MS), as described in the Article (c) and Article of the Taxonomy Regulation and further speci- fied in the Final Report on Minimum Safeguards published in October by the EU Platform on Sustainable Finance as well as OECD Guidelines for Multinational Enterprises and the UN Guiding Principles of Business and Human Rights. Human Rights Regarding human rights guarantees and due diligence in its own workforce, ethics and respect for human rights are among the core values of the Group. VGP is strictly commit- ted to upholding all fundamental individual rights and labour rights protections (see section .. Human Rights and Labour Conditions), as well as safeguarding the H&S and the wellbe- ing of its employees through enforced internal frameworks such as a dedicated Group framework for health and safety risk management and the Group’s Your Wellbeing framework (see sections ... Well-being, .. Occupational health and safety and . Sustainable Properties for the sections: Health and safety, security and environmental risk, and pol- lution). VGP only operates in countries with high standards of human rights protections and the infringement of human rights in its own workforce has not been identified as a mate- rial risk factor in the Group’s risk assessment (see section Risk factors). Yet, and as a safeguard, internal procedures are in place to anticipate, identify and prevent any infringement on employees’ human rights and freedoms. These include, for instance, clear rules against any form of discrimination along with anti-harassment and anti-bullying practices including a whistleblowing hotline accessible / to all employees. The Group indeed stands against racism, discrimination, and bias of any kind, striving to ensure that everyone feels equally wel- come and embraced. These principles are clearly stated in the Group Code of Conduct applicable to all employees. The Group has a zero-tolerance principle for violations of these rules (see section Conduct and Compliance in the Chap- ter Report of the Board of Directors). VGP makes sure to cul- tivate a sound work environment in which employees thrive (see section .. “Employee commitments and ESG”). The Group’s framework aims to fully embed VGP’s commitment to ensure equal opportunities and greater diversity and inclusion across the business (see section .. “Diversity”). VGP also cares about the protection of human rights in its value chain, and tackles this issue through the implementation of a due diligence process that identifies sustainability risks (includ- ing social and human rights risks) across its different pur- chasing categories and addresses them through mitigation actions. For example, main tenders are subject to a “Supplier Due Diligence” screening process, and all contracts require the acceptance of the Group’s Purchasing Conditions, includ- ing provisions on human rights and labour standards based on the ILO conventions and international human rights standards. For further information on the Group’s policies and actions to uphold human rights in its supply chain, please refer to sec- tions “Responsible supply chain” of the risk table in .. ESG Risks and opportunities and . Sustainable Supply Chain Management. Bribery/Corruption The Group has implemented robust internal mechanisms to anticipate, monitor and counter any risks of engaging in prac- tices that could amount to corruption or bribery, through the Group Compliance program and the Group Code of Conduct. Additionally, all employees are trained to identify and distin- guish situations that could be associated with corruption, with a clear communication of our zero-tolerance principle for any violation. For further information on the Group’s policies and commitments against corruption, bribery and fraud, please refer to sections “Business Ethics” of the risk table in .. ESG risks and opportunities, and the section ‘Conduct and Compli- ance in the Chapter Report of the Board of Directors. PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES Taxation The Group complies with the spirit and the letter of tax law and regulations. The Group’s tax policy, which is published in the annual report is regularly updated, describes the principles governing VGP’s approach to tax and the processes in place to ensure efficiency of these principles. These principles are also summarized in section Legal and regulatory risks in the Chap- ter ‘Risk Factors. In essence, the tax position of VGP reflects the geographical location of its real estate portfolio and is consistent with the normal course of its business operations. The tax strategy and tax risks are followed and monitored by a team of internal and external experts and discussed with an internal committee whose members include the CEO and the CFO and the Group’s auditors. The aim of the Group is to operate the business with low levels of tax risks. This is being done by ensuring that the tax consequences of arrangements entered into are being understood, including the way those arrangements will likely be viewed by relevant tax authorities. Only arrangements that are considered as acceptable to the relevant tax authorities are entered into. Fair competition The Group implements policies to anticipate and avoid engag- ing in any practice that could amount to a violation of fair com- petition and anti-trust regulations (See section Legal and regulatory risks in the Chapter ‘Risk Factors). Most exposed employees are educated and are expected to comply with all the competition and anti-trust laws as well as internal policies such as the Code of Conduct. If and when applicable, VGP is committed to fully co-operate with local authorities to pre- serve market integrity. VGP liability and absence of convictions VGP has developed an internal tracking methodology to scan news outlets and relevant platforms to identify whether the Group is involved in any ongoing litigation or proceeding. VGP has not been assigned or convicted for human rights viola- tions or any offence related to anti-trust regulations or corrup- tion. VGP has never been found guilty of tax evasion in any of the countries it operates in. .. VGP share of aligned activities– European Commission Reporting Templates The tables hereafter present taxonomy alignment figures based on total activity denominators (including non-eligi- ble activities), in IFRS methodology only, and including ser- vice charge income lines in numerators and denominators, in the format set by the European Commission. To calculate the share of alignment of service charge income (charges refunded to the tenants) in the Revenues table, a pro rata methodology has been used because their consolidated com- putation on an asset per asset was not available to screen the aligned lines: the share of gross rental income from aligned assets among the total portfolio of eligible standing assets has been applied to the total of service charge and property and facility management income to report the amount of aligned service charge and property and facility management income reinvoiced to the tenants. VGP Park München, Germany PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES Revenue KPI– VGP NV Consolidated Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute revenue (€ 000) Proportion of revenue Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 — 0.0% 100% YES YES YES YES YES YES YES 0.0% 7.7 Acquisition and ownership of buildings 7.7 980 0.9% 100% YES YES N/A N/A N/A N/A YES 0.9% 7.7 Acquisition and ownership of buildings 7.7 56 0.0% 100% YES YES YES YES YES YES YES 0.0% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 124 0.1% 100% YES YES N/A N/A N/A N/A YES 0.1% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 4,412 3.9% 7.7 Acquisition and ownership of buildings 7.7 103,969 91.4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 4,237 3.7% Revenue KPI– Proportional (including JVs at share) Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolut revenue (€ 000) Proportion of revenue Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A. Environmentally sustainable activities(Taxonomy-aligned) 7.1 Construction of new buildings 7.1 505 0.2% 100% YES YES YES YES YES YES YES 0.2% 7.7 Acquisition and ownership of buildings 7.7 8,840 3.7% 100% YES YES N/A N/A N/A N/A YES 3.7% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 124 0.1% N/A N/A N/A N/A N/A N/A N/A N/A 0.1% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 4,412 1.8% 7.7 Acquisition and ownership of buildings 7.7 221,077 92.4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 4,237 1.8% CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY Revenue KPI– VGP NV Consolidated Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute revenue (€ 000) Proportion of revenue Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 — 0.0% 100% YES YES YES YES YES YES YES 0.0% 7.7 Acquisition and ownership of buildings 7.7 980 0.9% 100% YES YES N/A N/A N/A N/A YES 0.9% 7.7 Acquisition and ownership of buildings 7.7 56 0.0% 100% YES YES YES YES YES YES YES 0.0% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 124 0.1% 100% YES YES N/A N/A N/A N/A YES 0.1% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 4,412 3.9% 7.7 Acquisition and ownership of buildings 7.7 103,969 91.4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 4,237 3.7% Revenue KPI– Proportional (including JVs at share) Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolut revenue (€ 000) Proportion of revenue Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A. Environmentally sustainable activities(Taxonomy-aligned) 7.1 Construction of new buildings 7.1 505 0.2% 100% YES YES YES YES YES YES YES 0.2% 7.7 Acquisition and ownership of buildings 7.7 8,840 3.7% 100% YES YES N/A N/A N/A N/A YES 3.7% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 124 0.1% N/A N/A N/A N/A N/A N/A N/A N/A 0.1% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 4,412 1.8% 7.7 Acquisition and ownership of buildings 7.7 221,077 92.4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 4,237 1.8% PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES CAPEX KPI– VGP NV Consolidated Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute CAPEX (€ 000) Proportion of CAPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 1,042 0.1% 100% YES YES YES YES YES YES YES 0,1% 7.7 Acquisition and ownership of buildings 7.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 2,294 0.3% 100% YES YES YES YES YES YES YES 0,3% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 691,817 95.3% 7.7 Acquisition and ownership of buildings 7.7 — N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 30,661 4.2% CAPEX KPI– Proportional (including JVs at share) Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute CAPEX (€ 000) Proportion of CAPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 1,042 0.1% 100% YES YES YES YES YES YES YES 0,1% 7.7 Acquisition and ownership of buildings 7.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 2,294 0.3% 100% YES YES YES YES YES YES YES 0,3% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 691,817 95.3% 7.7 Acquisition and ownership of buildings 7.7 — N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 30,661 4.2% CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY CAPEX KPI– VGP NV Consolidated Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute CAPEX (€ 000) Proportion of CAPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 1,042 0.1% 100% YES YES YES YES YES YES YES 0,1% 7.7 Acquisition and ownership of buildings 7.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 2,294 0.3% 100% YES YES YES YES YES YES YES 0,3% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 691,817 95.3% 7.7 Acquisition and ownership of buildings 7.7 — N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 30,661 4.2% CAPEX KPI– Proportional (including JVs at share) Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute CAPEX (€ 000) Proportion of CAPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 1,042 0.1% 100% YES YES YES YES YES YES YES 0,1% 7.7 Acquisition and ownership of buildings 7.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 2,294 0.3% 100% YES YES YES YES YES YES YES 0,3% E A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 691,817 95.3% 7.7 Acquisition and ownership of buildings 7.7 — N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 30,661 4.2% PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES OPEX KPI– VGP NV Consolidated Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute OPEX (€ 000) Proportion of OPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.7 Acquisition and ownership of buildings 7.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 — 7.7 Acquisition and ownership of buildings 7.7 23,328 100.0% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A OPEX KPI– Proportional (including JVs at share) Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute OPEX (€ 000) Proportion of OPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 142 0.2% N/A N/A N/A N/A N/A N/A N/A N/A 0,2% 7.7 Acquisition and ownership of buildings 7.7 2,490 4.4% 100% YES YES N/A N/A N/A N/A YES 4,4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 — 7.7 Acquisition and ownership of buildings 7.7 54,591 95.4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A CORPORATE RESPONSIBILITY REPORT PAGE EU TAXONOMY OPEX KPI– VGP NV Consolidated Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute OPEX (€ 000) Proportion of OPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.7 Acquisition and ownership of buildings 7.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 — 7.7 Acquisition and ownership of buildings 7.7 23,328 100.0% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A OPEX KPI– Proportional (including JVs at share) Substantial contribution criteria DNSH criteria DNSH criteria Economic activities Code Absolute OPEX (€ 000) Proportion of OPEX Climate change mitigation % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular Economy Y/N Pollution Y/N Biodiversity and eco-systems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of CAPEX Category (enabling activity) E A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (Taxonomy-aligned) 7.1 Construction of new buildings 7.1 142 0.2% N/A N/A N/A N/A N/A N/A N/A N/A 0,2% 7.7 Acquisition and ownership of buildings 7.7 2,490 4.4% 100% YES YES N/A N/A N/A N/A YES 4,4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 7.1 Construction of new buildings 7.1 — 7.7 Acquisition and ownership of buildings 7.7 54,591 95.4% 7.6 Installation, maintenance and repair of renewable energy technologies 7.6 N/A N/A PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES . Green bonds .. Green bond issuances The VGP Green finance framework was introduced in as part of our strategy to diversify financing sources. The Group has decided to develop a Green Bond framework to finance new development projects, and/or standing assets which meet the environmental criteria for the construction and oper- ational phases as defined in the “Use of Proceeds” procedure, and specified hereafter. Green Bonds are only used to finance resilient eligible assets, in line with a clear procedure for allo- cating funds. VGP issued its first Green Bond on the Euro market in March . In January , the Group issued its second Green Bond (split into two tranches) on the Euro market. These issuances are testament to the success of the Group’s integral focus on ESG as part of the organization, investments, and financing. In total, the two issuances raised €. billion. .. Green bond criteria The ESG criteria associated with the Green Bonds were approved by S&P Global/CICERO. They are (i) aligned with the “Green Bond Principles” (GBP) updated in March and (ii) fit in with the Group’s ESG strategy. Proceeds from Green Bonds issued under this framework will be used exclusively to finance and/or refinance, in whole or in part, “Eligible Assets”, described in the Green Finance Framework. Proceeds can be allocated to refinance existing projects as well as finance new developments. Eligible projects include: — renewable energy projects (i.e., onshore and off shore renewable energy facilities, including primarily solar and wind projects, but also hydrogen and geothermal energy projects) — Category of green buildings (i.e., real estate assets with BREEAM “Very Good” certification or equivalent DGNB/ LEED rating) — Other eligible project categories include energy efficiency (i.e., for existing or new (logistics) buildings, warehouses and technologies-related services and products), waste management (i.e., projects, investments and expenditures which promote better recycling rates), clean transporta- tion (i.e., electric vehicle charging stations, bike facilities), and sustainable water management (i.e., reduce freshwa- ter consumption, capturing and recycling rainwater, green roofing) Additional criteria and indicators to be monitored for eligible assets– including EU Taxonomy and CRREM, also referring to section . on EU Taxonomy and section .. on CRREM respectively– are published on the Investor Relations’ web- site under the following link: https://www.vgpparks.eu/en/ investors/financial-debt/ .. Current allocation of green bond proceeds In line with the Group’s internal Green Bond analysis, selec- tion and monitoring procedure, the funds generated by Green Bonds issuances are allocated to the selected assets based on a previously defined list of “eligible assets”. The criteria are presented above and explained in detail in the Green Finance Framework as available on the Group website. In the case of an asset disposal (both in full or partially) to one of the Group’s Joint Ventures during the funding period (i.e. prior to the bond issue maturity), the proceeds initially allocated to the disposed asset shall be reallocated to another “eligible asset” held by the Group, based on the same process. In case of a full disposal the equivalent asset base shall be reallocated and in case of a disposal to one of the Joint Ven- tures the remaining equity interest shall be reflected in the pro-rata asset allocation. CORPORATE RESPONSIBILITY REPORT PAGE GREEN BONDS The allocation of the proceeds from the outstanding Green Bonds as at December is illustrated below: Green Bond– April 2029 Green Bond– Jan 2027 Green Bond– Jan 2030 For reference: Use of categories Net bond proceeds allocation (€) % of total net bond proceeds Net bond proceeds allocation (€) % of total net bond proceeds Net bond proceeds allocation (€) % of total net bond proceeds EIB loan allocation (€) Renewable Energy 63,037,369 10.5% — 0.0% — 0.0% 44,809,712 Green buildings 752,829,611 125.5% 652,838,768 130.6% 861,878,614 172.4% o/w min excellent or gold-rated 518,497,981 86.4% 518,501,517 103.7% 500,514,527 100.1% Energy Efficiency 26,274,163 4.3% — 0.0% 0.0% Waste Management — 0.0% — 0.0% — 0.0% Clean Transportation 658,209 0.1% — 0.0% — 0.0% Sustainable Water Management 2,702,350 0.5% — 0.0% — 0.0% (over)/ unallocated (245,501,701) (40.8)% (152,838,768) (30.6)% (361,878,614) (72.4)% 90,190,288 (over)/ unallocated excl BREEAM Very Good or equivalent 11,170,701 18,501,517 514,527 Total gross proceeds 600,000,000 100.0% 500,000,000 100.0% 500,000,000 100.0% 135,000,000 The allocation of the proceeds between CAPEX and refinancing: Type of financing Grand Total (€) % CAPEX financing 2021 656,853,160 41% CAPEX financing 2022 789,015,636 49% CAPEX financing 2023 291,031,580 18% Refinancing 622,824,228 39% Total 2,359,724,603 147% Over/(under) allocation 759,724,603 47% Total gross proceeds 1,600,000,000 100% With regards to EU Taxonomy compliance, % of the proportional investments are in compliance with EU Taxonomy and the Group is conducting a review of several more assets in its portfolio for alignment with EU Taxonomy. As a consequence, the aligned portion of the portfolio with EU Taxonomy is expected to grow substantially in the coming period. Alignment with EU Taxonomy based on proportional share of investment Dec.23 % Use of proceeds aligned with EU Taxonomy 133,048,522 8% Incl. proceeds under review/being certified for EU Taxonomy alignment 294,460,522 18% Use of proceeds eligible for EU Taxonomy (alignment to be assessed) 1,305,539,478 82% Use of proceeds not aligned with EU Taxonomy — Total 1,600,000,000 100% PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES ... Green bond– April Green buildings allocation by certification type (€– proceeds allocation) Country BREEAM – Outstanding BREEAM– Excellent DGNB– Platinum DGNB/OGNI– Gold Grand Total % Austria — — — 64,565,056 64,565,056 12% Croatia — — — — — 0% Czechia — — — — — 0% Denmark — — — — — 0% France — — — — 0% Germany — — — 429,589,024 429,589,024 83% Hungary — — — — — 0% Italy — 3,011,172 — — 3,011,172 1% Latvia — — — — — 0% Netherlands — — — — — 0% Portugal — — — — — 0% Romania — 18,374,282 — — 18,374,282 4% Serbia — — — — — 0% Slovakia — — — — — 0% Spain — 2,958,448 — — 2,958,448 1% Grand Total 24,343,902 — 494,154,079 518,497,981 % of total 1 0% 3% 0% 59% 836,349,774 Renewable energy specification (€ proceeds allocation) Country 2021 2022 2023 Total Total (Apr ’29 Bond) Austria — — — — — Croatia — — — — — Czech Republic — 73,038 2,869,960 2,942,998 73,038 France — — — — — Germany 19,072,084 30,270,609 36,904,646 86,247,339 49,342,693 Hungary 84,909 — 84,909 84,909 Italy — 704,348 3,131,513 3,835,861 704,348 Latvia — — — — — Netherlands 5,309,425 6,644,132 835,417 12,788,974 11,953,557 Portugal — — — — — Romania — 530,824 1,068,176 1,599,000 530,824 Serbia — — — — — Slovakia — — — — — Spain — 348,000 — 348,000 348,000 Total 24,466,418 38,570,951 44,809,712 107,847,081 63,037,369 Sustainable Water Management (€ proceeds allocation) Czech Republic 185,354 Germany 2,341,996 Netherlands 175,000 Total 2,702,350 As % of total allocation to the bond (incl over-allocation). CORPORATE RESPONSIBILITY REPORT PAGE GREEN BONDS ... Green bond– January Green buildings allocation by certification type in euros invested Green buildings specification– € proceeds allocation per sustainable certification level by country Country BREEAM – Outstanding BREEAM– Excellent DGNB– Platinum DGNB/OGNI– Gold Grand Total % Austria — — — — — 0% Croatia — — — — — 0% Czechia — — — — — 0% Denmark — — — — 0% France — — — — — 0% Germany — — 56,414,224 413,558,655 469,972,879 91% Hungary — — — — — 0% Italy — 3,641,157 — — 3,641,157 1% Latvia — — — — — 0% Netherlands — — — — — 0% Portugal — 44,887,482 — — 44,887,482 9% Romania — — — — — 0% Serbia — — — — — 0% Slovakia — — — — — 0% Spain — — — — — 0% Grand Total 48,528,639 56,414,224 413,558,655 518,501,517 % of total 1 0% 6% 7% 49% 652,838,768 ... Green bond– January Green buildings allocation by certification type in euros invested Green buildings specification– € proceeds allocation per sustainable certification level by country Country BREEAM – Outstanding BREEAM– Excellent DGNB– Platinum DGNB/OGNI– Gold Grand Total % Austria — — — 105,376,919 105,376,919 20% Croatia — — — — — 0% Czechia — 36,638,240 — — 36,638,240 7% Denmark — — — — 0% France — — — — — 0% Germany — — — 255,966,862 255,966,862 49% Hungary — — — — — 0% Italy — — — — — 0% Latvia — — — — — 0% Netherlands — — — — — 0% Portugal — 17,103,590 — — 17,103,590 3% Romania 11,834,453 34,454,989 — — 46,289,442 9% Serbia — — — — — 0% Slovakia — — — — — 0% Spain — 39,139,474 — — 39,139,474 8% Grand Total 11,834,453 127,336,293 — 361,343,782 500,514,527 % of total 2 1% 15% 0% 43% 861,878,614 As % of the total allocation to the bond (including over-allocation). As % of the total allocation to the bond (including over-allocation). PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES .. Audited criteria VGP engaged an independent auditor to verify that the assets financed meet the eligibility criteria. The reporting on these criteria and the independent auditor’s attestation on the information related to the allocation of funds are presented in the following section. .. Annual Reporting on green bonds in compliance with framework ... Renewable energy This category includes the financing and/or refinancing of projects, investments and expenditures in products, technologies and services ranging from the generation and transmission of energy to the manufacturing of related equipment including among others onshore and offshore renewable energy facilities. This includes among others solar, wind, hydro and geothermal energy projects. Of the photovoltaic projects on VGP Parks’ roofs are owned and operated by VGP and of these are included in the Green Finance Framework allocation. Of these systems were operational by December , representing MWp and a further were under construction/waiting for grid connection, representing MWp. The eligible photovoltaic investments have generated green energy in for in total GWh, equivalent to , tCO2e. For calculating the equivalent CO2 emissions, the average grid factor of the VGP Parks portfolio of . tCO2/MWh has been used: Full year actual renewable energy production 2021 2022 2023 Full year production (MWh) 8,216 27,449 44,496 Emission factor (tCO2/MWh) 0.308 0.333 0.439 Avoided emissions (tCO2) 2,529 8,450 19,519 Anticipated annual renewable energy production 2022 2023 Full year production (MWh) 105,303 120,321 Emission factor (tCO2/MWh) 0.333 0.439 Avoided emissions (tCO2) 32,417 52,781 Please refer to the table below for the allocation of PV systems per bond and by status of the PVsystem (operational vs under construction): PV capacity (KWp) Production Bond allocation Country/Park/Building code existing awarded KWH p.a. Apr-29 Jan-27 Jan-30 Germany VGP Park Berlin GERBER– A 745 627,698 x VGP Park Berlin 2 GERBER2– B 746 628,811 x GERBER2– C 750 631,930 x VGP Park Berlin 4 GERBER4– M 1,591 1,341,044 x VGP Park Berlin Oberkrämer GEROBK– A 299 243,889 x GEROBK– A 849 691,691 x GEROBK– D 639 521,078 x VGP Park Berlin Wustermark GERWUS– A1 745 683,543 x VGP Park Borna GERBOR– A 748 642,910 x VGP Park Buseck GERBUS– A 749 643,020 x For each year the average emission factor for grey electricity for the VGP portfolio has been used. For an explanation of the year-over-year change in emission factor, please refer to section ... “GHG emissions from tenant operations”. CORPORATE RESPONSIBILITY REPORT PAGE GREEN BONDS PV capacity (KWp) Production Bond allocation Country/Park/Building code existing awarded KWH p.a. Apr-29 Jan-27 Jan-30 VGP Park Chemnitz GERCHE– A 746 693,706 x VGP Park Erfurt GERERF– A 750 622,185 x GERERF– A 1,538 1,276,125 x VGP Park Erfurt 2 GERERF2– B 3,327 2,761,609 x VGP Park Erfurt 3 GERERF3– A 2,451 2,034,330 x VGP Park Gießen Am alten Flughafen GERGAF– A 7,770 7,070,245 x GERGAF– B 1,000 909,991 x GERGAF– B 2,399 2,183,008 x GERGAF– PH 869 790,972 x VGP Park Ginsheim GERGIN– A 748 672,099 x VGP Park Göttingen GERGOE– A 750 625,367 x GERGOE– A 747 623,031 x GERGOE– B — VGP Park Göttingen 2 — GERGOE2– C 3,870 3,227,580 x GERGOE2– C 497 409,759 x GERGOE2– C 2,244 1,871,496 x VGP Park Halle GERHAL– A 1,830 1,661,858 x GERHAL– B 2,303 2,090,724 x GERHAL– C 3,365 3,055,674 x VGP Park Halle 2 GERHAL2– A 1,328 1,205,824 x GERHAL2– B VGP Park Hamburg GERHAM– A1 750 586,952 x GERHAM– A2 750 586,952 x GERHAM– A3 — VGP Park Hamburg 2 GERHAM2– B1 2,544 1,991,670 x GERHAM2– B2 750 586,952 x GERHAM2– B3 — VGP Park Hamburg 3 GERHAM3– C 750 586,952 x VGP Park Hochheim GERHOH– A 1,115 1,014,832 x VGP Park Höchstadt GERHOE– A 748 662,560 x VGP Park Koblenz GERKOB– A 3,174 2,815,338 x VGP Park Laatzen GERLAA– A 3,624 2,917,642 x GERLAA– B GERLAA– C 3,567 2,871,435 x PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES PV capacity (KWp) Production Bond allocation Country/Park/Building code existing awarded KWH p.a. Apr-29 Jan-27 Jan-30 GERLAA– PH Ost 375 301,875 x VGP Park Leipzig Flughafen GERLFH– A 299 272,064 x GERLFH– A 899 817,282 x VGP Park Leipzig Flughafen 2 GERLFH2– B 2,349 2,135,241 x VGP Park Lützellinden GERLUE– A 748 654,080 x VGP Park Magdeburg GERMAG– A 750 643,174 x GERMAG– A 1,798 1,542,856 x GERMAG– B 2,244 1,925,077 x GERMAG– C 10,273 8,814,200 x GERMAG– F 4,095 3,513,510 x VGP Park München GERMUE– A 748 740,207 x GERMUE– A 1,696 1,677,423 x GERMUE– B 3,791 3,749,101 x GERMUE– C 3,003 2,970,442 x GERMUE– E 1,895 1,874,551 x GERMUE– F 97 96,131 x GERMUE– PH Nord 460 454,940 x GERMUE– PH Sud 316 312,425 x VGP Park Rodgau GERROD– C 746 707,132 x VGP Park Rostock GERROS– A 2,193 1,890,366 x VGP Park Schwalbach GERSCH– A 645 569,049 x VGP Park Soltau GERSOL– A 749 593,798 x GERSOL– A 2,399 1,902,407 x VGP Park Wetzlar GERWET– B 747 644,696 x Italy VGP Park Calcio ITACAL– A 16 18,320 ITACAL– A 3,176 3,636,806 x VGP Park Sordio ITASOR– A 25 28,400 ITASOR– A 940 1,068,033 x VGP Park Valsamoggia ITAVAL– B 992 1,278,688 x Netherlands VGP Park Nijmegen NLDNIJ– A 2,279 2,096,993 x NLDNIJ– A 1,518 1,396,762 x NLDNIJ– A 1,012 930,764 x NLDNIJ– E VGP Park Nijmegen 2 NLDNIJ2– B1B2 869 799,020 x CORPORATE RESPONSIBILITY REPORT PAGE GREEN BONDS PV capacity (KWp) Production Bond allocation Country/Park/Building code existing awarded KWH p.a. Apr-29 Jan-27 Jan-30 NLDNIJ2– B1B2 2,213 2,036,328 x NLDNIJ2– B3B4 5,940 5,464,800 x NLDNIJ2– C 3,779 3,476,680 x VGP Park Roosendaal NLDROO– A 3,899 3,579,392 x Spain VGP Park Fuenlabrada ESPFUE– A 100 134,300 x VGP Park Lliçà dAmunt ESPLLI– A 46 57,927 x ESPLLI– C 78 98,580 x ESPLLI– D 83 105,780 x VGP Park San Fernando de Henares ESPSFH– A 53 69,405 x ESPSFH– B1 63 82,625 x ESPSFH– C1 36 47,116 x ESPSFH– D1 20 26,440 x ESPSFH– E 18 23,796 x VGP Park Valencia Cheste ESPVAL– A 33 x ESPVAL– B 66 x Grand Total 86,309 48,422 120,321,463 0 0 Please refer to section .. Energy Management and specifically ... Production of Renewable Energy for further information on the Group’s initiatives and KPIs with respect to renewable energy production. ... Green buildings Definition of the framework The framework defines eligible the financing and/or refinancing of projects, investments and expenditures in relation to real estate assets which have received, or are designed and intended to receive, BREEAM “Very Good” certification (or equivalent DGNB Silver/LEED Silver rating). In total eligible building projects have been identified and allocated under the Green Financing framework. This Green build- ing portfolio has predominantly been built since or is currently under construction. Given this is such a new portfolio it ben- efits from the latest ESG features of our building standard and green energy sourcing. As a reflection of the year-over-year improvement of the quality of the portfolio, the building allocation has been upgraded to cover the required amount through buildings with a green building certification of BREEAM Excellent or DGNB Gold or better. CRREM and .°C pathway The Group has analysed various asset specific and portfolio-based solutions to improve the stranding date. Based on the retrofit plans, heat pump initiatives, photovoltaic roll-out and green electricity transition an upgrade to .°C pathway compliance until is envisaged. Further details are included in section ... CRREM retrofit and improvement actions. Upgrade to minimum BREEAM Excellent or DGNB Gold allocation The eligible building projects have been identified and allocated to the three outstanding green bonds which is shown in the table below. The table also shows the certification level as well as status of the certification process. The BREEAM Excellent or DGNB Gold rated buildings have been taken as a minimum to allocate the bonds in full. Due to employed certification pre-checks and uniform VGP building standard being employed for all construction projects across Europe a very high degree of confidence can be expressed for expected realisation of the targeted certification level in case this is not yet completed. In case a project would not achieve the required certification level it will be removed from the eli- gible green buildings investments portfolio. EPC Of the completed building portfolio which is part of the net proceeds allocation of the green bonds and which has obtained an EPC rating as of December , % has received an energy EPC B score or better . In light of EU Taxonomy reviews existing EPC scores continue to be reviewed and updated (as the initial ECP rating from the development phase not always reflects all retrofits or investments in eco-efficiency conducted since). Given no EPC letter score is available in Germany the (conservative) residential equivalent score has been used with end-use energy below KWh/m/ annum EPC A – https://eurodw.eu/the-babel-tower-of-energy-performance-certificate-ratings-and-databases-in-europe/ PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES Building Certification Allocation Code GLA (m²) Level Status Green Bond – April 2029 Green Bond – Jan 2027 Green Bond – Jan 2030 AUTEHR– A 39,813 ÖGNI– Gold Ongoing AUTEHR– B 33,146 ÖGNI– Gold Ongoing x AUTEHR– C 7,585 ÖGNI– Gold Ongoing x AUTGRA– A 16,537 BREEAM– Very Good Ongoing x AUTGRA2– B 8,212 ÖGNI– Gold Realized x AUTGRA2– C 14,348 ÖGNI– Gold Ongoing x AUTLAX– A 26,076 ÖGNI– Gold Ongoing x AUTLAX– B 23,372 ÖGNI– Gold Ongoing x CZECEB– A 5,917 BREEAM– Excellent Ongoing x CZECEB– B 8,749 BREEAM– Excellent Ongoing x CZECEB– C 9,424 BREEAM– Very Good Realized x CZECEB– D 14,004 BREEAM– Excellent Ongoing x CZECEB– E 48,313 BREEAM– Excellent Ongoing x CZEHNN– H1 40,361 LEED– Silver Realized x CZEHNN2– H6 30,215 BREEAM– Very Good Realized x CZEKLA– A 15,806 BREEAM– Very Good Realized x CZEKLA– B 11,193 BREEAM– Very Good Realized x CZEOLO3– M 8,665 BREEAM– Excellent Ongoing x CZEOLO4– E 4,269 BREEAM– Excellent Ongoing x CZEOLO5– F 65,889 BREEAM– Very Good Realized x CZEPIL– E 5,790 BREEAM– Very Good Realized x CZEPRO– A 15,330 BREEAM– Very Good Realized x CZEPRO– B 25,055 BREEAM– Very Good Realized x CZEPRO– C 10,351 BREEAM– Excellent Ongoing x CZEUST2– A 22,813 BREEAM– Very Good Ongoing x CZEUST2– B 29,309 BREEAM– Very Good Ongoing x CZEVYS– A 28,868 BREEAM– Very Good Realized x ESPCOR– A 15,419 BREEAM– Excellent Ongoing x ESPCOR– B 7,218 BREEAM– Excellent Ongoing x ESPDOH– B 29,091 BREEAM– Very Good Realized x ESPFUE– A 41,752 BREEAM– Very Good Realized x ESPGRA– A 8,920 BREEAM– Very Good Realized x ESPLLI– A 13,639 BREEAM– Very Good Realized x ESPLLI– D 7,205 BREEAM– Very Good Realized x ESPLLI– E 22,195 BREEAM– Very Good Realized x ESPMAR– A 10,102 BREEAM– Excellent Ongoing x ESPSEV– A 15,057 BREEAM– Excellent Ongoing x ESPSEV– B 13,530 BREEAM– Excellent Ongoing x ESPSFH– C1 7,947 BREEAM– Very Good Realized x ESPSFH– C2 5,165 BREEAM– Very Good Realized x ESPSFH– D1 11,453 BREEAM– Very Good Realized x ESPSFH– D2 27,579 BREEAM– Excellent Realized x ESPVAL– A 14,177 BREEAM– Very Good Realized x ESPVAL– B 25,409 BREEAM– Very Good Realized x ESPVAL– C 25,517 BREEAM– Excellent Ongoing x ESPZAR– A 18,074 BREEAM– Very Good Realized x ESPZAR– B 21,373 BREEAM– Very Good Realized x ESPZAR– C1 22,556 BREEAM– Very Good Realized x ESPZAR– C2 13,616 BREEAM– Very Good Realized x ESPZAR– D 19,146 BREEAM– Excellent Ongoing x GERBER4– M 17,337 DGNB– Gold Realized x CORPORATE RESPONSIBILITY REPORT PAGE GREEN BONDS Building Certification Allocation Code GLA (m²) Level Status Green Bond – April 2029 Green Bond – Jan 2027 Green Bond – Jan 2030 GERERF– A 26,214 DGNB– Gold Ongoing x GERERF2– B 41,815 DGNB– Gold Ongoing x GERERF3– A 29,183 DGNB– Gold Ongoing x GERFRA– A 146,898 BREEAM– Very Good Realized x GERGAF– A1 124,922 DGNB– Gold Ongoing x GERGAF– A2 28,352 DGNB– Gold Ongoing x GERGAF– B 59,150 DGNB– Gold Ongoing x GERGOE2– C 80,157 DGNB– Gold Realized x GERHAL– B 26,848 DGNB– Gold Realized x GERHAL– C 37,933 DGNB– Gold Realized x GERHAL2– A 14,862 DGNB– Gold Ongoing x GERHDW– A 20,465 DGNB– Gold Ongoing x GERHDW– B 29,139 DGNB– Gold Ongoing x GERHDW– C 25,850 DGNB– Gold Ongoing x GERHDW2– A 43,471 DGNB– Gold Initiation x GERHOH– A 12,025 DGNB– Gold Ongoing x GERKOB– A 32,377 DGNB– Gold Ongoing x GERLAA– A 55,398 DGNB– Platinum Realized x GERLAA– B 11,803 DGNB– Platinum Realized x GERLAA– C 51,262 DGNB– Gold Realized x GERLAA– D 8,519 DGNB– Gold Realized x GERLEI– C1 2,519 DGNB– Gold Realized x GERLEI– C2 2,379 DGNB– Gold Realized x GERLFH– A 16,298 DGNB– Gold Ongoing x GERLUE– A 14,156 DGNB– Gold Realized x GERMAG– A 31,869 DGNB– Gold Realized x GERMAG– B 42,368 DGNB– Gold Ongoing x GERMAG– C1 67,376 DGNB– Gold Ongoing x GERMAG– D 74,045 DGNB– Gold Ongoing x GERMAG– F 51,995 DGNB– Gold Ongoing x GERMUE– A 56,874 DGNB– Gold Realized x GERMUE– B 81,549 DGNB– Gold Ongoing x GERMUE– C 48,471 DGNB– Gold Ongoing x GERMUE– E 39,352 DGNB– Gold Ongoing x GERMUE– F 7,487 DGNB– Gold Ongoing x GEROBK– A 13,717 DGNB– Gold Realized x GEROBK– B 11,502 DGNB– Gold Realized x GEROBK– C 9,086 DGNB– Gold Ongoing x GEROBK– D 24,223 DGNB– Gold Realized x GERROS– A 20,447 DGNB– Gold Ongoing x GERSOL– A 55,813 DGNB– Gold Realized x GERWUS– A1 10,997 DGNB– Gold Realized x HRVLUC– A 36,867 BREEAM– Very Good Ongoing x HUNBUD– A 29,853 BREEAM– Very Good Ongoing x HUNBUD– B.1 11,015 BREEAM– Very Good Realized x HUNBUD– C1.1 13,544 BREEAM– Very Good Ongoing x HUNGYO2– A 37,998 BREEAM– Very Good Ongoing x HUNGYO2– B 13,915 BREEAM– Very Good Ongoing x HUNKEC– A 21,937 BREEAM– Very Good Ongoing x HUNKEC– C 20,149 BREEAM– Very Good Ongoing x ITACAL– A 23,303 BREEAM– Very Good Realized x PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES Building Certification Allocation Code GLA (m²) Level Status Green Bond – April 2029 Green Bond – Jan 2027 Green Bond – Jan 2030 ITAPAD– A 15,301 BREEAM– Very Good Realized x ITAPAD– B 7,246 BREEAM– Very Good Realized x ITAPAR2– A 5,710 BREEAM– Excellent Realized x ITASOR– A 12,035 BREEAM– Very Good Realized x ITAVAL– A 6,679 BREEAM– Excellent Realized x ITAVAL– B 16,106 BREEAM– Very Good Realized x LVARIG– A1 7,030 BREEAM– Very Good Ongoing x LVATIR– A 28,897 BREEAM– Very Good Realized x NLDNIJ– A 67,352 BREEAM– Very Good Realized x NLDNIJ2– B1B2 42,505 BREEAM– Very Good Ongoing x NLDNIJ2– B3B4 62,520 BREEAM– Very Good Ongoing x NLDNIJ2– C 35,052 BREEAM– Very Good Ongoing x NLDROO– A 41,960 BREEAM– Very Good Realized x NLDROO– B 9,294 BREEAM– Very Good Realized x PRTLOU– A 12,606 BREEAM– Excellent Ongoing x PRTLOU– B 7,143 BREEAM– Excellent Ongoing x PRTMON– A 31,789 BREEAM– Excellent Ongoing x PRTSIN– A 12,901 BREEAM– Excellent Ongoing x PRTSMF– A 29,813 BREEAM– Very Good Realized x ROMARA– A 29,414 BREEAM– Very Good Realized x ROMARA– B 40,081 BREEAM– Excellent Ongoing x ROMBRA– A 28,956 BREEAM– Very Good Realized x ROMBRA– B1 20,920 BREEAM– Excellent Ongoing x ROMBRA– B2 13,812 BREEAM– Excellent Ongoing x ROMBRA– E 9,556 BREEAM– Very Good Realized x ROMBRA– I 17,465 BREEAM– Excellent Realized x ROMBUC– C 30,507 BREEAM– Very Good Realized x ROMBUC– D 15,699 206– BREEAM– Outstanding Realized x ROMTIM2– D 30,775 BREEAM– Very Good Realized x ROMTIM3– E 32,768 BREEAM– Excellent Ongoing x SVKBRA– F 57,328 BREEAM– Very Good Realized x SVKBRA– G 19,201 BREEAM– Very Good Ongoing x SVKBRA– H 18,354 BREEAM– Very Good Realized x Please refer to section . Sustainable Properties and more specifically .. Environmental certifications for additional details on the Group’s certification initiatives. ... Energy efficiency The financing and/or refinancing of projects, investments and expenditures focusing on Energy Efficiency measures in existing or new (logistics) buildings, warehouses and technologies (insulation, LED relighting, motion detectors, energy monitoring tools etc.) and related services and products. Whilst not all eco-efficiency measures have been separately accounted for the measures identified include air heat pumps, energy saving LED investments, sun protection and moving sensors in offices to reduce energy consumption. These expendi- tures and refurbishments in buildings have resulted in ca. € million of additional eligible investments, the proportional eli- gible spent amounts to € million. Properly sized heat pump installations instead of gas-powered heating help reduce the gas consumption of our buildings. Fur- thermore, such HVAC installations allow more easily to heat of cool different areas of the warehouse separately depending on occupancy and use. Automated controls further help optimize the operation of HVAC systems based on occupancy schedules and temperature settings in offices. CORPORATE RESPONSIBILITY REPORT PAGE GREEN BONDS Energy efficiency measures Avoided energy consumption and emissions 2023 Avoided energy consumption (MWh) 35,317 Emission factor (tCO/MWh) 0.058 Avoided emissions (tCO) 2,054 The emission factor is weighted emission factor based on the effective net kWh savings in electricity and gas against portfolio average emission factors of electricity (. tCO/MWh) and gas (. tCO2/MWh). For heat pumps an annualized Coefficient of Performance (CoP) of . is assumed. Details on the energy efficiency measures and related KPIs are discussed in more detail in section . Improving eco-efficiency. ... Waste management The financing and/or refinancing of projects, investments and expenditures which promote better recycling rates. The Group did not isolate any investments made specifically related to waste management. Please refer to section .. Waste Management for further information on the Group’s waste management user data and KPIs and waste man- agement improvement initiatives. ... Clean transportation The financing and/or refinancing of projects, investments and expenditures which promote clean transportation (electric vehicle charging stations, bike facilities, etc.). The Group has set the target to developing connectivity and sustainable mobility for each VGP Park to be equipped with EV charging and public transport access. The reported investments in electric charging facilities in the VGP Parks in amounts to € . million in VGP Parks locations, reflecting the locations where EV chargers have been installed and cost base could be isolated. The proportional eligible spent amounts to €. million. Based on the limited sites for which charging data is available the total kWh charged at the sites is , kWh per annum. EV charging infrastructure Avoided emissions 2023 Total EV charging (MWh) 299 Assumed car KMs covered 1 1,573,000 Avoided emissions (kgCO2/km) 2 0.050 Avoided emissions (tCO2) 79 please note this data is based on a gross-up of sites for which charging data is available Developing connectivity and sustainable mobility within VGP Parks is one of the key ESG targets of the Group. Further details can be found in section .. Develop connectivity and sustainable mobility. Based on assumed . kwh/km average reach of new European BEVs (€, new price). Source: https://alternative-fuels-observatory.ec.europa.eu/ general-information/vehicle-types. Based on the emission factor for diesel vehicles (. kgCO/KM) minus the emission factor