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Interim report

per 31 March 2013NSI N.V.

Report of the Management Board

NSI: further improvement of occupancy rate

Financial highlights Financial highlights Financial highlights Financial highlights

• Direct investment result of €13.4 million in Q1 2013, €0.20 per share

• Total investment result amounted to -€21.2 million in Q1 2013, consisting of €13.4million direct investment result and

-€34.6 million indirect investment result.

• Revaluations of the real estate portfolio amounted to -€42.4 million.

• Occupancy total portfolio improved to 81.3% as per 31 March 2013 from 81.1% as per year end 2012

• Second consecutive quarter of occupancy improvement in Dutch office portfolio from 71.3% as per year 2012 to 72.1% as per

31 March 2013

• NSI realized approx. 3% of the total take up in the Dutch office market, while NSI's portfolio represents 1.3% of the total

Dutch office market.

• Swiss retail center HertiZentrum in Zug sold at book value and semi-industrial asset Kortenberg (Belgium) at 15% above

book value (as per 31 December 2012); transfer of both assets will take place by end of May

• Loan to value slightly decreased to 58.0% on 31 March 2013 from 58.2% as per year end 2012

• AGM adopted new dividend policy

• Interim dividend Q1 2013 of €0.10 per share in cash, in line with the adopted new dividend policy

• NSI is highly committed to reduce its LtV to below 55%

Johan Buijs, CEO of NSI:

“The first quarter of 2013 shows the second consecutive quarter of an occupancy rate improvement in the Dutch office portfolio, which is

expected to improve further over the year. Our proactive and integral approach are fundamental in this. Thanks to the ongoing and active

dialogue with our tenants and the cooperation between our commercial and technical teams, we are able to propose new and existing

tenants a compelling offer. With this approach, NSI again significantly outperformed the market in terms of take up and was NSI the

fourth player in the market, measured by the volume of leasing transactions in square meters, in 2012. The retail portfolio showed a rather

stable development, taking into account the sale of two nearly fully let retail centers, despite the challenging retail climate.

As previously announced, NSI is strongly committed to reduce its LtV to below 55%. The AGMs approval of the dividend policy for a

sustainable dividend is an important step in this respect.”

31 March 2013

� 2

Operational highlights

Retail NL (27% of portfolio)

• Occupancy rate at a solid 92.0%, a decrease from 92.5% (year end 2012), partly due to sale two of (nearly) fully let shopping

centres.

• The retention rate remained stable at 76%.

Offices NL (38%of portfolio)

• Further improvement occupancy to 72.1% in Q1 2013 from 71.3% at year end 2012. Improving trend is expected to continue

over the year 2013.

• NSI ranked fourth in the Dutch market in total leasing transaction volume in 2012

• NSI realized a take up level of 7,570 sqm, representing approx. 3% of the total take up in the Dutch office market, while

NSI’s portfolio represents 1.3% of the Dutch market.

• Transformation of HNK Hoofddorp and Utrecht commenced and expected to be finalized in the autumn of 2013.� • The retention rate (78%) increased significantly compared with 2012 (47%), reflecting NSI’s ability to anticipate tenants’

needs and enhanced control over the former VNOI portfolio.

Belgium (29%of portfolio)

• Sale of semi-industrial asset in Kortenberg 15% above book value

• Occupancy decreased to 85% due to sale of semi-industrial asset

• Increase in leasing transactions in first quarter compared with first quarter of 2012

Other (6% of portfolio)

• Swiss retail center HertiZentrum sold, transfer expected end of May

• The sale of the last remaining Swiss asset (2,267 sqm office center in Fribourg) is in progress.

31 March 2013

� 3

Financial key figures

Q1 2013 Q4 2012 Q1 2012 FY 2012

Results(x €1,000)

Gross rental income 37,075 40,317*) 41,499 160,545

Net rental income 31,692 34,292 35,079 137,334

Direct investment result 13,415 14,958 16,181 63,405

Indirect investment result - 34,573 - 42,226 - 33,302 - 166,522

Result after taks - 21,158 - 27,268 - 17,121 - 103,117

Occupancy rate (in %) 81.3 81.1 82.2 81.1

Loan-to-value 58.0 58.2 57.3 58.2

Issued share capital (in shares)

Ordinary shares with a nominal value of

€0.46 on 31 March

68,201,841 68,201,841 60,225,539 68,201,841

Average number of outstanding ordinary

shares during period under review

68,201,841 67,095,658 60,231,244 64,288,818

Data per average outstanding ordinary shares

(x €1)

Direct investment result 0.20 0.22 0.27 0.99

Indirect investment result - 0.51 - 0.63 - 0.55 - 2.59

Total investment result - 0.31 - 0.41 - 0.28 - 1.60

Data per average outstanding ordinary share

(x €1)

(Interim-) dividend 0.10 0.11 0.26 0.86

Net asset value 9.47 9.78 12.68 9.78

Net asset value according to EPRA 10.52 10.95 13.83 10.95

� � � � �*) Including one-off rental income of €2.0 million � � �

31 March 2013

� 4

Outlook 2013

The economic environment remains challenging in 2013. The macro-economic indicators are pointing towards negative

economic growth in the Netherlands in 2013, and no recovery until 2014. In this environment, the distinctive and

operationally strong approach of NSIs remains, even more, crucial.

In 2013, NSI will specifically focus on:

Organisation

• NSI expands its Board of Management with a COO to further strengthen its active and innovative management of the

portfolio, in line with its strategic focus on operational excellence and creating a ‘best in class’ leasing platform. NSI

announced its intention to appoint Mark Siezen as COO as per 1 July 2013, subject to a yet to convene Extraordinary

General Meeting.

Offices:

• Further improvement of the occupancy in the office portfolio over the year in 2013. As a result of proactive management of

the expiration calendar in the previous years, only 11% (in value) of the contracts can expire in 2013, which will support the

improvement of the occupancy level.

• Further roll out of the HNK concept. NSI has commenced the conversion of two assets; in Utrecht and in Hoofddorp, to be

finalized in autumn 2013. The planned investment is approx. €2.3million.

• Through different business concepts and propositions, NSI aims to sustain the effective rent level, or even increase its

effective rent level by providing additional services and flexibility, like in the HNK concept.

Retail:

• NSI will continue to actively pursue the right mix in branches, including a further increase of the presence of

supermarkets.

Strategic focus:

• NSI will continue its disposal strategy of non-core assets and assets of which the value potential under NSI’s management

has been optimised. The sale of the last Swiss asset is in progress. Proceeds of asset sales will be used to strengthen the

balance sheet.

�Financing:

• NSI continues to work diligently on its refinancing requirements, including refinancing €186.3 million of debt that will

expire in 2013. NSIs largest syndicated loan facility (€243 million outstanding debt), maturing in 2013 and 2014 and

reflecting the majority of the debt maturing in 2013, is in an advanced stage of negotiation. In general, bank margins and

financings costs are increasing which will translate into higher financing costs in 2013 compared to 2012.

• NSI is highly committed to reduce its LtV to below 55% NSI expects for 2013 that the occupancy will continue to improve over the year, which will however not directly translate into higher financial results. Moreover, NSI will face higher financing costs and outflow of rental income of assets sold. As previously announced, NSI expects a direct result for the full year 2013 in the range of €50 to €56 million

31 March 2013

� 5

Financial report

Total investment result

The total investment result, consisting of the sum of the direct and indirect investment results amounted to

-€21.2 million in Q1 2013 (Q42012: -€27.3 million, Q1 2012: -€17.1 million).

Direct investment result

NSI uses the direct investment result (rental income less operating costs, service costs not recharged, administrative costs

and financing costs) as a measure for the performance of its core business and for determining its dividend.

The direct investment result amounted to €13.4 million in Q1 2013 (Q4 2012: €15.0 million Q1 2012: €16.2 million). Gross

rental income in Q1 2013 amounted to €37.1 million compared with €40.3 million in Q4 2012 (Q1 2012: €41.5 million), mainly

as a result of loss of gross rental income of disposed assets and the one-off income of €2.0 million in Q4 2012.

The occupancy rate of the total portfolio increased to 81.3% on 31 March 2013 compared to 81.1 % on 31 December 2012 (31

March 2012: 82.2%). The occupancy in the Dutch office portfolio continued to improve from 71.3% to 72.1% (31 March 2012:

73.4%). The occupancy level of the retail portfolio decreased from 92.5% as per 31 December 2012 to 92.0% on 31 March 2013

(31 March 2012: 95.1%), partly due to the disposal of two (nearly) fully let shopping centres.

Leasing activities

Offices NL The second consecutive quarter of improving occupancy in the Dutch office portfolio demonstrates that the occupancy level is gradually bottoming out. The expiration calendar, in which 11% of the contracts in the Dutch office portfolio could expire in the remaining months of 2013 compared to the annualized 2012 level of 23%, supports this.

The table below shows the development of occupancy in square meters. In financial reporting, NSI reports the financial

occupancy, which improved from 71.3% at year end 2012 to 72.1% as per 31 March 2013.

Leased1 January 2013 Leased in period Vacated in period Leased per 31 March 2013 Portfolio 31 March 2013

sqm % sqm sqm sqm % sqm

434,639 68% 18,131 21,868 429,096 68% 627,512

Leased in period (table above) are leases that came into effect in Q1 2013. New lettings are leases that have been signed in Q1 2013. NSI signed 7.570 sqm of new lettings (take up) in its Dutch office portfolio in the first quarter of 2013, representing approximately 3% of the total uptake in the Dutch office market. NSI’s portfolio represents 1.3% of this market, indicating that NSI has outperformed the market.

Recent transactions include a lease agreement with ForeyeT for approx. 860 sqm office/ 1,100 sqm industrial space in Capelle

aan den IJssel and with Ziut for approx. 2,300 office sqm/ 600 sqm industrial space.

Furthermore, NSI has let the premises where its own organisation is currently located (1,000 sqm in Hoofddorp) to a new

tenant (BuyitDirect.com). Hoofddorp is an area with high vacancy levels. This transaction shows that NSI is capable of

creating office locations that are eminently lettable, due to having the right market and product knowledge in place. NSI plans

to relocate to another property in its portfolio in order to add value in a similar way.

31 March 2013

� 6

Furthermore, NSI continued its focus on (proactively) renewing contracts. The proactive approach and continuous dialogue with tenants create a more balanced negotiation momentum and a well spread expiration calendar. NSI renewed leases concerning 38,915 sqm in the first quarter of 2013. In 2012, NSI ranked fourth in the Dutch office market, measured on total volume leasing transactions in sqm.

Retention:

Expiry sqm Q1 2013 Renewed sqm Retention

50,021 38,915 78%

The retention rate (78%) increased significantly compared with 2012 (47%), reflecting NSI’s ability to anticipate tenants’ needs and enhanced control over the former VNOI portfolio. In addition, the retention rate in 2012 was impacted by the expiration of a number of large contracts. The effective rent level of new leases, taking incentives into account, amounted to €104 per sqm in the first quarter of 2013 (2012; €120 per sqm), which does not indicate a trend as the average level of new leases in a quarter varies as a result of type of contract, property and region. The first quarter included two relatively large transactions in outer regions (in cities Heerlen and Deventer). The average effective rent level over the total office portfolio amounted to €146 per sqm (2012: €148 per sqm). The average lease duration of the portfolio was 3.8 years as per 31 March 2013.

Retail NL

The occupancy of the retail portfolio decreased to 92.0% compared to 92.5% as per 31 December 2012, partly due to the disposal

of two (nearly) fully let shopping centres Mereveldplein (97%) and Rozemarijndonk (100%).

The table below shows the development of occupancy in square meters. In financial reporting, NSI reports the financial

occupancy.

�Portfolio 1

January 2013

Leased per 1 January

2013

Leased in

period

Vacated in period Portfolio

31 March2013

Leased per 31 March 2013

Sqm Sqm % Sqm Sqm Sqm Sqm %

292,193 271,953 93.0% 3,658 6,881 284,687 261,401 91.8%

�

Expiry sqm Q1 2013 Renewed sqm Retention

20,768 15,699 76%

The retention rate remained stable at 76%.

The retail portfolio is characterized by a strong mix with a approx. 22% share of supermarkets. Supermarkets are generally less

sensitive to economic circumstances, which could also be noticed in the first quarter of 2013.

Take up in the retail portfolio in Q1 2013 consisted of a number smaller transactions. Renewals included contracts with a

number of supermarkets.

The average effective rent level over the total portfolio amounted to €152 per sqm (2012: €153 per sqm). The average lease duration of the retail portfolio was 3.6 as per 31 March 2013.

Belgium

The occupancy of the Belgian portfolio slightly decreased from 86% to 85% due to the sale of semi-industrial asset in

Kortenberg (transfer in May).

The number of leasing transactions increased in the first quarter of 2013 compared with the first quarter of 2012.

31 March 2013

� 7

Rental income in the Netherlands, Belgium en Switzerland x €1,000

Q1 2013 Q1 2012

The Netherlands

Gross rental income 26,422 29,122

Net rental income 21,240 23,454

Switzerland

Gross rental income 600 1,954

Net rental income 504 1,419

Belgium



Gross rental income Q1 2012 up to Q1 2013 Gross rental income by segment in the Netherlands, Belgium en Switzerland:

x €1,000 Q1 2012 Purchases Disposals Organic growth Q1 2013

the Netherlands

Offices 16,840 - - 262 - 1,980 14,598

Retail 10,008 - - 299 308 10,017

Industrial 2,105 - - 3 - 383 1,719

Residential 169 - - 73 - 8 88

Total 29,122 - - 637 - 2,063 26,422

Switzerland

Offices 822 - - 687 - 33 102

Retail 1,132 - - 646 12 498

Total 1,954 - - 1,333 - 21 600

Belgium

Offices 6,797 - - - 531 6,266

Industrial 3,626 - - 229 390 3,787

Total 10,423 - - 229 - 141 10,053

Total NSI 41,499 - - 2,199 - 2,225 37,075

NSI continued its focus on strict cost discipline. Operating costs amounted to €4,2 million in Q1 2013 (Q4 2012: €4.9 million;

Q1 2012: €4.9 million). Letting costs were lower mainly due to one-off compensation fees paid by tenants in Belgium.

Administrative costs decreased to €1.5 million (Q4 2012: €1.9 million, Q1 2012: 1.8 million). NSI has structurally reduced the

administrative costs; in the quarterly comparison Q4 2012 involved a number of non-recurring costs (approx. €0.4 million).

Financing costs decreased in Q1 2013 to €14.0 million from €14.5 in Q4 2012 (Q1 2012: €14.0 million), despite higher margins

and financing costs, offset by lower Euribor rates and hedging costs and a reduction in outstanding loans (€43 million).

Indirect investment result

The indirect investment result amounted to €34.6 million negative (Q4 2012: -€42.2 million, Q1 2012: -€32.8 million). The

indirect investment result consists of both realized revaluations (sales results on investments sold) and unrealized

revaluations. These unrealized revaluations concern the changes in the market value of the property portfolio (-€42.4 million)

and the derivatives (€8.3 million).

31 March 2013

� 8

The net result on sales on investments include 6 sold properties. Sold properties in the Netherlands include retail property

Mereveldplein (including residential units located above) in de Meern, retail property Rozemarijndonk in Spijkenisse, office

properties Oudezijds Voorburgwal in Amsterdam and Parklaan in Eindhoven and industrial property Archimedesbaan in

Nieuwegein. On average, the Dutch properties were sold 2% below book value. In Belgium the semi-industrial property

‘Guldendelle’ in Kortenberg has been sold at 15% above book value (delivery scheduled end of May).

The negative value of derivatives decreased on balance due to continuing low interest swap rates in combination with a

decreased maturity of the derivative instruments.

NSI utilizes interest-rate hedging instruments exclusively to limit operational interest rate risks. The nominal value of

derivatives is lower than nominal values of interest-bearing debts. NSI is not exposed to margin calls. The value of the

financial derivatives automatically reverts to zero at the end of the duration of these instruments.

The downward revaluation of the Dutch portfolio amounted to €40.7 million in Q1 2013 (Q4 2012-€32.5 million, Q1 2012:

-€23.8 million). The downward revaluation in the Dutch office portfolio was €33.3 million. Despite stabilizing market rents

and slightly improving occupancy rates, yields will remain under pressure due to valuation of vacancy and lack of transactions

as market evidence. The Belgian and Dutch assets that have been sold, but not yet transferred, have been reclassified as held

for sale. The value of the Belgian portfolio decreased by -€1.7 million (Q4: -€13.5 million).

Revaluation results of properties in the Netherlands (x €1,000)

Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 2011* 2010* 2009* 2008*

Offices - 33,313 - 23,264 - 32,583 - 25,434 -20,809 - 31,400 - 21,435 - 37,875 - 44,871

Retail - 5,296 - 6,752 - 2,893 - 3,951 - 2,828 - 622 - 1,179 - 7,920 7,770

Industrial - 1,980 - 2,467 - 2,145 - 1,285 - 197 - 1,351 - 2,416 - 5,504 - 4,367

Residential - 85 - - 25 - 125 - 5 135 - 1,747 44 - 248

Total -40,674 - 32,483 - 37,646 - 30,795 - 23,839 - 33,238 - 26,777 - 51,255 - 41,716

*) In accordance with IFRS the figures prior to the merger with VNOI (over the period 2008- first three quarters of 2011) have

not been amended and represent only NSI. As of the fourth quarter of 2011 all results of NSI and VNOI are fully consolidated.

Revaluation results of properties in Belgium (x €1,000)

Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 2011

Offices - 1,913 - 15,891 - 2.847 - 3.587 426 2,555

Industrial 198 2,420 2,529 1,872 1,125 - 6.126

Total - 1,715 - 13,471 - 318 - 1.715 1,551 - 3.571

Revaluation results of properties in Switzerland (x €1,000)

� �� Offices - 22 - 161 3 - - 2.559 208

Retail - - 1,782 6 - - 1.734 - 1.152

Total - 22 - 1,943 9 - - 4.293 - 944

31 March 2013

� 9

Yields in % at 31 March 2013 and 31 December 2012

gross yield*

31-03-2013

net yield**

31-03-2013

gross yield*

31-12-2012

net yield**

31-12-2012

Offices 10.4 8.6 10.3 8.6

Retail 7.9 7.0 7.8 6.7

Industrial 9.1 8.1 9.1 8.3

Residential 7.8 6.4 7.2 6.8

Total 9.5 8.1 9.4 8.0

* gross yield: the theoretical annual rent expressed as a percentage of the market value of the property.

** net yield: . the theoretical net rental income expressed as a percentage of the market value of the property.

gross yield*

31-03-2013

net yield**

31-03-2013

gross yield*

31-12-2012

net yield**

31-12-2012

The Netherlands 9.8 8.3 9.6 8.3

Switzerland 7.4 6.2 7.3 5.3

Belgium 8.9 8.8 9.0 8.7

Total 9.5 8.1 9.4 8.0

Balance sheet and financing The value of the real estate investments amounted to €2,039.7 million on 31 March 2013 (31 December 2012: €2,106.1 million).

This is the result of the balance of investments, disposals and revaluations.

The loan-to-value decreased to 58.0% at 31 March 2013 (year end 2012: 58.2%). NSI is highly committed to reduce its LtV (loan-

to-value) to below 55% and will continue to reduce its LtV by disposing non-core assets.

Debts to credit institutions amounted to €1,183.2 million as per 31 March 2013 (year end 2012: €1,226.4 million), reflecting a

€43 million debt repayment. NSI continues to work diligently on its refinancing requirements and improving its debt

maturity. Approx. €186.3 million will expire in 2013. Part of the 2013 refinancing requirement (€258.5 million) was already

covered in 2012 refinancing agreements. A €242 million syndicated loan facility, maturing in 2013 and 2014 and reflecting the

majority of the debt maturing in 2013, is in an advanced stage of negotiation

Equity NSI’s equity decreased to €771.8 million (31 December 2012: €789.8 million) as the result of the negative total investment

result in Q1 2013 of €21.2 million.

�The number of outstanding shares remained unchanged in the first quarter. The net asset value, including deferred tax and

the market value of the derivatives, amounted to €9.47 per share on 31 March 2013 (31 December 2012: €9.78). If the deferred

tax and the value of the derivatives are excluded (the net asset value according to EPRA), the net asset value amounts to €10.52

per share (31 December 2012: €10.95).

