Montea Comm. VA

Good morning, ladies and gentlemen. Thank you all for joining our Q3 analyst and investor call hosted from the Starship Enterprise at Euronext Brussels. As every quarter, I'm joined this morning by my two colleagues, Elsford Vake, our CFO, and Ina Mazlova, our investor relations manager. Europe's logistics real estate sector continues to perform strongly and Mantea's results stand out within this dynamic sector. With solid leasing activity, a very high occupancy rate and healthy rent levels, we're delivering on our promise and moving firmly towards our ambitious Track 27 goals. Here's the agenda for this morning. Els will start by sharing the nine-month results. I will then give you an update on our growth and Ina will walk you through both our portfolio and our markets. Els will return with an outlook and I will close with an update on the progress of our ESG targets. Finally, as always, we look forward to your questions. Ina will lead us through the Q&A session at the end of the call. Els, the floor is yours.

Thank you very much, Jo. We are well on track with an EPRA result for the nine month period of 83 million euro, an increase of 15% year on year, resulting into an EPS of 3.61 euro per share, representing a 2% increase year on year, or an 8% increase on a recurring basis. And this despite a 13% increase in the weighted average number of shares. The net result for that same period of 9 months 2025 amounts to €150 million and includes, besides the EPRA result, a positive portfolio revaluation of €21.2 million. Per share, the net result amounts to €4.99. Driven by a positive like-for-like rental growth of 3.3%, The top line driven by a like-for-like rental growth of 3% and a strong portfolio expansion, our top line increased by 25% year-on-year to a level of 103.7 million euro of net rental income. The operating result before portfolio result increased at the same pace to a level of 98.1 million euro. The operating margin improved compared to last year to 88.7%. The financial charges increased by 46% to 13.2 million and reflect the expected increased interest charges that are due to new debt that is taken out to finance our growth plan. All of this leads to an APRA result of 83 million euro, a 15% year-on-year increase, Per share, this results into an EPS of 3.61 euro, an 8% increase on a recurring basis. Moving on to the balance sheet, healthy fundamentals will enable our further growth with a loan-to-value of 38.8%, an adjusted net debt on EBITDA of 7.4 times and an interest cover of 4.5 times. You all know that we have a BBB Plus investment grade credit rating by Fitch. This investment grade credit rating has been achieved thanks to our solid business and financial profile with long-term funding, strong liquidity position of €231 million of immediately available funding and a hedge ratio that stood at 98% at the end of the third quarter. There is no debt that is maturing in 2025 nor in 2026, so the first debt that will come to maturity is in 2027 and is limited to 75 million euro. Cost of debt is stable and will remain stable throughout 2026 at an average cost of debt level of 2.1%. It's always been part of our strategy to keep the healthy balance sheet prudent approach. And looking back at the last couple of years, the net debt on EBITDA adjusted has never exceeded the eight times. Interest cover has never been below 4.5 times and loan to value has never exceeded 40%. Funding is long term, as I already mentioned, average of maturity both for financing and hedging around six years and diversified with 53% that is coming from bilateral credit line facilities and 46% from the private placement market. Over to you, Jo.

