Central Petroleum Limited

So good morning everyone from Prague. It's me here with the Q1 results for 26, which is good because we have seen a all-time record high leasing take up of more than 762,000 square meter of new deals. Around 445,000 square meter of that is new build, new deals, and the rest is some renewals. throughout the region, mostly for existing clients, long-term tenants as historically around two thirds of all of what we lease, we lease to our existing clients. So those are logistics service providers, DSV, Raben, and many others, but also we have been able to close in Q1 a number of deals in Germany, in Krefeld, which is one of our new projects in Germany, but also Some renewals in Romania, for example, Vallejo and Timisoara. We have done a deal with La Merlin in Bucharest. So all kind of different industries. But yeah, very good. So a record high. We've never seen so much leasing as we have seen in Q1. And I think Q2 is going to be a record again in terms of take-up. But let's see. how far we get. This confirms strong client base and confirms a right region. I think also confirms that with all of these events happening over the past weeks, months, decade, maybe. We've seen COVID, we've seen tariffs, we've seen wars. Often our clients adjust their supply chain from, you know, just in time it becomes just in case they want to build inventory. They cannot rely on the Suez Canal being open all the time. So rather have a bit of extra goods on stock. More in Europe for Europe is what we see mostly Central Europe because labor costs, productivity is different here than in some of the Western European countries. And often means that our clients are growing their business and building inventory just to make sure that they can deliver if they need to, to make sure that they can sell and continue to run their business. All of this also means flexibility. Leasing or renting property is therefore also very much in demand and appreciated and gives more flexibility. It's not that companies build properties which they will use for the next 30 years. It's more like they wanna maybe rent something for five years or 10 years or even short-term leases is what we do. And yeah, short-term leases can be at a bit higher rent than long-term leases, of course. Us, as well-established companies with feet on the ground here in Europe and Central Europe in particular, I think we benefit from that with the client base, with people on the ground, with a network. We've been doing this for more than 25 years, so we benefit from that. And yeah, Europe cannot rely on others. You need to maybe re-industrialize, as some people say. Anyway, become more self-sufficient. Do look after your energy business, technology, but also defense industry. And also for companies outside of Europe, also they come to Europe to be part of the European economy. And we've seen that many Asian countries companies come to Europe. We do a lot for them and I think it's going to continue and they also come to Europe under the in Europe for Europe idea. Some highlights on the operator and developer because I don't have to tell you that we collect rent because we always do that and Occupancy has been around 93%, similar to what we have seen over the past five years since our IPO, since the listing in Amsterdam in 2021. Okay, operator, so far good, 14.7 million square meter of lettable area, which produces 850 million euro of rental income. For next year, 2027, as you know, we target €1 billion of rental income and that is still a realistic target. That's with regards to the operator. With regards to the operator, I can also say maybe that we continue to invest money in those buildings, make sure that they remain in excellent condition. What do you do? All kinds of modernization, smart metering. Of course, we equipped those buildings with LED. We did and do some roof repairs, all kinds of other things to make sure that these buildings remain in a good condition. Often these buildings are obviously part of a larger business park. Yeah, it's just important, we believe, to continue to invest in those parks, not only the buildings, but also outside infrastructure. etc. For example, it reminds me of a project in Brno, Madrid, south of Brno, which we started in 2001. And then we now recently built another exit from the motorway to improve the Accessibility, that's what we do. We're also improving green areas and parking lot and some battery charges. So you make sure that these properties are up to date and fit for use. And they've been built well back in the day. So yeah, that's the operator, developer and the stuff we like. Two million square meter on the construction throughout the portfolio, 11 countries. Not all of that will be complete this year. Some properties take a bit more time to complete. But once fully let, it will do another €150 million rental income around that. Keep construction costs under control. Obviously, there's a bit of here and there discussion about construction prices. Try to keep that under control. I think we can do something on the rental growth as well. We have a large land bank. which we like to develop. So we are working on design and permitting to make sure that the land bank is prepared for future projects at the same time. So the developer is not only building buildings, but it's also preparing for future developments, which often is I think probably the most demanding because you need to do a proper design and you need to get your permits. And that's something which can take time. Once you're under construction, then you control that process and then you're okay. to estimate your completion dates target is to remain at 10 yield on costs do that continue to do that lots of existing clients also as i said adjusting supply chain adjusting strategy to the new reality you know flexibility also being able to react to the changing market circumstances goes for our clients but also goes for ctp i mean in times of change there is opportunity When all is steady, then it's easy. I think you can make a difference when it's a bit bumpy and more challenging. And this is something which we enjoy, which we like to make sure that now is the time to make a difference. So it's all hands on deck. It's the time of opportunity. And yeah, all together work for a better and stronger Europe, for sure. Asia, yeah, of course, we continue to look. We have teams on the ground in China. We have a team in the meantime in Vietnam to make sure that we understand the market. We talked to our existing clients on whether they would go to Vietnam with us and how that would look like. Many of our existing tenants have activities in Asia and many are in Vietnam already. We could have been part of that maybe, but we were not ready. And I think we are getting up to speed to be prepared and to see how we could extend our activities and also become active in Asia. And Vietnam would be the end of first. Market for us. I continue to go there. As you know, I'm typically involved in CTP when it's a startup, when things start to go before we hand over to local country teams. So I do... I plan to continue my travels to Vietnam on a monthly basis approximately and try to spend a week in Vietnam. So, so far good. This year I will hand over to my colleagues and I'm happy to and ready and prepared to answer any of your questions. Thank you so much.

