Aroundtown Sa Ord

everybody. Thank you for joining us for Around Town's Q1 2025 Resorts Call. You can view this presentation on Around Town's website, either on the home section or under financial reports of the investor relations section. Guiding you through the presentation today will be CEO Barak Varchen, CFO Eyal Ben-David, Executive Director Frank Rosin, Investor Relations Timothy Wright, Chief Sustainability Officer Limor Berman, Deputy CFO Jonas Tintelnoth, CFO of Hotels Kamal Deepmanektala, and representatives from Grand City Properties are also present. For the duration of the call, all participants will be on listen-only mode. During our presentation, you will have the opportunity to ask questions. With that, I would like to hand over to Barak and the rest of the team who will guide you through the presentation of our results.

Good morning, everyone, and thank you for joining our first quarter 2025 results presentation. We're happy to present a good start of 2025 with solid operational achievements, which has more than offset the impact of the disposal completed over the past period, positioning us well on track for our 2025 guidance. Although markets experience short-term volatility driven by macroeconomic and geopolitical uncertainty, our business has continued to perform resiliently with no material impact from these external factors. Importantly, the downward trend in interest rates has persisted into 2025. We saw further rate cuts both during and after the reporting period, which have created a more favorable landscape for financing and refinancing. This was clearly reflected in the strong investor demand of our latest bond issuance two weeks ago, where we achieved a 1.3 percentage point lower coupon compared to our last issuance in July of last year, reflecting the significant progress we made as a company, as well as the improved market sentiment. We're also encouraged by the continued recovery in the asset values. The positive valuation momentum that began in the second half of 2024 has carried into this year, supporting a further uplift in the property valuation. Our proactive financial strategy and successful disposals have positioned us well to pursue new opportunities and create value going forward. We'll take you through this development and more in the following slides. On slide four, we present the financial highlights for Q2025. Net rental income amounted to 295 million euros reflecting an increase of 1% compared to Q1 2024, driven by solid life-for-life rental growth of 3% and only partially offset by the impact of disposals between the periods. Adjusted EBITDA increased as well and amounted to 251 million euros as rental growth was further supported by cost efficiency. FFO1 amounted to 76 million euros stable year-over-year as a result of higher adjusted EBITDA, which offset the higher perpetual notes attribution. As in previous years, we are revaluing part of the portfolio each quarter and each asset at least once a year. In the first quarter, 15% of the portfolio was revalued, resulting in a positive like-for-like value change of 0.8% compared to December 2024, supported by operational growth. EFRA MTA per share came in came in at 7.6 euro, higher by 3% compared to December 2024. We also made further progress on obtaining a green certificate and are happy to report a key milestone. And now over half of our commercial portfolio is green certified with 65% of offices and 50% of our hotel assets have green certificates. LTV stands at 41%, 1% lower compared to year end 2024, maintaining our wide headroom to bond covenant. While we made significant improvements in strengthening our balance sheet in recent periods, we decided not to distribute the dividend for the year 2024 as we believe we should still remain conservative regarding capital allocation and maintain financial flexibility. Last month, S&P lowered our credit rating by one notch to BBB flat with a stable outlook. The recent microeconomic and geopolitical volatility has extended the market recovery period and has slowed down the pace of our disposal progress, thus extending the time to meet S&P's expectations. The updated rating level providing us much more flexibility going forward. Following the adjustment in the rating, we issued a 750 million euro bond for a period of five years with 3.5% coupon, showing the continuous investor trust in the company. On slide five, we present a summary of our operational growth reflected in continued like-for-like rental growth. Total like-for-like rental growth was 3%, with all segments contributing positively to the result. The like-for-like rental growth in the residential portfolio was 4.5%, benefiting from the persistent supply-demand imbalance, resulting in low vacancy and steady rent increases. The like-for-like in their hotel portfolio was 3.7%, reflecting positive fundamentals, as well as a successful repositioning of several assets. The like-for-like in the office portfolio was 1.6%. The segment benefits from high revisionary potential, allowing us to offer competitive rents and capturing upside. These positions are office assets well for growth when broader economic activity rebounds. Eyal, please continue on the next slide.