Financial ratios The funding available to the company under the credit facilities committed as at 31 March 2013 amounted to €84.0 million (31

December 2012: €71.3 million). NSI reduced it debts to credit institutions from €1,226.4 million as per 31 December 2012 to

€1,183.2 million as per 31 March 2013.

The average remaining maturity of the loans decreased from 2.3 years as per ultim0 2012 to 2.1 years as per 31 March 2013. The

variable interest part or the mortgaged loans decreased from 4.5% (ultimo 2012) to 3.1% as per 31 March 2013.

31 March 2013

� 10

Due to a higher awareness of financing partners in relation to real estate related risks, in combination with the overall

economic situation and changing regulations (Basel III/ Solvency II), NSI notes a general decreased availability of real estate

financing in the market. Processes of refinancing take materially longer to complete. Margins and costs have been rising

substantially since the beginning of the crisis as a result of before-mentioned trends. Loan covenants tend to become more

restrictive and are more diligently monitored to the effects of real estate valuations, property sales and development in

vacancy rates.

Average costs of debt funding increased from 4.8% (ultimo 2012)to 5.0%, mainly due to the refinancing of low interest loans at

higher margins that come into effect. This is based on the current – increased- interest margins by quarter end, which does

not reflect the average interest margin for the period. As a result of reduction in outstanding debt, the total financing costs

decreased. The interest coverage ratio amounted to 2.3 as per 31 March 2013 (ultimo 2012: 2.5)

Interim-dividend Q1 2013 The Annual General Meeting of Shareholders, held on 26 April 2013, adopted the new dividend policy. In line with this new

dividend policy, the Q1 interim dividend amounts to €0.10 per share in cash, which reflects a pay out of 50% of the direct

result, in accordance with the defined pay out at the current LtV level (58.0%)

31 March 2013

� 11

Developments in the portfolio

The value of the real estate portfolio decreased in the first quarter of 2013 by €66.4 million to €2,039.7 million, from €2,106.1

million at year-end 2012. This decrease is the result of revaluations of - €42.4 million, sales of €26.1 million, investments of

€2.5 million and exchange-rate differences of -€0.4 million.

Sold properties in Q1 2013 include retail property Mereveldplein (including residential units located above) in de Meern,

retail property Rozemarijndonk in Spijkenisse, office properties Oudezijds Voorburgwal in Amsterdam and Parklaan in

Eindhoven and industrial property Archimedesbaan in Nieuwegein. The Swiss retail center HertiZentrum and the semi-

industrial properties in Antwerp and Kortenberg (Belgium) have been sold and will be transferred by mid April and the end of

May respectively.

NSI continues its efforts to divest non strategic assets and assets of which the value potential under NSI’s management has

been optimised. The market for real estate transactions remains sluggish and transactions take longer to complete.

As at 31 March 2013 the portfolio consisted of 48 residential units and 265 commercial properties, spread across:

in % x €1,000

Sector spread

Offices 56 1,142,693

Retail 28 572,697

Industrial 16 320,116

Residential - 4,240

Total real estate investments 100 2,039,746

Geographical spread

The Netherlands 69 1,416,233

Switzerland 2 34,219

Belgium 29 589,294

Total real estate investments 100 2,039,746

Occupancy rate portfolio The occupancy in the entire portfolio as at 31 March 2013 increased to 81.3%, from 81.1% as per 31 December 2012. Occupancy

levels per sector were: 75.1% in offices, 89.7% in industrial premises and 92.0% in retail. Per country occupancy was 79.5% in

the Netherlands, 96.5% in Switzerland and 85 % in Belgium.

Retail

The occupancy rate of the retail portfolio slightly decreased from 92.5% (year end 2012) to 92.0%, partly due to sale of two

(nearly) fully let shopping centers.

Offices

The occupancy rate in the total office portfolio increased from 74.8% at 31 December 2012 to 75.1% at 31 March 2013, as a result

of the improved occupancy in the Dutch office portfolio from 71.3% as per 31 December 2012 t0 72.1%.

Logistics

The occupancy rate in the total logistics portfolio increased from 88.5% at 31 December 2012 to 89.7% at 31 March 2013.

31 March 2013

� 12

The theoretical gross annual rental income per segment in the Netherlands, Belgium and Switzerland per 31 March 2013: (x €1,000)

the Netherlands Belgium Switzerland Total

Offices 84,657 33,215 519 118,391

Retail 43,341 - 2,006 45,347

Industrial 9,858 19,249 - 29,107

Residential 330 - - 330

Total 138,186 52,464 2,525 193,175

Contractual annualized rental income from the portfolio amounted to €157.0 million as at 31 March 2013, compared with

€161.9 million as at 31 December 2012.

Shareholders’ resolutions

All proposals that were put to the vote in the Annual General Meeting of Shareholders of NSI on 26 April 2013 were approved,

including the new reservation and dividend policy, the reappointment of Daniël van Dongen as CFO and Henk Breukink as

member of the Supervisory Board.

� �

31 March 2013

� 13

��

31-03-2013 Q4 2012 31-03-2012 2012

Results (x €1,000)

Gross rental income 37,075 40,317*) 41,499 160,545

Net rental income 31,692 34,292 35,079 137,334

Direct investment result 13,415 14,958 16,181 63,405

Indirect investment result - 34,573 42,226 - 33,302 - 166,522

Result after tax - 21,158 27,268 - 17,121 - 103,117

Occupancy rate (in %) 81.3 81.1 82.2 81.1

Balance sheet data (x €1,000)

Real estate investments 2,039,746 2,106,091 2,294,260 2,106,091

Shareholders’ equity 771,779 789,788 895,404 789,788

Shareholders’ equity attributable to NSI

shareholders

645,679 666,850 763,647 666,850

Net debts to credit institutions

(excluding other investments)

1,183,219

1,226,432

1,315,693

1,226,432

Loan-to-value (debts to credit institutions/

real estate investments in %)

58.0

58.2

57.3

58.2

Issued share capital (in shares)

Ordinary shares with a nominal value of

€0.46 on 31 March

68,201,841

68,201,841

60,225,539

68,201,841

Average number of outstanding ordinary

shares during period under revieuw

68,201,841

67,095,658

60,231,244

64,288,818

Data per average outstanding ordinary share

(x €1)

Direct investment result 0.20 0.22 0.27 0.99

Indirect investment result - 0.51 - 0.63 - 0.55 - 2.59

Total investment result - 0.31 - 0.41 - 0.28 - 1.60

Data per share (x €1)

(Interim-) dividend 0.10 0.11 0.26 0.86

Net asset value 9.47 9.78 12.68 9.78

Net asset value according to EPRA 10.52 10.95 13.83 10.95

Average stock-exchange turnover

(shares per day, without double counting)

198,971

92,580

88,034

92,580

High price 5.11 9.70 9.70 9.70

Low price 5.00 5.95 8.50 5.95

Closing price 7.00 6.08 8.77 6.08

*) Including one-off rental income of €2.0 million� � � � �

31 March 2013

� 14

Geconsolidated direct en indirect Investment result (x €1,000)

1st quarter 2013 1st quarter 2012


Service costs not recharged to tenants - 1,136 - 1,482

Operating costs - 4,247 - 4,938


Financing income 108 28

Financing costs - 13,967 - 14,007

Administrative costs - 1,525 - 1,816

Direct investment result before tax 16,308 19,284

Corporate income tax - 17 - 80

Direct investment result after tax 16,291 19,204

Direct investment results attributable to non-controlling interest - 2,876 - 3,023

Direct investment result 13,415 16,181

Revaluation of real estate investments - 42,411 - 26,581

Elimination of rental incentives 47 - 293

Net result on sales of real estate investments 361 -

Movements in market value of financial derivatives 8,344 - 4,799

Exchange-rate differences 8 - 523

Allocated management costs - 636 - 581

Indirect investment result before tax - 34,287 - 32,777

Corporate income tax - - 193

Indirect investment result after tax - 34,287 - 32,970

Indirect investment result attributable to non-controlling interest - 286 - 332

Indirect investment result - 34,573 - 33,302

Total investment result - 21,158 - 17,121

Data per average outstanding share (x €1)

Direct investment result 0.20 0.27

Indirect investment result - 0.51 - 0.55

Total investment result - 0.31 - 0.28

31 March 2013

� 15

Condensed consolidated interim financial information

31 March 2013

� 16

Consolidated statement of comprehensive income (x €1,000)

note Q1 2013 Q1 2012


Service costs recharged to tenants 5,733 5,684

Service costs - 6,869 - 7,166

Service costs not recharged - 1,136 - 1,482

Operating costs 4 - 4,247 - 4,938

Net rental income 2 31,692 35,079

Revaluation of investments - 42,364 - 26,874

Net result on sales of investments 5 361 -

Total net proceeds from

investments

- 10,311 8,205

Administrative costs 6 - 2,161 - 2,397


Financing costs - 13,967 - 14,530

Movements in market value of

financial derivatives

8,344

- 4,799

Net financing result - 5,507 - 19,301

Result before tax - 17,979 - 13,493

Corporate income tax 13 - 17 - 273

Result after tax - 17,996 - 13,766

Exchange-rate difference on

foreign participations

- 5 52

Total non-realised result - 5 52

Total realised and non-realised

result

- 18,001 - 13,714

Result after tax attributable to:

NSI shareholders - 21,158 - 17,121

Non-controlling interest 3,162 3,355



result attributable to:

NSI shareholders - 21,163 - 17,069

Non-controlling interest 3,162 3,355

Total comprehensive income - 18,001 - 13,714

Data per average outstanding

share (x €1)

Diluted as well as non-diluted

result after tax

- 0.31 - 0.28

31 March 2013

� 17

Consolidated statement of financial position Before proposed profit appropriation Q4 2012 and Q1 2013 (x €1,000)

Note 31-03-2013 31-12-2012 31-03-2012

Assets

Real estate investments 7 1,981,787 2,036,114 2,174,335

Intangible assets 8,477 8,486 8,496

Tangible assets 3,788 3,750 3,904

Financial derivatives 388 666 -

Total fixed assets 1,994,440 2,049,016 2,186,735

Assets held for sale 8 57,959 69,977 119,925

Debtors and other accounts receivable 9 22,933 21,915 18,886

Cash 5,279 7,007 5,097

Total current assets 86,171 98,899 143,908

Total assets 2,080,611 2,147,915 2,330,643

Shareholders’ equity

Issued share capital 31,372 31,372 27,706

Share premium reserve 657,912 657,912 636,578

Other reserves 80,670 80,683 53,779

Retained earnings - 124,275 - 103,117 45,584

Total shareholders’ equity attributable to

shareholders

645,679

666,850

763,647

Non controlling interest 126,100 122,938 131,757

Total shareholders’ equity 10 771,779 789,788 895,404

Liabilities

Interest-bearing loans 11 797,399 961,046 999,822

Financial derivatives 12 72,127 80,787 67,192

Deferred tax liabilities 13 162 164 1,886

Total long-term liabilities 869,688 1,041,997 1,068,900

Redemption requirement long-term liabilities 11 302,115 186,273 226,439

Debts to credit institutions 88,984 86,119 94,529

Other accounts payable and deferred income 14 48,045 43,738 45,371

Total current liabilities 439,144 316,130 366,339

Total liabilities 1,308,832 1,358,127 1,435,239

Total shareholders’ equity and liabilities 2,080,611 2,147,915 2,330,643

31 March 2013

� 18

Consolidated cash flow statement (x €1,000)

note 31-03-2013 31-03-2012


Adjusted for:

Revaluation of real estate investments 5 42,411 26,581

Net result on sales of investments - 361 -

Net financing expenses 5,507 19,301

Deferred tax liabilities 13 - 193

Depreciation 150 111

Cash flow from operating activities 47,707 46,186

Movements in debtors and other accounts receivable 9 - 1,018 - 4,929

Movements in other liabilities, accrued expenses and

deferred income

3,602 1,497


Financing expenses - 13,300 - 15,446

Cash flow from operations 19,103 13,570

Purchases of real estate and investments in existing

properties

7

- 2,502

- 1,899

Proceeds of sale of real estate investments 26,449 4,005

Investments in tangible fixed assets - 179 - 134

Divestments of tangible fixed assets - 22

Cash flow from investment activities 23,768 1,994

Dividend paid - 8 -

Repurchase of own shares - 502

Drawdown of loans 11 - 754 29,940

Redemption of loans 11 - 46,718 - 64,656

Cash flow from financing activities - 47,480 - 35,218

Net cash flow - 4,609 - 19,654

Exchange-rate differences 16 - 450

Cash and debts to credit institution as of 1 January

- 79,112

- 69,328

Cash and debts to credit institutions as of 31 March

- 83,705

- 89,432

31 March 2013

� 19

Consolidated statement of movements in shareholders’ equity (x €1,000)

The development of the item shareholders’ equity per Q1 2013 was as follows:

Issued share

capital

Share

premium

reserve

Other

reserves

Retained

earnings

Total share-

holders’

equity

attributable

to

shareholders

Non-

controlling

interest

Total share-

holders’

equity

Balance as of 1 January 2013 31,372 657,912 80,683 - 103,117 666,850 122,938 789,788

Result Q1 2013 - - - - 21,158 - 21,158 3,162 - 17,996

Exchange-rate differences on foreign

participations

-

-

- 5

-

- 5

-

- 5


results Q1 2013

-

-

- 5

- 21,158

- 21,163

3,162

- 18,001

Costs related to optional dividend - - - 8 - - 8 - - 8

Total contributions by and to

shareholders

-

-

- 8

-

- 8

-

- 8

Situation as of 31 March 2013 31,372 657,912 80,670 - 124,275 645,679 126,100 771,779

The development of the item shareholders’ equity per Q1 2012 was as follows:

Issued share

capital

Share

premium

reserve

Other

reserves

Retained

earnings

Total share-

holders’ equity

attributable to

shareholders

Non-

controlling

interest

Total share-

holders’

equity

Balance as of 1 January 2012 27,732 637,054 53,727 62,705 781,218 128,402 909,620

Result Q1 2012 - - - - 17,121 - 17,121 3,355 - 13,766

Exchange-rate differences on foreign

participations

-

-

52

-

52

-

52

Total realised and non-realised results

Q1 2012

-

-

- 52

- 17,121

- 17,069

3,355

- 13,714

Repurchase of own shares - 26 - 476 - - - 502 - 502

Total contributions by and to

shareholders

- 26

- 476

-

-

- 502

-

- 502

Situation as of 31 Mach 2012 27,706 636,578 53,779 45,584 763,647 131,757 895,404

31 March 2013

� 20

Notes to the figures for the first quarter 2013 1. Most important principles for valuation and determination of the result The financial statements of NSI N.V. for the first quarter of 2013 were drawn up in compliance with International Financial

Reporting Standards, IFRS, as approved within the European Union. This report on the first quarter of 2013 has been drawn up

in accordance with IAS 34, ‘Interim Financial Reporting’.

For the most important principles for consolidation, valuation and determination of the result applied in this report, please

refer to the published 2012 financial statements (see www.nsi.nl). The consolidated figures are drawn up on the basis of

historical cost, except for property investments and financial derivatives, which are recognised at fair value. Unless stated

otherwise, the figures are presented in thousands of euros rounded to the nearest thousand.

This report on the first quarter of 2013 was approved by the Management Board and Supervisory Board on 14 May 2013.

The compilation of this interim report in accordance with IFRS requires that the Management Board forms opinions,

estimates and assumptions that affect the application of the accounting principles and the reported figures for assets,

liabilities, income and expenses. The estimates and the related assumptions are based on experience and various other factors

that are considered appropriate. The estimates and underlying assumptions are continually assessed. Revisions to estimates

are wholly included in the period in which the revision is made, if the effect only applies to that period, or in the period in

which the revision is made and future periods, if the effect also applies to future periods.

2. Segment information Below, a summary of the results of each of the reporting segments is included.

Per country the Netherlands Switzerland Belgium Total

Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012 Q1 2013 Q1 2012

Gross rental income 26,422 29,122 600 1,954 10,053 10,423 37,075 41,499

Service costs not recharged to

tenants

- 946

- 1,053

-

- 48

- 190

- 381

- 1,136

- 1,482

Operating costs - 4,236 - 4,615 - 96 - 487 85 164 - 4,247 - 4,938

Net rental income 21,240 23,454 504 1,419 9,948 10,206 31,692 35,079

Revaluation results - 40,539 - 24,001 - 22 - 4,293 - 1,803 1,420 - 42,364 - 26,874

Net result on sales - 1,133 - 6 - 1,488 - 361 -

Segment result - 20,432 - 547 488 - 2,874 9,633 11,626 - 10,311 - 8,205

Reconciliation

Administrative costs - 1,199 - 1,322 - 65 - 205 - 897 - 870 - 2,161 - 2,397

Net financing costs - 3,697 - 15,078 - 121 - 678 - 1,689 - 3,545 - 5,507 - 19,301

Result before tax - 25,328 - 16,947 302 - 3,757 7,047 7,211 - 17,979 - 13,493

Corporate income tax - 5 - 2 - - 256 - 12 - 15 - 17 - 273

Result after tax - 25,333 - 16,949 302 - 4,013 7,035 7,196 - 17,996 - 13,766

Non-controlling interest - - - - - 3,162 - 3,355 - 3,162 - 3,355

Investment income attributable

to shareholders NSI

- 25,333 - 16,949 302 - 4,013 3,873 - 3,841 - 21,158 - 17,121

Purchases and investments in

existing properties

1,694 1,460 22 - 786 439 2,502 1,899

31 March 2013

� 21

3. Exchange-rate differences In order to hedge currency risks, real estate investments in currencies other than the euro are generally funded by loans in

the currency of the investment (in this case Swiss Francs). As at 31 March 2013, the exchange rate for the Swiss franc was: CHF1

= €0.82001 (31 March 2012: €0.83022).

4. Operating costs The operating costs for the properties can be specified as follows:

Q1 2013 Q1 2012

Municipal taxes 902 1,046

Insurance premiums 203 205

Maintenance costs 1,028 1,046

Contributions to owner’s asscociations 106 177

Property management (including attributed administrative expenses) 1,298 1,245

Letting costs 328 540

Other costs 382 679

Total 4,247 4,938

5. Net result on sales of investments

Q1 2013 Q1 2012

Sales of real estate investments 41,181 -

Book value at time of sale 39,977 -

Total 1,204 -

Sales costs - 843 -

Total 361 -

The sales costs are including broker costs, legal costs, breakage costs for loan redemption and a rental guarantee.

6. Administrative expenses The administrative costs can be specified as follows:

Q1 2013 Q1 2012

Management costs 3,141 3,043

Audit costs 124 138

Consultancy costs 68 237

Appraisal costs 98 130

Compensation of Supervisory Directors, members of the Investments Advisory

Board and Stichting Prioriteit NSI

74 72

Other costs 128 123

Total 3,633 3,743

Allocated to operating costs - 1,357 - 1,256

Allocated to real estate portfolio - 115 - 90

Total 2,161 2,397

31 March 2013

� 22

7. Real estate investments The development of the real estate investments in operation and under development was as follows:

2013 2012

Real estate investments in operation 1,959,897 2,157,585

Real estate investments under development 21,890 16,750

Total 1,981,787 2,174,335

Real estate investments in operation and under development are valued at fair value. NSI determines the market value of the

investment properties on the basis of a professional appraisal management system. NSI internally appraises the entire

property portfolio every quarter. In addition, each quarter effectively approximately 50% of the portfolio is appraised

externally by reputable appraisers��Real estate investments in operation

The development of the real estate investments in operation per country was as follows:

The

Netherlands

Switzerland Belgium Total 2013 The

Netherlands

Switzerland Belgium Total 2012

Balance on 1 January 1,437,009 - 583,860 2,020,869 1,605,790 123,084 587,889 2,316,763

Investments 1,694 - 786 2,480 1,460 - 439 1,899

Reclassification into

real estate investments

under development

- 6,985

-

-

- 6,985

- 11,700

-

-

- 11,700

Reclassification into

assets held for sale

-

-

- 12,402

- 12,402

-

- 119,925

-

- 119,925

Sales - 2,000 - - - 2,000 - - - 4,005 - 4,005

Revaluations - 40,330 - - 1,735 - 42,065 - 23,839 - 4,293 1,551 - 26,581

Exchange-rate

differences

- - - - - 1,134 - 1,134

Balance on 31 March 1,389,388 - 570,509 1,959,897 1,571,711 - 585,874 2,157,585

The valuations contain:

The

Netherlands

Switzerland Belgium Total

2013

the

Netherlands

Switzerland Belgium Total

2012

Prepayment and

accrued income

in relation to

incentives

7,789

-

4,678

12,467

8,956

-

4,057

13,013

The development of the investments in operation by real estate type was as follows:

Retail Offices Industrial Residential Total 2013

Balance on 1 January 2013 551,377 1,146,269 318,898 4,325 2,020,869

Investments 377 1,266 837 - 2,480

Reclassification into real estate

investments under

development

-

- 6,985

-

-

- 6,985

Reclassification into assets

held for sale

-

-

- 12,402

-

- 12,402

Sales - - 1,450 - 550 - - 2,000

Revaluations - 5,297 - 34,881 - 1,802 - 85 - 42,065

Exchange-rate differences - - - - -

Balance on 31 March 2013 546,457 1,104,219 304,981 4,240 1,959,897

31 March 2013

� 23

On 31 March 2013, properties with a book value of €1,440.6 million (ultimo 2012: €1,507.2 million) were mortgaged as

security for loans taken out and credit facilities at banks amounting to €911.0 million (ultimo 2012: €951.0 million).

