Aroundtown Sa Ord

Dear ladies and gentlemen, welcome to the Around Town FA full year 2020 results presentation. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a lesson-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to J.B. Nagy's head of sustainability, who will lead you to this conference. Please go ahead, madam.

Good morning, everybody. Thank you for joining us for Around Town's full year 2020 results call. You should have received our press release and can view this presentation on Around Town's website, either on the home section or on the financial reports of the investor relations section. I'm Sylvie Vargis, Around Town's head of sustainability. With me today will be co-CEO and COO, Arak Bahin, Chief Financial Officer, Eyal Ben-David, Chief Capital Markets Officer, Osri Massachi, and our Executive Board Member, Frank Rosen. For the duration of the call, all participants will be on a listen-only mode. Following our presentation, you will have the opportunity to ask questions. But please feel free to send us your questions via email, also during the presentation. The email address is info at aroundtown.de. With that, I'd like to pass you over to Oshin Masachi, who will start presenting our results.

Many thanks, Sylvie. Good morning, everyone, and welcome to our full year 2020 earnings call for Aroundtown. 2020 was a very challenging year, impacted by the outbreak of the COVID-19 pandemic and its implications. The year started with significant uncertainty but continued with improved optimism once several vaccinations were developed. We learned that over 75% of our portfolio is resilient to the effects of the pandemic and the main impacts are on our hotel portfolio, but more on this later. We continue to see a strong demand for real estate investments in our core markets and we are convinced that our existing business model of repositioning value-add assets in top locations remains the right strategy to create shareholder value in the long term. During the following presentation, we will highlight the key achievements of our business, financially and operationally, in light of the ongoing pandemic and how our committed portfolio management provides resilience in the face of the ongoing challenges during this pandemic. But before we start with our presentation, I would like to update you that this morning, our board of directors resolved to launch an additional share buyback program with a volume of up to 500 million euros. We are launching the program on the back of a strong equity base, which was further supported by positive portfolio revaluations. In addition, 2021, In 2021, we continue to dispose properties at a premium to book value, while our share price remains to be traded at a significant discount to NAV. We continue to see a competitive transaction market with increasing pricing and compressing yields, while our share is traded at an FFO yield of around 5% to our 2021 guidance. including the impact on our hotel portfolio. Once the restrictions will be lifted and hotels will be open for all travellers, we expect to see a significant steep increase in the FFO and accordingly in the yields. Therefore, we see the share buyback as an accretive reinvestment into our portfolio at a very attractive pricing, which is an alternative to acquisitions. The share buyback will create long-term accretive growth on all per-share KPIs and enables us to benefit from the mispricing of our share. Let's begin on slide 4, where we summarize our financial performance highlights for the full year 2020. Starting with our net rental income, this resulted in €1 billion for 2020, an increase of 31% year-over-year. Our FFO1 decreased to 358 million euros and was largely impacted by the extraordinary hotel rent provision we applied in 2020. Last year, this KPI was defined as FFO1 after perpetuals and coverage adjusted. Respectively, the FFO1 per share came in 29% lower year over year at 27 cents per share in line with our 2020 guidance. We will provide you a breakdown of the different FFO metrics later in the presentation. Please note, the dividend payout ratio in 2020 of 65% of FFO1 per share before perpetuals amounted to 22 cents, which reflects a yield of 3.5%. From 2021 onwards, The dividend payout ratio is set to 75% of FFO1 per share. For the first time, we also report on the new ACRA NAD metrics. The ACRA NTA for 2020 stood at €11.2 billion or €9.5 per share, a per share growth of 10% year-over-year. More details will follow later in the presentation. I will speak shortly also in more detail about our successful revaluations and capital gains. But you can see here already that we had another successful year with like-for-like revaluation gains of 3.9% year-over-year, amounting to 769 million euros. On slide 5, we present you a glance of the business highlights of 2020. excluding 830 million euros of assets held for sale, the group portfolio stood at 24.5 billion euros at the end of 2020. Two-thirds of that value is offices and residential assets alone. Both of these segments were very limited, impacted by the pandemic. We focused last year on strengthening our financial and liquidity position and increased our cash and liquid assets positions up to 3.3 billion euros. At the same time, we kept our loan-to-value low at 34% and further reduced our average cost of debt to currently 1.4% after we issued our 0% coupon bond. Whilst maintaining a long debt maturity of 6.1 years and 76% of investment properties by rent remains unencumbered. Our capital allocation last year was highlighted by our significant debt repayments and share buyback programs, funded through successful disposals and very favorable refinancing terms. We will go into more details of each KPI as we go through the presentation. Moving to slide 6, we see an overview of our successful disposal program in 2020. Even during the lockdown and challenging market environment in 2020, we managed to execute disposals of non-core and mature assets in an amount of over 2.7 billion euros, of which 2.3 billion euros has been completed during 2020. The disposals were done with a 3% margin over book value, a rent multiple of 19 times, and 33% margin over total costs, including capex. As you can see from the charts, The disposals were made up of 57% retail and wholesale, 35% office and the remaining 8% a mix of hotel and development drives. As we experienced during 2020, also in 2021, we expect to see attractive selling opportunities above book value for additional non-core and mature assets capitalizing on significant value creation and recycling the freed-up funds into the share buybacks at a steep discount to NAV, and support further debt repayments, strengthen our balance sheets, as well as accretive acquisitions. The disposal of non-core properties enhances our overall portfolio quality and maintains our focus on strong assets with asset types in top tier locations. Year-to-date, the total signed disposal stands at around 200 million euros. These assets were sold across several deals above book value and we are in further advanced negotiations for additional disposals. These successful disposals reiterate once again the sound valuations of our portfolio with even further upside potential to be unlocked in the future. The proceeds of our disposals have benefited several strategic decisions as can be seen on slide 7. One key element was the share buyback program from last year that amounted to €1 billion at an average purchase price of €4.9 per share. That's a discount to the year-end IPRA net tangible assets of nearly 50%. The accretive value creation of the share buyback amounted to 70 cents per share and together with the profits and other items, resulted in an APRA NTA per share of 9.5 euros for December 2020, in comparison to 8.6 euros per share in December 2019. Including dividends, the APRA NTA amounted to 9.6 euros per share, which is a shareholder return of 12%. Moreover, we used the proceeds from disposals to repay over 1.5 billion euros of debt during the period and the remaining proceeds further strengthen our liquidity profile for future acquisition opportunities. As mentioned earlier, we initiated today an additional share buyback program in the amount of 500 million euros in line with the former shareholders' approval. The buyback will further support our 2021 per share KPIs especially the ePro-NTA and FFO1 per share. The new share-by-back program is not included in the 2021 guidance. Some key ESG achievements of 2020 are summarized on slide 8. In an effort to emphasize the importance of ESG for Ransom, we made it a goal for our management, the board of directors, as well as each employee within the company to create a strong sensitivity towards our ESG position within the real estate universe. Our ambition is to continue relentlessly to be ranked amongst the top companies within our industry. We will spend later more time going into details of what our main targets are and how we want to achieve them. In the next section, Barak will give you an update of our stable operations and the portfolio development during 2020.