Thanks, Barak. On slide six, we provide an update of our disposal progress. In the first quarter of 2025, we completed 149 million euros of disposals around book values at an average rental multiple of 18. These transactions cover a range of asset types, with majority being residential properties, as well as offices, building rights, and retail. The disposals were primarily located in Bremen, Frankfurt, as well as non-core locations in Berlin. The relatively high share of residential disposals during the first quarter are mainly the results of timing effects of the closing of the disposals. We signed here today disposals in the amount of 140 million euros, and together with disposals signed but not closed from previous periods, a total amount of 330 million euros disposals are expected to be completed in the coming periods. Moving to slide seven, where we provide an update on our recent bond issuance and liability management. Earlier this month, we successfully completed the 750 million euros senior unsecured bond issuance with a five-year maturity and a 3.5%. This marks a significant improvement compared to the 4.8% coupon on our previous issuance in July 2024. The transaction was very well received by the markets with the order book more than three times oversubscribed on the day of issuance. The proceeds are being used to support 1.3 billion euro of debt repayments in 2025, year to date. This includes approximately 600 million euro used for the repurchase of bonds, including some bonds with relatively higher coupons, and around 660 million euros relates to scheduled repayments. As a result of this proactive liability management measures, we further extended our debt maturity profile. These actions underscore our continued focus on disciplined financial management and optimizing our capital structure. Frank, please continue on the next slide.

Thank you, Eyal. On slide nine, we present an overview of our portfolio breakdown. Our portfolio includes 22% hotels, 34% residential, 38% offices, with the remaining 6% being logistics and retail. The portfolio remains well distributed across top locations in Germany, the Netherlands, and London. These top cities together are making up 88% of the portfolio locations. Our largest cities are Berlin at 24%, London at 8%, Munich at 7%, and Frankfurt at 6%. The long-term fundamentals for these markets remain intact, and we continue to see solid upside potential in the mean to long term. You can find further detailed breakdowns with area views of our main cities in the appendix. Continuing on slide 10, we present the main portfolio KPIs along with an overview of our tenant composition. As of March 2025, the portfolio is valued at 24.7 billion euros, generating 1.15 billion euros in annualized recurring and end of income which reflects a rental yield of 5%. The world remains robust at 7.5 years, supported by a well-diversified lease expiry profile that avoids any single-year concentration. Vecasy stands at 7.5%, stable compared to the end of 2024. In-place rent remains stable as well, at €11.2 per square meter. Our tenant base continues to reflect strong diversification with around 3,000 commercial tenants and a highly granular residential segment. Worth to highlight is that our top 10 tenants contribute less than 20% of total rent income, underscoring both the low dependency on individual tenants and the resilience of our income stream. On slide 11, we provide a closer look at the performance and positioning of our office portfolio. The majority of office assets are located in our four top strategic cities, Berlin, Frankfurt, Munich, and Amsterdam. These top cities collectively represent 60% of the total office portfolio. As of March 2025, 65% of our office portfolio holds green certifications. Going forward, we continue to expect gradual progress in obtaining certificates for the full portfolio. The office portfolio recorded a like-for-like rental growth of 1.6% in March 2025. The main drivers being rent taxation and reversion opportunities. Our tenant mix is well diversified with approximately 75% of rental income derived from public sector entities, multinational corporations, and large domestic firms. The demand situation remains impacted by the sluggish economy as occupier decision-making remains cautious due to the ongoing economic uncertainty, but we do see an encouraging pickup in office demand, and we do expect to start to see the office market improving in 2025 and in 2026. Market reports have already indicated the office take up in Germany's seven big cities, growing by 50% year on year in the first quarter. Slide 12 highlights the significant policy measures undertaken by the German government to stimulate economic growth through reforms to debt break. A 500 billion euro investment is to be launched, which is estimated to boost GDP by up to 2% per annum over the next decade by addressing chronic underinvestment in German infrastructure. In parallel, the suspension of debt break rules for defense spending Aligned with the Euro's ambition to mobilize 800 billion euros by 2030, it's expected to strengthen the defense sector and related infrastructure. These fiscal expansions are dissipated to yield considerably economic benefits with projected multiplier effects of up to 2.7 times GDP across Europe. In our view, these developments are positive for economic growth in Germany and for Europe as a whole. which continues to be the main driver for office demand in the long term. Kamathil, please continue on the next slide. Thank you, Frank.