Thank you very much, Els. It's a pleasure to give you an update on our growth strategy. As you know, it is based on four pillars, in-house developments, partnerships with seasoned developers, solid acquisitions, mainly sale and rendex, and of course, our green investments. Today, our total investments over the first nine months stand at 235 million of investments, well spread over those four months. categories. This means that when we look at everything we have done since the start of track 27 in 24, we have now 78% of the total volume we wanted to achieve, the 1.2 billion growth is now identified. 670 million has already been invested, another 60 million is in execution, and we have another 200 million in exclusive negotiations. Looking at the 235 million we are doing in this year, we do that as an average net yield of 6.6%. 156 million comes from developments and partnerships, 67 million comes from acquisitions, and 12 million comes from our sustainability investments, being solar panels and battery projects. In execution, we have today 66 million, 57 million is coming from projects under development at yields above 6.5%, and another 9 million from solar panels and battery energy hubs at an IRR of roughly 8%. Under exclusive negotiation, we have another 100 million of yielding investments, 50 million of solar panels and battery projects in Belgium and Holland, and another 45 million of non-yielding land bank that after development would also yield at at least 6.5%. When we look at the prelets, 155,000 square meters are in the pipeline. This is our 40% share in the GV with Weerts for Skechers in Liege. Development in Oss in Holland for Vos Logistics. two projects in Halle and Zelik where we hope or we expect that's better than hope we expect to start in the development in Q1 2026 so we expect to obtain all permits by the end of this year and a new project that we signed recently a small project with 4000 square meters GLA in Tiel, where we also expect to receive the building permit in due course. We signed an LOI for 30,000 square meters, but this is the same LOI as we already announced in the Q2 figures. So, pre-lets are doing pretty well. As I told you last time, we've done also some standing investments at Blue Gate, in Zaltbommel and in Zeewolde. this means that our development pipeline in execution today is roughly 100 000 square meter that is still in execution os and liege 100 pre-let and an average lease duration of 19 years and then of course another 300 000 square meters yielding we expect that average 6.8 percent where now three leases are signed but are waiting for the building permit, mainly Halle, Zelik and Tiel. You know where our land plots are for those projects. They are in Belgium, in Liege, in Halle, in Tongeren, in Zellig, in Grimbergen, and in Leumen. And in Holland, we have the project for Vos in Oz, of course, the Thiel project. And we have Born also in the Netherlands. Our land bank today is roughly 3.1 million square meters. I want to repeat that this is 100% zoned land. So this is not speculative land. This is real investment. Total value of that portfolio is 466 million today or roughly 200 euros per square meter. 60% of that land bank is yielding today on average at a yield of 5.7%. This gives us a huge opportunity potential. We want to capture 30% of our growth by 2027. And after that, there remains another 74% of rental growth based on the potential of this land bank. So very important part of our growth strategy. We estimate today that another 330 million of value creation is still hidden in this land bank. It is really, and I can't repeat it enough, the cornerstone of our growth strategy. This brings me to the portfolio update that I would like Ina to present to you. Ina.

Thank you, Jo. Starting off with our portfolio value, which has increased by close to 260 million year-to-date and 60 million in Q3. This has predominantly been driven by investments in our development program as well as the acquisitions. Looking specifically at the value uplift, we have seen a 0.7% value uplift year-to-date, which has in part been driven by the like-for-like revaluation of our portfolio of 0.4%. but also a 17% value uplift on the acquisitions we have realized in 2025, confirming the value creation potential on one of our core pillars of growth as well. For the EPRA net initial yield, it remains stable at 5%. Looking at the value generation and the evolution of the ERV growth, this has been one of the drivers for the like-for-like portfolio evaluation of our portfolio and the yield effects we continue to see as stabilizing. If we look at our reversionary potential within the portfolio, it currently stands at roughly 7% with the strongest double digit under rent present in our Dutch and German portfolios. More importantly, however, we see a very positive momentum on our lettings closed in 2025, also feeding through into 2026, whereas today we already extended and re-let 54% of our 12% of leases maturing or coming to break in 2026. This confirms a positive momentum on the lettings markets and we have also seen a slight 10% 10 basis points uplift in our occupancy rate, which remains at close to 100% significantly above the market average. The dynamic lettings momentum in Q3 clearly continued from where we've seen it in the first half of the year. We signed 110,000 square meters of new leases at an average rental uplift of 14%. It's actually accelerating the dynamic versus where we've been in Q2, and it brings the total now to 230,000 square meters, representing roughly 15 million of our headline rents. The average uplift on all of the re-lettings we have done stands at 10% today, and the leases have also been signed above latest ERV levels. Besides the fact that we are able to extend our average lease maturities by close to 0.8 years at the time of signing, We also see a continuous strength in our retention rates and are able to confirm our guidance on the occupancy rates that will remain above 99.5% by the end of this year. Looking at where the demand is coming from, we see a clear uptick in the demand coming from 3PLs as well as F&B sector for various types of units. This is clearly thanks to the strength of our commercial teams. And I think this is also a testament to the fact that our portfolio and warehouses remains attractive to different type of clients. We currently see in our portfolio, but also new tenants that we were able to attract. Moving on to the market updates. One of the drivers for our portfolio, which is very much a consumer-driven portfolio, is clearly the e-commerce. If we look at where the e-commerce penetration stands today, it's significantly below 20% for the market where Montea is active, and it's even at 10% for Belgium. The projections are very bright and strong, and this is expected to continue growing over the next four years consistently across all markets, even though it will still remain below the percentages we're seeing in more mature markets such as the UK. Retail sales projections, despite that, are expected to remain flat. So this is highlighting the fact that the consumer preferences are switching towards e-commerce. And this is a trend we're also seeing increasingly in the lettings demands that we are witnessing from our new as well as existing clients for our portfolio. What does this present in terms of opportunity? Effectively, the e-commerce penetration alone provides a 4 million square meter growth opportunity for logistics space market across our four markets alone. As you can see, this would also add up to 10% of incremental demand to the annual take-up figures we're witnessing today. So clearly a very optimistic and very important growth driver for us and something we will continue to focus on and capture as well. Now, Els, over to you for the outlook.