for grey electricity (. kgCO/KM) for charging EV vehicles (weighted according to car use in VGP countries). PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES ... Sustainable Water Management The financing and/or refinancing of projects, investments and expenditures which promote a sustainable water man- agement (reduce freshwater consumption, capturing and recycling rain water, green roofing etc.). Selected eligible projects: Sustainable Water Management Park Project Green Bond – April 2029 Green Bond – Jan 2027 Green Bond – Jan 2030 VGP Park Munchen Infiltration basin south incl. plants / vegetation x VGP Park Gottingen Rainwater channels with rainwater retention basin x VGP Park Buseck Use of rainwater for toilet facilities (cistern, piping, separation systems, technology) and Infiltration of rainwater in the rainwater retention basin x VGP Park Magdeburg Rainwater channels with large rainwater retention basin combined and connected (through transport trenches) with several smaller basins with overflow and throttling system x VGP Park Roosendaal Infiltration crates, installation built under building for water overflow and retention (independent of public sewerage) x VGP Park Berlin Entire green roof for water retention and bio-diversity stimulation x VGP Park Kladno Rainwater channels with rainwater retention basin x VGP Park České Budějovice Rainwater channels with rainwater retention basin x In , the water management projects collected , m of rainwater/greywater on site, which were partially used for cleaning and for watering green spaces. Please refer to section .. Water Management for further information on the Group’s water management user data and KPIs and water management improvement initiatives. .. Independent third party’s report on green bond criteria and indicators VGP has commissioned Cicero Shades of Green, part of S&P Global, as a third-party reviewer to check the allocation against the Green Finance Framework criteria and impact metrics for relevance and transparency. The attestation on the information related to the allocation of funds from Cicero Shades of Green is available hereafter. The original document is also available on VGP’s website. Community Day Czech Republic 2023 PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES . VGP External Review of Green Finance Reporting March , This report was produced by S&P using Shades of Green Methodology. On December , , S&P Global acquired Shades of Green from CICERO. S&P Global has reviewed the elements of VGP’s Corporate Responsibility Report (“Report”) relating to its green financing activities. We review against VGP’s Green Finance Framework (dated March , the “Framework”) criteria, and impact metrics for relevance and transparency. We consider that the allocations in the Report align with the Framework. Note that, according to the Report, around % of assets in VGP’s green portfolio are green buildings. The green buildings project category received a Light Green in our Second Party Opinion. Based on the Shades of Green allocated to the project categories, the investments in VGP’s green portfolio are not therefore, on the whole, representative of the Medium Green shading awarded to the Framework in our Second Party Opinion. Nonetheless, we note that– gen- erally speaking– VGP demonstrates a more holistic approach to the climactic and environmental performance of the green buildings portfolio. For example, according to VGP, the green buildings produce more renewable energy than energy con- sumed, while the green portfolio includes around EUR . bil- lion of green buildings with BREEAM Excellent or DGNB Gold (or better) certifications, exceeding the minimum Framework requirements. We consider that the Report utilizes relevant and suffi- ciently transparent impact metrics. In an improvement on last year’s Report, VGP now includes impacts for all project categories to which proceeds have been allocated. Finally, we consider the Report aligns with the core prin- ciples and recommendations contained in ICMA’s Hand- book– Harmonized Framework for Impact Reporting (June ). ICMA Handbook CORPORATE RESPONSIBILITY REPORT PAGE VGP EXTERNAL REVIEW OF GREEN FINANCE REPORTING Project allocation VGP has issued two green bonds under the Framework, total- ing EUR . billion. The first, issued in March , raised EUR million, and the second, issued in January , raised EUR billion in two, EUR million tranches. Allocation is reported as at December , with eligible assets in VGP’s green portfolio totaling around EUR . billion. In respect of allocation, we consider the Report aligned with the Framework; for a more detailed review, please see Appendix . The Framework was assigned an overall Medium Green in our Second Party Opinion, reflecting that, during the Second Party Opinion process, VGP noted that the main share of pro- ceeds would be used for renewable energy projects and that proceeds would be used in a “balanced” way. Project cate- gories were shaded Dark Green (renewable energy, waste management, clean transportation, and sustainable water and wastewater management projects), Light to Medium Green (energy efficiency), and Light Green (green buildings). Figure sets out the allocations by Shade of Green, showing that around % of assets in VGP’s green portfolio are green buildings. Based on the Shades of Green allocated to the pro- ject categories, the investments in VGP’s green portfolio are not therefore– on the whole– representative of the Medium Green shading awarded to the Framework. Nonetheless, we note that, generally speaking, VGP demon- strates a more holistic approach to the climactic and envi- ronmental performance of its green buildings portfolio. For example: i) the green portfolio includes around EUR . bil- lion of green buildings with BREEAM Excellent or DGNB Gold (or better) certifications, exceeding the minimum Framework requirements, ii) according to VGP, the green buildings pro- duce more renewable energy than energy consumed, iii) investments made in energy efficiency, including under the Framework, for example the use of heat pumps as standard (where feasible), and iv) VGP expects a substantial growth in these assets that align with the EU Taxonomy as a result of ongoing alignment reviews. VGP SPO Around % of green buildings under the first bond, % of the first tranche of the second bond, and % of the second tranche of the second bond are (or expect to be) rated BREEAM Excellent or DGNB Gold. Impact metrics VGP reports impacts as at December , . We consider that VGP provides transparent and relevant impact reporting for all project categories to which proceeds have been allo- cated; for a more detailed review, please see Appendix . For renewable energy investments, VGP reports impacts for its photovoltaic projects. More specifically, it reports the capacity, full year production, and avoided emissions. For avoided emissions, VGP is transparent on the grid factor used, namely the average grid factor of the European countries in which it operates. No impacts are reported for its one geo- thermal investment– this is considered only a minor omission. For green buildings, VGP lists the environmental certifica- tion for each financed building. While reporting on environmental certifications is a fair way to report impacts of green building investments, they are best reported alongside other metrics such as energy performance. As such, it represents a fair improvement that the Report includes the percentage of (completed) green buildings within the green building portfolio that have an EPC B or better. In a further improvement on last year’s Report, VGP now includes impacts for the energy efficiency and clean transpor- tation project categories. For energy efficiency investments, VGP reports avoided energy consumption and avoided emis- sions derived from the projects, while for clean transporta- tion, it provides data on total EV charging, avoided emissions, and assumed kilometers covered by car. For sustainable water management, the report provides information on collected and reused rainwater/greywater on site. Terms S&P Global provides a review of VGP’s annual reporting based on documentation provided by the issuer and information gathered during teleconferences and e-mail correspondence with VGP. VGP is solely responsible for providing accurate information. All financial aspects of the sustainable finance reporting– including the financial performance of the bond and the value of any investments in the bond– are outside of our scope, as are general governance issues such as corrup- tion and misuse of funds. S&P Global does not validate nor certify the existence of investments and does not validate nor certify the climate effects of investments. Our objective has been to provide an assessment of the extent to which the bond has met the allocation and reporting criteria established in the Framework. The review is intended to inform VGP, inves- tors and other interested stakeholders in VGP’s green bond and has been made based on the information provided to us. S&P Global cannot be held liable if estimates, findings, opin- ions or conclusions are incorrect. Our review does not follow verification or assurance standards and we can therefore not provide assurance that the information presented does not contain material discrepancies. Figure 1: Allocation by SPO Shade of Green. Shading is based on evaluation at time of issuance and does not reflect ex-post project verification. Allocation by Shade of Green Light Green – 96.1% Light to medium Green– 1.1% Dark Green– 3.5% PAGE VGP NV ANNUAL REPORT GREEN FINANCING OF THE GROUP ACTIVITIES Appendix – Detailed Review Category Description Review against framework criteria Impact Metrics Relevance of metrics Transparency considerations • Renewable Energy • Projects, investments and expenditures in products, technologies and services ranging from the generation and transmission of energy to the manufacturing of related equipment including among others onshore and offshore renewable energy facilities. This includes among others solar, wind, hydro, and geothermal energy projects. • No discrepancies identified • The projects financed under the renewable energy project category are solar panels and one geothermal heating project. • Total energy generated (MWh). • Avoided CO emissions (tCOe). • Metrics are relevant and production, capacity, and avoided emissions are listed as core indicators in the ICMA Handbook– Harmonized Framework for Impact Reporting. • Production and avoided emissions are reported on a portfolio basis, while capacity is reported on a project basis. • For avoided emissions, VGP uses the average grid factor of the 14 European countries in which it operates. Transparency on this is welcome. • No quantitative impacts are provided for the geothermal heating project. • Green Buildings • Projects, investments, and expenditures in relation to real estate assets which have received, or are designed and intended to receive, BREEAM “Very Good” certification (or equivalent DGNB/LEED rating). • No discrepancies identified • VGP selected DGNB Silver and LEED Silver as equivalent to BREEAM Very Good. Investors should note there is no consensus about the equivalence of different certification schemes. • In any case, the Report states that 69% of green buildings under the first bond, 79% of the first tranche of the second bond, and 58% of the second tranche of the second bond are (or expect to be) rated BREEAM Excellent or DGNB Gold. We welcome that the majority of VGP’s green building investments exceed the Framework criteria. • Environmental certification achieved or expected to be achieved. • Percentage of (completed) green buildings in the green building portfolio with EPC B or better. • Certification standard (including environmental certifications such as BREEAM, as well as EPCs) is listed as a core indicator in the ICMA Handbook– Harmonized Framework for Impact Reporting. • VGP reports environmental certification on a project basis. • Given that environmental certifications do not guarantee, for example, a certain energy use, VGP could consider reporting on additional metrics such as energy use on an absolute and intensity basis. As such, we welcome that the Report includes the percentage of green buildings in the green buildings portfolio with EPC B or better. Going forward, VGP could consider including more contextual information to add colour to this metric, for example how it compares to local regulations. We expect this may occur in parallel with increased reporting on the EU Taxonomy alignment of the green building portfolio. • Energy Efficiency • Projects, investments and expenditures focusing on energy efficiency measures in existing or new (logistics) buildings, warehouses. • Technologies (insulation, LED relighting, motion detectors, energy monitoring tools etc.) and related services and products, including installation. • No discrepancies identified • According to the Report, investments under the energy efficiency category are LED investments, sun protection, and moving sensors to reduce energy consumption. VGP has also invested in heat pumps which replace gas heating. • Avoided energy consumption (MWh) • Avoided emissions (tCO) • Metrics are relevant and energy savings and avoided emissions are listed as core indicators in the ICMA Handbook– Harmonized Framework for Impact Reporting. • This is the first year that VGP reports on impacts from energy efficiency projects. • VGP provides information on the baselines used for calculating avoided energy consumption, and how it derives its emissions factors for calculating avoided emissions. • According to VGP, the calculation includes a majority, rather than all, of energy efficiency investments. • Clean Transportation • Electric vehicle charging stations. • Bike facilities. • No discrepancies identified • According to the Report, investments under the clean transportation category are electric vehicle charging facilities across 36 locations. • Total EV charging (KWh) • Assumed car kilometres covered • Avoided emissions per km (kgCOkm) • Avoided emissions (tCO) • Metrics are relevant and/ or are included in the ICMA Handbook– Harmonized Framework for Impact Reporting as either core or “other sustainability indicators”. • This is the first year that VGP reports on impacts from clean transportation projects. • While the Report includes general information about the number of VGP sites with electric vehicle charging, some more precise information about the number and type of investments under the Framework could be helpful. • VGP provides sufficient and transparent information on how it has calculated impacts. According to the Report, the calculation is limited to sites where charging data is available. • Sustainable • water and wastewater management • Reduction of freshwater consumption. • Capturing and recycling rainwater. • Green roofing. • No discrepancies identified • The Report mentions different projects financed in this project category, such as the construction of rainwater channels with rainwater retention basin, the utilization of rainwater for toilet facilities, and the development of green roofs for water retention. • Collected and reused rainwater/greywater (m³) • Water reuse is listed as a core indicator in the ICMA Handbook– Harmonized Framework for Impact Reporting. • VGP reports on completed projects for this project category. Impacts for projects currently under construction will be reported following completion. CORPORATE RESPONSIBILITY REPORT PAGE VGP EXTERNAL REVIEW OF GREEN FINANCE REPORTING Appendix – Detailed Review Category Description Review against framework criteria Impact Metrics Relevance of metrics Transparency considerations • Renewable Energy • Projects, investments and expenditures in products, technologies and services ranging from the generation and transmission of energy to the manufacturing of related equipment including among others onshore and offshore renewable energy facilities. This includes among others solar, wind, hydro, and geothermal energy projects. • No discrepancies identified • The projects financed under the renewable energy project category are solar panels and one geothermal heating project. • Total energy generated (MWh). • Avoided CO emissions (tCOe). • Metrics are relevant and production, capacity, and avoided emissions are listed as core indicators in the ICMA Handbook– Harmonized Framework for Impact Reporting. • Production and avoided emissions are reported on a portfolio basis, while capacity is reported on a project basis. • For avoided emissions, VGP uses the average grid factor of the 14 European countries in which it operates. Transparency on this is welcome. • No quantitative impacts are provided for the geothermal heating project. • Green Buildings • Projects, investments, and expenditures in relation to real estate assets which have received, or are designed and intended to receive, BREEAM “Very Good” certification (or equivalent DGNB/LEED rating). • No discrepancies identified • VGP selected DGNB Silver and LEED Silver as equivalent to BREEAM Very Good. Investors should note there is no consensus about the equivalence of different certification schemes. • In any case, the Report states that 69% of green buildings under the first bond, 79% of the first tranche of the second bond, and 58% of the second tranche of the second bond are (or expect to be) rated BREEAM Excellent or DGNB Gold. We welcome that the majority of VGP’s green building investments exceed the Framework criteria. • Environmental certification achieved or expected to be achieved. • Percentage of (completed) green buildings in the green building portfolio with EPC B or better. • Certification standard (including environmental certifications such as BREEAM, as well as EPCs) is listed as a core indicator in the ICMA Handbook– Harmonized Framework for Impact Reporting. • VGP reports environmental certification on a project basis. • Given that environmental certifications do not guarantee, for example, a certain energy use, VGP could consider reporting on additional metrics such as energy use on an absolute and intensity basis. As such, we welcome that the Report includes the percentage of green buildings in the green buildings portfolio with EPC B or better. Going forward, VGP could consider including more contextual information to add colour to this metric, for example how it compares to local regulations. We expect this may occur in parallel with increased reporting on the EU Taxonomy alignment of the green building portfolio. • Energy Efficiency • Projects, investments and expenditures focusing on energy efficiency measures in existing or new (logistics) buildings, warehouses. • Technologies (insulation, LED relighting, motion detectors, energy monitoring tools etc.) and related services and products, including installation. • No discrepancies identified • According to the Report, investments under the energy efficiency category are LED investments, sun protection, and moving sensors to reduce energy consumption. VGP has also invested in heat pumps which replace gas heating. • Avoided energy consumption (MWh) • Avoided emissions (tCO) • Metrics are relevant and energy savings and avoided emissions are listed as core indicators in the ICMA Handbook– Harmonized Framework for Impact Reporting. • This is the first year that VGP reports on impacts from energy efficiency projects. • VGP provides information on the baselines used for calculating avoided energy consumption, and how it derives its emissions factors for calculating avoided emissions. • According to VGP, the calculation includes a majority, rather than all, of energy efficiency investments. • Clean Transportation • Electric vehicle charging stations. • Bike facilities. • No discrepancies identified • According to the Report, investments under the clean transportation category are electric vehicle charging facilities across 36 locations. • Total EV charging (KWh) • Assumed car kilometres covered • Avoided emissions per km (kgCOkm) • Avoided emissions (tCO) • Metrics are relevant and/ or are included in the ICMA Handbook– Harmonized Framework for Impact Reporting as either core or “other sustainability indicators”. • This is the first year that VGP reports on impacts from clean transportation projects. • While the Report includes general information about the number of VGP sites with electric vehicle charging, some more precise information about the number and type of investments under the Framework could be helpful. • VGP provides sufficient and transparent information on how it has calculated impacts. According to the Report, the calculation is limited to sites where charging data is available. • Sustainable • water and wastewater management • Reduction of freshwater consumption. • Capturing and recycling rainwater. • Green roofing. • No discrepancies identified • The Report mentions different projects financed in this project category, such as the construction of rainwater channels with rainwater retention basin, the utilization of rainwater for toilet facilities, and the development of green roofs for water retention. • Collected and reused rainwater/greywater (m³) • Water reuse is listed as a core indicator in the ICMA Handbook– Harmonized Framework for Impact Reporting. • VGP reports on completed projects for this project category. Impacts for projects currently under construction will be reported following completion. PAGE VGP NV ANNUAL REPORT SECTION Additional information Biotope at VGP Park München, Germany CORPORATE RESPONSIBILITY REPORT PAGE SECTION VGP Park Magdeburg-Sülzetal CORPORATE RESPONSIBILITY REPORT PAGE VGP REPORTING METHODOLOGY . VGP Reporting methodology VGP uses a variety of tools, processes and indicators to monitor the performance of the assets owned and managed by the Group. These methods are used to structure an environmental, social and societal management approach, track results and to inform its stakeholders about performance. The Group continuously improves its reporting tools and processes in order to fine-tune the quality and accuracy of its consolidated data. This enables the Group to man- age its data collection processes more efficiently, track and analyse performance at all levels (site, region, Group) on a regular basis, assess results against targets, and implement suitable corrective measures. The Group sustainability reporting framework, which tracks performance against each of its ESG Strategy commitments is reviewed and updated every year to fine-tune its accuracy. For a detailed explanation of the indicators used, the reporting scope, gross let- table area reference data as well as GPS coordinates, please refer to the VGP website: https:// www.vgpparks.eu/en/investors/environmental-disclosures/. PAGE VGP NV ANNUAL REPORT ADDITIONAL INFORMATION . Independent third-party’s ESGassurance report VGP NV Independent assurance report on selected environmental per- formance indicators published in the Annual Report of VGP NV for the year ended December To the board of directors We have been engaged to conduct a limited assurance engagement on selected environmental performance indica- tors (“Selected Information”) published in the Annual report of VGP NV (“the Company”) for the year ending December . In preparing the Selected Information, VGP NV applied the criteria of the GHG Protocol. The Selected Information needs to be read and understood together with the Applica- ble Criteria. The Selected Information in scope of our engagement is included in chapter “... Results: Group carbon footprint” of the Annual Report per December and is included in below table: Selected Information Applicable Criteria Scope 1– in tnCO2e GHG Protocol Scope 2– in tnCO2e (market & location based) GHG Protocol Scope 3 emissions related to the portfolio in use, category 13, downstream leased assets– in tnCO2e GHG Protocol Based on our work as described in this report, nothing has come to our attention that causes us to believe that the above- mentioned Selected Information included in chapter “... Results: Group carbon footprint” of the Annual Report of VGP NV per December , has not been prepared, in all mate- rial respects, in accordance with the Appliable Criteria. Responsibility of the board of directors The board of directors of VGP NV is responsible for the prepa- ration of the Selected Information and the references made to it presented in the Annual Report as well as for the decla- ration that its reporting meets the requirements of Applicable Criteria. The board of directors is also responsible for: — Selecting and establishing the Applicable Criteria; — Preparing, measuring, presenting and reporting the Selected Information in accordance with the Applicable Criteria; — Designing, implementing, and maintaining internal pro- cesses and controls over information relevant to the prepa- ration of the Selected Information to ensure that they are free from material misstatement, including whether due to fraud or error; — Providing sufficient access and making available all nec- essary records, correspondence, information and explana- tions to allow the successful completion of the Services; — Confirming to us through written representations that you have provided us with all information relevant to our Ser- vices of which you are aware, and that the measurement or evaluation of the underlying subject matter against the Applicable Criteria, including that all relevant matters, are reflected in the Selected Information. Our responsibilities Our responsibility is to express a conclusion on the Selected Information based on our procedures. We conducted our engagement in accordance with International Standard on Assurance Engagements ISAE (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board (IAASB), in order to state whether anything had come to our attention that causes us to believe that the Selected Information have not been prepared, in all material respects, in accordance with the Applicable Criteria. Applying these standards, our procedures are aimed at obtaining limited assurance on the fact that the Selected Information do not contain material misstatements. The pro- cedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a rea- sonable assurance engagement and consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Our work was performed on the data gathered and retained in the reporting scope by VGP NV as mentioned above. Our conclusion covers therefore only the abovementioned Selected Information included in chapter “... Results: CORPORATE RESPONSIBILITY REPORT PAGE INDEPENDENT THIRDPARTY’S ESG ASSURANCE REPORT Group carbon footprint” of the Annual Report per Decem- ber and not all information included in the Annual Report. The limited assurance on the Selected Information was only performed on the Selected Information covering the year end- ing December . We are required to plan and perform our work to address the areas where we have identified that a material misstate- ment of the description of activities undertaken in respect of the Selected Information is likely to arise. The procedures we performed were based on our professional judgment. In carry- ing out our limited assurance engagement on the description of activities undertaken in respect of the Selected Information, we performed the following key procedures:: — Perform analytical review procedures and consider the risks of material misstatement of the Selected Information. — Through inquiries of management, obtain an understand- ing of the Company, its environment, processes and infor- mation systems relevant to the preparation of the Selected Information sufficient to identify and assess risks of mate- rial misstatement in the Selected Information, and pro- vide a basis for designing and performing procedures to respond to assessed risks and to obtain limited assurance to support a conclusion. — Perform procedures over the Selected Information, includ- ing recalculation of relevant formulae used in manual cal- culations and assessment whether the data has been appropriately consolidated. — Perform procedures over underlying data on a statistical sample basis to assess whether the data has been col- lected and reported in accordance with the Applicable Cri- teria, including verifying to source documentation. — Perform procedures over the Selected Information includ- ing assessing management’s assumptions and estimates. — Accumulate misstatements and control deficiencies iden- tified, assessing whether material. — Read the narrative accompanying the Selected Informa- tion with regard to the Applicable Criteria, and for consist- ency with our findings. We apply International Standard on Quality Management and, accordingly, maintain a comprehensive system of qual- ity control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. In conducting our engagement, we have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the Interna- tional Ethics Standards Board for Accountants (IESBA), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Inherent limitations of theSelected Information We obtained limited assurance over the preparation of the Selected Information in accordance with the Applicable Cri- teria. Inherent limitations exist in all assurance engagements. Any internal control structure, no matter how effective, can- not eliminate the possibility that fraud, errors or irregularities may occur and remain undetected and because we use selec- tive testing in our engagement, we cannot guarantee that errors or irregularities, if present, will be detected. The self-defined Applicable Criteria, the nature of the Selected Information, and absence of consistent external standards allow for different, but acceptable, measurement methodologies to be adopted which may result in variances between entities. The adopted measurement methodolo- gies may also impact comparability of the Selected Informa- tion reported by different organisations and from year to year within an organisation as methodologies develop. Use of our report This report is made solely to the board of directors of VGP NV in accordance with ISAE (Revised) and our agreed terms of engagement. Our work has been undertaken so that we might state to the board of directors those matters we have agreed to state to them in this report and for no other purpose. Without assuming or accepting any responsibility or liability in respect of this report to any party other than the Company and its board of directors, we acknowledge that the board of directors may choose to make this report publicly available for others wishing to have access to it, which does not and will not affect or extend for any purpose or on any basis our responsibilities. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than VGP NV and its board of directors as a body, for our work, for this report, or for the conclusions we have formed. Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL Represented by Sofian Milad VGP Office Prague, Czech Republic Honey collected at the VGP office in the Czech Republic. CORPORATE RESPONSIBILITY REPORT PAGE CORPORATE DIRECTORY Corporate Directory VGP NV Registered seat Generaal Lemanstraat bus B- ANTWERP Belgium tel + () www.vgpparks.eu VAT: BE Enterprise number: .. Other VGP offices Vienna, Austria Prague, Czech Republic Jenišovice u Jablonce nad Nisou, Czech Republic Fredericia, Denmark Lyon, France Paris, France Düsseldorf, Germany Budapest, Hungary Segrate (Milan), Italy Riga, Latvia Luxembourg, Luxembourg ’s-Hertogenbosch, The Netherlands Porto, Portugal Lisbon, Portugal Bucharest, Romania Belgrade, Serbia Bratislava, Slovakia Barcelona, Spain Madrid, Spain Zaragoza, Spain Sevilla, Spain Bilbao, Spain Directors VM INVEST NV, represented by Bart Van Malderen Chairman; Non-Executive and Reference Shareholder Jan Van Geet s. r. o., represented by Jan Van Geet CEO; Executive and Reference Shareholder GAEVAN BV, represented by Ann Gaeremynck Non-Executive (Independent) Director Katherina Reiche Non-Executive (Independent) Director Vera Gade-Butzlaff Non-Executive (Independent) Director Financial Auditor Deloitte Bedrijfsrevisoren/ Réviseurs d’Entreprises BV/SRL Share code VGP is listed on Euronext Brussels ISIN: BE VGP NV is a member of the FTSE EPRA Nareit Global Developed Index and the Euronext ESG index Bloomberg: VGP BB Refinitiv (ThomsonReuters): VGP:BRU Portfolio PAGE VGP NV ANNUAL REPORT 2023 VGP PARK OVERVIEW Germany 1 VGP Park Hamburg 2 VGP Park Soltau 3 VGP Park Leipzig 4 VGP Park Leipzig Flughafen 5 VGP Park Berlin 6 VGP Park Berlin Oberkrämer 7 VGP Park Ginsheim 8 VGP Park Schwalbach 9 VGP Park München 10 VGP Park Bingen 11 VGP Park Rodgau 12 VGP Park Höchstadt 13 VGP Park Borna 14 VGP Park Bobenheim-Roxheim 15 VGP Park Frankenthal 16 VGP Park Wustermark 17 VGP Park Göttingen 18 VGP Park Göttingen 2 19 VGP Park Wetzlar 20 VGP Park Halle 21 VGP Park Halle 2 22 VGP Park Dresden-Radeburg 23 VGP Park Bischofsheim 24 VGP Park Gießen-Buseck 25 VGP Park Gießen-Lützellinden 26 VGP Park Gießen Am alten Flughafen 27 VGP Park Chemnitz 28 VGP Park Magdeburg 29 VGP Park Laatzen 30 VGP Park Einbeck 31 VGP Park Erfurt 32 VGP Park Erfurt 2 33 VGP Park Erfurt 3 34 VGP Park Rostock 35 VGP Park Wiesloch-Walldorf 36 VGP Park Nürnberg 37 VGP Park Hochheim 38 VGP Park Siegen 39 VGP Park Koblenz 40 VGP Park Rüsselsheim Czech Republic 41 VGP Park Tuchoměřice 42 VGP Park Ústí nad Labem 43 VGP Park Český Újezd 44 VGP Park Liberec 45 VGP Park Olomouc 46 VGP Park Jeneč 47 VGP Park Chomutov 48 VGP Park Brno 49 VGP Park Hrádek nad Nisou 50 VGP Park Hrádek nad Nisou 2 51 VGP Park Plzeň 52 VGP Park Prostějov 53 VGP Park Vyškov 54 VGP Park České Budějovice 55 VGP Park Kladno 56 VGP Park Ústí nad Labem City Spain 57 VGP Park San Fernado deHenares 58 VGP Park Lliçà d’Amunt 59 VGP Park Fuenlabrada 60 VGP Park Fuenlabrada 2 61 VGP Park Valencia Cheste 62 VGP Park Zaragoza 63 VGP Park Dos Hermanas 64 VGP Park Sevilla Ciudad de la Imagen 65 VGP Park Granollers 66 VGP Park Martorell 67 VGP Park La Naval 68 VGP Park Burgos 69 VGP Park Alicante 70 VGP Park Córdoba 71 VGP Park Belartza Latvia 72 VGP Park Kekava 73 VGP Park Riga 74 VGP Park Tiraines Romania 75 VGP Park Timișoara 76 VGP Park Sibiu 77 VGP Park Brașov 78 VGP Park Arad 79 VGP Park Bucharest Hungary 80 VGP Park Győr 81 VGP Park Győr Béta 82 VGP Park Alsónémedi 83 VGP Park Hatvan 84 VGP Park Kecskemét 85 VGP Park Budapest Aerozone Slovakia 86 VGP Park Malacky 87 VGP Park Bratislava 88 VGP Park Zvolen Austria 89 VGP Park Graz 90 VGP Park Laxenburg 91 VGP Park Ehrenfeld The Netherlands 92 VGP Park Nijmegen 93 VGP Park Roosendaal 94 VGP Park Moerdijk Italy 95 VGP Park Calcio 96 VGP Park Valsamoggia 97 VGP Park Valsamoggia 2 98 VGP Park Sordio 99 VGP Park Padova 100 VGP Park Paderno Dugnano 101 VGP Park Legnano 102 VGP Park Parma Lumiere 103 VGP Park Parma Paradigna Portugal 104 VGP Park Santa Maria da Feira 105 VGP Park Sintra 106 VGP Park Loures 107 VGP Park Montijo Serbia 108 VGP Park Belgrade Dobanovice Croatia 109 VGP Park Lučko Zagreb France 110 VGP Park Rouen 111 VGP Park Vélizy 112 VGP Park Mulhouse PORTFOLIO 2023 PAGE VGP PARK OVERVIEW VGP Parks all-over Europe Western and Southern Europe Germany, Austria, The Netherlands, France, Italy, Portugal, Spain Central and Eastern Europe Czech Republic, Slovakia, Romania, Hungary, Serbia, Croatia, Latvia PAGE VGP NV ANNUAL REPORT 2023 VGP PARK OVERVIEW Region Country Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total East Croatia Own 95,306 — — 36,867 36,867 0.00 East Czechia Committed 80,042 — — 32,013 32,013 0.00 East Czechia JV1 1,475,778 625,515 8,665 8,313 642,493 35.02 East Czechia Own 876,544 142,493 39,660 128,106 310,259 8.41 East Hungary JV1 207,148 83,174 — 4,900 88,074 5.22 East Hungary Own 1,208,566 114,270 105,873 252,123 472,266 15.06 East Latvia Own 330,622 133,542 — 14,060 147,602 7.59 East Romania JV2 292,724 146,085 — 0 146,085 6.91 East Romania Own 1,500,181 169,133 86,046 492,879 748,058 14.13 East Serbia Own 1,160,544 76,938 385,996 462,934 4.57 East Slovakia JV1 220,492 88,615 — 16,006 104,621 4.99 East Slovakia Own 1,283,143 138,244 48,104 390,712 577,060 9.66 West Austria JV2 38,239 16,537 — 0 16,537 1.41 West Austria Own 400,961 22,560 82,594 47,398 152,552 7.75 West Denmark Committed 175,256 — — 81,449 81,449 0.00 West France Own 728,428 — 39,330 287,535 326,865 2.17 West Germany Committed 151,790 — — 77,832 77,832 1.07 West Germany JV5 1,584,538 717,812 141,478 0 859,290 52.93 West Germany VGP Park Siegen JV 34,035 — — 20,976 20,976 0.00 West Germany JV1 2,411,625 1,173,600 — 14,829 1,188,429 68.80 West Germany JV3 644,158 276,003 — 37,878 313,881 26.23 West Germany Own 3,113,627 733,867 87,366 694,425 1,515,658 30.35 West Italy Committed 171,925 — — 79,129 79,129 0.00 West Italy JV2 197,136 86,380 — 0 86,380 5.64 West Italy Own 367,136 — 18,782 127,654 146,437 1.68 West Netherlands JV2 448,997 258,683 — 20,088 278,771 14.86 West Netherlands LPM JV 719,762 — — 487,867 487,867 0.00 West Netherlands Own 238,041 — — 136,222 136,222 0.00 West Portugal JV2 73,578 29,813 — 0 29,813 1.34 West Portugal Own 184,444 19,749 31,789 25,802 77,340 2.91 West Spain JV2 830,517 389,395 — 70,402 459,797 22.05 West Spain VGP Park Belartza JV 145,215 — — 63,640 63,640 0.00 West Spain Own 569,753 — 7,218 289,673 296,891 0.02 21,960,252 5,365,470 773,843 4,324,774 10,464,086 350.76 PORTFOLIO 2023 PAGE VGP PARK OVERVIEW * Gross Lettable Area is including development potential Gross Lettable Area by Region (in m²) — including JV at 100% Gross Lettable Area by Country (in m²) — including JV at 100% Gross Lettable Area by Ownership (in m²) — JV at 100% ,, m Central and Eastern Europe – % ,, m Western and Southern Europe – % ,, m Own – % ,, m Joint Ventures – % Austria – 169,089 m² – 2% Croatia – 36,867 m² – 0% Czechia – 984,765 m² – 9% Denmark – 81,449 m² – 1% France – 326,865 m² – 3% Germany – 3,976,065 m² – 38% Hungary – 560,340 m² – 5% Italy – 311,946 m² – 3% Latvia – 147,602 m² – 1% The Netherlands – 902,860 m² – 9% Portugal – 107,153 m² – 1% Romania – 894,143 m² – 9% Serbia – 462,934 m² – 4% Slovakia – 681,681 m² – 7% Spain – 820,327 m² – 8% PAGE VGP NV ANNUAL REPORT 2023 GERMANY Hannover Karlsruhe Nürnberg Stuttgart Frankfurt am Main Bonn Hamburg Leipzig Berlin PORTFOLIO 2023 PAGE GERMANY 1 VGP Park Hamburg 2 VGP Park Soltau 3 VGP Park Leipzig 4 VGP Park Leipzig Flughafen 5 VGP Park Berlin 6 VGP Park Berlin Oberkrämer 7 VGP Park Ginsheim 8 VGP Park Schwalbach 9 VGP Park München 10 VGP Park Bingen 11 VGP Park Rodgau 12 VGP Park Höchstadt 13 VGP Park Borna 14 VGP Park Bobenheim-Roxheim 15 VGP Park Frankenthal 16 VGP Park Wustermark 17 VGP Park Göttingen 18 VGP Park Göttingen 2 19 VGP Park Wetzlar 20 VGP Park Halle 21 VGP Park Halle 2 22 VGP Park Dresden-Radeburg 23 VGP Park Bischofsheim 24 VGP Park Gießen-Buseck 25 VGP Park Gießen-Lützellinden 26 VGP Park Gießen Am alten Flughafen 27 VGP Park Chemnitz 28 VGP Park Magdeburg 29 VGP Park Laatzen 30 VGP Park Einbeck 31 VGP Park Erfurt 32 VGP Park Erfurt 2 33 VGP Park Erfurt 3 34 VGP Park Rostock 35 VGP Park Wiesloch-Walldorf 36 VGP Park Nürnberg 37 VGP Park Hochheim 38 VGP Park Siegen 39 VGP Park Koblenz 40 VGP Park Rüsselsheim Germany PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Berlin BUILDING E tenant Picnic GmbH lettable area 10,585 m² + extension 9,950 m² built 2020 GERMANY VGP Park Berlin BUILDING D tenant Lidl Digital FC GmbH & Co. KG; Solardach LLG GmbH lettable area 53,675 m² built 2017 GERMANY VGP Park Berlin BUILDING C tenant SSW Stolze Stahl Waren GmbH; DefShop GmbH; Pets Deli Tonius GmbH; VGP PM Services GmbH; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH (DE) lettable area 26,062 m² built 2018 GERMANY VGP Park Berlin BUILDING B tenant Lillydoo Services GmbH; VGP Renewable Energy S.à r.l. lettable area 9,717 m² built 2018 GERMANY VGP Park Berlin BUILDING A tenant Emons Logistik GmbH; Barsan Global Logistik GmbH; Emsland-Stärke GmbH; Isringhausen GmbH & Co. KG; VGP Renewable Energy S.à r.l. lettable area 23,853 m² built 2015 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Bingen BUILDING A tenant Custom Chrome Europe GmbH lettable area 6,400 m² built 2014 GERMANY VGP Park Berlin BUILDING M tenant Malindo GmbH lettable area 17,337 m² built 2022 GERMANY VGP Park Berlin BUILDING H tenant Zalando Lounge Logistics SE & Co. KG lettable area 23,094 m² built 2019 GERMANY VGP Park Berlin BUILDING G tenant Logit Services GmbH; Pietsch GmbH; Alfred Kärcher Vertriebs-GmbH; Messenger Fullfillment GmbH lettable area 11,725 m² built 2020 GERMANY VGP Park Berlin BUILDING F tenant Picnic GmbH lettable area 24,872 m² built 2020 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Hamburg BUILDING A tenant GEODIS CL Germany GmbH; Nippon Express (Deutschland) GmbH; EGC Energie- und Gebäudetechnik Control GmbH & Co. KG; MH Handel GmbH lettable area 30,167 m² built 2013 GERMANY VGP Park Ginsheim BUILDING A tenant Greenyard Fresh Germany GmbH; 4PX Express GmbH; VGP Renewable Energy S.à.r.l.; Crane Worldwide Germany GmbH; Stahlgruber GmbH lettable area 35,799 m² built 2017 GERMANY VGP Park Frankenthal BUILDING A tenant Amazon Logistik Frankenthal GmbH; PV Frankenthal GmbH & Co KG lettable area 146,898 m² built 2018 GERMANY VGP Park Borna BUILDING A tenant Lekkerland SE; VGP Renewable Energy S.à r.l. lettable area 13,618 m² built 2015 GERMANY VGP Park Bobenheim-Roxheim BUILDING A tenant Lekkerland SE; Energie Südwest – Grüne Energie GmbH lettable area 23,271 m² built 2016 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Hamburg BUILDING A tenant Landgard eG; Kohivo Green-Investment GmbH & Co. KG lettable area 13,167 m² built 2018 GERMANY VGP Park Hamburg BUILDING A tenant LZ Logistik GmbH; Energie Südwest-Grüne Energie GmbH lettable area 14,471 m² built 2016 GERMANY VGP Park Hamburg BUILDING A tenant Zebco Europe GmbH; Hausmann Logistik GmbH; LZ Logistik GmbH lettable area 9,452 m² built 2015 GERMANY VGP Park Hamburg BUILDING A tenant MH Handel GmbH; VGP Renewable Energy S.à r.l. lettable area 20,170 m² built 2015 GERMANY VGP Park Hamburg BUILDING A tenant Hausmann Logistik GmbH; Drive Medical GmbH & Co. KG; CHEP Deutschland GmbH; VGP Renewable Energy S.à r.l. lettable area 24,750 m² built 2014–2016 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Hamburg BUILDING B tenant Rhenus Warehousing Solutions SE & Co.KG; VGP Renewable Energy S.à r.l. lettable area 57,473 m² built 2015–2017 GERMANY VGP Park Hamburg BUILDING B tenant Geis Industrie-Service GmbH; Karl Heinz Dietrich GmbH & Co KG; Lagerei und Spedition Dirk Vollmer GmbH; VGP Renewable Energy S.