Moving to slide 13, we provide an update on select office properties that we plan to convert into centrally located service departments and long-stay accommodations. These conversions are designed to meet the rising demand in key urban markets while unlocking value from under-rented properties. We have also already secured lease agreements across eight assets located in Berlin, Frankfurt, Dortmund, Hannover, and Rotterdam. These assets total approximately 1,200 rooms designated for conversion. Also, building permits have been already secured in Rotterdam and Dortmund, while the remaining projects in Berlin, Frankfurt, and Hannover are in the permitting phase. Moving to slide 14, Our residential portfolio continues to demonstrate strong operational performance, underpinned by favorable market fundamentals. In March 2025, we recorded a like-for-like rental growth of 4.5%, largely due to increasing in-place rents amid a persistent supply-demand imbalance. Residential market conditions in both Germany and London remain strong, with resilient fundamentals positioning us for sustained growth in rental income and cash flow. On slide 15, we provide an update on our hotel portfolio, which continues to perform very well. Our portfolio comprises more than 150 hotels, well diversified across major European tourist and business destinations. These properties are leased to third-party operators under long-term fixed leases, which are either inflation index or include contractual rent increases. In March 2025, the hotel portfolio achieved a like-for-like rental growth of 3.7%, driven by favorable market dynamics and robust tourism demand. Looking ahead, we anticipate continued moderate growth in REFPA, supported by increasing overnight stays and a steady recovery in international travel, all of which will contribute positively to our hotel rental income. Through the repositionings which we successfully completed last year, we will capture approximately 50 million in additional annual rental income over the coming years. Jonas, please continue on the next slide.

Thank you, Kamaldeep. Let's move to slide 17, where we present our financial results for the first quarter of 2025. Net rental income, which is 295 million euros, representing an increase of 1% compared to 293 million in the same period last year. This growth was primarily driven by strong like-for-like rental increases, which more than offset the impact from asset disposals. Operating and other income decreased slightly year over year and amounted to 83 million euros. The decrease is mainly due to lower rechargeable income to tenants in relation to heating and energy costs. During the quarter, we revalued 15% of our portfolio, which resulted in a positive like-for-like value increase of 0.8% compared to December 2024. This uplift was largely driven by sustained operational growth, while rental yields remained unchanged. Net finance expenses declined €55 million, a reduction of 10% compared to €61 million in the first quarter of 2024. This improvement reflects the impact of our proactive measures taken last year including net debt repayments, lower base interest, and swapping floating rates into lower fixed rates. These factors were partially offset by decline in interest income on our cash position due to lower benchmark rates. Net profit for the period amounted to 319 million euros, up from 102 million in the same period last year, resulting in earnings of 20 cents per share. Please turn to slide 18. Adjusted EBITDA for the quarter amounted to 251 million euros, an increase of 1% compared to the previous year. This was supported by the underlying rental growth and improved operational efficiency. FF01 came in at 76 million euros, stable compared to the 76 million recorded in Q1 2024. This result was driven by the growth in adjusted EBITDA and lower finance expenses and offset by the expected higher attribution to perpetual notes. On a per share basis, FF01 amounted to 7 cents, stable compared to the 7 cents in the same quarter last year. FFO2, which includes the disposal gain over total costs, amounted to 121 million euros. Moving on to slide 20, where we highlight our EFRA NAV metrics. The EFRA NRV amounted to 10.3 billion euros, slightly higher by 2% compared to December 24, reflecting 9.4 euros per share as of March 25. The EFRA NTA amounted to 8.4 billion euros, or 7.6 euros per share as of March 25, increasing by 3% compared to December 24 on a per-share basis. The increase in EFRA net metrics is mainly the result of operational profits supported by further positive property revaluations. Tim, please continue on the next slide.

Thanks, Jonas. On slide 21, we highlight our disciplined capital structure and strong credit profiles. Our loan-to-value ratio improved to 41%, down from 42% at the end of December 2024. This was driven by the impact of asset disposals and strong operational performance. Through the company's proactive measures, we were able to keep leverage below the 45% Board of Directors guidance and will continue to take proactive measures to maintain a conservative financial profile in the coming periods. €17 billion and 71% of our portfolio remain unencumbered, which supports our strong access to bank financing. Our average cost of debt was 2% as of March 2025, and average debt maturity was 3.7 years, or 4.5 years when adjusting for a debt covered by our liquidity position. Our hedge ratio is 97%. Our ICR was 4.3 times, and net debt to Eberder was 10.5 times as of March 2025. Moving to slide 22, here we present our debt maturity profile. And this includes our recent issuance and buyback, which extended our average debt maturity profile. Our liquidity position is further supported by 0.9 billion of RCFs with an average maturity in the second half of 2028. On slide 24, we confirm our four-year guidance for 2025. We are guiding for an FFO in the range of 280 to 310 million, which translates to 26 to 28 cents per share. This outlook reflects the expected positive contribution from continued rental growth, benefits from hotel repositionings, enhanced cost efficiencies, and the impact of our hedging and deleveraging efforts. At the same time, we expect some offsetting effects from the four-year impact of disposals, which were completed in 2024, this year in 2025, along with higher coupon payments on perpetual notes compared to last year.

