Aroundtown Sa Ord

Good morning, everybody. Thank you for joining us for Around Town's Q1 2026 resource course. You can view this presentation on Around Town's website, either on the home section or under financial reports of the investor relations section. With me today are CEO Barak Barhen, CFO Jonas Kintelnot, Executive Director Frank Ruvine, Chief Capital Market Officer Timothy Wright, Chief Sustainability Officer Limor Berman, Deputy CEO Kamal Deetman Akhtala and representatives from Grand City Properties are also present. For the duration of the call, all participants will be on a listen-only mode. Following our presentation, you will have the opportunity for 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 and thank you for joining us for our Q1 2026 results presentations. We started the year strong and have proactively pursued the highly accretive transactions, which have strong impact on our earnings metrics, on an absolute as well as per share basis. Among others, these include a successful increase of our holding rate in Grand City in April and the €250 million share buyback program launched in January, which is nearly completed and further signing disposals to fuel future capital recycling. From an operational perspective, performance across the portfolio remains solid, supported by resilient fundamentals. Our living portfolio, including residential and hotels, which now account together for 53% of the portfolio, is continuing to perform very well, and we're tapping the strong internal growth potential. With offices, the demand is slowly picking up, but did not reach yet to former year's levels. The macroeconomic and geopolitical environment remains mixed, This is creating volatility and a certain level of uncertainty, especially given the conflict in the Middle East. Against this environment, we remain confident in our ability to navigate ongoing volatility as we have done so successfully in the past years since the outbreak of the COVID pandemic. Our decision in Q4 of last year and the beginning of 2026 to proactively refinance our upcoming maturities has proven to be prudent And as a result, this macro uncertainty is currently not impacting us immediately, with sufficient liquidity to cover maturities this and next year. That being said, we will continue to monitor the market for opportunities to further optimize our debt portfolio proactively. Overall, with strong operational base, improving financial guidance, and sufficient liquidity, we believe the group is well positioned as we move through 2026. On slide four, we present the key financial highlights for Q1, 2026. Net rental income amounted to 297 million euros, higher compared to Q1, 2025, primarily driven by a solid like-for-like rental growth of 3%, which more than offset the impact of net disposals. Adjusted EBITDA amounted to 250 million euros stable compared to 251 million euros recorded in Q1, 2025. FFO1 amounted to 70 million euros lower by 8% compared to 76 million euros in 2005, mainly due to higher finance expenses and in line with our guidance. The negative impact was mostly offset by operational growth and lower perpetual notes coupons from our successful transactions in Q4 last year. As a result of the accretive transaction to increase our stake in GCP, we increased our FFO1 by 35 million euros on an annual basis with 25 million euros impacting this year's FFO and we therefore increased our absolute guidance for 2026 with FFO1 to range of 275 million euros to 305 million euros. On a per share basis, the guidance remained in range of 0.24 to 0.27 euros. APRA NTA per share amounted to 8 euros, increasing 3% compared to 7.8 euros per share as of December 2025, mainly as a result of the share buyback. The share of green certified assets steadily increases, with 72% of our commercial portfolio now certified, including 80% of offices and 67% of the hotel assets. Liquidity is high and increased to 4.1 billion euros plus 1 billion euros on drawn credit lines, maintaining the White Covenant headroom. Tim, please continue.

