NSI : 2016 Half Year Results

• * NSI decreased its interest in Belgian company IOW from 50.2% to 15.2% on 18 June 2015, and sold the remaining interest in Q1 2016 (between 16 February and 11 March). The result of IOW is presented as "discontinued operations".

• This document is a translation of the original Dutch document. In case of any conflicts between this translation and the original Dutch document, the latter will prevail

Johan Buijs, CEO of NSI:

"After the swift reinvestment of released funds in the Cobra acquisition last year, we once again were able to reinvest the proceeds from the sale of the industrial portfolio in the acquisition of Glass House within 3 months in Amsterdam. As a result of this active asset rotation strategy, the overall quality of our office portfolio increased over the past years, from 49% to 59% according to the independent JLL benchmark. Now Amsterdam, the strongest office market in the Netherlands, represents 30% of our office portfolio. Moreover the acquisition of "Glass House" shows the focus of NSI; investing in modern and sustainable real estate with the aim to create value with our HNK concept.

The half year results confirm our strategic direction. HNK continues to grow strongly and now almost compensates for the decline in the traditional office portfolio. We see a slightly positive organic development of the rental income of the traditional office portfolio over the 2nd quarter, and we expect this upward trend to continue in the second half of the year.

This shows that NSI is on the right track, and this confidence in the future is also reflected in the interim dividend of €0,13 per share, which represents a pay out of 90% of the direct result over the 1st half year of 2016.

Also the valuations show a stable picture.

A good moment to hand over the baton to my successor as of 1 September, Bernd Stahli." Progress Strategy

NSI aims to increase the quality of its portfolio through its asset rotation strategy. By divesting assets of which the value has been optimized or when the required investments will not result in the required returns NSI frees up funds to reinvest. NSI's investment focus is on the Dutch offices market, where NSI sees the best opportunities to create value based on its active management strategy.

As part of this strategy, NSI sold its remaining interest (15.2%, 2,476,241 shares) in IOW, after NSI already decreased its interest from 50.2% to 15.2% on 18 June 2015. The total proceeds of the sale of the remaining interest amounted to €53.5 million.

In addition, NSI sold almost the entire industrial buildings portfolio on 1 April 2016. Furthermore, 4 office assets ( in Zoetermeer, Breda and 2 offices in Zwolle) and a plot of land in Belgium were sold. The total proceeds from these sales amounted to €56.8 million.

On 15 July 2016, NSI acquired office property "Glass House" in Amsterdam Sloterdijk. The property of approx. 23,000 sqm is strategically located next to train station Amsterdam Sloterdijk. The acquisition price of €57 million (excluding purchasing costs) reflects a gross initial yield of over 11%.

NSI consciously pursue further growth in Amsterdam and do see Amsterdam Sloterdijk as a strong office location with potential for growth. The area benefits from the transformation to a multifunctional residential and office area and a strongly improved accessibility. Moreover, the property is suitable for the HNK concept, allowing to add value to the property in due course. The property is currently fully leased with a WAULT of 3.2 years.

The acquisition fits the strategy to improve the quality of the portfolio by migrating to targeted cities and increasing the average size per property. The released funds from the 25 non strategic assets are being reinvested in one high quality office asset on a strong location. This enables NSI to further leverage its leasing platform.

Following the acquisition, the G4 (Amsterdam, The Hague, Rotterdam and Utrecht) in the office portfolio of NSI represents 56% (previously 52%). The share of Amsterdam in the total office portfolio of NSI increases from 24% to 30%.

NSI has taken an important step in the further implementation of its financing strategy in the 1st quarter of 2016. As agreed with the banks in the terms of the €550 million facility concluded last year, securities related to the bank funding (€450 million) will be released as per 1 September 2016. As a consequence, at least 65% of the real estate investments will not be mortgage secured. This step increases the possibilities to diversify funding sources.

Outlook 2016

Acquisitions and disposals do have a significant impact on 2016 in the comparison with 2015.

On 18 June 2015, NSI divested its interest in Belgian Intervest Offices & Warehouses ("IOW") from 50.2% to 15.2%, and sold the remaining interest in 2016. IOW was fully consolidated in the figures of NSI until 30 June 2015. Following IFRS regulation regarding discontinued operations, IOW is presented under "discontinued operations" in 2016 and 2015 financial statements.

The impact of this phased sale on the direct result in 2016 compared with 2015 amounts to €8.5 million.

Furthermore, the disposals and acquisition of assets do have an impact on the results. The most significant transactions were the sale of the industrial portfolio (approx. €3.7 million lower gross rental income in 2016 in the comparison with 2015) and the acquisition of Glass House in July 2016 (contribution of approx. €3.0 to gross rental income in 2016).