It is possible to vary the level of securitisation within the banking arrangements, enabling NSI to create additional loan

capacity within the existing facilities or allocate the securities partly to a different facility.

Real estate investments under development 2013 2012

Balance on 1 January 15,245 5,050

Reclassification of real estate investments in operation 6,985 11,700

�� Balance on 31 March 21,890 16,750

Real estate investments under development contains three offices and two land positions per 31 March 2013. 8. Assets held for sale The book value of real estate held for sale equals the expected sales proceeds, representing fair value.

2013 2012

Balance on 1 January 69,977 -

Reclassification of real estate investments in operation 13,890 119,925

Investments 22 -

Sales - 25,575 -

Revaluations - 7 -

Exchange-rate differences - 348 -

Balance on 31 March 57,959 119,925

9. Debtors and other accounts receivable The main items concern the expected insurance settlement in connection to shopping centre ‘t Loon, prepaid costs 2013 for an

amount of €4.6 million, corporate income tax (€3.2 million) and rental income overdue for an amount of €5.4 million.

10. Shareholders’ equity The number of issued shares remained unchanged during the reporting period.

11. Interest-bearing debt �The development of the loans in the reporting period was as follows:

2013 2012

Balance on 1 January 1,147,319 1,259,837

Drawdowns - 754 29,940

Redemptions - 46,718 - 64,656

Exchange-rate differences - 333 1,140

Balance on 31 March 1,099,514 1,226,261

Redemption requirement long-term debt up to 1 year 302.115 226,439

Balance on 31 March 797,399 999,822

31 March 2013

� 24

Remaining maturities of the loans at 31 March 2013 was as follows:

Fixed interest Variable interest Total

Up to 1 year 28,545 273,570 302,115

From 1 to 2 years - 142,950 142,950

From 2 to 5 years 224,978 420,429 645,407

From 5 to 10 years - 9,042 9,042

More than 10 years - - -

Total loans 253,523 845,991 1,099,514

The interest-bearing debt are predominantly loans from banks and a €75 million Belgian bonds with an average remaining

maturity of 2.1 years. The weighted average interest on outstanding mortgages and interest-rate swaps at 31 March 2013 was

5.0% per annum including margin. The interest coverage ratio amounted to 2.3 as at 31 March 2013.

As collateral for the loans and the current account facilities at the banks, mortgages are registered on real estate with a value

of €1,440.6 million, together with a possessory lien on the rental income in some cases.

12. Financial derivatives

NSI limits its interest-rate risk by swapping the majority of the variable interest it pays on its loans into a fixed interest rate,

by means of contracts with fixed interest rates varying from 2.14% to 4.613% and with maturity dates between 2014 and 2022.

The market value of the financial derivatives amounted to €71.7 million as at 31 March 2013.

Number of

contracts

Nominal Negative market value

Positive market value

Up to 1 year - - - -

From 1 to 5 years 40 714,760 - 56,208

From 5 to 10 years 4 99,300 - 15,919

Total swaps 44 814,060 - 72,127

Total derivatives index

loans

7 54,000 388

-

Total derivatives 46 868,060 388 72,127

The weighted average remaining maturity of the financial derivatives is 3.8 years. NSI is hedged at a weighted interest rate of

3.1%, excluding margin. 3.1% of the current loans are subject to variable interest and are therefore not hedged.

13. Deferred tax liabilities Deferred tax liabilities are recognized at nominal value for the corporate income tax payable in future periods that arise

because of the differences between market value and value for tax purposes of the properties in Switzerland.

14. Other payables and accrued liabilities The largest items recognized under the other payables and accrued liabilities concern prepaid rent of €12,5 million, payable

operational costs of €10.4 million and payable interest of €8.9 million.

31 March 2013

� 25

15. Liabilities not appearing on the balance sheet In November 2012 NSI reached an agreement about the sale of two office properties (Leidsegracht and Herengracht in

Amsterdam). The sales price amounted to €8.0 million and the transfer is expected to take place in the second quarter of 2013.

Intervest Offices & Warehouses reached an agreement about the sale of an industrial property at de Kaaien in Antwerpen. The

sales price amounted to €2.1 million and the transfer took place on 15 April 2013.

In March 2013 Intervest Offices & Warehouses reached an agreement about the sale of a semi-industrial property at

Guldendelle in Kortenberg. The sales price amounted to €14.2 million and the transfer is expected to take place by the end of

May 2013.

Hoofddorp, 17 May 2013

Management Board Supervisory Board

J. Buijs, CEO H. Habas, chairman

D.S.M. van Dongen, CFO H.J. van den Bosch

H.W. Breukink

G.L.B. de Greef

31 March 2013

� 26

Other information Statement pursuant to the Financial Supervision Act The Netherlands Authority for the Financial Markets granted a licence to NSI N.V. on 13 July 2006. A copy of this license can be

obtained at the company’s office as well as via its website: www.nsi.nl

The members of NSI’s Supervisory Board and Management Board have no personal interests in any of the investments made

by NSI. Furthermore, they never had any such interest at any time during the period under review. The company is not aware

of any property transactions during the period under review with any people or organisations that could be considered to

have a direct relationship with the company.

Holders of shares with a capital interest of 5% or more: In accordance with the Financial Supervision Act, the Netherlands Authority for the Financial Markets received a notification

of a shareholder with an interest of more than 5% in the company. According to the most recent notification, this interest was

as follows: Habas Investments (1960) Ltd. and it subsidiaries (20.5%). The date of the notification mentioned above was 18

September 2012.

Financial calendar 2013

Financial calendar 2013

Publication HY results 2013 9 August 2013

Publication Q3 results 2013 8 November 2013

Interim-dividends

Setting of Q1 2013 interim-dividend 31 May 2013

Listing ex-dividend 4 June 2013

Payment of Q1 2013 interim-dividend 11 June 2013

Setting of HY 2013 interim-dividend 23 August 2013

Listing ex-dividend 27 August 2013

Payment of HY 2013 interim-dividend 3 September 2013

Setting of Q3 2013 interim-dividend 22 November 2013

Listing ex-dividend 26 November 2013

Payment of Q3 2013 interim-dividend 3 December 2013

31 March 2013

� 27

Review report To: the General Meeting of shareholders of NSI N.V.

Introduction We have reviewed the on page 16 to 25 the accompanying condensed consolidated interim financial information of NSI N.V.,

Hoofddorp (statutory seat Hoorn), which comprises the consolidated statement of financial position as at 31 March 2013, the

consolidated statements of comprehensive income, the consolidated statement of movements in shareholders’ equity and the

consolidated cash flow statement for the period of 3 months ended 31 March 2013, and the notes. Management of the

Company is responsible for the preparation and presentation of this consolidated interim financial information in

accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union. Our responsibility is to express a

conclusion on this interim financial information based on our review.

Scope We conducted our review in accordance with Dutch law including standard 2410, ‘Review of Interim Financial Information

Performed by the Independent Auditor of the Entity’. A review of interim financial information consists of making inquiries,

primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A

review is substantially less in scope than an audit conducted in accordance with auditing standards and consequently does

not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.

Accordingly, we do not express an audit opinion.

�Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed

consolidated interim financial information as at 31 March 2013 is not prepared, in all material respects, in accordance with

IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union.

Amstelveen, 17 May 2013

KPMG Accountants N.V.

H.D. Grönloh RA

OPINION RELATED TO

HABAS TULIP B.V.’S INVESTMENT

IN NSI N.V.

The Michel-Shaked Group May 2013

I. SCOPE OF ENGAGEMENT AND REPORT

At the request of Habas Tulip B.V. (“Habas”), we analyzed and assessed to what

extent a premium, if any, to Net Asset Value (NAV) should be applied to Habas’

investment in NSI N.V. (“NSI” or the “Company”) as of March 31, 2013.1

This report presents our methodologies, findings, and conclusions. In accordance

with recognized professional ethics, our professional fees for this service are not

contingent upon the conclusions herein.

II. FIRM QUALIFICATIONS

The Michel-Shaked Group is a multi-disciplined practice covering finance,

economic, accounting, and business consulting services. We have been called upon in

many of our corporate finance engagements to provide opinions as to the value of a wide

array of financial instruments and companies. In the last three decades, we have valued

hundreds of privately held and publicly traded companies. We have extensive experience

valuing and performing financial analysis on European companies. We have also been

retained by numerous Government Agencies including the Securities and Exchange

Commission (SEC), the Internal Revenue Service (IRS), the Justice Department, and the

Department of Labor (DOL) on issues of financial analysis and valuation. See the

Appendix for a non-exhaustive list of financial/analysis valuations performed.

III. SUMMARY OF OPINION

It is our opinion that as of March 31, 2013, a premium to Net Asset Value should

not be applied to Habas’ investment in NSI. The process of assessing whether or not a

premium should be applied to NSI’s NAV consists of analyzing three components: a

portfolio premium that reflects the benefits available to NSI from combining individual

properties and managing them as a diversified portfolio; a discount for the general and

administrative expenses necessary to generate the portfolio premium; and a net premium

attributable to management’s ability to create future value. As a result, as of March 31,

1 This report and analysis is based on information and data for the quarter ended March 31, 2013. Information and data pertaining to the period after March 31, 2013 are not included or reflected in this report and analysis.

1

2013, Habas’ investment in NSI is €132.6 million, which is equal to Habas’ share of

NSI’s NAV.

IV. FACTUAL BACKGROUND

A. Company History

NSI is a publicly listed closed-end real estate investment fund that was founded in

the Netherlands in 1993 as an independent property company. Since April 3, 1998, NSI

has been listed on the Official Market of stock exchange maintained by Euronext

Amsterdam. On October 14, 2011, NSI completed a merger with VastNed

Offices/Industrials (“VastNed”). VastNed was a Dutch REIT that primarily operated in

the Netherlands and Belgium.

The Company is qualified for Dutch Fiscale Beleggingsinstelling (“FBI”) status,

which subjects it to a zero rate of corporate taxation on its profits in the Netherlands.2

FBI status is often referred to as a Real Estate Investment Trust (“REIT”) in other

markets.

The Company is governed by a Management Board, a Supervisory Board, and an

Investment Advisory Board, each of which has its own specific tasks, rights, and powers.

The Management Board consists of the Company’s CEO and CFO and is responsible for

the day to day management of NSI. The Supervisory Board consists of five members and

supervises the policy of the Management Board and the general course of affairs of NSI.

The Investment Advisory Board consists of three members and represents the

Supervisory Board in the assessment and approval of the purchase and sale of portfolio

properties.3

As of March 31, 2013, NSI reported that its €1.98 billion real estate portfolio4

consisted of about 265 commercial properties and 1,700 leases located in the

Netherlands, Belgium and Switzerland. The Company maintains a diversified portfolio

of assets with exposure to office buildings (56%), retail properties (28%), and industrial

2 NSI N.V. Annual Report for the Year Ended December 31, 2012. 3 NSI N.V. Annual Report for the Year Ended December 31, 2012. 4 Net of assets held for sale.

2

buildings (16%). With the completion of the VastNed merger in 2011, the Company

continued a push towards geographical diversification, expanding into the Belgian

market, which now constitutes 29% of the Company’s total portfolio.5

B. Habas’ Investment in NSI

In the beginning of 2007, NSI was approached by Habas Investments (1960) Ltd.

to investigate the potential for a strategic cooperation between the two companies. Habas

Investments (1960) Ltd. is a publicly listed Israeli company that develops residential real

estate and is a member of the Habas Group. The Company aimed to use its international

expertise to expand NSI’s real estate portfolio outside the Dutch market. In February

2007, Habas Tulip B.V., a subsidiary of the Habas Group, acquired a 17.1 % stake of NSI

in a private transaction. Habas’ initial February 2007 investment was at €21.90 per share,

representing a 12.22% premium over NSI’s Gross Asset Value (GAV). By September

2007, Mr. H. Habas, Chairman of the Habas Group of Israel was elected chairman of

NSI’s Supervisory Board and, Amir Nitzani, manager of International activity for the

Habas Group, was appointed to the Company’s Investment Advisory Board.6 As of

March 31, 2013, following several add-on acquisitions, Habas Tulip B.V.’s ownership

interest in the Company stood at 20.54%.7

V. NET ASSET VALUE

It is well known in financial literature that a common method for valuing REITs is

on the basis of Net Asset Value (“NAV”). A REIT’s Net Asset Value “refers to the

commonly accepted market value of a company’s assets and properties after subtracting

its liabilities and obligations.”8 As of March 31, 2013, NSI’s NAV (attributable to

shareholders) was €645.9 million. We were not requested to opine on the accuracy of

NSI’s NAV. We rely on NSI’s NAV as published in its audited financial statements, and

use it as a basis for our analysis. While NAV is a useful reference point when attempting

5 NSI N.V. Interim Report for the Period Ended March 31, 2013. 6 NSI N.V. Annual Report for the Year Ended December 31, 2007, pp. 11-16. 7 Habas Management. 8 Gordon, Mark. The Complete Guide to Investing in REITs-Real Estate Investment Trusts: How to Earn High Rates of Return Safety. Atlantic Publishing, 2008, pp. 53-54.

3

to value a shareholder’s stake in a REIT, there are situations where NAV does not capture

the full value of an investor’s holding. For example, consider the following statements:

“A net asset value lends itself well to a REIT because of a REIT’s constantly changing property values. But to some in the REIT industry that can be a disadvantage because some investors hold the view that a REIT’s market value is not only based on property assets, but also on the total business the company operates.”9

“Since a REIT’s strategic plan is capable of generating value in excess of carried assets, it is not merely a collection of properties but an enterprise worthy of a valuation in excess of the net asset value of the property portfolio.”10

“…others worry that NAV models tend to miss the value creating skills of management.”11

“They’re [REITs] not just properties, [t]hey’re a collection of properties as managed by a management team.”12

As evidenced by the aforementioned quotes, NAV does not always reflect the

benefits available to a REIT from combining individual properties and managing them as

a diversified portfolio.13

VI. PORTFOLIO PREMIUM

The use of NAV as a valuation metric ignores the benefits of managing a set of

individual real estate assets in a portfolio. Since a REIT’s NAV is obtained by

9 Gordon, Mark. The Complete Guide to Investing in REITs-Real Estate Investment Trusts: How to Earn High Rates of Return Safety. Atlantic Publishing, 2008, p. 238. (In this report, when part of a quote is both boldfaced and underlined it indicates added emphasis not in the original quote). 10 Garrigan, Richard and John Parsons. Real Estate Investment Trusts. McGraw-Hill, 1998, p. 161.11 Starkman, Dean. “The NAV Debate: Is net asset value the most accurate way to value REIT stocks?” www.nareit.com, May/June 2005. 12 T. Ritson Ferguson as quoted in Starkman, Dean. “The NAV Debate: Is net asset value the most accurate way to value REIT stocks?” www.nareit.com, May/June 2005. 15 Note that a portfolio premium is actually applied to Gross Asset Value (GAV), which is the fair value of a REIT’s real estate assets. Since NAV is GAV less debt, both GAV and NAV fail to fully reflect the benefits of managing a collection of real estate in a portfolio. Whenever this report refers to the fact that NAV does not account for portfolio advantages, one can assume the same is true for GAV.

4

performing a DCF analysis on each individual property and then summing up those

individual amounts, NAV does not explicitly consider the synergies and cost advantages

of combining individual properties into a multi-property portfolio. A report on the Dutch

REIT market by Colliers International confirms the above notion as the three deals

examined by Colliers were completed at a premium to GAV of 8-10%.14 The following

are only some of the diversification benefits and costs advantages that accrue to a

company such as NSI, which owns a large number of portfolio properties:

A. International Diversification

The concept of international diversification is well known in financial literature.

For example consider the following:

“…the basic arguments in favor of international diversification are that foreign investments offer additional profit potentials while reducing the total risk of the portfolio. In other words, international diversification helps to improve the risk-adjusted performance of a domestic portfolio.”15

“The construction of internationally diversified portfolios is both the same as and different than creating a traditional domestic portfolio.Internationally diversified portfolios are the same in principle because the investor is attempting to combine assets that are less than perfectly correlated, reducing the total risk of the portfolio. In addition, by adding assets from outside the home market, assets that previously were not available to be averaged into the portfolio’s expected returns and risks, the investor has now tapped into a larger pool of potential investments.”16

By diversifying cash flows internationally, NSI is able to realize a reduction in

portfolio variability by investing in real estate assets that are not perfectly positively

correlated. For example, the Belgian and Dutch real estate markets do not move

completely in tandem. If the Belgian market appreciates or maintains its value while the

14 Opinion of the Valuation of the investment of Habas Tulip B.V. in NSI by Colliers International dated May 2009, p. 8.15 Solnik, Bruno. International Investments. 3rd Edition. Addison-Wesley, 1996, p. 90.16 Eiteman David, Arthur Stonehill, and Michael Moffett. Multinational Business Finance. 8th Edition. Addison-Wesley, 1998, p. 341.

5

Dutch market declines (or vice-a-versa), the fluctuations of the asset returns will offset

each other, resulting in risk reduction. All other things equal, the lower the risk of an

investment, the higher the value. This benefit is not reflected in the NAV figure.

B. Sector Diversification

NSI’s diversification across sectors offers the Company further risk reduction

advantages that are not reflected in the Company’s NAV. NSI has a rule that the

purchase price of a single property should not amount to more than 5% of the total

portfolio. By preventing its portfolio from having any concentrated positions, NSI

reduces the risk that the decline in any single investment will have a material impact on

its portfolio. Moreover, in the European Public Real Estate Association’s (“EPRA”)

2012 Global REIT Survey - Netherlands, NSI was listed as one of the top five REIT’s in

the Netherlands. Out of the five companies, NSI is the only company whose portfolio is

not highly concentrated (>75%) in one sector.17 Similar to the concept of international

diversification, as long as each segment does not respond to economic and market

conditions in exactly the same way, NSI’s sector diversification reduces portfolio risk.

All other things equal, the lower the risk of an investment, the higher the value. This

benefit is not reflected in the NAV.