à r.l. lettable area 40,587 m² built 2017 GERMANY VGP Park Hamburg BUILDING B tenant Lagerei und Spedition Dirk Vollmer GmbH; VGP PM Services GmbH; Heik Spedition GmbH lettable area 9,456 m² built 2017 GERMANY VGP Park Hamburg BUILDING C tenant Rieck Projekt Kontrakt Logistik Hamburg GmbH & Co. KG; VGP Renewable Energy S.à r.l. lettable area 23,680 m² built 2017 GERMANY VGP Park Hamburg BUILDING D tenant Lagerei und Spedition Dirk Vollmer GmbH lettable area 2,567 m² built 2015 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Höchstadt BUILDING A tenant C&A Mode GmbH & Co. KG; VGP Renewable Energy S.a r.l.; VGP Renewable Energy Deutschland GmbH lettable area 15,002 m² built 2015 GERMANY VGP Park Leipzig BUILDING A tenant Deine Tür GmbH; Kohivo Green-Investment GmbH & Co. KG lettable area 7,231 m² built 2019 GERMANY VGP Park Leipzig BUILDING A tenant Flaschenpost Leipzig GmbH; Energie Südwest – Grüne Energie GmbH lettable area 9,630 m² built 2019 GERMANY VGP Park Leipzig BUILDING B tenant USM operations GmbH; Solardach LLG GmbH lettable area 24,630 m² built 2017 GERMANY VGP Park Leipzig BUILDING C tenant fms field marketing + sales services GmbH lettable area 2,519 m² built 2022 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Rodgau BUILDING D tenant EBARA Pumps Europe S.p.A.; Asendia Germany GmbH lettable area 7,062 m² built 2016 GERMANY VGP Park Rodgau BUILDING C tenant toom Baumarkt GmbH; VGP Renewable Energy S.à r.l. lettable area 19,783 m² built 2015 GERMANY VGP Park Rodgau BUILDING B tenant Rhenus Warehousing Solutions SE & Co.KG; VGP Renewable Energy S.à r.l. lettable area 43,376 m² built 2016 GERMANY VGP Park Rodgau BUILDING A tenant A & O GmbH; Rhenus Warehousing Solutions SE & Co. KG; PTG Lohnabfüllung GmbH; toom Baumarkt GmbH lettable area 24,890 m² built 2016 GERMANY VGP Park Leipzig BUILDING C tenant Deine Tür GmbH lettable area 2,379 m² built 2022 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Wetzlar BUILDING B tenant POCO Einrichtungsmärkte GmbH; Global Cargo ServiceGmbH; Strieder Transport Logistik GmbH; VGP Renewable Energy S.à r.l.; Ancla Logistik GmbH lettable area 19,265 m² built 2018 GERMANY VGP Park Wetzlar BUILDING A tenant Ancla Logistik GmbH lettable area 18,994 m² built 2018–2019 GERMANY VGP Park Soltau BUILDING A tenant AUDI AG; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 55,813 m² built 2016 GERMANY VGP Park Schwalbach BUILDING A tenant Stronghold Germany GmbH; VGP Renewable Energy S.à r.l. lettable area 8,387 m² built 2017 GERMANY VGP Park Rodgau BUILDING E tenant PTG Lohnabfüllung GmbH lettable area 8,734 m² built 2015 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Wustermark BUILDING A tenant Colossus Logistics GmbH & Co. KG; L & B Leit- und Sicherungstechnische Dienstleistungs-GmbH; SEREDA GmbH; VGP PM Services GmbH; VGP Renewable Energy S.à r.l. lettable area 10,997m² built 2020 GERMANY VGP Park Göttingen BUILDING E tenant Van Waveren Saaten GmbH lettable area 6,046 m² built 2019 GERMANY VGP Park Göttingen BUILDING C tenant MediaMarktSaturn Beschaffung und Logistik GmbH; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 80,157 m² built 2021 GERMANY VGP Park Göttingen BUILDING B tenant Amazon EU S.à r.l.; Niederlassung Deutschland lettable area 38,381 m² built 2019 GERMANY VGP Park Göttingen BUILDING A tenant Friedrich ZUFALL GmbH & Co. KG; Amazon EU S.à r.l.; Niederlassung Deutschland; VGP Renewable Energy S.à.r.l. lettable area 43,001 m² built 2018 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Dresden BUILDING A tenant Schenker Deutschland AG; Kohivo Green-Investment GmbH & Co. KG lettable area 20,285 m² built 2018 GERMANY VGP Park Wustermark BUILDING C tenant TA Technix GmbH lettable area 6,382 m² built 2018 GERMANY VGP Park Wustermark BUILDING C tenant Wepoba Wellpappenfabrik GmbH & Co. KG lettable area 12,800 m² built 2018 GERMANY VGP Park Wustermark BUILDING B tenant Schulze Logistik Berlin GmbH; Gläser und Flaschen GmbH; Box at Work GmbH; Teppich Tetik GmbH lettable area 29,624 m² built 2019 GERMANY VGP Park Wustermark BUILDING A tenant Wardow GmbH lettable area 11,916 m² built 2019 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Bischofsheim BUILDING A tenant Bettmer GmbH; Wendel Energie UG lettable area 6,659 m² built 2019 GERMANY VGP Park Halle BUILDING A tenant L’ISOLANTE K-FLEX GmbH; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH, TTM Halle/Leipzig GmbH lettable area 21,263 m² built 2020 GERMANY VGP Park Halle BUILDING B tenant Ceha Deutschland GmbH; Schenker Deutschland AG; VGPRenewable Energy S.à r.l. lettable area 26,848 m² built 2020–2021 GERMANY VGP Park Halle BUILDING C tenant Trek Bicycle GmbH; VGP PM Services GmbH; Seifert Logistik Dienstleistung GmbH; VGP Renewable Energy S.à r.l. lettable area 37,933 m² built 2022 GERMANY VGP Park Halle BUILDING A tenant Nordlicht Consulting GmbH lettable area 14,862 m² built 2023 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Einbeck BUILDING A tenant Burgsmüller GmbH lettable area 8,883 m² built 2020 GERMANY VGP Park Chemnitz BUILDING A tenant ThyssenKrupp Automation Engineering GmbH; VGP Renewable Energy S.à r.l. lettable area 12,591 m² built 2019 GERMANY VGP Park Gießen-Buseck BUILDING A tenant PROLIT Verlagsauslieferung GmbH; JingDong Development Deutschland GmbH; VGP Renewable Energy S.à r.l. lettable area 17,357 m² built 2020 GERMANY VGP Park Gießen-Lützellinden BUILDING A tenant Pharmaserv GmbH; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 14,156 m² built 2020 GERMANY VGP Park Magdeburg BUILDING A tenant REWE Markt GmbH, VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 31,869 m² built 2020 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Magdeburg BUILDING B tenant Imperial Logistics & Services GmbH, Hörmann Logistic Solutions GmbH; Wheels Logistics GmbH & Co. KG; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 42,368 m² built 2021 GERMANY VGP Park Magdeburg BUILDING C tenant Contemporary Amperex Technology Thuringia GmbH; BWBekleidungsmanagement GmbH; VGP PM Services GmbH lettable area 112,431 m² built 2022, 2023 GERMANY VGP Park Magdeburg BUILDING F tenant APM Autoteile GmbH; Contemporary Amperex Technology Thuringia GmbH; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 51,995 m² built 2022 GERMANY VGP Park München BUILDING A tenant Bayerische Motoren Werke Aktiengesellschaft; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 56,874 m² built 2020, 2022 GERMANY VGP Park München BUILDING B tenant KraussMaffei Technologies GmbH; VGP Renewable Energy S.à r.l. lettable area 81,549 m² built 2022 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park München BUILDING C tenant KraussMaffei Technologies GmbH; VGP Renewable Energy S.à r.l. lettable area 48,471 m² built 2022 GERMANY VGP Park München BUILDING E tenant KraussMaffei Technologies GmbH; VGP Renewable Energy S.à r.l. lettable area 39,352 m² built 2022 GERMANY VGP Park München BUILDING F tenant KraussMaffei Technologies GmbH; VGP Renewable Energy S.à r.l. lettable area 7,487 m² built 2022 GERMANY VGP Park München BUILDING PH NORD tenant Bayerische Motoren Werke Aktiengesellschaft; Krauss Maffei Technologies GmbH lettable area 22,850 m² built 2020 GERMANY VGP Park München BUILDING PH SUD tenant KraussMaffei Technologies GmbH; VGP Renewable Energy S.à r.l. lettable area 19,419 m² built 2022 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Laatzen BUILDING A tenant KraussMaffei Extrusion GmbH; VGP Renewable Energy S.à r.l. lettable area 55,398 m² built 2022 GERMANY VGP Park Laatzen BUILDING B tenant KraussMaffei Extrusion GmbH lettable area 11,803 m² built 2022 GERMANY VGP Park Laatzen BUILDING C tenant Connox GmbH, VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 51,262 m² built 2021 GERMANY VGP Park Laatzen BUILDING D tenant EDEKA Einkaufskontor GmbH lettable area 8,519 m² built 2021 GERMANY VGP Park Laatzen BUILDING PH OST tenant Krauss Maffei Extrusion GmbH; EDEKA Einkaufskontor GmbH lettable area 12,854 m² built 2021 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Erfurt BUILDING A tenant Emons Logistik GmbH; JOST-Werke Logistics GmbH; KOMSA AG; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 26,214 m² built 2021 GERMANY VGP Park Erfurt BUILDING B tenant Kolibri Immobilien GmbH lettable area 41,815 m² built 2023 GERMANY VGP Park Erfurt BUILDING A tenant Sonova Logistics Center Germany GmbH; LGI TechLog GmbH; Dachser SE Logistikzentrum Erfurt; VGP Renewable Energy S.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 29,183 m² built 2023 GERMANY VGP Park Berlin Oberkrämer BUILDING A tenant GLX Global Logistic Services GmbH; Neolymp GmbH; VGPRenewable Energy S.à r.l.; VGPRenewable Energy Deutschland GmbH lettable area 13,717 m² built 2022 GERMANY VGP Park Berlin Oberkrämer BUILDING B tenant BDSK Handels GmbH & Co. KG; VGP PM Services GmbH; VGPRenewable Energy S.à r.l. lettable area 11,502 m² built 2022 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Berlin Oberkrämer BUILDING C tenant Amazon Deutschland E14 Transport GmbH lettable area 9,086 m² built 2022 GERMANY VGP Park Berlin Oberkrämer BUILDING D tenant Rieck Logistik Berlin Nord GmbH & Co. KG i.G.; Rieck Fulfillment Solutions Berlin Nord GmbH & Co. KG; VGP Renewable Energy S.à r.l. lettable area 24,223 m² built 2022, 2023 GERMANY VGP Park Berlin Oberkrämer BUILDING E tenant BTG Internationale Spedition GmbH; Toussaint Berlin GmbH lettable area 10,511 m² built 2023 GERMANY VGP Park Leipzig Flughafen BUILDING A tenant Meesenburg Großhandel KG, VGP Renewable Energy S.à r.l.; BDSK Handels GmbH & Co. KG lettable area 16,298 m² built 2022 GERMANY VGP Park Rostock BUILDING A tenant Schenker Deutschland AG lettable area 20,447 m² built 2022 PORTFOLIO 2023 PAGE GERMANY GERMANY VGP Park Nürnberg BUILDING H tenant Siemens Aktiengesellschaft Real Estate GS SRE DE NBY 2 lettable area 65,221 m² built acquired 2022 GERMANY VGP Park Hochheim BUILDING A tenant Vicampo.de GmbH; VGP Renewable Energy Deutschland GmbH; VGP Renewable Energy S.à r.l. lettable area 12,025 m² built 2023 GERMANY VGP Park Gießen Am alten Flughafen BUILDING A tenant Zalando Logistics Gießen SE & Co. KG; VGP Renewable EnergyS.à r.l.; VGP Renewable Energy Deutschland GmbH lettable area 124,922 m² built 2023 GERMANY VGP Park Gießen AmaltenFlughafen BUILDING B tenant UPS SCS GmbH & Co. KG; Rhenus Warehousing Solutions SE&Co.KG; VGP Renewable Energy S.à r.l. lettable area 59,150 m² built 2023 GERMANY VGP Park Rüsselsheim AREAL K tenant Opel Automobile GmbH lettable area 181,787 m² built acquired 2023 PAGE VGP NV ANNUAL REPORT 2023 GERMANY GERMANY VGP Park Rüsselsheim AREAL M tenant Opel Automobile GmbH lettable area 185,516 m² built acquired 2023 GERMANY VGP Park Rüsselsheim AREAL MM tenant Opel Automobile GmbH lettable area 24,446 m² built acquired 2023 GERMANY VGP Park Rüsselsheim AREAL P tenant Opel Automobile GmbH lettable area 30,008 m² built acquired 2023 VGP Park Gießen-Lützellinden, Germany PAGE VGP NV ANNUAL REPORT 2023 GERMANY VGP Park Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total VGP Park Erfurt VGP 50,265 26,214 — — 26,214 1.27 VGP Park Erfurt 2 VGP 76,443 41,815 — — 41,815 2.15 VGP Park Erfurt 3 VGP 46,840 29,183 — — 29,183 1.71 VGP Park Halle VGP 165,888 86,044 — — 86,044 4.10 VGP Park Halle 2 VGP 50,826 14,862 — 11,533 26,395 0.99 VGP Park Leipzig Flughafen VGP 47,361 16,298 — — 16,298 0.91 VGP Park Hamburg 4 VGP 32,362 — 9,700 9,700 0.00 VGP Park Hochheim VGP 25,308 12,025 — — 12,025 0.76 VGP Park Koblenz VGP 63,602 32,377 — 32,377 2.03 VGP Park Leipzig Flughafen 2 VGP 449,253 — 209,461 209,461 0.00 VGP Park Nürnberg VGP 383,448 65,221 — 89,666 154,887 5.33 VGP Park Rostock VGP 105,217 20,447 — 24,419 44,866 0.50 VGP Park Rüsselsheim – Areal K VGP 892,595 181,787 — 96,480 278,267 3.22 VGP Park Rüsselsheim – Areal M VGP 448,485 209,962 — 177,230 387,192 4.28 VGP Park Rüsselsheim – Areal P VGP 64,670 30,008 — 12,000 42,008 0.65 VGP Park Wiesloch- Walldorf VGP 211,064 — 54,989 63,936 118,925 2.44 Total VGP 3,113,627 733,867 87,366 694,425 1,515,658 30.35 PORTFOLIO 2023 PAGE GERMANY VGP Park Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total VGP Park Berlin Oberkrämer JV5 204,512 69,039 — — 69,039 5.19 VGP Park Gießen Am alten Flughafen JV5 316,866 184,072 67,433 — 251,505 16.28 VGP Park Göttingen 2 JV5 173,375 86,203 — — 86,203 5.33 VGP Park Laatzen JV5 284,927 139,835 — — 139,835 10.44 VGP Park Magdeburg JV5 604,858 238,663 74,045 — 312,708 15.67 VGP Park Siegen VGP Park Siegen JV 34,035 — — 20,976 20,976 0.00 VGP Park Berlin JV1 46,540 23,853 — — 23,853 1.29 VGP Park Berlin 2 JV1 187,455 89,454 — — 89,454 4.38 VGP Park Berlin 3 JV1 225,034 70,277 9,950 80,227 4.15 VGP Park Berlin 4 JV1 54,816 17,337 — 4,879 22,216 1.09 VGP Park Berlin Wustermark JV1 132,680 71,721 — — 71,721 3.88 VGP Park Bingen JV1 15,000 6,400 — — 6,400 0.49 VGP Park Bischofsheim JV1 13,457 6,659 — — 6,659 0.55 VGP Park Bobenheim-Roxheim JV1 56,643 23,271 — — 23,271 1.88 VGP Park Borna JV1 42,533 13,618 — — 13,618 0.93 VGP Park Buseck JV1 36,549 17,357 — — 17,357 1.01 VGP Park Chemnitz JV1 40,421 12,591 — — 12,591 1.15 VGP Park Dresden JV1 32,383 20,285 — — 20,285 0.94 VGP Park Einbeck JV1 20,300 8,883 — — 8,883 0.71 VGP Park Frankenthal JV1 174,282 146,898 — — 146,898 9.39 VGP Park Ginsheim JV1 59,845 35,799 — — 35,799 2.61 VGP Park Göttingen JV1 138,297 81,382 — — 81,382 3.47 VGP Park Hamburg JV1 271,843 114,742 — — 114,742 7.49 VGP Park Hamburg 2 JV1 213,918 107,515 — — 107,515 6.27 VGP Park Hamburg 3 JV1 51,351 23,680 — — 23,680 1.23 VGP Park Höchstadt JV1 45,680 15,002 —, — 15,002 0.95 VGP Park Leipzig JV1 105,885 46,389 — — 46,389 2.66 VGP Park Lützellinden JV1 23,379 14,156 — — 14,156 1.15 VGP Park Rodgau JV1 216,543 103,874 — — 103,874 6.47 VGP Park Schwalbach JV1 19,587 8,387 — — 8,387 0.55 VGP Park Soltau JV1 119,868 55,813 — — 55,813 1.88 VGP Park Wetzlar JV1 67,336 38,259 — — 38,259 2.23 VGP Park München JV3 644,158 276,003 — 37,878 313,881 26.23 Total Joint Ventures 4,674,356 2,167,415 141,478 73,683 2,382,576 147.96 VGP Park Berlin Bernau Committed 141,160 — — 70,618 70,618 0.00 VGP Park Steinbach Committed 10,630 — — 7,214 7,214 1.07 Total Committed 151,790 — — 77,832 77,832 1.07 Total Germany 7,939,773 2,901,282 228,844 845,940 3,976,066 179.38 PAGE VGP NV ANNUAL REPORT 2023 CZECH REPUBLIC Plzeň Liberec Ostrava Olomouc Brno Ústí nad Labem České Budějovice Prague PORTFOLIO 2023 PAGE CZECH REPUBLIC 41 VGP Park Tuchoměřice 42 VGP Park Ústí nad Labem 43 VGP Park Český Újezd 44 VGP Park Liberec 45 VGP Park Olomouc 46 VGP Park Jeneč 47 VGP Park Chomutov 48 VGP Park Brno 49 VGP Park Hrádek nad Nisou 50 VGP Park Hrádek nad Nisou 2 51 VGP Park Plzeň 52 VGP Park Prostějov 53 VGP Park Vyškov 54 VGP Park České Budějovice 55 VGP Park Kladno 56 VGP Park Ústí nad Labem City Czech Republic PAGE VGP NV ANNUAL REPORT 2023 CZECH REPUBLIC CZECH REPUBLIC VGP Park Brno BUILDING I. tenant KARTON P+P, spol. s r.o.; Igepa CZ s.r.o. lettable area 12,226 m² built 2017 CZECH REPUBLIC VGP Park Brno BUILDING II. tenant NOTINO, s.r.o.; SUTA s.r.o. lettable area 14,639 m² built 2013–2016 CZECH REPUBLIC VGP Park Brno BUILDING III. tenant HARTMANN – RICO a.s. lettable area 8,621 m² built 2013 CZECH REPUBLIC VGP Park Český Újezd BUILDING I. tenant Yusen Logistics (Czech) s.r.o.; Spedice Kudrová s.r.o. lettable area 12,789 m² built 2018 CZECH REPUBLIC VGP Park Český Újezd BUILDING II. tenant FIA ProTeam s.r.o. lettable area 2,753 m² built 2016 PORTFOLIO 2023 PAGE CZECH REPUBLIC CZECH REPUBLIC VGP Park Hrádek nad Nisou BUILDING H tenant Drylock Technologies s.r.o. lettable area 40,361 m² built 2012–2014 CZECH REPUBLIC VGP Park Hrádek nad Nisou BUILDING H tenant Drylock Technologies s.r.o. lettable area 17,848 m² built 2020 CZECH REPUBLIC VGP Park Hrádek nad Nisou BUILDING H tenant Drylock Technologies s.r.o. lettable area 29,609 m² built 2018 CZECH REPUBLIC VGP Park Hrádek nad Nisou BUILDING tenant Drylock Technologies s.r.o.; VGP Renewable Energy s.r.o. lettable area 30,215 m² built 2022 CZECH REPUBLIC VGP Park Liberec BUILDING L tenant KNORR-BREMSE Systémy pro užitková vozidla ČR, s.r.o. lettable area 11,436 m² built 2016 PAGE VGP NV ANNUAL REPORT 2023 CZECH REPUBLIC CZECH REPUBLIC VGP Park Olomouc BUILDING B tenant John Crane a.s. lettable area 12,029 m² built 2017 CZECH REPUBLIC VGP Park Olomouc BUILDING C tenant SGB Czech Trafo s.r.o.; Edwards, s.r.o. lettable area 11,429 m² built 2018 CZECH REPUBLIC VGP Park Olomouc BUILDING D tenant MedicProgress, a.s. lettable area 2,600 m² built 2019 CZECH REPUBLIC VGP Park Olomouc BUILDING G tenant Benteler Automotive Rumburk s.r.o.; Gerflor CZ s.r.o; PROZK s.r.o.; SUTA s.r.o. lettable area 12,117 m² built 2017 CZECH REPUBLIC VGP Park Olomouc BUILDING A tenant Nagel Česko s.r.o. lettable area 7,807 m² built 2017 PORTFOLIO 2023 PAGE CZECH REPUBLIC CZECH REPUBLIC VGP Park Olomouc BUILDING G tenant FENIX solutions s.r.o. lettable area 19,859 m² built 2015 CZECH REPUBLIC VGP Park Olomouc BUILDING H tenant Mürdter Dvořák, lisovna, spol. s r.o.; Nissens Cooling Solutions Czech, s.r.o. lettable area 14,254 m² built 2019 CZECH REPUBLIC VGP Park Olomouc BUILDING I tenant RTR – TRANSPORT A LOGISTIKA s.r.o; Pilulka Lékárny a.s.; FMČESKÁ, s.r.o.; HVM PLASMA, spol. s r.o. lettable area 23,283 m² built 2021 CZECH REPUBLIC VGP Park Olomouc BUILDING J tenant GBC Solino s.r.o. lettable area 14,331 m² built 2019 CZECH REPUBLIC VGP Park Olomouc BUILDING L tenant Nissens Cooling Solutions Czech s.r.o. lettable area 18,235 m² built 2020 PAGE VGP NV ANNUAL REPORT 2023 CZECH REPUBLIC CZECH REPUBLIC VGP Park Olomouc BUILDING F tenant ARDON SAFETY s.r.o.; HELLA AUTOTECHNIK NOVA, s.r.o.; Vodafone Czech Republic a.s. lettable area 65,889 m² built 2022 CZECH REPUBLIC VGP Park Pilsen BUILDING A tenant ASSA ABLOY ES Production s.r.o.; Mraknet s.r.o. lettable area 8,711 m² built 2014 CZECH REPUBLIC VGP Park Pilsen BUILDING B tenant FAIVELEY TRANSPORT CZECH a.s. lettable area 21,918 m² built 2015 CZECH REPUBLIC VGP Park Pilsen BUILDING C tenant Excell Czech s.r.o.; FAIVELEY TRANSPORT CZECH a.s. lettable area 9,868 m² built 2014–2015 CZECH REPUBLIC VGP Park Pilsen BUILDING D tenant COPO CENTRAL EUROPE s.r.o.; TRANSTECHNIK CS, spol. s r.o. lettable area 3,640 m² built 2015–2016 PORTFOLIO 2023 PAGE CZECH REPUBLIC CZECH REPUBLIC VGP Park Pilsen BUILDING E tenant Verhoek Europe s.r.o.; DHL Express (Czech Republic) s.r.o. lettable area 5,790 m² built 2021 CZECH REPUBLIC VGP Park Tuchoměřice BUILDING A tenant CAAMANO CZ INTERNATIONAL GLASS CORPORATION, s.r.o.; Invelt – s.r.o.; FC MORELO CZ s.r.o.; EFACEC PRAHA s.r.o. lettable area 6,577 m² built 2013 CZECH REPUBLIC VGP Park Tuchoměřice BUILDING B tenant HARTMANN – RICO a.s.; ESA s.r.o.; Lidl Česká republika v.o.s.; CETIN a.s. lettable area 18,604 m² built 2014–2017 CZECH REPUBLIC VGP Park Ústí nad Labem BUILDING P tenant JOTUN CZECH a.s.; Zebra Technologies CZ s.r.o. lettable area 5,368 m² built 2014 CZECH REPUBLIC VGP Park Ústí nad Labem BUILDING P tenant n/a lettable area 6,368 m² built 2018 PAGE VGP NV ANNUAL REPORT 2023 CZECH REPUBLIC CZECH REPUBLIC VGP Park Ústí nad Labem BUILDING P tenant Treves CZ s.r.o. lettable area 8,725 m² built 2017 CZECH REPUBLIC VGP Park Ústí nad Labem BUILDING P tenant Treves CZ s.r.o. lettable area 6,134 m² built 2018 CZECH REPUBLIC VGP Park Ústí nad Labem BUILDING P tenant JOTUN CZECH a.s.; SUTA s.r.o. lettable area 3,503 m² built 2020 CZECH REPUBLIC VGP Park Ústí nad Labem BUILDING P tenant SSI Technologies s.r.o. lettable area 10,883 m² built 2015, 2020 CZECH REPUBLIC VGP Park Jeneč BUILDING AB tenant 4PX Express CZ s.r.o. lettable area 52,582 m² built 2017 PORTFOLIO 2023 PAGE CZECH REPUBLIC CZECH REPUBLIC VGP Park Jeneč BUILDING C tenant 4PX Express CZ s.r.o.; SUTA s.r.o. lettable area 11,698 m² built 2018 CZECH REPUBLIC VGP Park Jeneč BUILDING D tenant 4PX Express CZ s.r.o. lettable area 1,885 m² built 2017 CZECH REPUBLIC VGP Park Jeneč BUILDING D tenant 4PX Express CZ s.r.o. lettable area 3,725 m² built 2019 CZECH REPUBLIC VGP Park Chomutov BUILDING A tenant Geis Solutions CZ s.r.o., Beinbauer Automotive CZ s.r.o., SUTA s.r.o. lettable area 15,570 m² built 2018 CZECH REPUBLIC VGP Park Chomutov BUILDING BC tenant Magna Automotive (CZ) s.r.o.; Geis Solutions CZ s.r.o. lettable area 36,095 m² built 2018 PAGE VGP NV ANNUAL REPORT 2023 CZECH REPUBLIC CZECH REPUBLIC VGP Park Chomutov BUILDING D tenant Magna Automotive (CZ) s.r.o. lettable area 5,544 m² built 2022 CZECH REPUBLIC VGP Park Prostějov BUILDING A tenant ITAB Shop Concept CZ, a.s.; twd CZ, s.r.o. lettable area 15,330 m² built 2021 CZECH REPUBLIC VGP Park Prostějov BUILDING B tenant ALFA – RENT PENTE s.r.o. lettable area 25,055 m² built 2021 CZECH REPUBLIC VGP Park Vyškov BUILDING A tenant ALFA – RENT PENTE s.r.o. lettable area 28,868 m² built 2021 CZECH REPUBLIC VGP Park Kladno BUILDING A tenant CARGO CARE s.r.o.; Damco Czech Republic, s.r.o. lettable area 15,806 m² built 2022 PORTFOLIO 2023 PAGE CZECH REPUBLIC CZECH REPUBLIC VGP Park Kladno BUILDING B tenant Kvadrat Czech Republic s.r.o. lettable area 11,193 m² built 2022 CZECH REPUBLIC VGP Park České Budějovice BUILDING C tenant DACHSER Czech Republic a.s. lettable area 9,424 m² built 2022 CZECH REPUBLIC VGP Park České Budějovice BUILDING D tenant DACHSER Czech Republic a.s. lettable area 14,004 m² built 2023 CZECH REPUBLIC VGP Park Ústí nad Labem City BUILDING A tenant Bosal Aftermarket Europe, spol. s r.o.; Exyte Technology CZ s.r.o. lettable area 22,813 m² built 2023 VGP Park Olomouc, Czech Republic PORTFOLIO 2023 PAGE CZECH REPUBLIC VGP Park Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total VGP Park Kladno VGP 68,705 26,999 — — 26,999 1.66 VGP Park Prostějov VGP 139,661 40,385 10,351 — 50,736 2.10 VGP Park Vyškov VGP 54,353 28,868 — — 28,868 1.10 VGP Park České Budějovice VGP 438,620 23,428 — 107,357 130,785 1.37 VGP Park Ústí nad Labem City VGP 108,000 22,813 29,309 — 52,122 2.17 Total VGP 809,339 142,493 39,660 107, 357 289,510 8.41 VGP Park Brno JV1 63,974 35,485 — — 35,485 2.18 VGP Park Český Újezd JV1 45,383 15,542 — — 15,542 0.83 VGP Park Chomutov JV1 106,791 57,210 — — 57,210 3.00 VGP Park Hrádek nad Nisou JV1 180,638 87,818 — — 87,818 5.77 VGP Park Hrádek nad Nisou 2 JV1 105,082 30,215 — — 30,215 1.71 VGP Park Jeneč JV1 173,859 69,889 — — 69,889 2.86 VGP Park Liberec JV1 36,062 11,436 — 2,304 13,740 0.62 VGP Park Olomouc 1 JV1 28,490 12,117 — — 12,117 0.74 VGP Park Olomouc 2 JV1 54,647 19,859 — — 19,859 0.76 VGP Park Olomouc 3 JV1 175,313 70,103 8,665 — 78,768 4.25 VGP Park Olomouc 4 JV1 88,708 33,865 — 6,009 39,874 2.36 VGP Park Olomouc 5 JV1 132,567 65,889 — — 65,889 3.29 VGP Park Plzeň JV1 102,044 49,926 — — 49,926 2.92 VGP Park Tuchoměřice JV1 58,701 25,181 — — 25,181 1.32 VGP Park Ústí nad Labem JV1 123,519 40,981 — — 40,981 2.40 Total Joint Ventures 1,475,778 625,515 8,665 8,313 642,493 35.02 VGP Park Malé Přítočno Committed 80,042 — — 32,013 32,013 — VGP Park Kladno Committed 67,205 — — 20,749 20,749 — Total Committed 147,247 — — 52,762 52,762 — Total Czech Republic 2,432,364 768,008 48,325 168,432 984,765 43.43 PAGE VGP NV ANNUAL REPORT 2023 SPAIN La Naval Burgos Zaragoza Barcelona Valencia Sevilla Madrid PORTFOLIO 2023 PAGE SPAIN 57 VGP Park San Fernado deHenares 58 VGP Park Lliçà d’Amunt 59 VGP Park Fuenlabrada 60 VGP Park Fuenlabrada 2 61 VGP Park Valencia Cheste 62 VGP Park Zaragoza 63 VGP Park Dos Hermanas 64 VGP Park Sevilla Ciudad de la Imagen 65 VGP Park Granollers 66 VGP Park Martorell 67 VGP Park La Naval 68 VGP Park Burgos 69 VGP Park Alicante 70 VGP Park Córdoba 71 VGP Park Belartza Spain PAGE VGP NV ANNUAL REPORT 2023 SPAIN SPAIN VGP Park Lliça d’Amunt BUILDING A tenant Picking Farma S.A.U. lettable area 13,639 m² built 2020 SPAIN VGP Park Lliça d’Amunt BUILDING C tenant Noatum logistics Spain, S.A.U.; DistriCenter, S.A.U.; Staci Logistics Spain, S.A.; Luís Simões Logística Integrada, S.A.; Gepanetrans Operador Logistico, S.L. lettable area 32,170 m² built 2019 SPAIN VGP Park Lliça d’Amunt BUILDING D tenant Moldstock, S.L. lettable area 7,205 m² built 2020 SPAIN VGP Park Lliça d’Amunt BUILDING E tenant Maskokotas, S.L.; Gotex, S.A.U. lettable area 22,195 m² built 2020 SPAIN VGP Park San Fernando deHenares BUILDING A tenant ThyssenKrupp Elevadores, S.L.U.; Rhenus Logistics S.A.U.; Noatum Logistics Spain, S.A.U. lettable area 22,962 m² built 2018 PORTFOLIO 2023 PAGE SPAIN SPAIN VGP Park San Fernando deHenares BUILDING B tenant Rhenus Logistics, S.A.U.; Logwin Solutions Spain, S.A. lettable area 19,671 m² built 2019 SPAIN VGP Park San Fernando deHenares BUILDING B tenant Rhenus Logistics, S.A.U. lettable area 12,267 m² built 2019 SPAIN VGP Park San Fernando deHenares BUILDING C tenant Huawei Technologies Espana, S.L. lettable area 7,947 m² built 2020 SPAIN VGP Park San Fernando deHenares BUILDING C tenant Areatrans S.A. lettable area 5,165 m² built 2020 SPAIN VGP Park San Fernando deHenares BUILDING D tenant Paack Logistics Iberia, S.L.U. lettable area 11,453 m² built 2021 PAGE VGP NV ANNUAL REPORT 2023 SPAIN SPAIN VGP Park San Fernando deHenares BUILDING D tenant Picking Farma, S.A.U. lettable area 27,579 m² built 2023 SPAIN VGP Park San Fernando deHenares BUILDING E tenant DSV Road Spain, S.A.U. lettable area 12,176 m² built 2019 SPAIN VGP Park Zaragoza BUILDING A tenant Cotrali Zaragoza, S.L. lettable area 18,074 m² built 2020 SPAIN VGP Park Zaragoza BUILDING B tenant Thinktextil, S.L. lettable area 21,373 m² built 2022 SPAIN VGP Park Zaragoza BUILDING C tenant Kuehne & Nagel, S.A. lettable area 22,556 m² built 2021 PORTFOLIO 2023 PAGE SPAIN SPAIN VGP Park Zaragoza BUILDING C tenant Kuehne & Nagel, S.A lettable area 13,616 m² built 2022 SPAIN VGP Park Valencia Cheste BUILDING A tenant Eurojuguetes, S.L.U. lettable area 14,177 m² built 2022 SPAIN VGP Park Valencia Cheste BUILDING B tenant Dia Retail España, S.A.U.; Aza Logistics, S.L.U.; Furnilogik, S.L.U. lettable area 25,409 m² built 2021 SPAIN VGP Park Fuenlabrada BUILDING A tenant Futurbaño, S.L.; Logista Pharma, S.A.U. lettable area 41,752 m² built 2022 SPAIN VGP Park Granollers BUILDING A tenant Grupo Transaher, S.L. lettable area 8,920 m² built 2022 PAGE VGP NV ANNUAL REPORT 2023 SPAIN SPAIN VGP Park Sevilla Dos Hermanas BUILDING B tenant Lamaignere Cargo, S.L.; Almacenaje y Total Distribución Logística,S.L.; Gardenstore, S.L.; Vapores Suardiaz Sur-Atlántico, S.L.; H2B2 Electrolysis Technologies, S.L. lettable area 29,091 m² built 2022 PORTFOLIO 2023 PAGE SPAIN VGP Park Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total VGP Park Alicante VGP 41,834 — — 24,528 24,528 0.00 VGP Park Burgos VGP 128,190 — — 78,264 78,264 0.00 VGP Park Córdoba VGP 35,986 — 7,218 15,419 22,637 0.00 VGP Park Fuenlabrada 2 VGP 65,005 — — 23,363 23,363 0.00 VGP Park La Naval VGP 225,792 — — 109,409 109,409 0.02 VGP Park Martorell VGP 18,235 — — 10,102 10,102 0.00 VGP Park Sevilla Ciudad de la Imagen VGP 54,712 — — 28,587 28,587 0.00 Total VGP 569,753 — 7,218 289,673 296,891 0.02 VGP Park Dos Hermanas JV2 103,000 29,091 — 25,739 54,829 1.18 VGP Park Fuenlabrada JV2 80,223 41,752 — — 41,752 2.12 VGP Park Granollers JV2 14,385 8,920 — — 8,920 0.59 VGP Park Lliçà dAmunt JV2 149,597 75,208 — — 75,208 4.99 VGP Park San Fernando de Henares JV2 222,713 119,219 — — 119,219 7.57 VGP Park Valencia Cheste JV2 113,104 39,586 — 25,517 65,103 1.85 VGP Park Zaragoza JV2 147,495 75,618 — 19,146 94,764 3.75 VGP Park Belartza VGP Park Belartza JV 145,215 — 63,640 63,640 0.00 Total Joint Ventures 975,732 389,395 — 134,042 523,437 22.05 Total Spain 1,545,486 389,395 7,218 423,715 820,327 22.07 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES Other european countries Paris Amsterdam Lisbon The Netherlands 92 VGP Park Nijmegen 93 VGP Park Roosendaal 94 VGP Park Moerdijk Portugal 104 VGP Park Santa Maria da Feira 105 VGP Park Sintra 106 VGP Park Loures 107 VGP Park Montijo France 110 VGP Park Rouen 111 VGP Park Vélizy 112 VGP Park Mulhouse OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE Latvia 72 VGP Park Kekava 73 VGP Park Riga 74 VGP Park Tiraines Romania 75 VGP Park Timișoara 76 VGP Park Sibiu 77 VGP Park Brașov 78 VGP Park Arad 79 VGP Park Bucharest Hungary 80 VGP Park Győr 81 VGP Park Győr Béta 82 VGP Park Alsónémedi 83 VGP Park Hatvan 84 VGP Park Kecskemét 85 VGP Park Budapest Aerozone Slovakia 86 VGP Park Malacky 87 VGP Park Bratislava 88 VGP Park Zvolen Austria 89 VGP Park Graz 90 VGP Park Laxenburg 91 VGP Park Ehrenfeld Riga Rome Vienna Bratislava Budapest Zagreb Belgrade Bucharest Milan Verona Graz Győr Timişoara Italy 95 VGP Park Calcio 96 VGP Park Valsamoggia 97 VGP Park Valsamoggia 2 98 VGP Park Sordio 99 VGP Park Padova 100 VGP Park Paderno Dugnano 101 VGP Park Legnano 102 VGP Park Parma Lumiere 103 VGP Park Parma Paradigna Serbia 108 VGP Park Belgrade Dobanovice Croatia 109 VGP Park Lučko Zagreb PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES HUNGARY VGP Park Alsónémedi BUILDING A. tenant Nagel Hungária Logisztikai Kft. lettable area 22,905 m² built 2016 HUNGARY VGP Park Alsónémedi BUILDING A tenant Magyar Lapterjesztő ZRT lettable area 8,774 m² built 2022 HUNGARY VGP Park Győr BUILDING A tenant SKINY Logisztikai Kft.; WSZL Kft.; Gebrüder Weiss Szállítmányozási Kft. lettable area 20,290 m² built 2009 HUNGARY VGP Park Győr BUILDING B tenant Lear Corporation Hungary Kft.; TI Automotive (Hungary) Kft. lettable area 24,742 m² built 2012, 2017 HUNGARY VGP Park Győr BUILDING C tenant Dana Hungary Kft. lettable area 6,463 m² built 2011 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE HUNGARY VGP Park Győr Béta BUILDING B tenant Raben Trans European Hungary Kft.; Transdanubia Logisztikai Kft. lettable area 13,915 m² built 2022 HUNGARY VGP Park Kecskemét BUILDING A tenant Andreas Schmid Kontrakt Logistik GmbH & Co. KG; BohnenkampKft.; Cargoport Kft.; Mercedes-Benz Manufacturing Hungary Kft. lettable area 21,937 m² built 2022 HUNGARY VGP Park Kecskemét BUILDING B tenant HunTex Recycling Kft. lettable area 17,046 m² built 2020 HUNGARY VGP Park Kecskemét BUILDING C tenant P-Development Vagyonkezelő Kft. lettable area 20,149 m² built 2023 HUNGARY VGP Park Hatvan BUILDING A tenant LKH LEONI Kft. lettable area 16,664 m² built 2019 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES HUNGARY VGP Park Budapest Aerozone BUILDING B. tenant BOXY Logisztikai Zrt. lettable area 11,015 m² built 2022 HUNGARY VGP Park Budapest Aerozone BUILDING C. tenant Agroloop Hungary Kft. lettable area 13,544 m² built 2023 SLOVAKIA VGP Park Malacky BUILDING A tenant Benteler Automotive SK s.r.o.; SPP – distribuce, a.s. lettable area 14,863 m² built 2009 SLOVAKIA VGP Park Malacky BUILDING B tenant Benteler Automotive SK s.r.o.; Cipher Europe s.r.o.; PLP Facility, a.s.; ASSA ABLOY Opening Solutions Slovakia s. r. o.; Forbo Siegling s.r.o. lettable area 20,049 m² built 2016 SLOVAKIA VGP Park Malacky BUILDING C tenant FROMM SLOVAKIA, a.s.; Molandertech s.r.o. lettable area 15,255 m² built 2015 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE SLOVAKIA VGP Park Malacky BUILDING D tenant Volkswagen Konzernlogistik GmbH & Co. OHG lettable area 25,692 m² built 2015 SLOVAKIA VGP Park Malacky BUILDING E tenant IDEAL Automotive Malacky, s.r.o. lettable area 12,756 m² built 2016 SLOVAKIA VGP Park Bratislava BUILDING A tenant Dirks Consumer Slovakia GmbH, org. zložka lettable area 43,361 m² built 2022 SLOVAKIA VGP Park Bratislava BUILDING F tenant Continental Barum s.r.o. lettable area 57,328 m² built 2021 SLOVAKIA VGP Park Bratislava BUILDING G tenant Coca-Cola HBC Česko a Slovensko, s.r.o.; Hossa family, s.r.o.; HOLLEX SLOVAKIA, s.r.o. lettable area 19,201 m² built 2023 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES SLOVAKIA VGP Park Bratislava BUILDING H tenant Geis SK s.r.o. lettable area 18,354 m² built 2022 LATVIA VGP Park Kekava BUILDING A tenant SIA “BMJ Latvia”; Hanzas Maiznīca AS; SIA “CONSTRUCTION TRADE”, MDL Terminal SIA; Power Solution SIA; GRIPsteel SIA; Energokomplekss SIA; JAS Worldwide Latvia SIA; VILKS SIA lettable area 35,841 m² built 2018 LATVIA VGP Park Kekava BUILDING B tenant MMD Serviss SIA lettable area 26,988 m² built 2019 LATVIA VGP Park Riga BUILDING B tenant DO IT SIA lettable area 41,816 m² built 2022 LATVIA VGP Park Tiraines BUILDING A tenant EUGESTA un Partneri SIA; TeleTower SIA lettable area 28,897 m² built 2023 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE ROMANIA VGP Park Timişoara BUILDING A tenant QUEHENBERGER LOGISTICS ROU SRL lettable area 17,613 m² built 2016 ROMANIA VGP Park Timişoara BUILDING A tenant FAN COURIER EXPRESS SRL; ITC LOGISTIC ROMANIA S.R.L.; KLG Europe Logistics SRL; INTER CARS ROMANIA SRL lettable area 18,085 m² built 2017 ROMANIA VGP Park Timişoara BUILDING B tenant UPS Romania S.R.L.; World Media Trans S.R.L.; Acila SRL; Ericsson Antenna Technology Romania S.R.L.; ITC LOGISTIC ROMANIAS.R.L., DUMERA S.R.L.; EUTRON ELECTRONIC SERVICES S.R.L.; EKOLINTERNATIONAL LOGISTICS S.R.L lettable area 17,976 m² built 2015 ROMANIA VGP Park Timişoara BUILDING B tenant DHL Freight Romania SRL; RESET EMS srl; S.C.; NEFAB PACKAGING ROMANIA SRL; HELBAKO ELECTRONICA SRL; LOSAN DEPOT SRL; SZW AUTOMOTIVE S.R.L.; D.B. GROUP ROMANIA S.R.L.; World Media Trans S.R.L. lettable area 18,176 m² built 2016 ROMANIA VGP Park Timişoara BUILDING C tenant cargo-partner Expeditii S.R.L.; EUROCCOPER S.A.; DELIVERY SOLUTIONS S.A.; DYNAMIC PARCEL DISTRIBUTION S.A. lettable area 21,879 m² built 2019 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES ROMANIA VGP Park Timişoara BUILDING C tenant Hafele Romania SRL; SYNTRONIC PRODUCTION AND AFTERMARKET SERVICES S.R.L.; CONTINENTAL AUTOMOTIVE PRODUCTS SRL; Ericsson Anteena Technology Romania SRL; DHL International Romania SRL lettable area 21,581 m² built 2019 ROMANIA VGP Park Timişoara BUILDING D tenant RPW LOGISTICS SRL; World Media Trans S.R.L. lettable area 30,775 m² built 2021 ROMANIA VGP Park Brasov BUILDING A tenant ECOPAL DISTRIBUTION SRL; DACHSER ROMANIA SRL; NEFAB PACKAGING ROMANIA SRL; DRIM DANIEL DISTRIBUŢIE FMCG SRL; OLSTRAL HPT SRL; TRADY 2000 SRL; COS 2000 DISTRIBUTION SRL; KARL HEINZ DIETRICH INTERNATIONAL EXPED SRL; ITC LOGISTIC ROMANIA SRL; TRANSMEC RO SRL; AUTOLIV ROMANIA SRL lettable area 28,956 m² built 2023 ROMANIA VGP Park Brasov BUILDING B tenant AUTOLIV ROMANIA SRL lettable area 20,920 m² built 2023 ROMANIA VGP Park Brasov BUILDING E tenant FILDAS TRADING SRL; ITC LOGISTIC ROMANIA S.R.L. lettable area 9,556 m² built 2021 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE ROMANIA VGP Park Brasov BUILDING I tenant SCHENKER LOGISTICS ROMANIA S.A.; DYNAMIC PARCEL DISTRIBUTION SA; MIELE TEHNICA SRL; RETURO SISTEM GARANŢIE RETURNARE S.A. lettable area 17,465 m² built 2023 ROMANIA VGP Park Arad BUILDING A tenant KUEHNE + NAGEL S.R.L.; Fan Courier Express SRL; NDB LOGISTICA ROMANIA SRL; DYNAMIC PARCEL DISTRIBUTIONSA; DRIM DANIEL DISTRIBUTIE FMCG SRL; Vodafone Romania SA; CAPS INDUSTRIES RO SRL lettable area 29,414 m² built 2022 ROMANIA VGP Park Sibiu BUILDING B tenant Englmayer Romania SRL; IKEA ROMANIA S.A.; SOMAREST SRL; VEL PITAR SA; TRANSMEC RO SRL lettable area 16,616 m² built 2022 ROMANIA VGP Park Bucharest BUILDING C tenant SELECT FRUITS SRL; GOLDEN PROVIDER DISTRIBUTIONSRL; ASTON COM SA; ALASKA ENERGIES SRL; INTER CARS ROMANIASRL lettable area 30,507 m² built 2023 ROMANIA VGP Park Bucharest BUILDING D tenant RAWPLUG ROMANIA SRL; S.C Würth Romania S.R.L.; TOMRA COLLECTION ROMANIA S.R.L. lettable area 15,699 m² built 2023 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES AUSTRIA VGP Park Graz BUILDING A tenant MAGNA Steyr Fahrzeugtechnik GmbH & Co. KG lettable area 16,537 m² built 2017 AUSTRIA VGP Park Graz BUILDING B tenant WeShip Fulfillment GmbH; LEVL GmbH; Johann Weiss GmbH lettable area 8,212 m² built 2022 AUSTRIA VGP Park Graz BUILDING C tenant Amazon Transport Austria GmbH lettable area 14,348 m² built 2023 NETHERLANDS VGP Park Nijmegen BUILDING A tenant Conpax Beheer B.V.; ESTG B.V.; Ahold Europe Real Estate &Construction B.V.; Nippon Express (Nederland) B.V.; OTC MedicalB.V.; VGP Renewable Energy Netherlands BV; Albert Heijn B.V.- afdeling online lettable area 67,352 m² built 2020 NETHERLANDS VGP Park Nijmegen BUILDING B, B tenant Holding Geurtsen Thomassen B.V.; VGP Renewable Energy Netherlands BV lettable area 42,505 m² built 2021 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE NETHERLANDS VGP Park Nijmegen BUILDING B, B tenant VGP Renewable Energy Netherlands BV, Bol.com B.V. lettable area 62,520 m² built 2022 NETHERLANDS VGP Park Nijmegen BUILDING C tenant Mantel Arnhem B.V., Holding Geurtsen Thomassen B.V.; VGP Renewable Energy Netherlands BV lettable area 35,052 m² built 2022 NETHERLANDS VGP Park Roosendaal BUILDING A tenant Active Ants B.V.; Raben Netherlands B.V.; VGP Renewable Energy Netherlands BV lettable area 41,960 m² built 2020 NETHERLANDS VGP Park Roosendaal BUILDING B tenant Loendersloot Global Logistics BV lettable area 9,294 m² built 2023 ITALY VGP Park Valsamoggia BUILDING A tenant Macron S.p.a.; VGP Renewable Energy Italy SRL lettable area 6,679 m² built 2020 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES ITALY VGP Park Valsamoggia BUILDING B tenant Macron S.p.a. lettable area 16,106 m² built 2019 ITALY VGP Park Calcio BUILDING A tenant FGC S.r.l.; Consorzio Service Internation CSI; VGP Renewable Energy Italy SRL lettable area 23,303 m² built 2020 ITALY VGP Park Sordio BUILDING A tenant General Logistics Systems Italy S.P.A; VGP Renewable Energy Italy SRL lettable area 12,035 m² built 2021 ITALY VGP Park Padova BUILDING A tenant Carlini Gomme s.r.l.; Gruber Logistics S.p.A. lettable area 15,301 m² built 2021 ITALY VGP Park Padova BUILDING B tenant Gruppo Executive Societa Consortile a r.l. lettable area 7,246 m² built 2021 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE ITALY VGP Park Parma Lumiere BUILDING A tenant GLS Enterprise s.r.l. lettable area 5,710 m² built 2022 PORTUGAL VGP Park Santa Maria da Feira BUILDING A tenant Rádio Popular – Electrodomésticos, S.A. lettable area 29,813 m² built 2021 PORTUGAL VGP Park Loures BUILDING A tenant DPD Portugal Transporte Expresso, S.A lettable area 12,606 m² built 2023 PORTUGAL VGP Park Loures BUILDING B tenant DHL Parcel Portugal; Unipessoal, Lda. lettable area 7,143 m² built 2023 PAGE VGP NV ANNUAL REPORT 2023 OTHER EUROPEAN COUNTRIES VGP Park Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total Latvia VGP Park Kekava VGP 148,442 62,829 — — 62,829 3.59 VGP Park Riga VGP 119,031 41,816 — 14,060 55,876 2.31 VGP Park Tiraines VGP 63,149 28,897 — — 28,897 1.69 Total VGP 330,622 133,542 — 14,060 147,602 7.59 Romania VGP Park Timisoara JV2 252,439 115,310 — — 115,310 5.56 VGP Park Timisoara 2 JV2 40,285 30,775 — — 30,775 1.35 VGP Park Arad VGP 388,977 29,414 — 167,309 196,723 1.45 VGP Park Brașov VGP 361,527 76,897 53,278 62,439 192,614 6.96 VGP Park Bucharest VGP 248,289 46,206 — 71,989 118,195 3.41 VGP Park Bucharest 2 VGP 227,782 — — 113,813 113,813 0.00 VGP Park Sibiu VGP 217,232 16,616 — 77,329 93,945 0.99 VGP Park Timisoara 3 VGP 56,374 — 32,768 — 32,768 1.33 Total Joint Ventures 292,724 146,085 — — 146,085 6.91 Total VGP 1,500,181 169,133 86,046 492,879 748,058 14.13 Hungary VGP Park Alsónémedi JV1 85,349 31,679 — 4,900 36,579 2.00 VGP Park Győr JV1 121,799 51,495 — — 51,495 3.22 VGP Park Hatvan VGP 37,808 16,664 — — 16,664 1.10 VGP Park Budapest Aerozone VGP 378,859 24,559 29,853 70,748 125,160 4.46 VGP Park Budapest Aerozone 2 VGP 372,798 — — 136,314 136,314 0.00 VGP Park Győr Béta VGP 142,294 13,915 37,998 19,740 71,653 3.98 VGP Park Hatvan VGP 21,776 9,317 9,317 0.00 VGP Park Kecskemét VGP 255,031 59,132 38,022 16,004 113,158 5.52 Total Joint Ventures 207,148 83,174 — 4,900 88,074 5.22 Total VGP 1,208,566 114,270 105,873 252,123 472,266 15.06 Slovakia VGP Park Malacky JV1 220,492 88,615 — 16,006 104,621 4.99 VGP Park Bratislava VGP 575,624 138,244 39,624 72,588 250,456 9.07 VGP Park Bratislava Committed 239,517 — — 119,101 119,101 0.00 VGP Park Bratislava 2 VGP 365,928 — — 155,325 155,325 0.00 VGP Park Zvolen VGP 102,074 — 8,480 43,698 52,178 0.59 Total Committed 239,517 — — 119,101 119,101 0.00 Total Joint Ventures 220,492 88,615 — 16,006 104,621 4.99 Total VGP 1,043,626 138,244 48,104 271,611 457,959 9.67 Austria VGP Park Graz JV2 38,239 16,537 — — 16,537 1.41 VGP Park Ehrenfeld VGP 189,367 — 33,146 47,398 80,544 1.63 VGP Park Graz 2 VGP 100,117 22,560 — — 22,560 3.41 VGP Park Laxenburg VGP 111,477 — 49,448 — 49,448 2.71 Total Joint Ventures 38,239 16,537 — — 16,537 1.41 Total VGP 400,961 22,560 82,594 47,398 152,552 7.75 OTHER EUROPEAN COUNTRIES PORTFOLIO 2023 PAGE VGP Park Owner Land area (m²) Lettable area (m²) Contracted annual rent (in million €) Completed Under construction Potential Total The Netherlands VGP Park Nijmegen JV2 162,214 67,352 — 20,088 87,440 4.49 VGP Park Nijmegen 2 JV2 200,272 140,077 — — 140,077 7.33 VGP Park Roosendaal JV2 86,511 51,254 — — 51,254 3.04 VGP Park Moerdijk LPM JV 719,762 — — 487,867 487,867 0.00 VGP Park Nijmegen 3 VGP 238,041 — — 136,222 136,222 0.00 Total Joint Ventures 1,168,759 258,683 — 507,955 766,638 14.86 Total VGP 238,041 — — 136,222 136,222 0.00 Italy VGP Park Verona Committed 171,925 — — 79,129 79,129 0.00 VGP Park Calcio JV2 48,593 23,303 — — 23,303 0.86 VGP Park Padova JV2 50,091 22,547 — — 22,547 1.61 VGP Park Parma Lumiere JV2 18,865 5,710 — — 5,710 0.56 VGP Park Sordio JV2 26,811 12,035 — — 12,035 1.00 VGP Park Valsamoggia JV2 52,776 22,784 — — 22,784 1.61 VGP Park Legnano VGP 50,177 — — 23,141 23,141 0.00 VGP Park Paderno Dugano VGP 92,288 — — 40,182 40,182 0.00 VGP Park Parma Paradigna VGP 99,487 — — 50,160 50,160 0.00 VGP Park Valsamoggia 2 (Lunga) VGP 125,184 — 18,782 14,172 32,954 1.68 Total Committed 171,925 — — 79,129 79,129 0.00 Total Joint Ventures 197,136 86,380 — — 86,380 5.64 Total VGP 367,136 — 18,782 127,654 146,437 1.68 Portugal VGP Park Santa Maria da Feira JV2 73,578 29,813 — — 29,813 1.34 VGP Park Loures VGP 51,526 19,749 — — 19,749 1.66 VGP Park Montijo VGP 75,550 — 31,789 — 31,789 1.25 VGP Park Sintra VGP 57,368 — — 25,802 25,802 0.00 Total Joint Ventures 73,578 29,813 — — 29,813 1.34 Total VGP 184,444 19,749 31,789 25,802 77,340 2.91 Serbia VGP Park Belgrade – Dobanovci VGP 1,160,544 — 76,938 385,996 462,934 4.57 Total VGP 1,160,544 — 76,938 385,996 462,934 4.57 Croatia VGP Park Zagreb Lučko VGP 95,306 — — 36,867 36,867 0.00 Total VGP 95,306 — — 36,867 36,867 0.00 France VGP Park Mulhouse VGP 213,472 — — 93,127 93,127 0.00 VGP Park Rouen 1 VGP 81,468 — 39,330 — 39,330 2.17 VGP Park Rouen 2 VGP 78,115 — — 34,412 34,412 0.00 VGP Park Rouen 3 VGP 161,708 — — 79,996 79,996 0.00 VGP Park Vélizy VGP 193,665 — — 80,000 80,000 0.00 Total VGP 728,428 — 39,330 287,535 326,865 2.17 Denmark VGP Park Vejle Committed 175,256 — — 81,449 36,867 0.00 Total VGP 175,256 — — 81,449 81,449 0.00 PAGE VGP NV ANNUAL REPORT 2023 FINANCIAL REVIEW 2023 PAGE 319 Financial review 2023 PAGE 320 VGP NV ANNUAL REPORT 2023 CONTENT Content Consolidated income statement — page Consolidated statement of comprehensive income — page Notes to and forming part of the financial statements — page Glossary of terms — page Consolidated cashflow statement — page Auditor’s report — page FINANCIAL REVIEW 2023 PAGE 321CONTENT Consolidated balance sheet — page Statement of changes in equity — page Supplementary notes not part of the audited financial statements — page Parent company information — page Statement of responsible persons — page PAGE 322 VGP NV ANNUAL REPORT 2023 CONSOLIDATED INCOME STATEMENT Consolidated income statement For the year ended 31 December 2023 Income Statement (in thousand of €) Note 31. 