This concludes our presentation. As always, you can find further material in our appendix. With that, we would like to start the Q&A. Before we invite your direct telephone questions, we would like to answer questions that we have received by email prior to this call. For simplicity reasons, the team has taken liberty to group similar questions in order to answer as many questions as possible. Allow me now to read out these questions. Could you provide some details on the latest performance of your hotel portfolio? What do you expect for this asset class going forward?

Thanks, Liat. As in 2024, our hotel portfolio continues with its strong performance, driven by a good environment and the positive impact from targeted repositionings of selected assets, as reflected in the 3.7% life-for-life rental growth recorded in March 2025, up from 2.3% in March 2024. Last year, the hospitality industry in Europe was positively impacted by several drivers, such as large events and a resurgence of corporate groups and international travel. we see this positive industry momentum sustained. This should also support an improved sentiment in the transaction market. Conference and business travel have increased in recent periods, and when combined with the already strong leisure demand, this trend bodes well for the hotel portfolio. We are on track to capture the upside potential through repositioning and reopening hotels, as well as from fixed rent step-ups and indexations driving strong internal growth. Going forward, we will continue unlocking further revenue increases from repositioning, refurbishments, and rebranding, which were also the drivers of our recent results.

Thank you, Kamini. What is the current yet in the situation of your office? What is your perspective going forward?

In the first quarter of the year, we continue to see in-place rent increase, driving the 1.6% like-for-like growth. Work patterns continue to normalize and rates of return to office continue to increase. In the past five years since the pandemic, we have seen very little supply coming into the market, and in many cases, supply was reduced due to the office conversion, which will provide tailwinds for the recovery. Having an under-rented portfolio with high revisionary potential will provide us with flexibility to capture the demand while driving higher rent. Recently in Germany, the economic outlook has been positively impacted by the new government's plan to reduce fiscal constraints and invest very significant public funds. While this has caused some volatility in interest rates, we view this plan as a positive driver for the German economy and ultimately for office space demand. We've prolonged 30,000 square meters of leases with an average in-place rent of 16.2 euro per square meter and a vote of five and a half years. Additionally, we signed 41,000 square meters of new leases, double that of Q1 2024, with an average in-place rent of 15.8 euro per square meter and a vault of nine years. On a selected and targeted basis, we are also continuing to explore conversions from our offices into service department. Also, conversion of office into edge data centers is considered. Due to the strong location of our assets, we have the opportunity to consider other usage concepts which are economically feasible and will create excess value.

Thank you, Marc. Can you provide more details on your rent-like-for-like performance?

Across the whole portfolio, we recorded like-for-like rental growth of 3%. London and Berlin were both stand-up performers and both recorded over 5% like-for-like rental growth in the period. Other strong locations included Leipzig, Halle, Amsterdam and Hamburg. The residential portfolio continues to benefit from the structural supply-demand mismatch that supported its solid like-for-like rental growth of 4.5%. The hotel portfolio also recorded strong rental growth of 3.7%, driven by step-up rents and indexation. The office portfolio recorded rental growth of 1.6%, mainly driven by indexation. The solid rental growth is expected to continue, especially in the hotel and residential segments. We see the German debt break reform and therefore potential higher government spending in upcoming periods as broadly positive and are hopeful it's a catalyst for economic growth and better office performance. Looking ahead, we will continue looking at ways to extract the full potential of the portfolio, including through repositionings and conversions. We conservatively expect rental income to increase 2-3% on a like-for-like basis in 2025.

Thank you, Tim. Could you provide more details? on the re-evaluation conducted. What are your expectations for the year?

We have conducted a partial re-evaluation of about 15% across the portfolio as part of our Q1-25 report, including a positive 0.8% like-for-like re-evaluation gains after accounting for CAPEX, where we saw a significant operational improvement of some of the properties. While we are cautious about generalizing the results from this partial revaluation to our whole portfolio, these results are following the positive operational achievements, while yields remained broadly stable. We plan to revalue the complete portfolio by H1 and to provide normal details as we provide in the year end as part of H1 results.