Even though NSI plans to focus its future investments in the office and retail

space, the Company will still have sector diversification benefits from a portfolio

invested 50% in office buildings and 50% in retail properties

C. Economies of Scale and Synergies

NSI is one of the five largest REITs in the Netherlands. NSI’s size affords the

Company the opportunity to generate significant economies of scale and synergies that

are not fully reflected in its NAV. There is ample evidence in both financial and

academic literature supporting the notion of economies of scale in REITs. For example,

consider the following:

17 Financial reports for Corio NV, Vastnet Retail NV, Eurocommercial NV and Wereldhave NV.

6

“For REITs..[g]rowth permits economies of scale… Bigger REITS are able to bid for bigger, more lucrative properties and capitalize on the discounts available in buying whole portfolios rather than individual buildings. Theyare also able to negotiate lower prices for supplies and maintenance contracts.”18

“In the case of REITs, larger REITS may achieve a level of market power, perhaps in financing or management contracts, that result in cost economies unavailable to less capitalized REITS.”19

“For total REIT expenses, estimates from the translog cost model suggests that, overall scale economies exist for REITs… The analysis shows that REITs of all asset sizes show estimated economies of scale.”20

With respect to NSI specifically, the Company benefits from:

1. Financing advantages over smaller rivals and independent property

owners due to stronger banking relationships and the prospect of being

a repeat customer. A large, diversified REIT is also more likely to

have access to the capital of institutional investors. These financing

advantages, which are not accounted for when valuing each property

separately, lead to a decrease in risk and ultimately a value higher than

the NAV.

2. Increased investment opportunities in domestic and international

markets due to capital, reputation, and experience advantages. As

evidenced by the following quote, increased investment opportunities

can lead to a premium to NAV:

“…in periods in which REITs can add value through external

growth we might expect to see premiums to NAV, all else equal.”21

18 Rosenthal, Midy, “Bigger REITs, better REITs” Institutional Investor 30 (February): 101.19 Bers, Martina and Thomas Springer. 1998a, “Economies of Scale for real estate investment trust.” Journal of Real Estate Research 14:275-90.20 Bers, Martina and Thomas Springer. 1998b “Sources of scale economies for REITs.” Real Estate Finance 14 (Winter): 47-56.

7

3. Maintenance costs and insurance costs are also likely to be lower for

a REIT with a large number of properties than for an individual

property owner. The centralized management of assets can lead to

enhanced bargaining power, supply discounts, and insurance savings.

These savings, which can be significant, are not fully incorporated in

the NAV calculation that values each of a REIT’s portfolio properties

separately. Thus, these savings are not reflected in NSI’s NAV.

4. The capacity to attract large tenants and move tenants between

different assets. For instance, a tenant may decide not to renew a lease

because he needs an increase or decrease in square footage. NSI, with

its multi-property portfolio, can retain that tenant by moving him to a

different NSI property.

5. Co-insurance benefits, which refer to the fact that the probability of

default or financial distress is significantly reduced when two or more

assets that are less than perfectly correlated are combined into a

portfolio.22 For example, if needed, the cash flows generated by some

of NSI’s assets can co-insure the cash flows of other assets

experiencing financial distress. This risk reduction benefit is not

accounted for when valuing each portfolio property independently, and

therefore it is not fully reflected in NSI’s NAV.

Confirmation of the fact that differences in growth rates and capital costs can lead

to a NAV premium can be found in academic literature that analyzes the departures from

NAV in REIT pricing. For example, consider the article by Jim Clayton and Greg

MacKinnon. Based on their findings:

21 Clayton Jim and Greg MacKinnon, “Departures from NAV in REIT Pricing: The Private Real Estate Cycle, the Value of Liquidity, and Investor Sentiment” February 2002 Working Paper, p.6. 22 Butler, Kirt C. Multinational Finance. South Western College Publishing, 1997, pp. 578-579.

8

a REIT Premium to NAV>0 if (kRE - gRE) > (kreit- greit)

kRE and gRE refer to the cost of equity and growth rates of private real estate, while

kreit- and greit refer to the cost of equity and growth rates attributable to publicly traded

REITs. Thus, a decrease in the cost of capital or increase in the REIT growth rate leads

to premiums to NAV.23

D. Corporate Governance Benefits

According to the EPRA 2008 corporate governance study, 71% of Dutch property

firms have adopted a two-tier board structure.24 This structure is viewed favorably for its

effective monitoring of management and is 40% higher than the European average.25

Furthermore, Dutch property firms are more likely to have audit and remuneration

committees relative to their European counterparts.26 With respect to NSI, the company

has a two-tier board structure as well as investment, audit, and remuneration committees.

Effective corporate governance can increase portfolio value by increasing the pool of

potential investors (both equity and debt providers) and decreasing capital costs. Over

the last three decades, the Michel-Shaked Group has amassed extensive experience

working with financial institutions. From our experience, investors such as pension

funds, insurance companies, and mutual funds are constrained by the types of companies

they can invest in. Pension consultants (working on behalf of pension funds) and other

institutional investors conduct extensive due diligence and set detailed rules for the types

of companies their money managers can invest in. For example, BlackRock Asset

Management, which owns 1.71% of NSI’s equity, is a renowned investment firm. Based

on our knowledge of BlackRock, sound corporate governance is a critical component of

its investment decision. Effective corporate governance is also an important criterion for

many other institutional investors. For a company such as NSI, effective corporate

governance increases its access to capital, thus lowering its capital costs. All other things

23 Clayton Jim and Greg MacKinnon, “Departures from NAV in REIT Pricing: The Private Real Estate Cycle, the Value of Liquidity, and Investor Sentiment” February 2002 Working Paper.24 European Public Real Estate Association Corporate Governance Study of European Listed Property Firms, 2008. 25 European Public Real Estate Association Corporate Governance Study of European Listed Property Firms, 2008. 26 European Public Real Estate Association Corporate Governance Study of European Listed Property Firms, 2008.

9

equal, the lower the cost of capital, the higher the REIT’s value. This advantage is not

reflected in NSI’s NAV.

VII. APPLYING A PORTFOLIO PREMIUM TO NSI

Based on our experience and discussion with service providers to the REIT sector

as well our review of academic literature, it is clear that portfolio benefits and economies

of scale exist for REITs. 27 Although these benefits vary, they can be significant. For

example, a study on the “Sources of Scale Economies for REITs” by Martina Bers and

Thomas Springer confirmed the existence of economies of scale for general and

administrative expenses, management fees, and operating expenses (which consist of

maintenance and repair fees, utilities, cleaning services, advertising expenses, and

security fees among other things). Bers and Springer found that general and

administrative expense as a percentage of total costs decreased from 16% for the smallest

REITs to 7% for the largest REITs. Similarly, management fees decreased from 11% to

4% and operating expenses decreased from 54% to 48%. For purposes of our analysis,

based on the aforementioned academic literature and Company specific information, we

conservatively assumed that NSI’s savings are 8% for the Company’s exploitation costs

(which consist of management fees, maintenance costs, insurance premiums, taxes, and

renting/letting costs).

Based on our analysis and discussion with REIT service providers, we also found

evidence of sizeable advantages related to financing costs. However, general economic

conditions as well as the real estate environment in the Netherlands negatively impacted

the ability to utilize these advantages. As a result, as of March 31, 2013, there is no

premium for financing cost savings.

A. Calculation of NSI’s Portfolio Savings

To calculate the total value of NSI’s annual portfolio savings, we computed the

present value of those savings by utilizing the following formula:

27 Rosenhal, Mindy, “Bigger REITs, better REITs,” Institutional Investor, February 1996; 30, 2; p. 101 and Bers, Martina and Thomas M. Springer, “Sources of Scale Economies for REITs,” Real Estate Finance, Winter 1998; 14, 4; pp. 47-56.

10

PV= CF(1+g)/ (WACC-g)

where:

� CF is the estimate of annual savings in year 0 (i.e. in the current year).

� g is the annual growth rate of the savings

� WACC is the Weighted Average Cost of Capital

For g, we assumed that NSI’s annual savings would grow by 2% per year. Given

the fact that it is widely accepted that the long-term, worldwide rate of inflation is

approximately 3% per year, a 2% growth rate is conservative.

B. Calculation of NSI’s WACC

NSI’s WACC is the discount rate that measures the risk involved in its business:

the higher the risk, the higher the rate used. The higher the rate used, the lower the value

of the discounted or capitalized cash flows. The rate chosen is designed to reflect the no-

risk rate of return, plus a factor for company equity and specific risk. The WACC is

based upon the concept of Business Enterprise Value, which represents the value of the

firm’s assets that are financed by providers of capital: equity and debt holders. As a

result, the WACC is calculated by determining the cost of equity and the after-tax cost of

debt and then weighting each of these rates by their proportion to the total capital

structure (equity plus debt).

NSI’s cost of equity was derived using the Capital Asset Pricing Model

(“CAPM”). The CAPM attributes differences in returns of the universe of stocks

comprising the “market” to their movement relative to that market. This difference is

quantified in a factor called the Beta (�) of an individual stock, which measures its

systematic risk, or tendency to move relative to the market. Stocks with Betas of 1.0

move in tandem with the market. A Beta greater than 1.0 implies that a 1% change in the

market is typically associated with a greater than 1% change in the stock price.

Conversely, a Beta less than 1.0 implies that a 1% change in the market is typically

associated with a less than 1% change in the stock. Unsystematic risk (the risk attributed

to a specific company) can be eliminated through portfolio diversification. Therefore, the

CAPM attributes differences in returns on individual companies to differences in Beta or

11

systematic risk. The formula to determine NSI’s cost of equity (Ke) using the CAPM is

as follows:

Ke = Rf + �(Rm – Rf) + Rs where:

Rf is the risk free rate

� is NSI’s Beta, or the measure of systematic risk

(Rm – Rf) is the equity risk premium for the entire market

Rs is the return in excess of CAPM

For NSI, the relevant risk-free rate (Rf) used in the CAPM model represents the

20-year European AAA government bond rate, which as of March 31, 2013 was 2.7%.

Based on equity return databases and our experience, the equity risk premium is 6.70%.

As required by the CAPM formula detailed above, the equity premium is multiplied by

the appropriate Beta. Beta is calculated by regressing the Company’s stock returns

against the returns on an appropriate index. Using regression analysis, we observed that

beginning in July 2012 NSI’s stock price was not trading in relation to the MSCI EAFE

Index. Therefore, for purposes of this analysis, we utilized NSI’s Beta as of June 30,

2012. We regressed NSI’s daily stock returns against the returns of the MSCI EAFE

Index for the 150 trading days for the period November 24, 2012 – June 30, 2012. This

arrived at a Beta of 1.003 as of June 30, 2012 (see Exhibits 1 and 2).

A size premium for NSI of 2.70% was obtained from the SBBI 2013 Yearbook

and added to the results of applying the CAPM. The size premium is determined based

on the firm’s size as measured by its value. It is added to the results of the CAPM to

reflect the notion that investors have historically required higher rates of return for

smaller companies and a lower premium for larger ones. The smaller the company is, the

larger the size premium.

A specific company risk premium of 3% was also added to the cost of equity.

This risk premium accounts for the additional risk associated with the company’s recent

performance.

As shown in Exhibit 3A, the cost of equity for NSI as of March 31, 2013 was

15.08%. According to the NSI’s Interim report, the Company’s cost of debt as of March

12

31, 2013 was 5.0%. As previously discussed, NSI does not pay corporate income taxes

due to its Dutch FBI status. Thus, NSI’s after tax cost of debt is the same as its pre-tax

cost of debt of 5.0%. As of March 31, 2013, NSI’s reported interest bearing debt was

€1,099.5 million. However, the Company’s 2011 annual report stated that the

Company’s debt and loan-to-value ratio of its real estate portfolio increased as a result of

the merger.28 The interim report states that the Company is “highly committed” to

reducing the loan-to-value ratio of 58.0% (as of March 31, 2013) to below 55%.29 This

implies that the Company expects to reduce its debt by €93.2 million. To calculate an

appropriate cost of capital, this reduction is applied to the Company’s interest bearing

debt, resulting in a target debt level of €1.01 billion.30 As shown in Exhibit 3A and 3B,

this results in a capital structure of 72.5% debt and 27.5% equity. Thus, the Company’s

WACC is 7.77%.

C. Exploitation Cost Savings

For the Latest Twelve Months (LTM) Ended March 31, 2013, the Company’s

exploitation costs were €17.766 million:

A Company such as NSI, with about 265 properties and 1,700 leases, realizes

savings on many of these costs relative to an independent property owner or a smaller

28 NSI N.V. Annual Report for the Year Ended December 31, 2011. 29 NSI N.V. Interim Report for the Period Ended March 31, 2013. 30 Total real estate investments of €1,981.8 million multiplied by 55% results in a debt target of €1,090 million. This figure is €93.2 million lower than the current adjusted debt to credit institutions (€1,183.2 million reported debt to credit institutions). The €93.2 million in LTV adjustments is deducted from current interest bearing debt of €1,099.5 million.

Exploitation Costs (000s) NSI 2012 Q1 2013 Q1 2012 LTMMunicipal taxes € 4,600 € 902 € 1,046 € 4,456Insurance premiums 764 203 205 762 Maintenance costs 3,927 1,028 1,046 3,909 Contributions to owner associations 476 106 177 405 Management of real estate 4,816 1,298 1,245 4,869 Letting costs 2,167 328 540 1,955 Other Costs 1,707 382 679 1,410 Total € 18,457 € 4,247 € 4,938 € 17,766Source: NSI Annual Report for December 31, 2012, Interim Report for Period Ended March 31, 2013.

13

REIT. In particular, insurance costs, maintenance costs, management costs, and letting

(rental) costs are all items that are clearly lower for a portfolio of professionally managed

properties. For the LTM ended March 31, 2013, of the €17.766 million in total

exploitation costs, €11.495 million are for these expenses.

An analysis of NSI’s management and insurance costs confirms the notion that

large REITs realize costs savings that are not available to smaller REITs or individual

property owners. For example, according to senior management, the average insurance

premium for an €8-€10 million property can be anywhere from .1%-.3% (depending on

the type of property being insured). In contrast, NSI with a portfolio of over 260 €8-€10

million properties, pays an average premium of .04%. This translates to about €1.23

million in annual insurance savings realized by NSI, which were not accounted for in the

Company’s NAV calculation.

In order to calculate the total portfolio savings NSI realizes on its exploitation

costs, we assumed NSI would realize an 8% savings on these costs. This translates to a

reduction of €933,920 per year. Using the constant growth model, which is often referred

to as the Gordon Growth Model, annual savings of €919,600 yields an additional €16.3

million in value.

PV = 919,600 * (1 + .02) = €16.3 million

.0777 -.02

Since NSI does not pay corporate income taxes, the after tax value of these

savings is also equal to €16.3 million.

D. Financing Cost Savings

NSI’s size advantage, bank relationships, and access to institutional capital may

enable the Company to realize significant financing costs savings that are not reflected in

its NAV. For example, it is well known in finance that there is a relationship between

firm size and risk. As mentioned previously a size premium is determined based on the

firm’s size as measured by its value. It is added to the results of the CAPM to reflect the

notion that investors have historically required higher rates of return for smaller

companies and lower rates of return for larger ones. The smaller the company is, the

larger the small stock premium. As evidenced by the table below, for companies with

14

market capitalizations in the top decile ($17,558 million to $626,550 million) a size

premium of negative .37% is added to the results of CAPM. This is in contrast to the

6.0% size premium applied to companies with market capitalizations in the bottom decile

($1.1 million to $254 million). Thus, all other things being equal, the required rate of

return by investors in a large firm is lower than that of a smaller firm.

When applied to REITs, the chart above confirms the fact that the cost of

financing for an individual property can be considerably greater than the financing cost

for a multi-property portfolio. NSI’s total real estate portfolio (including assets held for

sale) is valued at €1.98 billion or €7 million to €10 million per property. Thus, the size

premium alone can account for up to a 433 basis points difference in NSI’s cost of equity

financing relative to that of an individual property. A fundamental rule in finance is that

the lower the discount rate, the higher the value.

The co-insurance effect applicable to NSI’s property portfolio further reduces the

Company’s capital costs. The co-insurance of many different properties increases NSI’s

creditworthiness and decreases the likelihood that the Company will experience financial

distress. One way to estimate the magnitude of these savings is to look at the difference

Size Premium

Decile1 $ 17,558 $ 626,550 -0.37%2 0.76%3 0.92%4 1.14%5 1.70%6 1.72%7 1.73%8 2.46%9 2.70%

10 6.03%

Market Market Capitalization Capitalization of Smallest of Largest Company Company (in millions) (in millions)

7,748 17,5414,250 7,6872,773 4,2281,912 2,7591,347 1,909822 1,347514 818255 5141.1 254

Source: 2013 Ibbotson SBBI Valuation Yearbook.

15

in yields for European securities with different credit ratings. For example, as detailed in

Exhibit 4 according to the Merrill Lynch Global Index System, the difference between

AAA Non-Sovereign European Bonds and AA Non-Sovereign European Bonds is

approximately 15 basis points.31

However, recently, the Dutch commercial real estate market experienced a

tightened lending environment, which led to higher interest rates. Within this

environment, NSI’s typical advantages related to its size and relationships cannot be fully

utilized. As a result, as of March 31, 2013, there is no premium for financing cost

savings. As the Dutch market develops and rates fluctuate, the financing cost savings

may be revised in future reports.

E. Rental Income Synergies

A portfolio of real estate properties will also realize rental income synergies that

are not available to an individual property. For example, all other things being equal, the

occupancy rate for a multi-property portfolio is likely to be higher than that of a single

property. If the tenant of a single property owner does not renew a lease, due to either a

needed change in square meters or location, the single property owner will likely lose that

tenant. However, a multi-property REIT, with hundreds of different properties, is more

likely to retain that tenant by moving him to an existing portfolio property. NSI’s NAV,

which is based on market rates, ignores these top line benefits. Moreover, as discussed

previously, due to its size, reputation, and access to capital, NSI is exposed to more

investment opportunities than an individual property owner. These increased investment

opportunities justify a premium to NAV.

As a result of the merger, NSI acquired several properties with occupancy rates

lower than what NSI typically experiences. Currently, NSI’s vacancy rate is higher than

the industry’s rate. Therefore, for purposes of this analysis there is no premium for rental

synergies.

31 http://www.mlindex.ml.com.

16

F. Total Portfolio Benefits

Since portfolio benefits are based on the value of a REIT’s assets, the portfolio

premium is applied to a REIT’s Gross Asset Value. As of March 31, 2013, NSI’s GAV

was €2,180 million. Adjusted for assets held for sale of €58 million, the Company’s pro

forma GAV is €2,023. The total portfolio savings calculated above result from

exploitation cost savings and equate to €16.3 million, or a portfolio premium of 0.8%

over GAV.

VIII. NSI’S PREMIUM RELATED TO MANAGEMENT’S VALUE CREATING ABILITY

The above portfolio premium consists of savings that are currently being realized

by NSI’s real estate portfolio, but not included in the Company’s NAV calculation

(which is based on the summation of individual asset values). However, the portfolio

premium does not include a premium related to management’s ability to create future

value by enhancing existing assets and acquiring new assets that will generate returns

greater than the Company’s cost of capital. It is important to emphasize that a premium

related to management’s value creating ability is distinct from the portfolio premium and

can also be quite significant. For example, consider the following:

“…remember to apply an appropriate premium or discount to NAV –appropriate being the significant word herein order to give credit to the value-creating ability (or tendency to destroy value) of the REIT. At times, the ability of creative management to add substantial value and growth beyond

A. Gross Asset Value (€ millions) 2,022.7Exploitation Cost Savings 16.3Financing Cost Savings -Rental Income Synergies -B. Total Portfolio Benefits 16.3

Implied Portfolio Premium (B/A) 0.8%

Calculation of Portfolio Premium to GAV

17

what we’d expect from the properties themselves can significantly exceed the real estate values.”32

“After calculating NAV, Green Street evaluates seven factors to determine if a given REIT should trade at a premium above (or a discount below) its NAV, and if so, how great a premium (or discount):

1. Enterprise Value…This is the perceived ability of a management team to add value and generate growth in FFO. Does this company have untapped borrowing capacity? Or conversely, is it overleveraged? Does it have a considerable amount of land available for development? Has it demonstrated great negotiating skills?

***

The key is whether the public perceives that the REIT, which has added administrative expenses, can produce more value through its property management skills… and its development and acquisition strategies than one could obtain by buying individual projects directly.”33

“NAV as a static, even backward-looking perspective that doesn’t fully take into account the value-creating power that management provides.”34

With regards to NSI, management value creation initiatives include completing at

least 12 development projects with an investment totaling over €48 million.35 As

evidenced by the above initiatives, it is clear that NSI’s management is focused on

creating additional value in its real estate portfolio through asset improvements and other

strategies.

