Financial statements and profit appropriation
The Board of Directors prepared the Bouwinvest financial statements and discussed these with the Supervisory Board. Deloitte Accountants B.V. have audited the financial statements and provided them with an unqualified independent auditors’ report.
The financial statements will be submitted for adoption as part of the 2016 annual report at the 2017 Annual General Meeting of Shareholders (AGM). The Supervisory Board proposes that the AGM adopts the financial statements and discharges the Board of Directors for its management of the company and its funds and discharges the Supervisory Board for its supervision of same.
In the global real estate market, investments continued the upward line seen in the past years, with another marked increase in real estate investment activity in the Netherlands, driven by increased interest from both domestic and international investors. Bouwinvest’s in-depth knowledge of the Dutch and international real estate markets, thanks its in-house regional experts, its own research department and its cooperation with local partners, meant that the company was able to take full advantage of the real estate markets in 2016. Steady economic growth and the concomitant increases in employment and consumer and business confidence are all increasing interest in high-quality real estate in various sectors. On top of this, a number of megatrends, such as urbanisation, new technologies and the ageing of the global population, are driving demand for certain types of real estate right across the globe.
Bouwinvest used its knowledge of these developments and trends to invest over € 800 million in its Dutch and international portfolios in 2016. The Residential Fund invested € 255 million last year in a large number of high-quality and sustainable new-build properties, securing a solid pipeline for the years ahead. The Retail Fund once again focused on the optimisation of its portfolio, through a number of acquisitions and the development or redevelopment of new and standing assets. Last year saw the completion of the Nowadays (Damrak and Nieuwendijk) redevelopment in Amsterdam’s city centre, along with the unveiling of the revamped Beurspassage and the opening of a Primark flagship store. The Office Fund also continued on the optimisation path, continuing and initiating a number of major redevelopment projects. The Fund also acquired the Hourglass building, a prestigious mixed-use (office and hotel) new-build project in Amsterdam’s Zuidas Business district. In addition, both the Healthcare Fund and the Hotel Fund invested in new assets last year. Meanwhile, Bouwinvest’s International Investments invested in Pan-Asian hotels, US retail, Australian student accommodation, European offices and Nordic commercial property, together with a number of top-up investments in core funds in Australia and Japan.
Supervisory Board meetings
The Supervisory Board met seven times in the course of 2016 and conducted a total of ten conference calls, specifically for international investments and investments in the Dutch funds, including the Hourglass investment in Amsterdam by the Office Fund and the Hotel Fund. All members of the Supervisory Board were frequently present. The main subjects discussed at these meetings were Bouwinvest’s strategy, the strategy of the funds it manages and its investments in international listed and unlisted real estate funds, together with real estate market developments. The Supervisory Board also discussed the Investment Plan Real Estate 2017–2019 for bpfBOUW, the various (quarterly) reports and Bouwinvest’s compliance and risk management policies. The Board assessed investment proposals for the funds and the international portfolio and supervised the application of the related party transactions policy. The members of the Board also attended two themed sessions on real estate markets, one looking at hotels and the other exploring developments on the retail real estate market. The Board appreciates these opportunities to gain insight into the latest trends and developments in the global real estate world.
The Supervisory Board discussed the medium-term strategy and offered advice on Bouwinvest’s long-term strategy and the management of the Bouwinvest funds, including the governance of Bouwinvest and the Bouwinvest funds. In November 2016, the Board discussed and approved Bouwinvest’s business plan for the period 2017-2019.
In 2016, Bouwinvest welcomed a number of new clients to its funds. As per 1 January 2017, three new clients had committed to the Residential Fund, the Retail Fund and the Office Fund, taking the total number of clients to 17, including bpfBOUW. The Supervisory Board was pleased to welcome these new clients to its three main funds, and to note a continuing interest in all of Bouwinvest’s funds.
In four meetings, the Supervisory Board discussed the company’s quarterly reports, as well as the quarterly reports related to compliance, risk management and business incidents. The Board discussed the financial statements for 2016 in March 2017. The Supervisory Board also assessed the 2016 Annual General Meeting.
Finally, the Supervisory Board dealt with separate reports on Bouwinvest’s management of bpfBOUW’s international portfolio and its heritage portfolio.
Corporate Social Responsibility (CSR)
As it does each year, the Supervisory Board devoted extra attention to Bouwinvest’s CSR strategy. We are pleased to report that Bouwinvest's three Dutch sector funds were awarded GRESB Green Star status for the third year in a row. This was thanks once again to the transparency of the funds' reporting on CSR and sustainability-related matters and the funds’ ongoing efforts to increase the sustainability of their business operations and their real estate portfolios. More than three-quarters of Bouwinvest’s international portfolio is invested in unlisted funds that have been awarded Green Star certification.
In 2016, the Supervisory Board met once in the absence of the Board of Directors. This meeting was convened to discuss and evaluate the performance of the Supervisory Board, its committees and its individual members. The self-evaluation was based on an extensive questionnaire. The main conclusion was that the Board is performing well and effectively. The Supervisory Board also discussed the performance of the Board of Directors and its individual members. At least once a year, the Chairman of the Supervisory Board meets with the Head of Compliance. In 2016, they met once and reported no specific points of attention.
Members of the Supervisory Board attended several meetings of the Bouwinvest Works Council. Also last year, Bouwinvest installed its first fully elected Works Council. No less than 90% of Bouwinvest’s employees voted in this election, a testament to the engagement of the company’s workforce. Following the election, the average age of the members of the Works Council had fallen to 40 from an average age of 56, which constitutes a welcome rejuvenation of the council. The Supervisory Board welcomes the new Works Council and we look forward to working with the new members in the year ahead.
Audit Committee meetings
The Audit Committee has two members: J.H.W.R. van der Vlist, chairman, and R. Th. Wijmenga. The Audit Committee met four times in 2016, to discuss the annual and quarterly results and the reports from the external auditor. The Audit Committee also met with the external auditor in the absence of the Board of Directors.
In addition to financial reporting, the Audit Committee discussed the auditor’s report, valuations, the monitoring and control framework, including risk management, the risk reports, the compliance reports and the Internal Audit function. The internal auditor has a separate line of reporting to the Chairman of the Audit Committee. The Committee also devoted particular attention to the ISAE 3402 type II certification. The Audit Committee advised the Supervisory Board on the performance of the external auditor, which was judged adequate.
Selection and Remuneration Committee meetings
The Selection and Remuneration Committee has two members, C.G. Gehrels, chairman, and C.J. Beuving. The Selection & Remuneration Committee met twice. The Committee discussed Bouwinvest’s HRM policy, (management) development and succession planning. The Committee also discussed the performance of the members of the Board of Directors and target-setting.
A word of thanks
We would like to thank the Board of Directors and all Bouwinvest employees for their hard work and commitment and the excellent results they achieved for Bouwinvest in 2016.
Amsterdam, 20 March 2017
The Supervisory Board
Kees Beuving, Chairman
Jan van der Vlist