Thanks, Barak. Slide 5 outlines the main impacts from our increased share in GCP after the share-to-share transaction, which we concluded in April. We're happy to announce a high acceptance achieved, which enabled us to increase our share in GCP from 62.5 prior to the offer to 81.5 after settlement. The transaction was FFO per share neutral on day 1, with the transaction executed at an attractive 10% FFO yield In other words, we have increased our position in one of the most attractive real estate asset types without diluting the FFO per share. Following the increased stake, we have a simplified corporate structure and balance sheet with reduced contribution to minorities, resulting in lower leakage and further supporting our FFLTV ratio. We have increased our exposure to the residential markets in Germany and London, which benefits from strong and structural fundamentals and would strengthen our FFO generation going forward. Overall, we see the results of the exchange offer as very beneficial. Slide 6 sets out our strong achievements year-to-date and how we are positioned for growth in 2021 days. We continue to extract growth potential across the portfolio. The swift and efficient execution to increase our stake in GCP was FFO-accretive and thus provided strong absolute FFO growth from day one. Furthermore, we began ramping up investment in our portfolio in recent periods, which we will continue in the coming periods as we have more untapped potential to live. Through targeted refurbishments, conversions, and expansion projects, we are unlocking embedded value and driving additional like-for-like rental growth. At the same time, we continue to actively pursue capital recycling. This strategy allows us to dispose of assets at lower yields and reinvest into opportunities at higher yields, creating meaningful accretions. As we continue to successfully sell assets while acquisition opportunities fitting our criteria remain selective, we channeled some of our disposal proceeds into a share buyback program, effectively selling assets around book value, and we purchased our shares at a significant discount to now. We executed 60% of the program already in Q1, and as of today, the program is almost fully completed. As a result, the positive impact on the FFO one per share has been faster than initially expected, but the full impact of the share buyback program is to be seen in the next periods. Regarding acquisitions, we are selectively targeting high-quality assets at attractive yields with clear upside potential, without compromising on location or quality, focusing primarily on residential and hotel properties. On the financing side, we have continued to strengthen our financial profile. Our priorities remain in extending the average debt maturity profile and proactively managing financing costs. We have already fully refinanced the perpetual notes with the first call date in 2026, and our debt issuances in Q4 of last year and the beginning of this year leave us with no more near-term refinancing needs, providing flexibility over the timing of future refinancing. Taken together, these initiatives form a disciplined framework for operational execution and capital allocation, positioning us well for 2026. Frank, please continue.

Thank you, Tim. Turning to slide 8, the portfolio continues to demonstrate a well-balanced allocation across asset classes. Hotels account for 20%, residential 33%, office 34%, logistics and retail comprise 6%, while development and investment properties make up 7%. Geographically, the portfolio remains concentrated in key metropolitan markets. Germany, the Netherlands and London together represent 89%, of the total portfolio. Berlin constitutes the largest single-city exposure at 23%, followed by London at 9%, Munich at 7%, and Frankfurt at 6%. These markets are characterized by strong underlying fundamentals and provide meaningful long-term value potential. Slide 9 highlights the continuous strength of our operational performance, reflected in solid like-for-like rental growth across the portfolio and demonstrating the resilience of our diversified asset base. Our total like-for-like rental growth was 3% across the portfolio, with strong contributions mainly from Berlin, London, Utrecht, and Frankfurt. Residential assets, which represent 33% of the portfolio, delivered a like-for-like rental growth of 3.7%, supported by strong market fundamentals and structurally low vacancy levels. In addition to the like-for-like results, The residential portfolio benefits from operational growth driven by our capital recycle activities. Hotels accounting for 20% of the portfolio achieved a like-for-like rental growth of 4%, driven by targeted investments with attractive contractual rent-up step-ups and stable operating environment that supports healthy tenant performance. New signed leases further support the diversification of our strong tenants mix. Together, our living, residential, and hotel portfolio segments comprise more than half of the overall portfolio and continue to provide a strong foundation for rental growth. In offices, which makes up 34% of our portfolio, we achieved a like-for-like rental growth of 1.5% despite ongoing muted market activity. Growth was mainly driven by indexation and rent reversion offsetting slightly higher vacancies. Its performance is supported by our gap to market rents, which enhances tenant rotation and leasing activity. During the last 12 months, we renewed 200,000 square meters of leases at an average vault of five years, a trend slightly above previous levels. We also signed 140,000 square meters of new leases at an average vault of seven years and rent level around 11% above prior rates. The portfolio is well positioned to benefit from increased demand once we see the economic situation improve, which will translate into higher office activity. Please be aware that we publish on our website on a continuous basis the information on new signing of rent agreements. In parallel, we are progressing with our convention initiatives, particularly the transformation of assets into service apartments, data centers, and residential properties. The BAU Turbo regulation further supports these efforts by enabling faster office-to-residential conversions, increasing flexibility, reducing regulatory uncertainty and hurdles, and unlocking additional FFO and value potential. Development rights and the invest portfolio account for 7% of the portfolio. Office-to-service apartment conversions are progressing well, and additional repositioning and conversion projects are underway, with rent and contribution expected to come through over the coming years. We have started the refurbishment of our hotel in Frankfurt, the former Intercontinental. We expect to complete the renovation within two years and reopen the hotel, which has been closed since 2021. We also expect to complete the refurbishment and reopen our hotel in the city center of Hannover at the end of this year. We will also complete this year the refurbishment of additional 260 rooms of our Cardo hotel in Rome, which will contribute next year to our rental income. We are working on many more hotel upgrades, which will continue driving rental growth. We expect overall like-for-like rental income growth in the range of 2-3% in 2026. Kamadip, please continue. Thank you, Frank.