IX. NET ASSET VALUE AND GENERAL AND ADMINISTRATIVE EXPENSES

NSI’s general and administrative expenses consist largely of management salaries

and are itemized on the Company’s income statement. NSI’s gross general and

32 Block, Ralph L. Investing in REITs. Third Edition. Bloomberg Press, 2006, p. 217. 33 Poorvu, William J and Jeffrey L. Cruikshank. The Real Estate Game: The Intelligent Guide to Decision-Making and Investment. The Free Press, 1999, pp. 138 -139. Note that Green Street Advisors is a preeminent independent research, trading and consulting firm concentrating on REITs, other publicly traded real estate securities and private commercial real estate markets in North America and Europe. 34 Starkman, Dean. “The NAV Debate: Is net asset value the most accurate way to value REIT stocks?” www.nareit.com, May/June 2005. 35 NSI Management Report 2013.

18

administrative expenses are divided into three distinct groups. The first group consists of

property management costs which are allocated to NSI’s exploitation costs and are not

included in the Company’s report under G&A in the P&L statement. The second group

consists of indirect costs related to the managing of the Company’s existing property

portfolio (including letting and reletting, revaluations, acquisitions and sales of assets).

The third group is composed of direct costs related to the future improvement and

development of the Company (including asset development and redevelopment, potential

mergers and acquisitions, and international growth).36

With regards to the calculation of NSI’s adjusted NAV (which includes the

summation of individual asset values plus the portfolio premium), if a general expense

discount is applied, it should only be for the present value of the second group of

expenses. The Company’s property management costs (first group of expenses) are

allocated to the Company’s exploitation costs within the budget and are therefore already

included the Company’s NAV calculation.37 One could argue that second group of

expenses should be deducted because they represent the general and administrative costs

necessary to produce the 0.8% implied portfolio premium that was applied above. In

order to calculate the present value of these costs, we utilized the Gordon growth

formula:

PV = CF * (1 + g)

WACC-g

However, one important caveat is that the growth in general and administrative

expenses should be less than the growth in the Company’s revenue and cash flow. The

majority of general and administrative expenses is fixed and will not increase as the

Company’s top line increases. We applied a 1% growth rate for the Company’s year

ended March 31, 2012 general and administrative expenses related to managing the

existing property portfolio of €2.61 million.

36 NSI N.V. Annual Report for the Year Ended December 31, 2009, p.101 and Internal Company letter. 37 This is done since this allocation represents certain external resources previously used by NSI that are currently being provided by management, but are in essence part of the normative exploitation costs included in the NAV.

19

PV = 2.61 * (1 + .01) = €38.92 million

.0777 -.01

The calculation shows that €38.92 million may be deducted from the portfolio

premium of €16.3 million to represent management’s efforts in generating the portfolio

premium. Please note that this value is before including any additional value resulting

from the premium attributable to management’s asset improvement/acquisition efforts

(net of related cost) as detailed below.

With respect to the direct general expenses related to the future development and

growth of the Company (third group of expenses), it is improper to incorporate a discount

for these expenses without accounting for a premium attributable to management’s asset

improvement/acquisition efforts. If a premium related to management’s value creating

ability were applied to NSI’s NAV, it would cover the Company’s direct management

expenses of €6.18 million.38 Economically speaking, it would not make any sense for a

Company to pay its managers €6.18 million to create future value unless those managers

created value in excess of €6.18 million. Moreover, the €6.18 million in direct expenses

translates to only 1% of the Company’s NAV of €646 million. If one assumes

management can create more than 1% of additional value, all of NSI’s direct general

expenses are covered and an additional premium should be applied to the Company’s

NAV.

The Company has 12 development projects in the works totaling over €48

million, expected to be completed over the next one to two years.39 These projects have

an expected return on investment of approximately 15%, creating an additional €7.3

million in portfolio value (€1.17 million about direct general expenses).40 In order to

calculate the present value of this additional value, we again utilized the Gordon growth

formula with a 2% growth rate41:

38 Direct management expenses is for the Latest Twelve Months ended March 31, 2013. 39 NSI Management Report 2013. 40 Company management. 41 While a 1% growth rate was applied to the G&A supporting the portfolio premium, a 2% growth rate was applied to the G&A needed to create new value. The G&A related to the portfolio premium only has to maximize current portfolio benefits and does not require as much talent, resources, and incentives as the G&A needed to create future value. Thus, the G&A related to future value creation will grow at a faster rate.

20

PV = 1.17 * (1 + .02) = €20.62 million

.0777 -.02

It is important to note that it is debatable as to whether any discount for general

and administrative expenses should be applied. For example, Green Street Advisors the

preeminent REIT research and consulting firm, penalizes a REIT if its general and

administrative (overhead) costs are higher than those of the industry. The Company’s

website states that “Another self-evident premise is that a REIT with high G&A deserves

a lower premium to asset value than one with a lean operation.” William Poorvu and

Jeffrey Cruiskshank offer further insight to the Green Street model stating,

“Overhead costs. As in other industries, high overhead leads investors to place a discount on a REIT stock. Green Street calculates .7 percent of assets to be an average. It is unclear whether the present value of excessive overhead should be deducted to arrive at NAV, since potential buyers may or may not be factoring it into account.”42

The aforementioned quote highlights two important facts. First of all, it is unclear

whether any discount for management overhead should be applied. Secondly, the authors

point out that if a discount is applied, it should be for excessive overhead relative to the

REIT’s asset level. In order to determine whether NSI has excessive overhead, I

compared the Company’s ratio of total general expenses as a percentage of real estate

assets, excluding assets held for sale, to its competitors in the Dutch REIT market. As

shown in the table below, NSI’s ratio of .73% is better than the industry median and the

industry average of .90% and .89%, respectively. Given that NSI’s general expenses are

in the range of its Dutch competitors, it would be inappropriate to apply any discount to

the Company’s NAV for its general and administrative expenses.

42 Poorvu, William J and Jeffrey L. Cruikshank. The Real Estate Game: The Intelligent Guide to Decision-Making and Investment. The Free Press, 1999, p. 139.

21

Lastly, based on our experience, which includes consulting work for mutual funds

and investment companies, investors do not apply corporate general and administrative

expense discounts when analyzing the NAV for mutual funds, private equity funds, and

hedge funds. Keeping this framework in mind, we do not believe a general and

administrative expense discount should be applied to NSI’s NAV.

The net discount for general and administrative expenses is €18.30 million

(consisting of €38.92 million related to its indirect management expenses offset by a

premium of €20.62 million related management’s ability to create future value in excess

of direct general expenses). This discount is greater than the portfolio premium of €16.3

million calculated above. As a result, as of March 31, 2013, Habas’ investment in NSI is

€132.66 million, which is equal to Habas’ share of NSI’s NAV.

2012 Figures(€ in 000's) Total

General Expenses

Real Estate Assets (1)

Total General Expenses % of

Real EstateWereldhave NV 29,549 2,313,071 1.28%Corio NV 74,700 6,714,600 1.11%Eurocommercial Properties NV 12,685 2,558,581 0.50%Vastned Retail NV 13,601 1,980,985 0.69%

Median 0.90%Average 0.89%

NSI NV 14,773 1,981,787 0.75%

(1) Includes investment and development properties.

Net Asset Value (€ millions) 645.87Habas' Stake in NSI 20.54%Habas' Investment in NSI 132.66

Calculation of Habas' Investment in NSI

22

X. NET ASSET VALUE AND STOCK PRICE

As of March 31, 2013, NSI’s stock price differs from its NAV. Our analysis

above determines to what extent a premium, if any, to NSI’s stated NAV should be

applied to Habas’ investment. NSI is a publicly traded company and its NAV is

presented in its audited financial statements. We were not requested to opine on the

accuracy of NSI’s NAV. We rely on NSI’s NAV as published in its audited financial

statements, and use it as a basis for our analysis.

In a market-wide crisis, there are numerous potential causes for the difference

between a stock price and a NAV. A stock price is affected by company specific factors

as well as market and industry factors. As discussed above, a REIT’s NAV “refers to the

commonly accepted market value of a company’s assets and properties after subtracting

its liabilities and obligations.”43 It is well known in the financial literature that in the

long-run the stock price should reflect fundamental value, but in the short-run, shocks to

the market can cause substantial deviations between the stock price and the intrinsic

value.

The following is not intended to provide an explanation for the difference

between NSI’s stock price and NAV. Instead, it is a discussion of potential factors, as

provided by NSI’s management.

According to NSI management, both macroeconomic and company specific

factors have negatively affected NSI’s stock price. For instance, liquidity in the

European equity markets has been greatly reduced. The Property Development sector, as

a result of its association with the financial sector, has been negatively impacted. The

Dutch real estate market, relative to other markets, has performed poorly.

As for company specific factors, NSI management notes that throughout 2012

NSI focused on its integration with VNOI, which resulted in a larger amount of churn and

increased vacancy in the portfolio. Also according to NSI management, NSI’s

introduction of a stock dividend in 2012 led to dilution of its stock. There is also market

43 Gordon, Mark. The Complete Guide to Investing in REITs-Real Estate Investment Trusts: How to Earn High Rates of Return Safety. Atlantic Publishing, 2008, pp. 53-54.

23

speculation that NSI will potentially issue additional shares to recapitalize the merged

company, resulting in further dilution.

In conclusion, NSI states that its property valuations are based on recent external

and internal valuations of its properties. According to NSI management, possible factors

causing the difference between NSI’s NAV and stock price are the illiquidity of the

equity markets, poor market sentiment in Europe and in the Dutch real estate market, the

uncertainty among investors about further possible impairments, and the dilution of NSI’s

stock.

XI. LIMITING FACTORS AND OTHER ASSUMPTIONS

This report is furnished solely for the benefit of Habas Tulip B.V. This report

may not be relied upon by any other person or entity without Back Bay Management

Corp.’s and its division, The Michel-Shaked Group’s (“BBM/MSG”) expressed, prior

written consent. Any disclosure of this report, whether or not consented to, shall not

create any obligation or liability on BBM/MSG, or any of its employees. This report is

delivered subject to the conditions, scope of engagement, limitations and understandings

set forth in this report, and subject to the understanding that in no event shall any officer,

director, employee, agent, shareholder or controlling person of BBM/MSG be subject to

any personal liability whatsoever.

BBM/MSG is independent of both Habas Tulip B.V. and NSI. In accordance

with recognized professional ethics, BBM/MSG’s professional fees for this service are

not contingent upon the opinion expressed herein, and BBM/MSG does not have a

present or intended financial interest in the outcome of this matter.

This report relies on (and adopts without verification), the appraised value of

NSI’s assets and its base NAV as displayed on the Company’s financial statements. This

report is not an independent valuation of NSI’s assets. The opinion expressed herein is

valid only for the stated purpose and date of this report. This report should not be

considered as a fairness opinion or any other opinion related to the attractiveness or lack

of attractiveness of an investment in NSI or Habas.

The conclusions reached herein are for the exclusive use of our client, and

represent the opinion of BBM/MSG based on information furnished to BBM/MSG by the

24

parties to the transaction, and various other sources. The extent to which the conclusions

and valuations arrived at herein should be relied upon, should be governed and weighed

accordingly.

We understand that this report is to be used for the consolidated financial

statements of Habas Tulip B.V. and Habas Investments (1960) Ltd. We allow that this

report will be included; attached and cited in the Habas Investments (1960) Ltd financial

statements, prospectus or any other immediate report. This report is prepared in

accordance with IFRS.

Public information, statistical information and data are from sources deemed to be

reliable. However, no representation is made as to the accuracy or completeness of such

information and data.

Neither all nor any part of the contents of this report should be conveyed to the

public through advertising, public relations, news, sales, mail, direct transmittal, or other

media, without BBM/MSG’s prior written consent and approval.

The working papers for this engagement are being retained in BBM/MSG’s files

and are available for your reference. BBM/MSG is available to support its valuation

conclusions should this be required. However, future services regarding the subject

matter of this report, including, but not limited to testimony or attendance in court, shall

not be required of BBM/MSG unless previous arrangements have been made in writing.

Respectfully submitted,

___________________________________

The Michel-Shaked Group

25

A Select List of The Michel-Shaked Group’s Financial Analysis/Valuation Experience

COMPANY INDUSTRYCOMPANY INDUSTRY

3Com/U.S. Robotics Computer Networks

Aavid Thermal Technologies Thermal Management

Ad l hi C i ti C i ti d C blAdelphia Communications Communications and Cable

Advest Asset Management Asset Management

Air Transport International Transportation

Airgate Inc. Telecommunications

Albany International Machinery Fabrics

Allegheny Health Education and Research Foundation Health Care

Alliance Leasing Financial Services

American Chain Link Fence Chain Link FencesAmerican Chain Link Fence Chain Link Fences

American International Group Financial Services/Insurance

American Power Conversion Electronic Instruments

Annidis Corporation Medical Imaging System

Apollo Real Estate Management Real Estate

Atlantic Richfield Oil and Gas

Au Bon Pain Restaurant

Baan Company N V Enterprise Management

1

Baan Company N.V. Enterprise Management

Bank of America Corp. Money Center Bank

Bank Julius Baer Banking

A non-exhaustive listing of The Michel-Shaked Group’s experience.

Appendix

26



Belle Casinos Casino

Bennett Funding Group Financial Services

B tl Fi i l Fi i l S iBentley Financial Financial Services

Berdon LLP Accounting

Bidsdirect.com Online Auction

Bike Athletic Recreational Products

BNP Paribas Banking

Boston Chicken Food & Beverage

Boston Communications Group Telecommunications

Boston Partners Asset Management Asset ManagementBoston Partners Asset Management Asset Management

Broadcom Semiconductors

Brown Brothers Harriman Investment Banking & Advisory

Builder’s Square Home Improvement

Caldor Corporation Retail

Cambridge Electric Electric Utility

Cambridge Technology Partners Computer Networks

Carleton Woolen Mills Textiles

2

Carleton Woolen Mills Textiles

Cascade International Retail – Clothing

Check Point Software Technologies Software/Security


Appendix

27



Chevron Oil and Gas

Chiron Pharmaceuticals

CITGO Oil d GCITGO Oil and Gas

Club Med Personal Leisure

Coastal States Crude Gathering Oil and Gas

Cogent Capital Management Investment Management

Congoleum Flooring

Corvis Computer Networks

Credit Technologies Service to Wireless Firms

Cumberland Farms Inc Retail ConvenienceCumberland Farms, Inc. Retail – Convenience

Curacao Utilities Company Venezuela Electric Utility

Dade Behring Holdings, Inc. Health Care

Dairy Mart Convenience Stores Retail – Convenience

Dataware Technologies Inc. Software and Programming

Dictaphone Speech Recognition

Diet Center, Inc. Weight Management

Digital Equipment Computers

3

Digital Equipment Computers

Dragon Systems Speech Recognition

DuPage County Regulatory Commission Government


Appendix

28



Duro Industries Textiles

Dynamics Research Corp. Computer Networks

Ell H ldi I M di l S liEllman Holdings, Inc. Medical Supplies

Enron Energy Services

Enstar Group Child Care/Insurance

Enterprise Capital Management Asset Management

Espirit Energy Trust Oil and Gas Operations

Executive Life Insurance Company of California Insurance

Exxon Oil and Gas

Filtronic Comtek PLC Electronic InstrumentsFiltronic Comtek PLC Electronic Instruments

Finagle-A-Bagel Restaurant

First Executive Life Insurance Insurance

Flintkote Building Materials/Asbestos Claims

The Fortress Corporation Storage

FoxMeyer Pharmaceutical Distribution

Fundamental Portfolio Advisors Financial Services

Gilbane, Inc. Real Estate Management and Construction

4

Gilbane, Inc. Real Estate Management and Construction

Gilbane Properties, Inc. Real Estate

Gillette (Rembrandt) Consumer Products


Appendix

29



Goldman Sachs & Co. Financial Services

Grand Bahama Power Electric Utility

G t l & C A t M tGruntal & Co. Asset Management

GTE Telecommunications

Habas Group Real Estate

Halliburton Energy Services

The Hartford Insurance Group Insurance

Hayes Lemmerz International Auto & Truck

Hechinger Home Improvement

High Voltage Engineering Electronic InstrumentsHigh Voltage Engineering Electronic Instruments

Home Insurance Insurance

Honeywell Controls and Aerospace

Iberdrola Energy

Innoveda, Inc. Software and Programming

Instron Corporation Measurement Instruments

Interland (n/k/a Web.Com) Internet Services

Interpublic Group of Companies, Inc. Public Relations/Advertising

5

Interpublic Group of Companies, Inc. Public Relations/Advertising

InverWorld Holdings Financial Services

iPCS, Inc. Telecommunications


Appendix

30



ITT Conglomerate

Jones Truck Lines Trucking

JPSCO (J i ) El t i UtilitJPSCO (Jamaica) Electric Utility

JWP Water Utility & Engineering/Construction

Kenner & Company Private Equity Fund

Kinder Morgan Energy Services

Kinko’s Copying

Kinross Gold Corporation Basic Materials

Lady Luck Gaming Casino

Laminate Kingdom (d/b/a Floors Today) FlooringLaminate Kingdom (d/b/a Floors Today) Flooring

Lancer Partners Hedge Fund

Lebenthal & Co. Public Finance Activities

Lernout & Hauspie Speech Recognition

Liberty Mutual Insurance

The Liggett Group Tobacco

Lincoln North Partnership Real Estate and Construction

Litchfield Realty Company Real Estate

6

Litchfield Realty Company Real Estate

Lockheed Martin Aerospace and Defense

LOGAL Software, Inc. Software


Appendix

31



Los Angeles Metropolitan Transportation Authority Government

The Lyme Timber Company Real Estate

M4 E i t l E i t l S iM4 Environmental Environmental Services

Manufacturers and Traders Trusts Banking

Mark Properties Real Estate

Matrix Capital Markets Merger & Acquisition Advisory

Mayer Group Real Estate Consultants

McKessonHBOC, Inc. Pharmaceuticals

Merry-Go-Round Retail – Clothing

Metromedia International Group TelecommunicationsMetromedia International Group Telecommunications