Thank you, Ayanna. What are your thoughts on your current position? Will you continue prioritizing dealer region?

Our strong liquidity position has been a key factor in successfully navigating uncertain market conditions in past quarters. Since last year, we have been experiencing improving financing conditions, with a recent issuance at a lower coupon of 3.5% compared to our issuance last summer at a coupon of 4.8%, also driven by the ECB's rate cut policy. Therefore, we believe that we do not need to maintain a super high liquidity position and expect to gradually reduce the balance in the current period as we repay upcoming maturing debt. The proceeds in our conservative liquidity position have allowed us to conduct liability management exercises, whereby we repurchased approximately €600 million in shorter-term bonds, as well as repaying €660 million in scheduled bond redemption so far in 2025. Regarding our deleveraging efforts, As of March 25, our ATV declined further by one percentage point to 41%, compared to year-end 24, and has fallen four percentage points since June 2024. The successful decrease is a result of proactive management, driven mainly by disposals, increasing of cash flows, value creation, collections, and bond buyback at discount. Going forward, we follow our disposal strategy, but we are more open to utilize growth opportunities.

Thank you, Jonas. How has the S&P downgrade impacted your approach for the rest of 2025 in terms of disposal and liability management?

Our rating is at BBB stable and we have ample headroom and financial flexibility, so we're clearly less in the need to dispose. We still expect to sell our health for sale portfolio amounting to 660 million euros, which have already signed but not closed. We still seek to sell on an opportunistic basis if the price is right, which will enable us to recycle capital, reduce cost debt and pursue attractive growth opportunities while keeping leverage on a similar level.

Thank you. What's the latest progress with your plan on being a net seller in 2025?

We have signed €140 million in new disposals in 2025 so far and closed €150 million of disposals in Q1 2025, consisting mainly of residential assets which represented 81% of the disposal volume. Office assets represented 12%, development assets represented 6%, and retail logistics and other represented 1%. Disposal locations include Bremen, Frankfurt, Berlin, NRW, and London, as well as non-core locations. The closed disposal were executed around book values. Additionally, signed but not closed disposal amount to around 330 million euros, of which around half has already been closed as of today. comprising primarily office and development assets. Looking ahead, we plan to continue to dispose properties and to reduce leverage on one hand, while proceeds can also be used to fund accretive acquisitions opportunities as part of our capital recycling strategy if we see attractive opportunities.

Thank you, Bach. Why have you decided not to distribute DGENs for 2024? When do you expect to distribute DGENs again?

Thank you, Liat. The actions we have taken in past periods have allowed us to significantly strengthen our financial position and successfully navigate through past volatility. This is reflected in the significant improvement of our leverage metrics, such as the LTV, which is currently at 41%, down from 45% as of June 2024. Moreover, our proactive approach and the improved financial environment allow us to further strengthen our financial profile by assessing capital markets to extend our debt maturities. Our operations also remain robust, and we have a positive outlook for the coming periods. That being said, we believe that there is more work to be done on strengthening the balance sheet and the financial profile in order to position the company more strongly in the future. As such, the distribution of a dividend at this stage will be contradictory. For this reason, the Board has decided not to distribute dividend for 2024. We expect to distribute dividend again once our balance sheet has strengthened sufficiently and it will be appropriate from a capital allocation perspective to resume dividends. We believe that we will be able to distribute next year, but need to continue and see how the market develops in the upcoming periods before taking a such decision.

Thank you, Frank. To provide an update on the green certifications of your portfolio, how do you see them evolving?

We are pleased to announce we have continued to make progress on our green certifications since our last update as part of our annual report, which was published in March. Notably, in this short period, we have made the most progress on our hotel portfolio, which is now 50% green certified, up from 30%, which includes all our center parks now fully certified. This was the main driver behind the increase in the share of certificates, in our commercial portfolio, which reached 53%, up from 47%. We expect continued progress in the future, but we still know that as a result of limited capacity from certifying bodies and our large portfolio, it will take time to reach the full certification of our portfolio.

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

Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants requested to use only handsets while asking a question. Anyone who has a question may press the end one at this time. And the first question comes from Alice Eklund from First Berlin. Please go ahead.