12. 2023 31. 12. 2022 Revenue 1 5 113,722 84,784 Gross rental and renewable energy income 5 69,003 51,230 Net property operating expenses 6 (5,534) (8,223) Net rental and renewable energy income 63,469 43,007 Joint venture management fee income 5 26,925 21,537 Net valuation gains/(losses) on investment properties 2 7 87,958 (97,230) Administration expenses 8 (48,863) (33,956) Share in result of Joint Ventures 9.1 (10,715) (45,927) Other expenses — (3,000) Operating result 118,774 (115,569) Financial income 10 34,076 17,329 Financial expenses 10 (40,107) (44,337) Net financial result (6,031) (27,008) Result before taxes 112,743 (142,577) Taxes 11 (25,451) 20,035 Result for the period 87,292 (122,542) Attributable to: Shareholders of VGP NV 87,292 (122,542) Non-controlling interests — — Earnings Per Share 3 (in €) Note 31. 12. 2023 31. 12. 2022 Basic earnings per share 12 3.20 (5.49) Diluted earnings per share 12 3.20 (5.49) The consolidated income statement should be read in conjunction with the accompanying notes. 1 Revenue is composed of gross rental and renewable energy income, service charge income, property and facility management income and property development income. 2 Includes realized gains on disposals of subsidiaries of € 59 million in '23 and € 87.2 million in '22 3 Calculated based on the weighted average number of shares amounting to 22,311,583 shares as at 31 December 2022. The total issued shares at year-end 2022 and for the full year 2023 were 27,291,312 shares. FINANCIAL REVIEW 2023 PAGE 323CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Consolidated statement of comprehensive income For the year ended 31 December 2023 Statement of comprehensive income (in thousand of €) 31. 12. 2023 31. 12. 2022 Result for the year 87,292 (122,542) Other comprehensive income to be reclassified to profit or loss — — Other comprehensive income not to be reclassified to profit or loss — — Other comprehensive income for the period — — Total comprehensive income/(loss) of the period 87,292 (122,542) Attributable to: Shareholders of VGP NV 87,292 (122,542) Non-controlling interest — — PAGE 324 VGP NV ANNUAL REPORT 2023 CONSOLIDATED BALANCE SHEET Consolidated balance sheet For the year ended 31 December 2023 Assets (in thousand of €) Note 31. 12. 2023 31. 12. 2022 Intangible assets 1,000 1,200 Investment properties 13 1,508,984 2,395,702 Property, plant and equipment 107,426 73,280 Investments in Joint Ventures and associates 9.2, 9.4 1,037,228 891,201 Other non-current receivables 9.3 565,734 359,644 Deferred tax assets 11 8,304 3,839 Total non-current assets 3,228,676 3,724,866 Trade and other receivables 14 79,486 122,113 Cash and cash equivalents 15 209,921 699,168 Disposal group held for sale 20 892,621 299,906 Total current assets 1,182,028 1,121,187 Total Assets 4,410,704 4,846,053 Shareholders’ Equity and Liabilities (in thousand of €) Note 31. 12. 2023 31. 12. 2022 Share capital 16 105,676 105,676 Share premium 16 845,579 845,579 Retained earnings 1,263,162 1,250,920 Shareholders’ equity 2,214,417 2,202,175 Non-current financial debt 17 1,885,154 1,960,464 Other non-current liabilities 18 38,085 46,419 Deferred tax liabilities 11 23,939 79,671 Total non-current liabilities 1,947,178 2,086,554 Current financial debt 17 111,750 413,704 Trade debts and other current liabilities 19 84,075 110,676 Liabilities related to disposal group held for sale 20 53,284 32,944 Total current liabilities 249,109 557,324 Total liabilities 2,196,287 2,643,878 Total Shareholders’ Equity and Liabilities 4,410,704 4,846,053 The consolidated balance sheet should be read in conjunction with the accompanying notes. FINANCIAL REVIEW 2023 PAGE 325STATEMENT OF CHANGES IN EQUITY Statement of changes in equity For the year ended 31 December 2023 Statement of changes in equity (in thousand of €) Statutory Capital reserve IFRS Other reserves Retained earnings Total equity Balance as at 1 January 2022 108,874 (30,416) 78,458 574,088 1,523,019 2,175,565 Other comprehensive income/(loss) — — — — — — Result of the period — — — — (122,542) (122,542) Effect of disposals — — — — — — Total comprehensive income/(loss) — — — — (122,542) (122,542) Capital and share premium increase net of transaction costs 27,218 — 27,218 271,491 — 298,709 Share capital distribution to shareholders — — — — — — Dividends — — — — (149,557) (149,557) Balance as at 31 December 2022 136,092 (30,416) 105,676 845,579 1,250,920 2,202,175 Balance as at 1 January 2023 136,092 (30,416) 105,676 845,579 1,250,920 2,202,175 Other comprehensive income/(loss) — — — — — — Result of the period — — — — 87,292 87,292 Effect of disposals — — — — — — Total comprehensive income/(loss) — — — — 87,292 87,292 Capital and share premium increase net of transaction costs — — — — Share capital distribution to shareholders — — — — — — Dividends — — — — (75,050) (75,050) Balance as at 31 December 2023 136,092 (30,416) 105,676 845,579 1,263,162 2,214,417 PAGE 326 VGP NV ANNUAL REPORT 2023 CONSOLIDATED CASHFLOW STATEMENT Consolidated cashflow statement For the year ended 31 December 2023 Cash flow statement (in thousand of €) Note 31. 12. 2023 31. 12. 2022 Cash flows from operating activities 21 Result before taxes 112,743 (142,577) Adjustments for: Depreciation 5,920 4,479 Unrealised (gains)/losses on investment properties 7 (28,938) 184,447 Realised (gains)/losses on disposal of subsidiaries and investment properties 7 (59,020) (87,217) Unrealised (gains)/losses on financial instruments and foreign exchange (73) 1,426 Interest (income) (34,003) (17,329) Interest expense 40,107 42,911 Share in (profit)/loss of Joint Ventures and associates 9.1 10,715 45,927 Operating profit before changes in working capital and provisions 47,451 32,067 Decrease/(Increase) in trade and other receivables (20,773) 1 (43,215) 2 (Decrease)/Increase in trade and other payables 12,532 (12,632) Cash generated from the operations 39,210 (23,780) Interest received 6,713 24 Interest paid (57,331) (39,292) Income taxes paid (15,923) (7,590) Net cash generated from operating activities (27,331) (70,638) Cash flows from investing activities 21 Proceeds from disposal of tangible assets and other — — Proceeds from disposal of subsidiaries and investment properties 22 676,245 347,372 Investments in Investment Property and Property Plant and Equipment (667,015) (851,792) Distribution by/(investment in) Joint Ventures and associates 12,823 21,382 Loans provided to Joint Ventures and associates (99,371) (108,443) Loans repaid by Joint Ventures and associates 69,241 25,331 Net cash used in investing activities (8,078) (566,150) Cash flows from financing activities 21 Dividends paid (75,050) (149,557) Net Proceeds/(cash out) from the issue/(repayment) of share capital — 298,709 Net Proceeds from sale of own shares — — Proceeds from loans — 990,749 Loan repayments (375,000) (23,500) Net cash used in financing activities (450,050) 1,116,401 Net increase/(decrease) in cash and cash equivalents (485,459) 479,613 Cash and cash equivalents at the beginning of the period 699,168 222,160 Effect of exchange rate fluctuations (569) (157) Reclassification to (–)/from held for sale (3,219) (2,448) Cash and cash equivalents at the end of the period 209,921 699,168 The consolidated cash flow statement should be read in conjunction with the accompanying notes. 1 The movement on the receivables due to the sale of entities to the Joint Ventures amount € -53.8 million. Next to this, reclassification occur mainly with respect to receivable from Allianz which is shown as proceeds from disposal of subsidiaries and investment properties for an amount of € 7 million (See note 22). 2 Some reclassifications occur mainly with respect to receivable from Allianz which is shown as proceeds from disposal of subsidiaries and investment properties for an amount of € 56.7 million (See note 22). FINANCIAL REVIEW 2023 PAGE 327NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Notes to and forming part of the financial statements 1 General Information VGP NV (the “Company”) is a limited liability company and was incorporated under Belgian law on 6 February 2007 for an indefinite period of time with its registered office located at Generaal Lemanstraat 55 box 4, 2018 Antwerp, Belgium and the Company is registered under enterprise number 0887.216.042 (Register of Legal Entities of Antwerp – Division Antwerp). The Group is a pure-play real estate group specialised in the acquisition, development, and management of logistic real estate, i.e. buildings suitable for logistical purposes and light industrial activities. The Group focuses on strategically located plots of land or brownfields suitable for development of logistic business parks of a certain size, so as to build up an extensive and well-diversified land bank on top locations, i.e. locations in the vicinity of highly concentrated living and/ or production centres, with an optimal access to transport infrastructure. The aim of the Group is to become a leading pan-European owner, manager and developer of high-quality logistics and semi-industrial real estate. The Group is currently active in Germany, Austria, the Neth- erlands, Spain, Portugal, Italy, the Czech Republic, the Slovak Republic, Hungary, Romania, Latvia, Croatia, France, Denmark and Serbia. The Company’s consolidated financial statements include those of the Company and its subsidiaries (together referred to as “Group”). The consolidated financial statements were approved for issue by the board of directors on 4 April 2024. 2 Summary of principal accounting policies 2.1 Statement of compliance The consolidated financial statements have been prepared in accordance with the requirements of International Finan- cial Reporting Standards (IFRS) which have been adopted by the European Union. These standards comprise all new and revised standards and interpretations published by the Inter- national Accounting Standards Board (IASB) and interpre- tations issued by the International Financial Interpretations Committee of the IASB, as far as applicable to the activities of the Group and effective as from 1 January 2023. Standards and interpretations applicable for the annual report beginning on or after 1 January 2023 — IFRS 17 Insurance Contracts — Amendments to IFRS 17 Insurance contracts: Initial Appli- cation of IFRS 17 and IFRS 9 – Comparative Information — Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies — Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates — Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction — Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules (effective immediately – disclosures are required for annual periods beginning on or after 1 January 2023) The above new standards, amendments to standards and interpretations did not give rise to any material changes in the presentation and preparation of the consolidated financial statements of the year. Standards and interpretations published, but not yet appli- cable for the annual period beginning on 1 January 2023: — Amendments to IAS 1 Presentation of Financial State- ments: Classification of Liabilities as Current or Non-cur- rent and Non-current Liabilities with Covenants (applicable for annual periods beginning on or after 1 January 2024) — Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (applicable for annual periods beginning on or after 1 January 2024) — Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (applicable for annual periods beginning on or after 1 January 2024, but not yet endorsed in the EU) For the year ended 31 December 2023 PAGE 328 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS — Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (applicable for annual periods beginning on or after 1 January 2025, but not yet endorsed in the EU) The initial application of the above standards, amendments to standards and interpretation is estimated not to give rise to any material changes in the presentation and preparation of the consolidated financial statements. 2.2 Basis of preparation The consolidated financial statements are prepared on a his- toric cost basis, with the exception of investment properties and financial derivatives which are stated at fair value. All figures are in thousands of Euros (in thousands of €), unless stated otherwise. Minor rounding differences might occur. 2.3 Principles of consolidation Subsidiaries Subsidiaries are entities over which VGP NV exercises control, which is the case when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unreal- ised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Sub- sidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit bal- ance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: — Derecognises the assets (including goodwill) and liabili- ties of the subsidiary — Derecognises the carrying amount of any non-controlling interest — Derecognises the cumulative translation differences, recorded in equity — Recognises the fair value of the consideration received — Recognises the fair value of any investment retained — Recognises any surplus or deficit in profit or loss — Reclassifies the parent’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate. Joint ventures and associates A joint venture exists when VGP NV has contractually agreed to share control with one or more other parties, which is the case only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Associates are companies in which VGP NV, directly or indi- rectly, has a significant influence and which are neither sub- sidiaries nor joint ventures. This is presumed if the Group holds at least 20% of the voting rights attaching to the shares. The financial information included for these companies is pre- pared using the accounting policies of the Group. When the Group has acquired joint control in a joint venture or signif- icant influence in an associate, the share in the acquired assets, liabilities and contingent liabilities is initially re-meas- ured to fair value at the acquisition date and accounted for using the equity method. Any excess of the purchase price over the fair value of the share in the assets, liabilities and con- tingent liabilities acquired is recognized as goodwill. When the goodwill is negative, it is immediately recognized in profit or loss. Subsequently, the consolidated financial statements include the Group’s share of the results of joint ventures and associates accounted for using the equity method until the date when joint control or significant influence ceases. If the Group’s share of the losses of a joint venture or associ- ate exceeds the carrying amount of the investment, the invest- ment is carried at nil value and recognition of additional losses is limited except to the extent that VGP has incurred construc- tive or contractual obligations in respect of the associate. Unrealized gains arising from transactions with joint ven- tures and associates are set against the investment in the joint venture or associate concerned to the extent of the Group’s interest. The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply. The investments in joint ventures and associates in the balance sheet include the car- rying amount of any related goodwill. IAS 28.28 only permits recognition of the gain or loss from downstream transactions “to the extent of unrelated inves- tors’ interests in the associate or joint venture”. However, the standard does not specifically address the treatment of rev- enue derived from transactions with equity-method invest- ees (e.g. revenue from the sale of goods, or interest revenue) and whether that revenue should be eliminated from the con- solidated financial statements. In respect of the treatment of revenues derived from transactions with joint ventures and associates (e.g. sales services, interest revenue, …), the Group has opted not to eliminate its interest in these trans- actions. As a matter of example, VGP receives € 100 interest income on a loan provided to a 50/50 joint venture. Under the accounting policy adopted by VGP this interest income would be accounted for as € 100 interest income of the Group. The cost incurred by the joint venture would be accounted for on a proportional (50%) basis through “results in joint ventures and associates” without making any adjustment for the propor- tional interest held by VGP. By doing so the Group will only rec- ognise its proportional profit or loss in its consolidated figures and ensure that it does not recognise a higher profit or loss than its share in the “results in joint ventures and associates”. In contrast, according to IFRS 10.25 upon loss of control of a subsidiary, a parent de-recognises the assets and liabilities of the subsidiary (including non-controlling interests) in full and measures any investment retained in the former subsidiary at its fair value. In the absence of any other relevant guidance, entities have, in effect, an accounting policy choice of apply- ing either the approach in IFRS 10 or the approach in IAS 28. VGP has made the accounting policy choice to recognize the gain or loss on the disposal of a subsidiary to a joint venture or associate in full in profit or loss. 2.4 Foreign currency translation Items included in the financial statements of each of the Group’s entities are measured using the currency of the pri- mary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in euros (€), which is the Company’s functional currency and the Group’s presentation currency. Transactions in foreign currencies are translated to Euro at the foreign exchange rate ruling at the date of the transaction. Consequently, non-monetary assets and liabilities are pre- sented at Euro using the historic foreign exchange rate. Mon- etary assets and liabilities denominated in a currency other than Euro at the balance sheet date are translated to Euro at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the con- solidated income statement. FINANCIAL REVIEW 2023 PAGE 329NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2.5 Goodwill When VGP acquires the control over an integrated set of activ- ities and assets, as defined in IFRS 3 Business Combinations, the identifiable assets, obligations and conditional obligations of the acquired company will be booked to their fair value on the purchase date. The goodwill represents the positive differ- ence between the acquisition cost and the part of the group in the fair value of the acquired net assets. If this difference is negative (negative goodwill) it is immediately booked in the result after a re-evaluation of the values. After the initial take-up the goodwill is not written down, but subject to an impairment test, which is carried out each year on the cash flow generating units to which the goodwill is allocated. If the book value of a cash flow generating unit exceeds the oper- ating value, the loss of value following from this will be booked in the result and in the first instance included in the reduction of the possible goodwill and then subsequently to the other assets of the unit, in proportion to their book value. A write-down on the goodwill cannot be reversed in a subsequent financial year. 2.6 Intangible assets Intangible assets are measured at cost or fair value less accumulated amortization and any accumulated impairment losses. Intangible assets are amortized on a straight-line basis over the best estimate of their useful lives. The amortization period and method are reviewed at each financial year-end. 2.7 Investment properties Completed projects Completed properties are initially measured at cost (including transaction costs). After initial recognition, investment prop- erty is carried at fair value. An external independent valuation expert with recognised professional qualifications and experi- ence in the location and category of the property being valued, values the portfolio at least annually. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length trans- action after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. Any gain or loss arising from a change in fair value is recog- nised in the consolidated income statement. Property under construction Property that is being constructed or developed is also stated at fair value. The properties under construction are also val- ued by an external independent valuation expert using the same valuation methodology as used for the valuations of the completed projects but deducting the remaining construc- tion costs from the calculated market value of the respective projects. Any gain or loss arising from a change in fair value is recog- nised in the consolidated income statement. All costs directly associated with the purchase and con- struction of a property and all subsequent capital expenditure qualifying as acquisition costs are capitalised. Development land Land of which the Group has the full ownership i.e. registered in the respective land registry as owner and on which the Group intends to start construction (so called “development land”) is immediately valued at fair value. The development land is valued by an external independent valuation expert using the valuation sales comparative approach. Any gain or loss arising from a change in fair value is recog- nised in the consolidated income statement. All costs directly associated with the purchase of the devel- opment land are capitalised. Land which is not yet in full ownership but which is secured by a future purchase agreement or purchase option is not rec- ognised as investment property until the Group has become full owner of this land. The Group will be required to make from time to time down payments when entering into such future purchase agree- ments or purchase options. The down payments of the land will be recorded as other receivables unless such amounts are immaterial, in which case the Board of Directors may elect to classify such amounts under investment properties. Infrastructure works are not included in the fair value of the development land but are recognised as investment property and valued at cost. In case the Board of Directors is of the opinion that the fair value of the development land cannot be reliable determined the Board may elect to value the development land at cost less impairment until the fair value becomes reliably determinable. 2.8 Capitalisation of borrowing costs Interest and other financial expenses relating to the acquisi- tion and development of assets incurred until the asset is put in use are capitalised. Subsequently, they are recorded as financial expenses. 2.9 Leases VGP as lessee At the start of the lease period, the leases (except for leases with a maximum term of twelve months and leases whose underlying assets are of low value) are recognised on the bal- ance sheet as rights of use and lease liabilities at the present value of the future lease payments. Next, all rights of use that qualify as investment properties are valuated at fair value, in accordance with the valuation rules detailed under 2.7 Invest- ment properties. The minimum lease payments are recog- nised in part as financing costs and in part as settlement of the outstanding liability, in a manner resulting in a constant periodic interest rate on the remaining balance of the liability. The cost of financing is offset directly against the result. Con- ditional lease payments are incorporated as costs in the peri- ods in which they were made. VGP as lessor If a lease meets the conditions of a financial lease (according to IFRS 16), VGP as the lessor will recognise the lease from its start date as a receivable in the balance sheet at an amount equal to the net investment in the lease. The difference between this lat- ter amount and the book value of the leased property (exclusive of the value of the residual right held by VGP) at the start of the lease will be recognised in the profit and loss account for that period. Each periodic payment made by the lessee will be partly recognised by VGP as a repayment of the capital and partly as financial income based on a constant periodic return for VGP. The residual right held by VGP will be recognised at its fair value on each balance sheet date. This value will increase every year and will correspond to the market value of the full right of owner- ship at the end of the lease. These increases will be recognised in Net valuation gains/(losses) on investment properties in the profit and loss account. Group company is the lessor – fees paid in connection with arranging leases and lease incentives The Group makes payments to agents for services in connec- tion with negotiating lease contracts with the Group’s lessees. PAGE 330 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS The letting fees are capitalised within the carrying amount of the related investment property and amortised over the lease term. Lease incentives are recognised as a reduction of rental income on a straight-line basis over the lease term. 2.10 Property, plant and equipment Property, plant and equipment are valued at their cost price less the accumulated depreciations and write-downs. The cost price includes all directly attributable costs and the rele- vant part of the indirect costs incurred to make the asset ready for use. Future disbursements for repairs are immediately recorded in the result unless they increase the future financial profits of the asset. The straight-line depreciation method is applied over the estimated lifetime of the assets. The useful life and the depreciation method are revised at least annually at the end of each financial year. The tangible fixed assets are depreciated in accordance with the following percentages: — software: 33%; — IT equipment: 10–33%; — office furniture and fittings: 7–20%; — cars: 25%; — photovoltaic panels 5% 2.11 Financial assets at amortised cost Financial assets at amortized cost include trade receivables, other receivables and cash and cash equivalents and rep- resent non-derivative financial instruments which are held within a business model with the purpose to receive contrac- tual cashflows (held to collect) and the contractual terms of the financial asset give rise to cashflows at fixed dates which represent solely payments of principal and interest (SPPI). Such financial assets are stated at amortised cost with any dif- ference between cost and redemption value being recognised in the consolidated income statement over the period of the financial assets on an effective interest basis. Trade receivables do not carry any interest and are stated at amortised cost as reduced by appropriate bad debt allow- ances. Such allowances are based on the expected credit losses, calculated in accordance with IFRS 9. The group has not developed a provision matrix based on historical credit loss experience as historical credit losses are insignificant. In case there has been a significant increase in credit risk since initial recognition, the Group recognises lifetime expected credit losses. This is the case when there is objective evi- dence that the company will not be able to collect all amounts due according to the original terms of the receivables. Sig- nificant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganiza- tion, and default or delinquency in payments are considered indicators that the default risk has significantly increased. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments. Other financial assets at amortized cost include mainly loan to joint ventures and associates. These financial assets are accounted for at amortized cost and the Group recognizes a loss allowance for expected credit losses in accordance with IFRS 9. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since ini- tial recognition of the respective financial asset. Cash and cash equivalents comprise cash balances and call deposits. Such cash balances are only held with banks with high credit ratings, as such expected credit losses are not deemed significant. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash manage- ment are included as a component of cash and cash equiva- lents for the purpose of the consolidated cash-flow statement. 2.12 Non-current assets held for sale and discontinued operations A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly prob- able and the asset (or disposal group) is available for immedi- ate sale in its present condition. A discontinued operation is a component of an entity which the entity has disposed of or which is classified as held for sale, which represents a sepa- rate major line of business or geographical area of operations and which can be distinguished operationally and for financial reporting purposes. For a sale to be highly probable, the entity should be com- mitted to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan should be initiated, and the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its cur- rent fair value, and the sale should be expected to be com- pleted within one year from the date of classification. Assets (or disposal group) classified as held for sale are measured at the lower of their carrying amount and fair value less costs necessary to make the sale. Any excess of the carrying amount over the fair value less costs to sell is included as an impair- ment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior peri- ods is not restated to reflect the new classification in the balance sheet. 2.13 Interest bearing borrowings Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amor- tised cost with any difference between cost and redemption value being recognised in the consolidated income state- ment over the period of the borrowings on an effective inter- est basis. The Group classifies as a current portion any part of long-term loans that is due to be settled within one year from the balance sheet date. 2.14 Trade and other payables Trade and other payables are stated at amortised cost. 2.15 Derivative financial instruments The Group does not apply hedge accounting in accordance with IFRS 9. Derivative financial assets and liabilities are classi- fied as financial assets or liabilities at Fair Value through Profit or Loss (FVPL) . Derivative financial assets and liabilities com- prise mainly interest rate swap and forward foreign exchange contracts for hedging purposes (economic hedge). Recogni- tion of the derivative financial instruments takes place when the economic hedging contracts are entered into. They are measured initially and subsequently at fair value; transaction costs are included directly in finance costs. Gains or losses on derivatives are recognised in profit or loss in net change in fair value of financial instruments at FVPL. FINANCIAL REVIEW 2023 PAGE 331NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2.16 Impairment on property, plant and equipment and intangible assets The carrying amounts of the Group’s property, plant and equipment and intangible assets are reviewed at each bal- ance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recov- erable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the consolidated income statement. Impairment losses recognised in respect of cash-generat- ing units reduce the carrying amount of the assets in the unit (group of units) on a pro-rata basis. 2.17 Reversal of impairment An impairment loss is reversed in the consolidated income statement if there has been a change in the estimates used to determine the recoverable amount to the extent it reverses an impairment loss of the same asset that was recognised previ- ously as an expense. 2.18 Provisions A provision is recognised in the consolidated balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discount- ing the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability. 2.19 Revenue recognition Revenue includes rental income, renewable energy income, property and facility management income, development man- agement income and service charge income. Rental income from operating leases is recognised on a straight-line basis over the lease term. When the Group pro- vides incentives to its tenants, the cost of the incentives is recognised over the lease term, on a straight-line basis, as a reduction of rental income. Renewable energy income includes multiple streams, such as sale of energy, leasing of installations and government grants. The accounting treatment for solar revenue depends on the specific contractual terms of the agreement between VGP’s renewable energy company and its customers (e.g. ten- ants or green energy suppliers). If VGP’s renewable energy company has entered into a power purchase agreement (PPA) with its customers, revenue recognition is based on the deliv- ery of electricity. VGP’s renewable energy company recog- nizes revenue when electricity is delivered, based on the contractual price per kilowatt-hour (kWh). The revenue recog- nized is based on the amount of electricity delivered, and any adjustments to the contract price or revenue recognition will be made based on the terms of the PPA. If VGP’s renewable energy company has entered into a leas- ing agreement with its customers, i.e. renting out the solar equipment, the revenue recognition is based on the lease payments due under the lease agreement. VGP’s renewa- ble energy company recognizes revenue based on the lease payments due over the term of the lease agreement, and any adjustments to the lease payments or revenue recognition will be made based on the terms of the lease agreement. Govern- ment grants are recognized the year the government grant applies to. Revenue from service and property, facility and development management is recognised in the accounting period in which control of the services are passed to the customer, which is when the service is rendered. For certain service contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total ser- vices to be provided because the customer receives and uses the benefits simultaneously. Some property management contracts may include multi- ple elements of service, which are provided to tenants. The Group assesses whether the individual elements of service in contracts are separate performance obligations. Where the contracts include multiple performance obligations, and/or lease and non-lease components, the transaction price will be allocated to each performance obligation (lease and non- lease component) based on the stand-alone selling prices. Where these selling prices are not directly observable, they are estimated based on an expected cost, plus margin. In the case of fixed price contracts, the customer pays the fixed amount based on a payment schedule. If the services ren- dered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liabil- ity is recognised. Revenue is measured at the transaction price agreed under the contract. Amounts disclosed as revenue are net of varia- ble consideration and payments to customers, which are not for distinct services, this consideration may include discounts, trade allowances, rebates and amounts collected on behalf of third parties. A receivable is recognised when services are provided as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. When the Group is acting as an agent, the commission rather than gross income is recorded as revenue. 2.20 Expenses Service costs and property operating expenses Service costs for service contracts entered into and property operating expenses are expensed as incurred. Net financial result Net financial result comprises interest payable on borrowings and interest rate swaps calculated using the effective interest rate method net of interest capitalised, interest receivable on funds invested and interest rate swaps, foreign exchange and interest rate swap gains and losses that are recognised in the consolidated income statement. Income tax Income tax on the profit or loss for the year comprises cur- rent and deferred tax. Income tax is recognised in the consol- idated income statement except to the extent that it relates to items recognised directly in equity, in which case it is recog- nised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the car- rying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date. PAGE 332 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets and deferred tax liabilities have been offset, pursuant to the ful- filment of the criteria of IAS 12 §74. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. 3. Critical accounting estimates and judgements and key sources of estimation uncertainty 3.1 General business risk We refer to the chapter “Risk factors” for an overview of the risks affecting the businesses of the VGP Group. 3.2 Critical judgements in applying accounting policies The following are the critical judgments made by manage- ment, apart from those involving estimations (see note 3.3. below), that have a significant effect on the amounts reported in the consolidated financial statements: — Determining whether control, joint control or a significant influence is exercised over investments. In this respect management concluded that it has joint control over the Joint Ventures and hence these Joint Ventures and the related associates are accounted for using the equity method; — VGP has made the accounting policy choice to recognize the gain or loss on the disposal of a subsidiary to a joint venture or associate in full in profit or loss. In respect of the treatment of revenues derived from transactions with joint ventures and associates (e.g. sales services, interest rev- enue, …), the Group has opted not to eliminate its interest in these transactions nor to make any adjustment for the proportional adjustment to the joint venture correspond- ing figures. By doing so the Group will only recognise its proportional profit or loss in its consolidated figures and ensure that it does not recognise a higher profit or loss than its share in the “results in joint ventures and associ- ates”. (See note 2.3 for further information). 3.3 Key sources of estimation uncertainty VGP’s portfolio is valued at least annually by independent real estate experts. This valuation by real estate experts is intended to determine the market value of a property at a certain date, as a function of the market evolution and the characteristics of the property concerned. The property portfolio is recorded at the fair value established by the real estate experts in the Group’s consolidated accounts. (see note 13) 4. Segment reporting The chief operating decision maker is the person that allo- cates resources to and assesses the performance of the operating segments. The Group has determined that its chief operating decision-maker is the chief executive officer (CEO) of the Company. He allocates resources to and assesses the performance at business line and country level. The segmentation for segment reporting within VGP is primar- ily by business line and secondly by geographical region. 4.1 Business lines For management purpose, the Group also presents financial information according to management breakdowns, based on these functional allocations of revenues and costs. These amounts are based on a number of assumptions, and accord- ingly are not prepared in accordance with IFRS audited con- solidated financial statements of VGP NV for the period ended 2023 and 2022. The Group reports three segments as follows: Investment The Group’s investment or so-called rental business consists of operating profit generated by the completed and leased out projects of the Group’s portfolio and the proportional share of the operating profit (excluding net valuation gains) of the com- pleted and leased out projects of the Joint Ventures’ portfo- lio and consolidates as well property and asset management revenue, which include asset management, property manage- ment and facility management income. Revenues and expenses allocated to the rental business unit include 10% of the Group’s property operating expenses; other income; other expenses, after deduction of expenses allocated to property development; and share in result of the joint ventures, excluding any revaluation result. Associated operating, administration and other expenses include directly allocated expenses from the respective asset management, property management and facility management service companies. Property development The Group’s property development business consists of the net development result on the Group’s development activities. Valuation gains (losses) on investment properties outside the First, Second and Sixth Joint Venture perimeter i.e. Latvia, Cro- atia, Denmark and Serbia are excluded, as they are assumed to be non-cash generating, on the basis that these assets are assumed to be kept in the Group’s own portfolio for the fore- seeable future. In addition, 80% of total property operating expenses are allocated to the property development business, as are administration expenses after rental business and prop- erty management expenses. FINANCIAL REVIEW 2023 PAGE 333NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Renewable Energy The Group’s Renewable Energy segment includes gross renewable energy income and its direct attributable operating expenses. The renewable energy income is generated through sale of electricity, government grants and/or leasing activities. In addition, 10% of administration expenses are allocated to the Renewable Energy segment. The Renewable Energy segment leases roofs from other VGP entities. To the extent these are not eliminated in the consolida- tion perimeter, these have been added back as cost, in favor of a revenue recognition in the Investment segment. Breakdown summary of the business lines In thousands of € 31.12.2023 31.12.2022 Investment & Property and Asset Management EBITDA 171,388 122,139 Property development EBITDA 42,872 (112,062) Renewable energy EBITDA 1,603 3,912 Total EBITDA 215,863 13,989 Adjusted operating profit For the year ended 31 December 2023 Investment (+Prop. and asset mng) Development Renewable Energy Intersegment eliminations Total Gross rental and renewable energy income 64,705 — 4,361 (63) 69,003 Property operating expenses (470) (4,231) (896) 63 (5,534) Net property income 64,235 (4,231) 3,465 — 63,469 Joint Venture management fee income 26,925 — — — 26,925 Net valuation gains/(losses) on investment properties destined to the Joint Ventures — 78,667 — — 78,667 Administration expenses (9,517) (31,564) (1,862) — (42,943) Share of Joint Ventures’ Adjusted profit after tax 1 89,745 — — — 89,745 EBITDA 171,388 42,872 1,603 — 215,863 Other expenses — — — — — Depreciation and amortisation (698) (2,790) (2,432) — (5,920) Earnings before interest and tax 170,690 40,082 (829) — 209,943 Net financial cost – Own — — — — (6,032) Net financial cost – Joint Ventures and associates — — — — (34,199) Profit before tax — — — — 169,713 Current income taxes – own — — — — (15,923) Current income taxes – Joint Ventures and associates — — — — (6,297) Recurrent net income — — — — 147,493 Net valuation gains/(losses) on investment properties – other countries 2 — — — — 9,291 Net valuation gains/(losses) on investment properties – Joint Ventures and associates — — — — (61,181) Net fair value gain/(loss) on interest rate swaps and other derivatives — — — — — Net fair value gain/(loss) on interest rate swaps and other derivatives – Joint Ventures and associates — — — — (1,239) Deferred taxes – own — — — — (9,528) Deferred taxes – Joint Ventures and associates — — — — 2,455 Reported result for the period — — — — 87,292 1 The adjustments to the share of profit from the joint ventures (at share) are composed of € 61.1 million of net valuation losses on investment properties, € 1.2 million of net fair value loss on interest rate derivatives and € 2.5 million of reversal deferred taxes in respect of these adjustments. 