Yes, thank you very much, Ina. Happy to reconfirm our 2025 guidance of 4.90 euro EPS, an 8% increase year on year, and this excludes the potential one-off from the FBI recognition for fiscal year 2024 in the Netherlands. having a positive additional impact of 8 cents on the EPS. Also for 2027 we can reconfirm our EPS target of 5.60 euro, a 6% yearly average growth rate. Our track 27, our growth plan, will be done through a disciplined financial allocation with a focus on operational excellence. Leverage will remain under control, consistent with our track record. Before reaching an adjusted net debt on EBITDA of 8 times, we have an available investment capacity of 455 million euro. For 2027 we are evolving towards an operating margin of 90% and this will be done by keeping the costs under control with an average cost of debt that won't exceed the 2.5% and a high occupancy rate that will consistently be above 98% throughout the whole period. The targeted investment volume of 2025 of 300 million euro will be achieved through our four growth pillars. In-house developments, acquisitions of standing investments, as well as yielding land bank, partnerships with developers and land owners, as well as green investments in battery energy storage systems and solar panels. Well on track are we for the EPS growth path with an EPS target of 5.60 euro for 2027. We have a very strong return track record with 19% total accounting return on average over a period of 10 years. Moving on to the ESG part. Back to you, Jo.

Thank you, Els. To conclude, I would like to touch upon the ESG strategy. 32 MW has been installed on 13 projects in Belgium, and we have 10 more MW that are currently being installed in the Netherlands, and we have another 17 MW under study. In total, as you know, under Track 27, we have the ambition to install 100 MW, so we're well on track there. And we want to invest another 25 million in solar panels on our new developments, which would bring our total capacity to 135 megawatts. I would like to touch a word on the GRASP scoring, as every year in Q3, we have a new result. For our standing portfolio, our existing buildings, this is slightly below our score in 2024. We lost two points from 79 to 77. This decline is linked to two elements. We bought in the standing portfolio, we bought some standing guests that were older buildings ready for redevelopment. So they have an impact on the average score. But next to that, we also, as you know, do not believe in over certification of our portfolio. That's what you see. The building certification, we're only scoring 16%, which means that we are not into the business of certification. Why? We develop buildings to own them. So for us, certification is not a first target. The things that are important for us are linked to water, green gas emissions, energy, and there you see that we are outperforming the benchmark, or we are at least above the benchmark compared to our peers. when we look at our the grasp score of our new developments that we improve small by one point from 88 to 89 and you see that eight out of the 12 criteria we're scoring more than 90 percent which means that we are amongst the 10% most advanced companies or most ambitious companies on those grasp criteria. And again, you see water, energy, green gas emissions, waste are really things we are absolutely focused on. So we're very proud with these scores. And as you know, we continue on this path. We want to go to 135 megawatts of solar panels by 2027. 100 megawatts of batteries in the portfolio. Already 45% of our portfolio is heated by heat pumps today. And we want to go to 50% by 2030. And LED lighting, we have the target to go to 100% of the portfolio. by 2030. In short, ladies and gentlemen, I am convinced that Mantea remains an unmatched story. We are a partner in the largest single-tenant development in Belgium today, in Liège. We have an occupancy rate that is the highest occupancy rate in the gateway to Europe, the Benelux. And last but not least, every project we are developing, and I cannot repeat it enough, is 100% pre-led. So we're very proud of these results. We look forward to the last two months of this year. A lot of work still needs to be done, but we are open for your questions. I give the floor to Ina for the Q&A.