Good morning, everyone. Thanks for the detailed presentation as usual. The first question I have is this morning, if you might be able to provide us a little bit of insight into the economic opportunity of the office conversions and flats, which is going on right now in Berlin. are expected to start coming online next year.

Hi, Alice. Thanks for the question.

So yeah, we're in the conversion process, and they have been pre-signed. So we definitely see upside here in rental in the future. And clearly, it depends also on permits when we reach them. So far we see like 10 to 15 million potential coming over the next years. We cannot assess when it will come, but over the next two years is realistic.

The next question comes from Nine of Marios, pass two from Bernstein. Please go ahead.

Hi, good morning. Thank you for taking my questions. Just two from my side. I think you mentioned that after the reporting period, you obviously raised the bond and then repaid around 770 million through the buybacks and maturities. Were there any other debts, drawdowns or repayments we should be aware of, maybe on the bank financing side? That's my first question. And then secondly, can you break down the 180 million of new acquisitions or investment properties between the different categories such as loan-to-own and the vendor loans as well. Thank you.

Hi, thank you for the questions. No, there were no other material repayments other than the ones that you also mentioned with the 770 post Q1. Out of the €180 million of additions to the investment property, €40 million were acquired and $140 million were converted from vendor loans and loans to own. Out of this, already part were sold, and another two properties are in negotiation to be sold. Eventually, some properties will keep, and they will generate very nice return, and some will be disposed at a higher price than the loan that we have given.

Thank you.

the next question comes from line of manuel martin from auto beach bhf please go ahead uh yes hello thank you for taking my questions two questions from my side um the first one is on the valuation gains that you recorded in q1 is it possible for you to break down the valuation gains in according to asset classes so how much comes from resi How much from hotel, how much from office? That would be the first question. Second question, maybe you can clarify that a bit. In the around town reporting, it is reported that Grand City had like-for-like rental growth of 4.5%. While in the Grand City reporting, it's reported that it is 3.8%. Maybe there's a reason for the deviation. That's the second question, please.

Thanks, Manu, for the questions. Yes, so the revaluations were on a targeted basis where we saw operational improvements in the assets. Across the board, nothing specific in the asset class. Clearly, you've seen also GCP had some revaluation gain. We'll provide a full breakdown with a full portfolio evaluation in H1. And the second question, yeah, GCP reports a total portfolio like-for-like, while around-time breaks it down by asset class, or it takes only the specific residential part connected to it.

The next question comes from Nadir Rahman from UBS.

Please go ahead.

Hello, good morning. Nadir Rahman from UBS here. Two questions for me. The first one is on the dividend resumption. You said that you will be looking to see when your capital structure reaches what you call an appropriate stage. Could I ask if you have any metrics on that or any quantifiable targets you have to resume the dividends? And then my second question, a very quick one, is on the average cost of debt. You said it was 2.2%, and then now it's 2% specifically. Could you provide that to a higher degree of accuracy, please? Thank you.

Hi, thank you for the questions. On the dividends, we didn't build up a specific formula of when we are going to start. It just felt too early now. We are still on the leveraging level, and we see the market improvements, and we do feel more positive for next year. But for the moment, we feel that for this year, it is better to keep the liquidity and have a bit more flexibility also for external growth once we see it coming. On the cost of debt, it was 2% end of the year, and it's also 2% now. So there is no material change in the cost of debt.

Thank you.

Next question comes from Niraj Kumar from Barclays. Please go ahead.

Morning, everyone. Just a quick one on my side. Do you think you have good access to hybrids market? And how do you plan to address non-call 26 hybrids and the non-exchange subs?

We definitely see a good recovery in the hybrid markets for our instruments, but also we've seen peers, we've seen some issuances from some of our peers, so it gives us confidence that the market is open for new issuances, refinancing of the hybrids. Until next year, when our next perpetuals have their next call, there's still some time. We'll assess the situation clearly then, but clearly it's a good sign to see that the market is open.

Next question comes from nine of Rob Jones from BNPP. Please go ahead.

