Eurocommercial Pptys N V

Good morning, everybody. My name is Luca Lucaroni, Investor Relations Director. I'm happy to be on this call with Evert-Jan Van Garderen, our CEO, and Roberto Fraticelli, our CFO, to present your commercial results for the year 2024. The agenda for this conference call is presented on this slide. Evert-Jan Van Garderen will talk about the operational results of the company, followed by Roberto Fraticelli, who will discuss in more detail the financial results. Eberkian will finish the presentation with some closing remarks. We will then open the call for any questions and comments you may have.

Thank you, Luca, for introducing us and presenting the agenda for today. Good morning, everyone, and thank you for joining us this morning. I will start with an overview of the operations of your commercial during the financial year 2024, and we'll finish this presentation with some remarks on the Share Buy Back program, the dividend proposal, and the guidance for 2025. 2024 was a year of internal growth, which we achieved through the re-merchandising of several of our shopping centres, including our flagships Volue Shopping in Belgium and Carosello in Italy. The current 3.9 billion retail property portfolio comprises 24 shopping centres and provides diversification in terms of geography, size and type. Our four countries, Italy, France, Sweden and Belgium, are shown here weighted by value. As a consequence of the external valuations at 31st December 2024, the portfolio spread changed slightly compared to December 23. Italy went up from 44% to 45%, Belgium and France remains the same at 14 and 21% respectively. Whereas Sweden reduced from 21 to 20%. In addition to providing a good country diversification, our shopping centers are well spread in those four countries and are all located in wealthy regions, like for example, Northern Italy or close to the Swiss border near Geneva, or in the wealthy catchment of all the way shopping in Brussels. This slide provides the maps of the four countries showing where our 24 shopping centers are located. Italy remains our largest market at 45% of the portfolio, a weighting that we're happy to maintain, as all the positive economic and retail indicators that initially attracted us to the Italian market remain, namely extremely high wealth levels in Northern Italy, and in particularly in Lombardy, where our three Italian flagships And Cremonapo and Kuno are located. Very low online penetration, which has only just reached 10%. Low levels of household debt. And more importantly, very low shopping center density and therefore competition. Partly because shopping center development started relatively late in Italy from the early 90s, meaning that even today retail densities in our Italian catchments are half of the French ones. The existing portfolio also provides asset diversification with its five flagship shopping centers balanced by the remaining 19 suburban hypermarket anchored shopping centers. The five flagships are located in their respective countries' capital or main economic cities and are important shopping centers in a national context and retail hierarchy. These flagships attract a broad international talent base and have a higher discretionary spend component. particularly fashion. By contrast, our 19 suburban hypermarket anchored shopping centers have different and more defensive characteristics with over 60% of the floor space devoted to a broad range of essential and everyday retail, including groceries. Most were strategically cited and originally developed by the hypermarket themselves in the wealthy catchments of important provincial towns and cities. And these types of shopping centers provide a broad mix of both national and regional tenants and an increasing range of services for their more local communities. The company showed a strong operational performance in 2024. On the slide, you see an overview of the important operational metrics for the year, which underpin that statement. I will comment in more detail on each of these metrics in the remainder of this presentation. Like-for-like rental growth was 3.5%, well above our 10-year average of 2.8%. The growth was driven by indexation and turnover rent, although the indexation was lower than in 2023 due to much lower inflation. The rental growth was obviously the driver behind the 5.9% net property income uplift. We are pleased to be able to report that on 275 renewals and re-lettings, an average rental uplift of 4.5% was achieved. And that is on top of indexation. These lease transactions represent 18% of the minimum guaranteed rent of the portfolio. We were able to attract new tenants with our 104 re-lettings, achieving a much higher uplift of 9.1% and confirming the continuing strong demand from retailers to open new stores in our centers. The highest uplifts were achieved in Belgium and Italy. Over the last 12 months, the Italian leasing team signed 92 new deals, resulting in an overall rental uplift of 7.9%. 47 of these transactions were new lettings, producing an overall increase in rent of 14.1%, with the highest uplift achieved in Colostrada, 22%. In Belgium, at Waterway Shopping, the leasing team successfully concluded 24 lease renewals and re-lettings, resulting in an overall rental uplift of 6.6%, including 13 new lettings producing an increase of 16.6%. These figures demonstrate that our prime portfolio continues to be well positioned for leasing retail space to an expanding tenant base under sustainable conditions at affordable rent levels, while active tenant rotation and the regular introducing of new concepts ensures that our shopping centers remain attractive and relevant for their customers. Low vacancy is usually a good indicator of the quality of the properties. Over the last four years, we have reported vacancy rates in our property portfolio ranging between 1.3% to 1.8%, with an average of 1.6%. Last year, the APRA vacancy rate reduced steadily down to 1.4% by the end of December. The company has always been known for its low occupancy cost ratios, and we are therefore pleased to report a 9.8% occupancy cost ratio for our portfolio as per the end of December 24. This percentage is still one of the lowest in the industry and implies that the rents are affordable and sustainable. as was also confirmed by the full rent collection figures that we have again reported. The service charges and property taxes have remained stable over the last three years, whereas the rent increased, resulting in a slightly higher OCR than three years ago. Last year, retail sales in our shopping centers increased by 2.7% compared to 2023, with all four markets producing positive growth. Belgium performed particularly well as a result of the re-merchandising at Walloway, a process we internally refer to as the musical chairs. If we look at the various sectors, we see that most sectors performed well last year with some clear winners, which were health and beauty, sport, books and toys, food and beverage, and services. This slide illustrates the fastest growing sectors in our malls over the last three years. i.e. since the pandemic. The growth in terms of retail sales, which were health and beauty, food and beverage, and sport and lifestyle, with growth of 13, 19, and 11% per annum respectively. The growth in the health and beauty sector was driven by a number of international brands expanding across our markets. Rituals have opened three more stores in our shopping centers, bringing their total number in our portfolio to 13. with Giordalizzo joining this autumn. The French fragrance designer Adopt opened in Passage du Havre and Les Atlantes. Wiken Cosmetics opened three additional stores in our Italian portfolio, taking the number to seven. The sector is also seeing the expansion of specialist beauty centers, such as Medimarket, who are substantially increasing their footprint and unit size to provide a range of in-store treatments in addition to their normal product range. Many markets have recently taken an enlarged unit in Wallyway and opened in Cremona Po. The food and beverage sector is continuing its rapid expansion with a range of new brands, concepts, and formats. To satisfy this increased demand from both customers and operators, we have recently completed several F&B projects in our markets, repositioning food and beverage as a central pillar of attraction, increasing both footfall and dwell time. The sport and lifestyle sector also continues its rapid growth with the increasing popularity of branded sport and leisure fashion. Many of these brands are