Thank you, Jo. You have two options to ask your questions. If you're joining us through the webcast, please raise your hands. If you're joining us through the dial-in option, please press pound key five to enter the queue. And if you wish to withdraw your question, please press pound key six. Our first question comes from John at Van Lanschot Kempe. John, good morning. The line is yours.

Hi, good morning. I hope you can hear me. It was just a slide about using activity. Most of the activity screens to be in the sub 25,000 square meter category. You also signed a 4,000 square meter pre-lab. So at the same time, the majority of your land bank is geared towards assets above this size. How are you thinking about developing smaller units or say multi-tenant on the available land plots?

Thank you very much for that question. Interesting question. It's almost a philosophical question. You have people who say when you build a multi-tenant site, you lower your risk because you will always have at least one part left. You have less vacancy or you have less risk on vacancy. We from our side, we believe that big box will remain a core category in our sector and once you create a pre-let you will never be able to bring it back to one tenant because then the timings do not match anymore so the land we have we prefer to keep it for those big box operations let's not forget that those big box operations are much more automated need much more staff, so they're less likely to be vacated. So we keep on focusing on those big box developments, but I absolutely follow you, John. It is today easier, that's what you see in our portfolio, when something vacates of 5,000, 10,000 square meter, it's much easier to re-let it than if you have a vacancy of 40 or 60,000 square meters. Luckily for Montea, We don't have these kinds of vacancies and they are not on our radar over the next years to vacate. So it's not really our issue today. It has an impact on the development pipeline, absolutely, where we see, as I already mentioned in the last quarter, demand picking up. We see reasonable demand in all of our markets. A bit like we saw it before the pandemic, it takes time. It takes six to 12 months for companies to take strategic decisions on these kinds of larger developments.

John, perhaps to add to what Jo has mentioned in our standing portfolio over 2026, we have actually re-let our largest unit now that was coming to break. It has been extended by a double-digit lease term. And the next largest one that we have only represents around 1% of our rent roll. So in terms of any sizable maturities, also on the existing portfolio side, there we don't see any significant risk going into 2026.

Okay, that's clear. Thank you. Just looking at the tax-exclusive mobilization number, It increased by 30 million compared to last quarter. I think the difference is coming from yielding investments. Can you provide a bit more color on that?

It's in the different markets. It's both in Holland, in Belgium, as in France, that we see opportunities. These are things that are under exclusive negotiation today. So where we have a mandate, where we are in due diligence. So these are things that will have a high probability to be realized. And it's mainly yielding standing investments.

Okay, that's clear. And just the last one on your targeted investment volume for 2025. So there's a 65 million gap from where we are right now. I suppose that's brought me in line with what is in execution, but obviously that's over a longer timeline. So could you share your thoughts on the bridge from 235 now to 300 million by the end of this year?

That's why I said that there's still a lot of work to be done in those last two months. So we need to close some of the deals. But we, as Al said, we feel confident that we will be able to deliver that in the next two months.

Okay, that's clear. Thank you.

Thank you, John.

Thank you.

Our next question comes from Frederick at Kepler. Frederick, good morning. The line is yours.