Morning team. I think I've got about three or four. So one's on offices. So you talk about 1.6% light flight rental growth year on year. Obviously that includes indexation. I suspect indexation was more than 1.6. So what's the negative kind of contributor to pushing it, the light flight down to 1.6? I think it wasn't. vacancy because i think vacancy actually improved year on year for offices um the second one was on cash um if you think or if we look post period end and think about pro forma cash today um adjusting for the liability management exercises you've done etc where are we today roughly in terms of that pro forma cash balance and the other two were um investor flagged to me this morning that there's i think about 7.1 million euros of director or senior management loans from around town. I'm just wondering what that 7 million was for. And then finally on the divvy, just going back to one of the questions earlier, to the outside in view, from my perspective, it looks like you've taken a view on the dividend and said there are specific criteria that has resulted in us deciding or electing to not pay a dividend in relation to FY24. In my simplistic head, that would be a very similar or indeed same criteria for the decision to reinstate a dividend in a future year should whatever those conditions are improved. So if you don't want to say what the conditions would need to look like to reinstate a dividend, maybe you could tell us what your kind of hurdle rate or conditions were that caused you or made you go down the route of electing to suspend the dividend. Thanks.

Thanks, Rob. About the first question about the offices, so we did have about nearly 2% interest rate growth and about 0.3% negative occupancy on the like for like. That's on the offices side. I will need to check the cash balances as of today. I don't have it in my mind, but I think that the overall balance is not a material. We did reduce the total balance because we repaid more than we record, but it's not a significant amount. On the dividend side, I will need to check about the loans and I will come back to you. But on the dividend side, We really was on a, let's say, deleveraging mode really until recently. We continue to want to improve our balance sheet and deliver. The main idea was so far to keep the rating at the BBB+, and remove the negative outlook. Just a few weeks ago, S&P took the decision already to take a rating action. We basically need to revalue again the situation. We have nice headrooms now that we can allow ourselves to also seek external growth. And we need to think what is the right move now for the capital location, whether it's to distribute dividends, if it's to do external growth, there are also other opportunities for the cash. So that was the reason that we decided for this time not to pay the dividend now, but we are positive that next year subject to market condition looks good. Once we have, let's say, better formula or we decide about specific conditions, we will give you an update. Thank you.

The next question comes from nine of Stephanie Dawson from Jefferies. Please go ahead.

Good morning. Maybe a follow-up on your like-for-like rental growth, please. Could you give the drivers for the group like-for-like rental growth? And in offices, what is currently the reversionary potential? Because you talked about the occupancy, which was... So the impact was down 0.3% in-place rent. But is it... What is your typical reversion or rental uplift on renewals or relating in your portfolio? And what can we expect in terms of rental growth for this year in offices? The second question, you talked about external growth. So what kind of acquisition are you currently targeting? What kind of, I mean, in what asset type and What are your financial criteria to invest? And on the opposite side, the third question would be, what could we expect in terms of disposals for this year on top of the €330 million to be closed?

Thank you. Thank you for your questions.

About the revisionary potential of the offices, I think that when we combine the market rental for our portfolio to the current rental income of the office portfolio, we have about a 15% gap. The market is higher by 15%, so this gives us additional way to go up when every tenant goes out and a tenant comes in. Plus, you can add to that our vacancy that gives an additional rental income once it's let, then it gives you more than 25% revision potential on the office's side. When you compare to the actual relating activity, even now in weaker demand environment, we managed to relate at a higher rent per square meter in comparison to the tenant that is living or to the average. When we compare just Q1 relating activities, they were about 6% higher than the former tenants. Our focus now is not on capturing the full market trend that we can. It's really just to bring in more tenants and taking the demand from the market. We'll be able to push more the interest rent once we have a big tailwind from the market and the demand comes back once the economy shows a bit more signs of recovery. On the acquisition side, we are more opportunistic on acquisition. So we didn't put any target how much we want to acquire. We built up the tax fund, the turnaround fund to enable us to acquire more without putting all the equity from our side. We are pretty much opportunistic here. We are looking for a high yield, more mismanaged properties that their buyers cannot now refinance, or if it's a fund that cannot now, it's a closed fund that comes to the end, that we really manage to buy it at attractive yields. There is no specific target of how much yield. It's really an opportunistic level. We do analyze some deals, and if they will be closed, we're clearly going to update. On the disposal side, we have the L4CEL with nearly 700 million, of which 330 were already signed, so we are going to dispose in the coming 12 months this 400 million euro. We have additional negotiations, initial ones, about additional disposals, so there is a possibility for more disposals than just the L4CEL, but this is still initial. We believe that the 700 million is the right number for the next, overall for the next 12 months. Thank you for the question.

With that, I'd like to thank all of you that participated in this call and the questions you raised before and during the call. All the best and goodbye.