Thank you. Moving on to operation and the portfolio overview. Please turn to slide 10. Our two core markets, Germany and the Netherlands, continue to make up the lion's share with 86% of our commercial portfolio and 85%, including our proportional residential portfolio, to a 41% stake in the grand city properties. Both markets are very strong microeconomic factors, and we continue to focus our external growth in the metropolitan regions of these people A-rated markets. Berlin, Munich, Frankfurt, and Amsterdam make up 60% of the office portfolio value with high asset quality and under supply in those regions. Our diversified investment strategy into top European locations has always been one of the competitive advantages especially in combination with the strong diversification across asset sites, micro locations, and tenant mix. On the right-hand side of slide 11, you can see the breakdown of the geographic distribution as well as the composition by asset class, of which the office portfolio is our largest asset segment, making up 51% by value and 65% combined with the residential assets we are holding in GCP. The hotel properties, which are heavily affected by the lockdown, account for 24%. Our high diversification elements protect us significantly against macroeconomic or domestic uncertainty, which in turn will not have a negative impact on our complete portfolio. In 2020, in line with our view to dispose non-strategic assets, we were able to reduce our retail exposures from over 9% of the portfolio value to 7% through many successful disposal above book value. At the same time, the exposure to wholesale assets was significantly reduced after successful value creation and selling these assets above their book value. This allows us now to focus our capacities on our three core access classes, office, hotels, and residential. They will remain the key growth drivers in our target for future acquisitions when market transactions will meet again our acquisition criteria, while strengthening our dominant position in the top tier cities of Germany and the Netherlands. As presented on slide 12, our tenant base includes more than 4,000 tenants across our properties with limited exposure to any single tenant. The rental income of our largest 10 tenants accounts for 18% of our total rental income. Our overall portfolio amounted to 21.2 billion euros, not including assets held for sale in the amount of 813 million euros. The rental yield stood at 4.6%, down 30 basis points from last year. Our vacancy rate moved up slightly to 8.9%, predominantly due to the high volume of disposals with low vacancy levels. We work relentlessly on our lettings and believe to reduce vacancies in the coming period. The collection rates for all our asset types except hotels recovered fast after the Q2 lockdown was lifted and basically leveled off at the pre-pandemic level. In our view, Our asset and location diversification are translated into our conservative valuations, which are highlighted on the next slide. Moving on to slide 13. Although we saw last year stable rental levels across all asset classes, except for hotels, we also noticed a slowing number of new lettings. Our letting activities continued in full force during the lockdown. At the beginning of the pandemic, we felt a natural slowdown in take-up, which was also reflected in tenants hesitating to increase their spaces. So, our team placed an extra effort on our colonization activities. Over the recent months, however, we noticed in the market an increased demand for spaces and have been approached by potential new and existing tenants who returned to their expansion plans, which we see as a good sign going forward. Our life for life net rental income, excluding hotels, amounted to 1.3% for 2020, coming predominantly from an increase in in-place rent. However, our support to our hotel tenants dragged down the overall 2020 life for life growth to 0.2%, of which 0.4% come from in-place rent and negative 0.2% from occupancy decrease. Fourthly, please continue.

