Well House was conceived as a highly sustainable office development in Amsterdam's Zuidas district, neighbouring NSI's Vivaldi I and II assets. Over the past two years, NSI has continued to review the project's feasibility, including a comprehensive redesign process and an extensive contractor tender process.

While rental prospects for high-quality, sustainable office space in Amsterdam remain attractive, the latest feasibility review showed that materially higher construction costs have significantly impacted the project's economics. In combination with the development, leasing and execution risks associated with a speculative development of this nature, the resulting risk-adjusted return would fail to adequately compensate for the risks involved.

NSI also assessed alternative, scaled-back versions of the project during the review process. These alternatives were similarly found not to meet the company's investment criteria.

The decision to cancel the project is driven by project-specific economics and does not reflect a change in NSI's view of the long-term attractiveness of Amsterdam's office market. NSI intends to retain ownership of the site, preserving future strategic flexibility within the broader Vivaldi cluster and avoiding potential disruption to the operation and leasing of the adjacent Vivaldi assets.

The project starts today and is scheduled for completion in the first half of 2028. A total of 2,500 sqm will be added to the existing building to create an open, welcoming and lively environment where connection and collaboration are encouraged. With flexible floorplates ranging from approximately 370 sqm to over 4,500 sqm, Noon is designed to accommodate both single-tenant headquarters and dynamic multi-tenant use.

Noon occupies a unique location in Amsterdam, where the dynamic Zuidas business district meets the vibrant Amsterdam Oud-Zuid neighbourhood. The building will be carefully redeveloped, drawing on its architectural heritage and existing structure to create a unique, high-quality working environment.

The building is designed to meet the highest ESG standards and is set to be Paris Proof, while targeting a BREEAM Outstanding In-Use certification and an A++++ EPC label.

Noon is designed for NSI by Cepezed, Dura Vermeer is selected as the contractor for the redevelopment, and HofmanDujardin is the interior designer.

Currently, the building has a contracted rent roll of €1.1 mln per annum, a WAULT of 1.9 years and EPC label C. With an occupancy rate of 71%, the asset offers near-term asset management potential. In the medium to long term, the building offers significant scope for a large-scale development, which directly aligns with NSI’s strategy to offer sustainable places with a comprehensive range of services at easily accessible and vibrant locations in major cities in the Netherlands.

Ahmed Ouahim, Head of Investments at NSI, commented: “Sypesteyn is NSI’s first acquisition in three years and represents a unique opportunity to invest further in Utrecht’s prime market. The asset offers immediate cashflow, can be optimized in the near term through active asset management and holds substantial development potential in the medium to long term. It is therefore well-positioned to benefit from significant rental growth in the future.”

The state of the art building is slated to be BREEAM Outstanding, adhere to the highest sustainability criteria (aligned with the Paris Agreements and EPC Label A++++). In close collaboration with ING and the Municipality of Amsterdam,  NSI has obtained the irrevocable building permit, finalised the leasehold agreement and successfully concluded the tender phase for construction. As such, the project, set to become a valuable addition to Amsterdam's office stock, and for the Southeast submarket in particular, will now advance to the construction phase with ING.

Sten Karelse, Head of Development: ‘‘Over the past years, we have worked closely with ING to design a future-proof office that meets the changing needs and demands of the organisation and its employees. We are proud to have completed the development phase and we are pleased that ING will soon start the construction of this exceptional Paris-Proof office building."

Bernd Stahli, CEO: “We are pleased by this transaction. In the face of challenging market conditions, the successful delivery of a 'ready to start' project, befitting a top-tier institution such as ING , not only underscores the exceptional credentials of NSI's development team but also aligns seamlessly with NSI’s unwavering commitment to capital discipline. Also, crucially, this transaction ensures the construction of this iconic building by the most natural partner – its future occupier.”

