Montea Comm. VA

Good morning, ladies and gentlemen, and thank you for joining our webcast this morning. The first half of the year demonstrates that Mantea Strategy is working exactly as intended. As momentum picks up across our markets, we see our clients taking strategic decisions, translated directly into leasing activity, investments, developments, and earnings growth. As in every quarter, I'm pleased to present these results together with our CFO, Els, and our investor relations manager, Inna. Els and I will take you through the results, after which Inna will lead the Q&A session. Our APS remains fully on track with 5% year-on-year increase underpinned by a strong 2.8% rental growth. Our portfolio as well as our development pipeline have seen exceptional leasing momentum with 255,000 square meters let, re-let, securing an average rental uplift of not less than 16%. This progress means that we have now secured 95% of track 27, bringing us within reach of the 1.15 billion target we set ourselves. At the same time, we have fully secured the funding required to deliver this growth. With both investment and financing largely locked in, we have a clear runway for future earnings growth and confidence on future execution of our strategy and our promised value creation. Before diving into results, I would like to give one slide on the market update. And what we see is, while geopolitical uncertainty remains a reality that is unlikely to change soon, we see that occupiers are starting to look through that. 51% of occupiers are now looking to expand in the next three years, an increase not seen since 2023. Businesses have increased their confidence with 3PLs, post and parcel delivery and e-commerce being most optimistic, along with Chinese occupiers that are increasingly active across Europe. I will come back on that later on. And last but not least, we see that occupiers are concerned because of the lack of good quality product. Also on that topic, I will come back later on. I said 255,000 square meters of letting and re-letting. 145,000 of that is in the existing portfolio, but 72% of that 145,000 square meters is leased to new tenants. And we were able to increase the rent by 16%. On average, in line with our ERV. When we look at the kind of leases we signed, we see that more than half of them were big bucks above 25,000 square meters with nice names like GD.com and CRG. Going into detail on some of the deals, the JD.com deal is a deal we did on the former Decathlon site. You remember we developed that building in 2017 for Decathlon. The lease was expiring in 2027 and we were already closing this deal today, de-risking the 2027 lease maturity profile already in 2026. Another nice deal we did over the last months was with CRG, the Claes Retail Group. You remember that six months ago we bought this building empty after the bankruptcy of Euroshu. We renovated the building and at delivery it was leased to CRG. A nice deal on a core location. We continue to sustain near full occupancy in our portfolio, outperforming the market by no less than 500 base points. 95% of the leases maturing in 2026 have now been let or re-let, only leaving us 0.6% to renegotiate over the last half year. And as I said, the tenants are struggling With the lack of good product, and this is something you see in my opinion in this graph, where you see that for good product like our portfolio, you still have an occupancy rate of 99.4%, where the average of the market is now roughly between 94 and 95%. We also see that we are able to catch rent reversion with an average rental growth of 4% since 2022, clearly demonstrating the capturing of the reversionary potential to both indexation and positive reversion. As of today, we still have 7% of rent potential to capture, meaning future rental growth potential. Let me now focus on track 27, our growth plan. As already mentioned, 95% of the 1.15 billion we want to invest is now secured. More than 800 million has been invested. Another 90 million is under execution today. And another 180 million is under exclusive negotiation. A part of this are the remaining directly yielding acquisitions we announced in Q1. which we expect to close in the very near future. And at an average yield of above 6.5, on average 6.6%. You know our four growth pillars, but I always want to repeat them. Development, acquisitions, partnerships, and green investments. Developments, 130,000 square meters of new leases signed. We'll come back on that. 33,000 square meters acquired in Brussels, and of course our ongoing partnership with the Weerts Group in Liège. Going to the first pillar, the developments, we were able to win a tender in the Port of Antwerp for the development of a new building for DP World. We were able to sign a lease with Bosch Siemens Households for development in Thiel. Aurelie Vande Cauter We bought 48 hectares of land, which is the former glasswork site. We remediated the site. We developed, and I start from the right-hand side, we developed for Interchama last year 95,000 square meters GLA, both logistics and a cross-dock platform. In the back of the site, we have a land lease with Struik Verwoe. for another longer period for the exterior storage of building materials. The one in blue next to InterGamma is the one we are starting now, the 67,000 square meters. of which 70% is pre-led to BSH. The one in green is the one we still have on the market on the commercial process where we are actively looking for tenants. Then the two purple ones we developed for Over D and are starting a development for Ario. And the one in the back, the small one, the yellow one, is a very interesting one. We leased it out. It's a land lease. to Mylands, and Mylands is building a trans-European charging platform for truck charging. And this is nice because we will be able to use the energy we produce on the roofs of this park to develop or to charge the trucks that come to the park. So this is really sustainability in action. In short, we have 188,000 square meters now under development in Halle for the Kolruyt Group, two projects in Tiel, and of course our 40% in the GV with Wertz in Liege, which gives us another 220,000 square meters in the near-term development pipeline and after that even 1.4 million square meters of future development potential in the portfolio. Second pillar, acquisitions. We did a very nice acquisition in Brussels, really at the entrance of Brussels. We know that Brussels is struggling to organize the last mile logistics. You know that we have had great experience in Antwerp with the Blue Grape project, and we really intend to do the same in Brussels. The building is now leased for a long period to BPOST. but this strategic plot will only become more strategic in the upcoming years. Talking about the partnerships, the beautiful Sketchers project we developed together with WIRTS and we're really proud of the successful partnership. The first three units of five have now been delivered to Sketchers who have now started the automation works in the building The remaining phases are fully on track for this beautiful, ambitious development. Looking at the pipeline of the project beyond the successful execution, what makes this project particularly attractive for us is the earning profile. Through our joint venture structure, Montea has been generating a return on every euro invested from day one, resulting in an immediate positive contribution to our earnings. Last but not least, and you know this is a very important one for me, I always emphasize on it, It's our land bank where we think it is our most important competitive advantage. We were able to add another 500,000 square meters of land under option in Q2, mainly in France. So we continue to secure strategic land with now close to 4 million square meters under control. Knowing Montea, you know that we always plan with the long term in mind. Our first priority today is the execution and remains the execution of track 27, but we are already preparing the future beyond track 27. One of the key growth drivers will remain this land bank and the in-house developments we can realize on them. And with the French land bank now as an anchor, where we are in the process of securing 500,000 square meters of permits, we intend to continue the growth. on this land bank beyond 2027. And to make this very concrete, in our land bank we see another 75% of rental growth in the upcoming years. But of course growth just for the sake of growth is not really the game we're at. We want to create value and we think that there is around 350 million of additional value remaining to be captured through these developments. This, in our opinion, highlights the unique strengths of the Montea platform. A substantial portion of our future earnings growth and value creation is already embedded in the assets we own today. And with this positive message, I would like to give the floor to Els.

