• Like-for-Like Net Rents Increase: 5.2% increase.
• Earnings Per Share (EPS): EUR 2.09.
• Dividend: Increased to EUR 1.57.
• Portfolio Value Decline: 2.7% overall decline.
• Asset Disposals: EUR 729 million since 2017.
• Vacancy Rate: 5.1%, would be 4.5% excluding recent acquisition.
• EPRA Earnings Per Share: EUR 2.09.
• Operating Costs: Lower than in 2023.
• Financing Costs: Higher than in 2023.
• Corporate Income Tax Rate: Below 4%.
• Net-Debt-to-EBITDA: Improved due to higher EBITDA and lower debt.
• Loan-to-Value: Well within external hurdle of 60%.
• Interest Coverage Ratio: Affected by higher average variable rates.
• Cost of Debt: Lower at end of 2024.
• EPS Guidance for 2025: EUR 2.05 to EUR 2.15.

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Release Date: January 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NSI NV (FRA:N4RN) reported a strong 5.2% increase in like-for-like net rents, driving earnings to EUR2.09.
• The company increased its dividend to EUR1.57, maintaining its commitment to pay out at least 75% of EPS.
• NSI NV's portfolio is heavily concentrated in Amsterdam, which constitutes about 55% of its assets, indicating a strategic focus on high-demand areas.
• The company successfully executed asset rotation, selling over EUR700 million in assets since 2017, and made its first acquisition in three years with the Sypesteyn building in Utrecht.
• NSI NV remains a leader in sustainability, with 44% of its assets rated as 'excellent' in energy performance, significantly above the Dutch market average.

Negative Points

• NSI NV experienced a small decline in overall asset values by 2.7% in 2024.
• Financing costs increased due to higher variable interest rates and lower income from swaps.
• The company anticipates higher financing costs upon refinancing due to rising interest rates.
• NSI NV's guidance for 2025 suggests stable earnings, with potential negative impacts from asset disposals not fully offset by new acquisitions.
• The company faces challenges in expanding without raising equity due to its current size and balance sheet constraints.

Q & A Highlights

Q: What are the assumptions behind the EUR2.15 EPS guidance for 2025? A: Bernd Stahli, CEO, explained that the guidance assumes a certain level of tenant retention, typically between 60% and 85%. The assumption includes some tenants leaving, but if they are immediately replaced or if existing tenants extend their leases, it could positively impact EPS.

Q: What is NSI NV's ideal scenario for acquisitions in 2025? A: Bernd Stahli, CEO, stated that while they are open to acquisitions, they are dependent on market conditions and seller motivations. They are looking for high-yielding assets in core markets and will evaluate each deal individually without setting a specific growth target.

Q: What is the current spread on NSI NV's marginal cost of debt for new acquisitions? A: Elke Snijder, CFO, mentioned that the projected cost of debt is expected to rise above 4%, with bank margins between 150 and 200 basis points.

Q: Can you elaborate on the dividend payout and tax rate expectations? A: Bernd Stahli, CEO, noted that the dividend payout is set at a minimum of 75% of earnings. Elke Snijder, CFO, added that the corporate income tax rate is expected to be between 5% and 7%, assuming no further changes in government policies.

Q: Are there any plans for share buybacks in 2025? A: Bernd Stahli, CEO, clarified that there are no current plans for share buybacks. The focus is on maintaining capital for potential attractive deals rather than buybacks, which may not significantly impact share price long-term.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.