On slide 10, we provide an update of the key portfolio KPIs. As of March 2026, the portfolio is valued at 25.1 billion euros and generates 1.15 billion euros of annualized recurring rental income corresponding to a rental yield of 5%. These yields are based on current contractual rents and do not reflect future agreed rent step-ups from the hotel properties. Assuming full contractual rent including the agreed rent step-ups for the newly opened hotels, the hotel portfolio yield increases to 5.8%. Also note, the office portfolio yield of 5.1% reflects the vacancy of the respective assets. Considering the properties at 100% occupancy, the yield would be 6.1%. The vault remains solid at 7.3 years, supported by a well-balanced maturity profile. EPRO vacancy stands at 7.5% compared to 7.6% in December 2025, while in-place rent remains stable at 11.7 euros per square meter. It is important to note that EPRO vacancy, in line with market standards, excludes properties under major refurbishment or development. Development rights and the investment portfolio account for 7% of the total portfolio, and include approximately 700,000 square meters of existing space with around 90% vacancy. The embedded value and rental growth potential of these assets will be realized progressively over the coming years with further details provided on the development portfolio slide in the appendix. On slide 11, we summarize our conversion strategy, which will drive revenue growth through targeted investments to convert part of the portfolio, mainly offices into asset classes, which generally generate higher rents and partially also longer leases. Most of these additional rents come on top of the like for like rental growth. Starting with service departments, there is a structural demand for flexible living solutions in central urban locations. By converting assets into fully service departments or mixed-use formats, we are able to respond to local demand dynamics while extracting higher rental income through long-term leases of up to 20 years. We have a good track record in executing these projects in recent years and a good pipeline of projects coming up. Moving to residential conversions, we are leveraging fast-track regulations to accelerate the transformation of commercial properties into high-quality residential assets. These conversions allow us to shift capital into one of the highest demand asset classes, improving long-term cash flow stability. Early and ongoing discussions with municipalities have been constructive with encouraging feedback supporting approximately 120,000 square meters of office space suitable for conversion, with an additional pipeline currently under review. Finally, data centers represent a third highly attractive conversion pathway. A large part of our portfolio is positioned in locations with strong demand for data centers, particularly in Germany. The data center conversions have a high growth potential with stronger revenue potential driven by location and grid access. Overall conversions demonstrate once more how we are actively reallocating capital, leveraging our portfolio and in-house expertise to optimize asset allocation and extracting additional value across the portfolio. On slide 12, we outlined the progress achieved on disposal so far this year. Year to date, we have signed disposals totaling circa 300 million euros and closed in Q1, 27 million euros. The closed disposals were executed at 1% above book value. The disposals were predominantly comprised of non-core properties, mainly office and residential assets, alongside selected sales of development and retail properties. From a geographic perspective, activity was mainly concentrated in non-co locations nrw life sake berlin and london in aggregate disposals were completed at a 15 premium to total cost resulting in disposal gains of circa 0.3 million euros and contributing 3 million euros to ffo2 in addition to the completed disposals we have circa 635 million euros of investment properties classified as held for sale as of the reporting date. After the reporting period, we completed additional disposals amounting to 270 million euros around book values, further supporting our capital recycling strategy. The majority of the signed and completed disposals were Penta branded hotels comprising 11 properties in Germany, Belgium and France. These hotel properties were excluded from the December 2025 portfolio and classified as held for sale. As the disposal has no impact on the portfolio's annualized rental income and our 2026 guidance. On the acquisition side, as of Q1, 2026, we signed acquisitions totaling 175 million of which 100 million euros was signed in Q4 of last year. Of the signed acquisitions, 75 million euros relates to residential assets in Germany that were completed after the reporting period. The remaining 100 million euros consists of assets located in London with around half completed in May and the balance expected to close in the third quarter of 2026. In parallel to acquisitions, a portion of disposal proceeds are being allocated to our share buyback program, which is highly accretive. As of last week, 93% of the program has been executed at an average price of 25 cents per share, representing a discount of 67% to NAV and delivering strong FFO per share accretion. On slide 13, we provide an updated overview of our hotel tenant base, reflecting the disposal activity and new leases signed. With over two decades of activity in the European hotel market, the group has built and maintained long-term relationships as a key in its business culture, which has allowed us to develop strong partnerships with a broad range of hotel operators. Center Parcs is the largest individual tenant and represents approximately 7% of total group rental income. In recent months, we have signed several new leases resulting in further strengthening of the tenant mix. In addition, following the disposal of our remaining Penta hotels, Penta is currently no longer a tenant. We view our in-house capability to operate hotels on an interim basis as a key advantage. While our strategy is focused on securing long-term leases with strong tenants, this capability allows us to replace operators with limited disruption to hotel operations and long-term value, thereby reducing the dependency risk. Further details of our hotel tenants and their backgrounds are provided later in this presentation and on our website. On slide 14, we provide an overview of the ongoing progress and growth of AT World, which contributes to expand rapidly and has now over 850 locations across 25 countries, highlighting the strong demand for flexible workspace solutions and scalability of the business model. While AD World started in our portfolio, we have developed it into a PropTech solution with revenue-generating potential, with the platform scaling through addition of third-party spaces, which now make up the majority of spaces available on the platform. AT World is strongly aligned with modern working trends, providing a wide range of working environments tailored to different needs from premium office setting to informal or meeting spaces. The flexibility combined with the variety and large number of locations makes AT World an ideal solution for business travelers as well as freelancers, startups, and remote workers. On this slide, we also highlight two examples of AT World network locations. The first is within our asset Hilton Berlin. The hotel has a large and underused lobby space. While part of the lobby was already utilized as an AT world space, the data we gathered made it clear that a more premium offering would further enhance the value. We therefore converted part of the space into a premium co-working offering operated by Mindspace Germany, one of the company's joint ventures. The offering benefits not only from its central location, but combines additional services and amenities provided by the hotel into the offering, such as larger meeting and conference rooms, as well as access to the fitness space and swimming pool. Limor, please continue on the next slide.