Good morning. Yes. Yes. I just wanted to follow up on the demand-demand. So you have, of course, a large pipeline or so of assets which have been permitted for quite some time now and still does not attract a lot of demand, I would say. Can you give a view on going forward, what is your feeling about those assets? And I mean, for instance, I take the asset in Neumann, for instance, in Jindalden, et cetera. Can you give some color?

I will not give color on individual development lines, Frédéric. I hope you can understand that. We never talk about running negotiations. But I can say that both in Belgium as in Holland, there are advanced discussions. As I said, the two projects in Halle and Zalik, we are expecting to obtain the permits in the months to come, so to start in Q1 2026. When we talk about those where the permit is in place and we are waiting for the tenant, I can say that at least three of them, without giving any more specifications, at least three of them are in are on a board level discussion. So there's a final approval, local approval, and we are waiting for board level approval from the tenant.

Versus, for instance, three months or six months ago, would you say it's more likely than not to happen?

I think if I compare to August, I have the same probability. It's really toward the same three projects that we already had on top of our mind at that time, or it was in negotiation with the same clients, I would say. Again, as I already said, it's just taking more time and we are not used to that anymore. We've had this period of time where things were decided within two or three months due to lack of availability. That's no longer the case. People take more time, ask longer exclusivities, but it's slowly but surely, I would say.

Just a question on the top ten tenants of Montea. Back in H1, Amazon was around 3% of the portfolio, today they are around 3.7%. Was there a specific event or just the delivery of the asset in Amsterdam?

No, this is indeed all on the standing portfolio and the inclusion of all of the leases we have across the portfolio.

Then maybe a third one, more technical on your partnership with WIRT. So I remember that you give a shoulder loan to the structure. But of course, the structure at the moment is not generating cash, if I'm not mistaken. So just to be sure, how does your financing income is getting recognized? Is it only accrued or, yeah, I just wanted to have an understanding of that.

Yeah, it's accrued on a quarterly basis indeed.

Okay, and it will be paid in one go when the stuff will be generated in cash?

Indeed, and when we will add extra bank funding from external banks.

Okay. And then the last one, not related to the Q3, just wondering, you know, on your structure. So you have a specific juridic structure in Belgium. You have a limited partnership. Just wondering if the structure will be subject to an AGM vote in the next coming years?

Yes, as the mandate will end in September 2026. Okay.

Thank you very much.

Thank you, Fred.

Thank you, Frederick. Our next question comes from Pierre-Emmanuel at Jefferies. Good morning, Pierre-Emmanuel.

Good morning, all. Actually, I have a quick follow-up question on your land bank and specifically in France. It was a cornerstone of your CMD back in 2024, but yet nothing has been announced. So can you maybe provide a quick update on the two main projects of Saint-Ly and Toury? Is there anything new there, or are you applying for building permits? Are you switching the project to other asset classes? I don't know, but it would be nice to have a quick update on your land back in France. Okay.

As you know, in every country in Europe, so also in France, it's taking longer to get all the permits in place. So we are working both in Saint-Lys as in Turie on obtaining the building permits. So I can reconfirm that we're on the track 27 that was mainly driven by Belgium and Holland. As from 2027, France will be an important part of that growth strategy. We see that there is demand for both projects, and it's really linked to the permitting process that we are not yet able to start first project there. So there is demand. The locations are absolutely the right locations if we look at the demand, but it's really about the permitting there. And I don't expect to start there already in 2026, but in 2027, this will definitely be a very important engine on our growth strategy.

Okay, and it would be 100% statistics, right?

Yeah, that's a mix of logistics and industry. As you know, France is absolutely believing in the reindustrialization of France. So we are asked to, next to 3PL or logistic activities, also to have some industrial activities. So we are working on both of them.

Okay, that's good. And is the 800 million euros total investment... still in place? Or are you including this?

Where does the 800 million comes from?

From the CMD, it was a discussion following the presentation that has been made at the time.

Yeah, absolutely. That's still the case. And I must say that we have a very dynamic team in France and they are still bringing new projects to the table. So France will, when I said that the CMD, I think it's about a year and a half ago, that France was an important engine for the future. This is even more the case today.