increasingly operating cross-border, with JD Sports being particularly prominent, with whom we already have six stores covering France and Italy. Increasing demand for sneakers and training shoes has seen the expansion of specialist footwear retailers such as Courir, Foot Locker, Snipes, and Sketchers. This slide illustrates the fastest growing brands in our shopping centers over the last five years in terms of floor space. I just mentioned JD Sports, but on this slide, I would also particularly mention Normal, the expanding Danish value retailer, who is present in all our seven Swedish shopping centers and are also performing well in France, in both Passage du Havre and now in Modul, in the suburbs north of Paris. Fashion continues to be the cornerstone of our galleries, representing 37% in terms of mall floor space. However, the big change in this sector is that it now comprises fewer, but much larger stores. This is most evident with Inditex, who recently doubled and even tripled their store size at Voluwe and Carosello in order to showcase the latest full Zyra concept. All the Inditex brands are expanding their representation and we're currently having 26 of their stores, mainly in Italy and Belgium. This slide shows the concentration of floor space of the largest fashion groups in our portfolio who are demanding bigger stores in dominant shopping centers while vacating smaller stores in secondary retail locations. 47% of our fashion floor space is led to our five largest fashion retailers, as illustrated on this slide. With our ongoing re-merchandising projects, we can provide them with the right retail space in terms of size, layout and design. And I will show you two outstanding examples, which are Carozello near Milan and Wolio Shopping in Brussels. At Carozello, Media World relocated into the former COIN department store. thereby creating the retail space and opportunity for a major re-merchandising, including a new full-format Zara store of around 4,600 square meters, a new Bershka, and an enlarged Stradivarius. These Inditex stores were all completed and fully open for trading in early October 24, and collectively became their flagship representation, serving the eastern region of Milan. As part of the re-merchandising, H&M have relocated and established their latest concept in the former Zara unit next to the main entrance. During 2024, important re-merchandising improvements were completed at Walloway Shopping, with the successful spring opening of the new and large Zara store, 3,300 square meters, Carrefour Market, who replaced the Met supermarket in May, focusing on fresh and quality products to better serve the essential and everyday needs of Voluway's wealthy catchment. This was followed in June by the opening of the latest C&A concept store, and meanwhile Inno completed the refurbishment of their 12,000 square meters department store during the autumn, when the MediMarket Parapharmacy also relocated into a larger store of 675 square meters to provide a wider range of products where most recently Massimo Dutti relocated to a larger unit for its latest concept. Bolliwe and Carosello are examples of creating internal organic growth through delivering major re-merchandising projects to enhance the performance of our shopping centres, thereby growing the company's business while preserving the dominant position of its assets over the medium and long term. The impact of these re-merchandising projects is already visible. In the fourth quarter of 2024, Carosello's overall turnover was up by 18.1%, and the footfall numbers were up 5.7%. Furthermore, Carosello became even more dominant as Zara closed stores in competing centers, and the Inditex Group increased its presence in Carosello with a full-format Zara, an enlarged Stradivarius store, and a new Baerska. In the fourth quarter, Voliway also saw a significant increase of 6.1% in retail sales and a footfall increase of 18.7%. The re-merchandising has increased tenant demand, resulting in 100% occupancy and year-end valuation uplift of 3.3%. In Sweden, at Grand Samarkand, Växjö, the development of a new external retail store for the expanding value retailer Ekohallen is almost finished. The 8,200 square meters unit has been led on a 10-year lease and is scheduled to open at the end of this month. The development will provide a return of at least 8% on cost, which is a total amount of 130 million Swedish kronor. In the past, we developed a similar store for Ekohallen at Norsköping, illustrated in the picture at the bottom left of this slide, And we sold that investment at a yield of 6%. Our property portfolio has strong fundamentals to generate internal growth as we achieved with the re-merchandising strategy executed at Walloway and Carozello. To summarise, what are these strong fundamentals? It's the retailer's flight to quality, no supply of new retail space and strong demographics. Point one. Retailers are prioritizing fewer, but larger and fit for purpose stores. In order to create a unique customer experience, brands are increasingly offering new products and services, which can be easily accommodated in shopping centers in dominant commercial areas. Most retailers have an omni-channel approach and need physical stores to be successful. E-commerce is no longer a threat, but an opportunity. with consumers shifting towards experience driven retail, where physical stores play a crucial role in brand engagement. With our portfolio, we can serve this demand from retailers. Number two, while new large scale developments face restrictions in many countries and building permits are harder to obtain, this creates a competitive advantage for us. The limited new supply means that our existing high quality assets become even more valuable. reinforcing our dominant market position in our catchments. Point three, beyond financial considerations, demographics play a pivotal role in our success. Our presence in densely populated areas with above average purchasing power and low unemployment rates ensures a strong customer base with consistent demand for quality retail spaces. It is very clear that our strategy of creating internal growth through re-merchandising is already showing positive results. We intend to repeat this strategy over the next two years in Italy, at IGLI, Colostrada and Cremona Po, where we have opportunities to deliver growth from similar re-merchandising projects, but also in Ingolstadt in Sweden. In addition to those four shopping centres, we continue to identify similar opportunities at other assets in France, Italy, and Sweden. Before I hand over to Roberto for discussing the financial results, I would like to say a few words about some of the ESG activities listed on this slide. We finalized the double materiality assessment to identify key ESG topics and to evaluate your commercial's impact on the environment and society. We have identified six material topics on which we intend to report in the future. Three items concern environmental topics, two items concern social topics, and one item concerns a governance topic. However, the very recently published so-called omnibus proposal of the European Commission, if endorsed by the European Council and the European Parliament, will on the basis of currently available information imply that your commercial is no longer in scope for the corporate sustainability reporting directive, the CSRD. We are monitoring the further developments to understand what will be applicable for the company. Meanwhile, we will continue with all our planned ESG activities. The recertification of our assets under the new BREEAM in use protocol version six is progressing well and the certificates we received are either excellent or very good scores. We continue to make further progress with our sustainable finance goals, having added green and sustainability linked loans for financing Belgian, Italian and Swedish shopping centers during 2024, which loans Roberto will cover in more detail as part of the financial review. This slide provides the major ESG achievements reported over 2024, but also an update on the percentage of green leases out of the total leases per country and the electrical vehicle charges in our shopping centers, as well as the gas removal we are achieving. Much more detail regarding our ESG activities for each of our countries can be found in the comprehensive country commentary sections of our press release. This is the moment to hand over to Roberto, who will discuss in more detail the valuation of our property portfolio, the funding, and the financial results.