Turning to slide 15, we provide an update on our dream certification strategy and the strong progress across the portfolio. We continue to expand certification coverage across our commercial assets. Using the BRIM framework, we are driving higher standards, better building performance, and stronger tenant engagement. Today, certification coverage has expanded to 72% of the portfolio. We are progressively improving the scoring level to at least a very good rating. We are also proud to share an important milestone. This year, we achieved the first excellent BRIM score in our portfolio. This achievement reflects targeted measures to improve sustainability of our building in key areas, such as energy optimization, as well as measures implemented as part of the letting processes, including measures that improve the well-being of our tenants' employees. On slide 16, we present an overview of our ESG rating and awards. We are very proud to be included once again in the S&P Sustainability Yearbook. This marks our second consecutive year, while GCP has also been included this year for the first time. Out of more than 9,200 companies assessed across over 50 industries, fewer than 900 companies were selected for inclusion based on the S&P Global's Corporate Sustainability Assessment. This recognition places both companies among the industry top performers and supports our inclusion in the Dow Jones Best in Class Europe Index. Here we are included for the fourth consecutive year. In addition, Morningstar's social analytics recognize us as an ESG leader with top scores for both globally and within the real estate sector. These achievements demonstrate that our ESG strategy is creating measurable impact and positioning us among the leading performers in the industry. Jonas, please continue on the next slide.