Turning to the financial highlights. The portfolio-like flag rental growth came in at 4.6% for Q126, accelerating from 4.2% in Q125, driven by indexation and continued positive rent reversion capture. As Raymond highlighted, we delivered a record quarter leasing activity of 762,000 square meter, up 83%, and occupancy remained stable at 93%. The annualized rental income increased by 14% year-on-year to €849 million, illustrating the strong cash flow generation of our portfolio. We remain well on track to achieve our annualized rental income of €1 billion by 2027. This cash flow will finance our future growth. Our company-specific adjusted EPRA earnings increased by 11% year-on-year to €120 million, This translates into 25 cents per share, an increase of 9% compared to Q1 2025, adjusting for capitalized interest. We remain on target to meet our full year 26 company-specific adjusted APRA earnings per share guidance of €1.01 to €1.03. Now looking at the valuation results. For the Q1 and Q3 results, only the investment properties under development are revalued. In Q126, the revaluation amounted to 164 million euros, driven by the construction and leasing progress, allowing us to capture the development profit on our pipeline. Of the project delivered in Q126, we achieved a yield on cost of 10.4%. The total portfolio cross-asset value now stands at 18.9 billion euros, up 2.2% from full year 25. And the support of demand drivers of our business are not just prevailing, but are becoming even more relevant given the current geopolitical environment, whether it is our European companies reshoring or global companies relocating manufacturing to Europe, and in particular to the business smart CEE region, to more effectively manage their supplies and risks. And these changes bring opportunity. And we are ready. not only with the 2 million square meter of space under construction today, but as well with our 33 million square meter land bank. This enables us to capitalize on our high development yield and cost. We also continue to grow with our existing customers. 73% of the new leases signed in Q1 were with existing clients expanding with us. And our tenant retention rate was high at 95%. Of the space under construction today, over 80% is in or around our existing parks, where we continue to see strong demand, especially from those existing clients. Our APRA NTA per share increased from €18.58 at Q125 to €20.95 at Q126, representing a strong year-on-year increase of 12.8%. We've now been five years listed as CTP. And in those five years, we have delivered an annual growth of 19% in terms of GLA and 22% in terms of the annualized rental income. But this is just the start of our self-financed development-led business. And it's supported by our standing portfolio. It's sustainable and growing income alongside market expansion opportunities. Looking forward, Structural tenant demand drivers, including our medium-term double-digit annualized growth trajectory, remain unchanged, as Richard will highlight to you now.