Thank you, Rekia, and welcome, everybody. We'll just have a quick look. The first slide is the financial performance in 2024. In this slide, we are giving you the overview of the most important financial metrics, and that's really important, and then we're going to look at them more in detail in the coming slides. As you see, as already said, property investments went up to 3.9 million. That's a plus 3.1%, which is very, very important. The loan-to-value ratio went down from 42.5%. It went down to 41.3%. That's also thanks to the fact that the debt actually remains stable to the 1.6 billion. So that's very important. That also, of course, caused an increase in the upper NTA per share, which went up 5.6% to 41.79 euros. If we then move to the property income and the profit and loss, we see that the net property income went up 5.9%. That's a strong increase, up to 197 million euros. That's mainly due to two things. One is, of course, these very good results of our property. And on the other hand, we also managed to do some savings in the cost. So we hope we appreciate that. And that leads, of course, to direct investment results of 2.39%. There, it's important to consider that the interest expenses were capped thanks to the 80% interest rate hedging level, which shielded us from the strong increase in the URIBOR this year. And then that allows us to propose a dividend of 1.80, which is also an important increase of almost 6% compared to last year. In the key financial metrics, you see the most important one. So the average cost of debt, as we said, stays stable, actually diminished a little tiny bit, but that's very important. The interest coverage, it went down from 3.7 to 3.5. That's due to increase, the 5 million euros increase in interest expenses. But you saw also the improvement in the net debt to EBITDA, which went from 8.9 to 8.5. We also showed the APRA LTV, 42.8. Of course, we believe our LTV ratio is much more relevant. But you also showed the average loan maturity from 2.7, it went up to 3.3. That's also thanks to the loan renewals that we did during this year, which we'll discuss further in the presentation. And also we were busy with hedging. So the average interest rate hedging maturity went up from 5.3 years to almost six years. If we then go to valuations, then what we see, it's really interesting because, you know, the valuations can depend on several factors. One of them is the net initial yield. And we see that the net initial yield is actually stable because it was 5.8 last year, and this year it's only 5.7, so a minimal change. So that means that the value is actually value which has been created in the properties, and that's due to an increase in the NGRs and the ERVs. So that's very important. I think we owe a big thanks to our property and leasing teams who have been working flat out to achieve these results. But it also tells us that if yields remain more or less stable, then for the future, we can also see that the possible increases in MGRs and ERV can have a possible important results on the valuation also for 2025. We look also at valuation split, which is something that we usually do. You see five dominant flagships. the yield actually stayed the same at 5.4, and there was a small improvement from 6.2 to 5.9 for hypermarket anchored shopping centers. But the value has increased for both, and that's extremely important. Now to a slide which we are particularly proud of. Luca, Jacopo, Tom, Emilie, they all contributed to this effort, and we thought it was also nice, as Erika mentioned before, to put some green color even there. because indeed the renewals of the loans that we did were actually green. It's either green and sustainability-linked, green loans, sustainability-linked loans. And there are three loans which are not green, but they're easy to explain. Let's say the last two, the small ones, we just extended their duration by one, one and a half, two years so that they could match the extension of the larger brothers which were expiring later. which we'll see on Fiordaliso and Iginio. And the other one is the 550 million corona in Valbo. We are finalizing the papers so that we can also, in discussion with the bank, also qualify that as a gridlock. So give us some more time on this. Then our usual financial summary, the 31st of December, 2024. What's important to see is, of course, total net borrowing stayed there at 1.6 billion. The average term of the edged increase from 5.3 to 5.9 and the overall interest stayed at 3.2. What we decided to do this year was also to give you a split of the loans which are expiring in 2026 and 2027, just to give you the overview. What you see, the main loans which are expiring in 2026 are on the three flagships, which is Italian flagships, sorry, which is Fiordaliso, Carosella and Igigli. And there is also an amount on C4, a Swedish asset. C4, we have already started discussions with the bank. We are optimistic about these discussions. In Italy, Luca and the team have already started those negotiations. Actually, on one of these loans, we are pretty advanced. So we hope we can finalize it by the end of H1. But we are very hopeful with these negotiations. If we look already at 2027, what you see is that Cournot is expiring. We're also very positive. We have a strong relationship with INGs, which is financing the asset, and also a very strong relationship with Nordea, which is financing the portfolio in Sweden, which expires in 2027. Lenders shares, as usual, 34% in the Netherlands, strong Italy and Germany with 25% and 22%. Now we've got Sweden at 13% and France at 6%. Then if we go to the interest hedging, also we need to thank Luca and the entire team in Amsterdam. As you see, the top gives to the past, the bottom gives you expectations and future so what you see is actually the hedging and being stable at 80 percent or slightly above or slightly below that helped us keep the um the interest expenses stable as we said and we also put for a comparison uh also the curve of the year rebar so that you can actually see the movements in your report during these years Bottom, you see the hedging ratio. As we said, our policy is to have the 80% of our loans, net loans, hedged. And that's also the case for the foreseeable future. So all in all, we think a very stable financial picture for you to take into consideration. If we then go to the financial position, and that's the Natterer team doing this fantastic job, we what we usually put here for you is the financial position on the right hand side with the frs figures so you see the increase in property investments you see the stable net borrowings and you see also the increase in the nta and of course per share the increase in both in no three items actually net asset value adjusted net asset value and mpr nta if we then go down to our bridge you see if we start from the 39.59 which we had the december 23 we add the investment results we add the direct investment result then we take out the dividend distribution then as you can see the share buyback equalized the stock dividend and that we that we had and then of course for forever then we have to adjust for the deferred taxes and the uh financial instruments And then we have the other is mainly exchange rates, the Euro SEC impact that we have in our accounts. And that gets us to a final NTA of 41.79, which you see. Then we go down to the income statement. There as well, as for the figures on the left-hand side, you see the rental income going up from the 215 to 219. So a nice increase of 4.4. Net income increased by 9.9 million. Direct investment result increased by 3.9%. And of course, there is the limited impact of the interest expenses, which is thanks to the 80% interest hedging that we have put in place. Then we're almost there. Direct investment results here also breached. Just to give you the overview of the impact on your direct investment results, you see we added 7.3 million euros of rental income. Then we have an amortization of lease incentives. As Evert-Jan has told us, we have a lot of re-merchandising that was done in our shopping centre, so that's really important. We also had a positive result for bad debts. We actually managed to collect some of the debt that we had already lost hope for. And so there are some one off here. Net service charges is also positive. So that means we managed to collect some more service charges than we used to. So the net result is actually more positive for the company for 3 million euros. Here you see the impact of the interest expenses, the 5.3 million euros. And then IT expenses, as you know, we are busy with that digitalization program. So we got some very nice investment, which Thijs has been making with his team to move us forward in this digitalization path. And then we had a one-off in Sweden for corporate income tax, which is also helpful. And now there is just a little mix of everything. And that gets us to the 127.9 of your direct investment results for 2024. And last but not least, we tried to give you also the picture to take into account the EBITDA. As you see, rental income, property expenses, net service charges, company expenses, other income and expenses. And that gives you to an EBITDA of 190 compared to an EBITDA of 181. So that's plus 5% compared to last year. And that, of course, then you see the impact on the recording earnings. And on this positive note, I would hand back over to Jan.