2 Relates to developments in countries outside of the JV perimeters i.e. Latvia, Croatia, Denmark and Serbia. PAGE 334 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Adjusted operating profit For the year ended 31 December 2022 Investment (+Prop. and asset mng) Development Renewable Energy Intersegment eliminations Total Gross rental and renewable energy income 45,391 — 5,901 (62) 51,230 Property operating expenses (792) (7,136) (357) 62 (8,223) Net property income 44,599 (7,136) 5,544 — 43,007 Joint Venture management fee income 21,537 — — — 21,537 Net valuation gains/(losses) on investment properties destined to the Joint Ventures 1 — (83,874) — — (83,874) Administration expenses (6,793) (21,052) (1,632) — (29,477) Share of Joint Ventures’ Adjusted profit after tax 2 62,796 — — — 62,796 EBITDA 122,139 (112,062) 3,912 — 13,989 Other expenses — — — — (3,000) Depreciation and amortisation (633) (2,530) (1,316) — (4,479) Earnings before interest and tax 121,506 (114,592) 2,596 — 6,510 Net financial cost – Own — — — — (27,009) Net financial cost – Joint Ventures and associates — — — — (18,852) Profit before tax — — — — (39,351) Current income taxes – own — — — — (7,590) Current income taxes – Joint Ventures and associates — — — — (4,217) Recurrent net income — — — — (51,158) Net valuation gains/(losses) on investment properties – other countries 3 — — — — (13,356) Net valuation gains/(losses) on investment properties – Joint Ventures and associates — — — — (106,118) Net fair value gain/(loss) on interest rate swaps and other derivatives — — — — — Net fair value gain/(loss) on interest rate swaps and other derivatives – Joint Ventures and associates — — — — 2,096 Deferred taxes – own — — — — 27,625 Deferred taxes – Joint Ventures and associates — — — — 18,369 Reported result for the period — — — — (122,542) 1 The net valuation losses on investment properties destined to the Joint Ventures contains a revaluation loss of € 213.5 million offset by a realized valuation gain on transactions with the Joint Ventures and some first time valuation effects, totalling to € 129.6 million. 2 The adjustments to the share of profit from the joint ventures (at share) are composed of € 106.1 million of net valuation losses on investment properties, € 2.1 million of net fair value gain on interest rate derivatives and € 18.4 million of reversal deferred taxes in respect of these adjustments. 3 Relates to developments in countries outside of the JV perimeters i.e. Latvia, Croatia, France, Denmark and Serbia. FINANCIAL REVIEW 2023 PAGE 335NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 4.2 Geographical information This basic segmentation reflects the geographical markets in Europe in which VGP operates, VGP’s operations are split into the individual countries where it is active. This segmentation is important for VGP as the nature of the activities and the customers have similar economic characteristics within those segments. 31.12.2023 In thousands of € Gross rental and renewable energy income (Incl. JV at share) Net rent and renewable energy income (Incl. JV at share) Operating EBITDA (Incl. JV at share) Investment properties (Incl. JV at share) Renewables property, plant and equipment Total assets (Incl. JV at share) Capital expenditure 1 Western Europe Germany 94,050 88,920 116,823 2,429,295 76,817 2,632,744 344,106 Spain 11,207 8,444 8,233 329,102 — 342,664 15,780 Austria 1,674 730 11,699 190,978 — 200,223 47,283 Netherlands 8,418 7,034 16,784 280,989 15,238 310,394 17,778 Italy 2,885 2,077 (77) 91,886 3,797 108,727 12,476 France — 1,218 7,872 97,333 — 110,501 67,680 Portugal 974 858 (6,996) 54,826 — 66,757 11,080 Denmark — (24) (830) 2,488 — 3,583 2,488 Luxembourg 2 — — — — — 168,203 — Belgium² — — — — — 569,770 — 119,208 109,257 153,508 3,476,897 95,852 4,513,566 518,671 Central and Eastern Europe Czech Republic 22,737 21,501 33,022 513,940 2,287 531,634 23,048 Slovakia 6,669 5,834 (5,546) 227,649 — 233,207 20,708 Hungary 8,020 6,772 14,638 227,256 — 237,937 47,248 Romania 9,001 7,469 1,904 208,060 555 238,516 43,089 Croatia — (15) (248) 6,246 — 7,969 144 46,427 41,561 43,770 1,183,151 2,842 1,249,263 134,237 Baltics and Balkan Latvia 5,418 6,366 5,359 99,460 — 106,008 9,353 Serbia 23 (250) (1,130) 67,936 5 72,289 30,599 5,441 6,116 4,229 167,396 5 178,297 39,952 Other 3 — (1,888) 14,357 75 — 2,471 — Total 171,076 155,046 215,864 4,827,519 98,699 5,943,597 692,859 1 Capital expenditures includes additions and acquisition of investment properties and development land but does not include tenant incentives, letting fees, and capitalised interest. Capital expenditure directly incurred for the own portfolio, amounts to € 662.5 million (of which € 212.4 relates to acquisitions) and amount to € 30.4 million on development properties on behalf of First, Second and Fifth Joint Venture. 2 Balance sheet only 3 Other includes the Group central costs and costs relating to the operational business which are not specifically geographically located PAGE 336 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 31.12.2022 In thousands of € Gross rental and renewable energy income (Incl. JV at share) Net rent and renewable energy income (Incl. JV at share) Operating EBITDA (Incl. JV at share) Investment properties (Incl. JV at share) Renewables property, plant and equipment Total assets (Incl. JV at share) Capital expenditure 1 Western Europe Germany 68,258 61,276 (60,528) 2,439,013 49,175 2,661,881 464,454 Spain 9,455 7,605 32,252 383,874 — 456,971 39,079 Austria 1,118 964 (12,289) 129,428 — 136,722 54,830 Netherlands 6,320 5,282 (1,044) 297,514 15,285 320,736 13,516 Italy 2,711 1,957 20,621 83,719 703 112,832 18,570 France — (72) (1,074) 21,218 — 22,870 21,437 Portugal 415 565 10,249 48,593 — 52,986 26,018 Luxembourg 2 — — — — — 190,145 — Belgium² — — — — — 733,144 — 88,277 77,577 (11,813) 3,403,359 65,163 4,688,287 637,904 Central and Eastern Europe Czech Republic 18,889 17,526 26,356 527,852 73 547,589 54,179 Slovakia 4,630 4,942 (10,048) 214,761 — 225,179 35,279 Hungary 5,117 4,774 4,068 169,393 — 181,031 43,637 Romania 4,590 3,366 (6,151) 165,552 531 190,840 858 Croatia — (64) (94) 5,825 — 6,262 5,796 33,226 30,544 14,131 1,083,383 604 1,150,901 139,748 Baltics and Balkan Latvia 2,241 1,014 273 93,530 — 95,973 33,504 Serbia 24 (524) (1,338) 24,243 — 25,241 46,789 2,265 490 (1,065) 117,773 — 121,214 80,293 Other 3 — (1,477) 12,735 75 — 2,431 — Total 123,768 107,134 13,988 4,604,590 65,767 5,962,833 857,945 1 Capital expenditures includes additions and acquisition of investment properties and development land but does not include tenant incentives, letting fees, and capitalised interest. Capital expenditure directly incurred for the own portfolio amounts to € 832.6 million (of which € 202.5 related to land acquisition) and amounts to € 25.3 million on development properties on behalf of the First and Second Joint Venture. 2 Balance sheet only 3 Other includes the Group central costs and costs relating to the operational business which are not specifically geographically located FINANCIAL REVIEW 2023 PAGE 337NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS The table below shows the geographic segmentation, excluding the share in the Joint Ventures. 31.12.2023 In thousands of € Gross rental and renewable energy income (Own Net rent and renewable energy income (Own) Investment properties (Own) Property plant and equipment and Intangible assets (Own) Total non-current assets (IP 1 , PPE and Intangibles) Western Europe Germany 38,150 37,638 960,417 77,189 1,037,606 Spain 1,269 146 104,838 214 105,052 Austria 968 113 178,478 71 178,549 Netherlands 1,287 942 47,409 15,290 62,699 Italy 222 72 44,467 3,876 48,343 France — 1,218 97,333 71 97,404 Portugal 352 322 44,154 54 44,208 Denmark (24) 2,485 224 2,709 Luxembourg — — — 37 37 Belgium — — — 7,435 7,435 42,248 40,427 1,479,581 104,461 1,584,042 Central and Eastern Europe Czech Republic 5,551 5,202 180,791 2,947 183,738 Slovakia 4,640 4,190 192,067 58 192,125 Hungary 5,398 4,263 191,600 102 191,702 Romania 5,725 4,460 167,120 838 167,958 Croatia — (15) 6,246 2 6,248 21,314 18,100 737,824 3,947 741,771 Baltics and Balkan Latvia 5,418 6,366 99,460 6 99,466 Serbia 23 (250) 67,936 12 67,948 5,441 6,116 167,396 18 167,414 Other 2 (1,174) — — — Total 69,003 63,469 2,384,801 108,426 2,493,227 1 Including investment properties included in assets held for sale for an amount of € 875.8 million 2 Other includes the Group central costs and costs relating to the operational business which are not specifically geographically located PAGE 338 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 31.12.2022 In thousands of € Gross rental and renewable energy income (Own Net rent and renewable energy income (Own) Investment properties (Own) Property plant and equipment and Intangible assets (Own) Total non-current assets (IP 1 , PPE and Intangibles) Western Europe Germany 30,905 28,353 1,311,996 49,645 1,361,641 Spain 2,675 1,830 215,015 293 215,308 Austria 462 399 115,943 38 115,981 Netherlands 1,921 1,726 144,835 15,356 160,191 Italy 714 360 40,374 791 41,165 France — (72) 21,218 8 21,226 Portugal 104 306 37,998 67 38,065 Luxembourg — — — 34 34 Belgium — — — 6,465 6,465 36,781 32,902 1,887,379 72,697 1,960,076 Central and Eastern Europe Czech Republic 5,234 4,251 242,545 670 243,215 Slovakia 2,552 2,879 178,605 50 178,655 Hungary 2,779 2,547 132,014 114 132,128 Romania 1,619 615 124,102 825 124,927 Croatia — (64) 5,825 — 5,825 12,184 10,228 683,091 1,659 684,750 Baltics and Balkan Latvia 2,241 1,014 93,530 5 93,535 Serbia 24 (524) 24,243 2 24,245 2,265 490 117,773 7 117,780 Other 2 — (613) — 117 117 Total 51,230 43,007 2,688,243 74,480 2,762,723 1 Including investment properties included in assets held for sale for an amount of € 292.5 million 2 Other includes the Group central costs and costs relating to the operational business which are not specifically geographically located FINANCIAL REVIEW 2023 PAGE 339NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. Revenue In thousands of € 31. 12. 2023 31. 12. 2022 Rental income from investment properties 54,298 35,177 Rent incentives 10,344 10,152 Total gross rental income 64,642 45,329 Gross renewable energy income 4,361 5,901 Property and facility management income 22,513 18,016 Development management income 4,412 3,521 Joint Venture management fee income 26,925 21,537 Service charge income 17,794 12,017 Total revenue 113,722 84,784 The Group leases out its investment property under operating leases. The operating leases are generally for terms of more than 5 years. The gross rental income reflects the full impact of the income generating assets delivered in 2023. During 2023, gross rental income included € 22.8 million of rent for the period related to the property portfolio sold during the tenth closing with the First Joint Venture, the fourth closing with Second Joint Venture and the first closing with the Fifth Joint Venture. At the end of 2023, the Group (including the joint ventures) had annualized committed leases of € 350.8 million 1 compared to € 303.2 million 2 as at 31 December 2022. The customers represent a healthy mix of logistic tenants and end users. The top 10 tenants (by annualised rent income) are all blue-chip clients. As at 31 December 2023, the top ten tenants take up approximately 32.0% of the total (own and Joint Ventures) Annualised Committed Leases. The breakdown of future lease income for the own portfolio and Joint Ventures at share is as follows: 31. 12. 2023 In thousands of € Lease income in < 1 year Lease income in < 2 years Lease income in < 3 years Lease income in < 4 years Lease income in < 5 years Lease income > 5 years Total JV at share – Active Leases 113,473 107,853 96,697 86,456 74,573 348,475 827,527 JV at share – Committed Leases 321 339 339 339 339 1,722 3,399 Total – JV at share 113,794 108,192 97,036 86,795 74,912 350,197 830,926 Own – Active Leases 82,136 81,071 78,103 62,153 55,232 287,216 645,911 Own – Committed Leases 19,084 39,625 41,227 41,434 42,058 282,090 465,518 Total – Own 101,220 120,696 119,330 103,587 97,290 569,306 1,111,429 Total – at share 215,014 228,888 216,366 190,382 172,202 919,504 1,942,355 31. 12. 2022 In thousands of € Lease income in < 1 year Lease income in < 2 years Lease income in < 3 years Lease income in < 4 years Lease income in < 5 years Lease income > 5 years Total JV at share – Active Leases 86,458 82,610 76,642 67,024 59,461 260,623 632,818 JV at share – Committed Leases 629 742 742 706 437 2,567 5,859 Total – JV at share 87,087 83,352 77,384 67,730 59,934 263,190 638,677 Own – Active Leases 95,629 112,349 112,848 108,541 98,662 604,581 1,132,610 Own – Committed Leases 3,004 9,337 10,194 10,194 9,694 90,197 132,620 Total – Own 98,633 121,686 123,042 118,735 108,356 694,778 1,265,230 Total – at share 185,720 205,038 200,426 186,465 168,290 957,968 1,903,907 1 € 225.1 million related to the joint ventures’ property portfolio and € 125.6 million related to the own property portfolio. 2 € 173.3 million related to the joint ventures’ property portfolio and € 129.9 million related to the own property portfolio. PAGE 340 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 6. Net property operating expenses In thousands of € 31. 12. 2023 31. 12. 2022 Repairs and maintenance (796) (653) Letting, marketing, legal and professional fees (766) (742) Real estate agents (1,022) (1,911) Service charge income 17,794 12,017 Service charge expenses (16,890) (11,891) Other operating income 6,477 3,505 Other operating expenses (9,498) (8,253) Renewable energy operating expenses (833) (295) Total (5,534) (8,223) 7. Net valuation gains/(losses) on investment properties In thousands of € 31. 12. 2023 31. 12. 2022 Unrealised valuation gains/(losses) on investment properties 22,399 (180,111) Unrealised valuation gains/(losses) on disposal group held for sale 6,539 (4,336) Realised valuation gains/(losses) on disposal of subsidiaries and investment properties 59,020 87,217 Total 87,958 (97,230) The own property portfolio, excluding development land but including the assets being developed on behalf of the joint ventures, is valued by the valuation expert at 31 December 2023 based on a weighted average yield of 6.22% (compared to 5.29% as at 31 December 2022) applied to the contractual rents increased by the estimated rental value on unlet space. A 0,10% variation of this market rate would give rise to a variation of this portfolio value of € 31.6 million. The realized gain comprises gains on the effectuated transactions in ’23 with the First, Second and Fifth Joint Venture. Please note that the realized gains include a € 23.8 million gain on the Fifth Joint Venture, such gain was recorded in H1 ’23 as unrealized and has been reported as fully realized over the full year ’23 in the table above. 8. Administration expenses In thousands of € 31. 12. 2023 31. 12. 2022 Wages and salaries (26,120) (14,066) Audit, legal and other advisors (7,168) (6,833) Other administrative expenses (9,655) (8,578) Depreciation (5,920) (4,479) Total (48,863) (33,956) The administrative costs for the period increased from € 34 million for the period ended 31 December 2022 to € 48.9 million for the period ended 31 December 2023. The increase is mainly due to the increased costs of the long-term incentive plan (LTIP) which is directly proportionally linked to the net asset value growth of the Group. During the year 2022 a reversal of this accrual was booked in an amount of € 4 million, whereas in ’23 an additional € 5.5 million has been expensed, which is a variance of € 9.5 million versus previous year. As at 31 December 2023, the group employed 367.5 full-time equivalents, a decrease of 15.5 FTE versus ’22. FINANCIAL REVIEW 2023 PAGE 341NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9. Investments in Joint Ventures 9.1 Profit from Joint Ventures The table below presents a summary Income Statement of the Group’s Joint Ventures with (i) Allianz Real Estate (VGP European Logistics, VGP European Logistics 2, VGP Park München) and the associates; (ii) the joint venture with Roozen Landgoederen Beheer (LPM), (iii) the joint venture with VUSA (Belartza) located in San Sebastian, Spain (iv) the joint venture with Weimer Bau (Siegen) in Germany and (v) the joint venture with Deka, all of which are accounted for using the equity method. VGP European Logistics and VGP European Logistics 2 are incorporated in Luxembourg. VGP European Logistics owns logis- tics property assets in Germany, the Czech Republic, Slovakia and Hungary. VGP European Logistics 2 owns logistics property assets in Spain, Austria, the Netherlands, Italy and Romania. VGP Park München is incorporated in München (Germany) and owns and develops the VGP park located in München. LPM Joint Venture will develop Logistics Park Moerdijk (“LPM”) together with the Port Authority Moerdijk on a 50:50-basis and has been sold in ’24. The joint venture with Deka contains five parks located in Germany. The joint ventures with Vusa and Grekon contain land to be developed jointly with its partner. VGP NV holds 50% directly in all joint ventures and holds another 5.1% in the subsidiaries of VGP European Logistics holding assets in Germany and specifically 10.1% in the German subsidiary 1 that has been disposed to the First Joint Venture in Q1 ’23. INCOME STATEMENT in thousand of € First Joint Venture (excl. minorities) at 100% Second Joint Venture at 100% Third Joint Venture at 100% Development Joint Ventures at 100% Fifth Joint Venture at 100% Joint Ventures at 50% First Joint Venture Asset Companies minority share 31. 12. 2023 Gross rental income 107,748 48,667 27,729 16 12.996 98,578 3.495 102.073 Property Operating expenses — — — — — — — — — underlying property operating expenses 1,969 (2,859) 427 (307) (457) (613) 52 (561) — property management fees (10,208) (5,959) (2,398) — (602) (9,584) (351) (9.935) Net rental income 99,509 39,849 25,758 (291) 11.937 88,381 3.196 91.577 Net valuation gains/(losses) on investment properties (76,864) (38,137) (26,064) (1,669) 27.986 (57,374) (3.805) (61.179) Administration expenses (2,239) (867) (116) (29) (292) (1,772) (65) (1.837) Operating result 20,406 845 (422) (1,989) 39.631 29,235 (674) 28.561 Financial income 114 1,063 153 — 101 715 (203) 512 Financial expense (25,743) (20,199) (12,210) (573) (12.027) (35,376) (570) (35,946) Net financial result (25,629) (19,136) (12,057) (573) (11.926) (34,661) (773) (35.434) Taxes (3,579) 3,661 (806) (1,678) (5.761) (4,082) 240 (3.842) Result For The Period (8,802) (14,630) (13,285) (4,240) 21.944 (9,508) (1.207) (10.715) Other comprehensive income — — — — — — — — Total Comprehensive Income/Loss For The Period (8,802) (14,630) (13,285) (4,240) 21.944 (9,508) (1.207) (10.715) 1 VGP Park Berlin 4 PAGE 342 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS INCOME STATEMENT in thousand of € First Joint Venture (excl. minorities) at 100% Second Joint Venture at 100% Third Joint Venture at 100% Development Joint Ventures at 100% Joint Ventures at 50% First Joint Venture Asset Companies minority share 31. 12. 2022 Gross rental income 96,754 34,229 7,533 46 69,281 3,257 72,538 Property Operating expenses — — — — — — — — underlying property operating expenses 81 (1,680) 10 (14) (802) (49) (851) — property management fees (8,862) (4,849) (766) — (7,239) (321) (7,560) Net rental income 87,973 27,700 6,777 32 61,240 2,887 64,127 Net valuation gains/(losses) on investment properties (126,246) (92,546) 16,385 5,054 (98,677) (7,440) (106,117) Administration expenses (1,868) (502) (130) (76) (1,288) (45) (1,333) Operating result (40,141) (65,348) 23,032 5,010 (38,725) (4,598) (43,323) Financial income 2,118 2,313 — — 2,216 — 2,216 Financial expenses (21,535) (11,984) (2,502) (408) (18,215) (757) (18,972) Net financial result (19,417) (9,671) (2,502) (408) (15,999) (757) (16,756) Taxes 8,050 19,214 834 (1,529) 13,286 866 14,152 Result For The Period (51,508) (55,805) 21,364 3,073 (41,438) (4,489) (45,927) Other comprehensive income — — — — — — — Total Comprehensive Income/Loss For The Period (51,508) (55,805) 21,364 3,073 (41,438) (4,489) (45,927) FINANCIAL REVIEW 2023 PAGE 343NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9.2 Summarised balance sheet information in respect of Joint Ventures BALANCE SHEET in thousand of € First Joint Venture (excl. minorities) at 100% Second Joint Venture at 100% Third Joint Venture at 100% Development Joint Ventures at 100% Fifth Joint Venture at 100% Joint Ventures at 50% First Joint Venture’s German Companies minority share 31. 12. 2023 Investment properties 2,215,320 916,912 630,859 226,200 742,658 2,365,975 76,743 2,442,718 Other assets 2,196 (997) 3,392 75 (186) 2,238 — 2,238 Total non-current assets 2,217,516 915,915 634,251 226,275 742,472 2,368,213 76,743 2,444,956 Trade and other receivables 19,282 13,878 20,870 19,333 27,187 50,275 535 50,810 Cash and cash equivalents 46,997 18,078 33,467 4,011 42,813 72,683 1,672 74,355 Total current assets 66,280 31,956 54,337 23,344 70,000 122,958 2,207 125,165 Total assets 2,283,796 947,871 688,588 249,619 812,472 2,491,171 78,950 2,570,121 Non-current financial debt 948,283 545,534 379,245 144,930 534,980 1,276,486 33,767 1,310,253 Other non-current financial liabilities 512 — — — — 256 — 256 Other non-current liabilities 7,257 6,236 — 2,971 10,298 13,381 200 13,581 Deferred tax liabilities 197,363 39,043 — 583 22,006 129,498 6,127 135,625 Total non-current liabilities 1,153,415 590,813 379,245 148,484 567,284 1,419,621 40,094 1,459,715 Current financial debt 27,368 11,355 1,016 — — 19,869 744 20,613 Trade debts and other current liabilities 19,452 10,037 11,600 37,993 25,060 52,071 494 52,564 Total current liabilities 46,819 21,392 12,616 37,993 25,060 71,940 1,238 73,178 Total liabilities 1,200,234 612,205 391,861 186,477 592,344 1,491,561 41,332 1,532,893 Net assets 1,083,561 335,666 296,727 63,142 220,128 999,610 37,618 1,037,228 PAGE 344 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS BALANCE SHEET in thousand of € First Joint Venture (excl. minorities) at 100% Second Joint Venture at 100% Third Joint Venture at 100% Development Joint Ventures at 100 % Joint Ventures at 50% First Joint Venture’s German Asset Companies minority share 31. 12. 2022 Investment properties 2,168,850 713,723 638,474 155,670 1,838,360 77,987 1,916,347 Other assets 1,825 2,421 3,583 75 3,951 14 3,965 Total non-current assets 2,170,675 716,144 642,057 155,745 1,842,311 78,001 1,920,312 Trade and other receivables 14,675 21,282 35,354 1,072 36,192 270 36,462 Cash and cash equivalents 40,386 17,874 32,274 9,180 49,857 1,350 51,207 Total current assets 55,061 39,156 67,628 10,252 86,049 1,620 87,669 Total assets 2,225,736 755,300 709,685 165,997 1,928,360 79,621 2,007,981 Non-current financial debt 917,863 417,795 367,052 82,048 892,379 34,030 926,409 Other non-current financial liabilities — — — — — — — Other non-current liabilities 6,914 5,427 — 3,834 8,087 221 8,308 Deferred tax liabilities 197,983 37,528 — 583 118,047 6,393 124,440 Total non-current liabilities 1,122,759 460,750 367,052 86,465 1,018,513 40,644 1,059,157 Current financial debt 25,627 8,495 — — 17,061 744 17,805 Trade debts and other current liabilities 17,527 23,425 32,621 5,336 39,456 362 39,818 Total current liabilities 43,154 31,920 32,621 5,336 56,517 1,106 57,623 Total liabilities 1,165,913 492,670 399,673 91,801 1,075,030 41,750 1,116,780 Net assets 1,059,823 262,630 310,012 74,196 853,330 37,871 891,201 On 17 th of January 2023, VGP concluded a tenth transaction with its 50:50 joint venture, VGP European Logistics (“First Joint Ven- ture”). The transaction comprised 3 logistic buildings, which are located in Germany (one) and in the Czech Republic (two). The gross asset value of the completed assets amounted to € 114.6 million 1 and the net proceeds from this transaction amounted to € 73.5 million. Following the completion of this tenth closing, the First Joint Venture’s property portfolio consist of 104 com- pleted buildings representing around 1,971,000 m² of lettable area, with an 98.9% occupancy rate. VGP and their 50:50 joint venture, VGP European Logistics 2 (The “Second Joint Venture” also called “Aurora”) concluded upon a transaction comprising 11 logistic buildings, including 5 buildings in 4 new VGP parks and another 6 newly completed logistic buildings which were developed in parks which were already transferred to the joint venture in a prior closing. The 11 buildings are located in Spain (7), the Netherlands (3) and Italy (1). The transaction with VGP European Logistics 2 formed the 4 th closing between VGP and this joint venture. The gross asset value of the assets amounted to a value of € 253 million with net proceeds of € 194.4 million. Following the completion of fourth closing, the Second Joint Venture’s property portfolio consist of 43 completed buildings rep- resenting around 927,000 m² of lettable area, with an 98.2% occupancy rate. VGP has signed 21 July 2023 a new joint venture agreement with Deka Immobilien, a prominent real estate investment com- pany. The joint venture endeavours that two of Deka Immobilien’s public funds, Deka Westinvest InterSelect and Deka Immobilien Europa, acquire a 50% stake in five project companies owned by VGP. The project companies own and operate five strategically located parks in Germany, namely Gießen – Am alten Flughafen, Laatzen, Göttingen 2, Magdeburg and Berlin Oberkrämer. These parks boast a portfolio of 20 buildings, generating a total annu- alized rental income of € 52.9 million at the time of the transaction. The agreed gross asset value of all assets stands at over € 1.1 billion. The transaction was foreseen to be executed in three clos- ings, with the first closing effectuated in Q3 2023. Pricing has been agreed for the full portfolio, thus including the remaining two closings which are set to materialize in H1 and H2 of ’24. VGP is set to recycle over € 700 million of cash from all closings. The first closing, encompassing 17 of the 20 buildings, gener- ated € 393 million in net proceeds (€ 455 million gross). The remaining closings are set for H1 (two buildings) and Q3 2024 (one building), once the construction of the respective assets are completed. These closings expect to generate minimum € 250 mil- lion of gross cash proceeds. The Joint Ventures’ property portfolio, excluding development land and buildings being constructed by VGP on behalf of the Joint Ventures, is valued at 31 December 2023 based on a weighted average yield of 5.01% (compared to 4.68% as at 31 Decem- ber 2022). A 0.10% variation of this market rate would give rise to a variation of the Joint Venture portfolio value (at 100%) of € 88.9 million. 1 The transaction value is composed of the purchase price for the completed income generating buildings and the net book value of the development pipeline which is transferred as part of a closing but not yet paid for by the First, Second and Fifth Joint Venture. FINANCIAL REVIEW 2023 PAGE 345NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS The (re)valuation of the First, Second, third and Fifth Joint Ventures’ portfolio was based on the appraisal report of the property expert IO Partners, preferred partner of Jones Lang LaSalle. VGP provides certain services, including asset-, property- and development advisory and management, for the Joint Ventures and receives fees from the Joint Ventures for doing so. Those services are carried out on an arms-length basis and do not give VGP any control over the relevant Joint Ventures (nor any unilateral material decision-making rights). Significant transactions and decisions within the Joint Ventures require full Board and/or Shareholder approval, in accordance with the terms of the Joint Ven- ture agreement. 9.3 Other non-current receivables In thousands of € 31. 12. 2023 31. 12. 2022 Shareholder loans to First Joint Venture 47,619 38,047 Shareholder loans to Second Joint Venture 31,822 32,614 Shareholder loans to Third Joint Venture 158,132 183,526 Shareholder loans to Development Joint Ventures 140,992 79,350 Shareholder loans to Fifth Joint Venture 172,490 — Shareholder loans to associates (subsidiaries of First Joint Venture) 4,977 16,402 Construction and development loans to subsidiaries of the First Joint Venture 8,482 5,280 Construction and development loans to subsidiaries of the Second Joint Venture 22,786 96,071 Construction and development loans to the Fifth Joint Venture 287,813 — Construction and development loans reclassified as assets held for sale (319,081) (101,351) Other long term receivables 9,702 9,705 Total 565,734 359,644 The other non-current receivables increased by € 206.1 million. Main changes include financing to the Development Joint Ven- tures (mainly LPM) of € 61.6 million, as well as a new shareholder loan following the transaction with the Fifth Joint Venture of € 172.5 million. Shareholder loans to the First, Second and Third Joint Venture reduced by € 28 million. This includes the set off between the creation of new shareholder loans following the transactions with the First and Second Joint Venture in the first half of ’23 and € 57 million net distributions through shareholder loans. 9.4 Investments in joint ventures and associates In thousands of € 31. 12. 2023 31. 12. 2022 As at 1 January 891,201 858,116 Additions 166,211 116,379 Result of the year (10,715) (45,927) Repayment of equity 1 (3,407) (14,154) Dividends 1 (6,062) (23,214) Adjustment from sale of participations — — As at the end of the period 1,037,228 891,201 The investments in joint ventures and associates increased by € 146 million. This change is mainly related to (i) equity contribu- tions of transactions with Joint Ventures in an amount of € 166.2 million; (ii) an equity repayment from the Development Joint Ven- ture Siegen of € 3.4 million; (iii) a dividend received from the First Joint Venture for an amount of € 6 million, (iv) as well as the share in the result of the Joint Ventures, a loss of € 10.7 million. 1 On top of the equity distribution and dividends from the joint ventures for an amount of € 9.5 million (in 2022: € 37.4 million), VGP group received a partial repayment of shareholders loan for a total amount of € 72.5 million (in 2022: € 22.6 million). Resulting in a total profit distribution by the Joint Ventures of € 82 million (in 2022: € 60 million). PAGE 346 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9.5 EPRA performance measures on the Joint Ventures at share This paragraph provides additional performance measures for the Joint Ventures (excluding the Development Joint Ventures), calculated in accordance with the Best Practices Recommendations of the European Public Real Estate Association (EPRA). We assess that the metrics are most accurate when determined on the developed portfolio. Therefore, our Development Joint Ven- tures, which only contain development land, were not considered in the performance measures below. We provide these measures on the Joint Ventures at share, in particular for the First, Second, Third and Fifth Joint Venture, to aid comparison with other European real estate businesses. (i) Summary EPRA Metrics of Joint Ventures at share 1 31. 12. 2023 31. 12. 2022 EPRA Net Tangible Assets (EPRA NTA) 1,130,627 957,554 EPRA Earnings 43,678 39,530 EPRA Net Initial Yield (NIY) 4.98% 4.52% EPRA ‘Topped-up’ NIY 5.03% 4.65% EPRA Vacancy Rate 0.9% 1.0% EPRA Cost Ratio (including direct vacancy costs) 10.0% 11.7% EPRA Cost Ratio (excluding direct vacancy costs) 9.8% 11.5% EPRA Loan to value (LTV) ratio 31.6% 31.3% (ii) Detailed calculation of EPRA Metrics EPRA NTA – Joint Ventures at share (in thousands of €) 31. 12. 2023 31. 12. 2022 IFRS NAV 997,200 826,648 IFRS NAV per share (in €) 36.54 30.29 NAV at fair value (after the exercise of options, convertibles and other equity) 997,200 826,648 To exclude: Deferred tax 134,111 130,732 Fair value of financial instruments (681) 174 Intangibles as per IFRS balance sheet (3) — Subtotal 1,130,627 957,554 Fair value of fixed interest rate debt Real estate transfer tax NAV 1,130,627 957,554 Number of shares 27,291,312 27,291,312 NAV per share (in €) 41.43 35.09 EPRA Earnings of Joint Ventures at share (in thousands of €) 31. 12. 2023 31. 12. 2022 Earnings per IFRS income statement (8,598) (47,464) Adjustments to calculate EPRA Earnings, exclude: Changes in value of investment properties, development properties held for investment and other interests 58,988 108,631 Profits or losses on disposal of investment properties, development properties held for investment and other interests 1,359 14 Profits or losses on sales of trading properties including impairment charges in respect of trading properties. — — Tax on profits or losses on disposals — — Negative goodwill/goodwill impairment — — Changes in fair value of financial instruments and associated close-out costs 1,239 (2,093) Acquisition costs on share deals and non-controlling joint venture interests 1,972 1,212 Deferred tax in respect of EPRA adjustments (11,282) (20,770) Adjustments (i) to (viii) above in respect of joint ventures (unless already included under proportional consolidation) — — Non-controlling interests in respect of the above — — EPRA Earnings 43,678 39,530 1 First, Second, Third and Fifth Joint Venture (at share) – excluding development Joint Ventures. FINANCIAL REVIEW 2023 PAGE 347NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS EPRA NIY and 'topped-up' NIY of Joint Ventures at share (in thousands of €) 31. 12. 2023 31. 12. 2022 Investment property – share of Joint Ventures 2,492,104 1,899,055 Trading property — — Less: developments (183,306) (81,193) Completed property portfolio 2,308,798 1,817,861 Allowance for estimated purchasers’ costs 40,529 30,768 Gross up completed property portfolio valuation 2,349,327 1,848,629 Annualised cash passing rental income 116,806 83,359 Property outgoings 160 144 Annualised net rents 116,966 83,503 Add: notional rent expiration of rent free periods or other lease incentives 1,105 2,465 Topped-up net annualised rent 118,071 85,968 EPRA NIY 4.98% 4.52% EPRA “topped-up” NIY 5.03% 4.65% EPRA Vacancy Rate of Joint Ventures at share (in thousands of €) 31. 12. 2023 31. 12. 2022 Estimated Rental Value of vacant space 1,241 867 Estimated rental value of the whole portfolio 132,415 90,1567 EPRA Vacancy Rate 0.9% 1.0% EPRA Cost Ratios of Joint Ventures at share (in thousands of €) 31. 12. 2023 31. 12. 2022 Include: Administrative/operating expense line per IFRS income statement 11,572 8,452 Net service charge costs/fees 307 439 Management fees less actual/estimated profit element — — Other operating income/recharges intended to cover overhead expenses less any related profits 1,678 395 Exclude (if part of the above): Investment property depreciation 6 2 Ground rent costs — — Service charge costs recovered through rents but not separately invoiced — — EPRA Costs (including direct vacancy costs) 10,195 8,494 Direct vacancy costs 159 144 EPRA Costs (excluding direct vacancy costs) 10,036 8,350 Gross Rental Income less ground rents – per IFRS 102,070 72,519 EPRA Cost Ratio (including direct vacancy costs) 10.0% 11.7% EPRA Cost Ratio (excluding direct vacancy costs) 9.8% 11.5% PAGE 348 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS EPRA LTV Metric of Joint Ventures at share (in thousands of €) 31. 12. 2023 31. 12. 2022 Include 1 : Borrowings from Financial Institutions 854,723 638,592 Hybrids (including convertibles, preference shares, debt, options, perpetuals) — — Bond loans — — Foreign currency derivatives (futures, swaps, options and forwards) (681) (1,919) Net payables 5,753 6,661 Owner-occupied property (debt) — — Current accounts (equity characteristic) — — Exclude: Cash and cash equivalents (72,355) (46,619) Net Debt 787,441 596,716 Include: Owner-occupied property 38 2 Investment properties at fair value 2,489,307 1,905,968 Properties under development — — Intangibles 3 3 Net receivables 5,204 1,362 Financial assets — — Total Property Value 2,494,551 1,907,335 LTV 31.6% 31.3% 10 Net financial result In thousands of € 31. 12. 2023 31. 12. 2022 Bank and other interest income 6,488 — Interest income – loans to Joint Ventures and associates 27,505 17,305 Net foreign exchange gains 73 — Other financial income 10 24 Financial income 34,076 17,329 Bond interest expense (47,488) (52,140) Bank interest expense – variable debt (1,971) (3,708) Bank interest expense – interest rate swaps – hedging — — Interest 14,960 18,144 Fair value loss on interest rate derivatives — — Net foreign exchange losses — (1,426) Other financial expenses (5,608) (5,207) Financial expenses (40,107) (44,337) Net financial result (6,031) (27,008) 1 Shareholder loans are excluded from calculation. FINANCIAL REVIEW 2023 PAGE 349NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 11 Taxation 11.1 Income tax expense recognised in the consolidated income statement In thousands of € 31. 12. 2023 31. 12. 2022 Current tax (15,923) (7,590) Deferred tax (9,528) 27,625 Total (25,451) 20,035 11.2 Reconciliation of effective tax rate In thousands of € 31. 12. 2023 31. 12. 2022 Result before taxes 112,740 (142,577) Adjustment for share in result of joint ventures and associates 10,715 45,927 Result before taxes and share in result of joint ventures and associates 123,455 (96,650) Income tax using the German corporate tax rate 15.825% (19,537) 15.825% 15,295 Difference in tax rate non-German companies 6,736 14,329 Non-tax-deductible expenditure (1,578) (1,253) Compensation fiscal losses (9,301) (6,968) Other (1,771) (1,368) Total 20.6% (25,451) 20.7% 20,035 The majority of the Group’s result before taxes is earned in Germany. Hence the effective corporate tax rate in Germany is applied for the reconciliation. The expiry of the tax loss carry-forward of the Group can be summarised as follows: 2023 In thousands of € < 1 year 2–5 years > 5 years Tax loss carry forward 92 16,873 85,936 2022 In thousands of € < 1 year 2–5 years > 5 years Tax loss carry forward 1,178 15,299 96,200 11.3 Deferred tax assets and liabilities In thousands of € Assets Liabilities Net 2023 2022 2023 2022 2023 2022 Investment properties — — (57,537) (101,427) (57,537) (101,427) Currency hedge accounting/Derivates — — (161) (1,260) (161) (1,260) Tax losses carried-forward 3,515 3,026 — — 3,515 3,026 Capitalised interest — — (865) (1,429) (865) (1,429) Capitalised cost — — (79) (103) (79) (103) Other 732 266 — — 732 266 Tax assets/liabilities 4,247 3,292 (58,642) (104,219) (54,395) (100,927) Set-off of assets and liabilities 4,057 547 (4,057) (547) — — Reclassification to liabilities related to disposal group held for sale — — 38,760 25,095 38,760 25,095 Net tax assets/liabilities 8,304 3,839 (23,939) (79,671) (15,635) (75,832) A total deferred tax asset of € 16,134k (€ 17,325k in 2022) was not recognised. PAGE 350 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 12 Earnings per share 12.1 Earnings per ordinary share (EPS) In number 31. 12. 2023 31. 12. 2022 Weighted average number of ordinary shares (basic) 27,291,312 22,311,583 Weighted average number of ordinary shares (diluted) 27,291,312 22,311,583 Weighted average number of ordinary shares (diluted and after correction for reciprocal interest through associates) 27,291,312 22,311,583 In thousands of € 31. 12. 2023 31. 12. 