In Q1, 2026, we have again demonstrated our strong access to debt capital markets and our continued focus on diversifying sources of liquidity, raising nearly 800 million euros of new debt during the quarter. We seized a favorable market window early in January and issued 500 million euros of green bonds with a four and a half years maturity ahead of the geopolitical volatility that followed. The bond was very well received with an order book almost nine times oversubscribed and provided highly attractive funding at a spread of only 92 basis points, our first issuance below 100 basis points since 2021. Following our inaugural Samurai loan from March last year, we also returned to the Asian markets, with a new dual-tranch five-year syndicated loan, raising 22.5 billion yen, equivalent to 122.7 million euros, at a margin of 115 basis points, and 180 million US dollars, at a margin of 135 basis points. With 15 Asian banks in the syndicate, we further broadened our pool of lenders and strengthened geographic diversification, both of which remain long-term strategic priorities for us. We also continued to actively manage our debt portfolio and repurchased €216 million of our February 2030 bonds with a 4.75% coupon. generating material interest savings over the coming years. Supporting our integrated business model, the developer, the growth engine, the operator, we will continue to proactively manage our debt portfolio and diversify funding sources in support of long-term value creation. Turning to the key debt metrics, our interest coverage ratio remained stable at 2.5 times, comfortably above covenant level. Our normalized net debt to EBITDA stood at 9.4 times, broadly stable. And our loan-to-value stood at 46.4%, marginally above our 40% to 45% target range, primarily reflecting the land bank-led acquisition in Italy at the end of 2025. We believe this acquisition will be highly accretive over time. Importantly, the next stage of growth is built in and financed. To complete our 1.4 to 1.7 million square meter pipeline in 2026, we do not require additional equity capital due to our sector-leading yield on cost of around 10%. Every euro we invest in our pipeline increases our ICR and decreases our net debt to EBITDA as leasing income comes on stream. That underpins our confidence that we can continue growing rental income at double-digit rates while strengthening the balance sheet. Looking through 2026 and beyond, CTP maintains a conservative debt maturity profile. We also repaid €350 million of bonds maturing in January, and our only remaining bond maturity in 2026 is €275 million at the end of September. Looking further ahead, maturities remain limited over 2027 and 2028, with less than €1.1 billion in total outstanding over those two years. Liquidity at the end of March stood at €1.9 billion, comprising €600 million of cash and our €1.3 billion RCF, more than sufficient to meet our cash needs for the next 12 months. We continue to rebalance our capital structure towards unsecured funding, currently at 71%, with a medium-term goal of around 80%. Our average debt maturity is 4.8 years. 99.9% of our debt is hedged or fixed rate, and the weighted cost of our debt decreased to 3.2% in Q1, marginally below year-end 2025 due to our active liability management and refinancing activities. We do not expect a material increase in our average cost of debt in 2026. We remain confident in the outlook for CTP, despite the volatile geopolitical backdrop. Operationally, the quarter was marked by record leasing activity, while rental levels remained resilient. We continue to see structural drivers, such as rising disposable incomes, supply chain professionalization, and in-Europe, for-Europe production, supporting occupier demand across our markets. Our pipeline remains highly profitable and tenant-led, with 2 million square metres under construction, bringing 154 million euros of future rental income and over 7 billion euros of development profit potential in our land bank. This provides significant embedded growth well beyond the current year. More broadly, we remain firmly on track towards €1 billion of annualised rental income by 2027, supported by development completions and reversionary capture, while continuing to progress towards our longer-term ambition of 30 million square metres of GLA. Thank you for your attention. We now welcome your questions.

The first question today comes from Marios Pasto from Bernstein. Your line is now open. Please go ahead.

Thank you. Good morning. Thanks for taking my questions. I've got two from my side. So firstly, you mentioned you're anticipating another good second quarter of leasing volumes. But maybe can you give some colour on the negotiations and the pace of leasing in the current environment, which will then feed into your volumes maybe later in the year? Has anything changed on the ground? Thank you.