Thank you, Roberto, for presenting all the figures. I also would like to say a few words about the Share Buy Back program, which your commercial executed in the summer of 2024. as it is related to our dividend policy and in particular to the option to elect for shares instead of a cash dividend. The objective of the buyback program was to avoid dilution as a result of offering stock dividend to shareholders in 2024. We announced the start of a buyback program of our shares for a maximum amount of 15 million. The program started on 30 June and ceased on 30 September. as the maximum amount of 50 million was spent to buy back the company's shares. The total number of shares bought back was 640,000, representing 1.2% of the issued share capital of the company. In the press release, we included the dividend proposal, which will be tabled at the general meeting scheduled for Tuesday, the 3rd of June 2025, for approval by the shareholders. On balance, we are optimistic about 2025 and therefore propose to increase the total dividend per share from €1.70 paid in 2024 to a total dividend per share to be paid in 2025 amounting to €1.80. This is an increase of 5.9% and translates into a 75% payout ratio, which is our payout ratio target. This proposal implies a final cash dividend of €1.12 per share. We will also offer shareholders the option to elect for a dividend in shares instead of the cash dividend of €1.12. As these shares will be charged to the fiscal share premium reserve, there is no Dutch dividend withholding tax due, which may be attractive for those shareholders who cannot obtain a reduction or a credit for the 15% Dutch dividend withholding tax. The take-up of stock dividend last year and in January 2025 confirmed that around 20% of our shareholders appreciate this option. The ex-dividend date will be Thursday the 5th of June 2025 and the dividend distribution date will be Thursday the 3rd of July 2025. The outlook for 2025, albeit solid for our shopping centers, remains linked to the evolution of the macro environment and also the geopolitical tensions. On the income side, 2025 indexation in our markets will have a positive impact on rental growth, which we expect to be further improved by our renewal and relating program and higher turnover rents, notwithstanding some temporary vacancy during the re-merchandising projects. As said before, we're on balance optimistic about 2025, and therefore, assuming no major deterioration of the macroeconomic environment, we expect the direct investment result for the year 2025 to be between €2.40 and €2.45 per share. And I would like to conclude this presentation with the statement that as management board, we're truly thankful to all our teams in the various countries for their hard work and their continuing commitment to Eurocommercial. And I will now hand over to the operator for questions.

Thank you very much. Ladies and gentlemen, as a reminder, if you would like to ask a question or contribute on today's call, please press star 1 now on your telephone keypad. And to redraw your question, please press star 2. Also, ensure your line remains unmuted locally. You will be advised when to ask your question. The first question comes from the line of Valerie Jacob calling from Bernstein. Please go ahead.

Hello, good morning, everyone. I've got a quick question. The first one is a bit broad, but I just wanted to understand how we should think about your commercial in terms of capital allocation in the next two years. So if you can Talk about maybe, you know, the capex that you plan to spend on development projects. If you can talk about share buyback, do you think you're going to do a new one with a dividend? And also opportunities you see in terms of disposals and acquisition. That's my first question. My second question is about your values that have been quite strong, especially in Italy. I think that's similar to some of your peers. And maybe if you can give us some color on the investment markets and any transaction that maybe can support this growth. And my third question is about financial costs. I mean, do you expect any increase in your 2025 guidance or do you think this will remain around current level? Thank you.

Well, thank you, Valerie, for your question. Very valuable questions, and I think some of your questions, Roberto, will comment on. Maybe I should kick off with your first question about capital allocation. Indeed, we have quite some options, but one of the allocations will certainly be what I talked about, the further re-merchandising projects we have on the go. and although we are not yet in a position to give more details we do hope that that will be the case when we come out with our first quarter results on on the specifics on on the various centers but have we we flagged at least three more in italy where we where we can do the project as well as in in sweden so there will no doubt be more capital allocated of course these are not always big amounts, but in order to reshuffle your tenants around, there is, of course, some capex involved. And then you said, what about the buybacks and also disposal acquisitions? I think the share buyback for us was a last year success in the sense that we neutralized the dilution by the stock dividend. Whether we will do that again this year, we will First of all, have a look at where we will be in the summer, whether it makes sense. I think it also depends on opportunities we might see. We have the feeling that markets are, at least in our countries where we're active, opening up a little bit more than maybe six to 12 months ago. Obviously, interest does play an important role, and interest has come down rapidly in the second half of 2024. But of course, in today's world, it's quite an uncertain element as well. I mean, with the biggest jump we saw in German bonds only yesterday, or was it the day before? So that's something which may determine, again, the appetite in the markets. Having said that, I think appetite for certainly for good retail property has increased. I think it's always a relative game. And if we see other asset classes, I think retail still has good fundamentals. Typically, I think in our world of the shopping centers. And that brings me to your question. What will your commercial do? I think the rotation model, which we talked about a lot in the past, I think is probably a bit more on the horizon than it was some time ago. For example, I know it's a smaller project, but we showed you EcoHallon, which is a standalone box, almost ready. And I think that could be certainly one where you could say maybe it makes sense to to look at some disposal there and reinvest it in really the shopping centers themselves, which of course are core business. So on that note, I hand over to Roberto, unless Valerie, you meanwhile have an additional question or is that something which answers your broader, as you said, the broader questions on your commercial and where we're going?

Yeah, no, no, I mean, I think that's clear. In terms of country allocation, I mean, as you mentioned at the beginning, Italy has, you know, mechanically become bigger. Is it something that you're comfortable with, you know, because you're spending a lot of money in Italy? Are you comfortable increasing the share in Italy or would you like to have more, you know, balance and investment in other countries?