My second question is on values actually. So what we saw in Q3 is that ERVs in France, Netherlands and Belgium increased quite decently. Do you expect any positive uplift to be recognized already in Q4, so for the end of this year? And in your view, what could be the uplift on values?

Pierre-Emmanuel, as you know, we don't comment on our expectations and that's also the work for our appraisers to be done. I think what is a clear sign of confirmation is the fact that the leases that we are signing, the past quarters, they have predominantly been skewed towards Belgium and the Netherlands. That is, of course, something that the valuers take into account. So today we remain very comfortable with where we are. And if it comes, then it will certainly be a positive.

Okay, that's all for me. Thank you very much.

Thank you very much. Our next question comes from Francesca at ING. Good morning, Francesca.

Hello, good morning, everybody. Can you hear me? Yes. So the first one is a little one on the FBI status in the Netherlands. I remember that last year we got the green light at this moment of the year. When do you expect to have the confirmation for 2024?

It will come. It will take a little bit more of time indeed because there is a slight delay at the tax administration. Hopefully before the end of the year, might be beginning of next year. Okay.

And the second question is on the contracts. I see that more than 50% of the contracts for 2026 have already been renewed. Can you give us a little bit of colors about the discussion that you had with tenants? And also, I saw that 8% of the leases that mature in 2025 were not extended. Can also you make a comment about the tenant that left?

Yes, sure. I will start with 2025. So we have a couple of ongoing negotiations. These were really more the Q4 remaining negotiations that were to be done. In terms of where our expectation is today, again, the worst case scenario that we anticipate is that our occupancy will be at least 99.5%. But there is not much to report, it's more the going concern negotiations that were really for Q4. And on the progress for 2026, this is a mix between both breaks and maturities that were coming into play, especially in Q1 and Q2. In some cases, it were the tenants that approached us to renegotiate the leases and basically extend them already as of today because they have visibility and requirements for space and they want to stay in the same space. And in terms of the mix, again, there were a couple of larger leases, so especially a few 3PLs, also food distribution as well. And it's quite a mixed bag in terms of sectors and lease types and sizes as well. Okay.

And maybe a question for Gino. If you can make a comment about the German market, what do you see in terms of investment, in terms of transaction? Also, other peers, other holistic peers are pointing to Italy and Spain as interesting markets at the moment for investment. What are your thoughts on these markets? Thank you.

Yes. Well, as every Belgian, it is difficult to start in Germany. It's a command I hear from a lot of people. Why? Because it's a very large market with very local representation. When you are used to do business in Belgium or Holland, you're used to have one counterpart for the country at DHL, for example. In Germany, you have seven different hubs and they all have their what we call local heroes. So it's very difficult to start. So we have to focus more on several markets, on specific markets. This being said, the deals we have done in Leverkusen, in Mannheim and in Hamburg have been very successful, are very good deals where we see a lot of potential. But of course, we want to grow faster. This being said, today, when the hurdle rate, as we already announced in the past, is more around 6.5% given our current share price, given our cost of debt today, at 6.5%, and you have a market that comes from 3, 3.5% in the best days, and that is now also still the most resilient market of Europe. There's still a stretch between the yields there and what we are able to offer. So it is really a market for us where we have to focus on creativity to be in-depth like the three deals we did, but we continue to do so. But it remains very, very tough for us to get started there. This being said and already mentioned by Ina, 3PL, e-commerce, food distribution, defense, last mile, absolutely all sectors that are very active in the German market. So we see potential, but given where the market comes from and given our cost of debt, cost of equity and our EPS targets, it remains a very challenging market for us. But we are absolutely committed to continue our efforts there and to find new growth opportunities.

And what about other markets outside Germany? Do you see deals passing by or anything that might be more interesting?

Well, the markets you mentioned are absolutely interesting markets. Italy and Spain are definitely markets that might have potential. for Montea. This being said, we absolutely want to focus today on the delivery of TRACK27, and they are not part of that program. So we are not actively looking at those markets today.

