The Fund’s strategy

The Office Fund has a clearly defined growth and optimisation strategy with a focus on the optimisation of its portfolio through targeted acquisitions and continuous enhancement of core standing assets.

The Fund’s strategy focuses on office properties that generate stable returns and will continue to do so in the future, taking into account the trends and development in the office market. In addition to this, the Fund’s strategy is focused on active asset management to optimise the portfolio and keep it as future-proof as possible. Based on the market trends and developments described above, the Fund’s strategy focuses on:

Core regions (Amsterdam, Rotterdam, The Hague, Utrecht) that closely correlate with the urbanisation trend in the Netherlands and property in A locations. At least 80% of the Fund’s investment will be made in its defined core regions.
Multifunctional locations, with a blend of culture, education, sport and work. Locations where a widely diverse group of people come together form a good basis for an inspiring working environment.
Multi-tenant properties to reduce the volatility of revaluations and to increase the control of asset management risks.
Enhancement of core properties by creating special building propositions with an increase in comfort and providing an attractive environment that is seen as an appealing (business) meeting place.
Responsible Investment: continuing the improvement of the Fund’s sustainability performance.
Maintaining and expanding our networks and close cooperation with tenants, property managers and other stakeholders to ensure our occupancy rate.

Diversification guidelines and investment restrictions

The Fund applies a defined set of diversification guidelines and investment restrictions in the execution of its strategy. The Fund will adhere to the following investment restrictions to focus on its core activity and to limit risks. The Fund expanded its diversification guidelines slightly in the Fund Plan 2019-2021.

Diversification guidelines	Current portfolio	Conclusion
≥ 80% of investments invested in the core regions	100.0% in core regions	Compliant
≥ 90% of investments invested in low or medium risk categories	100.0% in low and medium risk	Compliant
≥ 70% of investments invested in multi-tenant assets	80.8% multi tenant	Compliant
The total rental income of one tenant may not exceed 15% of the total potential rental income	There are no tenants exceeding 15% of the total potential rental income	Compliant
The total rental income of the five largest tenants may provide a maximum of 50% of the total potential rental income of the Fund	43.2% on investment property	Compliant
Investment restrictions
< 15% invested in single investment property	There is one investment property exceeding 15%	Non compliant *
< 10% invested in non-core office properties	5.1% concerns non-core office properties (2 public parking assets)	Compliant
No investments that will have a material adverse effect on the Fund’s Diversification Guidelines.	There have been no investments in 2018 that have a material adverse effect on the Fund's diversification guidelines	Compliant
Restrictions on (re)development activities < 5% of the Fund's total investment portfolio value
a. only Assets from the Fund's porfolio qualify for (re)development	In 2018 all (re)development activities were executed only for assets of the Fund's portfolio	Compliant
b. the activities are exclusively targeted at optimising the quality of the portfolio	All activities were targeted at optimising the quality of the Fund portfolio	Compliant
c. not allowed if it has a negative impact on the Fund’s Diversification Guidelines	There was no negative impact on the Fund's diversification guidelines	Compliant
d. signed commitments relating to at least 60% of the rental income of the Asset is required	Commitment > 60%	Compliant
e. (re)development is undertaken by and for the risk and account of Bouwinvest Office Development, a wholly owned subsidiary of the Fund	All (re)development activities are undertaken by and for the risk and account of Bouwinvest Office Development	Compliant
f. all financial risks in connection with the work to be conducted as part of the (re)development will be contractually excluded by Bouwinvest Office Development and transferred to external developers or contractors. Examples of such risks are: design and building risks and cost and planning risks	All financial risks in connection with the work to be conducted as part of the (re)development are contractually excluded by Bouwinvest Office Development and transferred to external developers or contractors	Compliant
g. zoning risks remain with the Fund, however starting the building activities in relation to a (re)development is conditional upon obtaining the relevant zoning permits	The building activities in relation to a (re)development were conditional upon obtaining the relevant zoning permits	Compliant

(*) The value (as if completed) of two other assets is >15% of the Fund. The shareholders decided to allow the acquisition of these buildings, so a deviation from this restriction is permitted. In addition, positive revaluations cannot prevent the value of a single asset rising to a level of >15% of the Fund's total portfolio.

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Report of the Board of Directors

Diversification guidelines and investment restrictions