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Message from the Chairman

Dear stakeholders,

Last year was remarkably dynamic for the retail sector as a whole. We saw new, international retailers, like Primark, opening flagship stores, while existing players on the Dutch market, both national and international, were looking to expand and improve the quality of their existing stores. At the same time, major Dutch chains like V&D and Macintosh struggled to adapt to the new market dynamics. Despite all of this, there are still great opportunities on the retail market, especially now that the economy is picking up and unemployment is falling. Consumer confidence is now at the highest point since the crisis and this renewed optimism is having a visible impact on market sentiment.

We also saw this improved sentiment reflected in our valuations last year. Especially in the segments we believe are the future long-term growth drivers in the retail sector, the Experience and Convenience segments, where we are already heavily invested. Of course, the positive revaluations also reflect the major (re)developments we have carried out in core segments, such as Nieuwendijk in the Experience segment and Parkweide in Ede in the Convenience segment.

In fact, it was in those two segments that we saw the most positive revaluations last year, which is why the Fund performed so well and outperformed the IPD Property Index. And from 1 January 2016, we will have three new investors in the Retail Fund. This renewed interest in retail investments is a clear endorsement of our strategy of focusing on Experience and Convenience.

Of course, online shopping continued to grow last year and the Netherlands does have one of Europe’s highest retail space per capita ratios. This is why we believe the focus should be on transformation and redevelopment. The retail market is a consolidation market and that consolidation will focus on the segments that will defy retail trends, like online shopping. You have to build value in the existing stock, as we did for instance with Westerhaven in Groningen. Following the redevelopment, we managed to sign up Primark, which will have a huge positive impact on the local retail landscape. Primark attracts new shoppers and new retailers and boosts values.

We are very good at building value in our retail portfolio, partly because we really believe in sustainable partnerships with all our stakeholders. The successful large-scale developments of Nieuwendijk and Damrak in Amsterdam, or in Westerhaven in Groningen, would not be possible without all our partners: building companies, advisors, local authorities and of course our own people. It is always a major joint effort, taking into account strict deadlines, sustainability measures and the fact that we are always working in a busy retail environment.

We firmly believe that no matter what happens there will always be a need for retail. You just have to have the expertise to know where the opportunities are and be in a position to take advantage of them. And that goes for new-build projects, too, such as the Stadionplein project and the Mosveld shopping centre, both in Amsterdam. Wherever people live or work, they will need to shop. Bouwinvest's involvement and expertise in the residential and office sectors is a major advantage on this front. For instance, we are involved in some wonderful residential projects in the northern district of Amsterdam, but one of the first questions everybody asks when we present these projects is ‘where will people shop?’ The answer in this case is Mosveld, which will be a perfect addition to the Convenience segment of our retail portfolio.

So we will continue to focus on our core segments of Experience and Convenience. People will always need places where they can do their daily shopping and they will always want to experience the fun of shopping in our city centres, with their historical buildings, restaurants and the like. In other words, great places to meet friends and combine shopping with other fun activities. These are the future of retail and we want to play a successful role in that future, for all our stakeholders.

I would like to close by thanking everyone who worked on the retail portfolio for their hard work, dedication and their excellent performance last year. It was a real team effort and something we can all be proud of.

Dick van Hal

Chairman of the Board of Directors

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