Metropolitan West Asset Management Asset Management

MGM/UA Communications Film/Studios

Micro Networks Electronic Instruments

Mirant Energy Services

Mobil Oil and Gas

The MONY Group Insurance

Morse Tool Tools

7

Morse Tool Tools

Munford, Inc. (d/b/a Majik Market) Retail – Convenience

National Power Corporation (Philippines) Electric Utility


Appendix

32



NetBank, Inc. Internet Banking

NetFax, Incorporated Internet Services

N th M h t F d I d St lNorth Manchester Foundry Iron and Steel

ON Technology Software Programming

One Lincoln Real Estate

OneStar Telecommunications

PaineWebber, Inc. Financial Services

Papa Gino’s Food & Beverage

Paracelsus Healthcare Corp. Health Care

Parisian Retail ClothingParisian Retail – Clothing

PETCO Retail – Pet Care

PCD, Inc. Electronic Instruments

PictureTel Communications Equipment

Pilgrim Asset Management Investment Management

Piper Capital Management, Inc. Financial

Polaroid Cameras and Film

Portland General Electric Electric Utility

8

Portland General Electric Electric Utility

Power Generation Company (Trinidad) Electric Utility

PRI Automation Semiconductors


Appendix

33



Quadrax Basic Materials

Quigley Asbestos Claims Processing

R i F t P d t I Ti bRayonier Forest Products, Inc. Timber

Raytech Corporation Auto & Truck

Refco Financial Services

Regional Transportation Authority Government

Restrac, Inc. Human Resources

Robertson Stephens, Inc. Asset Management

Roche-Bobois (USA) Retail – Furniture

Safety Kleen Environmental ServicesSafety-Kleen Environmental Services

Salomon Smith Barney Finance & Insurance

Savoy Hotel Partners Real Estate

Shaw Group Construction/Engineering

Shoebuy.com Retail

Solar Cosmetic Labs Cosmetics

Southwest Gas Corporation Natural Gas

Sprint PCS Telecommunications

9

Sprint PCS Telecommunications

Stone & Webster Construction/Engineering

Styling Technology Corporation Personal & Household Products


Appendix

34



Summit Technology Vision Technology

Texaco Oil and Gas

T l A ti T l i tiTelecom Argentina Telecommunications

Transition Systems Health Care Information

UNIFI Communications Telecommunications

United Companies Financial Financial Services

U.S. Financial Life Companies Asset Management

US Unwired Telecommunications

US West (n/k/a Qwest) Telecommunications

Vencor Hospital ManagementVencor Hospital Management

Ventas Realty Real Estate

Vetta Sports Biking Accessories

Wieboldt Stores Department Stores

Wilmington Trust Financial Services

World Bazaar Giftware

Xpedior, Inc. Computer Services

Xyvision, Inc. Software Programming

10

Xyvision, Inc. Software Programming

Zenith Electronics Consumer Electronics

Zurich Insurance Insurance


Appendix

35

Exhibit 1

NSI Regression DataFor the Period November 24, 2011 through June 30, 2012

NSI MSCI Index NSI MSCI Index Date Closing Price Closing Price % Return % Return

Nov-24-2011 9.50 1322.57Nov-25-2011 9.21 1321.23 -3.1% -0.1%Nov-28-2011 9.57 1366.44 3.9% 3.4%Nov-29-2011 9.79 1381.76 2.3% 1.1%Nov-30-2011 9.84 1427.27 0.5% 3.2%Dec-01-2011 9.53 1431.70 -3.3% 0.3%Dec-02-2011 9.30 1441.07 -2.4% 0.7%Dec-05-2011 9.30 1455.30 0.0% 1.0%Dec-06-2011 9.30 1438.59 0.0% -1.2%Dec-07-2011 9.27 1444.37 -0.3% 0.4%Dec-08-2011 9.05 1421.67 -2.4% -1.6%Dec-09-2011 8.90 1428.19 -1.7% 0.5%Dec-12-2011 8.28 1404.67 -7.3% -1.7%Dec-13-2011 8.50 1396.10 2.7% -0.6%Dec-14-2011 8.50 1363.55 0.0% -2.4%Dec-15-2011 9.00 1368.46 5.7% 0.4%Dec-16-2011 8.66 1370.78 -3.9% 0.2%Dec-19-2011 8.78 1360.97 1.4% -0.7%Dec-20-2011 9.00 1387.78 2.5% 2.0%Dec-21-2011 9.00 1384.81 0.0% -0.2%Dec-22-2011 9.12 1393.43 1.3% 0.6%Dec-23-2011 9.25 1401.60 1.5% 0.6%Dec-27-2011 9.29 1405.36 0.4% 0.3%Dec-28-2011 9.17 1386.64 -1.3% -1.3%

36

Exhibit 1



Dec-29-2011 9.35 1393.45 2.0% 0.5%Dec-30-2011 9.45 1412.55 1.0% 1.4%Jan-02-2012 9.50 1422.40 0.5% 0.7%Jan-03-2012 9.40 1446.64 -1.0% 1.7%Jan-04-2012 9.05 1439.89 -3.8% -0.5%Jan-05-2012 9.00 1416.47 -0.6% -1.6%Jan-06-2012 8.84 1406.71 -1.8% -0.7%Jan-09-2012 8.50 1405.10 -3.9% -0.1%Jan-10-2012 8.65 1428.96 1.7% 1.7%Jan-11-2012 8.57 1419.33 -1.0% -0.7%Jan-12-2012 8.87 1423.02 3.5% 0.3%Jan-13-2012 8.89 1415.22 0.2% -0.5%Jan-16-2012 9.15 1417.89 2.9% 0.2%Jan-17-2012 9.25 1437.05 1.1% 1.3%Jan-18-2012 9.29 1445.00 0.4% 0.6%Jan-19-2012 9.24 1464.78 -0.5% 1.4%Jan-20-2012 9.25 1472.05 0.2% 0.5%Jan-23-2012 9.35 1487.63 1.1% 1.1%Jan-24-2012 9.40 1476.25 0.5% -0.8%Jan-25-2012 9.20 1475.53 -2.2% 0.0%Jan-26-2012 9.29 1505.67 1.0% 2.0%Jan-27-2012 9.38 1495.58 0.9% -0.7%Jan-30-2012 9.32 1480.91 -0.7% -1.0%Jan-31-2012 9.40 1486.74 0.9% 0.4%

37

Exhibit 1



Feb-01-2012 9.69 1514.86 3.0% 1.9%Feb-02-2012 9.70 1518.58 0.1% 0.2%Feb-03-2012 9.51 1529.46 -2.0% 0.7%Feb-06-2012 9.62 1529.55 1.1% 0.0%Feb-07-2012 9.53 1540.09 -0.9% 0.7%Feb-08-2012 9.68 1544.48 1.5% 0.3%Feb-09-2012 9.65 1549.80 -0.3% 0.3%Feb-10-2012 9.34 1524.97 -3.3% -1.6%Feb-13-2012 9.25 1538.87 -0.9% 0.9%Feb-14-2012 9.07 1526.16 -2.0% -0.8%Feb-15-2012 9.17 1537.05 1.1% 0.7%Feb-16-2012 9.04 1530.02 -1.4% -0.5%Feb-17-2012 9.10 1548.44 0.6% 1.2%Feb-20-2012 9.30 1571.27 2.2% 1.5%Feb-21-2012 9.28 1563.57 -0.2% -0.5%Feb-22-2012 9.21 1553.17 -0.8% -0.7%Feb-23-2012 8.95 1559.01 -2.8% 0.4%Feb-24-2012 8.98 1573.82 0.3% 0.9%Feb-27-2012 8.90 1565.16 -0.9% -0.6%Feb-28-2012 8.80 1571.22 -1.1% 0.4%Feb-29-2012 8.87 1567.67 0.8% -0.2%Mar-01-2012 8.94 1570.58 0.8% 0.2%Mar-02-2012 9.06 1561.54 1.3% -0.6%Mar-05-2012 9.02 1554.08 -0.4% -0.5%

38

Exhibit 1



Mar-06-2012 8.75 1513.86 -3.1% -2.6%Mar-07-2012 8.75 1515.10 0.0% 0.1%Mar-08-2012 8.88 1548.16 1.5% 2.2%Mar-09-2012 8.81 1544.13 -0.8% -0.3%Mar-12-2012 8.95 1540.16 1.6% -0.3%Mar-13-2012 9.17 1556.73 2.4% 1.1%Mar-14-2012 9.34 1553.96 1.9% -0.2%Mar-15-2012 9.27 1565.87 -0.8% 0.8%Mar-16-2012 9.26 1581.00 0.0% 1.0%Mar-19-2012 9.34 1586.11 0.8% 0.3%Mar-20-2012 9.23 1569.05 -1.2% -1.1%Mar-21-2012 9.25 1559.97 0.2% -0.6%Mar-22-2012 9.07 1553.81 -2.0% -0.4%Mar-23-2012 8.94 1556.76 -1.4% 0.2%Mar-26-2012 9.10 1569.73 1.8% 0.8%Mar-27-2012 9.02 1573.84 -0.9% 0.3%Mar-28-2012 8.97 1558.22 -0.6% -1.0%Mar-29-2012 8.95 1542.83 -0.2% -1.0%Mar-30-2012 8.77 1553.46 -2.0% 0.7%Apr-02-2012 8.73 1570.08 -0.4% 1.1%Apr-03-2012 8.77 1559.16 0.5% -0.7%Apr-04-2012 8.61 1512.53 -1.9% -3.0%Apr-05-2012 8.73 1509.02 1.4% -0.2%Apr-10-2012 8.67 1481.99 -0.7% -1.8%

39

Exhibit 1



Apr-11-2012 8.65 1486.73 -0.1% 0.3%Apr-12-2012 8.35 1506.27 -3.6% 1.3%Apr-13-2012 8.30 1488.02 -0.6% -1.2%Apr-16-2012 8.20 1486.07 -1.2% -0.1%Apr-17-2012 8.27 1509.39 0.9% 1.6%Apr-18-2012 8.30 1508.23 0.3% -0.1%Apr-19-2012 8.16 1502.34 -1.7% -0.4%Apr-20-2012 8.09 1511.15 -0.8% 0.6%Apr-23-2012 8.25 1481.26 1.9% -2.0%Apr-24-2012 8.17 1494.90 -1.0% 0.9%Apr-25-2012 8.20 1504.32 0.4% 0.6%Apr-26-2012 8.04 1513.11 -1.9% 0.6%Apr-27-2012 8.33 1521.38 3.4% 0.5%Apr-30-2012 8.31 1516.21 -0.2% -0.3%

May-02-2012 8.21 1504.56 -1.3% -0.8%May-03-2012 8.07 1503.67 -1.6% -0.1%May-04-2012 7.90 1483.87 -2.1% -1.3%May-07-2012 8.10 1471.98 2.5% -0.8%May-08-2012 7.99 1454.15 -1.3% -1.2%May-09-2012 7.80 1440.42 -2.5% -0.9%May-10-2012 7.78 1446.19 -0.2% 0.4%May-11-2012 7.68 1444.52 -1.3% -0.1%May-14-2012 7.32 1418.66 -4.8% -1.8%May-15-2012 7.22 1402.70 -1.4% -1.1%

40

Exhibit 1



May-16-2012 7.00 1385.67 -3.1% -1.2%May-17-2012 6.72 1378.79 -4.1% -0.5%May-18-2012 6.60 1356.90 -1.7% -1.6%May-21-2012 6.82 1364.43 3.3% 0.6%May-22-2012 7.22 1384.17 5.7% 1.4%May-23-2012 6.87 1345.65 -4.9% -2.8%May-24-2012 7.08 1354.40 3.0% 0.6%May-25-2012 7.21 1350.38 1.8% -0.3%May-28-2012 6.98 1354.37 -3.2% 0.3%May-29-2012 6.64 1365.02 -5.1% 0.8%May-30-2012 6.35 1339.00 -4.4% -1.9%May-31-2012 6.23 1332.89 -2.0% -0.5%Jun-01-2012 5.95 1312.34 -4.5% -1.6%Jun-04-2012 5.97 1308.01 0.3% -0.3%Jun-06-2012 6.42 1341.84 7.3% 2.6%Jun-07-2012 6.59 1361.94 2.6% 1.5%Jun-08-2012 6.71 1344.48 1.9% -1.3%Jun-11-2012 6.60 1355.92 -1.7% 0.8%Jun-12-2012 6.43 1355.34 -2.6% 0.0%Jun-13-2012 6.25 1363.06 -2.9% 0.6%Jun-14-2012 6.14 1360.75 -1.7% -0.2%Jun-15-2012 6.71 1375.59 8.9% 1.1%Jun-18-2012 6.54 1380.42 -2.6% 0.3%Jun-19-2012 6.77 1400.77 3.4% 1.5%

41

Exhibit 1


NSI MSCI Index NSI MSCI Index Date Closing Price Closing Price % Return % ReturnJun-20-2012 6.84 1411.88 1.1% 0.8%Jun-21-2012 6.76 1396.21 -1.2% -1.1%Jun-22-2012 6.59 1379.85 -2.4% -1.2%Jun-25-2012 6.63 1362.37 0.5% -1.3%Jun-27-2012 6.52 1373.42 -1.6% 0.8%Jun-28-2012 6.40 1373.62 -1.8% 0.0%Jun-29-2012 6.72 1423.38 4.9% 3.6%

42

Exhibit 2

NSI Regression Results

Regression StatisticsMultiple R 0.483R Square 0.233Adjusted R Square 0.228Standard Error 0.021Observations 150

Coefficients Standard Error t StatIntercept (0.003) 0.002 (1.636)MSCI EAFE Index 1.003 0.149 6.709

43

Exhibit 3ANSI N.V.Weighted Average Cost of Capital (WACC)As of March 31, 2013

Cost of Equity WACCAfter-Tax Cost of Debt (4) 5.00%

Risk Free Rate (1) 2.7% Weight of Debt (5) 72.50%Beta (2) 1.00Market Premium 6.70% Cost of Equity 15.08%Size Premium (3) 2.70% Weight of Equity (5) 27.50%Specific Risk Premium 3.00%

Cost of Equity 15.08% WACC 7.77%

(1) Represents 20-Year Risk Free Rate for Euro area from European Central Bank (ECB) database.(2) See Exhibit 2.(3) Stocks, Bonds, Bills, and Inflation 2013 Yearbook Valuation Edition. Size premium corresponds to 9th decile (3/31/13 market cap in USD).(4) NSI N.V. Interim Report for the Period ended March 31, 2013(5) See Exhibit 3B.

44

Exhibit 3BNSI N.V.Enterprise ValueAs of March 31, 2013(millions, except per share data)

Shares Market Preferred Adjusted EnterpriseCompany Stock Price Outstanding Value Stock Debt (1) Value Debt (%) Equity (%)

NSI N.V. € 5.60 68.2 € 381.7 - € 1,006.3 € 1,388.0 72.50% 27.50%

(1) NSI N.V. Interim Report for the Period Ended March 31, 2013, adjusted per report.

Capital Structure

45

Exhibit 4

Yields on Non-Sovereign European BondsAs of March 31, 2013

EffectiveDuration Spread over

Type of Security Yield (years) AAA BondsAAA Rated Non-Sovereign Bonds 1.04% 4.94 0.00%AA Rated Non-Sovereign Bonds 1.19% 4.81 0.15%A Rated Non-Sovereign Bonds 1.86% 4.42 0.82%BBB Rated Non-Sovereign Bonds 3.19% 4.12 2.15%

Sources:Merrill Lynch Global Index System

46

Update as per 31-03-2013

8953 DietikonLerzenstrasse 10 Commercial property

Moritz MengesChristoph Zaborowski

1Q 201331.03.2013

AppraiserProject managerProject number

ClientValuation date Valuation reportValuation purpose

40647.8

Habas Swiss Investment

- 1Q 2013 Page 1 of 15Lerzenstrasse 10 , 8953 Dietikon Valuation no. 7141.61Created on 24.04.2013

Wüest & Partner 1 Summary

Volume (SIA 416)

CHF

* Yield: Annuity in % of market value

5.89

Volume (GVA)

NPV repair costs 1-10

%

Land Reg. Sheet no.Volume (SIA 116)

Plot utilisation ratio

Ann. 11

Vacant

Ann. 1-10

Potential

Floor Area (SIA 416)

Project manager

Post code, Town/City

Construction Year

Discount rate (nominal) %

Ownership form

Vacant

Canton

Quality profile coefficient

Current

Property accounts Annuity

Construction Year 2

Building insurance value

%

InspectionGround lessee

Potential

Costs

Street 1

NFA Ann. (%)

Rep. c. 1-10/m³ to GVA

Perc.

Street 2

Net present value

Rep. c. 1-10/GVA value %

Ownership Share %

Current

Rep. c. 1-10/m³ to SIA 116

Planning zone

Project name

%

Discount rate (real) %

Annuity

Total

Market value

%

Current

Total refurbishment

Rental IncomeCurrent

Values

Owner

% projected

Cadastral no.

Imprint

Construction type

Percentile

% MV

%

%

Property no.

p. m³

Site area Partial refurbishment

Annuity

%

Current

Yield (*)

% GVA

Potential

Property type

current %

p. m³

Market value (MV)

Client

Produced by

Proj. income ground lease

Reference value

Yield (Y)

Inflation p.a. %

Annuity

Potential

Property name

Appraiser

Book value

Rental Area

Contact

Valuation date

Projected

128.5

Frame construction

0

Repair costs

100.0

[email protected]

12,744 m²

Seefeldstrasse 60

CHF

230

3,055,971

4.3

163,328

Others 69

Repair costs

2.5

0.37

84.8

0.34 165,119

99.1

3117

CHF

HABAS Swiss Investments AG

00

1.7

218

Trade / Industry

100.0

Income losses

Upkeep costs

579,121

2,438,211

11

7.0

[email protected]

8002 Zürich

4.65

3,231,443

Gotthardstrasse 6

10155

38,6400

2000

202

Upkeep costs

0.0

4.90.29

Lerzenstrasse 10

City Plaza

80

3,549,435

CHF

1992

10.5

0

100.0

38,64011.2

Total net income

Ground lease (costs)213,114

6.88

51,960,000

[email protected]

8953 Dietikon

3,489

Repair costs

150,326

CHF

Andreas Schoch

CHF p. m² NFA

0.0

130,471

78,370 m³

+41 44 289 90 00

16.7

Office

ZH

165,119 101.1

100.0

11.8

Total additional costs4,581,149

CHF

85.6

5.89

CHF/m²

1.99

31.03.2013

8008 Zürich

0

884,481

118,316 3,058,575

5,782 m²

51.9HABAS Switzerland Investment

CHF/m²

20 0.325.4

101.5Running costs

5

Christoph Zaborowski

2,436,510

Commercial property

11.07.2006

79.0

127.1

Running costs

0

150,326

203

213,114

2,414,546

109.0

Wüest & Partner

Projected rental income

Retail218

Sole ownership

1.3 230

4.70

51,960,000

CHF

19.0

0.48

Moritz Menges4.9

7.0Upkeep costs

0.079.8

74

5.75

3,063,350

Habas Swiss Investment

5.89

51,959,136

100.04,077

2,806,855

Special use

1.00

5.4

0.25Running costs

588,200

Residential

65,805,573

52

4213.0

0.0

CHF/m²

44,469,000

10.5

www.wuestundpartner.com

0.41


Wüest & Partner 2 Summary II

in nominal terms

in nominal terms

31.03.2023

31.03.2018

CHF

CHF p. Mt.

9.91592480.00.09.9159

00

248

Parking space (bike/bicycle)Outdoor parkingIndoor parking

0000000

Total6 Room +5 Room4 Room3 Room2 Room1 Room

Total

%UnitsParking TypeVacantPercentileUnitsApartment Type

%

Parking Spaces - DetailsApartment Mix

%Vacant

CurrentCHF p. Mt.

10069.063.19.0

MthsLatestWeighted Av.Earliest

IndexationContract Length

1,16210.05252

% m²Potential

%Current

Percentile Classification

25315013111572609397318257181403274211193176

Trade / IndustryRetailOffice

30925822720590%70%50%30%

16910%

p. m²CHF

Price Ranges Municipality

Residential%

Vacant

Current Weighted Av.Mths Mths %

Current

Locational quality

Properties with handicaps

Problem properties

Prime propertiesQuestion marks

III II I

VI V IV

IX VIII VII

poor good

Period1 2 3 4 5 6 7 111098

105.7105.3104.9104.4102.4102.2102.0101.8101.5101.2100.0Market value

110.2109.1108.0106.9105.9105.9105.0103.9102.7101.7100.0Projected rental income

110.8109.7108.6107.5106.5109.7109.8108.8107.8106.5100.0Total income

97.496.495.594.593.692.791.792.491.492.0100.0Running costs

4.94.94.94.94.94.84.84.94.95.05.5 in % of projected rental income

142.0109.4108.3107.2106.2105.1104.1103.0102.0101.0100.0Upkeep costs


100.80.00.00.0283.10.00.00.00.00.0100.0Repair costs

109.351.951.450.9189.849.949.449.348.848.8100.0Total costs

111.2125.0123.8122.684.4125.5125.8124.6123.4121.9100.0Total net income


6.146.106.066.036.096.116.066.015.965.925.89Gross yield %

4.655.255.225.193.645.435.455.415.375.324.42Net yield %

14.0

2.5

1,100,000

86.3

6.36

7.04

% Building insurance value

per m³ SIA 116

Exit

Exit

Repair costsTotal Period 1-10

Various Indicators

per m²

per m³ GVA

per m³ SIA 416

Internal Rate of Return

per Apartment

Development: Value, Revenue, Costs & YieldsMarket matrix and Quality profile

2.12.3

Market CoefficientProperty quality

2.0Locational quality

5.0

Condition Micro location

Standard Usability

Macro-location

Quality profile property

4.0

3.0

2.0

1.0

1=very good; ... 5=very poor

%


Wüest & Partner 3 Contents

1 Summary

2 Summary II

3 Contents

4 Income summary

Tenant summary5

6 Rent roll

7 Projected account summary

8 Results

9 Quality profile (extended)

10 Context


CHFCHF

Wüest & Partner

Rental Income%

AnnuityPercentileper m²% Currentmin/m²max/m²Percentileper m²ShareIncomeAreaUnits

CHFUse

Potential in nominal terms

4 Income summary

79.82,438,211 52218

106.1

99.947.7

522185.0

2,314,684

2,436,510

2,331,8454.3

2,435,75912925710.5

2,182,571

11,16527Office

Actual

ProjectedVacant %

3.4105,154 74

123.0

107.329.2

805.0

107,236

112,880

105,3654.5

110,3406518617.1

87,176

1,41133Warehousing / Archiving

Actual

ProjectedVacant %

1.338,640 230

95.0

100.0 2305.0

36,708

38,640

36,9474.1

38,5212302300.0

38,640

1681Catering / Gastronomy

Actual

ProjectedVacant %

15.5473,967

105.7

100.350.55.0

451,554

475,320

453,9474.2

473,9569.9

427,047

248Indoor parking

Actual

ProjectedVacant %

2035.0

3,063,350202

106.447.7

100.2

2,928,1044.3

3,058,575100.010.5

2,910,182

3,055,971

2,735,434

309 12,744Vacant %Actual

ProjectedTotal


CHF CHF


VacantShare %per m²SC %RenovationOptionsW. index %W. duration [a]Latest endEarliest end1st Early BreakShare %per m²AreaNo area %Units

Wüest & Partner

ContractIncomeTenant

5 Tenant summary

5.04.0209110,2800.01002.915.02.201615.02.201615.11.20144.0207109,096468758ADP Schweiz AG5.088.22032,419,5700.01005.531.12.201831.12.201388.92042,433,15310,09580227Axpo Trading AG5.03.7228102,2000.01004.331.07.201731.07.20173.8231103,1693766712Haymoz Fleet Performance AG5.01.618043,6200.01001.231.05.201431.05.20141.312935,0111299111Swisscom IT Services Workplace5.02.420766,6400.0854.831.12.201731.12.20172.016655,005283676Valueplus AG

0.000.0010015Visitors

5.0Total 100.02042,742,3100.01005.331.12.201831.12.201315.11.2014100.02032,735,43411,35181279


Wüest & Partner

LeaseSC %Area Perc. Vacantper m²Perc.per m²OptionsIndex %EndStartUnitsRoomsVacant

IncomeRental UnitsCHFCHFUseStoreyTenantNo.