2022 Result for the period attributable to the Group and to ordinary shareholders 87,292 (122,542) Earnings per share (in €) – basic 3.20 (5.49) Earnings per share (in €) – diluted 3.20 (5.49) Earnings per share (in €) – after dilution and correction for reciprocal interest through associates 3.20 (5.49) 12.2 EPRA NAV’s – EPEA NAV’s per share The EPRA NAV metrics make adjustments to the IFRS NAV in order to provide stakeholders with the most relevant information on the fair value of the assets and liabilities. The three different EPRA NAV indicators are calculated on the basis of the following scenarios: 1. Net Reinstatement Value: based on the assumption that entities never sell assets and aims to reflect the value needed to build the entity anew. The purpose of this indicator is to reflect what would be required to reconstitute the company through the investment markets based on the current capital and financing structure, including Real Estate Transfer Taxes. EPRA NRV per share refers to the EPRA NRV based on the number of shares in circulation as at the balance sheet date. See www.epra.com. 2. Net Tangible Assets: assumes that entities buy and sell assets, thereby realizing certain levels of deferred taxation. This per- tains to the NAV adjusted to include property and other investments at fair value and to exclude certain items that are not expected to be firmly established in a business model with long-term investment properties. EPRA NTA per share refers to the EPRA NTA based on the number of shares in circulation as at the balance sheet date. See www.epra.com. 3. Net Disposal Value: provides the reader with a scenario of the sale of the company’s assets leading to the realization of deferred taxes, financial instruments and certain other adjustments. This NAV should not be considered a liquidation NAV as in many cases the fair value is not equal to the liquidation value. The EPRA NDV per share refers to the EPRA NDV based on the number of shares in circulation as at the balance sheet date. See www.epra.com. FINANCIAL REVIEW 2023 PAGE 351NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 31 December 2023 In thousands of € EPRA NRV EPRA NTA EPRA NDV EPRA NAV EPRA NNNAV IFRS NAV 2,214,417 2,214,417 2,214,417 2,214,417 2,214,417 IFRS NAV per share (in €) 81.14 81.14 81.14 81.14 81.14 NAV at fair value (after the exercise of options, convertibles and other equity) 2,214,417 2,214,417 2,214,417 2,214,417 2,214,417 To exclude: Deferred tax 54,395 54,395 — 54,395 — Fair value of financial instruments — — — — — Intangibles as per IFRS balance sheet — (1,000) — — Subtotal 2,268,812 2,267,812 2,214,417 2,268,812 2,214,417 Fair value of fixed interest rate debt — — 327,837 — 327,837 Real estate transfer tax 27,521 — — — — NAV 2,296,333 2,267,812 2,542,254 2,268,812 2,542,254 Number of shares 27,291,312 27,291,312 27,291,312 27,291,312 27,291,312 NAV/share (in €) 84.14 83.10 93.15 83.13 93.15 31 December 2022 In thousands of € EPRA NRV EPRA NTA EPRA NDV EPRA NAV EPRA NNNAV IFRS NAV 2,202,175 2,202,175 2,202,175 2,202,175 2,202,175 IFRS NAV per share (in €) 80.69 80.69 80.69 80.69 80.69 NAV at fair value (after the exercise of options, convertibles and other equity) 2,202,175 2,202,175 2,202,175 2,202,175 2,202,175 To exclude: Deferred tax 100,927 100,927 — 100,927 — Fair value of financial instruments — — — — — Intangibles as per IFRS balance sheet — (1,200) — — Subtotal 2,303,102 2,301,902 2,202,175 2,303,102 2,202,175 Fair value of fixed interest rate debt — — 533,612 — 533,612 Real estate transfer tax 87,431 — — — — NAV 2,390,533 2,301,902 2,735,787 2,303,102 2,735,787 Number of shares 27,291,312 27,291,312 27,291,312 27,291,312 27,291,312 NAV/share (in €) 87.59 84.35 100.24 84.39 100.24 PAGE 352 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 13 Investment properties and Property, Plant and Equipment In thousands of € 31. 12. 2023 Completed Under Construction Development land Total As at January 1 1,276,093 561,489 558,120 2,395,702 Reclassification from held for sale 117,120 — 1,400 118,520 Capex 131,165 161,478 157,408 450,051 Acquisitions 79,407 49,538 83,489 212,434 Capitalised interest 4 12,125 2,660 14,789 Capitalised rent free and agent’s fee 5,278 2,004 145 7,427 Sales and disposal (900,957) (313,100) (13,064) (1,227,121) Transfer on start-up of development — 135,893 (135,893) — Transfer on completion of development 278,610 (278,610) — — Net gain (loss) from value adjustments in investment properties (17,696) 46,164 7 28,475 Reclassification to held for sale (448,579) (20,750) (21,964) (491,293) As at December 31 520,445 356,231 632,308 1,508,984 In thousands of € 31. 12. 2022 Completed Under Construction Development land Total As at January 1 562,730 855,160 434,624 1,852,514 Reclassification from held for sale 183,100 160,770 3,735 347,605 Capex 306,291 298,459 25,351 630,101 Acquisitions 41,664 29,309 131,541 202,514 Capitalised interest 9,774 5,560 2,810 18,144 Capitalised rent free and agent’s fee 10,467 2,576 — 13,043 Sales and disposal (353,665) — (3,757) (357,422) Transfer on start-up of development — 40,178 (40,178) — Transfer on completion of development 720,060 (720,060) — — Net gain from value adjustments in investment properties (87,208) (110,463) 5,394 (192,277) Reclassification to held for sale (117,120) — (1,400) (118,520) As at December 31 1,276,093 561,489 558,120 2,395,702 Any of the Group’s investment property is pledged at 31 December 2023. 13.1 Fair value hierarchy of the Group’s investment properties All of the Group’s properties are level 3, as defined by IFRS 13, in the fair value hierarchy as at 31 December 2023 and there were no transfers between levels during the year. Level 3 inputs used in valuing the properties are those which are unobservable, as opposed to level 1 (inputs from quoted prices) and level 2 (observable inputs either directly, i.e. as prices, or indirectly, i.e. derived from prices). 13.2 Property valuation techniques and related quantitative information (i) Valuation process The Group’s investment property is initially carried at cost plus transaction cost. It is subsequently measured at fair value and is val- ued at least once per year. In view of the rapid growth of the portfolio the Group has opted to perform the valuations twice per year i.e. as at 30 June and 31 December. Valuations are performed by independent external property appraisers. The Group ordinarily used Jones Lang LaSalle as the Group’s valuator. From time to time, at the discretion of the Company, a small part of the portfolio may be valued by another external independent valuator. For the 31 December 2023 valuations, all valuations were carried out by iO Partners, Jones Lang LaSalle preferred partner. With the exemption of the assets destined for the Fifth and Sixth Joint Venture, classified as held for sale, which are valued at the agreed market value with the Joint Venture partner, net of ancillary cost and gains such as supplementary rent and construction variation orders, remaining rent incentives and transaction fee. As a result, the value of the Group’s assets depends on developments in the local real estate market in each of the Group’s countries of operations and is subject to change. Gains and losses from changes in fair value are recognized in the Group’s income statement as valua- tion results and are also a component of the Group’s indirect result. The Group’s valuation contracts are typically entered into for a term of one year and the fees of the property experts are fixed for the term of their appointment and are not related to the value of the properties for which a valuation is made. The valuations are prepared in accordance with the RICS Valuation – Professional FINANCIAL REVIEW 2023 PAGE 353NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Standards (incorporating the International Valuation Stand- ards) Global edition July 2017 (same approach as for the previ- ous period end valuations). The basis of valuation is the market value of the property, as at the date of valuation, defined by the RICS as: “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgea- bly, prudently and without compulsion.” (ii) Valuation methodology Discounted cash flow approach In view of the nature of the portfolio and the bases of valuation iO Partners, Jones Lang LaSalle preferred partner has adopted the income approach, discounted cash flow technique, analysed over a 10- or 15-year period for each property. The cash flow assumes a ten/fifteen-year hold period with the exit value cal- culated on ERV or contracted income. To calculate the exit value iO Partners, Jones Lang LaSalle preferred partner has used the exit yield which represents their assumption of the possible yield in the 10/15 th year. The cash flow is based upon the rents paya- ble under existing lease agreements until the agreed lease end. In case of early break option, the valuator has assumed that the break will be exercised only if the penalty is low. After the lease termination the valuator has assumed a cer- tain expiry void period and a 5 year new lease contract. For currently vacant premises the valuator has assumed a certain initial void period and 5 year lease contract. For the properties that are under construction, the valuator has adopted an ini- tial void starting as of the valuation date. The assumed rental income was calculated on the basis of estimated rental value (ERV). The assumed voids are used to cover the time and the relocated cost of marketing, re-letting and possible recon- struction. The voids were adopted to each of the buildings within the portfolio. In order to calculate the net rental income the valuators have deducted capital expenditures (contribu- tion to the sinking fund) from the gross rental income. Term & Reversion Valuation Approach This is the traditional method of valuing investment proper- ties. The market value is derived by capitalising the estimated net income from the property on a term and reversion basis. It involves the capitalisation of the present income over the period of its duration together with the valuation of each subsequent different rent likely to be received following market rent reviews or following re-letting for their separate estimated durations, each discounted to a present value. The yield or yields applied to the different income categories reflect all the prospects and risks attached to the income flow and the investment. The yields are derived from a combination of analysis of completed compa- rable investment transactions and general experience and mar- ket knowledge. The most important yield is the equivalent yield, although regard must be had to the yield profile of the invest- ment over time, particularly the initial yield at the valuation date. Equivalent yield approach For the properties in Spain, the valuator has adopted the equivalent yield approach. The equivalent yield approach cal- culates the gross market value by applying a capitalisation rate (equivalent yield) to the net rental income as of the valuation date and capitalising the income into perpetuity. The above- mentioned assumptions are more thoroughly specified in the below section of the valuation assumptions. Valuation assumptions The following main assumptions, together with the quanti- tative information included in section “(iv) Quantitative infor- mation about fair value measurements using unobservable inputs”; were made by the valuator. — iO Partners, Jones Lang LaSalle preferred partner analyses adopts a 10- or 15-years cash flow approach to reflect the initial income and any agreed rent indexation reverting to the estimated rental value after expiry of the current leases. For the purpose of the valuation the valuator has assumed that the current tenants will stay in the premises until the agreed lease end. In case of early break option, the valua- tor has assumed that the break will be exercised only if the penalty is low. — The valuator has assumed that after termination (first possible break) of the current lease contracts new 5-year leases will be signed and the valuator’s ERV will be applied and the rent will be indexed each lease anniversary in line with EU CPI, if not mentioned otherwise in the lease agreements. — The range of used estimated rental values has been detailed in below section “(iv) Quantitative information about fair value measurements using unobservable inputs”. — After the termination of existing leases (first break option) the valuator has adopted an expiry void of 2 –12 months. The assumed voids are used to cover the time and the cost of marketing, re-letting and possible reconstruction. The voids were adopted to each of the building within the portfolio. — For properties that are vacant and under construction, the valuator has adopted an initial void starting at the valuation date. — From the gross income the valuator has deducted a contri- bution to a sinking fund at 0.25%–8.20%. (for JV, it is how- ever 0.0%–3.0%) — The rents were indexed in line with the indexation that was agreed in the lease agreements. Therefore, the rents are subject to the indexation according to German, Spanish, Italian, Austrian CPI, EU CPI, EICP or HICP. Some of the rents are indexed in line with the fixed indexation and some of the rents are not subject of indexation at all. Please note that several tenants have agreed to the maximum caps in indexation. The EICP indexation was assumed at the level of 6.40% for year 2024 and 1.49% for the following years, prognosis in cashflow. . — The rents after reversion have been indexed on an annual basis each lease anniversary in line with the EU CPI index- ation, which is assumed to be at 6.40% for year 2024 and 1.49% for the following years, prognosis in cashflow. — The exit value was calculated on ERV or contracted income – The cash flow that was used for the calculation was discounted either quarterly or monthly depending on the frequency of the rent payments. — Based on the location, projected achievable rental income stream and position in the market the valuator has applied exit yields and discount rates (see below section “(iv) Quan- titative information about fair value measurements using unobservable inputs”; for further details). Property that is being constructed or developed for future use as investment property is also stated at fair market value, and investment properties under construction are also val- ued by an independent valuation expert. For the proper- ties under construction the valuation expert has used the same approach as applicable for the completed proper- ties but deducting the remaining construction costs from the calculated market value, whereby “remaining construc- tion costs” means overall pending development cost, which include all hard costs, soft costs, financing costs and devel- oper profit. Developer profit takes into account the level of risk connected with individual property and is mainly dependent on development stage and pre-letting status. Land held for development is valued using the valuation sales comparison approach. The sales comparison approach pro- duces a value indication by comparing the subject property to similar properties and applying adjustments to reflect PAGE 354 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS advantages and disadvantages to the subject property. This is most appropriate when a number of similar properties have recently been sold or are currently for sale in the market. In June 2020 VGP sold 50% of the shares of VGP Park München GmbH to Allianz Real Estate, thereby losing control over VGP Park München in 2020 (the “Transaction”). The com- pletion of the development of VGP Park München has taken several years. As a result of the loss of control over VGP Park München, VGP has deconsolidated all assets and liabilities of VGP Park München and has recognized a gain on the dis- posal which has been calculated as the difference between: (i) the carrying value (= equity value) of all assets and liabili- ties of VGP Park München at the Transaction Date, and (ii) the fair market value of 100% of the shares of VGP Park München (the “Fair Value”). The gain on the Transaction has been recog- nized in full (100%), consistent with the accounting policies of VGP and IFRS 10 (See note 2.3 – Principles of consolidation – Joint venture and associates – in this section further informa- tion). Until the completion of the majority of the buildings such buildings have been measured at their proportional agreed purchase price with Allianz Real Estate, as this was considered to be the best reflection of their fair value. Since December 2022, following the completion of the majority of the build- ings in the second half of 2022, such buildings are revalued by an external independent valuation expert in accordance with the Group’s valuation rules (See note 2.7 – Investment proper- ties – in this section further information). With the exemption of the land plot destined for construction of building D, has still been valued at the proportional agreed purchase price with Allianz Real Estate, as this is still considered as the best reflection of the fair value until the building will be completed. In November 2020, VGP entered into a 50:50 joint venture (“LPM Joint Venture”) with Roozen Landgoederen Beheer in respect of the development of the Logistics Park Moerdijk. In February 2024 (refer to note 27 Events after the balance sheet date) the group divested its stake in the LPM Joint Venture. The Board of Directors has therefore concluded that the acquisition cost is the best approximation of the fair value of the development land. In October 2021 VGP entered into a 50:50 joint venture with Vusa. The VGP Park Belartza Joint Venture focuses on the development of a mixed (logistics/commercial) park whereby VGP will lead the logistics development and its joint venture partner (Vusa) will lead the commercial development. The VGP Park Belartza Joint Venture has the right to sell and VGP the right to acquire the logistics income generating assets devel- oped by the VGP Park Belartza Joint Venture. Vusa has the right to acquire the commercial income generating assets devel- oped by the VGP Park Belartza Joint Venture. The land which is currently in ownership of this joint venture is still subject to receiving its final rezoning permits. The Board of Directors has therefore concluded that the acquisition cost is therefore the best approximation of the fair value of the development land. In February 2022 the VGP Park Siegen Joint Venture purchased a brownfield site located in Siegen, Germany. The VGP Park Siegen Joint Venture has the right to sell and VGP the right to acquire the income generating assets developed by the VGP Park Siegen Joint Venture. VGP’s joint venture partner leads the commercial development. In the second half of 2022 part of the brownfield has been sold to a third party. The remainder of the site could be further redeveloped or sold. The Board of Directors has therefore concluded that the acquisition cost is therefore the best approximation of the fair value of the devel- opment land. Valuation review The valuations made are reviewed internally by the CEO, CFO and Financial Controller and discussed with the independent valuator as appropriate. The CFO and CEO report on the out- come of the valuation processes and results to the audit com- mittee and take any comments or decision in consideration when performing the subsequent valuations. At each semi-an- nual period end, the financial controller together with the CFO: (i) verify all major inputs to the independent valuation report; (ii) assess property valuation movements when compared to the prior semi-annual and annual period; (iii) holds discus- sions with the independent valuer. (iii) Climate risk legislation The EU is currently producing legislation on the transition to net zero emissions which is likely to include an update to the Minimum Energy Efficiency Standards and also the inten- tion to introduce an operational rating. Whilst the nature of the legislation is not yet clear it could have a potential impact to future asset value. The introduction of mandatory climate related disclosures in the EU (including “Sustainable Finance Disclosure Regulations” (SFDR) and “Corporate Sustainability Reporting Directive” (CSRD) in the EU), including the assess- ment of physical and transition climate risks, may potentially have an impact on how the market views such risks and incor- porates them into the sale and letting of assets. Sustainabil- ity and climate risk legislation has an impact on the value of an asset, even if not explicitly recognised. Valuers reflect mar- kets, they do not lead them. Where the valuers recognise the value impacts of sustainability and legislation, they are reflect- ing their understanding of how market participants include sustainability and legislation requirements in their bids and the impact on market valuations. For further actions being taken by the VGP Group in respect of climate transition and environmental footprint in general we reference is made to the “Corporate Responsibility Report” included in this Annual Report 2023. (iv) Quantitative information about fair value The quantitative information in the following tables is taken from the different reports produced by the independent real estate experts. The figures provide the range of values and the weighted average of the assumptions used in the determina- tion of the fair value of investment properties. FINANCIAL REVIEW 2023 PAGE 355NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-23 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range Czech Republic IP 134,283 Discounted cash flow ERV per m² (in €) 39–65 Discount rate * 6.15%–6.40% Exit yield * 6.15% Weighted average yield 5.72% Cost to completion (in ’000) 0 Properties valued (aggregate m²) 142,493 WAULT (until maturity) (in years) 5.75 WAULT (until first break) (in years) 5.75 Czech Republic IPUC 17,290 Discounted cash flow ERV per m² (in €) 63 Discount rate 7.50% Exit yield 6.15% Weighted average yield 7.55% Cost to completion (in ’000) 14,050 Properties valued (aggregate m²) 29,309 Czech Republic DL 23,923 Sales comparison Price per m² Germany IP 339,078 Discounted cash flow ERV per m² (in €) 46–82 Discount rate * 6.80%–8.20% Exit yield * 4.95%–5.70% Weighted average yield 5.42% Cost to completion (in ’000) 916 Properties valued (aggregate m²) 312,160 WAULT (until maturity) (in years) 6.29 WAULT (until first break) (in years) 6.00 Germany IPUC 89,010 Discounted cash flow ERV per m² (in €) 74–82 Discount rate 6.05%–7.30% Exit yield 4.55%–5.30% Weighted average yield 5.16% Cost to completion (in ’000) 42,892 Properties valued (aggregate m²) 87,366 Germany DL 180,017 Sales comparison Price per m² Spain IPUC 850 Discounted cash flow ERV per m² (in €) 44 Discount rate n/a Exit yield 6.00% Weighted average yield 7.12% Cost to completion (in ’000) 3,400 Properties valued (aggregate m²) 6,905 Spain DL 86,595 Sales comparison Price per m² Romania IP 104,360 Discounted cash flow ERV per m² (in €) 52–66 Discount rate 8.25%–9.75% Exit yield 8.00%–9.50% Weighted average yield 9.06% Cost to completion (in ’000) 3,385 Properties valued (aggregate m²) 169,110 WAULT (until maturity) (in years) 5.51 WAULT (until first break) (in years) 4.89 Romania IPUC 18,460 Discounted cash flow ERV per m² (in €) 50 Discount rate 9.00%–9.50% Exit yield 8.50%–8.75% PAGE 356 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-23 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range Weighted average yield 11.10% Cost to completion (in ’000) 29,250 Properties valued (aggregate m²) 86,045 Romania DL 44,300 Sales comparison Price per m² Nederlands DL 40,545 Sales comparison Price per m² Italy IPUC 6,700 Discounted cash flow ERV per m² (in €) 85 Discount rate 8.80% Exit yield 5.90% Weighted average yield 8.13% Cost to completion (in ’000) 13,900 Properties valued (aggregate m²) 18,773 Italy DL 37,767 Sales comparison Price per m² Austria IP 64,700 Discounted cash flow ERV per m² (in €) 85–192 Discount rate 6.50%–6.75% Exit yield 5.40%–5.50% Weighted average yield 5.41% Cost to completion (in ’000) — Properties valued (aggregate m²) 22,558 WAULT (until maturity) (in years) 13.30 WAULT (until first break) (in years) 13.30 Austria IPUC 89,400 Discounted cash flow ERV per m² (in €) 84–99 Discount rate 6.85%–7.00% Exit yield 5.35%–5.60% Weighted average yield 6.76% Cost to completion (in ’000) 39,100 Properties valued (aggregate m²) 82,685 Austria DL 24,378 Sales comparison Price per m² Hungary IP 91,072 Discounted cash flow ERV per m² (in €) 50–70 Discount rate * 7.00%–8.00% Exit yield * 6.50%–7.25% Weighted average yield 7.42% Cost to completion (in ’000) 0 Properties valued (aggregate m²) 114,270 Hungary IP 91,072 Discounted cash flow WAULT (until maturity) (in years) 5.40 WAULT (until first break) (in years) 5.40 Hungary IPUC 65,760 Discounted cash flow ERV per m² (in €) 53–58 Discount rate 7.50%–8.00% Exit yield 6.75%–7.25% Weighted average yield 7.81% Cost to completion (in ’000) 21,800 Properties valued (aggregate m²) 105,874 Hungary DL 33,348 Sales comparison Price per m² Latvia IP 97,820 Discounted cash flow ERV per m² (in €) 56–63 Discount rate 8.00%–8.75% Exit yield 8.00–8.25% Weighted average yield 7.88% FINANCIAL REVIEW 2023 PAGE 357NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-23 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range Cost to completion (in ’000) 950 Properties valued (aggregate m²) 133,535 WAULT (until maturity) (in years) 7.48 WAULT (until first break) (in years) 7.48 Latvia DL 1,640 Sales comparison Price per m² Slovakia IP 110,296 Discounted cash flow ERV per m² (in €) 40–74 Discount rate * n/a Exit yield * n/a Weighted average yield 6.17% Cost to completion (in ’000) 0 Properties valued (aggregate m²) 138,209 WAULT (until maturity) (in years) 7.54 WAULT (until first break) (in years) 7.36 Slovakia IPUC 19,910 Discounted cash flow ERV per m² (in €) 65 Discount rate 7.50% Exit yield 7.25% Weighted average yield 8.05% Cost to completion (in ’000) 1,650 Properties valued (aggregate m²) 8,480 Slovakia DL 60,619 Sales comparison Price per m² Portugal IP 27,415 Discounted cash flow ERV per m² (in €) 66–72 Discount rate 7.81%–7.87% Exit yield 5.81%–5.87% Weighted average yield 6.09% Cost to completion (in ’000) 580 Properties valued (aggregate m²) 19,749 WAULT (until maturity) (in years) 20.64 WAULT (until first break) (in years) 15.49 Portugal IPUC 5,101 Discounted cash flow ERV per m² (in €) 51 Discount rate 8.28% Exit yield 6.28% Weighted average yield 6.97% Cost to completion (in ’000) 26,520 Properties valued (aggregate m²) 31,789 Portugal DL 11,638 Sales comparison Price per m² Serbia IPUC 44,380 Discounted cash flow ERV per m² (in €) 61–77 Discount rate 9.25%–9.50% Exit yield 8.25% Weighted average yield 9.36% Cost to completion (in ’000) 17,150 Properties valued (aggregate m²) 76,938 Serbia DL 23,556 Sales comparison Price per m² Croatia DL 6,246 Sales comparison Price per m² France IPUC 20,120 Discounted cash flow ERV per m² (in €) 55 Discount rate 6.45% PAGE 358 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-23 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range Exit yield 5.50% Weighted average yield 5.30% Cost to completion (in ’000) 20,850 Properties valued (aggregate m²) 39,329 France DL 77,213 Sales comparison Price per m² Denmark DL 2,487 Sales comparison Price per m² Total 2,000,277 1 IP = completed investment property IPUC = investment property under construction DL = development land 1 This includes the investment property reclassified to held for sale for an amount of € 491,293 (000) (see table note 13). FINANCIAL REVIEW 2023 PAGE 359NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-22 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range Czech Republic IP 202,580 Discounted cash flow ERV per m² (in €) 38–60 Discount rate 4.75%–6.00% Exit yield 4.75%–5.50% Weighted average yield 4.94% Cost to completion (in ’000) 220 Properties valued (aggregate m²) 201,762 WAULT (until maturity) (in years) 7.99 WAULT (until first break) (in years) 7.60 DL 37,666 Sales comparison Price per m² (in €) Germany IP 845,250 Discounted cash flow ERV per m² (in €) 41–144 Discount rate 4.50%–7.00% Exit yield 4.00%–5.75% Weighted average yield 4.88% Cost to completion (in ’000) 38,535 Properties valued (aggregate m²) 744,066 WAULT (until maturity) (in years) 9.35 WAULT (until first break) (in years) 9.18 IPUC 378,180 Discounted cash flow ERV per m² (in €) 51–85 Discount rate 5.30%–7.15% Exit yield 4.30%–5.40% Weighted average yield 4.84% Cost to completion (in ’000) 214,720 Properties valued (aggregate m²) 408,825 DL 85,318 Sales comparison Price per m² (in €) Spain IP 61,670 Equivalent yield ERV per m² (in €) 42–64 Equivalent yield 4.95%–5.80% Reversionary yield 5.28%–6.19% Weighted average yield 5.63% Cost to completion (in ’000) — Properties valued (aggregate m²) 77,440 WAULT (until maturity) (in years) 4.10 WAULT (until first break) (in years) 3.50 DL 93,500 Sales comparison Price per m² (in €) Romania IP 27,503 Discounted cash flow ERV per m² (in €) 49–54 Discount rate 8.70%–9.70% Exit yield 8.00%–8.75% Weighted average yield 9.52% Cost to completion (in ’000) 1,550 Properties valued (aggregate m²) 55,928 WAULT (until maturity) (in years) 5.18 WAULT (until first break) (in years) 5.82 Romania IPUC 53,110 Discounted cash flow ERV per m² (in €) 48–66 Discount rate 8.30%–8.95% Exit yield 7.50%–8.15% Weighted average yield 8.88% Cost to completion (in ’000) 5,750 Properties valued (aggregate m²) 92,743 Romania DL 43,489 Sales comparison Price per m² (in €) PAGE 360 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-22 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range Netherlands DL 38,606 Sales comparison Price per m² (in €) Italy IP 8,350 Discounted cash flow ERV per m² (in €) 88 Discount rate 6.65% Exit yield 5.30% Weighted average yield 5.88% Cost to completion (in ’000) 200 Properties valued (aggregate m²) 5,710 WAULT (until maturity) (in years) 8.90 WAULT (until first break) (in years) 8.90 DL 32,024 Sales comparison Price per m² (in €) Austria 13,400 Discounted cash flow ERV per m² (in €) 78 Discount rate 6.20% Exit yield 4.95% Weighted average yield 4.75% Cost to completion (in ’000) 20 Properties valued (aggregate m²) 8,210 WAULT (until maturity) (in years) 7.81 WAULT (until first break) (in years) 7.81 IPUC 37,180 Discounted cash flow ERV per m² (in €) 196 Discount rate 5.90% Exit yield 4.40% Weighted average yield 4.65% Cost to completion (in ’000) 23,200 Properties valued (aggregate m²) 14,330 DL 65,363 Sales comparison Price per m² (in €) Hungary IP 65,150 Discounted cash flow ERV per m² (in €) 50–66 Discount rate 6.50%–7.50% Exit yield 6.00%–6.75% Weighted average yield 7.05% Cost to completion (in ’000) — Properties valued (aggregate m²) 80,350 WAULT (until maturity) (in years) 6.15 WAULT (until first break) (in years) 5.49 Hungary IPUC 32,480 Discounted cash flow ERV per m² (in €) 50–61 Discount rate 6.50%–7.50% Exit yield 6.00%–6.75% Weighted average yield 7.06% Cost to completion (in ’000) 41,350 Properties valued (aggregate m²) 101,150 DL 33,205 Sales comparison Price per m² (in €) Latvia IP 71,420 Discounted cash flow ERV per m² (in €) 47–61 Discount rate 7.35%–8.00% Exit yield 7.35%–7.50% Weighted average yield 7.54% Cost to completion (in ’000) 5,750 Properties valued (aggregate m²) 104,377 WAULT (until maturity) (in years) 7.69 WAULT (until first break) (in years) 7.69 FINANCIAL REVIEW 2023 PAGE 361NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Region Segment Fair Value 31 Dec-22 (€ ’000) Valuation Technique Level 3 – Unobservable Inputs Range IPUC 20,470 Discounted cash flow ERV per m² (in €) 58 Discount rate 7.35% Exit yield 7.35% Weighted average yield 7.12% Cost to completion (in ’000) 3,200 Properties valued (aggregate m²) 28,816 DL 1,640 Sales comparison Price per m² (in €) Slovakia IP 97,890 Discounted cash flow ERV per m² (in €) 40–55 Discount rate 5.85%–6.25% Exit yield 5.85%–6.00% Weighted average yield 5.45% Cost to completion (in ’000) — Properties valued (aggregate m²) 119,019 WAULT (until maturity) (in years) 8.51 WAULT (until first break) (in years) 8.51 IPUC 16,360 Discounted cash flow ERV per m² (in €) 49–66 Discount rate 6.00%–8.00% Exit yield 6.00%–6.50% Weighted average yield 6.37% Cost to completion (in ’000) 6,350 Properties valued (aggregate m²) 27,642 DL 63,132 Sales comparison Price per m² (in €) Portugal IPUC 21,740 Discounted cash flow ERV per m² (in €) 83–99 Discount rate 7.94%–8.20% Exit yield 5.50% Weighted average yield 5.78% Cost to completion (in ’000) 10,350 Properties valued (aggregate m²) 19,881 Portugal DL 16,258 Sales comparison Price per m² (in €) Serbia DL 24,243 Sales comparison Price per m² (in €) Croatia DL 5,825 Sales comparison Price per m² (in €) France DL 21,220 Sales comparison Price per m² (in €) Total 2,514,222 1 1 This includes the investment property reclassified to held for sale for an amount of € 118,520 k (see table note 13). PAGE 362 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (v) Sensitivity of valuations The sensitivity of the fair value based on changes to the significant non-observable inputs used to determine the fair value of the properties classified in level 3 in accordance with the IFRS fair value hierarchy is as follows (all variables remaining constant): Non observable input Impact on fair value in case of Fall Rise ERV (in €/m²) Negative Positive Discount rate Positive Negative Exit yield Positive Negative Remaining lease term (until first break) Negative Positive Remaining lease term (until final expiry) Negative Positive Occupancy rate Negative Positive Inflation Negative Positive A decrease in the estimated annual rent will decrease the fair value. An increase in the discount rates and the capitalisation rates used for the terminal value i.e. the exit yield of the discounted cash flow method will decrease the fair value. There are interrela- tionships between these rates as they are partially determined by market rate conditions. For investment properties under con- struction, the cost to completion and the time to complete will reduce the fair values whereas the consumption of such cost over the period to completion will increase the fair value. In addition, the sensitivity of the fair value of the portfolio can be estimated as follows: the effect of a rise (fall) of 1% in rental income results in a rise (fall) in the fair value of the portfolio of approximately € 19.9 million 1 (all variables remaining constant). The effect of a rise (fall) in the weighted average yield (see note 7) of 25 basis points results in a fall (rise) in the fair value of the port- folio of approximately € 77.1 million 1 (all variables remaining constant). 13.3 Property Plant and Equipment In thousands of € 31. 12. 2023 31. 12. 2022 Photovoltaic Equipment – in use 60,533 16,063 Photovoltaic Equipment – under construction 31,330 87,048 Leases capitalized under IFRS 16 13,213 2,280 Other property plant and equipment 2,350 17,882 Total 107,426 73,280 14 Trade and other receivables In thousands of € 31. 12. 2023 31. 12. 2022 Trade receivables 15,926 16,063 Tax receivables – VAT 58,328 87,048 Accrued income and deferred charges 2,470 2,280 Other receivables 10,142 17,882 Reclassification to (–)/from held for sale (7,380) (1,160) Total 79,486 122,113 The reclassification to held for sale pertains mainly to the assets earmarked for the Fifth and Sixth Joint Venture per 31. 12. 2023. 15 Cash and cash equivalents The Group’s cash and cash equivalents comprise only cash deposits of which 68% held at Belgian banks. 1 Determined on the yield and rental income of the own and held for sale portfolio FINANCIAL REVIEW 2023 PAGE 363NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 16 Share capital and other reserves 16.1 Share capital Issued and fully paid Number of Shares Par value of Shares (€ 000) Ordinary Shares issued at 1 January 2023 27,291,312 105,676 issue of new shares — — Ordinary Shares issued at 31 December 2023 27,291,312 105,676 The statutory share capital of the Company amounts to € 136,092 k. The € 30.4 million capital reserve included in the Statement of Changes in Equity, relates to the elimination of the contribution in kind of the shares of a number of Group companies and the deduction of all costs in relation to the issuing of the new shares and the stock exchange listing of the existing shares from the equity of the company, at the time of the initial public offering (“IPO”) in 2007 (see also “Statement of changes in equity”). 16.2 Other Reserves In thousands of € 31. 12. 2023 31. 12. 2022 As at 1 January 845,579 574,088 Share premium arising on the issue of new shares — 271,491 As at 31 December 845,579 845,579 As at 31 December 2023, the Group did not hold any treasury shares. 17 Current and non-current financial debts The contractual maturities of interest-bearing loans and borrowings (current and non-current) are as follows: MATURITY In thousands of € 31. 12. 2023 Outstanding balance < 1 year > 1–5 year > 5 year Non-current Bank borrowings — — — Schuldschein Loan 25,686 25,686 — Bonds 3.35% bonds Mar-25 79,933 79,933 — 3.50% bonds Mar-26 189,514 189,514 — 1.50% bonds Apr-29 596,147 — 596,147 1.625% bonds Jan-27 497,654 497,654 — 2.25% bonds Jan-30 496,220 — 496,220 1,859,468 767,101 1,092,367 Total non-current financial debt 1,885,154 792,787 1,092,367 Current Bank borrowings — — Schuldschein Loan 3,000 3,000 Bonds 3.25% bonds Jul-24 74,939 74,939 Accrued interests 33,811 33,811 Liabilities related to disposal group held for sale — Total current financial debt 111,750 111,750 Total current and non-current financial debt 1,996,904 111,750 792,787 1,092,367 PAGE 364 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS The above 31 December 2023 balances include capitalised finance costs of (i) € 314 000 on bank borrowings and schuldschein loans (2022: € 425 000) and (ii) € 10.6 million on bonds (2022: € 13.7 million). The accrued interest relates to the 6 1 issued bonds (€ 33.5 million) and the Schuldschein loans (€ 0.3 million). The coupons of the bonds are payable annually on 6 July for the Jul-24 Bond, 30 March for the Mar-25 Bond, 19 March for the Mar-26, 8 April for the Apr-29 bond and 17 January for bonds Jan-27 & Jan-30. The interest on the Schuldschein loans are paya- ble on a semi-annual basis on 15 April and 15 October for the variable rate Schuldschein loans and annually on 15 October for the fixed rate Schuldschein loans. MATURITY In thousands of € 31. 12. 2022 Outstanding balance < 1 year > 1–5 year > 5 year Non-current Bank borrowings — — — — Schuldschein Loan 28,575 — 28,575 — Bonds 3.25% bonds Jul-24 74,820 — 74,820 — 3.35% bonds Mar-25 79,879 — 79,879 — 3.50% bonds Mar-26 189,295 — 189,295 — 1.50% bonds Ap-r29 595,416 — 595,416 1.625% bonds Jan-27 496,884 496,884 — 2.25% bonds Jan-30 495,595 — 495,595 Total non-current financial debt 1,960,464 — 869,454 1,091,010 Current Bank borrowings — — — — Schuldschein Loan — — — — Bonds 2.75% bonds Apr-23 149,897 149,897 — — 3.90% bonds Sep-23 224,534 224,534 — — Accrued interests 39,273 39,273 — — Total current financial debt 413,704 413,704 — — Total current and non-current financial debt 2,374,168 413,704 869,454 1,091,010 17.1 Overview 17.1.1 Bank loans The loans and credit facilities granted to the VGP Group are all denominated in € can be summarised as follows (all figures below are stated excluding capitalised finance costs): 31. 12. 2023 In thousands of € Facility amount Facility expiry date Outstanding balance < 1 year > 1–5 year > 5 year KBC Bank NV 75,000 31-dec-26 — — — — Belfius Bank NV 75,000 31-dec-26 — — — — Belfius Bank NV 100,000 31-jul-27 — — — — BNP Parisbas Fortis 50,000 31-dec-26 — — — — BNP Parisbas Fortis 50,000 31-dec-26 — — — — JP Morgan SE 50,000 12-dec-25 — — — — European Investment Bank 150,000 05-feb-34 — — — — Total bank debt 550,000 — — — — 1 The issued bond as per January 10 th 2022 has been considered as two bonds, given their dual tranche maturity as well as different cost. FINANCIAL REVIEW 2023 PAGE 365NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 31. 12. 2022 In thousands of € Facility amount Facility expiry date Outstanding balance < 1 year > 1–5 year > 5 year KBC Bank NV 75,000 31-dec-26 — — — — Belfius Bank NV 75,000 31-dec-26 — — — — Belfius Bank NV 100,000 31-jul-27 — — — — BNP Paribas Fortis 50,000 31-dec-25 — — — — BNP Paribas Fortis 50,000 31-dec-26 — — — — JP Morgan SE 50,000 12-dec-25 — — — — Total bank debt 400,000 — — — — 17.1.2 Schuldschein loans On 10 October 2019, VGP completed a Schuldscheindarlehen private placement (“Schuldschein loans”) for an aggregate amount of € 33.5 million (excluding capitalised finance costs) which was used to finance the development pipeline of the Group. The Schuldschein loans represents a combination of fixed and floating notes whereby the variable rates represent a nominal amount of € 21 million which is not hedged. The current average interest rate is 3.49 per cent per annum. The loans have a remain- ing weighted average term of 2.65 years. 31. 12. 2023 In thousands of € Facility amount Facility expiry date Outstanding balance < 1 year > 1–5 year > 5 year Schuldschein loans 29,000 Oct -24 to Oct-27 29,000 3,000 26,000 — 31. 12. 2022 In thousands of € Facility amount Facility expiry date Outstanding balance < 1 year > 1–5 year > 5 year Schuldschein loans 29,000 Oct -24 to Oct-27 29,000 — 29,000 — 17.1.3 Bonds The following bonds have been repaid in 2023: — the € 150 million fixed rate bond maturing on 2 April 2023 which carries a coupon of 2.75% per annum (listed on the regulated market of Euronext Brussels with ISIN Code: BE0002677582 )(“Apr-23 Bond”) — € 225 million fixed rate bonds due 21 September 2023 carry a coupon of 3.90% per annum. The bonds have been listed on the regulated market of NYSE Euronext Brussels (ISIN Code: BE0002258276). (“Sep-23 Bond”) The following five bonds are outstanding at 31 December 2023: — € 75 million fixed rate bonds due 6 July 2024 which carry a coupon of 3.25% per annum. The bonds have been listed on the regulated market of NYSE Euronext Brussels (ISIN Code: BE0002287564). (“Jul-24 Bond”) — € 80 million fixed rate bonds due 30 March 2025 carry a coupon of 3.35% per annum. The bonds are not listed (ISIN Code: BE6294349194). (“Mar-25 Bond”) — € 190 million fixed rate bonds due 19 March 2026 carry a coupon of 3.50% per annum. The bonds have been listed on the reg- ulated market of NYSE Euronext Brussels (ISIN Code: BE0002611896). (“Mar-26 Bond”) — € 600 million fixed rate bonds due 8 April 2029 carry a coupon of 1.50% per annum. The bonds have been listed on the Luxem- bourg Stock Exchange (Euro MTF) (ISIN Code: BE6327721237). (“Apr-29 Bond”) — € 1,000 million fixed rate bonds, dual tranche on five and eight years due 17 January 2027 and 17 January 2030, carry a coupon of 1.625% and 2.25% per annum. The bonds have been listed on the Luxembourg Stock Exchange (Euro MTF) (ISIN Code: BE6332786449 and BE6332787454). (“Jan-27 and Jan-30 Bond”) 17.2 Key terms and covenants 17.2.1 Bank loans As a general principle, loans are entered into by the Group in € at a floating rate, converting to a fixed rate through interest rate swaps in compliance with the respective loan agreements. For further information on financial instruments we refer to note 23. There are no bank credit facilities outstanding at the level of the subsidiaries as at 31 December 2023. All of the revolving credit facilities, mentioned in note 17.1.1, are unsecured. The interest rate on the credit facilities granted by Belfius Bank SA/NV, KBC Bank NV, JP Morgan SE and BNP Paribas Fortis SA/NV are at floating interest rate plus a margin. All aforementioned revolving credit facilities are subject to the same covenants as the current issued bond except for the Con- solidated gearing which is limited to 55% with the possibility of going up to 60% on two test dates (“gearing spike”) provided these two test dates do not follow each other. During the year the Group operated well within its loan covenants and there were no events of default nor were there any breaches of covenants with respect to loan agreements noted. PAGE 366 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 17.2.2 Schuldschein loans The Schuldschein Loans represents a combination of fixed and floating notes whereby the variable rates represent a nominal amount of € 21 million which is not hedged. The Schuldschein loans are unsecured and are subject to the same covenants as the bonds (see note 17.2.3.). During the year the Group operated well within its Schuldschein loan covenants and there were no events of default nor were there any breaches of covenants with respect to Schuldschein loans noted. 