Thanks, Limor. Moving on to slide 18, we present our financial results for the first quarter of 26. Inadventure income reached €297 million, slightly above the €295 million recorded in Q125. This increase was driven by like-for-like rental growth, partially offset by the impact of net disposals. Operating and other income, which primarily comprises recoverable expense from tenants, remained stable year over year. As we did not revalue our portfolio during Q1, the impact from property revaluation and capital gain was significantly lower compared to last year, where we recorded a positive result of €204 million. We will revalue the portfolio as part of the semi-annual report. The current period result was driven mainly by a capital gain as a result of a small volume of disposal, which was executed at a 1% premium to book value, and a 15% gain over total cost. We have a weak value of portfolio as part of the H1 results. Finance expenses amounted to €17 million in Q126, in line with €17 million in the fourth quarter of 2025. The increase compared to last year was mainly the result of refinancing measures executed in 2025, which have a full period impact in Q126. Overall, profit for the period amounted to €119 million, compared to a profit of €319 million in the first three months of 2025, with the change mainly explained by the absence of revaluations in Q1-26. On a per share basis, net profit amounted to 5 cents. Turning to slide 19, we present our adjusted EBITDA and FFO results. Adjusted EBITDA for the first three months of 2026 totaled €250 million, stable compared to the equivalent period of 2025. mainly as a result of disposal impacts offsetting internal growth. FFO1 amounts to 17 million euros, in line with our guidance. The low perpetual notes attribution resulting from the perpetual notes transactions conducted in recent period will offset the higher financing expenses. On a per-share basis, FFO1 amounts to 7 cents, stable compared to 7 cents in the current period of 25. The positive contribution from the share buyback will support the per-share FFO1 in the coming periods. FFO2, which incorporates disposal gains over total costs, was €74 million, decreasing year-over-year mainly as a result of lower disposal activity in the reporting period. On slide 21, we highlight our EFRA NAS metrics. EFRA NRV totaled €9.7 per share, increasing by 3% compared to December 25. EFRA NTA totaled €8 per share, increasing by 3% as well. All EFRA NAS metrics are positively impacted, by operational profits. On a per share basis, the NAV metrics are further supported by the share buyback, which is being executed at a steep discount in NAV. Turning on to slide 22, we present our maturity profile. Our average debt maturity stood at 3.6 years at quarter end, extending to 4.4 years when taking into account a liquidity position. We continue to maintain strong financial flexibility, supported by broad access to multiple sources of financing. This is underpinned by our solid BBB credit rate from S&P, a high level of unencumbered assets across diversified asset types and geographies, strong mortgage banking relationships as well as additional ungrown revolving credit facilities amounting to 1 billion euros, with an average maturity in the first half of 2019. Our high hedging ratio of 95% further limits potential negative impacts from market volatility, and our cost of debts is stable at 2.3%. The maturity profile shown on the slide shows a further breakdown of the debt maturities, providing a clearer picture of what part of the maturities are attributable to GCP. On slide 23, we provide an overview of our key debt metrics and our solid financial profile. Our loan-to-value stood at 42%, slightly up compared to 41% at the end of 25. Our ICR stood at 3.4 times, and net debt to A-star stood at 11 times in Q126, both negatively impacted by the higher financing expenses. Additionally, we continue to maintain a substantial pool of unencumbered investment properties amounting to 17 billion euros, representing approximately 69% of rental income. On slide 24, we present key details on the recent Perpetual Note transactions. Following GCP's Perpetual Note issuance and tender offer conducted after Q126, in addition to Roundhouse Perpetual Notes issuance in January of this year, all Perpetual Note refinancing needs have been fully addressed. As a result, the next first perpetual note call date for roundhouse in 29 and for TCP in 2031. As a result of the transactions conducted this year and at the end of last year, perpetual note scoop on payments has stabilized and will be below 2025 levels. To conclude, on slide 26, we present our adjusted guidance for 2026. We now guide on FFO1 in the range of 275 to 305 million euros and FFO1 per share in the range of 24 to 27 cents. Following the increased toll in GCP, as is the share buyback, which adds to the existing positive drivers such as expected gradual rental growth and the positive impact from perpetual small transactions, we are unlocking FFO support of growth measures both in absolute and per share level. On the other hand, we also expect more volatile environment which could result in higher for refinancing costs which have a potential offsetting impact on the positive drivers.

This concludes our presentation. As always, you can find survey 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 an update on your disposal progress after the reporting period?