Hey Marios, thanks for your question. So if we look in terms of leasing, and Raymond already said it also in the video, we see a good start of the second quarter. So that remains supportive. And that's really driven by... if you take a step back and look to the long-term drivers of what is now really underlying those leasing activities, it comes back to that the current geopolitical volatility that we are seeing is actually only supporting demand from our tenants because they want to have security in their supply chain. So that's why also if we look to the second quarter, We see a good start, and we are positive on the outlook for the quarter, thanks to the current position where we are in, which we think is only good for Europe long term. Because Europe as a continent, driven by those geopolitical movements, has to become more self-sufficient. And if you then look to where most of that production, which will happen in Europe for Europe, will take place, that remains consistently in what we call the business smart central and eastern European region. That hasn't changed materially. That has been in place over the last five years. And that's why you also see the consistent growth in leasing that we are able to do. And that will play out through the second quarter. Of course, we need to deliver and we'll update you accordingly. But I think the first quarter should give you the confidence in what we are saying because we speak to our clients on a daily basis. We have people on the ground in all our parks, property managers, relationship managers. We speak to the clients. We see how the clients are operating. They see that... the space which the clients will need. And that is how we are so reactive. And that's also why we are growing so much with our existing clients. And I think that's often a bit underestimated by the capital markets. But if you look, if we do more than 70% consistently with our existing clients expanding with us, and you know, we have a very broad base of existing clients, more than 1500 across the portfolio. That drives an enormous amount of stable and consistent growth over the years. And that we expect to play out in the second quarter. So all is set up for that and we'll try to deliver in line with also the guidance we have given for this year.

Okay, thank you. And just on construction costs, I think there was a reference to it in the presentation. How protected are you from price increases across both your existing developments, but also on the future impacts or potential impacts on your development returns targets? Any color there would be appreciated.

Yeah, sure. Yeah, thanks for the question. In regarding construction costs for this year, yeah, I wouldn't really expect any significant impact on our pipeline for this year. You can't hedge everything forever into the future. So should there be a really long-term persistent growth increase in energy costs, driving, you know, higher construction commodity prices that's going to flow through into our business, you know, and we won't compromise on our targets. So that means that we will, you know, look to increase rents going forward. I think, you know, if you look at the backdrop to today versus the last time you saw a significant energy price increase, which was the start of 2022, At the start of 2022, you had a lot of construction activity that was still ongoing, fueled by the zero interest rate policy that had been going on for the last 15 years. You have a lot lower level of construction activity generally at the moment. So we would think construction cost inflation can remain relatively muted. Thank you very much.

Thank you. The next question comes from Frederick Renard of Kepler Chevro. Your line is now open. Please go ahead.

Yes, hi, good morning. A few questions on my end. Just to hear your thoughts on rental dividends. You mentioned that adjusted for the country mix, the rents are up 1% year on year, while admittedly, I guess in your countries, inflation would be more closer to 2%. So can we conclude that the rental growth is slowing down or is it just due to the specific lease term that we are negotiating? First question.

Hey, Fred. Indeed, you are correct. If you look to the leases that we signed, they were up 1%. But those are indeed not like for like. And that's why you also need to look at the like for like rental growth that we are showing. That's always the mix of those two figures. And the like for like rental growth, you see, of course, the indexation, but you also see the reversion capturing. And as we are, the leases which are coming up to expiry, we see that we are able to capture that reversion. And that's ultimately, of course, the fundamental proof of the EFEs in our portfolio and the rental growth in our portfolio. If you look to the leases we signed in a specific half, they are indeed not like for like, so it depends. We have signed a bit more renewals this quarter. So, pronunciations. While a bit less, if you look to the ratio, actually, new leases. So, that impacts a bit that figure. But overall, what we see is, and that's also what we said, I think, at the full year, we continue to expect rental growth in line with inflation.

Okay, that's clear. Can you maybe just remain on that quantify from the 4.6% like for like how much was driven by reversion and how much by indexation?

Around two and a half percent by indexation and the remaining is mostly reversion.

Okay. And then last question for me. I just wanted to have your view on the new starter project for Q1. So if I compute it correctly, it's around 140,000 square meters, which would be the second slowest new construction starting since early 2022. Is this just a timing issue or have you decided to slow things down regarding new construction?

