Wereldhave N.V. — Management Reports 2009

Oct 28, 2009

Strategy key points

• Strategy aimed at value creation and distribution of risks
• Diversification of investments across nine countries/regions and three sectors
• Steady growth of the share of shopping centres in the portfolio
• Phasing-out of logistics buildings and buildings with a value below EUR 20 million
• Operational scale per country/region at least EUR 400 million
• Specialisation by sector per country/region

Financial objectives

• Stable growth of direct results and dividend
• Payout ratio of 85-95% of direct results
• Solid balance sheet ratios; solvency within the margin of 55-65%

THE HAGUE – Wereldhave N.V., an internationally diversified property investment company, announces a rebalancing of its strategy today. Under new management, appointed in mid-2009, Wereldhave will continue to focus on a stable growth of direct results and dividends. Value creation and a distribution of risks are key items in the refined strategy. Wereldhave spreads its investments across nine countries/regions (six European countries and three regions in the United States) and three sectors (shopping centres, offices and residential buildings). The exposure to shopping centres in the total portfolio will be enhanced. Logistics property and property with a value of less than EUR 20 million will ultimately be divested.

Hans Pars, chairman of the Management Board:

"Wereldhave is a financially strong company and is well-prepared to take advantage of opportunities in the market. We aim for a stable growth of direct results and of dividends by expanding our portfolio, particularly in shopping centres and offices. Wereldhave's strategy is still the right choice, also under the current market conditions, but we will shift emphasis. It is important to note that we want to have solid positions in all countries. We will gradually divest projects smaller than EUR 20 million, as well as our logistics buildings. We wish to expand the share of shopping centres from 45% to 50-60% of our portfolio. We have a specific approach for every sector in which we operate, aimed at creating value for our shareholders."

Wereldhave is the only major European property investment company operating in both Europe and the United States. Wereldhave has operations in six countries in Europe and three regions in the United States. Real estate is a local business. This means that local expertise is crucial for being successful as a property investment company. With its own local staff, Wereldhave is able to maintain direct contact with tenants, without having to bridge any cultural differences. This ensures that Wereldhave is more quickly aware of the current needs of tenants and has access to up-to-date market information. Knowledge of rapidly changing user requirements is also used for development projects.

Value creation

Each of the various property sectors has its own dynamics. Operating in several sectors, Wereldhave has better opportunities to create value. Wereldhave aims to create value for its shareholders by:

• Active management of shopping centres by its own experts in order to achieve rental growth;
• Sound timing in the purchase and sale of office buildings and residential projects, based on in-house own market analyses;
• The development of projects at cost based on in-house knowledge and experience.

Active management

In shopping centres, there is a relationship between the tenant's turnover and the value of the property. This makes it possible to create value by actively managing the property. This allows the tenant's turnover to increase, creating opportunities to raise rents. Due to the close relationship between the tenant and the property, the occupancy rate of good shopping centres is very high. This way, shopping centres contribute to the continuity of results. In-house shopping centre management is a key element of Wereldhave's strategy.

Sound timing

The office and residential markets are dominated by tenants who regard the property as a commodity and consider all available alternatives at the end of the lease. Rental growth depends on fluctuations in supply and demand, which cannot be controlled by property owners. Office markets are generally more volatile than residential markets. Although active management is important for operating results, the decisive factor for success in both markets is the timing of purchases and sales. Attractive returns on investment can be generated by using the economic cycles in the purchase and sale of offices and residential real estate. In-house market analyses and a local presence support this policy.

In-house development

The third method of value creation available to Wereldhave is the development of property for its own portfolio. This allows Wereldhave to keep control over the timing of investment, safeguard the property's quality and add the property at cost to the portfolio. Wereldhave thus acquires projects at competitive prices, at a quality that meets the latest user requirements and with a timing that effectively responds to current market conditions.

In principle, Wereldhave aims for a portfolio with a 50-60% share in shopping centres (currently 45%) and a 30-45% share in offices and residential projects. Annually development projects to a value of 5-10% of the balance sheet total should be added to the investment portfolio. In the next few years, the composition will gradually move in this direction.

Distribution of risks

Wereldhave aims to distribute the risks of the real estate market, which is cyclical by nature, by spreading the portfolio over the European mainland, the United Kingdom and the United States as well as by investing in several real estate sectors, each with their own pace of development. Country and sector spread also creates a diversification of tenants, which further spreads risks. At the same time, this spread offers opportunities, as there is always a market with attractive investment opportunities.