Michel van Wissen, Head of Corporate Real Estate Management & Facility Services at ING in The Netherlands:  “ING feels strongly connected to the Southeast district of Amsterdam. The building at Bijlmerdreef 98 is an important addition to the other adjacent head office locations where ING is already housed. The new office will fully comply with current sustainability requirements and align with modern employment practices, for which ING is known. We thank NSI for the cooperation in recent years”.

Well House, built for change
The building, designed by Dam & Partners Architects, will be a flagship location, prominently located at the top-end of the main Zuidas arterial road. The building, a true pioneer in terms of sustainable building design, will feature a roof terrace with sweeping views of the Zuidas and the city of Amsterdam.

Well House, previously known under its working name Vivaldi III, sits at the intersection of well-being, nature, and sustainability. Conceived as a place that revolves around connection and growth, this green landmark will enable companies to offer their employees best in class healthy, sustainable, and natural workspaces.

From conception to construction, sustainability and well-being are the driving forces behind Well House. By using sustainably sourced wood and choosing circular materials, the carbon footprint of the building is minimised. As a result, both in its construction and at completion, the building will be Paris proof. Thanks to its ambitious sustainability and well-being standards Well House is designed to achieve a BREEAM Outstanding rating and a WELL Platinum label. With Well House we seek not only to contribute to the well-being of tenants, but also to the well-being of future generations.

The collaboration
NSI has selected contractor J.P. van Eesteren because of its proven track record in timber construction and sustainable innovative offices, with projects such as the hybrid-wood residential tower HAUT in Amsterdam and the wooden office of Triodos Bank in Driebergen-Rijsenburg. NSI and J.P. van Eesteren are working together on the Technical Design with the intention to start construction in the second half of this year. The expected completion date will be in the second half of 2025.

Marco Peppel, Chairman of the Board at J.P. van Eesteren: “Well House will be our third major wooden construction project in a row. This is a fantastic opportunity to work with NSI and Dam & Partners Architects to demonstrate that the bar can be raised even higher. Not only with the literal height of 86 meters, but mainly in terms of sustainability. This project perfectly aligns with our own ambitions to build in the most sustainable and circular way possible. We are very excited to realise this iconic project!”

Deputy mayor Marieke van Doorninck (Zuidas): “It is great that the Zuidas is getting one of the tallest wooden office buildings in the world, at 86 meters high. The building also has the highest level of sustainability, both during construction and after completion, making it a perfect fit with our Paris-proof ambitions. Well House shows how we can grow as a city without increasing our footprint, so we can keep the earth habitable for future generations.”

Sten Karelse, Head of Development at NSI: “At NSI, we strive for a world in which the development of new buildings and their use is in full harmony with nature. With Well House we demonstrate this future is already here and it is our goal to inspire the wider real estate industry to a more sustainable future. The entire design, including the use of wood and other natural elements, aims to offer the most comfortable workspaces for organisations, with employee well-being at the core.”

Including ‘t Loon shopping center in 2021 NSI has sold a total of 13 assets, for total proceeds of € 115m, at an average 11% premium to book value.

These 2021 disposals conclude the non-core disposal program initiated in 2016. Back then, the portfolio consisted of 165 assets in 72 cities, a 21% vacancy rate, an average asset value of € 7m, with retail making up 34% of the portfolio and Amsterdam only representing a modest 21% of assets. By the end of 2021 the pro-forma investment portfolio will comprise 51 assets, with 60% of the portfolio by value in Amsterdam, an average asset value of € 25m, and significant value-add/development opportunities in offices and residential to generate future shareholder value. The vacancy rate of the portfolio at year-end 2021 is likely to end up below 6.5%.

Over the five-year period (2017-2021) NSI has generated a 9.6% unlevered IRR on the entire portfolio. Please see the attached slide deck for more details on NSI’s asset rotation track record and the transition the business has made over the period.

Bernd Stahli, CEO: “Having completed the non-core disposal programme in full, we are looking to the future with confidence. NSI is firmly on the front foot to pursue future growth, with a portfolio focused on the main growth clusters in The Netherlands, a significant Amsterdam-centered development programme and a clear focus on sustainability and customer experience, all underpinned by a strong balance sheet and an excellent in-house team.”