It's, it's, it's more of a timing issue. Uh, actually the exact number is, um, um, because we delivered 116,000 square meter, uh, in Q1, uh, our pipeline increased by roughly 50. So in total, the new start is actually around 170, um, to give the exact figure. Um, and that depends a bit there when we start projects. I think if you look to the pipeline we are having, uh, we have now a bit over 2 million square meter under construction. which allows us to deliver that 1.4 to 1.7 that we expect for this year. So you need to look at, okay, what is the expected deliveries and what is the total pipeline? And then it's in the timing of which quarter we start the project and ultimately, Typically, if you have a simple building, we can deliver in nine months, 12 months. If it's a simple logistics building, if it's a more complicated building, more manufacturing or more extras, it can take longer. There are also one-to-office buildings in Brno in our pipeline, which also take longer. So it's always a bit a mix of when do those projects start. And ultimately... Yes, if you look to the pre-leasing, which is ultimately where we guide upon, because as management we are looking where do we want to start on a speculative basis and where do we want to have pre-letting in place. You see that the pre-letting made a nice jump in Q1 on the back of, of course, the strong leasing evidence. that we showed. We have more pre-letting, as you know, in new locations, like usual, because that's in line with our strategy. While the pre-letting in our existing parks, because if you have an existing park of 100, 200, 300,000 square meters with proven demand, where we, as explained also in the call, grow mostly with those existing clients, we typically start with a bit lower pre-let, because we have the proven evidence of leasing demand over there. So that remains consistent and that's what we are managing upon. So where is the pre-let that we want to target for the locations? And there I think you saw the good growth that we have been able to deliver. So when do the project start? There's more of a timing issue than anything else.

Okay, understand. Thanks, Nathan.

Thank you. The next question comes from John Viong of Kempen. Your line is now open. Please go ahead.

Hi, good morning. Thank you for taking my questions. As you mentioned, Q1 has been a record quarter in terms of leasing. But could you comment on the split between leasing for new developments and expiring leases? And how does this split compare to previous years?

Yeah, sure. And that's also what we highlighted in the press release, I think, already. If you look to the 762, around 320, 330 is related to prolongations. So if you look to the amount of prolongations as part of the overall leasing, the percentage is a bit higher. This year, we have a bit over 700,000 square meters of leases expiring. So with that, we are nearly at half of the expiry is basically taken care of and some already for next year. Of course, it's not always exactly calendar year to calendar year. So we have taken care of a lot of the Expire is upcoming, which I think is a good sign. So tenants, that goes back to what I said before, looking for the security in their supply chain. So willing to prolong their leases to make sure that they keep the space available, which is basically essential to, of course, run their business. And then the rest is for new leasing, either for some expansion of existing clients and existing parks or for future pipeline projects, some for 26 deliveries, some for 27 deliveries. If you want more details, I can give you a more detailed split offline. happy to help if that is useful for your modeling. But in general, yes, a bit more prolongations this quarter than normally. And that's also what I said when answering to Fred, of course, impacting slightly that eventual tone figure.

So on those prolongations, does that mean that the tenants have pulled forward the decision or is it also a bit of active management on your side?

A bit of both. You never want to negotiate with the tenant in the last months or a couple of months of a lease. You want the certainty and the clarity as a landlord, but the tenant also needs the certainty and the clarity. That's what Martin was saying. If you look at what are tenants doing with us, they're prolonging their stay with us in an existing park and often they're expanding either their operations under the existing roof or sometimes also adding a small amount of space and that's the real strength of our city park model that we're able to offer tenants the opportunity to grow and develop their business in the same location, which is the much more efficient and effective way for them to run their business.

Okay, that's clear. And just combining your comment on strong leasing activity in Q2 and the timing for construction starts. So would it be fair to assume that development starts over the next quarter should just come in higher than the 170,000 square meters in Q1?

I would assume our pipeline to remain roughly stable in Q2. So subject to the amount of deliveries, we'll also start a similar amount of new projects. But as the portfolio grows over time, also the new starts will grow.

Okay, that's clear. Thank you.

Thank you. The next question is from Nadir Rahman of UBS. Your line is now open. Please go ahead.

Hello, good morning. Thank you for taking my question. Just one from me on, I believe it is slide 12 of your presentation from this morning. You give some figures on the rental tones across different countries and I've noticed that quite a disparity for both Germany and Poland and also Romania. And I just wanted to ask what the drivers were for the change in rental tone across these markets. I think it was negative for Germany and and a positive upholding year on year. Thank you.