Year to date, including after the reporting date, we have signed disposals amounting to circa 300 million euros, representing around half of our properties held for sale. After the reporting period, we completed disposals in the amount of circa 270 million euros, primarily consisting of the company's Penta-branded hotels, which includes 11 hotels in Germany, Belgium, and France. These hotel properties were previously classified as held for sale and were excluded from FFO1 guidance. Therefore, there is no negative impact here.

Thank you, company. How complex are office-to-residential and service apartment conversions in terms of permitting, and how much space are you currently converting with what kind of rent upside?

Office to service department conversions typically follow a relatively straightforward execution path. In most cases, these projects remain within the existing zoning framework and can be implemented with a standard building permit, which is usually obtained within a few months and up to a year. We currently have several projects under execution alongside additional projects in the planning phase. To date, we have completed several conversion projects across the portfolio, including the recently completed project in Rotterdam. These conversion investments are yielding very well, diversify the demand structure of the property, and we don't have any operational efforts as these are led to an external operator on a long-term basis of up to 20 years. As we will continue identifying more projects, the share of our living portfolio, which already makes up the majority of our portfolio, will increase while the share of our office portfolio will reduce. Demand for apartments, including service apartments, remains very strong and we are working with a broad range of hospitality and living operators as shown in our presentation. These projects typically achieve higher rents than traditional office use supported by longer lease terms of 15 to 20 years, which enhances income visibility and stability as office leases are generally shorter. We are in active discussions with multiple operators who are looking to expand and value around town as a long-term partner with a large and diversified portfolio. And we will provide further updates as new projects are added to the pipeline. All planned projects currently presented in the appendix of our presentation are expected to generate additional 15 million euros of annual rental income corresponding to an attractive yield of around 15% on invested capital. We see these conversions as a compelling way to unlock value from our existing office portfolio while responding to structured demand in the living and hospitality segments.

Thank you, Kamalini. Do you have an update regarding the impact of the VAL approval regulation on your office conversion strategy?

VAL approval regulation is a positive development of our conversion strategy as it streamlines change of use processes and significantly shortens approval timelines. This makes conversions from commercial to residential users more practical and broadens the range of economically viable projects. We have already initiated discussions with municipalities across several locations in Germany and have received encouraging feedback for around 120,000 square meters of office space. Based on this feedback, we're currently working through the detailed business cases to assess the economic viability of individual projects, as the new subsidy program for such conversions have been published. Beyond our own portfolio, we also expect the Baotou framework to have a broader market impact, by structurally reducing office supply through conversion to residential, hospitality or other alternative uses, which should be supportive for the overall office target overall.

Thank you, Mark. How are you approaching your development portfolio and what role does it play in future value creation?

Development projects account for approximately 7% of our portfolio and represent an important source of future rental growth and value creation. These projects capture embedded development potential across both land plots and mainly existing buildings. We view these assets as growth opportunities that can be unlocked through disposals, refurbishments, conversions, and in selected cases, new construction. Each development asset is assessed individually, and we actively explore the most attractive and capital-efficient way to unlock its potential. Depending on the project, this may involve preparing a planning concept, securing permits, and subsequently disposing of the asset with approved rights, or fully executing the CAPEX program, typically supported by a pre-let agreement. A key focus area is conversions into residential, benefiting from the Baotuba framework, as well as commercial living and hospitality concepts. The development portfolio comprises around 700,000 square meters of existing space, of which approximately 90% is currently vacant. Geographically and by use, the portfolio is well diversified. Our efforts are primarily concentrated on the living segment, including residential, hospitality, and mixed-use schemes, where we see the strong structural demand and long-term fundamentals. Value creation is realized through a combination of targeted disposals where development rights are crystallized and selective execution where we reposition assets through upgrade and disciplined capex deployment. This approach allows us to optimize returns while maintaining a clear focus on capital efficiency across the wider portfolio. In-house development team is continuously refining the optimal business plan for each asset, working closely with the local authorities, construction partners, and, where relevant, assessing available subsidy schemes. An overview of the selected development project is included in the appendix of our presentation, with additional assets available on our website.

Thank you, Barak. Given the continued discount to now, do you intend to increase the size of the share buyback program?