Thanks, Barak. Turning to slide 14, we highlight our healthy portfolio valuations. The commercial portfolio like-for-like revaluation gains, excluding hotels, amounted to 7.2%. Including hotels, the like-for-like revaluation came in at 3.9% increase and reflects a total revaluation and capital gains of 769 million euros. which supported the ICWA NCA growth to 11.2 billion euros. As highlighted before, the like-for-like revaluation and capital gains in our residential segments through grand city properties amounted to over 4%, thanks to the resilience and high demand of this asset class, which contributes to our equity and the seed balance as a proportion to our holdings. A key to our portfolio value uplift, even in times of uncertainty, the multiple layers of diversification across our portfolio. The demand for real estate in top locations remained high during 2020 and we have been able to further improve our portfolio through operational efforts and the strengthening of our fundamentals. Our successful disposals worth over 2.7 billion euros in 2020 above book value are a testimony to the recoverability of our assets and fair assessment through external valuators. On slide 15, we want to highlight our revisionary upside potential in our existing commercial portfolio. Now, during the current market conditions, it might not be the optimum time to extract this revisionary potential. However, having this significant cushion serves us as a strong downside protection. Our December 2020 rental income run rates amounts to 883 million euros on an annualized basis. Let's assume we freeze today's market rents and the locations of our assets with similar asset quality. The get-to-market rent results in a 23% rental growth potential, including filling our vacancies. The majority of that potential is recognized in our office portfolio. Our December 2020 development rights and projects valued at 1.9 billion euros, have not been included in this revisionary potential and would add further growth opportunities given the low speculative volume of new developments we see in our key markets. One should not underestimate the downside protection from the existing gap to market rent levels, reflected in the 23% just highlighted. This upside ensures our in-place rents have a strong buffer in case of weakening rents. The long walls of 8.9 years and current asset valuations of less than half of the replacement costs in our locations further ensure long-term stable rental income and valuations. As shown on slide 16, with 51% in value, our office assets represent the largest portion of our group portfolio. We didn't need to adjust our strategy because of the COVID-19 pandemic. Already before the pandemic, our strategy has always been to focus on central locations in top-tier cities such as Berlin, Munich, Frankfurt and Amsterdam. They alone account for 60% of our office assets' value. The chart on the left reflects the further diversification into additional top-tier cities across Germany and the Netherlands. With a world of 4.6 years and no dependency on any single tenant or location, we maintain a well-diversified and robust tenant structure, of which more than 50% of the rent generated comes from tenants in the strongest industries such as governmental, health or energy. Our largest office tenant is the public sector with 25% of the rent and includes heavyweights like the Deutsche Bundesbank, Siemens, the German and Dutch governments and insurance companies. Our strategic investment in the residential sector through GCP is reflected on slide 17. The residential assets account for 14% by value of our group portfolio share and have an average lease length of 9 years. This diversification to residential assets in top German cities has proven to be the most resilient asset class exposure in Europe last year, and even achieving a 1.8% like-for-like rental growth, whilst decreasing vacancies and values further appreciating. Residential rents in high-demand locations continue to increase, with the exception of Berlin, where rents were negatively impacted by the rent cap last year, and as a result, the gap between rent levels and purchase prices On slide 18, we give a summary of the hotel portfolio. As you surely know from your own experience with travel restrictions and the many ongoing virtual video meetings, the hotel industry is still under enormous pressure from lengthy lockdowns due to the COVID-19 pandemic and the resulting absence of hotel guests. Without a doubt, we strongly believe in the increasing of our hotel investments in the mid to long term. Our historically high ratio of domestic hotel demands in Germany, the Netherlands and the UK from leisure and business travellers will eventually act as a catalyst for faster recovery once lockdowns are lifted. We already experienced such strong rebound effects in the summer of last year. Our 174 strong hotel portfolio of mainly high-quality four-star hotels located across top European cities like Berlin, Cologne, Frankfurt, London, Brussels, Paris and many other cities ensure a healthy mix of geographic diversification. Slide 19 gives a snapshot of our third-party hotel operators and brands with more than 30 different high-quality tenants. The lease contracts are up to 25 years long, fixed with no variable component, and a vault of 17.3 years, up from 15 years vault in 2019. These tenants have a strong track record of successfully navigating through numerous cycles, including the global financial crisis of 2008 and 2009. As you can see, our hotels use a diverse branding blend, each of them matching the unique operational strengths needed for the specific location and assets they operate. Our largest tenant in the hotel portfolio is Center Park with 6% of the group's rental income, reflecting 22% of the total rental income from hotels. In the meantime, however, our hotel tenants face challenging times under the imposed lockdowns. Travel restrictions delayed governmental subsidies, and slow vaccine rollouts across Europe. On slide 20, we provide an update on the hotel rent collection of our portfolio. Whilst rent collection levels of all our other asset classes are again similar to pre-corona levels, the full-year collection rate for hotels came in at 60%, supported by a good third quarter from our leisure hotels. The continuation of the travel bans and the return to a lockdown in Q4 placed significant financial pressure on hotel tenants and resulted in a rent collection in Q4 of 46%. During the year we continuously supported our tenants in every way economically sensible. In several cases we were able to reduce the financial pressure of our tenants in the short term and in return negotiated longer contract periods, increased future rents, or discuss alternative asset usages. Due to the uncertainties that remain until this day, on when the market will fully open again, travel bans, lifts and hotels accepting international tourists again, we created an extraordinary expense for uncollected rents for 2020 in the amount of 120 million euros, in line with our published 2020 guidance. We used the time of lockdowns as efficiently as possible by accelerating refurbishment works in several hotels, which were originally planned for the next years. These asset improvements result in a decrease of current grants due to work interruptions, or in some cases, in a complete stop of the hotel operations. But once completed, will lead to a higher return and margin. We are full confident in our tenants that once the lockdowns and travel bans will be lifted, they will benefit from the fast recovery and our contractual rents will be paid in full. Some of the main arguments why we are convinced of the recovery potential for our hotel assets are highlighted on slide 21. All of our double and triple net leases have fixed plus TPI linked rents. With more than 30 different third-party operators and 17-year walls, we are in business with a strong network of experienced tenants that understand how to shift gears in challenging waters. Compared to less than 10% of hotels that remained open in our portfolio during the first lockdown in Q2 2020, today 80% of our hotels by rental share remain open for business at an optimized cost efficiency and a safe environment for guests and employees. Germany and the UK historically have both over 80% domestic demand for hotel bookings, and in the top cities of these locations 68% of our hotels are located. All these locations share the high demand for residential apartments, an asset class which we touched on moments ago. that has proven to be very resilient during the pandemic. We keep the option to convert some hotels into micro apartments should the environment for the hotel business deteriorate in the future. So while we remain cautious for the short-term outlook of our hotel business, we are confident this segment will be an outperformer once the threat of infections can be controlled and people gain their confidence in traveling. Following our successful disposals of our wholesale logistics and retail portfolio in 2020, you can see on slide 20 the remaining position of these asset types. At the end of 2020, the retail portfolio stood at 7% of the group portfolio value and logistics at 4%. Their walls were 5 years and 5.7 years respectively. The top investment location for both asset classes remains Berlin, with almost half the asset value, followed by North Rhine-Westphalia and several other attractive locations across German and Dutch metropolitan regions. Over 40% of the remaining retail assets are essential goods stores, such as food-related shops. Due to the strong locations and high demand for these assets, the collection rate for the full year 2020 for retail properties amounted to 95% and 99% for logistics. In other words, very similar levels as seen before the outbreak of the pandemic. Whilst we believe the impact of the pandemic had a positive long-term influence on our last mile logistics assets due to the acceleration of e-commerce, we fear that retail assets will have long-term difficulties to withstand the trends that emerged away from the traditional shopping. Therefore, we continue to view retail assets in general as non-core and we look for opportunities to recycle the capital into our core asset types. On slide 23, we classify our three main capex investments. The proportional split between capex for expansion, tenant improvements and other related capex expenses shifted slightly towards 10% improvement when comparing 2019 to 2020. The overall capex accounting for 1.3% of investment opportunities remained stable in each of the two years. The total capex investment amounted to 286 million euros in 2020, a plus 31 million euros for maintenance. The ratio of maintenance over invested properties increased therefore to 0.14% when comparing to 2019. As you can see from the pie chart, the majority of CAPEX was invested in tenant improvements and expansion activities that create additional income drivers and value creation potential. Last year, the focus for tenant improvement CAPEX was shifted to accommodate investments that enhance social distancing, improve air quality, and other initiatives that were a priority for our tenants during the COVID-19 pandemic. I'll now hand you over to Sylvie to present the ESG part of the presentation.

Thank you, Oshri. On slide 25, we highlight the top-line ESG goals of Round Town. We have set ambitious sustainability goals on ourselves and our ambition goes far beyond the roofs and walls of our properties. The company has set clear goals and objectives to create opportunities for our operations to flourish, for our people to develop, and for our communities to grow. This will be achieved through the creation of solutions for innovative and healthy work environments, through applied research into flexible work methods, by offering smart solutions to our tenants through developing our employees and the communities that we are active in, whilst keeping in mind a strong governance of the business. At present, we still have much room to improve before achieving the results to becoming a market leader, but we follow our goals as we know that these will drive innovation, and we know that sustainability is also a prerequisite for sustainable long-term growth and profitability. At the bottom of this slide you will find some links that will direct you to more information in the presentation about our initiatives, how we address each aspect of our ESG approach. On slide 26 we break down ESG into its individual elements in order to take a closer look at each component. To our tenants we want to offer customized solutions where they can run their business effectively. Our ambition is to be a market leader and to constantly improve our tenant satisfaction. This can be achieved by open communication and a high level of transparency. To further improve employee satisfaction, we have set ourselves the target to be considered as one of the top 10 employers in the commercial real estate space to ensure that we always attract the best talent and we have put various measures in place to achieve this goal. In 2020, we appointed our Head of Human Capital Development, who is dedicated to improving employee satisfaction. We also conducted an employee satisfaction survey and will do these surveys now on a regular basis. On the environmental side, we set clear targets to reduce CO2 emissions by 40% by 2030. This will be achieved, among others, by replacing and or upgrading fossil fuel heating systems and switching to climate-neutral energy providers. By offering tenant incentives through green lease elements, through installations of photovoltaic and EV charging stations, as well as smart meters in order to create more energy-efficient facilities. Furthermore, within our integrated sustainable business strategy, we are planning to increase the number of green certified buildings within the portfolio through refurbishments and new builds. On the social side and with the COVID-19 pandemic in mind, 2020 was an exceptional year that challenged our capacity for flexibility, innovation, sustainability and creativity. Active community contribution is one of our main priorities. We are aware of the important role we play in our local communities and take our responsibility very seriously. We engage and communicate with our local stakeholders in an open, meaningful, accurate, and timely way. We established the Around Town Foundation, which complements our asset-level engagement to support charitable organizations and people in our local communities. The Foundation works closely with local partners to identify and support programs focused on youth and elderly care, adult and vocational training, including student scholarships, community development, sport and civic engagement for charitable purposes. On the governance side, the board of directors currently consists of a total of six members, of which 50% are independent, with a minority position to executive directors and one-third of the board is female. The board has formed several committees of its own members and assigned certain duties to them. The board has determined the duties and procedures of the committees in its Rules of Procedure or on a separate resolution. These help the Board to have better oversight in specific important topics. That wraps up the operational section and I will now hand you over to Igal for an overview of our financial results.