I think we are comfortable if it would pick up a bit more. Of course, we like the spread over the four countries because they do have different qualities, and that helps us overall for the portfolio. For example, Sweden, we have the exposure to the Swedish krona, and sometimes you lose, sometimes you gain. I mean, we've seen a very... strong appreciation of the Swedish Krona over the last days for all obvious reasons. So that's then suddenly a plus. No, but even if we would go to 50%, I don't think we would find that a difficult position. On the other hand, we do like the spread over the countries. But as you say, obviously it's also linked to where are the opportunities and the next

opportunities in terms of re-merchandising are suddenly sorry certainly Italy so that that may have a tick up a little bit in them yeah we'll see if we feel good enough yeah okay your second question Valerie was was on values in Italy I mean you're absolutely right I mean there's been several transactions I'm all over all over Europe but also in Italy I mean we can recall Romest we can recall Forum Palermo we can recall Ballet Center but there are many more which are actually in discussions which also gives us a a good idea of where the market is going i mean before we used to have just uh investors looking for high double digit yields and then it went down to low double digit and now we're actually looking at yields which are more in line let's say with uh with deals we would expect in in in a normal market so we're getting there if we're still there um i don't think so but it will take it will take a while but You know, the direction is a good direction. And if you look at the values, to be fair, as we saw, the upper net initially didn't change for the flagship. So it was really value creation through the increase in net operating income, the increase in ERVs. So what we're seeing is, and that's also the judgment of our independent valuers, is that the value creation which has been made you know it's really translating into the value of the assets if that answers your question before we go to finance the next question comes from the no no wait wait because valeria the third question which was finance we expect the finance cost to go up or down or remain stable our expectation is for them to remain stable Of course, they will go down a bit, but let's assume they remain stable. And it really depends also from what we saw in the past two days. Things can shift so quickly. So we really need to be cautious and we really need to go ahead with our hedging program and keep the thing as steady as possible.

Thank you. Thank you.

Next question is from Stefan Afonso calling from Jefferies. Please go ahead.

Yes, good morning and thank you for taking my questions. Two questions actually. The first one on indexation. What are your expectations for this year? And if possible, could you share a breakdown per country as you used to do? And regarding the drop in the life-long growth in Belgium, I understand that you granted a two-year rent-free period for the Voluvae department store. more color on this situation. And finally, besides this specific situation, what are the typical incentives rented to tenants when these are signed, both in terms of rent-free period and capex? Thank you.

Thank you for your questions. On indexation for 2025, what we can say about that is that for Italy, the index is 1%. It was last year 0.8, but it's now 1%. And for the indexation in Sweden, 1.6% is applied. And these are the indices we apply as from January for those two countries. If we look at France, that is a more blended percentage, which is around just under 3%, if we look at our portfolio. And then Belgium is a monthly indexation, so that's something which is going forward during the year. But in our budget, we use 2% to try to get that indexation. in our budget, so that's probably the best guess for now for Belgium. So these are the four countries with their indices. Then we go to your second question about volume-based shopping and particularly what happened there in terms of lease incentives. Indeed, the department store renovation was one One of the big steps is now a great store. We did contribute there to the tenant. Not that there is a rent-free, but there is certainly a contribution, and that has an impact, of course, on measuring rental growth, because the rental growth per country does include any lease incentives, whether it's tap rents, whether it's also, you know, a rent-free period or some other contributions. Well, the contributions are, of course, maybe can also be sometimes in the CAPEX, but it's really an effect. So that's true, but it's not that sitting there at no rent. I must stress that. And then you also asked what are the sort of lease incentives in general What we see today, as we just talked about, is a fit-out cost. That could be a contribution to a tenant's fit-out cost. A step rent is probably something you see as well. A real rent freeze, I think these are exceptions. But it's mostly, I think, more in the area of fit-out cost today than than so much in the rental income, which is of course also, yeah, you can actually explain because we should not forget how much tenants actually invest in their stores. And certainly these new flagships or latest concept, they're not cheap. And if you look at, it's not always so easy to track it, but You have to think about 2,000 to maybe 2,500, sometimes 3,000 euros per square meter if you really want to build a nice store. So that means that these retailers do invest a lot of money in our shopping centers, which is, of course, a sign of confidence. And we like that. It means that they also believe in the medium to long term of the shopping center and therefore make the investments. And for us, it's, of course, a clear sign that they are for the medium to long term. So it's really a partnership. Does that answer your questions?

Okay. And just maybe one question. Regarding incentives, how have they evolved over the past three years or since the pandemic, for example?

Well, let's say the lease incentives, obviously we are obliged under IFRS to have the amortization of the lease incentives in the top line revenue. So you have to spread them out over the term of the lease until usually the first break in the lease. So there's a variety of depreciation terms. So once you've granted a lease incentive, it's something which you will also see in the years to come in your rental revenue. But I think it's fair to say that the lease incentives as such haven't changed that much in terms of what tenants demand. It's more that if you do bigger works like we do with the re-merchandising, you'll move around a lot of tenants, which means that they have to build a lot of new stores, which is what we want. And therefore, the overall ease incentive is probably bigger than if you have a mall where there's nothing happening.

Yeah. So it's really time related, let's say, to the projects. And so that could be that if there are big projects, as we've seen for this year and we're seeing for next year, then, of course, there are important amounts which are being involved.

And just coming back to what is the remaining lease term for this lease agreement?

Oh, let's say we entered into a brand new lease with them. And the usual term in Belgium is nine years. So actually in 24, we signed a lot of new leases with those big tenants we talked about. So in terms of the vault, as we say in the sector, it's a very good improvement of the length of the leases in Waterway. It also is, of course, a little bit what happened to the valuation of Waterway, because, yeah, the value, you see brand new leases for the long term, which obviously helps your cash flow model, et cetera.

Okay, thank you very much.

The next question comes from the line of Francesca Taragina calling from ING. Please go ahead.

Hello, good morning, everybody. Many thanks for taking my questions. I have three. Do you prefer me to go one by one?

Hi, Francesca. If you can do the three together, then we will answer them like we did for now. Yep.

okay the first one is about italy uh i see a very very strong organic performance especially strong when it comes to uh renegotiation and rental uplift can you elaborate a little bit on this and do you ex what do you expect for let's say the first half of 2025 if i'm not wrong the organic performance of carosello was not included and i don't see it explicitly mentioned Can you give us a sense about the trends in rents that you see there since the merchandising plan is now completed? The second question is about investments. Can you elaborate a bit on the investments that you expect for 2025 when it comes to refurbishment, enlargement, things you are planning for 2025? Can you help us to quantify it? And the third one is about external growth. I escalate a bit the question of Valérie. In the past, you mentioned to be open to JV. Is this something, for example, you are still keen to? And about disposal, would you be open to disposal eventually to make room for some new investment opportunity? And when I talk about disposal, I'm referring to certain non-prime assets that you still have. That's it. Thanks.

Well, thank you, Francesca. I didn't pick up the last words of the third question. That was about the disposal. Yeah, yeah. But she referred to something specific, Francesca, about the disposals.

Yeah, I was thinking maybe non-prime assets that you see.

Non-prime, okay. I picked the Primark, which of course is an important brand. Okay, non-prime. Yeah, no, thank you so much. Roberto will start because he's the expert, of course, to talk about Italy. uh carosello and and again i think we we would have loved to talk more actually about italy today because there's a lot uh cooking but um we couldn't because of course we we are always in partnership and with the retailers who well who are involved in this case and and and of course we need to to always check whether everybody's comfortable with with certain information being published but uh That came just a bit, this press release too early, but we do hope to say a bit more in the Q1. But Roberto, please take the floor.