Geographical spread

Wereldhave operates in a number of large, stable and professional real estate markets on both sides of the North Atlantic. The European property investments are located in the Netherlands, Belgium, Finland, France, Spain and the United Kingdom. In the United States, Wereldhave operates in three core markets: the East Coast (Washington DC), Texas and the West Coast (San Diego). Wereldhave sees plenty of opportunities for expansion in the countries where it currently operates. It will therefore not add any new countries to its portfolio for the time being.

Sector spread

In each country or region, Wereldhave selects the real estate sector where it wishes to operate. This means that the sectors may vary according to country or region. Wereldhave's principle is that the size of the portfolio is at least EUR 400 million in each country/region. This size and choice of sector ensure that Wereldhave's local operational scale is large enough to attract and retain knowledge and experience. The minimum threshold per country will result in changes to the portfolio's future composition. In view of their management intensity, buildings with a value below EUR 20 million will gradually be divested. Wereldhave will also ultimately sell the logistics buildings in the portfolio.

Objectives

Wereldhave aims to achieve stable growth in the direct result per share and dividend, with a payout ratio of 85-95%. Wereldhave has solid capital ratios with a current solvency rate of approximately 69%. This allows Wereldhave to take advantage of attractive purchasing opportunities that could arise in the upcoming period. In view of the portfolio quality, the Management Board deems it acceptable to finance the growth by lowering the solvency to 55-65%.

It is Wereldhave's ambition to expand the portfolio, at first mainly by applying the principle of an operational scale of EUR 400 million per country/region. In each country, Wereldhave will determine a sector in which it wishes to operate. Wereldhave aims to ultimately increase the share in shopping centre to 50-60% of the total portfolio. In addition, Wereldhave wishes to invest in a number of selected office markets.

Market and vision

Although few real estate transactions were made this year, the prevailing market opinion is that returns on real estate have increased and, consequently, that prices have fallen. In combination with falling market rents, Wereldhave takes into account the possibility of a further decrease in property values. Opportunities could present themselves when highly leveraged parties are confronted with higher interest expenses as a result of refinancing and are forced to sell their property.

Wereldhave will assume for now that the supply of first-class property will continue to be limited, which means that first-class property will experience a decrease in value to a lesser extent than second-class property. The decrease in value of office buildings will continue longer than the decrease in value of retail property, since the rents of first-class retail space are likely to be less volatile.

The financial crisis on the letting markets of both office buildings and shopping centres has highlighted the dividing line between first-class and second-class property. Wereldhave's strategy, which focuses on the active management of strong shopping centres, the purchase and timely sale of offices and the development of new real estate that meets the latest requirements, is tailored to the current turbulent market situation.

By using active management to improve the portfolio quality and by regularly adding new real estate to the portfolio and selling older property, Wereldhave keeps the marketability of its portfolio up-to-date, also under today's market conditions.

Wereldhave aims to invest in high-quality real estate that meets the latest

sustainability requirements. Long-term sustainability largely depends on the property location. Locations with good public transport facilities and housing many facilities such as shops and restaurants will usually continue to be attractive to tenants for a longer period of time. High-quality real estate attracts tenants who are willing and able to pay a premium in return for permanent quality. Wereldhave limits risks by investing in high-quality real estate.

About Wereldhave

Established in 1930, Wereldhave is a property investment company with an internationally diversified investment portfolio of approximately EUR 2.6 billion. Wereldhave is noted for its value creation and distribution of risks. It creates value by actively managing shopping centres, sound timing of purchases and sales of offices and residential property and developing property at cost for its own portfolio. Wereldhave's activities are spread across six European countries – the Netherlands, Belgium, Finland, France, Spain and the United Kingdom – and three regions in the United States. Wereldhave shares are traded on the NYSE Euronext stock exchanges in Amsterdam and Paris.

The results up to and including the third quarter 2009 of Wereldhave N.V. will be published at November 10, 2009, before trading hours. In a conference call to be held that day at 14.00 h CET (to be followed by audiocast at www.wereldhave.com) an explanation to the results will be given. Analysts and institutional investors who wish to participate in the conference call should apply at investor.relations@wereldhave.com ultimately November 3, 2009.

For further information:

Information for analysts:

Wereldhave N.V. Richard W. Beentjes Tel. + 31 70 346 93 25 Wereldhave N.V. Charles F. Bloema Tel. + 31 70 346 93 25

www.wereldhave.com