Thank you. On slide 28, we present the profit and loss for the year 2020 compared to 2019. Our recurring net rental income resulted in 953 million euros and increased 26% year-over-year. The interest was mainly as a result of the successful merger with TLG in Q1 2020, offset by the property disposals. This number doesn't include assets that were already marked for sale, despite their positive cash flow. Due to our diversification and strong location, and in spite of the high volatility in the market, We recorded this year property evaluations and capital gains of 1 billion euros, including capex, and 759 million euros net of capex, which is also reflected in the 3.9% life-for-life growth. The approach this year was more conservative and reflected the uncertainties, especially in the hotel properties. Therefore, evaluation results came in below the 1.2 billion of last year. Property operation expenses, administration expenses, and finance expenses were in line with our expectations and guidance. The item as a financial result increased mainly to the one-time €70 million expense related to the net repayment of €1.2 billion bonds as part of our liability management activities in 2020, as well as changes in fair value of derivatives, which took an opposite turn in comparison to last year. The net profit for the period amounted to 906 million euros, generating 50 cents earning per share for the full year. Moving to slide 29, the adjusted EBITDA grew to 944 million euros in 2020, up from 773 million euros in 2019. In line with the increase in net trends, this 22% year-over-year increase was driven to a large extent through the merger with the United States. The adjusted EBITDA calculation is already after excluding 41 million euros contributions of assets sell-for-sell, and therefore referring to the recurring portfolio. Slide 30 provides a detailed view of our transform operation. FFO1 before COVID. previously defined as FFO1 after perpetual grew from 446 million euros in 2019 to 478 million euros at the end of 2020. Our FFO1 previously defined as FFO1 after perpetual COVID adjusted amounted to 358 million euros in 2020 or 27 cents per share in line with the 2020 guidance. The decrease this year was mainly owed to the €120 million non-requiring rent provision we put in place for uncollected rent from hotel tenants due to the uncertainties of the effects from the pandemic over the hotel industry. Due to the large volume of successful disposals, closed in 2020 in the amount of €2.3 billion, the FFO2 increased from 757 million euros to 933 million euros, reflecting 575 million euros disposal gains for the full year. Continuing with slide 31, we illustrate how we derived in our calculations to the three new NAV metrics, replacing the APRA NAV and APRA triple NAV. These are the APRA net reinstatement value, APRA net tangible assets and APRA net disposal value and are calculated according to the APRA best practice recommendations. As a starting point, all three new NAV metrics are calculated based on the IFRS equity attributed to the shareholders and using the same number of shares outstanding. The APRA NRT scenario aims to reflect the value required to recreate the entity and assumes that no selling of assets takes place. Therefore, we added back the complete deferred tax liabilities and we deduct the goodwill created in relation to the mergers of the TLG, which mainly refers to the deferred taxes. The EFRA NRG resulted in €13.1 billion, or €11.1 per share in 2020, in comparison to €9.8 per share in 2019, an increase of 9% year-over-year. The APRA NTA aims to reflect the tangible value of assets and assumes that entities buy and sell assets, thereby crystallizing certain levels of unavoidable deferred tax liability. Therefore, APRA NTA excludes intangible assets in goodwill and adds back the portion of deferred tax liabilities that are not expected to crystallize as a result of a long-term holding strategy. Therefore, we add back only the deferred tax liabilities with regards to our long-term portfolio, which means that the deferred taxes for asset sell-for-sell, the retail portfolio, which we see as non-core, and the development price and invest portfolio, which all amounts together to 20% of the portfolio, are not added back for the NTH. With regards To the purchaser's cost, we analyzed the portfolio structure and only added back purchaser's costs which relate to properties that enable real estate transfer tax optimization at disposal. We found that real estate transfer tax optimization can be achieved in 40% of the portfolio and therefore added back real estate transfer tax related to these properties. The EFRA NTA amounted to €11.2 billion in 2020, or €9.5 per share, in comparison to €10.5 billion in 2019, or €8.6 per share, which reflects a 10% year-over-year increase on a per-share level. As mentioned before, the deep discount of the share price to the EFRA NTA per share while we dispose properties at back-booth values presents how aggressive the share market is. The EFTA NDV aims to represent the shareholders' value under an orderly sales of business, where the fair taxes, financial instruments, and certain other adjustments are calculated to the full extent of their liability, lack of any resulting tax. The EFTA NDV amounted to 8.4 billion euros, or 7.1 euro per share in 2020, in comparison to 8.4 billion euros, or 6.9 euro per share, which reflects 3% year-over-year increase on a per share level. Slide 32 illustrates graphically all three APRA-NAD metrics and the change to last year. With that now, back to Oshri to conclude the final part of the presentation.

Thanks, Eyal. Let's continue on slide 33. We've been placing great emphasis on our conservative capital structure to strengthen our fundamentals throughout this pandemic and beyond. As you can see from the debt maturity profile, until the end of 2024, there are no major debt expiries coming up except for one 600 million euro senior bond with a very low coupon of 0.375% expiring in Q3 of next year. Therefore, our cash cover ratio for the next three years resulted to four times. In 2020, we successfully maintained our defensive loan-to-value level of 34%, while further reducing the low average cost of debt to 1.4%, with an average maturity of 6.1 years and kept a strong interest cover ratio of 4.3 times. These conservative financial ratios ensure sufficient headroom to all our covenants, including our stricter internal board LTV limit of 45%. In addition, 76% or 15.6 billion euros of our assets remain unencumbered, providing additional sources of capital if required. During 2020, We repaid over 1.5 trillion euros of bonds and bank debts with higher costs of debt and issued new bonds with lower costs of debt. At the end of 2020, we had a strong liquidity position available in the amount of 3.3 billion euros for growth opportunities and further economic challenges. But as always, we plan long-term and will monitor several funding options across markets, when we see that acquisitions pick up again. Moving to slide 34, we provide a glance of our strict financial policies and highlight the fact that we keep our goal of a rating upgrade to A- from currently BBB Plus rating, which was confirmed by S&P recently. This upgrade remains a high priority for us and we continue to see a high level of financial cost savings opportunities associated with our merger with TOG from last year. Following our revision of the FFO1 definition this year, we have updated our dividend policy distribution to 75% of FFO1 per share from this year onwards. we want to provide an outlook for our full year 2021 guidance. We prepared the guidance based on our existing portfolio, taking into account the disposal of the assets held for sale and conservatively didn't consider any material acquisition. Due to the continuous lockdown and slow rollout of vaccines across Europe, we based our guidance on the conservative assumption that our hotels will not fully recover in 2021 and will therefore perform similar to 2020. We expect the FFO1 for 2021 to be in the range of 340 million to 370 million euros. Having successfully completed our share buyback program in the amount of 1 billion euros last year, we will see the full effect on the per share growth during 2021. Therefore, we expect the FFO1 per share to be in the range of 29 to 31 cents up from 27 cents in 2020, which reflects an increase of 7.5% to 15%. This calculation does not include further potential buyback programs in 2021, including the ones started today. We see our expected 2021 dividends per share in the range of 22 to 24 cents. That concludes our full year 2020 presentation. As always, the appendix holds plenty more information for you all to look at. And I'll now hand you over to Sylvie, who will lead the Q&A session.