Following this transaction, NSI’s exposure to this cluster comprises five adjacent assets, all 100% occupied, which make up circa 7% of the overall portfolio. 

Ahmed Ouahim, Head of Transactions at NSI, commented: "Not only has Life Sciences real estate proven highly defensive during the past 18 months dominated by Covid, the long-term prospects of Life Sciences as an asset class are bolstered by rapidly accelerating growth in the science and innovation fields. In addition to benefiting from these underlying fundamentals, the acquisition of Mendelweg 30 offers interesting future value-add opportunities." 

The largest asset by value is the Atlanta building in the city centre of Amsterdam, located at Stadhouderskade 5-6. The building, which is held in freehold and a listed monument, offers 6,542 sqm of office space over 11 floors. Following an extensive renovation in the autumn of last year at a cost of circa €12m, this state of the art office building with an A energy label is now fully let to WeWork and has a 14-year remaining lease term. The layout and location of the asset perfectly suit the exploitation by a flex operator and so are a natural fit with NSI’s long term portfolio and business ambitions.

In Amsterdam Zuidoost, at Hogehilweg 6, NSI has acquired a 3,097 sqm multi-let building with a 100% occupancy rate. The building, with a B energy label, has a remaining lease term of 2.7 years. The asset is located in a highly promising submarket of Amsterdam, undergoing a dramatic transformation from mono-functional office location to a multi-functional "live, work, play" area articulated around a major transport hub. The building complements NSI’s existing office assets in the area.

The asset in Rotterdam is located in the city center at Westblaak 155-189 and offers 6,202 sqm of modern office space. The building, with an A energy label, is multi-let with a 88% occupancy and a remaining lease term of 3.7 years. The asset is optimally located in the proximity of the metro station, the nearby vibrant Witte de Withstraat and is an ideal complement to NSI’s neighbouring HNK Rotterdam Centrum, a strongly performing asset, which underpins NSI’s long term confidence in this area.

The acquisition of this portfolio further establishes the company as the leading owner and operator of modern and quality office space in urban locations in the Netherlands. Following this acquisition, the portfolio will be 55% located in Amsterdam by value and will have total size of €1.3bn.

Ahmed Ouahim, head of transactions at NSI, commented: "this transaction cements NSI’s position as a leader in the Dutch office market. The portfolio offers a mix of central locations and value-add potential which we deem very attractive. We are pleased with the process and outcome of what was a complex transaction, but was able to be carried out at remarkable speed thanks to the strength of our team".

In December 2019, NSI and ING signed a cooperation agreement and preliminary lease agreement for Laanderpoort. The design process is now in progress and the Preliminary Design is expected to be adopted in the second quarter of 2021. Construction is scheduled to start in mid-2022.

Sten Karelse, Head of Development NSI: "We are delighted to shape this project together with the Municipality of Amsterdam and ING. This brings the planned redevelopment of Laanderpoort one step closer. We believe in the enormous appeal and qualities of the area and its further development. With the new Laanderpoort, we are responding to changing needs in the way of working and we are creating a flexible and particularly inviting working environment for ING and other users."

Dirk de Jager, Amsterdam Southeast District Manager: “With this building, NSI will achieve harmony with the surroundings. Self-employed people and freelancers from Amsterdam Southeast can also come here for work space and communal office facilities, while amenities will be made available to people in the neighborhood. The green public space around the building will connect seamlessly with the Bijlmerdreef, which will be renovated into a green lane. Likewise, the developments in ArenAPoort will provide an exciting area for the tenants of this office complex, with facilities that match the growth of the district from about 90,000 inhabitants now to about 140,000 in 2040."

Michel van Wissen, General Manager Corporate Real Estate Management & Facility Services at ING: "The redevelopment of Laanderpoort is the next step in creating an attractive and inspiring living area where education, business and the environment come together. This creates the opportunity for ING to allow more employees to use the qualities of Cumulus Park, in which several buildings are connected to create an open atmosphere in a pleasant and sustainable working environment."