6 Rent roll

20005 1 x 5 53220 5.0206,360211860.010031.12.201801.11.20129381 174,109O0Axpo Trading AG20032 1 x 5 53220 5.042,460211860.010031.12.201301.01.20091931 35,819O0Axpo Trading AG20031 53220 5.023,100211860.010031.12.201301.10.20091051 19,487O0Axpo Trading AG20030 1 x 5 53220 5.021,120211860.010031.12.201301.01.2009961 17,816O0Axpo Trading AG20017 1 x 5 53220 5.020,240211860.010031.12.201301.01.2009921 17,074O0Axpo Trading AG20026 53220 5.056,320101760.010031.12.201701.01.20082561 45,093O0Valueplus AG20101 1 x 5 53220 5.0473,000632530.010031.12.201801.11.20122,1501 543,370O1Axpo Trading AG20205 1 x 5 53220 5.0107,360652570.010031.12.201801.11.20124881 125,409O2Axpo Trading AG20202 1 x 5 53220 5.079,860652570.010031.12.201801.11.20123631 93,288O2Axpo Trading AG20211 53220 5.053,460151800.010031.12.201801.11.20122431 43,819O2Axpo Trading AG20210 53220 5.023,760151800.010031.12.201801.11.20121081 19,475O2Axpo Trading AG20201 53220 5.022,0002201001 22,000O2Vacant20215 53220 5.0233,6402201,0621 233,640O2Vacant20302 1 x 5 56230 5.097,520462080.010031.12.201801.11.20124241 88,039O3Axpo Trading AG20306 1 x 5 56230 5.073,600462080.010031.12.201801.11.20123201 66,445O3Axpo Trading AG20305 1 x 5 56230 5.056,810462080.010031.12.201801.11.20122471 51,287O3Axpo Trading AG20307 1 x 5 56230 5.021,160462080.010031.12.201801.11.2012921 19,103O3Axpo Trading AG20310 56230 5.092,920532200.010015.02.201616.02.20114041 88,880O3ADP Schweiz AG60301 1 x 5 56230 5.038,640562300.010031.07.201701.08.20101681 38,640C3Haymoz Fleet Performance AG20315 1 x 5 56230 5.024,610642560.010031.07.201701.08.20101071 27,344O3Haymoz Fleet Performance AG20301 1 x 5 56230 5.022,310482090.010031.07.201701.08.2010971 20,265O3Haymoz Fleet Performance AG20401 1 x 5 59240 5.0378,000632530.010031.12.201801.12.20121,5751 398,128O4Axpo Trading AG25012 1 x 5 15180 5.0210,96051750.010031.12.201801.11.20121,1721 204,561O-1Axpo Trading AG25027 1 x 5 15180 5.030,96051750.010031.12.201801.11.20121721 30,021O-1Axpo Trading AG25010 1 x 5 15180 5.015,12051600.010031.12.201301.01.2009841 13,440O-1Axpo Trading AG25011 1 x 5 15180 5.014,58051600.010031.12.201301.01.2009811 12,960O-1Axpo Trading AG25026 1 x 5 15180 5.012,06051600.010031.12.201301.01.2009671 10,720O-1Axpo Trading AG25028 15180 5.023,22051290.010031.05.201401.09.20051291 16,619O-1Swisscom IT Services Workplace A20033 1 x 5 80 5.01,4401860.010031.12.201801.11.2012181 3,341W0Axpo Trading AG20034 1 x 5 80 5.09601860.010031.12.201801.11.2012121 2,227W0Axpo Trading AG50004 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W0Axpo Trading AG50003 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W0Axpo Trading AG50002 80 5.03201500.010031.07.201701.08.201041 600W0Haymoz Fleet Performance AG50001 80 5.03206841 272W0Vacant50102 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W1Axpo Trading AG50101 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W1Axpo Trading AG50202 1 x 5 80 5.0320660.010031.12.201801.12.201241 263W2Axpo Trading AG50201 80 5.03208041 320W2Vacant


Wüest & Partner




6 Rent roll

50301 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W3Axpo Trading AG50302 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W3Axpo Trading AG55001 1 x 5 80 5.038,720660.010031.12.201801.11.20124841 31,867W-1Axpo Trading AG55010 1 x 5 80 5.06,640880.010031.12.201801.11.2012831 7,287W-1Axpo Trading AG55105 1 x 5 80 5.04,080660.010031.12.201801.11.2012511 3,358W-1Axpo Trading AG55101 1 x 5 80 5.03,600660.010031.12.201801.11.2012451 2,963W-1Axpo Trading AG55108 1 x 5 80 5.03,520660.010031.12.201801.11.2012441 2,897W-1Axpo Trading AG55011 1 x 5 80 5.01,280660.010031.12.201801.11.2012161 1,053W-1Axpo Trading AG55109 1 x 5 80 5.01,120660.010031.12.201801.11.2012141 922W-1Axpo Trading AG55112 1 x 5 80 5.0880660.010031.12.201801.11.2012111 724W-1Axpo Trading AG55111 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W-1Axpo Trading AG55110 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W-1Axpo Trading AG55012 80 5.05,1201250.010015.02.201616.02.2011641 7,976W-1ADP Schweiz AG55107 80 5.02,160650.010031.12.201701.01.2013271 1,752W-1Valueplus AG55102 80 5.014,160801771 14,160W-1Vacant55106 80 5.01,92080241 1,920W-1Vacant55201 1 x 5 80 5.013,840660.010031.12.201801.11.20121731 11,390W-2Axpo Trading AG55206 1 x 5 80 5.04,640660.010031.12.201801.11.2012581 3,819W-2Axpo Trading AG55207 1 x 5 80 5.01,440660.010031.12.201801.11.2012181 1,185W-2Axpo Trading AG55210 1 x 5 80 5.01,120660.010031.12.201801.11.2012141 922W-2Axpo Trading AG55211 1 x 5 80 5.0320660.010031.12.201801.11.201241 263W-2Axpo Trading AG55212 80 5.0320660.010031.12.201801.11.201241 263W-2Axpo Trading AG55205 80 5.01,76059221 1,306W-2Vacant81055 5.020,4000.010031.05.201401.07.200710 18,392IP-1Swisscom IT Services Workplace A80165 5.06,1200.0031.12.201701.01.20083 6,120IP-1Valueplus AG81064 5.02,0400.0031.12.201701.01.20081 2,040IP-1Valueplus AG80001 1 x 5 5.0371,2800.010031.12.201801.11.2012182 371,935IP-2Axpo Trading AG80078 5.046,92023 46,920IP-2Vacant80055 1 x 5 5.016,3200.010031.07.201701.08.20108 16,320IP-2Haymoz Fleet Performance AG80257 5.012,2400.010015.02.201616.02.20066 12,240IP-2ADP Schweiz AG80280 5.00001.01.201315 0IP-1Visitors


Wüest & Partner




6 Rent roll

153,168 5.0

% proj.% proj.

202 100.0 203 100.0

95.010.5320,53890.02,735,434 2,910,183

12,744 3,055,971309

Total actual rental incomeTotal vacant

3,063,350Total projected rental income


CHF -31.03.2113

1101.04.2023

-31.03.2023

1001.04.2022

-31.03.2022

901.04.2021

-31.03.2021

801.04.2020

-31.03.2020

701.04.2019

-31.03.2019

601.04.2018Potential

Annuity

Accounts % Proj.

Account % Proj.

01.01.2009

-31.03.2017-31.03.2016-31.03.2015-31.03.2014-30.09.2012

01.04.201601.04.201501.04.201401.04.20131 2 3 4

-31.03.2018

01.04.20175

Period


7 Projected account summaryWüest & Partner

3,371,0853,337,9593,305,1103,272,5853,240,3803,241,9883,060,111 3,112,486 3,143,599 3,178,248 3,212,016100.0 3,058,5753,063,3502,985,354 100.0Projected rental income168,554166,898165,256163,629162,01970,608169,161 31,722 26,996 32,005 36,6745.0 130,471153,16814,634 0.5Vacant

0000000 0 0 0 00.0 000 0.0Other income losses168,554166,898165,256163,629162,01970,608169,161 31,722 26,996 32,005 36,6745.0 130,471153,16814,634 0.5Income losses

16,56916,40516,24316,08215,92315,76515,000 15,150 15,302 15,455 15,6090.5 15,00015,00015,473 0.5Other income3,219,1003,187,4663,156,0983,125,0383,094,2843,187,1452,905,950 3,095,914 3,131,904 3,161,697 3,190,95095.5 2,943,1042,925,1822,986,192 100.0Total income

0000000 0 0 0 00.0 000 0.0Caretaking32,03431,71731,40331,09230,78430,47929,000 29,290 29,583 29,879 30,1780.9 29,00029,00029,186 1.0Insurance

5,5235,4685,4145,3615,3085,25510,000 10,100 7,651 7,727 5,2030.2 5,6465,00014,996 0.5Utilities115,985114,837113,700112,574111,460110,35670,000 106,050 107,110 108,182 109,2633.4 103,413105,00072,416 2.4Property Management

0000000 0 0 0 00.0 000 0.0Property taxes11,04610,93710,82910,72110,61510,51010,000 10,100 10,201 10,303 10,4060.3 10,00010,0001,718 0.1Other expenditure

00000050,000 0 0 0 00.0 2,26700 0.0Other running costs164,589162,959161,346159,748158,167156,600169,000 155,540 154,545 156,091 155,0504.9 150,326149,000118,316 4.0Running costs198,832153,116151,600150,099148,613147,141140,000 141,400 142,814 144,242 145,6855.9 165,119180,000163,328 5.5Upkeep costs302,500000849,2160300,000 0 0 0 08.9 213,114273,8490 0.0Repair costs665,920316,075312,946309,8471,155,995303,742609,000 296,940 297,359 300,333 300,73519.7 528,558602,849281,643 9.4Total running and maint. costs665,920316,075312,946309,8471,155,995303,742609,000 296,940 297,359 300,333 300,73519.7 528,558602,849281,643 9.4Total costs

2,553,1802,871,3912,843,1522,815,1911,938,2882,883,4032,296,950 2,798,974 2,834,545 2,861,365 2,890,21675.8 2,414,5462,322,3342,704,550 90.6Total net income

Other running cost:2013: management fees for re-letting of vacant areas of CHF 50,000 (corresponding to approx. 15% of the expected rent)

Repair costs2013 CHF 300,000 Partial repair of the flat roof (partial)2019 CHF 800,000 Replacement of the heating and ventilation plants/installations


Market value in CHF

CHF

CHF

CHF

CHF

CHF

320,53810.5

16,5693,387,654

168,5545.0

3,219,100

16,4053,354,364

166,8985.0

3,187,466

16,2433,321,353

165,2565.0

3,156,098

16,0823,288,667

163,6295.0

3,125,038

15,9233,256,303

162,0195.0

3,094,284

15,7653,257,753

70,6082.2

3,187,145

15,6093,227,625

36,6741.1

3,190,950

15,4553,193,702

32,0051.0

3,161,697

15,3023,158,901

26,9960.9

3,131,904

15,1503,127,636

31,7221.0

3,095,914

15,0003,075,111

169,1615.5

2,905,950Total income Income losses %Income losses

CurrentIncome

Results

01.04.2013 01.04.2014 01.04.2015 01.04.2016 01.04.2017 01.04.2018 01.04.2019 01.04.2020 01.04.2021 01.04.2022 01.04.2023

100.0 101.2 101.5 101.8 102.0 102.2 102.4 104.4 104.9 105.3 105.751,960,000 52,600,800 52,759,572 52,885,350 52,997,962 53,086,518 53,182,160 54,271,492 54,511,007 54,738,948 54,943,905

100.0 121.9 123.4 124.6 125.8 125.5 84.4 122.6 123.8 125.0 111.22,296,950 2,798,974 2,834,545 2,861,365 2,883,403 1,938,288 2,815,191 2,843,152 2,871,391 2,553,180

100.0 48.8 48.8 49.3 49.4 49.9 189.8 50.9 51.4 51.9 109.319.9 9.5 9.5 9.4 9.4 9.4 35.7 9.5 9.5 9.5 19.8

609,000 296,940 297,359 300,333 300,735 303,742 1,155,995 309,847 312,946 316,075 665,920

665,920609,000 296,940 297,359 300,333 300,735 303,742 1,155,995 309,847 312,946 316,075300,000 0 0 0 0 0 849,216 0 0 0 302,500140,000 141,400 142,814 144,242 145,685 147,141 148,613 150,099 151,600 153,116 198,832169,000 155,540 154,545 156,091 155,050 156,600 158,167 159,748 161,346 162,959 164,589

100.0 106.5 107.8 108.8 109.8 109.7 106.5 107.5 108.6 109.7 110.8

3,060,111 3,112,486 3,143,599 3,178,248 3,212,016 3,241,988 3,240,380 3,272,585 3,305,110 3,337,959 3,371,085

5.00 49,140,000 6.22

51,960,000

4.90 50,040,000 6.11

4.50 5.66

4.80 50,980,000 5.994.70

52,970,0005.88

4.6054,020,000

5.77

55,110,0004.40 5.55Current GY %

Discount Rate/Yields %4.70

5.75

5.89

1.00Discount rate in real terms

Gross yield (GY) annuity

Discount rate in nominal terms51,960,00051,960,000

100.0 %

SensitivityDiscount rate %

Assumed inflation p.a.Ownership interestTotal market value

Market Value

DevelopmentMarket ValueExtrapolation of market value

Development

Total net incomeTotal net income

% projected incomeDevelopment

Total additional costs

2,890,216

Repair costsUpkeep costs

Total running and maint. costs

Running costs

Total costs

Accounts

118,316

281,643

163,3280

9.2

3,055,971

281,643

Costs

Development

Total income before income lossesAdditional incomeProjected rental income

-31.03.2015

01.04.2014

-31.03.2016

01.04.2015

-31.03.2017

01.04.2016

-31.03.2018

01.04.2017

-31.03.2019

01.04.2018

-31.03.2020

01.04.2019

-31.03.2021

01.04.2020

-31.03.2022

01.04.2021

-31.03.2023

01.04.2022

-31.03.2113

01.04.2023

-31.03.2014

01.04.20131110987654321

Period


8Wüest & Partner


9 Quality profile extended

5.0Scale from ...Weight.

Wüest & Partner

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 ...to CommentsRating

2.5100Commercial average 5.0 = very poor 1.0 = very good

1.0 = very good5.0 = very pooraverageMicro location 50 2.6

1.0 = very good

4.03.02.0

104050Commercial location in municipality

Public transport linksPedestrian thoroughfare

goodaveragepoor

5.0 = very poor

5.0 = very poor

5.0 = very poor

1.0 = very good

1.0 = very good

2.5 averageUsability 20 5.0 = very low 1.0 = very high

1.0 = very high2.52.52.5

503020 average

averageaverageLayout quality

Access/ParkingFlexibility

5.0 = very low

5.0 = very low 1.0 = very high

5.0 = very poor 1.0 = very good

1.0 = very high2.2 highStandard 10 5.0 = very low

2.02.0

2.5333333

Space provisionBuilding fabricBuilding services high

highstandard 5.0 = very limited 1.0 = very large

5.0 = very low

5.0 = very low

1.0 = very high

1.0 = very high

2.220Condition good 5.0 = very poor 1.0 = very good

2.02.02.530

5020Building envelope

InteriorBuilding services average

goodgood 5.0 = very poor

5.0 = very poor

5.0 = very poor

1.0 = very good

1.0 = very good

1.0 = very good


9 Quality profile extended

5.0Scale from ...Weight.

Wüest & Partner

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 ...to CommentsRating

Macro locationQualitätsprofil Liegenschaft

Condition

Standard

Micro location

Usability

1

3

5

4

2

very goodvery good

very good 1.0 = very good

1.0 = very good

1.0 = very good

5.0 = very poor

5.0 = very poor

5.0 = very poor

1.2811.40

CommercialResidential

1.2100Macro location coefficient

1.0 = very good

1.0 = very good

1.0 = very high

5.0 = very low

5.0 = very low

5.0 = very poor

5.0 = very pooraverage

2.2

2.52.6

2.5

2.220102050

100

Micro locationUsabilityStandardCondition

Weighted total

averageaveragehighgood 5.0 = very poor

1.0 = very high

1.0 = very good


Wüest & Partner 10 Context

MethodCommission

The valuation uses the discounted cash-flow (DCF) method. With this method, the current market value of a property is determined as the total of all projected future net income from ongoing operations discounted to present-day equivalents. No allowance is made for any possible transaction cost (such as taxes, charges or fees). Further valuation does not account for any taxation (except of mandatory property taxes) or interest cost.

The net income of operations is discounted individually for each property with due allowance for specific opportunities and threats, and with adjustment in line with prevailing market conditions and risks. All projected cash flows are presented to ensure maximum transparency.

Wüest & Partner applies a so-called one-period DCF model. The valuation period extends for 100 years , from the valuation date. Due to formal constraints the report displays a time-weighted residual value for the period 11 through 100 of the valuation.

Wüest & Partner was commissioned by HABAS Swiss Investment to value the property in question as per the stipulated day of valuation for accounting reasons.

The valuations comply with national and international standards. These standards also accord with the reporting guidelines commonly used in Switzerland. The valuation focuses on the calculation of the market value. In the absence of any official definitions of market value in Switzerland, the concept used in standard European valuation textbooks is adopted. Property values are thus determined in accordance with the guidelines of the RICS (Royal Institution of Chartered Surveyors) and TEGOVA (The European Group of Valuers' Associations).

In accordance to these regulations the market value is defined as «the estimated amount for which a property �� transaction after proper marketing, wherein the parties have each acted knowledgeably, prudently, and without compulsion.»

Value and price may diverge. No allowance can be made in this valuation for any circumstances affecting the price.


Wüest & Partner 10 Context

�� !�Partner to the best of its knowledge and with due observance of current professional standards. The valuation was performed with reference to the specified valuation date and may be affected by subsequent events for which no allowance can be made at the present time. A revaluation shall become necessary should any such events occur.

�� documentation summary. A site visit has been held in the course of the first recognition of the property.