Yeah, that really comes back to that the leases are not like for like. So if you look to Germany, last year we signed some deals for new developments. This year, we basically only signed deals for the former DIR portfolio. So that's why you saw that last year the leasing, we signed at slightly higher rents because we had new developments in that. But this year, it's more the older product in DIR. So that's why you saw in Germany a slight decrease. Poland, you saw an increase, indeed, that's driven by one tenant which has extras and which needed a big yard space. We published, I think, two weeks ago, it's the Windar. They produce windmills for the wind farms. So they have larger extras and larger outdoor space. So if you then look on a square meter basis, your rent screens higher. So it's really... The leasing is reflective of the specific deals we are signing in the quarter. So that's why we always look at it as I said before, in combination with the like for like rental growth, where you see it across the whole portfolio. And that's why we are constructive, of course, on the back of the leasing demand that we continue to see the rental growth coming through in line with inflation.

That's very clear. Thank you.

Thank you. The next question is from Stephen Bomas of ABN AMRO-ODO BHF. Your line is now open. Please go ahead.

Hi, good morning, and thank you for taking my questions. So I have two. To start off, why did you remove the number of head of terms signed for that slide, and how many head of terms were signed up to March 26th? That's the first one. And then the second, where was demand for leasing for new developments coming from? So please break down the 435,000, let's say, by country type of clients, type of assets, and maybe what we can expect for the breakdown in the coming period. Thank you.

Yeah, sure. If I look at the demand for the new leases, we saw that pretty much across the board. And you need to be careful about looking at one quarter. If you look at the last two quarters we've done in total over one and a half million. square meters of leasing. If we look at the slightly longer term trend, what we see is an increase in demand from logistics companies, an increased demand from wholesale and retail. And both of those reflect the fact that We are operating in markets with significantly faster growing disposable incomes, growing middle classes with aspirations to improve their quality of life and their willingness to spend money that's attracting new entrants into the economy. into retail spaces and driving increased retail sales across Central Europe. And you see that then flowing through into demand from logistics and retail and wholesale. Tenants, what we've seen less of over the last couple of years, and that comes and goes a little bit, is automotive. But we've continued to see good demand from Asian tenants make up 12% of the portfolio. Now, new leasing this quarter was a bit less than the 20% we've been running out in the last two years. That's partly to do with the good level of extensions and expansions with existing tenants. that we had. So that's there. And look, regarding the HOTS, we'll always add or take away one or the other bit of information going forward. We are very happy and comfortable with the development of leasing activity in Q1. And as Raymond said in his presentation, we're very, very happy with the start in Q2.

Do you have the number of head of terms?

It's just under 100. So similar to what we have seen in previous years. No fundamental change. Because otherwise we would not sign ultimately more leases. They are linked together. A very large number of HOTs translates basically into lease agreements. Because if you sign a HOT with a tenant, they agree on all the commercials. as most of our clients are existing clients, they are not surprised by the lease terms we are putting in the contract. It's mostly just a copy-paste. So if you agree on the commercials, then you see a very high flow-through into the final lease agreements being signed.

Okay. Okay, clear. Thank you.

Thank you. The next question comes from Bart Geissens of Morgan Stanley. Your line is now open. Please go ahead.

Yeah, hi, good morning. I have two questions. My first question is, I think you said at the start of the presentation, there's more demand for shorter leases. Can you provide a bit more color on that? What portion of leases that you signed are now shorter? What does shorter mean? And are tenants willing to pay a premium for that flexibility? That will be my first question, thank you.

Yes, the short-term leases are actually mostly seasonal. They are not in our leasing figures, by the way, but just to be clear, the leasing we communicate are all leases above one year. which is very important. So there are sometimes short-term leases we do because we are an active operator. So if a tenant says, okay, we need a short-term three months, six months more space, and then we move into a new building, That's the flexibility we have due to our parks. And that's also what drives, of course, the loyalty from our tenants and those long-term relations, because we are a partner for them. We help them to run their business. So we always will do some, and that's seasonal, and especially in those times when people are looking for that security in their supply chain, we can do some more. But those are not in our leasing figures. Those are on top. That, I think, is very important. Yeah, that's clear. If you look to... The rental tone of those, yes, days are always slightly higher because ultimately that's the flexibility we offer. That gives us the negotiation position. So for short-term leases, we also always target to sign above ERV, very simple deals, no incentives, et cetera, just extra income for us and helping ultimately run the tenant, their business.