Okay. Thank you, and one.

Thank you, Francesca.

Thank you, Francesca.

Our next question comes from Thomas at Deutsche Bank. Good morning, Thomas.

Hi, morning all. Actually, two questions. The first one is on the LOI for the 30,000 square meter lease. Just wondering if you could provide an update there and by when should we expect the deal to close or do you expect the deal to close?

As I already said to Frederik, I cannot comment on a specific deal going forward. What I can say is that this was the LOI we already announced in Q2. He is now on a board level discussion. So let's see what happens over the next weeks.

Okay. And the second one is actually on rental growth. I mean, you show an acceleration of reversions, but like for like rental growth slows down mainly on lower indexation. So what should we expect to have on both measures roughly?

So, Thomas, on the like-for-like, indeed, the main impact of the slowdown is linked to the indexation. We index leases depending on when the contracts were signed. So, this is a rolling basis and we apply the indexation as reflected in the rental contract. So, there is a rolling window. In terms of our reversion on the portfolio, so if you look at the leases that were signed, especially related to the 110,000 square meters, some of them were going well into the end of Q3, also starting Q4, so we would expect that impact to be feeding through into our like-for-like gradually as well. But again, this is our guidance today for 26 and 27. It really reflects the indexation only. So our guidance includes a 2% indexation per year over the next year and the year after. And the reversion is a gradual impact that we expect to see, having given the volume of leases that we were able to renegotiate over the last months. Thank you.

Thank you.

Our next question comes from Steven at ABN AMRO. Steven, the floor is yours.

Hi, good morning. Thank you for taking my question. The question on the Dutch market. So H125CBRE data has shown increase in vacancy in several regions in the Netherlands. So among others, it shows vacancies in areas like Mid-Limburg, so around Bourne, at 6% and the A15, so that being teal at 9% vacancy. How do you look at this vacancy data and what potential impact do you expect this to have on finding new leases for your land bank projects and or the impact on rental levels if you would sign one?

Yeah, absolutely, Steven. That's what we see in all of our markets. There's a clear polarization between A and B product and the difference between A and B can be both on geography, as on quality of the building. So what we see is that, of course, first of all, the land plots we have are on A locations. But secondly, for new developments, there is still traction. So this is typically, like we said, our InterGamma deal we did earlier this year or that we delivered earlier this year. This is a 100,000 square meter facility. It's regrouping, it's merging three facilities in the teal area into one new building, obviously this means that three older obsolete buildings vacate at that moment. So that's an absolutely logical trend. It will be to the owner to redevelop them, to bring them back up to standard, but that there is a clear polarization between A and B on quality and on location, that's absolutely true. So if there is vacancy in Thiel that will be linked to older facilities, there is zero vacancy on grade A buildings.

And it's also, of course, linked to grid connectivity, where in Tiel and in Born we have both grey and green electricity available, green through our solar panels and the grid connectivity, which is always a very important criteria for us in order to invest into a land location.

Steven, and maybe to add to that as well, you have seen that earlier this quarter we have signed a lease with Over D Metals, which is actually for a location in Thiel vacated by rematch. It was a bankruptcy in place. If you look at both rent levels and also the term of the lease contract, the rent levels we signed above where we were letting it to rematch. And on top of that, it was a very long-term lease that we now signed with Oversea as well. So I think this is, you know, and this was a sizable 20,000 square meter plus location as well. So for us, it's both on the standing portfolio and also on the quality, as Elf mentioned, also grid connectivity. We feel comfortable about the quality of the product we're offering there.

Thanks. It's very clear. Good stuff. Thanks.

Thank you. Thank you very much. Our next question comes from Wim at KBC Securities. Wim, good morning.

