Eurocommercial Pptys N V

Good morning, my name is Ilaria Vitaloni, Investor Relations Officer, and I'm happy to be on this call with Evertian Van Garderen, our CEO, and Roberto Fraticelli, our CFO, to present Eurocommercial's real results for the year 2025. Evertian will talk about the acquisition of Adion Shopping in Sweden, announced on Wednesday, and about the operational results of the company, followed by Roberto, who will discuss in more detail the financial results. We will then open the call for any questions and comments you may have.

Good morning, everyone. Thank you for joining us today. I will start with the acquisition of Avignon Shopping in Umeå, Sweden, and then move to our operation results for 2025. Let me start with Avignon Shopping, a highly strategic acquisition for Eurocommercial. On Wednesday, we announced the acquisition of Avignon Shopping in Umeå for a total investment of around 110 million. We expected to complete this acquisition on 31st of March, 2026. The map shows where Umeå is, fairly easy to reach from Stockholm by airplane, actually easier to reach than some of our other shopping centers in Sweden. Avion Shopping comprises approximately 45,000 square meters of gross level area around 80 shops and restaurants and 7 newly built large format retail boxes. Most importantly, the center benefits from a direct internal link to IKEA, which significantly enhances Avignon's destination character and regional pool. It has a catchment of around 270,000 inhabitants and the city is around 130,000 inhabitants, but with a growing population. Believe it or not, Avian Shopping even attracts customers from Finland who can reach Umeå by ferry. Umeå is one of the Swedish fastest growing cities. It has a young and highly educated population, driven by Umeå University, which has more than 40,000 students. This creates a structurally stable and recurring footfall base. The city has a dynamic and diversified economy. strong public sector employment and continued population growth. Demographic growth in Sweden has been concentrated in regional hubs like UMEA and Avion is positioned directly at the heart of this growth. Within 30 minutes, the center serves approximately 50% of the catchment population. That is a very strong accessibility profile, particularly for a regional shopping destination. And Avignon is a dominant regional shopping destination. It is anchored by IKEA with direct internal access, which is critical. IKEA is not just a tenant, it's a structural traffic driver from a local retail scheme into a true regional destination. The presence of IKEA drives high stable and recurring footfall, which in turn supports tenant sales productivity and leasing dynamics. By the way, the nearest other IKEA store is almost 400 kilometers away. Beyond IKEA, the tenant mix is attractive and diversified, combining fashion, sports, lifestyle, services and food and beverage. The seven newly built retail boxes provide flexibility and adaptability to evolving retail formats, which we consider strategically important in today's retail landscape. The gallery was built in 2016 and is BREEAM Excellence certified. The retail boxes are brand new. The total asset is modern, well configured and fully aligned with our ESG strategy. In short, this is not a turnaround project. It is a high quality, modern, dominant center with embedded growth potential. Here you will find a map of the shopping center, showing the gallery and the adjoining retail boxes, and the IKEA store, connected to the mall. There are 2600 parking spaces, which we jointly own with Inka Centers, the owner of the IKEA store of 30,000 square meters. You can see where the major brands are located. The pie chart shows a well-balanced tenant mix, with the usual, mostly Nordic brands, and a good restaurants offer. You should not forget that this offer includes the very popular IKEA restaurant with its famous meatballs and fish dishes, which although not part of our property, improves the dwelling time of the visitors of the center. From a capital allocation perspective, this acquisition is highly disciplined. In July 2025, we disposed of the Eco Mega Store, part of our shopping center Samarkand in Sweden. a non-core single-tenant asset. That disposal released capital at an attractive point in the cycle. With Avignon, we redeployed that capital with some additional fresh capital, of course, into a multi-anger dominant regional center with significantly stronger long-term growth characteristics. This is asset rotation in action. We reduce single-tenant exposure and increase exposure to diversified, destination-led retail. We improve portfolio quality, we enhance geographic balance, and we create additional income with growth potential. With the acquisition of Avignon Shopping, the country weightings will change, increasing our exposure to Sweden to 23%, reducing our exposure to France to 20%, and with the weightings to Italy and Belgium relatively stable. This transaction represents a clear step forward in strengthening and upgrading our Swedish portfolio. With this acquisition, Sweden becomes our second largest market, reinforcing our longstanding conviction in the resilience and structural attractiveness of the Nordic retail market. We operate exclusively in established, resilient European economies, Italy, Sweden, France, and Belgium. Across these markets, consumer recovery is underway when we look at the retail sales figures. Importantly, since 2023, online penetration has stabilized at approximately 12%. In addition, Sweden remains one of the most transparent and institutionally stable real estate markets in Europe. There is GDP growth, there is an improving household purchasing power, recently boosted further with the tax incentives provided by the government. and there are also dominant centers which continue to consolidate market share. Our portfolio consists of dominant retail destinations in resilient . We operate two complementary formats, five flagship regional centers, experiential and destination-led, attracting visitors from a wide demographic area, and 20 hypermarket anchor centers, essential, convenience-driven, and deeply embedded in local communities. These 20 centers are the first choice retail destinations in their catchments. They benefit from strong footfall, diversified tenant mixes, and high sales productivity. Avignon shopping fits perfectly in this last category. For us, it is plug and play. Let me now turn to our broader results review. 