I mean, you're absolutely right, Francesco. I mean, there is an organic and strong performance of the Italian market and we see that in all shopping centers. So that's interesting to see that, you know, there is, when we do the renegotiations, an important component in all our shopping centers. If we look at the rental uplift that we have, what are the expectations for the future? Let's say the expectations are for it to grow. He gave a hint on three big projects that we are finalizing in Italy on Collestrada We expect also a very strong contribution. I mean, what we are doing is really setting these assets ready for the future. So really long-term investments, not only on our side, but also on our retailers' side, that they are making a lot of investment in the assets. You asked about Carosello. Does Carosello give an indication? Yes, we haven't published yet. We have the relectings that we've performed in this last year after the refurbishment, but they show an increase well above the 20%. So that gives you an idea. And that's not, of course, including the musical chairs that we did. So after that, what you see the effects on the renewals and relectings with our tenants. So it's really... important then to keep on doing these projects.

Yeah, and Francesca, you asked about 25 capital expenditure investments and to quantify that, obviously we have our budgets. I think it's fair to say that what we have done over the past years, it's probably a good example of what you will see us doing going forward, is that what of the overall results which we which we achieve and then i'm talking particularly direct investment results um let's say 75 of that is now um used for for dividend um but the remainder is allowing us to do all those capital expenditure projects including by the way also esg investments we're doing which is important not only because we want to achieve the goals we set out, but also sometimes important in terms of timing because you don't want to miss subsidies or tax breaks or other economic incentives which we can pick up by doing a particular investment on a particular timing in order to qualify for that kind of incentive. Bearing that in mind, I think you would probably not be surprised if going forward we do a sort of similar overall CapEx expenditure, which is a maximum, I would say, 25% of the direct investment result. So the other 75% being available for dividends. That's the sort of all-part figure I can give for now.

And also, as you correctly pointed out, Francesca, I mean, Those investments, you know, also in ESG, they are allowing us to reduce service charges, which is also important for the growth, the rental income growth in the shopping center. So that's, yeah.

Yeah, and then the last one, Francesca, are we open for joint ventures? We have been saying that for some time, and that hasn't changed. I mean, we're still open. enjoying two nice joint ventures today with AXA and Finiper in Italy. So we're used to doing so with institutional investors, us running the show, doing the asset management, but with a long-term partner. And I think that concept would work also for maybe one or more of the other flagships we have. which could be then further in Italy or, well, we have now Walloway in a very nice shape. Maybe we don't want to do a JV immediately on Walloway because we probably would like to enjoy a bit of all the hard work done there and further updates we expect. But again, these are big assets and Walloway is is actually, but we don't disclose individual asset values, but it is a fairly large asset, but there is now one larger asset in our portfolio. But these are, of course, ideal for joint ventures, so we would still be interested to do so, and it's on our list.

And as you know, yes, about disposal or non-prime assets, let's say we have a business plan for each of our shopping centers, We actually look at the present and the future of these assets. So for those assets where we believe we can no longer strongly contribute to the growth, then those assets for us are assets where we could do some capital recycling in favor of other investments where there is more potential growth. Have we answered your question, Francesca?

Yeah. Many thanks, Roberto. Everything is very clear. Thank you.

Thank you. The next question comes from the line of Steven Boumans calling from ABN AMRO ODO. Please go ahead.

Hi, good morning. Thank you for taking my questions. Two questions. So first, if I look at retail sales and footfall numbers, it seems that Italy and Belgium are outperforming Sweden and France. What's the key drive here? Is it the re-merchandising projects? Is it the geographic footprint, quality of the assets, or given maybe that destination centres are outperforming the regional centres in general? And how should we look at that forward here in 2025? Then the second question is on the occupancy cost ratios. They've been trending upwards. And I guess especially for Italy, the OCR remains low. Hence the question, where could these OCRs land in, let's say, the next five years, especially for Italy? That's it for me.

Okay. Well, thank you, Stephen, for your, for your questions. Maybe, uh, I start with, with, um, uh, the footfall in particular. Yeah. What you saw in, in Belgium and again, particularly in the last quarter, which, um, um, I couldn't resist not to talk about because it's amazing what is happening there. And, um, yeah, that we have much, um, higher visitor numbers and, and an increase in, in turnover. If I look at Waterway, I can only say that's, I think, 99%, you could say, the result of the re-merchandising project. I mean, if you now visit the mall, it's great. It has nice brands. We also upgraded, I think, in a way, the retail offer in Waterway. And it's very much appreciated. We know it's a wealthy catchment. And yeah, it attracted a lot more visitors than previously. So I think it's certainly that result. And having said that, I think what also helped, that was maybe something where we were a bit lucky, but that Carrefour Market is there now replacing Match. And they are quite attractive to customers. to the catchment and we picked up that actually they're gaining market share actually as a brand. So that's all good news for Waterway. In general, whether destination centers do better than the smaller ones, we've seen, of course, some positive news from peers as well on reporting on the larger centers who were really popular, I think, also in the fourth quarter, also with the Christmas sales. So maybe there's a bit of effect as well, but it's for us difficult to, to actually measure that. Um, for, uh, for Belgium, um, OCRs, uh, Steven, I think, um, it's, um, it is still, of course, um, uh, for us, uh, important that we. Right. They have attractive OCRs, um, and they are still, um, at the lower end, it picked up a little bit, but, um, I think there is, is some effect from Sweden. where they still had a high indexation over two years, almost 11%, and then on top of that again, 6.8%. It's now down to 1.6%, but obviously that in two years' time, you could say 20% higher rental rates. Yeah, rental levels, which obviously will then increase OCRs unless your turnover is really key pace, but that's not always immediately the case. So a bit of a fact there, but particularly OCRs in Italy, Roberto.

Yeah. Stephen was talking. Stephen, thank you so much for your questions. We're, of course, taking out of the picture indexation wars and prices of raw materials. They, of course, have a strong impact on the service charges and therefore on the OCRs. What we do see, which is actually interesting, is higher conversion ratio. So the people actually coming in our shopping centers tend to spend more than what they used to. And that's due to several factors. And one we hope we can be a little bit proud of is also the communication that we started to do with our clients in cooperation with our retailers, which is part of our digitalization effort. So what we're seeing is actually also a change in the catchment areas. Just to give an example without a different reference, but when you introduce Primark in one of the shopping centers, then, of course, your catchment area increases a lot. And that, of course, is extremely good for the turnover of all the tenants within the shopping centers. That's the same if you introduce a large Inditex store. So those are all things which are extremely important. So you see an increase in the catchment area, you see an increase in the conversion power, and those are the little bits that are in our hands. If we just look at those little bits, then we are positive for concerns the increase in turnovers in the coming periods. that would have a positive effect on the OCR. So that would mean that if we keep the OCR stable, we will be able to increase the rents. As you know, we are not here to squeeze in retailers on the country. We're here to work with them. So we're not going to be too greedy. Of course, on the other hand, there is all the questions on consumer spending, interest rates, fear of war, and all those things. as we said before, keeping those outside. That's a bit of you. That's an answer to your question, Stephen.