Thank you, Ossi. Before we invite the direct telephone questions, we would like to answer questions that we have received by email prior to this call. For simplicity reasons, we have taken liberty to group similar questions in order to answer as many questions as possible. Allow me now to read out these questions. First question. Could you comment on the office market in your locations, Germany and Netherlands? What are the current dynamics of the Latin market and how do you expect the trend to develop?

The office markets in Germany and the Netherlands entered the crisis at very low vacancies due to the high demand which exceeded the supply for many years. The new construction could not meet the demand either, which resulted in high pre-lat ratios that further increased during 2020. You can see the development over the last quarters in the appendix of our presentation. The vacancies in the German property market significantly reduced from over 10% in 2010 to below 3%. Of the top cities in Germany and the Netherlands, Berlin, which is our biggest location, is the strongest office market. Although the vacancy in Berlin since the outbreak of the crisis slightly increased from a very low level of 1.8% to 2.8% as of the end, rents increased further. Prime rents across Germany continued to increase during 2020. One year into the pandemic, we see the impact on the letting market was not as large as initially feared. According to market reports, the average vacancy slightly increased to 3.7%, up from just below 3% before the pandemic. In 2020, 2.7 million square meters were rented in the top seven cities in Germany, 750,000 square meters in the last quarter of 2020 alone, after 600,000 square meters in Q3. We saw in 2020 hesitation from new lettings from prospective tenants as it takes new tenants longer to decide and on average took less space. We assigned approximately 130,000 m2 new lettings in 2020 at over €15 per m2, which is 40% higher than our average €10.8 per m2. Due to the letting hesitation of prospective tenants in the midst of the pandemic, we were not able to fill in newly vacated space fast enough and this resulted in an increase of 0.6% in the office vacancy in comparison to last December. In the last period, we do feel an increased demand for offices across our locations by new tenants and expect to fill in the vacancies within the upcoming periods. Referring to our existing tenants, we saw a higher amount of tenants prolonging their short-term leases in order to postpone their decision-making. We prolonged over 310,000 square meters of office space in 2020 at around €12 per square meter. As a comparison, in 2019, we have prolonged 260,000 square meters of office space. We believe a significant amount of pent-up demand exists which will be released with the easing of the restrictions and with the progress of vaccinations. The high pre-net ratios for new construction is also giving us confidence going forward. Looking forward, we are cautiously optimistic and expect to see continuous progress in the office market. The headwind for strong progress is dependent on the long-term economic condition in Germany and in the Netherlands, and there is no assurance when and in which way the economies will recover from the pandemic effects. Higher unemployment and the large amount of insolvencies is a threat to demand for office space. Therefore, we are focusing on signing longer leases. The current situation has proven again the importance to focus on the strongest and more resilient economies in Europe. The office market in Germany and the Netherlands also have a competitive advantage over other strong office markets in Europe as rents are comparatively lower while construction costs are similar. This leads to high continuous demand and a low amount of speculative construction. The strength and stability of the office market of our location is highlighted by the strong investment market. Although the total investments were lower in 2020 than in 2019, As a result of the initial uncertainties after the outbreak of the pandemic, the year ended with a strong fourth quarter. Initial yields for prime properties were below 3% in the fourth quarter, a historically low level. The decreasing yields is reported by the low negative interest rates on government bonds and the historically last spread to office yields. At that, we will continue to analyze the markets and remain cautiously optimistic.

Next question. Did you experience any structural shift to working from home? If not, do you expect any material impact?

No, we did not experience any significant impact. We don't believe there will be a significant structural shift in demand related to working from home. The lockdown taught many companies to deal with a remote workforce and at the beginning Probably the majority of workforce also enjoys the flexibility to some extent. But we believe after such a long lockdown period and forced working from home, many employees are also happy to go back to regular work, office working environment, and employers seek to have more control and closer contact to their employees. However, we do believe that working from home, although not a new concept, is here to stay and will become part of corporate culture to provide its employees more flexibility. A flexible usage of office space and increase in mobility are going to improve further alone technological solutions. Although flexible space is expected to reduce the average number of employees at the office, it does require more commune and shared areas which offset to some extent the reduction in space. Therefore, the net effect remains unclear and we currently do not expect the flexible work habits to fundamentally change the demand for office space. On the other hand, working physically together in teams and physically meeting have many advantages which can hardly be replaced with remote working. Please also note the incentive for employers to implement permanent remote working is highest in large cities with high rents and long commuting times. Our office locations, mainly in Germany and the Netherlands, are characterized by short commutes from affordable housing in central locations and low office rents compared to international standards such as Paris, London, New York and others.

Next question. How do you see the hotel market recovery?

Local and international travel restrictions, minimum distance restrictions as well as other restrictions, remain to significantly impact the hotel market. Currently, our hotels are restricted and limited to business travel and essential workers are not allowed to host leisure tourists, and the minimum distance restrictions and availability of vaccination reduces the demand for conferences. The hotel market will not recover until restrictions are lifted and the population will be vaccinated at a high degree. For our biggest hotel market, Germany, infections are currently increasing again, and we are in the middle of a third wave, and the recovery is accordingly delayed. Currently, the vaccination progress is unfortunately very slow, and cannot reduce the increasing infection rate. We believe that only a significantly higher vaccination rate will eventually lead to a lift in restrictions, as we see recently in the UK, where we also have hotels. The vaccination progress in the UK has been going well, and the UK government laid out an opening plan in which hotels are expected to open for all, business and leisure, by mid-May. Our hotel tenants are receiving a high demand of booking already, also for conferences and weddings. UK gives us an idea of the recovery potential of our hotel portfolio, which is based on pent-up demand and high share of domestic demand. The locations where our hotels are located have a historically high domestic demand and low share of international demand, and it will help our hotels to recover faster compared to markets with a high demand for international travel. Air travel restrictions might be lifted later than hotels, and thus we expect the domestic demand will be higher compared to historical aberrations.

Next question. Can we get more color on the rent collection of your portfolio and the provisions made in 2020? Did you account for provisions in the guidance for 2021? And how much acquisitions and disposals did you account for in your guidance?