Bernd Stahli, CEO: ‘NSI has been working on this potential development since 2018. We fully recognise the short term challenges facing the market. However, we thoroughly believe that in the long run demand for modern, comfortable and sustainable offices will remain, certainly in this prime Amsterdam business district. Given the potential start date in 2022 we have time to see how the economy, office market and customer demand evolves in the period ahead and will plan and act accordingly’.

Sten Karelse, Head of Development at NSI: ‘The agreement with the municipality is an important first step in order to realise this unique opportunity for NSI. We will now start the consultation with all relevant stakeholders to further progress this project. The design fully embraces the changing needs of potential end-users, recognising that inspiration, well-being, meeting and connectivity are key. This wooden building as such marks a new generation of future-proof circular high-rise offices.‘

The redevelopment and modernisation includes the creation of a formal second entrance, a spacious atrium, a refurbished courtyard and fully renovated office floors, with an emphasis on sustainability, innovation and ease of use. The building now offers thermal energy storage, solar panels, a sedum roof and smart sensors to optimise energy usage.

The acquisition price (excl. purchase costs) of € 34.0m represents a gross initial yield of 3.5% (4.1% on July 1) and a reversionary yield of 6.3%. Strong demand for modern office space in Amsterdam-Sloterdijk in recent years has resulted in an overall vacancy rate of below 5% for the area and an average vacancy rate of 1.5% for the four NSI assets in this submarket. Due to the healthy underlying market dynamics rents of in excess of € 200 per sqm have already been achieved.

The deal fits NSI’s strategy to selectively acquire interesting value-add initiatives and to create attractive clusters around major public transport hubs. Following this transaction, Amsterdam will make up 55.5% (Dec 19: 51.0%) of the Offices and HNK portfolio.

Ahmed Ouahim, Head of Transactions of NSI comments: “ONE20 is located next to both the Glass House and Q-port buildings and so it further cements our position in this strong sub-market of Amsterdam. The Sloterdijk submarket is transforming rapidly to a multifunctional location with excellent transportation links, including Amsterdam’s second busiest train station. The building offers great value-add potential through letting up the remaining vacancy and capturing the potential reversion in existing leases”.

The lease agreement with ING is subject to planning and a leasehold agreement with the municipality of Amsterdam and other conditions subsequent agreed between NSI and ING. Construction is planned to commence in Q1 2022 and the capex (excl. land) is expected to be circa € 120 million.

NSI was a net seller of assets in 2019, creating € 100m in capacity to help fund its development pipeline. During the year 28 assets were sold for € 129m, at on average a 9% premium to book value. These disposals comprise 20 smaller office assets, seven retail assets and one industrial asset. As a result of these disposals NSI has exited a further 14 cities in 2019.

Two office assets were acquired during the year, in Amsterdam and Leiden, at a combined cost of €29m. A retail asset in Leiderdorp, part of the transaction with Retail Estates in 2017, was transferred back to NSI in early H2 2019 and subsequently sold in December.

As a consequence of selling assets with above average vacancy and strong lease up in the fourth quarter, the EPRA vacancy rate will fall below 7.5% for the total portfolio and to around 2% for Amsterdam offices by Year End.

NSI will publish its preliminary full year results 2019 on Tuesday, 28 January before the market opens. A conference call for analysts and investors will be held at 10am.

In the second quarter NSI has also sold five office assets for a combined disposal price of €19.9m, on average 24% above the December 2018 book value.

This initiative is part of a wider ambition by the municipality to upgrade the wider Amsterdam South East area and create a more vibrant, high-end, multifunctional destination. NSI is fully invested in this part of Amsterdam with both its Centerpoint and Laanderpoort assets and is pleased to be a key partner for the Municipality with a shared vision to transform this dynamic area with a strong focus on sustainability, accessibility and well-being.