NSI has evaluated its strategy regarding the markets it operates in after the completion of the merger with VastNed Offices / Industrial. In particular NSI's position in the Swiss market has been investigated and the conclusion is that it is more attractive to invest in the Netherlands and Belgium as returns are significantly higher in these markets.
Therefore, NSI considers the Swiss market no longer as a core market and it will focus exclusively on the Netherlands and Belgium.
NSI's Swiss portfolio consists of 15,000 m² of office space in Thalwill and Fribourg and 22,000 m² of retail space in Fribourg and Zug, with an overall value of CHF 148 million (approx. 121 million) and net rental income of CHF 6.6 million.
Over the last years NSI has added considerable value to its Swiss portfolio: occupancy rates of office space are with 98% almost at friction vacancy levels, the retail location in Fribourg has been redeveloped and in Zug tangible extension development plans are in place.
Considering the higher returns that can be achieved in the Netherlands and in Belgium this means that NSI will leave the Swiss market in the near future if the opportunity to do so arises at good prices. Selling the Swiss portfolio will have a positive effect on the company`s loan-to-value ratio of around 2-2.5%.
NSI will intensify its disposal strategy of its smaller, non-core office buildings in the Netherlands and envisages to divest around 50 million in 2012. NSI experiences a good demand for these smaller assets, as is shown by two recent disposals in Groningen (on September 1, 2011, a 100% vacant office building was sold for 2.0 million) and in Zoetermeer (on December 7, 2011, a 4.5-million office building, 100% occupied) at a price level 7.7% above book value.
As is the case with the Swiss properties, NSI will only sell at acceptable price levels. NSI will benefit from its experienced and fully equipped asset management team that sold a number of properties for over 116 million in this category in 2008, 2009 and 2010.
The proceeds of the divestments in the Dutch portfolio will be used to redeem debt and will result in approximately a 1% improvement of the company`s loan-to-value.
"Our Swiss portfolio has been performing very well. Over the years the value of our properties has been very stable, even increasing in times when other markets were declining. However when the prospect of growth at attractive returns is rather limited, one has to conclude that now is the right time to start selling our Swiss properties and add value for our shareholders," Johan Buijs, CEO of NSI, said.
"Moreover, we will increase value by selectively divesting parts of our Dutch office portfolio."