Excluding those which are mostly impacted from the government-imposed restrictions, the collection rate is basically back to pre-pandemic levels and reached to over 97%. In this regard, the uncertainty we have seen in the beginning of the pandemic has decreased significantly as the diversification and strength of our portfolio and tenants prevailed. We are confident to continue and maintain a high collection rate also in 2021. The collection rate for the hotel assets amounted to 50%, including 11% of the rents which were settled for lease extension. Due to the continued restrictions followed by the second lockdown, crossing into Q1 2021, we have conservatively accounted for the remaining uncollected rents as an extraordinary expense. We are in continuous negotiation with our tenants and on a case-by-case level, find the right solution to assist them in this difficult period. Only in very specific cases, we reduce rents short-term, which will be charged back at higher amounts. We believe it is important to support our tenants who generally have a very strong cash record in achieving stable and high profitability, but for that, they need to tell the market to be open. The collection level in 2021 clearly depends on lifting the restrictions. For now, we stay conservative and assume collection rates to remain on the current level. Our base case for 2021 guidance is that markets will not fully open and will have similar trends as in 2020. Therefore, we factor in an amount of 90 to 120 million euros of extraordinary rent provisions as we cannot assess when restrictions will be lifted and we prefer to remain conservative and assume the current situation going forward. A better than assumed scenario will support our performance and we will continue to update our guidance in the next reporting periods. For the guidance, We only accounted for signed deals, so currently signed disposals of over 200 million are included on top of the help or sell portfolio of over 800 million euros, which are not included in the guidance. At this stage, we didn't include acquisitions in our guidance. We will update the guidance along new acquisitions and further disposals.

Next question. The rental income, like for like, amounted to 0.2%. In which locations did you have the highest like-for-like performance? What was the reason for the decrease in like-for-like results? What do you expect going forward?

The decrease in like-for-like growth is predominantly related to a negative like-for-like result in the hotel rents. The rental like-for-like growth in 2030 was 0.2%, which is the net result of a positive 1.3% rent like-for-like growth in the portfolio excluding hotels, and a negative 1.8% life-for-life in the hotel portfolio. In certain situations, on a very selective basis, where our hotel tenants have been mostly impacted from the restrictions, we have agreed on short-term reduction in the relief agreement, which affected the life-for-life negatively. This trend will flow back shortly after the restrictions will be lifted and the market will be open. For offices, we experienced a slightly lower life-for-life as compared to previous periods, As in the current market uncertainties, tenants postpone their decision to expand and let new space. We believe the hesitation to rent new space creates a large amount of pent-up demand, but it will probably only be released once uncertainties will disappear, which will be favorable support, new rating achievement, and in turn increases our like-for-like range. We achieved the strongest like-for-like increase in Utrecht, Amsterdam, Berlin, Hanover and Dresden. As mentioned before, the degree of flattening is depending on lockdowns and restrictions. It is very difficult to make a reasonable assessment going forward. We are a few months into 2021 and start to feel a slight void in office pick-ups, but on the other hand, hotels continue not to perform. It is hard to see a significant improvement so far as the lockdown restrictions have remained. We therefore conservatively expect the like-for-like to remain level this year.

Next question. Can you please elaborate on your revaluation gains? What were the key drivers and where did you achieve the strongest increase? What was the valuation like-for-like? Also, what do you expect going forward with the current market still in lockdown and potentially open up with a successful vaccination progress?

We achieved 1.1 billion euros of revaluation gains in 2020 in all asset classes excluding hotels, which have been offset by a devaluation in the hotel portfolio of 300 million euros, resulting in a net revaluation gain of 770 million euros. The like-for-like performance excluding hotels was 7.2% and 3.9% including the hotels. The high degree of diversification of our portfolio in terms of archetypes, locations, tenants and lease structures resulted in an overall positive result as we were able to capture many different key drivers of the different markets we are in. Each city, country, tenant and archetype is differently affected by the lockdown and can benefit or be negatively impacted by it. Our revaluations are the result of operational achievements and yield compression. Yield compression, which was around 25 basis points contributed, accounted for almost all the revaluation gains, with our modest rent improvement over the year contributing marginally to the value. We achieved revaluation gains across our portfolio locations in top cities of Germany and the Netherlands, mainly in Berlin, Munich, Dresden and Leipzig. The highest revaluations were recorded for our offices in which the result of the focus on central locations is in top cities paired with a high quality. Our strong disposal activity also validated our valuations as we have been able to sell above book value. Further, current market transactions are executed at low yields, partially lower than before the crisis. especially in top cities in Germany and the Netherlands. Therefore, we expect our valuations to remain stable and with a hopefully progressing pace of vaccination and subsequent lockdown restrictions, we believe the lessons in hospitality markets to recover which will further support our valuations.

Next question. There have been several transactions in the markets at high multiples, especially in German offices. What is your assessment on this?

These acquisitions highlight that office yields contracted. As buyers seek a stable investment, Germany, which provides long-term upside potential. The demand is highest for properties with a strong tenant at long walls and in strong locations. Negative government yields direct especially funds and insurances to invest in real estate where positive yields can be achieved. You can see on page 75 of the presentation that the spread of prime office yields to bond yields is at historically high levels. We used the opportunity to dispose part of our portfolio, mainly non-core, but also mature properties. The high demand resulted in disposals above book value, which also validates the valuation of our portfolio.

Will Around Home pay a dividend this year? If yes, How much and what is it based on?

Based on our payout policy, we will suggest to the AGM in June a dividend of 22 cents per share from 2020. The dividend is based on the FFO1 before perpetual after the COVID adjustment. As we change our FFO classification, going forward, our dividend policy is based on the FFO1 after perpetual loan, now simply called FFO1. with a payout ratio of 75%. This is also reflected in our guidance.

Next question. Why did you issue new debts and perpetual notes, and what are you planning to do with your large cash balance, which also increased due to disposals?

Part of our financial policy is to proactively manage our debt maturity schedule by refinancing shorter-term debts at times when the markets provide a favorable opportunity to refinance with lower maturities and lower rates. We issued in December of last year a €1 billion bond at 0% coupon with a maturity of 6 years and bought back around €600 million of bonds at an average coupon of around 1.5% with an average maturity of 3 years. Due to these efforts, AronPond will have lower financing expenses which increases the future FFO and the dividends, as Arampton's dividend policy is tied to the FFO1 per share, while extending the average debt maturity. The excess funds will be used for further debt repayments, such as bank debts, which will further improve the debt structure, as well as for general corporate purposes and further acquisitions. The property disposals have been funding the share buyback, as well as debt repayments, during 2020, Therefore, the share buyback was leveraged mutual. By disposing mainly non-core properties of mainly retail and wholesale assets, we also further increase the focus of our portfolio on stronger asset classes and increase the overall asset quality.

You announced an additional share buyback program. What do you plan to do with the shares held in treasury?

In the former buyback programs, we bought back 13% of our share and we can go up to 20% according to the approval we received in the OGM in May 2020. We see the share buyback as a reinvestment into our portfolio at a very attractive pricing, which is an alternative for acquisitions. Further, disposing properties at a premium to NAV while buying our shares at significant discounts to NAV is creating immediate value. We intend to keep the Treasury shares to be used for future script dividends, acquisitions, capital increases and others. As the shares are held in Treasury, they will not carry any voting rights, not entitled to dividends and are also deducted from the per share KPIs, therefore increasing each shareholder share in the company.

