The Supervisory Board hereby presents the Bouwinvest Real Estate Investors B.V. (Bouwinvest) 2023 annual report, which includes the financial statements for 2023. The Bouwinvest Management Board prepared the annual report, Deloitte Accountants B.V. has audited the financial statements and provided an unqualified auditor’s report (see the auditor’s report chapter).

The Supervisory Board has discussed the annual report with the Management Board, in the presence of the external auditor. The Supervisory Board has concluded that the annual report meets all the rules and requirements in the field of governance and transparency. The annual report provides an accurate and complete picture of the results, risks and events that the Supervisory Board oversees.

The financial statements will be submitted to the Annual General Meeting of shareholders (AGM) for adoption on xx April 2024, as part of the 2023 annual report. The Supervisory Board proposes that the meeting adopts the financial statements and, as proposed by the Management Board, a loss of € 2,2 million shall be charged against Bouwinvest’s shareholders’ equity. The Supervisory Board proposes that the General Meeting discharge the Management Board for their management and the Supervisory Board for their supervision of said management, and that the General Meeting adopt the financial statements.

1. Supervision

The Supervisory Board supervises and advises the Management Board in the setting and realisation of its strategic targets and is responsible for the employment of the statutory directors. In this report, the Supervisory Board explains how it has fulfilled its role in the year under review.

This year was characterised by declining real estate market conditions. The war in Ukraine, the Gaza conflict, increasing interest rates and uncertainty to the global economic outlook all contributed to this. The global economic turbulence is forecast to continue, resulting in a forecasted flat to low value growth in real estate markets the coming year. Interest rates are forecast to remain high for at least the first half of 2024 as part of central banks strategies to combat inflation. Due to decreasing revenues and increasing costs of the management organisation, the management board has focussed on cost control and further boosting the efficiency of the organisation. To develop a structural healthy cost/income ratio Bouwinvest needs to become a more flexible and agile organisation, demonstrate structural outperformance in its products, improve client and product diversification and decrease the time-to-market for launching new products and investment strategies. In November 2023, the Social Impact Partnership was launched, an initiative with real estate investments focusing on creating social value in Dutch communities, specifically managed for ABP and bpfBOUW.

Corporate Strategy

This year, the Management Board launched a revised long-term corporate strategy for Bouwinvest. The Supervisory Board discussed this corporate strategy with the Management Board several times during the year as it was developed and finalised. The Corporate Strategy was approved by the Supervisory Board on 19 September 2023. Achieving further scale of assets under management is central to this strategy, driven by increasing costs of regulation, long-term pressure on fees and the requirement to expand both the width and depth of capabilities in order to deliver outperformance. Scale will be achieved in the Dutch markets and the international markets by further diversifying and growing the product and client base. In order to enable the organisation to deliver outperformance to investors, further investments in skills, competencies, systems, processes and people are necessary in the coming years. In addition to this, the capabilities around responsible investing and corporate responsibility will have to be enhanced. Bouwinvest will continue to deliver the right balance between financial, environmental, social, and governance objectives aligned with it investors wishes and needs. The new corporate strategy has been converted into the Bouwinvest Business Plan 2024, and this also was approved by the Supervisory Board in November 2023. The strategic objectives have been translated into clear targets and kpi’s as part of this Business Plan.

Bouwinvest organisation ready for the future

The Supervisory Board has been closely involved in the transformation project #Invest. To successfully execute the new corporate strategy, the Bouwinvest organisation will need to become more flexible and efficient in order to cope with cyclical downturns, increased regulatory requirements, and the corresponding additional resources required to address these. Bouwinvest needs to diversify its product portfolio and investment strategies. The implementation of a new organisational structure and a new way of working are key to achieving these goals.

The quarterly reports were discussed extensively by the Supervisory Board, enabling it to form a complete picture of the progress against the strategic objectives, the creation of stakeholder value and the financials of the Bouwinvest management company. Accurate, timely and active execution of the fund and mandates plans, in combination with outstanding client service, are key to Bouwinvest’s success. The Supervisory Board also discussed the results of the performance evaluation of Bouwinvest’s Dutch and international investments, in terms of process, methodology, performance measurement and indices.

This year the regulations of the Supervisory Board, the ARC committee and the HR committee were revised and updated in line with the Dutch Corporate Governance Code. The profile of the Supervisory Board was also discussed and updated.

Henk-Dirk de Haan succeeded Rianne Vedder as CFRO as of 1 October 2023. The Supervisory Board would like to thank Rianne Vedder for her efforts and involvement. The Supervisory Board wishes Henk-Dirk de Haan every success in his new role.

The Supervisory Board considers the information made available to it to be sufficient.

2. Composition of the Supervisory Board and evaluation

Composition of the Supervisory Board

With four members, the Supervisory Board is deemed to be of sufficient size given the scope of responsibilities. At year-end 2023, the Supervisory Board consisted of two female members and two male members. Details on each member of the Supervisory Board are provided in the next section of this annual report.

