Vastned Belgium : Half-yearly financial report of the board of directors for the period 01.01.2023 to 30.06.2023

Half-yearly financial report 2023

Regulated information / embargo until 25 July 2023, 6.00 pm

Antwerp, 25 July 2023

Bruges Steenstraat 80 • H&M

Half-yearly financial report 2023

Regulated information / embargo until 25 July 2023, 6.00 pm

Antwerp, 25 July 2023

Strong operational results in a changing market environment

• EPRA earnings of € 1.40 per share for the first semester of 2023, compared to €1.25 per share for the same period previous financial year.
• Slight increase in the value of the real estate portfolio despite the changing economic environment and rising interest rates.
• High occupancy rate of 99.3% underlines the quality of the real estate portfolio.
• A low debt ratio of 27.4% provides solid protection.
• € 40.0 million of unused credit facilities available.
• Expected EPRA earnings per share of € 2.65 - € 2.75 for financial year 2023.

2 / 41

Half-yearly financial report 2023

Regulated information / embargo until 25 July 2023, 6.00 pm

Antwerp, 25 July 2023

Table of Contents

1.	Half-yearly report for the first semester of 2023	4
	1.1.	Economic developments	4
	1.2.	Operating result	5
	1.3.	Rental activities	5
	1.4. Composition and evolution of the real estate portfolio	5
	1.5. Investments	7
	1.6. Divestments	7
	1.7. Occupancy rate	8
	1.8. Valuation of the portfolio by the independent valuation experts
		as at 30 June 2023	8
	1.9. State of the Belgian retail real estate market in 2023	9
2.	Financial results for the first semester of 2023	10
	2.1. Analysis of the results	11
	2.2. Financial structure as at 30 June 2023	13
	2.3. Risks during the remaining months of 2023	14
3.	Sustainability	15
4.	Outlook for 2023	15
5.	Condensed consolidated interim financial statements	16
	5.1. Condensed consolidated income statement	16
	5.2. Condensed consolidated statement of comprehensive income	17
	5.3. Condensed consolidated balance sheet	18
	5.4. Condensed consolidated cash flow statement	19
	5.5. Condensed statement of changes in the consolidated shareholders' equity	20
	5.6. Statement accompanying the condensed consolidated interim financial
		statements	21
	5.7. Notes to the condensed consolidated interim financial statements	21
	5.8. Report of the statutory auditor	31
	5.9. Financial calendar	32
6.	Alternative Performance Measures	33
	6.1. Glossary of Alternative Performance Measures	33
	6.2. Reconciliation tables of the Alternative Performance Measures	36

Half-yearly financial report 2023

Regulated information / embargo until 25 July 2023, 6.00 pm

Antwerp, 25 July 2023

1. Half-yearly report for the first semester of 2023

1.1. Economic developments

The first semester of 2023 was characterised by high inflation figures and rising interest rates. After peaking in October 2022 (12.75%), inflation had fallen back to 4.15% in June 2023. With core inflation1 still measuring 8.14%, the drop in inflation is attributable to decreasing energy prices. This shows that inflation is still not under control.

In pursuit of inflation targets of no more than 2.0%, the European Central Bank has processed several interest rate hikes. The interest rate in December 2022 was only 2.0%, but by June 2023 it had risen to 3.5%. Since July 2022, there have been a total of eight (8) interest rate hikes, which has resulted in a 4.0% increase in the interest rate (from -0.5% to 3.5%).

The European Central Bank's sharp interest rate hikes led to concerns about real estate shares due to the close correlation between share price and interest rates. Rising interest rates also increase the yield or capitalisation

rate, which in turn reduces the value of the real estate. This raises the debt ratio, putting pressure on real estate companies to further reduce this debt ratio by carrying out a capital increase or selling real estate.

For Vastned Belgium the impact was limited, as the Company continues to operate on a solid basis with a stable and low debt ratio. In addition, rental income is indexed in accordance with the health index, which increases the operational distributable result. In addition, occupancy rates remain high, partly due to the prime location of

the retail properties and the asset management team's continuous close monitoring of tenants. Finally, the Brussels Region ordinance to apply only limited indexation has affected Vastned Belgium to a very limited extent. Since the indexation mechanism of the Brussels Region does not take energy into account, decreasing energy prices have no impact on this. As a result, the applied indexation rate is currently higher than the regular indexation mechanism.