Next question. Can you provide more information about the disposals? What was the vacancy and worth of these properties? Are you planning to continue disposing in 2021?

We disposed numerous properties, which are mainly located in various locations across Germany and the Netherlands, and included about two-thirds of retail and wholesale, and the remaining were office properties, hotel and development assets. The walls were 6.5 years with nearly full occupancy. The disposed retail and wholesale properties are spread across Germany, mainly in non-major cities in the states of Saxony, Baden-Württemberg, Thüringen, Brandenburg, Mecklenburg-Vorpommern and others. We sold retail properties at around 5% above book value and wholesale properties at 2% above book value. We sold offices in Berlin, Utrecht, Frankfurt, Amsterdam, Wiesbaden, Rostock, Hannover and others. Offices were sold at 2% above book value. The hotels we sold were in Dresden and Rostock and were sold at 5% above book value. The disposal multiple increased to 19 times. At the end of the year, we sold more mature properties, mainly offices in Germany and the Netherlands. compared to previously mainly retail and wholesale, which had a higher yield. The signed disposals are not part of our portfolio overview, as well as not part of the recurring net rent, adjusted EBITDA and FFO. Part of our strategy is to optimize our portfolio by disposing non-core properties, Additionally, selectively we dispose mature properties to capitalize on the value we listed. Year-to-date, 2021, we signed disposals for around 200 million euros of retail and office properties in Leipzig, Dresden and various cities in the Netherlands. We have an advanced disposal pipeline of over half a billion euros.

Next question. After a low acquisition activity in 2020, Are you expecting to pick up your acquisition pace again? What is your firepower?

Up until the outbreak, we finalized the measure of acquisitions through the merger with TLG and its 5 billion euro portfolio. With the outbreak of the pandemic, we muted our acquisition activity in order to preserve our high cash balance and see to what extent the pandemic will affect our business. After some time into the pandemic, we were able to assess the impact on our business better. We launched a share buyback, which is highly long-term accretive, substantially more accretive than the deals we saw on the market. We continue our futuristic acquisition activity, and we are scanning the market to find the right deals. Our acquisition strategy is focused on accretive and high-quality additions to our portfolio, with a substantial upside potential, which create long-term shareholder value. Currently, we are looking at a pipeline of over 500 million euros. We currently have a significant firepower of 2 billion euros.

Can you please give us an update on your development projects?

Please see the slide 55 in the appendix of our presentation, where we present a breakdown for location, asset size, and current development projects. Our strategy is to analyze our portfolio for unused land or underutilized space of existing properties or land of existing properties for which we can obtain building rights. These rights we either sell at high gains or on a selective basis. We will consider developing the properties if they are located in top locations and with high pre-let agreements. In addition, our development portfolio includes properties which are subject to enhanced repositioning, which would significantly increase their value and rental income. Our target yield for development is 8-10% NOI over the cost, depending on the location and asset type. As of December 2020, the portfolio includes 1.8 billion euros of projects and building rights. These are mainly located 50% in Berlin, 13% in Paris, 10% in Frankfurt, 4% in Hamburg, 4% in Munich and also 4% in Rotterdam. The asset types are mainly for residential, hotel and office properties, but as they are not finalized, they are still subject to change. To utilize the current hotel lockdown restrictions, we brought forward large capex plans of few hotel properties including a complete facelift, upgraded interior and adding more space to the hotels. Therefore, we are able to fully execute the refurbishment instead of in small steps per section of the hotel, how we usually do it in order to maintain the operations of the hotel tenant. Therefore, we are able to use the current situation effectively as the hotels will be renovated faster and we'll come back to the market in an improved stage and we're able to achieve higher rents sooner. The total amount of building rights and developments reflects only around 6% of our total assets committed. It's currently 200 million euros, less than 1% of the portfolio value.

When do you expect to enter the DAX index which will now be extended to 40 companies?

Based on the current rankings with the other companies, our current market cap is not sufficient to enter. With a share price recovery to over €8, we see good chances to enter the docks.

Have you been able to achieve any synergies so far after the merger with TLG?

Yes, we have been working on the integration and raising synergies despite dealing with the challenges from the pandemic. We issued 1 billion euro bonds at 0% coupon, and a 600 million euro perpetual at 1.625%, which is even lower than the anticipated synergies level, while in parallel, we paid 400 million euro of TLG bond with a coupon of 1.4%, and a bank debt from TLG at an amount of 130 million euro with an interest rate of 2.1%, and expect to further repay bank debt also in 2021. This reduces long-term finance expenses and increases the SFO. Additionally, we implemented several operational synergies on the property management level in locations where we have strong overlap, economies of scale, as well as the corporate level. Due to one-off expenses to implement these changes, we will benefit from the positive long-term impact on the operational profitability going forward. In addition, Our long-standing deal sourcing network supported our high disposal activity and supported the deal preparation, negotiation, handling and execution, which resulted in a successful disposal above book value. Further, our combined portfolio has become more resilient with a larger focus on top cities and strong asset classes, and thus weathering the impact of the pandemic. The larger synergies potential we see is potential rating upgrade from S&P. The merger has many rating supportive criteria, such as a larger portfolio with strong focus on quality assets in top tier locations in Germany, and also larger footprint in these top locations at higher diversification, lower vacancy, lower tenant dependency, and higher profitability. We initially expected the rating discussions around the positive aspects of the merger would be towards the end of 2020. We now expect it to be delayed until the impacts of the current crisis and ongoing uncertainties can be clearly assessed.

Those were the questions that we received prior to this call. We can now start the open session for your questions. We would appreciate if you can ask all your questions at once and we will answer them one by one.

Ladies and gentlemen, we will now begin our question and answer session via the phone. If you have a question for our speaker, please dial 01 on the telephone keypad now to enter the queue. Once the name has been announced, you can ask the question. If you find a question that you prefer to turn to speak, you can dial 02 to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question received is from Rob Jones from Xen. The line is not open, so please go ahead.

Great, yes, thanks so much. There's a couple of questions from me. You've touched on it a little bit already, but in terms of guidance for disposals for this year, obviously $200 million done year-to-date. You've got $0.8 billion of assets held for Xen. I think you mentioned as well $500 million, a $500 million figure in terms of disposals pipeline but can you give an idea in terms of total content for the whole of FY21 that would be quite helpful especially on the buyback I get the impression that you are alluding to the fact that post this 500 million buyback as long as you continue to undertake disposals and the shares continue to trade at let's say 6.5 euros or less then we should realistically expect further buybacks this year like we saw last year just a bit of clarity on that or whether I'm reading that wrong. And then just the final one, or two actually, one on hotels, one on ESG. So in terms of hotels, do you see any potential for tenant failure if lockdowns are still in place by failure in this Q2? I appreciate you've got a diversified portfolio by operator, but could you see some isolated examples of hotel tenant failure in your portfolio? And then the final one's on ESG. Do you have a target for energy efficiency or energy consumption reduction? Obviously, I can see the CO2 reduction target there. And in relation to those targets in general, do they include scope 3 or are they just scope 1 and 2? Thanks so much.