Thank you very much, Jo. All of our growth is backed by a very strong balance sheet. During the first half of the year, we secured and refinanced 207 million euros of funding. This means that we now have all the means in place to execute track 27. At the same time, we further improved the quality of our financing. We refinanced all debt maturing in 2027 well ahead of time, while keeping our long-term, well-diversified financing profile with long-term interest rate protection. We also continue to maintain the cost of debt at a very low level of 2.2% on average, well below our maximum guidance of 2.5% under track 27. In short, we have the funding, the balance sheet and the flexibility to deliver our growth plans and take new opportunities whenever they arise. Our funding position has been strengthened further. With the refinancing done, we now have no debt maturing before 2028. At the same time, we extended the average maturity to 5.5 years, creating a well-balanced repayment profile. The funding platform has been strengthened by adding three new lending relationships. Overall, our funding is well spread over time, supported by a broader group of financing partners and fully aligned with the execution of Track 27. Our financial strength is not only reflected in our funding profile, it is also recognized externally. Fitch reaffirmed our BBB plus investment grade credit rating with a stable outlook, recognizing both the resilience of our portfolio as our disciplined financial management. For the first time, we also obtained a strong F1 short-term credit rating, all while keeping our leverage and coverage ratios within the expected levels. We continue to operate within a resilient financial framework. All remaining TRAK27 investments are fully funded and covered within our around eight times adjusted net debt on EBITDA barrier. We maintain our financial discipline and we continue to protect the strength of our balance sheets while keeping the flexibility to capture new opportunities and of course market momentum. Based on this strong first half year performance, we reaffirm our guidance for both 26 and 27, keeping us firmly on track to deliver the 7% annual EPS growth ambition of track 27. We have our 2027 EPS target of 5.60 euros inside, thanks to the strong performance of our existing portfolio, the continued like-for-like rental growth, additional income from recently completed projects, and of course from new directly yielding investments. With our growth pipeline secured, funding in place and earnings feasibilities continuing to improve, we remain confident about the road ahead. I will now hand back to you Jo.

Thank you Els. So in conclusion, we see strong leasing momentum with 255,000 square meters signed over the last six months. We see significant progress on track 27, with 95% now secured and with a fully funded investment pipeline, as Els mentioned, that provide us confidence in the earnings trajectory ahead with a 7% earnings per share growth over the next years. Backed by a strategic land bank, sorry to repeat it again, but backed by a strategic land bank, deep local market expertise with our local teams and a high quality portfolio, Montea is well positioned to translate future market demand into sustainable long-term growth. And with this message, I will now hand over to Inna for the Q&A session.