The share buyback is an integral part of our capital recycling strategy, allowing us to deploy disposal proceeds in a highly accretive manner. To date, we have completed approximately 93% of the program at an average price of €2.55 per share, which represents a discount of around 67% to NAS, and delivers meaningful FSO and NAS per share accretion. We expect the current program to be fully completed shortly. We view share buybacks as part of our capital recycling and holistically review all our options on an ongoing basis. At this stage, we believe that the buyback program, together with the proposed dividend, is a good balance between capital returns, balance sheet strength and financial flexibility. We are monitoring the current macro-member line trend, which will influence our decision if and when to extend it.

Thank you, Jonas. How do you view your new stake in GCP? Do you plan to increase your stake further?

When we launched the share exchange offer, we set a limit of ownership of up to 89.5% of the total of GCP shares. However, please note that we do not have set an ownership goal. We are very happy with the high acceptance of the offer and the results of the exchange. We continue to have the option to acquire additional GCP shares in the market, which we will use on an opportunistic basis, as GCP's FFO yield is highly attractive and is one of the possible growth rises in our pool, evaluating the benefits of each option on an ongoing basis to ensure an accretive deployment of our capital.

Thank you. Could you provide some details on your updated guidance What are the main drivers of the increase?

The main driver of our increased absolute guidance was the increased stake in GCP from 62 to 82%, which was an accretive transaction and is expected to add around 35 million euros of any live FFO1. As a result, we raised our 2026 FFO1 guidance to 275 to 305 million euros, reflecting the periodic impact where the per share guidance remains unchanged at 24 to 27 cents. as the transaction is therefore one new tool from day one. While the increased FAC and GCP supported the FSO growth on an absolute basis, the share buyback supports growth on a per share basis.

Thank you, Jonas. 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.

We will now begin the question and answer session. The first question comes from the line of Alice Acklin from First Berlin. Please go ahead.

Yes, good morning everyone. Thank you for the detailed presentation as always. I've got a question I believe best directed at Tam pertaining AT World. It looks like that is, rapidly moving from pilot phase into a broader rollout. And I was wondering if you could maybe give us a sense of the economics that is now emerging from those platforms at this time, maybe in terms of like revenue per location, membership growth, or tenant retention, just any sort of KPIs that sort of give us an indication of what's emerging from that standpoint. Thank you.

Thank you very much for the question. Now, it's progressing really well. I mean, you see that the platform is growing and there's more and more third-party spaces onboarding and really we keep up that pace also. We're still in the startup phase, meaning we're really building up the platform and really the value of the platform itself. And with that... The next step is clearly driving more memberships. So we have a few hundreds of memberships, but nothing too material to brag about it yet. So we're moving really from the startup phase into the scale of phase and working really hard. And we see the potential there. We definitely get also the feedback of the value that the membership's seeing when they're using it. So we believe there's a potential and we want to tap it. So let's hope in the next few quarters we can answer the question again.

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The next question comes from the line of from Bernstein. Please go ahead.

Good morning. Thank you for the update after taking my questions. I have a question related to acquisitions. I see most of the recent deals that have been signed have been in the residential space. I just wanted to check an update on the pipeline of potential deals you're currently tracking, maybe by location, but also the asset types you're seeing as most attractive to your portfolio. and also whether you're seeing more opportunities coming to the market in the current environment. Thank you.

Thanks, Marius, for the question. Now, it's promising to see that we see some acquisition opportunities, but clearly they remain selective, but more selective because we are very strict in our criteria what we want to buy. So the acquisitions were resis, clearly GCP, when they announced they gave some more input on those. But very good resi assets standing as well as developments in Germany as well as in London. So really fits the capital recycling strategy of selling lower yielding and buying high yielding. But again, the opportunities remain selective in terms of what we would like to buy. We're looking mainly at residential and hotel, and we are very active in general. We're looking at a lot of deals. It doesn't necessarily mean we want to take those deals. So we have an active pipeline, but I would not call it here advanced or anything like this. Obviously, you saw that we launched a share buyback program, and that's exactly the reason why we launched it, because the acquisition opportunities were not as favorable as the share buyback program. So that's why we basically refrained from this opportunity and took the share buyback instead. Now going forward, we still believe there will be more opportunities coming up. There's opportunities hopefully from mismanaged situation, distressed financial situation. And we're ready. We're here. You know, we launched the TAG Fund, which gives us a leverage-light opportunity to grow. But currently, we believe that we will probably pull the disposal proceeds into other accretive growth measures, for example, the conversions, as we also mentioned, which are yielding very well currently.