17.2.3 Bonds All bonds are unsecured and at fixed interest rate. The terms and conditions of the bonds include following financial covenants: — Consolidated gearing to equal or to be below 65% — Interest cover ratio to equal or to be above 1.2 — Debt service cover ratio to equal or to be above 1.2 The abovementioned ratios are tested semi-annually based on a 12-month period and are calculated as follows: — Consolidated Gearing means consolidated total Net financial debt divided by the sum of the equity and total liabilities; — Interest cover ratio means the aggregate net rental income (increased with the available cash and cash equivalents) divided by the Net finance charges; — Debt service cover ratio means Cash available for debt service divided by Net debt service. During the year the Group operated well within its bond covenants and there were no events of default nor were there any breaches of covenants with respect to the bonds noted. 17.3 Reconciliation debt movement to cash flows 2023 In thousands of € 01-Jan-23 Cash Non-cash movements 31-Dec-23 Acquisitions/ (divestments) Foreign exchange movement Fair value changes Other Non-current financial debt 1,960,464 — — — — (75,310) 1,885,154 Other non-current financial liabilities — — — — — — — Current financial debt 413,704 (375,000) — — — 73,046 111,750 2,374,168 (375,000) — — — (2,264) 1,996,904 Non-current financial assets — — — — — — — Total liabilities from financing activities 2,374,168 (375,000) — — — (2,264) 1,996,904 The cash movements relate to: (i) repayment of bond debt in the amount of € 375 million. The non-cash movements relate to: (i) € 75 million of transfer of Jul-24 bond from non-current financial to current financial debt and € 3 million transfer for the short- term part of the Schuldschein loan (ii) € 5,5 million relating to decrease in accrued interests on bonds and schuldschein loans; and (iii) € 3.2 million relating to amortisation of capitalised finance costs. 2022 In thousands of € 01-Jan-22 Cash Non-cash movements 31-Dec-22 Acquisitions/ (divestments) Foreign exchange movement Fair value changes Other Non-current financial debt 1,340,609 990,749 — — — (370,894) 1,960,464 Other non-current financial liabilities — — — — — — — Current financial debt 44,147 (23,500) — — — 393,057 413,704 1,384,756 967,249 — — — 22,163 2,374,168 Non-current financial assets — — — — — — — Total liabilities from financing activities 1,384,756 967,249 — — — 22,163 2,374,168 FINANCIAL REVIEW 2023 PAGE 367NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 18 Other non-current liabilities In thousands of € 31. 12. 2023 31. 12. 2022 Deposits 4,517 8,252 Retentions 9,330 19,057 Other non-current liabilities 27,535 20,772 Reclassification to liabilities related to disposal group held for sale (3,297) (1,662) Total 38,085 46,419 The other non-current liabilities decreased by € 8.3 million which is the result of (i) a decrease in deposits received from tenants (-€ 3.7 million) and (ii) long-term retentions (-€ 9.7 million). Last year the deposits and retentions were mainly in companies which are sold in 2023 to the Fifth Joint Venture. The increase in other non-current liabilities is mainly the result of a higher provision for LTIP. 19 Trade debt and other current liabilities In thousands of € 31. 12. 2023 31. 12. 2022 Trade payables 67,023 98,079 Deposits — — Retentions 1,491 4,945 Accrued expenses and deferred income 5,189 3,330 Other payables 21,599 10,507 Reclassification to liabilities related to disposal group held for sale (11,227) (6,185) Total 84,075 110,676 The trade debts and other current liabilities lowered by € 26 million. The trade payables decreased by € 31 million. Other payables increased to € 21.6 million and relates mainly to VAT payables, short-term leasing obligations (mainly in Renewable Energy) and obligations for wages. 20 Assets classified as held for sale and liabilities associated with those assets In thousands of € 31. 12. 2023 31. 12. 2022 Intangible assets — — Investment properties 875,817 292,541 Property, plant and equipment — — Deferred tax assets — — Trade and other receivables 7,380 1,160 Cash and cash equivalents 9,424 6,205 Disposal group held for sale 892,621 299,906 Non-current financial debt — — Other non-current financial liabilities — — Other non-current liabilities (3,297) (1,662) Deferred tax liabilities (38,760) (25,095) Current financial debt — — Trade debts and other current liabilities (11,227) (6,187) Liabilities associated with assets classified as held for sale (53,284) (32,944) Total net assets 839,337 266,962 PAGE 368 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS In order to sustain its growth over the medium term, VGP entered into three 50/50 joint ventures with Allianz (First, Second and the recently terminated Fourth Joint Venture) in respect of acquiring income generating assets developed by VGP. These Joint Ventures act as an exclusive take-out vehi- cle of the income generating assets, allowing VGP to partially recycle its initially invested capital when completed projects are acquired by the Joint Ventures. VGP is then able to re-in- vest the proceeds in the continued expansion of its devel- opment pipeline, including the further expansion of its land bank, allowing VGP to concentrate on its core development activities. Each of these joint ventures have an exclusive right of first refusal in relation to acquiring the following income gener- ating assets of the Group: (i) for the First Joint Venture: the assets located in the Czech Republic, Germany, Hungary and the Slovak Republic; and (ii) for the Second Joint Venture: the assets located in Austria, Italy, the Benelux, Portugal, Romania and Spain. The development pipeline which will be transferred as part of any future acquisition transaction between the Joint Ven- ture and VGP is being developed at VGP’s own risk and subse- quently acquired and paid for by these joint ventures subject to pre-agreed completion and lease parameters. The investment properties which are being developed by VGP on behalf of the First and Second Joint Venture have a total net asset value of € 35.9 million. The Fourth Joint Venture was due to become effective at the moment of its first closing, which was initially expected to occur in November 2022. However, in view of the limited trans- parency on pricing of the seed portfolio in the current volatile market environment, Allianz decided not to proceed with the first initial pipeline portfolio closing of the Fourth Joint Ven- ture. To this end Allianz formally waived the exclusivity obliga- tion in respect of the initial pipeline portfolio allowing VGP to sell the initial pipeline portfolio to one or multiple third parties, including through the establishment of a new alternative joint venture(s). As no further transaction with the Fourth Joint Ven- ture were envisaged on the short to midterm, the Joint Venture has been terminated. As per 21 July 2023, VGP entered into a new Joint Venture agreement (the Fifth Joint Venture) with Deka of which a first closing took place in August ’23. The remaining assets have been classified as held for sale and these assets have been recognized at the agreed fair market value with the Joint Ven- ture partner net of ancillary cost and gains such as supple- mentary rent and construction variation orders, remaining rent incentives and transaction fees. The total net assets pertain- ing to the Fifth Joint Venture amount to € 338.1 million. As per 15 December 2023 VGP entered into a new Joint Ven- ture agreement with AREIM Pan-European Logistics Fund (D) AB, or Areim, on a 50:50 basis, with the purpose of invest- ing into VGP developed assets in Germany, Czech Republic, France, Slovakia and Hungary. The venture will utilize debt up to a loan-to-value of 35%. The investor, Areim, has commit- ted a € 500 million equity investment. The investment period lasts until 15 December 2028, with possibilities to extend the Joint Venture by mutual agreement. A seed portfolio has been identified and has been classified as held for sale and these assets have been recognized at the agreed fair market value with the Joint Venture partner net of ancillary cost and gains such as supplementary rent and construction variation orders and remaining rent incentives. The total net assets pertaining to the Sixth Joint Venture amount to € 465 million. 21 Cash flow statement In thousands of € 31. 12. 2023 31. 12. 2022 Cash flow from operating activities (27,331) (70,637) Cash flow from investing activities (8,078) (566,150) Cash flow from financing activities (450,050) 1,116,401 Net increase/(decrease) in cash and cash equivalents (485,459) 479,614 The changes in the cash flow from investing activities was mainly due to: (i) € 667 million (2022: € 851.8 million) of expend- iture incurred for the development activities and land acqui- sition; (ii) € 676.2 million cash recycled resulting from the fourth closing with the Second Joint Venture (€ 194.4 million), the tenth closing with the First Joint Venture (€ 73.5 million); the first closing with the Fifth Joint Venture (€ 393 million) and some final settlements of previous closings (€ 15.5 million). The changes in the cash flow from financing activities were driven by: (i) € 75 million dividend paid out in May 2023 (2022: € 150 million); (ii) € 375 million repayment from the Apr-23 and Sep-23 Bonds. FINANCIAL REVIEW 2023 PAGE 369NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 22 Cash flow from disposal of subsidiaries and investment properties In thousands of € 31. 12. 2023 Second JV First JV Fifth JV Third JV Other Investment property 1,034,382 252,672 117,331 664,379 — — Trade and other receivables 46,404 3,678 1,003 41,723 — — Cash and cash equivalents 71,515 2,255 7,270 61,990 — — Non-current financial debt — — — — — — Shareholder debt (755,586) (167,525) (75,080) (512,981) — — Other non-current financial liabilities (14,933) (1,244) (1,668) (12,021) — — Deferred tax liabilities (56,057) (20,430) (7,210) (28,417) — — Trade debts and other current liabilities (62,363) (2,309) (6,215) (53,839) — — Total net assets disposed 263,362 67,097 35,431 160,834 — — Realized valuation gain on sale 59,021 18,557 9,928 30,776 — (240) Total non-controlling interest retained by VGP (1,027) — (1,027) — — — Additional share price due at completion of buildings 7,025 — — — 7,025 — Shareholder loans repaid at closing 584,407 154,834 67,083 362,490 — — Equity contribution (165,028) (43,831) (22,105) (99,092) — — Total consideration 747,760 196,657 89,310 455,008 7,025 (240) Consideration to be received — — — — — — Consideration paid in cash 747,760 196,657 89,310 455,008 7,025 (240) Cash disposed (71,515) (2,255) (7,270) (61,990) — — Net cash inflow from divestment of subsidiaries and investment properties 676,245 194,402 82,040 393,018 7,025 (240) In thousands of € 31. 12. 2022 Second JV First JV Fifth JV Third JV Other Investment property 369,657 294,209 75,448 — — — Trade and other receivables 16,019 16,019 — — — — Cash and cash equivalents 18,086 18,086 — — — — Non-current financial debt — — — — — — Shareholder Debt (191,009) (191,009) — — — — Other non-current financial liabilities (2,458) (2,458) — — — — Deferred tax liabilities (76,675) (25,898) (50,777) — — — Trade debts and other current liabilities (13,511) (13,511) — — — — Total net assets disposed 120,109 95,438 24,671 — — — Realized valuation gain on sale 87,612 49,015 11,321 — 27,163 113 Total non-controlling interest retained by VGP (227) — (227) — — — Additional share price due at completion of buildings 63,689 — — — 63,689 — Shareholder loans repaid at closing 205,491 168,562 36,929 — — — Equity contribution (104,190) (72,727) (17,882) — (13,581) — Total consideration 372,484 240,288 54,812 — 77,271 113 Consideration to be received (7,026) — — — (7,026) Consideration paid in cash 365,458 240,288 54,812 — 70,245 113 Cash disposed (18,086) (18,086) — — — Net cash inflow from divestment of subsidiaries and investment properties 347,372 222,202 54,812 — 70,245 113 PAGE 370 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 23 Financial risk management and financial derivatives 23.1 Terms, conditions and risk management Exposures to foreign currency, interest rate, liquidity and credit risk arise in the normal course of business of VGP. The company analyses and reviews each of these risks and defines strategies to manage the economic impact on the company’s performance. The results of these risk assessments and proposed risk strategies are reviewed and approved by the Board of Directors on regular basis. Some of the risk management strategies include the use of derivative financial instruments which mainly consists of forward exchange contracts and interest rate swaps. The company holds no derivative instruments nor would it issue any for speculative purposes. As at 31 December 2023 there were no derivative financial instruments outstanding (same as for 31 December 2022). 23.2 Foreign currency risk VGP incurs principally foreign currency risk on its capital expenditure as well as some of its borrowings and net interest expense/ income. VGP’s policy is to economically hedge its capital expenditure as soon as a firm commitment arises, to the extent that the cost to hedge outweighs the benefit and in the absence of special features which require a different view to be taken. The table below summarises the Group’s main net foreign currency positions at the reporting date. Since the Group has elected not to apply hedge accounting, the following table does not include the forecasted transactions. However, the derivatives the Group has entered into, to economically hedge the forecasted transactions are included. As at 31 December 2023 there were no foreign currency derivatives outstanding (same as for 2022). In thousands 2023 CZK DKK HUF RON RSD Trade & other receivables 43,113 779 1,058,564 142,382 430,545 Non-current liabilities and trade & other (135,417) (84) (698,801) (37,318) (640,549) Gross balance sheet exposure (92,303) 695 359,764 105,064 (210,004) Forward foreign exchange — — — — — Net exposure (92,303) 695 359,764 105,064 (210,004) In thousands 2022 CZK HUF RON RSD Trade & other receivables 32,461 1,933,338 110,221 10,212 Non-current liabilities and trade & other (244,235) (2,484,759) (37,078) (6,744) Gross balance sheet exposure (211,774) (551,421) 73,144 3,467 Forward foreign exchange — — — — Net exposure (211,774) (551,421) 73,144 3,467 The following significant exchange rates applied during the year: 1 € = 31. 12. 2023 31. 12. 2022 Closing rate Closing rate CZK 24.72500 24.11500 DKK 7.45564 — HUF 382.80000 400.87000 RON 4.97460 4.94740 RSD 117.17370 117.32240 FINANCIAL REVIEW 2023 PAGE 371NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Sensitivity A 10 % strengthening of the euro against the following currencies at 31 December 2023 would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all variables, in particular interest rates, remain con- stant. The analysis is performed on the same basis for 2022. Effects In thousands of € 2023 Equity Profit or (Loss) CZK — 339 DKK — (8) HUF — (85) RON — (1,920) RSD — 163 Total — (1,512) Effects In thousands of € 2022 Equity Profit or (Loss) CZK — 798 HUF — 125 RON — (1,344) RSD — (3) Total — (423) A 10 % weakening of the euro against the above currencies at 31 December 2023 would have had the equal but opposite effect on the above currencies to amounts shown above, on the basis that all other variables remain constant. PAGE 372 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 23.3 Interest rate risk The Group applies a dynamic interest rate hedging approach whereby the target mix between fixed and floating rate debt is reviewed periodically. These reviews are carried out within the confines of the existing loan agreements should such loan agree- ments require that interest rate exposure is to be hedged when certain conditions are met. Where possible the Group will apply IFRS 9 to reduce income volatility whereby some of the interest rate swaps may be classified as cash flow hedges. Changes in the value of a hedging instrument that qualifies as highly effective cash flow hedges are recognised directly in shareholders’ equity (hedging reserve). The Group also uses interest rate swaps that do not satisfy the hedge accounting criteria under IFRS 9 but provide effective economic hedges. Changes in fair value of such interest rate swaps are recognised immediately in the income statement. (Interest rate swaps held for trading). At the reporting date the Group interest rate profile of the Group’s (net of any capitalised financing costs) was as follows: In thousands of € 31. 12. 2023 31. 12. 2022 Financial debt Fixed rate Schuldschein Loan 8,000 8,000 Bonds 1,945,000 2,320,000 Variable rate Bank debt — — Schuldschein Loan 21,000 21,000 Reclassified to liabilities related to disposal group held for sale — — Interest rate hedging Interest rate swaps Held for trading — — Reclassified to liabilities related to disposal group held for sale — — Financial debt after hedging Variable rate Bank debt — — Schuldschein Loan 21,000 21,000 Total variable debt (A) 21,000 21,000 Fixed rate Bonds 1,945,000 2,320,000 Bank debt — — Schuldschein Loan 8,000 8,000 Total fixed rate debt (B) 1,953,000 2,328,000 Total financial debt (C) = (A) + (B) 1,974,000 2,349,000 Fixed rate/total financial liabilities 98.9% 99.1% The effective interest rate on financial debt (bank debt, schuldschein loans and bonds), including all bank margins on the out- standing financial debt amount 2.11 % for the year-ended 2023 (2.31 % in 2022). Sensitivity analysis for change in interest rates or profit In case of an increase/decrease of 100 basis points in the interest rates, profit before taxes would have been € 210 k lower/higher (2022: € 210k). This impact comes from a change in the floating rate debt, with all variables held constant. Sensitivity analysis for changes in interest rate of other comprehensive income For 2023 there is no impact given the fact that there are no interest rate swaps outstanding classified as cash flow hedges as at the reporting date. The same situation applied at the 31 December 2022 reporting date. FINANCIAL REVIEW 2023 PAGE 373NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 23.4 Credit risk Credit risk is the risk of financial loss to VGP if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from VGP’s receivables from customers and bank deposits. The management has a credit pol- icy in place and the exposure to credit risk is monitored on an on-going basis. Each new tenant is analysed individually for credit- worthiness before VGP offers a lease agreement. In addition, the Group applies a strict policy of rent guarantee whereby, in gen- eral, each tenant is required to provide a rent guarantee for 6 months. This period will vary in function of the creditworthiness of the tenant. For the credit risk in respect of other non-current receivables please refer to the section “Risk Factors” in this annual report. At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset. The maximum exposure to credit risk at the reporting date was: In thousands of € 31. 12. 2023 31. 12. 2022 Carrying amount Carrying amount Other non–current receivables 565,734 359,644 Trade & other receivables 26,068 33,945 Cash and cash equivalents 219,345 705,373 Reclassification to (–)/from held for sale (10,812) (6,774) Total 800,335 1,092,188 As at 31 December 2023 there was € 1.6 million of restricted cash held in a bank account (2022: € 5.3 million). The group’s cash and cash equivalents comprise primarily cash deposits of which 68% held at Belgian Banks (See note 15). The aging of trade receivables as at the reporting date was: In thousands of € 31. 12. 2023 31. 12. 2022 Carrying amount Carrying amount Gross trade receivables Gross trade receivables not past due 14,826 15,371 Gross trade receivables past due 1,305 692 of which bad debt and doubtful receivables 205 — Provision for impairment of receivables (–) (205) — Total 15,926 16,063 PAGE 374 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 23.5 Liquidity risk Liquidity risk is the risk that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding. The company manages its liquidity risk by ensuring that it has sufficient cash available and that it has sufficient available credit facilities and by matching as much as possible its receipts and payments. As at 31 December 2023 the Group, in addition to its available cash, has several committed credit lines at its disposal up to a maximum equivalent of € 550 million (2022: € 400 million) at floating interest rates with fixed margins. The following are contractual maturities of financial assets and liabilities, including interest payments. The amounts disclosed in the tables below are the contractual undiscounted cash flows. Undiscounted cash flows in respect of balances due within 12 months generally equal their carrying amounts in the statement of financial position, as the impact of discounting is not significant. In thousands of € 2023 Carrying amount Contractual Cash flow < 1 year 1–2 years 2–5 years More than 5 years Assets Cash and cash equivalents 219,345 219,345 219,345 — — — Derivate financial instruments — — — — — — Trade and other receivables 26,068 26,068 26,068 Other non-current receivables 565,734 565,734 — 150,694 242,550 172,490 Reclassified to (–) from held for sale (10,812) (10,812) (10,812) — — — 800,335 800,335 234,601 150,694 242,550 172,490 Liabilities Secured bank loans — — — — — — Unsecured Schuldschein loans 28,686 31,388 3,833 748 26,807 — Unsecured bonds 1,934,407 2,137,998 115,143 117,705 773,650 1,131,500 Derivative financial instruments — — — — — — Trade and other payables 131,496 120,265 78,883 19,892 13,186 8,304 Reclassification to liabilites related to disposal group held for sale (13,461) (13,461) (10,165) (1,444) (1,379) (474) 2,081,128 2,276,189 187,693 136,902 812,264 1,139,330 In thousands of € 2022 Carrying amount Contractual Cash flow < 1 year 1–2 years 2–5 years More than 5 years Assets Cash and cash equivalents 705,373 705,373 705,373 — — — Derivate financial instruments — — — — — — Trade and other receivables 33,945 33,945 33,945 Other non-current receivables 359,644 359,644 — — 359,644 Reclassified to (–)from held for sale (6,774) (6,774) (6,774) 1,092,188 1,092,188 732,544 — 359,644 — Liabilities Secured bank loans — — — — — — Unsecured Schuldschein loans 28,575 32,218 830 3,833 27,555 — Unsecured bonds 2,306,320 2,566,040 428,043 115,143 871,105 1,151,750 Derivative financial instruments — — — — — — Trade and other payables 161,614 157,243 109,263 24,680 13,885 9,416 Reclassification to liabilities related to disposal group held for sale (7,593) (7,593) (5,967) (60) (1,346) (221) 2,488,916 2,747,908 532,168 143,595 911,199 1,160,945 FINANCIAL REVIEW 2023 PAGE 375NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 23.6 Capital management VGP is continuously optimising its capital structure targeting to maximise shareholder value while keeping the desired flexibility to support its growth. The Group operates within and applies a maximum gearing ratio of net debt/total shareholders’ equity and liabilities at 65%. As at 31 December 2023 the Group’s gearing was as follows: In thousands of € 31. 12. 2023 31. 12. 2022 Non-current financial debt 1,885,154 1,960,464 Other non-current financial liabilities — — Current financial debt 111,750 413,704 Financial debt classified under liabilities related to disposal group held for sale — — Total financial debt 1,996,904 2,374,168 Cash and cash equivalents (209,921) (699,168) Cash and cash equivalents classified as disposal group held for sale (9,424) (6,205) Total net financial debt (A) 1,777,559 1,668,795 Total shareholders’ equity and liabilities (B) 4,410,704 4,846,053 Gearing ratio ((A)/(B)) 40.3% 34.4% 23.7 Fair value The following tables list the different classes of financial assets and financial liabilities with their carrying amounts in the balance sheet and their respective fair value and analyzed by their measurement category under IFRS 9. Abbreviations used in accord- ance with IFRS 9 are: AC Financial assets or financial liabilities measured at amortised cost FVTPL Financial assets measured at fair value through profit or loss HFT Financial liabilities Held for Trading 31. 12. 2023 In thousands of € Category in accordance with IFRS 9 Carrying amount Fair value Fair value hierachy Assets Other non-current receivables AC 565,734 565,734 Level 2 Trade receivables AC 15,926 15,926 Level 2 Other receivables AC 10,142 10,142 Level 2 Derivative financial assets FVTPL — — Level 2 Cash and cash equivalents AC 217,753 217,753 Level 2 Reclassification to (–) from held for sale (10,812) (10,812) Total 798,743 798,743 Liabilities Financial debt Bank debt AC 28,686 28,686 Level 2 Bonds AC 1,934,407 1,629,160 Level 1 Trade payables AC 67,023 67,023 Level 2 Other liabilities AC 64,472 64,472 Level 2 Derivative financial liabilities HFT — — Level 2 Reclassification to liabilities related to disposal group held for sale (13,460) (13,460) Total 2,081,128 1,775,881 PAGE 376 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 31. 12. 2022 In thousands of € Category in accordance with IFRS 9 Carrying amount Fair value Fair value hierachy Assets Other non-current receivables AC 359,644 359,644 Level 2 Trade receivables AC 16,063 16,063 Level 2 Other receivables AC 17,881 17,881 Level 2 Derivative financial assets FVTPL — — Level 2 Cash and cash equivalents AC 700,066 700,066 Level 2 Reclassification to (–) from held for sale (6,774) (6,774) Total 1,086,880 1,086,880 Liabilities Financial debt Bank debt AC 28,575 28,575 Level 2 Bonds AC 2,306,320 1,797,451 Level 1 Trade payables AC 98,079 98,079 Level 2 Other liabilities AC 63,532 63,532 Level 2 Derivative financial labilities HFT — — Level 2 Reclassification to liabilities related to disposal group held for sale (7,594) (7,594) Total 2,488,912 1,980,044 The following methods and assumptions were used to estimate the fair values: — Cash and cash equivalents and trade and other receivables, primarily have short terms to maturity; hence, their carrying amounts at the reporting date approximate the fair values; — The Other non-current receivables are evaluated by the Group based on parameters such as interest rates, individual cred- itworthiness of the counterparty and the risk characteristics of the financed project. As at 31 December 2023, the carrying amounts of these receivables, are assumed not to be materially different from their calculated fair values. — Trade and other payables also generally have short times to maturity and, hence, their carrying amounts also approximate their fair values. — The fair value of financial instruments is determined based on quoted prices in active markets. When quoted prices in active markets are not available, valuation techniques are used. Valuation techniques make maximum use of market inputs but are affected by the assumptions used, including discount rates and estimates of future cash flows. Such techniques include amongst others market prices of comparable investments and discounted cash flows. The principal methods and assump- tions used by VGP in determining the fair value of financial instruments are obtained from active markets or determined using, as appropriate, discounted cash flow models and option pricing models. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observa- ble market data. During the reporting period ending 31 December 2023, there were no transfers between Level 1 and Level 2 fair value measure- ments, and no transfers into and out of Level 3 fair value measurements. 24 Personnel Long-term incentive plan (“LTIP”) for VGP team The board of directors has set up a long-term incentive plan. The LTIP allocates profit sharing units (“Units”) to the respective VGP team members (the other members of the Executive Management Team and designated senior managers). One Unit represents an amount equal to the net asset value of VGP divided by the total amount of issued VGP shares. After an initial lock-up period of 5 years (from the respective award date), each participant may return the Units against cash payment of the proportional net asset value growth of such Units. This LTIP is therefore directly and solely based on the net asset value growth of the Group and has no direct nor indirect link to the evolution of the share price of the VGP shares. At any single point in time, the number of Units outstanding (i.e. awarded and not yet vested) cannot exceed 5% of the total amount of shares issued by the Company. During the financial year 2023 there were 787,987 Units allocated to the VGP team and 134,332 Units were vested. The total pay-out of the 134,332 units amounts to € 6.1 million, which has been paid for € 1.4 million in 2023. The remainder is expected to be paid out in 2024. Consequently, the total aggregate Units allocated as at 31 December 2023 (after vesting) amount to 1,364,566 Units. Based on the 31 December 2023 financial figures these Units represent an aggregate net asset value of € 22.3 million (2022: € 18.1 mil- lion) which was provided for in the 2023 accounts. (see Remuneration Report for further details). FINANCIAL REVIEW 2023 PAGE 377NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 25 Contingencies and commitments In thousands of € 31. 12. 2023 31. 12. 2022 Contingent liabilities 40,950 6,230 Commitments to purchase land 58,270 149,266 Commitments to develop new projects 296,513 370,629 Contingent liabilities mainly relate to bank guarantees linked to land plots and built out of infrastructure on development land. The commitment to purchase land relates to contracts concerning the future purchase of 795,000 m² of land for which deposits totalling € 2.9 million have been made. The down payment on land was classified under investment properties as at 31 December 2023 (same classification treatment applied for 2022) and is mainly composed of € 2.2 million for the acquisition of a land plot located in Vejle, Denmark. It is expected that 30.2 million of the commitments to purchase land and € 284.3 million of the commitments to develop new projects will be payable in ’24. 26 Related parties Unless otherwise mentioned below, the settlement of related party transactions occurs in cash, there are no other outstanding balances which require disclosure, the outstanding balances are not subject to any interest unless specified below, no guaran- tees or collaterals provided and no provisions or expenses for doubtful debtors were recorded. 26.1 Shareholders Shareholding As at 31 December 2023 the main shareholders of the company are: — Little Rock S.à.r.l. (29.65%): a company controlled by Mr. Jan Van Geet; — Tomanvi SCA (2.31%): a company controlled by Mr. Jan Van Geet; — VM Invest NV (19.00%): a company controlled by Mr. Bart Van Malderen The Extraordinary General Shareholders’ Meeting of 8 May 2020 approved the introduction of the double voting right. A double voting right is therefore granted to each VGP share that has been registered for at least two years without interruption under the name of the same shareholder in the register of shares in registered form, in accordance with the procedures detailed in article 29 of the Articles of Association. In accordance with Belgian law, dematerialised shares do not benefit from the double voting right. The two main ultimate reference shareholders of the company are therefore (i) Mr Jan Van Geet who holds 39.52% of the voting rights of VGP NV and who is CEO and an executive director and (ii) Mr Bart Van Malderen who holds 23.53% of the vot- ing rights of VGP NV and who is a non-executive director. The full details of the shareholding of VGP can be found in the section “Information about the share” of this annual report. Lease activities Drylock Technologies s.r.o, a company controlled by Bart Van Malderen, leases warehouses from VGP and the First Joint Venture under long term lease contracts. The rent received over the year 2023 amounts to € 7.1 million (2022: € 5.1 million). Jan Van Geet s.r.o. leases out office spaces to the VGP Group in the Czech Republic used by the VGP operational team. The leases run until 2026 and 2023 respectively. During 2023 aggregate amount paid under these leases was € 132 k equivalent (2022: € 123 k). All lease agreements have been concluded on an arm’s length basis. Other services The table below provides the outstanding balances with Jan Van Geet s.r.o.. The payable balance relates to unsettled invoices. The receivable balances relate to cash advances made to cover representation costs. In thousands of € 31. 12. 2023 31. 12. 2022 Trade receivable/(payable) (67) — VGP occasionally also provides real estate support services to Jan Van Geet s.r.o. (and vice versa). During 2023 VGP recorded a € 17 k revenue for these activities (2022: € 12k). 26.2 Subsidiaries The consolidated financial statements include the financial statements of VGP NV and the subsidiaries listed in note 29. Trans- actions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. PAGE 378 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 26.3 Joint Ventures The table below presents a summary of the related transactions with the Group’s Joint Ventures: In thousands of € 31. 12. 2023 31. 12. 2022 Loans outstanding at year-end 875,113 451,289 Investments in Joint Ventures 166,211 116,379 Equity distributions received 3,407 14,154 Dividends distributions received 6,062 23,214 Net proceeds from sales to Joint Ventures 676,245 347,372 Other receivables from/(payables) to the Joint Ventures at year-end — 55 Management fee income 22,514 18,017 Interest and similar income from Joint Ventures and associates 27,505 17,305 26.4 Key management Key Management includes the Board of Directors and the executive management. The details of these persons can be found in the section Board of Directors and Management of this Annual Report. Key management personnel compensation is shown in the table below: In thousands of € 2023 2022 Basic remuneration and short-term incentives and benefits 5,163 4,717 Long term variable remuneration 3,566 — Total gross remuneration 8,729 4,717 The disclosures relating to the Belgian Corporate Governance Code are included in the Corporate Governance Statement of this annual report. For 2023 no post-employment benefits were granted. 27 Events after the balance sheet date As per January ’24, the group acquired its first site in Denmark, which is located in the northern part of the Triangle Region, a com- mercially important region in the centre of Denmark. On an area of more than 175,000 m² will be developed more than 80,000 m² of semi-industrial premises which are suitable for light industry and logistics services. The site is adjacent to the highway E45, exit 61 b Vejle Syd. The park will offer full-scale services including photovoltaics, on-site electric car charging and high-quality technical and sustainable features. As per February ’24, the group divested its stake in the LPM Joint Venture for a consideration of ca € 170 million. 28 Services provided by the statutory auditor and related persons The audit fees for VGP NV and its fully controlled subsidiaries amounted to € 216.8k and additional non-audit services were per- formed during the year by Deloitte for which a total fee of € 86.8k was incurred. These fees were mainly paid for the obtained ESG limited assurance report. Audit fees for jointly controlled entities amounted to € 233.6k. Additional non-audit services for jointly controlled entities amounted to € 335.6k. FINANCIAL REVIEW 2023 PAGE 379NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 29 Subsidiaries, joint ventures and associates 29.1 Full consolidation The following companies were included in the consolidation perimeter of the VGP Group as at 31 December 2023 and were fully consolidated: Subsidiaries Registered seat address % VGP NV Antwerpen, Belgium Parent (1) VGP Belgium NV Antwerpen, Belgium 100 (5) VGP Renewable Energy NV Antwerpen, Belgium 100 (1) VGP CZ X a.s.. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (1) VGP Park Prostejov a.s. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Park Ceske Budejovice a.s. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Park Usti nad Labem City a.s. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Park Rochlov a.s. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Park Vyskov a.s. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Park Kladno s.r.o. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Zone Mnichovo Hradiste s.r.o. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Park CZ 1 s.r.o. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP – industrialni stavby s.r.o. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (3) SUTA s.r.o. Prague, Czech Republic 100 (3) VGP FM Services s.r.o. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (3) VGP Renewable Energy s.r.o. Jenišovice u Jablonce nad Nisou,Czech Republic 100 (2) VGP Industriebau GmbH Düsseldorf, Germany 100 (3) VGP PM Services GmbH Düsseldorf, Germany 100 (3) FM Log.In. GmbH Düsseldorf, Germany 100 (3) VGP Renewable Energy Deutschland GmbH Düsseldorf, Germany 100 (3) VGP Park Hamburg 4 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Halle S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Rostock S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Ottendorf-Okrilla S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Erfurt S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Berlin Bernau S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Erfurt 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Leipzig Flughafen S.à r.l Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 32 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Berlin-Hönow S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Wiesloch-Walldorf S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Frankenthal 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Hochheim S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Erfurt 3 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Halle 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Nürnberg S.à r.l.. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Koblenz S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 47 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Leipzig Flughafen 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 49 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 50 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 51 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 52 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 53 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 54 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 55 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) PAGE 380 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Subsidiaries Registered seat address % VGP Logistics S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (1) VGP Asset Management S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (3) VGP Renewable Energy S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Graz 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Laxenburg S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP Park Ehrenfeld S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 38 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP DEU 42 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (2) VGP European Logistics 3 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 100 (1) VGP Industriebau Österreich GmbH Vienna, Austria 100 (3) VGP Latvija ,SIA Riga, Latvia 100 (2) VGP Park Riga ,SIA Riga, Latvia 100 (2) VGP Park Tiraines ,SIA Riga, Latvia 100 (2) VGP Industrial Development Latvia ,SIA Riga, Latvia 100 (3) VGP Zone Brasov S.R.L. Bucharest, Romania 100 (2) VGP Park Sibiu S.R.L. Bucharest, Romania 100 (2) VGP Park Arad S.R.L. Bucharest, Romania 100 (2) VGP Park Bucharest S.R.L. Bucharest, Romania 100 (2) VGP Park Bucharest Two S.R.L. Bucharest, Romania 100 (2) VGP Park Timisoara Three S.R.L. Bucharest, Romania 100 (2) VGP Park Timisoara Four S.R.L. Bucharest, Romania 100 (2) VGP Proiecte Industriale S.R.L. Bucharest, Romania 100 (3) VGP Renewable Energy S.R.L. Bucharest, Romania 100 (2) VGP Park Bratislava a.s. Bratislava, Slovakia 100 (2) VGP Park Zvolen s.r.o. Bratislava, Slovakia 100 (2) VGP Park Slovakia 2, s.r.o. Bratislava, Slovakia 100 (2) VGP Park Slovakia 3, s.r.o. Bratislava, Slovakia 100 (2) VGP Park Bratislava 2 a.s. Bratislava, Slovakia 100 (2) VGP – industriálne stavby, s.r.o. Bratislava, Slovakia 100 (3) VGP Service Kft. Budapest, Hungary 100 (3) VGP Park Hatvan Kft. Budapest, Hungary 100 (2) VGP Park Györ Beta Kft. Budapest, Hungary 100 (2) VGP Park Kecskemet Kft. Budapest, Hungary 100 (2) VGP Park BUD Aerozone Kft. Budapest, Hungary 100 (2) VGP Park BUD Aerozone 2 Kft. Budapest, Hungary 100 (2) VGP Park HU 1 Kft. Budapest, Hungary 100 (2) VGP Park HU Two Kft. Budapest, Hungary 100 (2) VGP Park HU Three Kft. Budapest, Hungary 100 (2) VGP Hungary 2 Kft. Budapest, Hungary 100 (3) VGP Renewable Energy Kft. Budapest, Hungary 100 (2) VGP Nederland BV Tilburg, The Netherlands 100 (3) VGP Renewable Energy Netherlands BV Tilburg, The Netherlands 100 (2) VGP Park Nederland 3 BV Tilburg, The Netherlands 100 (2) VGP Park Nederland 4 BV Tilburg, The Netherlands 100 (2) VGP Park Nederland 5 BV Tilburg, The Netherlands 100 (2) VGP Park Nederland 6 BV Tilburg, The Netherlands 100 (2) VGP Park Nederland 7 BV Tilburg, The Netherlands 100 (2) VGP Naves Industriales Peninsula, S.L.U. Barcelona, Spain 100 (1) VGP Park Sevilla Ciudad de la Imagen, S.L.U. Barcelona, Spain 100 (2) VGP Park Martorell, S.L.U. Barcelona, Spain 100 (2) VGP Park Fuenlabrada 2, S.L.U. Barcelona, Spain 100 (2) VGP Park Alicante, S.L.U. Barcelona, Spain 100 (2) FINANCIAL REVIEW 2023 PAGE 381NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Subsidiaries Registered seat address % VGP Park Burgos, S.L.U. Barcelona, Spain 100 (2) VGP Park Córdoba, S.L.U. Barcelona, Spain 100 (2) VGP Park La Naval, S.L.U. Bilbao, Spain 100 (2) VGP (Park) Espana 17, S.L.U. Barcelona, Spain 100 (2) VGP Renewable Energy Spain, S.L.U. Barcelona, Spain 100 (2) VGP (Park) Espana 19, S.L.U. Barcelona, Spain 100 (2) VGP (Park) Espana 20, S.L.U. Barcelona, Spain 100 (2) VGP (Park) Espana 21, S.L.U. Barcelona, Spain 100 (2) VGP (Park) Espana 22, S.L.U. Barcelona, Spain 100 (2) VGP (Park) Espana 23, S.L.U. Bilbao, Spain 100 (2) VGP (Park) Espana 24, S.L.U. Bilbao, Spain 100 (2) VGP Italy SRL Milan, Italy 100 (3) VGP Park Verona SRL Milan, Italy 100 (2) VGP Park Parma SRL Milan, Italy 100 (2) VGP Park Italy 8 SRL Milan, Italy 100 (2) VGP Park Valsamoggia 2 SRL Milan, Italy 100 (2) VGP Park Italy 10 SRL Milan, Italy 100 (2) VGP Park Milano Paderno Dugnano SRL Milan, Italy 100 (2) VGP Park Italy 12 SRL Milan, Italy 100 (2) VGP Park Legnano SRL Milan, Italy 100 (2) VGP Park Italy14 SRL Milan, Italy 100 (2) VGP Park Italy15 SRL Milan, Italy 100 (2) VGP Park Italy16 SRL Milan, Italy 100 (2) VGP Park Italy17 SRL Milan, Italy 100 (2) VGP Park Italy18 SRL Milan, Italy 100 (2) VGP Renewable Energy Italy SRL Milan, Italy 100 (2) VGP Construção Industrial, Unipessoal Lda Porto, Portugal 100 (3) VGP Park Sintra, S.A. Sintra, Portugal 100 (2) VGP Park Loures, S.A. Loures, Portugal 100 (2) VGP Park Portugal 4, S.A. Porto, Portugal 100 (2) VGP Park Montijo, S.A. Porto, Portugal 100 (2) VGP Park Portugal 6, S.A. Porto, Portugal 100 (2) VGP Park Portugal 7, S.A. Porto, Portugal 100 (2) VGP Energia Renovável Portugal, S.A. Porto, Portugal 100 (2) VGP Constructions Industrielles SAS Lyon, France 100 (3) VGP France SAS Lyon, France 100 (1) VGP France 2 SAS Lyon, France 100 (1) VGP Park Rouen 1 SCI Lyon, France 100 (2) VGP Park Rouen 2 SCI Lyon, France 100 (2) VGP Park Rouen 3 SCI Lyon, France 100 (2) VGP Park Vélizy SCI Lyon, France 100 (2) VGP Park France 5 SCI Lyon, France 100 (2) VGP Park France 6 SCI Lyon, France 100 (2) VGP Industrial Development d.o.o. Beograd Belgrade, Serbia 100 (3) VGP Park One d.o.o. Beograd Belgrade, Serbia 100 (2) VGP Park Two d.o.o. Beograd Belgrade, Serbia 100 (2) VGP Industrial Development Croatia d.o.o. Zagreb, Croatia 100 (3) VGP Park Lučko d.o.o. Zagreb, Croatia 100 (2) VGP GREECE ΜΟΝΟΠΡΟΣΩΠΗ Α.