The operating costs were higher in the 1st half of 2016 due to the implementation of the IFRIC 21 directive. This involves that all annual costs related to municipality taxes (approx. €4 million) are booked in the 1st quarter instead of an equal distribution over the

year.

NSI expects to further improve the occupancy rate of its office portfolio. Among other as a result of the improved quality of the office portfolio through asset rotation and the continued rollout of HNK. NSI expects that HNK will largely compensate for the negative like for like growth in the office portfolio.

NSI expects to have 16 HNK's in operation within 6 to 9 months. Based on enhanced insights, NSI applies stricter selection criteria for adding properties from the existing portfolio to the HNK portfolio. In addition to the approx. 3 HNK's suitable for HNK in the current office portfolio, NSI is actively exploring acquisition opportunities for HNK in Amsterdam and Utrecht.

The retail market remains challenging despite increased consumer spending. Due to the focus on local shopping centres, NSI expects a relatively stable development of the occupancy rate in its retail portfolio.

On balance, NSI expects to improve the overall occupancy rate of the total portfolio.

For the full year 2016, based on the current portfolio including the recent acquisition of Glass House, NSI expects a direct result per share between €0.31 and €0.33.

The interim dividend of € 0.13 per share reflects the positive expectations based on a structurally improving portfolio. This reflects a payout of approx. 90% of the direct result for the 1st half of 2016, in line with the dividend policy of a payout of at least 75% of the direct result, and offering a consistent dividend yield to shareholders.

*organic development of the 'standing' portfolio over 12 months

Offices (excluding HNK)

The occupancy rate was 78.8% as per 30 June 2016 compared with 73.8% as per 30 June 2015, mainly due to asset rotation (31 March 2016: 79.7%).

NSI signed for 4,713 sqm new leases (take up) in the 1st half year of 2016. The take up /supply ratio over the past 12 months was 13% compared with a market average of 14% (source: DTZ). The retention rate was high (76.2%) over a low expiry volume, reflecting the multi tenant strategy. NSI has focused on the small and medium enterprises with a multi-tenant approach in recent years, which decreases the number of large expiries.

The gross rental income increased in the 1st half of 2016 to €23.7 million versus €21.0 million in the 1st half of 2015, mainly due to acquisitions in 2015. Like-for-like growth compared with the 1st half of 2015 (-6.2%) is mainly due to expiry of lease contracts in the past 12 months.

The 2nd quarter of 2016 showed a slightly positive development compared to the 1st quarter of 2016. The gross rental income rose slightly to €12.1 million (including €0.2 million non-recurring item) in the 2nd quarter of 2016 compared to €11.6 million in the

1st quarter of 2016.

In the remaining months of 2016, 5% of the lease contracts may expire.

The average effective rent level of new leases over the last 12 months rose to €116 per m2 due to the mix of locations of new leases, but the underlying trend shows a stable development. The average rent levels in the office portfolio amounted to €151 per sqm as per 30 June 2016 (€153 per sqm as per 31 March 2016).

HNK

The average occupancy rate increased to 62.2% as per 30 June 2016 (31 March 2016: 57.0%, 30 June 2015: 62.3%). The occupancy rate in HNK is continuously being impacted by new HNKs being added to the HNK portfolio, which usually have a low occupancy rate at the start. As per 1 January 2016, the properties for transformation to HNK Rotterdam Westblaak, HNK Amsterdam Arena and HNK Dordrecht were added to the HNK portfolio, representing 25,000 sqm in total. Excluding the addition of these properties to the HNK portfolio, the occupancy rate was 69.0% as per 30 June 2016

The gross rental income from HNK increased by 16% to €3.1 million in the 2nd quarter (1st quarter 2016: €2.6 million) and to €5.7 million in the 1st half year of 2016 (1st half year 2015: €4.0 million). The like for like growth over the last 12 months amounted to 20.9% and the organic rental growth in the 2nd quarter 2016 compared with the 1st quarter 2016 was 19.4%.

Het gemiddelde effectieve huurniveau van nieuwe verhuringen over de afgelopen 12 maanden steeg naar €177 per m2 (€171 per m2 per 31 maart 2016), bij een stabiele ontwikkeling van de gemiddelde huur voor de totale HNK portefeuille (€178 per m2).

The 12 months rolling effective rent level of new leases in the HNK portfolio increased to €177 per sqm over the last 12 months (€166 per sqm as per 31 March 2016), while the effective rent for the overall HNK portfolio remained stable at €178 per sqm.