Maybe a bit more specific. So let's say the OCR is a bit below 10% seen today. It's unlikely that that will be 12% in three, four years.

Well, I mean, taking out the exogenous, consumer spending, wars, interest, price of gas, and the rest, Let's say we do believe that we are going to pick it up, but it's difficult for us to foresee that we're actually going to 12% or 13%. I mean, that would not be in our policy of operating with our retailers. Clear. Thank you. Thank you.

The next question comes from the line of Amal Aboulkwatem calling from the group. Please go ahead.

Good morning, gentlemen. Thank you for taking my question. Actually, I have three questions. The first one, do you hear me?

Yeah, yeah, perfect.

Yeah, sorry. Yeah, first one is about the retailer demand. You have been discussing and we have been commenting a lot the demand and the rental uplift in Italy. And you also mentioned in your press release a word that triggered me. You mentioned the rental tension regarding the Italian markets. Can you quantify that? And especially with regard with the current context of In Europe, how do you see the demand for new sport? Can you give us some color of any waiting list you would have on your portfolio? That would be my first question. The second one is about the risk of bankruptcies within your portfolio. I noticed that there is a slightly higher number of units under administration. It's a small increase in terms of units, but in terms of MDR, it's slightly more significant here. Can you comment on that one? And the last one is again on ReLUV. The question is, following the re-merchandising and the relating that you have done, do you still see any potential for negative reversion in the current, let's say, lease agreement and tenant base you have in Bolivie? And that's it for me. Thank you.

Well, thank you, Amal. Italy is very popular this morning. I ask Roberto again to... to give some color on Italy and how many people are queuing up for our units and waiting lists, etc. But we paid a bit of that.

We paid them. Now, there is, as you said, a lot of retailist demand. I mean, what we have seen is a big split between the centers performing well, where capital is invested, where Things are kept in a nice and efficient way where the retailer mix is actually the retail mix which is adapted to the catchment area. Those centers are performing well. The others, and there are quite a few, when there is very little investment, the tenant is selected on the basis of how much can he actually pay, and there is no real link between the offer within the shopping center and the catchment area, that's a bit more complicated. So we got Ilaria here who's doing a fantastic job for concerns consumers, the identification of the different groups. And what we are trying to do is really to match the requests of our catchment area to the services and goods that we can provide. And we listen to our customers quite often every year, but also directly now with our CRM program. And what we do is we use their feedback to understand also what they suggest that we do as improvements in our shopping centers. So have you seen quite a change in the offer that we have for concerns of retailers at the services that we provide within the shopping centers? And there we have to say there is a list. We got some centers where actually the main difficulty that we have is size, is vacancy because there is no vacancy. There is no extra space that we can rent. So there what you see is what we are trying to do is actually negotiate with some tenants which are performing less well so that they can leave the center. before so that we can remodernize the space and rent it to somebody else. I mean, one example is in Carosello where we had to wait for COIN to reach an agreement with them to have them out of the shopping center so that we can use, we were then able to use the space for MediaWorld and then move Zara in the space that MediaWork and H&M then left and this is something that we're doing for all the shopping centers of course it takes time negotiations and sometimes you really have to wait for the end of the contract because otherwise there is no way that they're going to leave the shopping center so we do have a wishing list we do have it's a waiting list I do not like it to put it that way but we do have a wish wishing list for for the tenants that we would like to have, for the retailers that we would like to have in our shopping centers. And I have to be honest, leasing teams that actually have been extremely active to try and find possible combinations whereby we could find, yeah, suitable. There's nothing like perfection, but the suitable space for some of these retailers. So maybe you get a smaller space than you would actually want. But, you know, you've got the space in Carosello. You've got the space in EGID. You've got the space in Fiodaris. And that's what we've been doing so far. So there is rental tension. There is a wishing list. There are tenants who cannot wait, actually, to get in the shopping center. But we are being very selective. We'll just go for those tenants which actually give a contribution to the improvement of the services and products that we offer to our catchment area. Does that answer your question, Adante?

Yes, very clear. Thank you very much, Roberto.

Yeah, and then, Amal, your two other questions, tenants and administration, and then the potential further in Walloway. And tenants and administration indeed ticked up a little bit, but yeah, I think it is still happening in markets. I mean, I just take Gaza, for example, in Belgium. which filed for bankruptcy with an effect in Belgium and the Netherlands so you cannot exclude these casualties but again it's not always bad news because in a number of cases quite the majority they still pay rent sometimes it's taken over by a better brand so you benefit from it I think the The GoSpor-InterSpor case was a very good example for us. So it's not always bad news. And yeah, it's not something which we can say, oh, that is a worrying effect. But, you know, it does happen in retail. I think there are still winners and losers. But overall, you know, it shouldn't affect us also not for the near future. Tenancy and administration, we're monitoring it, but we're not suffering from it. Potential. Sometimes it's an opportunity. It's an opportunity, indeed. And then Wallyway again, is there further reversion potential? I think Wallyway is a very good example of a mall which has a history, of course, and we see in the deals, and they're very specific, that you know in in with a certain unit if it is a decent unit and the trouble is sometimes that still some of the units are of course rather deep and not have that much voltage which is obviously the result of a mold being more than 50 years around and and therefore some lateral space is easier than than others but i think we still have the potential to on the back of the success of the mall in general with the increase in footfall to do some good leasing deals. On the other hand, I'm not excluding cases where we definitely want to get a brand in that maybe we cannot achieve the current rent on this specific unit because some of these units are units with rather high rents per square meter, which goes well sometimes well above 1,200 or more per square meter. So that's a case-by-case matter, I think, Amal.

Okay, I understand. I have to put it differently. Do you still have tenants where you think that they are paying grants above market relevance?

Yeah, I think, let's say there's always a unit where you could say this is maybe maybe a rent which is too high. The other thing which we should not forget, if a tenant is paying maybe too much, but we also should relate it to the sector the tenant is in. So if a tenant is probably maybe struggling with the rent level, if you change the sector, for example, you could end up with a situation where it is affordable because the tenant is doing a different bit different business, higher margin business, for example, and therefore you can afford the rent. So it's not always so black and white. So we're trying really to do it in a tailor-made way.

Thank you very much.

Thank you, Amal. Thank you. The next question comes from the line of Kay Close, calling from Barenburg.