No, no, that's clear. Thank you. And are they in your occupancy and what percentage of your occupancy do they represent?

They are in our occupancy. They are probably around one, one and a half percent, but they are on a consistent basis.

Okay, great. And then my other question, look, we've talked about this or other people have asked the question, right? We're now four months into the year and the start of the conflict kind of fell in the middle of that period, right? So we have two months pre-conflict and two months of conflict in the Middle East. You're clearly highlighting how the mount is strong and so on, but we look across all the industries, there is a delay in decision-making nevertheless, right? There is a fear about the impact on economic growth, maybe more in Asia than in Europe at the moment, but it's clearly in the post. So can you provide any color on kind of leasing volume, time to sign a lease, rental tone for kind of the first two months of the year compared to the second two-month period of the year? Are you seeing any change there or not at all?

Not really, honestly, at the moment. But if I look at what we're seeing from our tenants and what's being reported across the industry at the moment, no, we're not seeing a significant change in tenant behavior. So, Q1 was, like we said, was a record for us, which we're super, super happy with. And Q2 started well so far, touch wood, no change to tenant behavior. And I think that goes back a little bit to what Martin was saying, Earlier, you know, yeah, there's short-term volatility. Yeah, there may be a little more short-term uncertainty created by that. But actually, this is just significantly reinforcing the mid- and long-term trends that are ongoing in terms of energy independence, military independence, manufacturing independence. that every region needs in and for itself going forward. It's very clear we've moved out of a globalized world into a more multipolar world, and that will mean that there needs to be a lot more investment in Europe for Europe across multiple parts of the economy, and that will continue to drive... um growth in the in in the mid to long term um accepting that there may be one or the other um you know episode of short-term volatility um thing you know if you look at um our tenants you know half of our tenants are manufacturers they're thinking on a 10 15 20 year horizon and sometimes for some of them volatility is a good opportunity to get a space or claim a position in a market or take a space close to where a workforce is around. So the volatility is not only a challenge, but it's also potentially, and for those who have the financial strength and corporate balance sheets are in pretty good shape at the moment, it's also a great opportunity for them to take as well.

Great. Thank you very much.

Thank you. The next question is from Thomas of Deutsche Bank. Your line is now open. Please go ahead.

Hi, good morning. I do have, I think, two questions. The first one is actually on your midterm growth plan. I mean, you target the 30 million square meter TLA target. But as I understand, you don't mention the concrete timeline anymore. Previously, you basically set 2030, I think, as a target, just wondering how we should interpret it.

Yeah, Thomas, we always said that we have the ambition to get to 30 million square meters by 2030, you know, and we would still maintain that ambition. If we can get there by 2030, fantastic. If it takes us another year or two years further, we've still grown faster and further than anyone else. in the timeframe. So we will do our best to get there as quickly as possible. We have the capability to do that with the 33 million square meters of land that we have, 14.7 million of GLA and 2 million under construction. We can get there with what we already have. have secured. We know we don't need the capital to grow. You know, we don't need equity to grow at 10 to 15 percent a year, which is what we've been doing for the last 28 years. You know, prior to the IPO, we never had access to equity and we were able to grow Um, every year the IPO allowed us to grow faster, but, um, we can, uh, we can do that, but it would, it will just, to some extent, you know, depend on, um, you know, the health of the, uh, the, the markets that we're, we're in and the tenant demand that we see if the tenant demand continues, um, over the five, six, seven years. Um, yeah, then we'll, we'll, we'll, we'll get there.

Hmm. Okay.

second question is on Hungary and the regime change over there I mean just wondering what are your thoughts on the potential impact on your business if you can say I think if you look to politics it's over overestimated in terms of impact on the operations Hungary has been a good in terms of leasing for us in the last three years. We have done record leasing almost in Hungary in those years. We don't expect that to change because ultimately it comes back to how business friendly is a government and ultimately Where do tenants want to invest? Where do they see the workforce? Where is the tax situation attractive? Where are their clients located? That's ultimately driving the decision-making of our clients. And we have seen a lot of inflow from China in Hungary, for example. That will not change with the new government. That will continue. So the leasing in Hungary also, if you look to the first quarter, was good. So ultimately, what will be helpful, of course, is more from a capital market perspective. Hungary might be a bit better on the map, especially if they also get, of course, more funds from Europe that will help them to bolster the balance sheet of the Hungarian state, give them subsidies to do a road and other infrastructure developments. So that's helpful for... the business. Thank you.