1.2. Operating result

In the first semester of 2023, rental income increased by

• 0.6 million compared to the same period in previous financial year. This increase is due to the indexation of the rent of existing rental agreements and the increased occupancy rate compared to the same period previous financial year (99.3% vs. 98.8%). The increase is partly offset by lease renewals (against lower terms) concluded in previous financial year.

Vastned Belgium's EPRA earnings amount to € 7.1 million for the first half of 2023 compared to € 6.4 million in the same period of previous financial year. The increase of

• 0.7 million comprises both an increase in rental income and a decrease in general expenses. Exceptional costs for an amount of € 0.3 million were registered in the first semester of 2022 for a potential delisting of Vastned Belgium.

Per share, this amounts to an EPRA earnings of € 1.40 compared to € 1.25 in the first semester of previous financial year.

1) Core inflation does not consider the price evolution of energy products and unprocessed foods.

4 / 41

1.3. Rental activities

Vastned Belgium concluded thirteen (13) rental agreements in the first semester of 2023, representing a total rental volume of € 1.7 million. This corresponds to approximately 8.7% of Vastned Belgium's total rental income.

In total, eight (8) lease agreements were concluded, of which four (4) were commercial lease agreements, two (2)

Half-yearly financial report 2023

Regulated information / embargo until 25 July 2023, 6.00 pm Antwerp, 25 July 2023

were agreements with residential tenants and two (2) were pop-up agreements. In addition, five (5) lease renewals were concluded with existing tenants. The rental prices negotiated by Vastned Belgium (excl. pop-up agreements) are 9.1% higher than the market rental prices determined by independent valuation experts due to the quality of the real estate portfolio and the result of the good work of a committed asset management department.

1.4. Composition and evolution of the real estate portfolio

Real estate portfolio

30.06.2023 31.12.2022

Fair value of investment properties (in thousands €) 2	312,743	312,590
Total leasable space (m²) 2	75,935	76,086

As at 30 June 2022, the majority of the real estate portfolio consists of high-qualityinner-city properties located in the cities of Antwerp, Brussels, Ghent and Bruges, as well as high-quality retail parks and retail warehouses.

The fair value of the investment properties amounted to € 312.7 million as at 30 June 2023 (incl. the value of IFRS 16 right-of-use assets worth € 0.2 million), which corresponds to a € 0.1 million increase compared to previous financial year (€ 312.6 million as at 31 December 2022). In addition, a retail property located at Grand Rue 19 in Bergen (Mons) has been recognized as asset held for sale for an amount of € 0.4 million. Taking into account this classification, the total fair value of the real estate portfolio increases by € 0.5 million.

In the first half of 2023 the European Central Bank continued to raise interest rates. As a result of these interest rate hikes, the independent valuation experts increased the capitalisation rates of various retail properties. This would normally result in a decrease in the fair value of the real estate portfolio, but Vastned Belgium was able to offset this decrease by concluding rental agreements above the market rental prices determined by independent valuation experts. This allows Vastned Belgium, in a challenging market environment, to realise a slight increase in the fair value of the real estate portfolio.

Investment properties

The average yield in the real estate company's portfolio amounts to 6.23% (excluding the assets held for sale) on 30 June 2023, and has increased compared to the average yield as at the end of previous financial year (6.05% as at 31 December 2022).

Sensitivity analysis3

In the case of a hypothetical negative adjustment of the yield used by the independent valuation experts in valuing the Company's real estate portfolio (yield or capitalisation rate) by 1.0% (from 6.23% to 7.23% on average), the fair value of the real estate would decrease by € -43.2 million or -13.8%. This would increase the Company's debt ratio by 4.3% to 31.7%.

In the reverse case of a hypothetical positive adjustment of this yield by 1.0% (from 6.23% to 5.23% on average), the fair value of the real estate would increase by € 59.7 million or 19.1%. This would reduce the Company's debt ratio by -4.3% to 23.1%.

In the case of a hypothetical decline in the current passing rents of the Company (with equal market yield) of € -1.0 million (from € 19.5 million to € 18.5 million), the fair value of the real estate would decrease by € -16.0 million or -5.1%. This would increase the Company's debt ratio by 1.5% to 28.9%.

1. Excluding the assets held for sale.
2. Excluding the assets held for sale and the value of the IFRS 16 right-of-use assets.

5 / 41