And maybe just to add to that, I mean, overall, we're looking to balance between the share buyback as well as, you know, very quick acquisition opportunities with the But at the same time, of course, making sure that our leverage stays conservative.

Next question.

Next question comes from the line of Stefan Schaaf from SRCA Research. Please go ahead.

Good morning, gentlemen. I have a very general question about the sluggish German office market. What's your view here? What could be for the second quarter and also for the second half of the year in terms of investment activities of possible investors, also from abroad, and also in terms of tenant demand for office space? You know, the economy in Germany is still sluggish and has more or less a zero growth.

Hi Stefan, thank you for the question. Yes, we agree with you. The market is not there. It didn't recover full, but in general we start to see signs of positive dynamics. They're coming from a pickup demand and also on the back of low supply in the market. We also clearly see, and we're one of the players in the market doing the same, taking office space out of the market. So, low construction, reduced office space, and we believe that we will see, hopefully, better performance. But right now, it's okay. It's kind of stable. You see we have positive like-for-like performance, which is not as strong as the other asset types, but we're happy with the results, and we're working hard for it, obviously.

We now have a question from the line of Stephanie Dossmann from Jefferies. Please go ahead.

Hello, everyone. Actually, I would have three questions, please. The first one is regarding your APRA LTV, which is still up. And I was wondering if you could give a kind of detailed figure about the difference impact to reconcile the increase. I mean, even after the share increase in Grand City, which has a lower LTV. So I just would like to reconcile a bit the difference impact in the increase of the IPRA LTV to 59%. The second question would be about your GVs and the impact on the SFO1. Could you give the detailed figures of global worth contribution in Q126 compared to Q125? And the last one regarding, again, the investment market. The market is currently challenging in the current context on it. And we start to see yield expansion, actually, in market data. So I was wondering what was your expectation in terms of like-for-like value change for 26 in your segment, so in offices, hotels, and lessees, please?

Hi. Thanks, Stephanie, for your questions. First of all, just talking about the FRA TV. Yes, correct. The connection with Grand City, there is a positive impact. On the other hand, clearly aware of the share buyback we launched earlier this year of $250 million. $150 million of that was already spent if we had a negative impact. Those are, I think, the main factors in terms of FRA TV, how we got to the 59%.

Please also note that we didn't have any revaluations in 2021. We didn't value the portfolio. So you'll see that for H1. Regarding the FF01 and the JVs, so yes, global worth, the impact decreased a little bit because global worth is paying low dividends. I'm happy to go through more details later on. Thanks, Stephanie. Regarding the investment markets, value changes, so yeah, look, we continue to sell. We're selling well and we're selling on book value. Yes, we're selling a mix of asset types. We sold the mostly this year hotels and developments, but you saw last year the majority, or not the majority, but a big chunk, a really big chunk was offices. We also still see in basically all asset classes we see demand. Our size and our diversity clearly plays in hand here to find suitable buyers that match with our assets. Value change in general we'll have to see. We will come out again in H1 with our valuations. We see that valuations continue performing as before, meaning operational growth is supporting valuation growth. Now clearly the recent volatility in the market will probably have an impact. It will all depend clearly if it's a short-term impact or a long-term impact, but let's say we see less of a growth materializing into the value, but again, valuations performing in the same direction as they did before.

And maybe just to follow up on your second question, in terms of contribution JVs and SSO, the contribution year was about 10 million. In previous comparable years, it was 12 million, so slightly lower. And I think also if you're looking at the end of this whole year in terms of expectation, I think we're looking at 10 million per quarter. I think it's a decent assumption also for the rest of the year and the run rate. Thank you.

Also, I wanted to add on the LTV question before, clearly, The disposals which were closed in Q1 was a relatively low amount compared to actually the big amount that we closed in Q2. So clearly if you factor this in, there will be another around a percent decrease only from that disposal impact. Okay, it seems that there are no further questions. Thank you very much every time for joining and available questions. Always happy for that and we'll see each other very soon clearly for a lot of more upcoming conferences prior to the summer break, but you can as always reach us through email.

Thank you.