Please go ahead. Yes, good morning. I've got two questions on the financials and one on France. The first one is on the current taxes in the direct results statement. I saw the footnote which describes or explains the reduction year-on-year. I just want to understand if this effect for 2024 will also be repeated in 2025, so if the cash tax rate is likely to remain as low as it was in 2024. The second question is on the shift in property expenses and company expenses. could you maybe indicate, adjusted by the shifts, what was the normalized or the adjusted increase year-on-year? And the third question, third and last question, would be on the renewals in France, where you explained the slight rent decrease. Is it fair to assume that some of the similar effect we could see in 2025? Thank you.

Yeah, that is the renewals in France, where the because there we had a minus, a little minus, and whether that's something we could expect for 2025. Maybe I take the last question first, Kai, and then I leave Roberto with the other two questions, although I can imagine that maybe on the property expenses, because that's quite technical that we sort of get in touch with Kai to show how this normalized position is then in order not to lose you entirely in the call in terms of a lot of numbers. Renewals in France. No, let's say that there was particularly linked to the Pullen Bear lease in Passage du Havre, which we also already reported in the summer. As you know, with renewals, these are figures which concern a 12-month period. We, of course, roll it forward. So every quarter, you lose the oldest quarter and you get a new one. So if there is a deal, a negative deal in there, you will... see it for some time being published. Going forward, I think in France, you know, France is probably one of the markets where it is a bit tougher in terms of the leasing. So I think there's still some upside here and there, but I wouldn't compare it to Italy. So going forward, I think on renewals and lettings, I would be less optimistic. I think still, you know, a little plus, but less optimistic like what is happening in Italy and in some individual cases actually in Belgium.

And I'll take the financial ones. Yeah, then for concern, the current taxes, it is a one-off that we had in Sweden. So that is considered the previous levels and the standard levels that we have. For concerns of company expenses and property expenses, I'll just tell you shortly what we did. And then, of course, we can see together more in detail, to go more in detail on the single items. But mainly, let's say, we had the classification of the property tax in Italy, which we had in the property expenses. We declassified to the service charges. And there's a reason for that. That's because all property taxes are in the service charges for all countries. In Italy, they were not because the legislation before didn't allow for property taxes to be recharged to tenants. That's now changed. So property tax can be recharged to tenants, and that's also what we're doing. So it was more accurate to report in the service charges where it belongs. IT costs. that's part of our digitalization. Let's say what we did before, we just had general IT costs, which were related to the maintenance of servers, connections, you know, the computers and all the user stuff. Let's say, but what we do have now is that a real input for concerns of digitalization in our shopping centers. So you can, and it's a really an investment which is done in each of the shopping centers. You can look at it as CRM, for example. You can look at it as digitalization efforts like digitalization screens and the management of them and everything. We thought it was more appropriate to have it where it belongs, which is the property where we are investing it so that we're also getting some results. We talked about the conversion ratio, for example. that the increase in the conversion ratio that's also part of the effort that we are they were doing but yeah your disposals when you want to go through more in details in all of them that we really with pleasure great thanks so much indeed ladies and gentlemen as a final reminder if you would like to ask a question please press start one now

As we currently have no question in the queue, we are going now to take some questions in the meantime from the webcast. The floor is yours.

Thank you, operator. We have a look at the webcast and there are three questions coming from Benjamin Legrand. And the first one is, why is Belgium like-for-like rental growth lower compared to the rest while vacancy is down and rental uplift goes higher than average. I think we've probably touched upon this with the discussion we had earlier on the rental growth and the department store and lease incentives. So like-for-like rental growth is always concerning the entire portfolio. So in this case, it's the total rent in Voluway, whereas rental uplift is only talking about those deals where you have effectively done them in the 12 months period. So that can be only a proportion of the total which you use for rental growth. So therefore rental uplift and rental growth is not necessarily always going hand in hand. And the vacancy is down, yeah, because let's say doing all this nice re-merchandising, we attracted a lot more additional tenants, bringing us to a very low vacancy in Voliway. The next question is, do you see continued positive acceleration, reversion on re-lettings, renewals in your portfolio going forward? Again, I think we touched upon what we expect in the next months in the coming period on renewals, re-lettings. If I would have to give an overall ballpark figure, I think we should, as always, be cautious. And I think there is still reversion. But, you know, if you can add maybe a 2% overall for the portfolio, don't forget indexation is still there as well. Then that would be something which we could expect. And the last one, do you intend any additional share buyback for 2025 to offset dilution from script dividend? Again, we talked about capital allocation. Last year, we announced the buyback when we also announced the script issue price for the stock dividend that was in June, just before our annual general meeting. So that is probably the moment if we want to do it again to announce it. But it also depends on what we see in the market. If there is an opportunity where we say the capital raised with the stock dividend. we will use together maybe with some leverage to acquire something where we have an accretive deal on the table, then that could be maybe preferred over considering buyback. So for now, it's a bit too early to tell. So we'll let you know when we're there. And I think that those are the questions in the webcast. Operator, any other investors or participants who would like to ask questions?

Yeah, we have another one. The last one from Lynn. Sorry for the pronunciation. From KBC Securities. Please go ahead.

Good morning, everyone. Yeah, just the last one, a quick one from my side. I was just wondering why the investment expenses doubled in 2024 and what do you see in 2025 regarding that item? Thanks.

Yeah. Well, thank you, Lynn. Thank you for your question. I think, Roberto, you would like to, yeah, to comment on that.

Yeah, absolutely, Lynn. We have an increase in investment expenses this year. So if you look at it, a lot of it is IFRS 2, and that's your performance plan. Then what you also have is part of the balance, which is linked to the indirect result. It's also there increasing. And then we got the valuation fees, which are always there. And one important contribution was also for aborted acquisition costs. So we looked at some items, as you know, but they didn't go through. So that's the entire composition of the investment expenses. And looking forward, well, we think it will possibly stay be reduced next year. It really depends on what's going to happen. But does that answer your question?

Yeah, investment expenses are always a bit volatile because they do include some one-offs. But we will be also in our annual report very transparent about what the composition is. But Roberto just gave you the description. So that's something which we which we report separately because we clearly have a distinction between the direct investment result and the indirect investment result, which is probably a typical Dutch way of looking at a P&L. But for us, it's also important to follow those Dutch particular rules. Okay, Lynn, does that answer your question?

Yes, it does. Thank you.

Okay, well, thank you. Well, ladies and gentlemen, we currently have no questions, so I will hand it back to your host to conclude this conference. Thank you.

Okay. Well, thank you so much, everybody who participated and who asked us questions. I hope it gave a lot of insight, and we experienced a nice conversation today. So let's stay in touch. And thank you for now. Wishing you a pleasant day. Thank you. Thank you very much. Thank you for joining today's call.

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