Hi, good morning. I'd like to squeeze in two questions. First one is on the pipeline, and it's already been mentioned. So you have 320,000 square meters of permits. One of your, let's say, yeah, let's say the way you work is that you keep pre-let levels at 100% in the pipeline. Just want to make, get your idea on how is that really set in stone? Because, well, you see some competitors who start developing projects with very low pre-let levels, and then obviously you can speed up the entry of the new tenant, which gives, I think, also some commercial advantage in negotiation. How do you feel about it? And maybe also because some of these permits might be getting a bit older, if there is any kind of time limit before you have to start developing?

Yeah, you're absolutely right. I think 100% speculative development has never been part of our strategy. We think that you don't get the remuneration for the extra risk you're taking. At the end of the day, our product can be developed over a period of nine months. In most cases, companies have, for these kinds of strategic decisions, have an idea nine months prior to the final move. we don't feel that there is a reason or a premium you get for speculative development this being said suppose we would have a 50 000 square meter facility and tomorrow we have a tenant for at least 50 we would indeed decide to build the entire facility why if we would split it up into two phases the extra cost of having two building sites and the, of course, the extra nuisance that would give to the first tenant represents roughly 18 months of rent. So basically when we consider that on that location, it must be possible to find a tenant within two and a half years, being the year of construction plus the 18 months of extra costs of splitting it up into two phases, we would start to the entire facility. For every project Mantea has done over the last 10 years where we took that decision to do the development based on 50% pre-let, we were able to lease the entire facility before the delivery of the building. This has been the case in Confins in France. It has been the case, for example, in Waddingsveen, no, not Waddingsveen, Aalsmeer in Holland. So on those projects where we did it, we were able to do it. So it would still be part of our strategy, but I think reasonably a pre-let of at least 50% would be our minimum hurdle rate to start a project.

Okay. Just a small add-on to that first question is, suppose then the 50% is still in pre-let phase, what kind of percentage of the total investment cost would you have to spend for signing then, let's say then the second tenant, let's say like the final fit out, can you give an idea that 10, 25% of the total cost?

Yeah, basically what we would do is start the construction in one phase, but what we would not do is indeed the finishing, which is roughly 30% of the capex because it's too specific. We don't know the wrecking of the final tenant. But as I said, in most of the cases, by the time we did the Casco works, we already knew who the final tenant would be and we could continue the works, which is of course always the most favorable situation. But I absolutely agree. Once you start a construction site, it's an amazing fact, but it's absolutely true in our sector. Once you start, once people start to see cranes on a certain site, It's creating momentum. You see new leads coming in. So it's absolutely true. But from there, jumping to now we go to 100% speculative development, that would be an absolute change in a strategy of also of our promise towards our shareholder. So there we're not really into 100% spec, but based on 50% pre-let, we would absolutely consider it.

Okay, great. Thanks. Very useful. Second question is on the current, let's say, dealing around all these sites in Forst. And I imagine you have signed an NDA and you're probably not going to say where you are in the process. So my question is a bit differently. So I see that you partner with DMA and Revive. Can you just give a view on what the roles is? I guess DMA decontamination and then Revive is like a brownfield specialist, but how do they fit together and how would that then, suppose that you win the deal, how would you then repetition the work?

I think it was mentioned in LECO and the information was correct. We are no longer participating in the tender process. And I think what I hear in the market is that the tender process has been stopped because there was not enough money comfort on the soil decontamination so we might get back into the race in a second phase but we are not involved we were not involved in the first phase of that tender procedure okay so then your link with Damien could be even more significant if the decontamination is the issue yeah Well, we've had very good experiences with DEMI in the past. We worked with them on the site decontamination in Grimbergen. We teamed up with them for the Blue Gate project. So they know their business. We like their approach to the market. But for us, the Audi site was not a priority under Track 27.

Okay. All right, those were my questions. Thanks a lot. Thank you, Wim.

Thank you very much, Wim. We don't have any questions remaining in the queue, so over to you for concluding remarks.

Thank you very much, Ina, as already mentioned. I think that some work is left to be done over the last two months of the year. Looking forward to that. Thanks for your questions and looking forward to have individual talks with each and every one of you over the next weeks. We are available. Thanks for joining the call today and hope to see you soon. Have a nice day.