Nothing in the Report should be construed as advice to proceed or not to proceed with a transaction and/or any investment or provision of finance or the consideration of terms on which to so proceed. The scope of this Report is not nor does it purport to be a confirmation or complete review of all matters of a legal, technical or real estate relevant nature which may be of interest or concern to a potential purchaser and financing parties considering or evaluating whether to proceed with a transaction or the consideration or terms on which to so proceed.

In consideration of our agreement to make a copy of the Report available to you, you agree to treat the contents of the Report as confidential and not to distribute copies of the Report, or otherwise disseminate the contents of the Report, to any person without our prior written consent, with the exception of (a) disclosure on a confidential basis to such of your professional advisers, directors, officers, servants, employees and/or agents and members of the group of companies controlled by you who need to consider the matters set out in the Report (b) disclosure required by law in any jurisdiction, or (c) disclosure for regulatory purposes.

We hereby confirm to have performed the valuation independently and neutrally in conformity with its business policies. It is addressed to HABAS Swiss Investment and was carried out solely for those purposes specified above. No conflicts of interest of any kind exist. The valuation was; Wüest & Partner shall accept no liability in respect of third parties other than that mentioned above.

The valuation is based on the current letting situation as disclosed in the relevant rent-roll prepared by the charged management. The projected rental income reflects the relevant terms and conditions of ongoing rental contracts as well as the general regulations of the rental law and the generally applied business principles. The estimation of the rental values is determined individually for all separate letting units on the basis of the prevailing local and regional market conditions.

The projection of the running and maintenance cost is determined on the basis of the property accounts of previous operations and validated with benchmarks and comparable information of our extensive databases.

�� lifecycle analysis of the individual building elements. The building structure's remaining lifespan was estimated and periodic refurbishments modelled on the basis of the general condition of the fabric as determined during the property inspection. Appropriate annual reserves were calculated accordingly and plausibility tested using comparables and Wüest & Partner's own benchmarks. The calculation factors in 100% of repair costs in the first 10 years; the proportion applied from year 11 onwards is limited to the value-preserving investments.

The relevant discount is based on a risk-adjusted interest rate. Rates are determined individually for each property on the basis of appropriate benchmarks derived from comparable transactions. Credit risks posed by specific tenants are , if not otherwise stated, not explicitly factored into the valuation

Inflation is respected with an annual rate of 1.0%. Specific adjusment clauses in the rental contracts are reflected individually.

Disclaimer Valuation Assumptions


Habas Star B.V.

Unaudited Condensed Consolidated Interim Financial Statements

as of 31 March 2013

Habas Star B.V. Unaudited Condensed Consolidated Interim Financial Statements as of 31 March 2013 Table of Contents

Page Unaudited condensed consolidated interim balance sheet 2 Unaudited condensed consolidated interim statement of comprehensive income 3 Unaudited condensed interim statement of changes in equity 4 Unaudited condensed consolidated interim statement of cash flow 6 Notes to the unaudited condensed consolidated interim financial statements 7 Independent report on review of unaudited condensed consolidated interim financial information 11

2

Habas Star B.V. Unaudited Condensed Consolidated Interim Balance Sheet Euro (In thousands) As of As of As of 31 March 31 March 31 December 2013 2012 2012 (Unaudited) (Unaudited) (Audited)

Assets

Non current assets Equity accounted investees 134,282 181,074 143,548 Deposits in pledged bank accounts 18,215 - 12,061 Investment property - 111,934 - Property and equipment 3 3 2 Other investments - 509 - Total non current assets 152,500 293,520 155,611

Current assets Trade and other receivables 3,030 6,587 4,198 Cash and cash equivalents 512 5,678 1,338 Assets held for sale 47,163 12,222 45,516 Total current assets 50,705 24,487 51,052

Total assets 203,205 318,007 206,663

Equity Share capital 24 24 24 Capital notes 121,325 114,067 114,929 Share premium 20,771 20,771 20,771 Reserves (13,815) (5,949) (7,606) Retained losses (63,575) (9,876) (56,318) Total equity 64,730 119,037 71,800

Liabilities Non-current liabilities Credit from banks 54,672 127,923 54,642 Shareholders loans 26,623 44,942 26,543 Deferred tax liabilities 1,170 2,474 2,222 Derivatives 1,949 9,004 2,299 Total non-current liabilities 84,414 184,343 85,706 Current liabilities Credit from banks - 1,660 - Shareholders loan 20,420 - 15,317 Derivatives - 450 - Trade and other payables 3,050 4,372 3,641 Liabilities held for sale 30,591 8,145 30,199 Total current liabilities 54,061 14,627 49,157

Total liabilities 138,475 198,970 134,863

Total equity and liabilities 203,205 318,007 206,663 Director _______________________ Date: May 24, 2013 The notes on pages 7 to 10 are an integral part of these consolidated financial statements

3

Habas Star B.V. Unaudited Condensed Consolidated Interim Statement of Comprehensive Income Euro (In thousands) For the year For the three months ended ended 31 March 31 March December 31 2013 2012 2012 Income Revenues from investment property rentals 565 1,644 5,763 Revenues from services 17 22 68 Gain from repayment of subordinated loan 10 157 157 Gain from increase in holdings in equity accounted investee's - - 1,330 Gain from shares buy-back of associate - 48 48 Increase in fair value of real estate investment - - 207 Total income 592 1,871 7,573 Expenses Property operating expenses 53 247 805 General and administrative expenses 367 366 1,400 Impairment of subordinated loan - - 509 Impairment losses 650 - 22,414 Loss on sale of investment property - - 2,471 Change in fair value of investment property 2,425 - 320 Company's share of losses of equity accounted investees 4,255 3,224 21,030 Financing income (965) (181) (753) Financing expenses 2,092 2,752 11,542 Total expenses 8,877 6,408 59,738 Loss before income tax (8,285) (4,537) (52,165) Income tax income (expense) 1,028 (17) 1,169 Loss for the period (7,257) (4,554) (50,996) Other comprehensive income (loss) that will be transferred to profit or loss Foreign currency translation differences for foreign operations (163) 278 180 Effective portion of change in the fair value of cash flow hedge 350 (291) (988) Other comprehensive income loss for the period 187 (13) (808) Total comprehensive loss for the period (7,070) (4,567) (51,804) The notes on pages 7 to 10 are an integral part of these consolidated financial statements

4

Habas Star B.V. Unaudited Condensed Interim Statement of Changes in Equity Euro (In thousands) Translation reserve from Share Capital Notes Share Hedging foreign Retained Total capital MRE Habas premium reserve operation losses equity For the three months ended 31 March 2013

Balance at 1 January 2013 24 30,170 84,759 20,771 (2,299) (5,307) (56,318) 71,800 Translation differences on Capital Notes - 1,679 4,717 - - (6,396) - - Loss for the period - - - - - - (7,257) (7,257) Other comprehensive income for the period - - - - 350 (163) - 187 Balance at 31 March 2013 24 31,849 89,476 20,771 (1,949) (11,866) (63,575) 64,730 For the three months ended 31 March 2012

Balance at 1 January 2012 24 30,063 84,459 20,771 (1,311) (5,080) (5,322) 123,604 Translation differences on Capital Notes - (119) (336) - - 455 - - Loss for the period - - - - - - (4,554) (4,554) Other comprehensive loss for the period - - - - (291) 278 - (13) Balance at 31 March 2012 24 29,944 84,123 20,771 (1,602) (4,347) (9,876) 119,037

5

Habas Star B.V. Unaudited Condensed Interim Statement of Changes in Equity Euro (In thousands) Translation reserve from Share Capital Notes Share Hedging foreign Retained Total capital MRE Habas premium reserve operation losses equity For the year ended 31 December 2012 Balance at 1 January 2012 24 30,064 84,458 20,771 (1,311) (5,080) (5,322) 123,604 Translation differences on Capital Notes - 106 301 - - (407) - - Loss for the year - - - - - - (50,996) (50,996) Other comprehensive income (loss) for the year - - - - (988) 180 - (808) Balance at 31 December 2012 24 30,170 84,759 20,771 (2,299) (5,307) (56,318) 71,800

6

Habas Star B.V. Unaudited Condensed Consolidated Interim Statement of Cash Flow Euro (In thousands)

For the year For the three months ended ended 31 March 31 March December 31 2013 2012 2012 Cash flows from operating activities: Loss for the period (7,257) (4,554) (50,996)Adjustments for: Share of (profit) loss on equity accounted investees 4,255 3,224 21,030 Impairment losses 650 - 22,414 Loss from sale of investment property - - 2,471 Change in fair value of investment property 2,425 - 113 Change in fair value of derivatives (907) 356 (174)Increase (decrease) in credit from banks 38 (71) 424 Depreciation - - 1 Gain from increase in holding in equity accounted investees - - (1,330)Changes in trade and other receivable 1,131 (2,960) 240 Increase in loan to associate (48) )46( (187)Increase in interest on shareholders loans 1,038 1,082 4,881 Change in trade and other payables (564) 353 (2,042)Increase (decrease) in deferred taxes liabilities (1,030) 12 (383)Dividend from associates - - 5,150 Impairment of subordinated loan - - 509 Gain from repayment of subordinated loan (10) (157) (157)Gain from shares buy-back of associate - (48) (48)Net cash (used in) provided by operating activities (279) (2,809) 1,916

Cash flows from investing activities: Investment in investment property (1) )68( (68)Proceeds from sale of other investments 10 1,964 1,964 Investment in equity accounted investees (120) - (6,222)Proceeds from sale of investment property - - 77,641 Investment in bank deposits (4,334) - (18,647)Repayment of loans to equity accounted investee - 7 8 Net cash (used in) provided by investing activities (4,445) 1,903 54,676

Cash flows from financing activities: Loans received from shareholders 7,145 - 9,200 Repayment of shareholders loans (3,000) - (16,082)Repayment of credit from banks (244) )208( (55,085)Net cash used in financial activities 3,901 )208( (61,967)

Decrease in cash and cash equivalents (823) (1,114) (5,375)Cash and cash equivalents at the beginning of the period 1,338 6,846 6,846 Effect of exchange rate fluctuations on cash and cash equivalent (3) (55) (133)Cash and cash equivalents at the end of the period 512 5,677 1,338 The notes on pages 7 to 10 are an integral part of these consolidated financial statements

7

Habas Star B.V. Notes to the Unaudited Condensed Consolidated Interim Financial Statements Note 1 - Reporting Entity

Habas Star B.V. (hereinafter: “The Company”) was incorporated in The Netherlands as a private company with limited liability and acts as a financing and holding company. The Company is owned 74% by Habas Investment (1960) Ltd. and 26% by Mayer (Kesher) Real Estate Ltd. The Company was incorporated on 24 October 2006 and is registered at the Chamber of Commerce in Amsterdam. The condensed consolidated interim financial statements of the Company as of and for the three month period ended 31 March 2013 comprise the Company and its subsidiaries (hereinafter: “The Group”), and the Company’s interests in associates. The Company’s business is investment in properties, held directly or indirectly, for the generation of rental income and gains and real estate debt transactions.

Note 2 - Statement of Compliance

A. Statement of compliance These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements. They should be read in conjunction with the financial statements as of and for the year ended 31 December 2012 (hereinafter: “the annual financial statements”). These condensed consolidated interim financial statements were approved by the Board of Directors on 24 May 2013. B. Use of estimates and judgments The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The significant judgments made by management in applying the Group’s accounting policies and the principal assumptions used in the estimation of uncertainty were the same as those that applied to the annual financial statements.

Note 3 - Significant Accounting Policies

Except as described below, the accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its annual financial statements. Presented hereunder is a description of the changes in accounting policies that were applied in these condensed consolidated interim financial statements and their effect:

Habas Star B.V. Notes to the Unaudited Condensed Consolidated Interim Financial Statements

8

Note 3 - Significant Accounting Policies (cont’d)

As from January 1, 2013 the Group applies the new amendment described below:

1. Amendment to IAS 1, Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income (hereinafter - “the Amendment”). The amendment to IAS 1 changes the presentation of items of other comprehensive income (hereinafter – “OCI”) in the financial statements, so that items of OCI that may be reclassified to profit or loss in the future, would be presented separately from those that would never be reclassified to profit or loss.

The application of the standard had no material effect on the financial statements.

2. A new suite of accounting standards on consolidation of financial statements, joint arrangements and disclosure of involvement with other entities

IFRS 10 Consolidated Financial Statements (hereinafter - “IFRS 10”). IFRS 10 introduces a new single control model for determining whether an investee should be consolidated, which is to be implemented with respect to all investees. According to IFRS 10 de facto power is to be considered when assessing control, which means that the existence of effective control of an investee will require consolidation. In addition, when assessing the existence of control, all substantive potential voting rights will be taken into account, and not only potential voting rights that are currently exercisable. The application of the standard had no material effect on the financial statements. The suite of standards is applicable retrospectively for annual periods beginning on or after January 1, 2013 (other than certain relief in the transitional provisions).

IFRS 13, Fair Value Measurement

When measuring the fair value of a liability the effect of the entity’s own credit risk must be taken into account. Measurement of fair value of investment property should reflect consideration of future capital expenditure which would improve or extend the property and the future economic benefits to be gained from this expenditure should such expenditure or benefits be taken into account by market participants on the measurement date. Should there be a bid price and ask price for an asset or liability being measured at fair value, the price in the range between them which best reflects fair value under the circumstances should be used in order to measure fair value. IFRS 13 is applicable on a prospective basis where the disclosure requirements need not be applied in comparative information for periods before initial application. The application of the standard had no material effect on the financial statements.

Note 4 - Significant Events during the Reporting Period

1. Further to Note 7A to the Annual Statements, following a further decrease in NSI’s share price, the Company has reviewed the provision for impairment of its investment in NSI, using an external, independent appraiser. According to the valuation, which is attached to these financial statements, no further provision for impairment, beyond the provision for impairment recorded in 2012 is necessary. As at March 31, the carrying amount of the investment in NSI shares is EUR 132.6 million this is calculated as the investment amount before impairment - EUR 155,014 thousand, less impairment provision of EUR 22,414 thousand, to give a net investment amount in the books of EUR 132.6 million.


9

Note 4 - Significant Events during the Reporting Period (cont’d)

2. Following a continuing decrease in NSI’s share price during and after the reporting period, Tulip is required, according to the agreement with the bank lender (described in Note 14A in the annual financial statements) to increase the loan guarantee in order to avoid a LtSV breach. Accordingly, an additional cash amount of about EUR 6.1 million has been pledged to the bank lender, so that as at 31 March 2013, the balance of the pledged account was EUR 18.2 million. Since at the reporting date the LtSV was 51.40% Tulip obtained a waiver on 25 March 2013 from the bank lender agreeing to accept a temporary new LtSV level of 55%. This temporary waiver was valid from 25 March 2013 until 5 April 2013. After the reporting date the pledged account balance has increased to EUR 18.7 million.

The increase in the pledged account deposit was financed by the shareholders of the Company as follows:

a. On 11 February 2013 the Company received a loan of EUR 2.5 million from Mayer (Kesher) Real Estate Ltd. (hereinafter: “MRE”). This loan bears an annual interest rate of 12%. On 1 May 2013 the Company repaid partial repayment of the loan in the amount of EUR 1 million. The parties agreed to postpone the repayment date of the loan balance until 31 May 2013. On 13 May 2013 the Company repaid the remainder of the loan in the amount of about EUR 1.57 million (principal and interest accrued to that date).

b. On 14 March 2013, the Company received an additional loan from MRE totalling EUR 1.3 million. This additional loan is repayable by 13 June 2013 and bears an annual interest rate of 12%, together with an additional “Phantom Amount” to be calculated as follows: On the date of granting the loan, the NSI share value on the Euronext stock exchange (hereinafter: “Stock Exchange”), was EUR 5.36 per share.

For so long as the average closing price of the NSI shares on the Stock Exchange, during the ten trading days preceding the loan repayment date (hereinafter: “NSI Stock Value at maturity price”), is higher than EUR 5.36 per share, an additional amount known as the Phantom Amount will be payable by the Company, calculated based on a notional multiplier of 242,537 (i.e. EUR 1.3 million divided by EUR 5.36 per share) multiplied by the difference between: (a) the NSI share value on the date of repayment and (b) EUR 5.36. Where the NSI share value at the date of repayment is lower than EUR 5.36, then the Phantom Amount is zero.

The meaning of the above is that in addition to the interest that MRE will be entitled to under the additional loan, MRE will also be entitled to an additional amount (the Phantom Amount) if should there be any increase in value of the NSI shares above EUR 5.36 at the date of repayment for 242,537 NSI shares represents about 1.7% of the total shares held by Tulip in NSI.

If the additional loan, including interest and the Phantom Amount, if any, is not fully repaid by the due date, the amount of the outstanding loan principal, plus interest, plus any Phantom Amount, will bear interest at a rate of 5% per month.

Under the additional loan agreement, the Company has undertaken that any cash flow to the Company will be used exclusively for the repayment in whole or in part of this additional loan.

In the event that the financing bank exercises its right to enforce Tulip to sell any or all of its shares in NSI, then the additional loan shall become immediately repayable.


10

Note 4 - Significant Events during the Reporting Period (cont’d)

2. (cont’d) c. On 21 March, 2013, the Company received new loans of about EUR 1.2 million from

its shareholders Habas investments and MRS pro-rata to their shareholdings. d. On 5 April 2013, the Company received new loans of about EUR 0.7 million from

Habas Investments and MRS pro-rata to their shareholdings. Note 5 - Subsequent Events

1. On 10 April, 2013 the Company sold its entire interest (30%) in Horn Three GmbH & Co. KG and Horn Three Management GmbH, two entities incorporated in Germany, to an unrelated third party, for a total of about EUR 1.27 million. Of this amount as agreed between the parties, a total of about EUR 0.27 million will be paid to cover part of a tax liability (Real Estate Transfer Taxes) arising in respect of this transaction (the remaining balance of the tax liability will be paid by the buyer). For more information about the entities sold, see Note 7 of the annual financial statements. This transaction has generated to the Company a net cash flow of about EUR 1 million. The Company recorded a loss from the sale of approximately EUR 0.23 million. Horn Three GmbH & Co KG acquired the three shopping centers in Germany, held at the date of this report by Durango Munich GmbH & Co. (a German entity owned 30% by the company) (hereinafter: “Durango”). On completion of this sale, the Company will record an additional loss of about EUR 0.41 million. The sale of the three properties mentioned above is not expected to generate any cash to investors in Durango.

2. On 21 Further to Note 7C to the Annual Statements, in May 2013 Tarcoola Shopping Centers

GmbH an equity accounted investee, registered in Germany, reached an agreement with the financing bank who have agreed to retract their demand for immediate repayment of the loan and extended the repayment date to October 2014.

Accountants - Belastingadviseurs - Management Consultants Mazars Tower, Delflandlaan 1 - Postbus 7266 - 1007 JG Amsterdam Tel: 020 20 60 500 - Fax: 020 64 48 051 - [email protected]

Mazars Paardekooper Hoffman N.V. Statutair gevestigd te Rotterdam (KvK Rotterdam nr. 24389296).

46526/018SvS/JK

REVIEW REPORT

To: the management and shareholders of Habas Star B.V.

INTRODUCTION

We have reviewed the accompanying balance sheet of Habas Star B.V. (“the Company”) as of March 31, 2013 and the related statements of income, changes in equity and cash flows for the three-month period then ended. Management is responsible for the preparation and presentation of this interim financial information in accordance with IAS34. Our responsibility is to express a conclusion on this interim financial information based on our review.

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engage-ments 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.

RESTRICTION ON DISTRIBUTION AND USE

The interim financial information is prepared for purposes of providing information to Habas Investments (1960) Ltd. and their auditors to enable it to prepare the interim financial information of the group. The interim financial information may not be distributed or used for another purpose and should not be issued to third parties without our prior written consent.

Amsterdam, 24 May 2013

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Habas Q12013 FS - TASE · 6 (" ) .5 ˙ ˙ 2013 31 ˘ ˘ ˙ ˘ ˆ ˇ ˇ ˇ 19,176 - - 385 177 3,253...

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Transcript of Habas Q12013 FS - TASE · 6 (" ) .5 ˙ ˙ 2013 31 ˘ ˘ ˙ ˘ ˆ ˇ ˇ ˇ 19,176 - - 385 177 3,253...