Hi Paul, thank you for the questions. So, about the disposals. We didn't put for ourselves a complete target of how much we want to sell in 2021. We analyze the market, we see the demand, and then we decide if it's worthwhile to sell or not. We have our non-core assets that, in general, we don't expect to keep them for long. It's clear that we want to reduce our retail exposure. We currently have about 600 sites, another 500 million in the pipeline, and from that we will see how the demand will be and how the market will change. Referring to the buyback, at the moment we see the 500 million buyback as a good quantity for this year. That's why we see that 500 million will continue until the end of the year. Additional buybacks will be considered again depending on the market and if we find other acquisitions, attractive acquisitions that we want to do that depends on evaluation of this year to see if the market recover, pandemic is over. So there are several elements that we'll, let's say we'll use if we wish to extend the 500 million that was announced this morning. On hotel tenants, we don't see a tenant failure. The tenants are strong. They are all begging the market to be open. We are in continuous contact with them, assisting whenever we can assist. At least in the UK, when there are no signs of the market to be open, everybody is excited. we don't see any, let's say, sign of failure for a tenant. On the ESG, we are going to prepare our targets also on the consumptions. Our targets at the moment include mainly scope 1 and 2, but our investments are also invested in scope 3. But on that, we will give more information in our next calls while we are also preparing a deep analysis of the portfolio and our program and targets for the next years. Thank you for your questions.

The next question received is from Kai Klose of Darenberg. Your line is now open. Please go ahead. Yes, good morning.

Could you give us a split of last year's sales of assets between non-core and mature, and what was the average margin over book value for the sale of non-core and for the sale of mature assets.

Hi, Kai, thank you for your question. I think we put it in the presentation, the information of how the split, I will need to find it, but what we see overall, that we closed 2.3 billion, you see on page six of the presentation, that on the right side, we sold in all cities about 40%, we sold 20% in Berlin and 30% in Frankfurt, And we also give you a bit more information also on the asset classes. So all sale and retail, which we don't see as core and basically see as a non-core, amounted to nearly 60%, including the hotel and development is 65%. So about 70% are non-core from these photos. Thank you.

The next question is from Manuel Martin of Auto KFF. Your lines are open. Please go ahead.

Thank you very much for taking my questions. Two questions from my side. The first one is kind of to check the understanding. So if I understand correctly, your assessments regarding your hotel portfolio valuations that the valuations will stay stable or maybe even rise if vaccination accelerates this. This is correct. That would be the first question. Second question is a follow-up on your share buyback program. This 500 million volume, is it really a set number or would you think about reducing the share buyback if suddenly a lot of purchasing opportunities would appear in the markets for properties? Thank you.

Hi, Manuel, good morning. Thank you. About the valuation of hotels, we believe that if vaccination will be available and the market will be open, We will see an increase in value, for sure we need to see it long term, and we need to see the extent of the recovery, but we want to believe that we will see an uplift in the valuation if everything is back to normal. On the buyback, currently we see a 500 million program as sufficient, I mean, we have sufficient firepower for additional acquisitions, so the buyback is not stopping us from entering into acquisitions, but you're right, I mean, if we come to the conclusion that we see that it's not less a benefit for us to continue with the buyback, we can stop it. It's not an obligation, it's an up to 500 million program. Thank you. Thank

The next question we received is from Paul May of Barclays. Your line is now open. Please go ahead.

Hi, guys. I've got four questions for you. Just to be clear, on the Expo guidance, you're assuming, was it 90 to 120 million impact from hotels? So if we were to just add that back to the guidance, that would be a full recovery guidance number. Secondly, given cheaper valuations and, as you mentioned, probably more stable and better growth opportunities in Grand City than to around town at the moment, would it not make more sense to buy more into Grand City? What are the limits you have there in terms of acquiring more than necessarily doing the share buyback in around town? Take-up in Germany across many cities was down 37% year-on-year in 2020. I appreciate, obviously, the pandemic and the lockdown, so that's expected to be down. How quickly do you expect this to recover, and do you expect it to recover back to 2019 levels? And will this affect your ability to capture the reversion? I think you mentioned you wouldn't be able to capture it at the moment, but I'd assume on a return to full demand, you wouldn't be able to capture that. And then finally, on the work-from-home, you sort of mentioned that you don't expect there to be any impact going forwards, but companies will adopt work-from-home. Just noting a Deloitte survey back in the last year that suggested two-thirds of companies want to increase remote working and just over one-third want to reduce costs through reducing office space. Just wondered what your thoughts were on that survey and whether you've seen anything in your portfolio. Thanks very much.

Thanks, Paul, for the question. So, referring to FFO and full recovery, we did include the provision for 90 until 120 million, and we started with the current adjusted EBITDA and FFO ratios that we have now. There is more if the market will be completely open. There are more cost savings we can achieve. and we can perform better, not only by removing the provisions that we have created. We will increase the rent, the life for life will grow. So I expect that if the market will be open, the recovery will be more than just eliminating the 90 to 120 million provisions. Referral valuation. We see additional positions in Grand City. We do believe in Grand City. We see the position in Grand City as a long-term. We constantly choosing the script dividend when Grand City wants to achieve. That's why our percentage in Grand City is gradually growing. Grand City itself issued the buyback program, which is currently running. And, yeah, it's always in our mind and it's part of our consideration if to continue or let's say actively buying shares or just let our position grow naturally while Grand City is buying their own shares. Your third question was about the take-up if we see a recovery to 2019. It really depends. I mean... We do feel, it's surprising, but we do feel really in the last month and a half on the office sector, we do feel raising demand. It's something that we didn't see in Q4 last year. So we see companies stop hesitating or get to a conclusion that they do want to continue, that they can measure all their own businesses, how the pandemic is affecting, like we know now better on our business, And basically they are able to take decisions, and we see more and more demand coming in, not only for prolongation, but also for new lettings. How fast we can go to 2019 is still early to say. Let's see in the next report, and I will update about the progress of the pickup. About working from home. You know, I don't want to say that I'm fully aware about everything which is done in that survey, but what we hear from our tenants that are working on prolongation is also a mix of the both. One wants to use the working from home to, let's say, save costs. Some businesses were harmed by the pandemic, not only related specifically to the hotel industry, but in general. So they do see it as a cost saving measure, and some are still hesitating and really want to integrate that home office as part of the concept. But it doesn't speak to every tenant or every industry. So as we said before, we do see working from home here to stay. It's not going to disappear. It's not a new concept, though. But it will have an effect, but we see it as a limited effect and not something material. And we will need to learn how to live with it and to cope with it and also assist our tenants who wish to have this in any way we can. Thank you for your question.

So thank you all. Many thanks for your questions and participation in this call. These were all the questions we received. Stay safe, and we look forward to speaking to all of you hopefully soon again in person. Goodbye and all the best.

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