Composition of the Supervisory Board and its committees

Division of the areas of expertise of the Supervisory Board

All the members of the Supervisory Board are independent, according to the criteria laid down in the regulations of the Supervisory Board.

Evaluation

In the first half of 2023, the Supervisory Board carried out an external self-evaluation. The results were discussed in the Supervisory Board, in attendance of the Management Board. The Supervisory Board is deemed to be experienced, professional, well prepared and in tune with market developments. The relations within the Supervisory Board are considered as open and constructive. The composition is seen as balanced and complementary, both in expertise, roles and behavioral repertoire, although there is a strong financial orientation. Knowledge of institutional investors is seen as potentially less well represented within the Supervisory Board.

3. Other matters

Appointments

Members of the Management Board

One new appointment was made to the Management Board in 2023. Henk-Dirk de Haan was appointed CFRO and statutory director from 1 October, when Rianne Vedder stepped down as CFRO and statutory director. Rianne Vedder’s contract ended on 15 October 2023.

Members of the Supervisory Board

Jos van Lange and Jos Nijhuis were reappointed for a second term in 2023, Jos Nijhuis for a period of 4 years, Jos van Lange for a period of 3 years. In 2024 the reappointments of Gabrielle Reijnen and Wendy Verschoor are scheduled. This schedule of resignations ensures the continuity of the Supervisory Board.

Meetings of the Supervisory Board

Meetings

Supervisory Board

The Supervisory Board met a total of nine times in 2023. The members of the Management Board attended all of these meetings. Prior to the regular meetings, the Supervisory Board held its own consultations. Above you will find an overview of the number of meetings of the Supervisory Board and its committees, together with the attendance record of the members of the Supervisory Board.

In addition to these meetings, the chair and the other members of the Supervisory Board consulted regularly with the members of Bouwinvest’s Management Board.

Last year there were regular consultations involving the chair of the Supervisory Board, the chair of Audit, Risk & Compliance committee, the CEO and CFRO of the Management Board, the chairs of the Board of Stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid (bpfBOUW) and the director of the management office of bpfBOUW.

As the member appointed on the nomination of the Works Council, Supervisory Board member Wendy Verschoor acts as the liaison between the Supervisory Board and the Works Council. She joined also the regularly meetings of the Works Council with the CEO on the general course of affairs of the company.

Audit, Risk & Compliance committee

The Audit, Risk & Compliance committee consists of Jos van Lange (chair) and Wendy Verschoor. The committee met a total of five times in 2023.

The committee discussed a.o. the budget for 2024, the annual results, the reports of the external auditor and the management letter. The committee also met the external auditor without the Management Board being present. The committee also advised the Supervisory Board on the performance of the external auditor which it considered to be good.

The committee paid particular attention to the changed market conditions and the increasing impact of these on both the funds and mandates as well as the management organisation.

The committee also discussed the Risk Management, Compliance, Internal Audit reports and the ISAE 3402 type 2 reports. The committee continued to devote attention to the development of the Bouwinvest risk management, compliance and audit functions. The committee monitored the implementation of CSRD and paid attention to the execution of the CDD process. Updated charters for Risk Management, Compliance and Audit were discussed. The committee was satisfied with the results. The Risk & Compliance Committee devoted attention to IT and Cyber security. The regulations of the committee were reviewed and approved by the Supervisory Board. In 2023 Bouwinvest continued to execute an extensive cybersecurity program that is applicable for all employees.  

HR committee

The HR committee met a total of six times in 2023. Main focus of the HR committee for this year was the workstream HR of the transformation project #Invest. Performance management, job functions, competencies, a new HR IT system and payroll were the main topics of this workstream. Part of the transformation is also the change of the organisational structure. The HR committee discussed the proposed changes and advised the Supervisory Board with regard to these proposed changes.

At each meeting of the HR committee a short deep dive was organized to give the committee the opportunity to discuss a subject in more detail. This year deep dives were held on HR themes that were also part of the transformation project: the HR plan and the 2023 HR planning, competency management, the selection and implementation of the new HR IT system, and the philosophy and strategy of the new performance management system. The regulations of the committee were also reviewed and approved by the Supervisory Board.

The commission discussed, in close cooperation with the chair of the Audit, Risk & Compliance committee, the search for a new CFRO and the appointment of Henk-Dirk de Haan as CFRO of Bouwinvest.

The committee discussed the performance of the Management Board and the targets for 2024. The HR committee conducted evaluation interviews with all members of the Management Board. The evaluation interview with CFRO Rianne Vedder was also in the presence of the chair of the Audit, Risk & Compliance Committee. Additional details are in the renumeration report.

A word of thanks

The Supervisory Board would like to thank the members of the Management Board and all Bouwinvest employees for their commitment and engagement and for the results achieved in this challenging year.

Amsterdam, 27 March 2024

The Supervisory Board

Jos Nijhuis

Jos van Lange

Gabriëlle Reijnen

Wendy Verschoor