Ε. Athens, Greece 100 (3) VGP PARK GREECE 1 ΜΟΝΟΠΡΟΣΩΠΗ Α.Ε. Athens, Greece 100 (2) VGP Denmark ApS Fredericia, Denmark 100 (3) VGP Park Denmark 1 ApS Fredericia, Denmark 100 (2) PAGE 382 VGP NV ANNUAL REPORT 2023 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 29.2 Companies to which the equity method is applied Joint venture Registered seat address % VGP European Logistics S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) VGP European Logistics 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) VGP Park München GmbH Baldham, Germany 50 (4) LPM Holding BV Haghorst, The Netherlands 50 (4) Belartza Alto SXXI SL Bilbao, Spain 50 (4) Grekon 11 GmbH Lahnau, Germany 50 (4) VGP Park Goettingen 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) VGP Park Magdeburg S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) VGP Park Laatzen S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) VGP Park Gießen Am alten Flughafen S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) VGP Park Berlin Oberkraemer S.à r.l. Luxembourg, Grand Duchy of Luxembourg 50 (4) Associates Registered seat address % VGP Park Bingen GmbH Düsseldorf, Germany 5,1 (6) VGP Park Hamburg GmbH Düsseldorf, Germany 5,1 (6) VGP Park Hamburg 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Hamburg 3 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Rodgau GmbH Düsseldorf, Germany 5,1 (6) VGP Park Höchstadt GmbH Düsseldorf, Germany 5,1 (6) VGP Park Berlin GmbH Düsseldorf, Germany 5,1 (6) VGP Park Berlin 2 S.à r.l Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Berlin 3 S.à r.l Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Frankenthal S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Leipzig S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Leipzig GmbH Düsseldorf, Germany 5,1 (6) VGP DEU 3 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Wetzlar S.à r.l Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Ginsheim S.à r.l Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Dresden S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Goettingen S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Berlin Wustermark S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Bischofsheim S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Einbeck S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Chemnitz S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Gießen S.à r.l. Luxembourg, Grand Duchy of Luxembourg 5,1 (6) VGP Park Berlin 4 S.à r.l. Luxembourg, Grand Duchy of Luxembourg 10,1 (6) (1): Holding and service company (2): Existing or future asset company and renewable energy companies. (3): Services company (4): Holding company (including its respective subsidiaries as applicable) (5): Dormant (6): The remaining 94.9% (89.9%) are held directly by VGP European Logistics S.a r.l.. 29.3 Changes in 2023 (i) New investments Subsidiaries Registered seat address % VGP Park France 4 SCI Lyon, France 100 VGP Park France 5 SCI Lyon, France 100 VGP Park France 6 SCI Lyon, France 100 VGP France 2 SAS Lyon, France 100 FINANCIAL REVIEW 2023 PAGE 383NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (ii) Name change New Name Former Name VGP Energia Renovável Portugal, S.A. VGP Park Portugal 8 S.A. VGP Park Fuenlabrada 2, S.L.U. VGP (Park) España 12, S.L.U. VGP Park Alicante, S.L.U. VGP (Park) España 13, S.L.U. VGP Park Burgos, S.L.U. Daisen Investments 2020, S.L.U. VGP Park Córdoba, S.L.U. Maliset Investments 2020, S.L.U. VGP Park La Naval, S.L.U. Urlau Proyectos y Servicios, S.L.U. VGP Park Vélizy SCI VGP Park France 4 SCI VGP Park Parma SRL VGP Park Italy 5 SRL VGP Park Montijo, S.A. VGP Park Portugal 5, S.A. VGP Renewable Energy Spain, S.L.U. VGP (Park) Espana 18 S.L.U. (iii) Subsidiaries divested Subsidiaries Registered seat address % VGP Park Sweden 1 AB Bromma, Sweden 100% VGP Sweden AB Bromma, Sweden 100% (iv) Subsidiaries sold to the First Joint Venture Subsidiaries Registered seat address VGP Park Hradek nad Nisou 2 a.s. Jenišovice u Jablonce nad Nisou,Czech Republic VGP Park Olomouc 5 a.s. Jenišovice u Jablonce nad Nisou,Czech Republic VGP Park Berlin 4 S.à r.l. Luxembourg, Grand Duchy of Luxembourg (v) Subsidiaries sold to the Second Joint Venture Subsidiaries Registered seat address VGP Park Dos Hermanas, S.L.U. Barcelona, Spain VGP Park Granollers, S.L.U. Barcelona, Spain VGP Park Valencia Cheste, S.L.U. Barcelona, Spain VGP Park Parma 2 Srl Milan, Segrate, Italy (vi) Subsidiaries sold to the Fifth Joint Venture Companies Registered seat address VGP Park Goettingen 2 S.à r.l. Luxembourg, Grand Duchy of Luxembourg VGP Park Magdeburg S.à r.l. Luxembourg, Grand Duchy of Luxembourg VGP Park Laatzen S.à r.l. Luxembourg, Grand Duchy of Luxembourg VGP Park Gießen Am alten Flughafen S.à r.l. Luxembourg, Grand Duchy of Luxembourg VGP Park Berlin Oberkraemer S.à r.l. Luxembourg, Grand Duchy of Luxembourg (vii) Registered number of the Belgian companies Companies Company number VGP NV BTW BE 0887.216.042 RPR – Antwerp (Division Antwerp) VGP Renewable Energy NV BTW BE 0894.188.263 RPR – Antwerp (Division Antwerp) VGP Belgium NV BTW BE 0894.442.740 RPR – Antwerp (Division Antwerp) (viii) Subsidiaries sold from VGP NV to VGP Renewable Energy Companies VGP Renewable Energy Spain S.L.U. VGP Energia Renovável Portugal, S.A. PAGE 384 VGP NV ANNUAL REPORT 2023 SUPPLEMENTARY NOTES NOT PART OF THE AUDITED FINANCIAL STATEMENTS Supplementary notes not part of the audited financial statements For the year ended 31 December 2023 1 Income statement, proportionally consolidated The table below includes the proportional consolidated income statement interest of the Group in the Joint Ventures. The interest held directly by the Group (5.1% and 10.1%) in the German asset companies of the Joint Ventures have been included in the Joint Ventures’ figures (share of VGP). Proportionally consolidated income statement In thousands of € 31.12.2023 31.12.2022 Group Joint Ventures Total Group Joint Ventures Total Gros rental and renewable energy income 69,003 102,073 171,076 51,230 72,539 123,769 Property operating expenses (5,534) (10,496) (16,030) (8,223) (8,412) (16,635) Net rental and renewable energy income 63,469 91,577 155,046 43,007 64,127 107,134 Joint Ventures management fee income 26,925 — 26,925 21,537 — 21,537 Net valuation gains/(losses) on investment properties 87,958 (61,179) 26,779 (97,230) (106,117) (203,347) Administration expenses (48,863) (1,837) (50,700) (33,956) (1,333) (35,289) Other expenses — — — (3,000) — (3,000) Operating result 129,489 28,561 158,050 (69,642) (43,323) (112,965) Net financial result (6,031) (35,434) (41,465) (27,008) (16,756) (43,764) Taxes (25,451) (3,842) (29,293) 20,035 14,152 34,187 Result for the period 98,007 (10,715) 87,292 (76,615) (45,927) (122,542) FINANCIAL REVIEW 2023 PAGE 385SUPPLEMENTARY NOTES NOT PART OF THE AUDITED FINANCIAL STATEMENTS 2 Balance sheet, proportionally consolidated The table below includes the proportional consolidated balance sheet interest of the Group in the Joint Ventures. The interest held directly by the Group (5.1% and 10.1%) in the German asset companies of the Joint Ventures have been included in the Joint Ventures’ figures (share of VGP). Proportionally consolidated balance sheet In thousands of € 31.12.2023 31.12.2022 Group Joint Venture Total Group Joint Venture Total Investment properties 1,508,984 2,442,718 3,951,702 2,395,702 1,916,347 4,312,049 Investment properties included in assets held for sale 875,817 — 875,817 292,541 — 292,541 Total investment properties 2,384,801 2,442,718 4,827,519 2,688,243 1,916,347 4,604,590 Other assets 682,464 2,238 684,702 437,963 3,965 441,928 Total non-current assets 3,067,265 2,444,956 5,512,221 3,126,206 1,920,312 5,046,518 Trade and other receivables 79,486 50,810 130,296 122,113 36,462 158,575 Cash and cash equivalents 209,921 74,355 284,276 699,168 51,207 750,375 Disposal group held for sale 16,804 — 16,804 7,365 — 7,365 Total current assets 306,211 125,165 431,376 828,646 87,669 916,315 Total assets 3,373,476 2,570,121 5,943,597 3,954,852 2,007,981 5,962,833 Non-current financial debt 1,885,154 1,310,253 3,195,407 1,960,464 926,409 2,886,873 Other non-current financial liabilities — 256 256 — — — Other non-current liabilities 38,085 13,581 51,666 46,419 8,308 54,727 Deferred tax liabilities 23,939 135,625 159,564 79,671 124,440 204,111 Total non-current liabilities 1,947,178 1,459,715 3,406,893 2,086,554 1,059,157 3,145,711 Current financial debt 111,750 20,613 132,363 413,704 17,805 431,509 Trade debts and other current liabilities 84,075 52,564 136,640 110,676 39,818 150,494 Liabilities related to disposal group held for sale 53,284 — 53,284 32,944 — 32,944 Total current liabilities 249,109 73,178 322,287 557,323 57,623 614,946 Total liabilities 2,196,287 1,532,893 3,729,180 2,643,877 1,116,780 3,760,657 Net assets 1,177,189 1,037,298 2,214,417 1,310,975 891,201 2,202,176 PAGE 386 VGP NV ANNUAL REPORT 2023 PARENT COMPANY INFORMATION Parent company information For the year ended 31 December 2023 1 Financial Statements VGP NV 1.1 Parent company accounts The financial statements of the parent company VGP NV, are presented below in a condensed form. In accordance with Belgian company law, the directors’ report and financial statements of the parent company VGP NV, together with the auditor’s report, have been deposited at the National Bank of Belgium. They are available on request from: VGP NV Generaal Lemanstraat 55 bus 4 B-2018 Antwerpen (Berchem) Belgium www.vgpparks.eu The statutory auditor issued an unqualified opinion on the financial statements of VGP NV. 1.2 Condensed income statement In thousands of € 2023 2022 Other operating income 21,589 21,630 Operating profit or loss (6,666) 1,897 Financial result 118,081 36,780 Non-recurring income/(expense) financial assets 175,261 111,688 Current and deferred income taxes (11,876) (5,002) Result for the year 274,800 145,362 FINANCIAL REVIEW 2023 PAGE 387PARENT COMPANY INFORMATION 1.3 Condensed balance sheet after profit appropriation In thousands of € 2023 2022 Formation expenses, intangible assets 18,271 23,737 Tangible fixed assets 91 134 Financial fixed assets 3,481,466 3,271,101 Other non-current receivables 9,705 9,705 Total Non-current assets 3,509,533 3,304,677 Trade and other receivables 31,714 24,225 Cash & cash equivalents 48,678 441,162 Total current assets 80,392 465,387 Total assets 3,589,925 3,770,064 Share capital 136,092 136,092 Share Premium 759,509 759,509 Non-distributable reserves 13,609 13,609 Retained earnings 554,779 380,957 Shareholders’ equity 1,463,989 1,290,167 Amounts payable after one year 1,903,605 1,980,071 Amounts payable within one year 222,331 499,826 Creditors 2,125,936 2,479,897 Total equity and liabilities 3,589,925 3,770,064 Valuation principles Valuation and foreign currency translation principles applied in the parent company's financial statements are based on Belgian accounting legislation. 2 Proposed appropriation of VGP NV 2023 result In thousands of € 2023 2022 Result for the year for appropriation 274,800 145,362 Result brought forward 380,957 313,368 Result to be appropriated 655,757 458,730 Transfer to legal reserves — 2,722 Result to be carried forward 554,779 380,957 Gross dividend 100,978 75,051 Total 655,757 458,730 The Board of Directors of VGP NV will propose to the Annual Shareholders’ Meeting to distribute a gross dividend of € 3.70 per share corresponding to a total gross dividend amount of € 100,977,854. PAGE 388 VGP NV ANNUAL REPORT 2023 AUDITOR’S REPORT Auditor’s report Statutory auditor’s report to the shareholders’ meeting for the year ended 31 December 2023 – Consolidated financial statements The original text of this report is in Dutch Statutory auditor’s report to the shareholders’ meeting of VGP NV for the year ended 31 December 2023 – Consolidated financial statements In the context of the statutory audit of the consolidated finan- cial statements of VGP NV (“the company”) and its subsidiaries (jointly “the group”), we hereby submit our statutory audit report. This report includes our report on the consolidated financial statements and the other legal and regulatory requirements. These parts should be considered as integral to the report. We were appointed in our capacity as statutory auditor by the shareholders’ meeting of 12 May 2023, in accordance with the proposal of the board of directors (“bestuursorgaan”/“organe d’administration”) issued upon recommendation of the audit committee. Our mandate will expire on the date of the share- holders’ meeting deliberating on the financial statements for the year ending 31 December 2024. We have performed the statutory audit of the consolidated financial statements of VGP NV for 17 consecutive periods. Report on the consolidated financial statements Unqualified opinion We have audited the consolidated financial statements of the group, which comprise the consolidated balance sheet as at 31 December 2023, the consolidated income statement, the consolidated statement of comprehensive income, the con- solidated statement of changes in equity and the consolidated cash flow statement for the year then ended, as well as the summary of significant accounting policies and other explana- tory notes. The consolidated balance sheet shows total assets of 4 410 704 (000) EUR and the consolidated statement of com- prehensive income shows a profit for the year then ended of 87,292 (000) EUR. In our opinion, the consolidated financial statements give a true and fair view of the group’s net equity and financial posi- tion as of 31 December 2023 and of its consolidated results and its consolidated cash flow for the year then ended, in accor- dance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regu- latory requirements applicable in Belgium. Basis for the unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addi- tion, we have applied the International Standards on Audit- ing approved by the IAASB applicable to the current financial year, but not yet approved at national level. Our responsibilities under those standards are further described in the “Responsi- bilities of the statutory auditor for the audit of the consolidated financial statements” section of our report. We have complied with all ethical requirements relevant to the statutory audit of consolidated financial statements in Belgium, including those regarding independence. We have obtained from the board of directors and the com- pany’s officials the explanations and information necessary for performing our audit. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion. FINANCIAL REVIEW 2023 PAGE 389AUDITOR’S REPORT KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters How our audit addressed the key audit matters Valuation of investment properties Assessing the valuer’s expertise and objectivity VGP develops, owns and manages a portfolio of logistic and industrial warehousing properties, located mainly across Europe. The property portfolio is valued at () EUR as at December , () EUR is held by joint ventures at share and () EUR is presented under “disposal group held for sale”. The portfolio includes completed investments and prop- erties under construction (“development properties”) and is valued using the income approach in accordance with IAS which is based on expected future cash flows. Devel- opment properties are valued using the same methodol- ogy with a deduction for all costs necessary to complete the development. Key inputs into the valuation exercise are yields and estimated rental values, which are influenced by prevailing market forces, comparable transactions and the specific characteristics of each property in the portfolio. The Group uses professionally qualified external valuers to fair value the Group’s portfolio at six-monthly intervals. The valuation of the portfolio is a significant judgement area, underpinned by a number of assumptions which can involve judgements and the existence of estimation uncertainty. Cou- pled with the fact that only a small percentage difference in individual property valuations, when aggregated, could result in a material misstatement on the income statement and bal- ance sheet, warrants specific audit focus in this area. Assessing the valuer’s expertise and objectivity — We assessed the competence, independence and integrity of the external valuers. — We assessed management’s process for reviewing and challenging the work of the external valuers. Testing the valuations — We compared the amounts per the valuation reports to the accounting records and from there we agreed the related balances through to the financial statements. — We involved internal valuation specialists to assist the financial audit team to discuss and challenge the signifi- cant assumptions and critical judgement areas for specific properties, including yields and estimated rental values and compared to other data we have knowledge of. — We obtained the external valuation reports and confirmed that the valuation approach is in accordance with RICS in determining the carrying value in the balance sheet. — For development properties we also confirmed that the supporting information for construction contracts and budgets was consistent with the cost to complete deducted from the valuation of development properties. — Capitalized expenditure was tested on a sample basis to invoices, and budgeted costs to complete were compared to supporting evidence (for example by inspecting original construction contracts). Reference to disclosures The methodology applied in determining the valuation is set out in note . of the consolidated financial statements. In addition we refer to note of the consolidated finan- cial statements containing the investment property roll-for- ward, note in relation to the disposal group held for sale and note in relation to investments in joint ventures and associates. Creation of a new joint venture In July , VGP has signed a joint venture agreement with DEKA (the “Fifth Joint Venture”) through which VGP sold % of the shares of subsidiaries directly to DEKA, thereby losing control over these entities (the “Joint Venture Entities”) which mainly own multiple investment properties. The proper accounting treatment of this joint arrangement in accordance with IFRS is complex, and requires manage- ment judgement specifically with respect to: — Assessing whether under the joint venture agreement, VGP has joint control over the Joint Venture Entities; — Determining the appropriate accounting treatment upon loss of control of the Joint Venture Entities in the consolidated financial statements of VGP NV; Proper accounting treatment of the creation of the joint ven- ture is material to the Group’s financial statements: the value of these investments per December , reported on the balance sheet as Investments in joint ventures and associ- ates, for the Fifth Joint Venture amounts to () EUR. Therefore, the key audit matter relates to the appropriate accounting treatment and disclosure in accordance with IFRS of the creation of this new joint venture. Reference to disclosures Refer to note . for the related accounting policies, note . in relation to the critical judgements in applying accounting policies and note in relation to investments in joint ventures. Information and standing data — We tested the standing data the Group provided to the valuers for use in the performance of the valuation, relat- ing to rental income, key rent contract characteristics and occupancy. — We considered the internal controls implemented by man- agement and we tested the design and implementation of controls over investment properties. — We held discussions with management and obtained sup- porting documentation as necessary to ensure that we understood the nature of the transaction. We reviewed the proposed accounting treatment in relation to the Group’s accounting policies and relevant IFRS standards. — We have read the paragraphs and addenda to the contracts supporting these transactions and evaluated the appro- priateness of the recognition and measurement policies applied to the creation of these new joint ventures. — We have challenged management’s assessment in relation to the joint control of the Fifth Joint Venture. — We have assessed the accounting treatment upon loss of control of the Joint Venture Entities in the consolidated financial statements of VGP NV. — We have involved our own IFRS experts to analyze the appropriate accounting treatment of this transaction. — We have assessed appropriate disclosure of this transac- tion in the notes to the consolidated financial statements. PAGE 390 VGP NV ANNUAL REPORT 2023 AUDITOR’S REPORT Responsibilities of the board of directors for the preparation of the consolidated financial statements The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the board of directors is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applica- ble, matters to be considered for going concern and using the going concern basis of accounting unless the board of direc- tors either intends to liquidate the group or to cease opera- tions, or has no other realistic alternative but to do so. Responsibilities of the statutory auditor for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor’s report that includes our opin- ion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consid- ered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of consolidated financial statements in Belgium. The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the efficiency or effectiveness demonstrated by the board of directors in the way that the company’s business has been conducted or will be conducted. As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: — identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrep- resentations, or the override of internal control; — obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appro- priate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control; — evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; — conclude on the appropriateness of the use of the going con- cern basis of accounting by the board of directors and, based on the audit evidence obtained, whether a material uncer- tainty exists related to events or conditions that may cast sig- nificant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated finan- cial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern; — evaluate the overall presentation, structure and content of the consolidated financial statements, and whether the consolidated financial statements represent the underly- ing transactions and events in a manner that achieves fair presentation. — obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direc- tion, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficien- cies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regard- ing independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated to the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes any public disclosure about the matter. Other legal and regulatory requirements Responsibilities of the board of directors The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated finan- cial statements. Responsibilities of the statutory auditor As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility is to verify, in all material respects, the director’s report on the consolidated financial statements as well as to report on these matters. Aspects regarding the directors’ report on the consolidated financial statements In our opinion, after performing the specific procedures on the directors’ report on the consolidated financial statements, this report is consistent with the consolidated financial statements for that same year and has been established in accordance with the requirements of article : of the Code of companies and associations. In the context of our statutory audit of the consolidated financial statements we are responsible to consider, in par- ticular based on information that we became aware of during the audit, if the directors’ report on the consolidated finan- cial statements and other information disclosed in the annual report on the consolidated financial statements, i.e.: — the required components of the VGP annual report in accordance with Articles : and : of the Code of companies and associations, which appear in the chapter “Report of the Board of Directors”. are free of material misstatements, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such a mate- rial misstatement. FINANCIAL REVIEW 2023 PAGE 391AUDITOR’S REPORT Statements regarding independence — Our audit firm and our network have not performed any pro- hibited services and our audit firm has remained independ- ent from the group during the performance of our mandate. — The fees for the additional non-audit services compatible with the statutory audit, as defined in article : of the Code of companies and associations, have been properly disclosed and disaggregated in the notes to the consoli- dated financial statements. Single European Electronic Format (ESEF) In accordance with the draft standard on the audit of the com- pliance of the financial statements with the Single European Electronic Format (“ESEF”), we have also performed the audit of the compliance of the ESEF format and of the tagging with the technical regulatory standards as defined by the European Delegated Regulation No. / of December (“Del- egated Regulation”). The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (“digital consolidated financial statements”) included in the annual financial report. Our responsibility is to obtain sufficient and appropriate evi- dence to conclude that the format and the tagging of the dig- ital consolidated financial statements comply, in all material respects, with the ESEF requirements as stipulated by the Del- egated Regulation. Based on our work, in our opinion, the format and the tag- ging of information in the official version of the digital consol- idated financial statements included in the annual financial report of VGP NV as of December are, in all material respects, prepared in accordance with the ESEF requirements as stipulated by the Delegated Regulation. Other statements — This report is consistent with our additional report to the audit committee referred to in article of Regulation (EU) No /. Signed at Antwerp. The statutory auditor Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL Represented by Kathleen De Brabander PAGE 392 VGP NV ANNUAL REPORT 2023 GLOSSARY OF TERMS Glossary of terms Allianz or Allianz Real Estate Means, in relation to (i) the First Joint Venture, Allianz AZ Finance VII Luxembourg S.A., SAS Allianz Logistique S.A.S.U. and Allianz Benelux SA (all affiliated companies of Allianz Real Estate GmbH) taken together; (ii) the Second Joint Venture, Allianz AZ Finance VII Luxembourg S.A., and (iii) the Third Joint Venture, Allianz Pensionskasse AG, Allianz Versorgungskasse Versicherungsverein a.G., Allianz Lebensversicherungs-AG and Allianz Lebensversicherungs AG. Allianz Joint Ventures or AZ JV Means the First Joint Venture, the Second Joint Venture and the Third Joint Venture taken together. AZ JVA(s) or Allianz Joint Venture Agreement(s) Means either and each of (i) the joint venture agreement made between Allianz and VGP NV in relation to the First Joint Venture; (ii) the joint venture agreement made between Allianz and VGP NV in relation to the Second Joint Venture; and (iii) the joint venture agreement made between Allianz and VGP Logistics S.àr.l. (a % subsidiary of VGP NV) in relation to the Third Joint Venture. Annualized committed leases or annualized rent income The annualized committed leases or the committed annualized rent income represents the annualized rent income generated or to be generated by executed lease– and future lease agreements. Associates Means either and each of the subsidiaries of the First Joint Venture or Fourth Joint Venture in which VGP NV holds a direct .% (.%) participation, Belgian Code of Companies and Associations means the Belgian Code of Companies and Associations dated March (Wetboek van vennootschappen en verenigingen/Code des sociétés et associations), as amended or restated from time to time. Belgian Corporate Governance Code Drawn up by the Corporate Governance Commission and including the governance practices and provisions to be met by companies under Belgian Law which shares are listed on a regulated market (the“ Code”). The Belgian Corporate Governance Code is available online at HYPERLINK www.corporate- governance committee.be.; www.corporategovernance- committee.be. Break First option to terminate a lease. Cash available for debt service Means for the covenant calculation of the Net debt service ratio, the available cash and cash equivalents of the group (i.e. excluding restricted cash) increased by the earnings before interests and depreciations and amortizations of VGP NV. Contractual rent The gross rent as contractually agreed in the lease on the date of signing. Dealing Code The code of conduct containing rules that must be complied with by the members of the Board of Directors, the members of executive management, and all employees of the VGP Group, who by virtue of their position, possess information they know or should know is insider information. Derivatives As a borrower, VGP wishes to protect itself from any rise in interest rates. This interest rate risk can be partially hedged by the use of derivatives (such as interest rate swap contracts). Development Joint Ventures Means either and each of (i) the joint venture agreement made between Roozen and VGP in relation to the LPM Joint Venture; (ii) the joint venture agreement made between Revikon and VGP in relation to the VGP Park Siegen Joint Venture; and (iii) the joint venture agreement made between VUSA and the VGP in relation to the VGP Park Belartza Joint Venture Development JVA(s) Means either and each of (i) the joint venture agreement made between Roozen and VGP in relation to the LPM Joint Venture; (ii) the joint venture agreement made between Revikon and VGP in relation to the VGP Park Siegen Joint Venture; and (iii) the joint venture agreement made between VUSA and the VGP in relation to the VGP Park Belartza Joint Venture Discounted cash flow This is a valuation method based on a detailed projected revenue flow that is discounted to a net current value at a given discount rate based on the risk of the assets to be valued. EPRA The European Public Real Estate Association, a real estate industry body, which has issued Best Practices Recommendations Guidelines in order to provide consistency and transparency in real estate reporting across Europe. EPRA Net Reinstatement Value (EPRA NRV) Basic NAV adjusted for fair valuation of derivatives; deferred tax and transaction costs (real estate transfer tax and purchaser’s costs). EPRA Net Tangible Assets (EPRA NTA) Basic NAV adjusted for fair valuation of derivatives, deferred taxes and Intangible fixed assets. This metric includes the transaction costs (real estate transfer tax and purchaser’s costs). EPRA Net Disposal Value (EPRA NDV) Basic NAV adjusted for fair valuation of fixed interest rate debt. EPRA Earnings Earnings from operational activities, i.e. (i) excluding changes in value of investment properties; (ii) result on disposal of investment properties, development properties held for investment and other interests; (iii) fair value of derivatives; (iv) deferred taxes and (v) acquisition costs on share deals and non-controlling joint venture interests. FINANCIAL REVIEW 2023 PAGE 393GLOSSARY OF TERMS EPRA Net Initial Yield (NIY) Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs. EPRA “Topped-up” NIY This metric incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents). EPRA Vacancy Rate Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio. EPRA Cost Ratio Administrative and operating costs (including and excluding costs of direct vacancy) divided by gross rental income. EPRA Loan to value (LTV) ratio The proportion of the gross asset value of Investment property funded by net debt. Equivalent yield (true and nominal) Is a weighted average of the net initial yield and reversionary yield and represents the return a property will produce based upon the timing of the income received. The true equivalent yield assumes rents are received quarterly in advance. The nominal equivalent assumes rents are received annually in arrears. Estimated rental value (“ERV”) Estimated rental value (ERV) is the external valuers’ opinion as to the open market rent which, on the date of valuation, could reasonably be expected to be obtained on a new letting or rent review of a property. Exit yield Is the capitalisation rate applied to the net income at the end of the discounted cash flow model period to provide a capital value or exit value which an entity expects to obtain for an asset after this period. Fair value The fair value is defined in IAS as the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction. In addition, market value must reflect current rental agreements, the reasonable assumptions in respect of potential rental income and expected costs. First Joint Venture Means VGP European Logistics S.àr.l., the : joint venture between VGP and Allianz, also referred to as “Rheingold” Fourth Joint Venture Means VGP European Logistics S.àr.l., the : joint venture between VGP and Allianz, also referred to as “Europa” Fifth Joint Venture Means the : joint venture between Deka Immobilien, through their funds “Deka Immobilien Europa” and “Deka Westinvest InterSelect” and VGP. Grekon Joint Venture or Grekon Means Grekon GmbH, the : joint venture between VGP and Revikon GmbH, part of Weimar Gruppe Gearing ratio Is a ratio calculated as consolidated net financial debt divided by total equity and liabilities or total assets. IAS/IFRS International Accounting Standards/ International Financial Reporting Standards. The international accounting standards drawn up by the International Accounting Standards Board (IASB), for the preparation of financial statements. Indexation The rent is contractually adjusted annually on the anniversary of the contract effective date on the basis of the inflation rate according to a benchmark index in each specific country. Insider information Any information not publicly disclosed that is accurate and directly or indi- rectly relates to one or more issuers of financial instruments or one or more financial instruments and that, if it were publicly disclosed, could significantly affect the rice of those financial instru- ments (of financial instruments derived from them). Investment value The value of the portfolio, including transaction costs, as appraised by independent property experts. Joint Ventures Means either and each of (i) the First Joint Venture; (ii) the Second Joint Venture, (iii) the Third Joint Venture, (iv) the LPM Joint Venture, (v) the Grekon Joint Venture; and (vi) the Fifth Joint Venture . LPM Joint Venture or LPM Means LPM Holding B.V., the : joint venture between VGP and Roozen Landgoederen Beheer. LPM JVA or LPM Joint Venture Agreement Means the joint venture agreement made between Roozen Landgoederen Beheer and VGP NV in relation to the LPM Joint Venture. Lease expiry date The date on which a lease can be cancelled. LTV Means Loan-to-value and is determined by dividing the net financial debt by Investment property Market capitalisation Closing stock market price multiplied by the total number of outstanding shares on that date. Net asset value The value of the total assets minus the value of the total liabilities. PAGE 394 VGP NV ANNUAL REPORT 2023 GLOSSARY OF TERMS Net debt service Means for the covenant calculation of the Net debt service ratio, the sum of the Net finance charges and capital repayments on financial debt of the year. Net finance charges Means for the covenant calculation of the Interest cover ratio, the net financial result of the group corrected for the capitalized interests. Net financial debt Total financial debt minus cash and cash equivalents. Net Initial Yield Is the annualized rents generated by an asset, after the deduction of an estimate of annual recurring irrecoverable property outgoings, expressed as a percentage of the asset valuation (after notional purchaser’s costs). Occupancy rate The occupancy rate is calculated by dividing the total leased out lettable area (m²) by the total lettable area (m²) including any vacant area (m²). Prime yield The ratio between the (initial) contractual rent of a purchased property and the acquisition value at a prime location. Project management Management of building and renovation projects. VGP employs an internal team of project managers who work exclusively for the company. Property expert Independent property expert responsible for appraising the property portfolio. Property portfolio The property investments, including property for lease, property investments in development for lease, assets held for sale and development land. Reversionary Yield Is the anticipated yield, which the initial yield will rise to once the rent reaches the ERV and when the property is fully let. It is calculated by dividing the ERV by the valuation. Roozen or Roozen Landgoederen Beheer Means in relation to the LPM Joint Venture, Roozen Landgoederen Beheer B.V. Second Joint Venture Means VGP European Logistics S.àr.l., the : joint venture between VGP and Allianz, also referred to as “Aurora” Sixth Joint Venture Means : Joint Venture with AREIM Pan-European Logistics Fund (D) AB, or Areim, also referred to as “Saga” Take-up Letting of rental spaces to users in the rental market during a specific period. Third Joint Venture Means VGP Park München Gmbh, the : joint venture between VGP and Allianz. VGP European Logistics or VGP European Logistics joint venture Means the First Joint Venture. VGP European Logistics or VGP European Logistics joint venture Means the Second Joint Venture. VGP Park Moerdijk Means the LPM Joint Venture. VGP Park Belartza Joint Venture Means Belartza Alto SXXI, S.L., a : joint venture between VGP en VUSA VGP Park München or VGP Park München joint venture Means the Third Joint Venture. VGP Park Siegen Joint Venture Means Grekon GmbH, the : joint venture between VGP and Revikon. Vusa Means Valeriano Urrutikoetxea, S.L.U.; Galdakarra XXI, S.L.; Saibigain XXI, S.L.U.; and Belartza Garaia, S.L.U.; Weighted average term of financial debt The weighted average term of financial debt is the sum of the current financial debt (loans and bonds) multiplied by the term remaining up to the final maturity of the respective loans and bonds divided by the total outstanding financial debt. Weighted average term of the leases (“WAULT”) The weighted average term of leases is the sum of the (current rent and committed rent for each lease multiplied by the term remaining up to the final maturity of these leases) divided by the total current rent and committed rent of the portfolio Weighted average yield The sum of the contractual rent of a property portfolio to the acquisition price of such property portfolio. FINANCIAL REVIEW 2023 PAGE 395STATEMENT OF RESPONSIBLE PERSONS Statement of responsible persons The undersigned declare that, to the best of their knowledge: — The annual accounts, which are in line with the standards applicable for annual accounts, give a true and fair view of the capital, the financial situation and the results of the Company and the consolidated subsidiaries; — The annual report gives a true and fair view of the development and the results of the Com- pany and of the position of the Company and the consolidated companies, as well as a description of the main risks and uncertainties they are faced with. Jan Van Geet as permanent representative of Jan Van Geet s.r.o. CEO Piet Van Geet as permanent representative of Urraco BV CFO Disclaimer This report may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. VGP is providing the information in this report as of this date and does not undertake any obligation to update any forward-looking statements contained in this report in light of new information, future events or otherwise. The information in this report does not constitute an offer to sell or an invitation to buy securities in VGP or an invitation or inducement to engage in any other investment activities. VGP disclaims any liability for statements made or published by third par- ties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other report or press release issued by VGP. PAGE 396 VGP NV ANNUAL REPORT 2023 Notes VGP NV Generaal Lemanstraat 55 box 4 2018 Antwerp Belgium tel +32 3 289 14 30 fax +32 3 289 14 39 e-mail [email protected] www.vgpparks.eu Follow us on
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