Thank you. The next question is from Eleanor Frew of Barclays. Your line is still open. Please go ahead.

Hi team. Thanks for the presentation. Kind of a quick one. So the pre-letting in new parks fell slightly quarter on quarter. Is that one would be tenants changing their minds or is that more of an impact of greater speculative development bringing that number down?

That has to do with starts during the quarter. So there's still a material amount of pre-letting in the new parks, but I wouldn't over-interpret that.

Great, thanks. And then has there been any change in incentives you've needed to offer to help achieve that high leasing volumes? And would you say you're prioritising price or occupancy at the moment?

There's always a balance and it depends on where you are. Overall, not really seeing a change in the incentives. As we said earlier, a lot of the leasing is... uh you know a good chunk was was was extensions they are not really talking about um uh incentives uh so much for the for the new leasing um again is primarily driven by existing um clients so yeah you always you know we always want to lease for more they always want to pay less um and the the the talent is always to come to a deal that works for both parties, which we've been able to do record levels in Q1.

Great, thank you very much.

Thank you. Moving on to webinar questions. The first from Vivian Marquette of DeGroove Betacam who asks, could you comment on the Italian market and letting activity there?

Yeah, sure. So we entered Italy in the end of last year, as you remember, in November of last year, through a big land bank acquisition. We have been working hard in the meantime to build up the team. So we have now more than 10 people in Italy. We're working on the leasing, on the developments that are under construction, but also on the pre-development of some of the other land sites. So we are making good progress there. If you look to what we said in 26, we expect to deliver close to 200,000 square meters. Most of that is under construction, is pre-led, so good underway. The Italian market in general has seen good take-up in the first quarter. So now we are working for our pipeline for next year to secure also the leasing for the 27 pipeline. But in general, we are positive on the Italian market. That's why we entered and we see that playing out. And now also with the team being built up, we have the people on the ground, working there on a daily basis. Raymond and myself are frequently in Italy. Raymond is always involved in the startup of the markets, like he said before. So continue to drive the business there, integrated within the CTP platform. We also have our existing clients that we have in other markets. reaching out to us. They also have space for us in Italy. So that's good. And that also is how we grow. We grow tenant-led. So tenants asking us, can you also do something for us in market X or market Y? And that's also playing out here. So we are constructive on our Italian market entry and on track.

Thank you. The next webcast question is from Wim Louis of KBC Securities, who asks, is there any impact of the geopolitical situation on the Vietnam plans or timeline?

Hi, Wim. Ultimately, we are in Vietnam. Like Raymond said, we are making progress. We are looking to buy land. We are now looking also at the design and permitting of buildings. Also speaking to clients. So we are in that stage. We hope to be able to... to execute on that during the course of this year. We also have now a team on the ground in Vietnam. The geopolitical movements that you are seeing are across the world with more local productions. And that is the role that Vietnam plays for Southeast Asia. So also in Vietnam, if you look to And each time when we drive around there, you see new plants being built, new logistics centers being created, as ultimately the economic growth is strong, double-digit. They target in many of the areas. So... And the solid economic backdrop, of course, we need to see how long the current geopolitical movement will play out. and how that affects different regions. But for now, what we see also in Vietnam is a continuation of operations and a continuation of Vietnam benefiting from nearshoring, similar to what we see here in the Central and Eastern European region. But of course, we are also careful because it's a new market, especially in geopolitical times. There might be willing sellers, so it's good to have cash in the pocket so you can act quickly when you want. We are not in a rush. We want to carefully understand the market, and that's why we are spending time there and trying to educate ourselves and building the team so we have a full setup when we make the decision to kick off.

Thank you. We have no further questions at this time, so I'd like to hand back to the management team for any final remarks.

No, we'd just like to thank everyone very much for their attention and their questions and wish you all a good day. Thank you very much.