2025 was operationally strong. Like-for-like rental growth reached 3.4%. Rental uplift on renewals and re-lettings was 4.8% across 297 lease transactions. Retail sales increased by 3.4%. The most spectacular key performance indicators are the reduced OCR for the portfolio, down to 9.4%, and the reduced vacancy, down to 1%, showing a healthy property portfolio. Our collection rate stands at 99%. Footfall increased by 6.2% in flagship centers and 2.8% across the portfolio, despite temporary disruption from ongoing re-merchandising in some of our shopping centers. Huawei Shopping showed an outstanding increase in footfall of 10%. Last year retail sales in our shopping centres increased by 3.4% compared to 2024, with all four markets producing positive growth. Belgium performed particularly well as a result of the re-merchandising at Woloway, 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, and hyper and supermarkets. January 2026 showed that the positive trend continues with a 6.5% retail sales growth for our portfolio. This time Italy produced a remarkable 9.5% growth. Like-for-like rental growth was 3.4%. The growth was driven by a material portion of organic growth and by indexation, although the indexation was lower in 2024 due to much lower inflation. The right-hand table shows the rental growth per country, with Italy's contribution being the highest. The company has always been known for its low occupancy cost ratios, and we are therefore pleased to report a 9.4% occupancy cost ratio for our portfolio as per the end of December 2025. This is lower than the OCRs we reported during 2025 and is clearly the result of growing retail sales. whereas rents increase modestly. This percentage is still one of the lowest in industry and implies that the rents are affordable and sustainable, as is also confirmed by the full rent collection figures that we have again reported. Healthy OCRs will in due course enable us to negotiate higher rents when renewals or re-lettings come up. Low vacancy is usually an indicator of the quality of the properties. Over the last five years, We have reported vacancy rates in our property portfolio ranging between 1.2% to 1.8% and with an average of 1.5%. We are proud to report that at December 2025 we were at 1%, the lowest number reported since December 2020. We are pleased to be able to report that on 297 renewals and re-lettings, An average rental uplift of 4.8% was achieved on top of indexation. These lease transactions represent 40% of the minimum guaranteed rent of the portfolio. And we were able to attract new tenants with our 101 re-lettings, achieving a much higher uplift of 8.8% and confirmed continuous 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%. 48 of these transactions were new lettings, producing an overall increased rent of 13.1%, with the highest uplift achieved in Egili, being 16.4%. In Belgium, at Allaway Shopping, the leasing team successfully concluded 15 lease renewals and re-lettings, resulting in an overall rental uplift of 5.8%. And these figures demonstrate that our prime portfolio continues to be well positioned for leasing retail space to expanding tenant base under sustainable conditions and at affordable rent levels. This slide provides an interesting overview of the sectors where we sign deals. The majority of the deals we concluded last year were in the sectors health and beauty, fashion, and food and beverage, i.e. restaurants. Our merchandising mix remains balanced. The main sectors are hypermarkets, which are our anchors, recurring daily traffic. Fashion provides strong destination appeal, whereas services and food and beverage enhance dwell time and customer experience. The diversification over a number of sectors obviously limits concentration risk. This slide provides the increase in gross lettable area of the various brands in our portfolio during 2025. Strong fashion brands like Zara took 51%, whereas in the health and beauty sector, brands like Rituals and Normale and MidiMarket took 32%. We continue to attract powerful brands such as Inditex, Rituals and Primark, reinforcing the dominance of our centers. Three more Primark stores are planned, whereas Rituals is present in all our centers except for one. We welcomed the Inditex group last year again with a number of stores and the group is now represented at 35 stores in our portfolio. Remerchandising has been, and is a very important driver of internal growth. We completed re-merchandising projects in Walloway Shopping and Carosello, but for three centres in Italy and our French centre Valtori, the re-merchandising projects are ongoing. Re-merchandising remains a key value driver. Look at the results. At Walloway and Carosello, the completed project delivered higher footfall, double digit turnover growth, occupancy close to or at 100% and a strong rental uplift. Egili in Florence is a prime example of proactive asset management. We are reducing the hypermarket footprint and introducing new international formats. A new full format Zara store has opened. A new pool and bear store has been added. And the opening of Lefties, the answer of the Inditex group to the Primark formula, is scheduled for the fourth quarter of 2026. The project strengthens EGLE's dominant position in Tuscany, enhances the customer journey it offers, and expands its catchment. You can see the highlights on this slide. ESG is embedded in our strategy. What have we achieved in 2025? Scope 1 and 2 carbon emissions reduced by 40%. Scope 1, 2 and 3 carbon emissions reduced by 23%. Renewable energy reached 93% in landlord-controlled areas, whereas waste to landfill declined by 7%. More importantly, we have nearly removed all gas installations in our portfolio. All assets are BM certified. 83% of our assets have an EPC label A, B or C. Green financing reached almost 1 billion. We continue to future-proof the property portfolio while enhancing sustainable financing. We make a significant effort to engage with our customers in our shopping centers, hence our good score on customer satisfaction. Obviously, we are participating in a number of independent ESG assessments, resulting in scores and awards as posted on this slide. This is not just ESG reporting, it is a competitive edge. More and more retailers and consumers demand sustainable environments, and your commercial is delivering. And now is the moment to hand over to Roberto to discuss our financial results. Thank you.

Thank you very much, Jevetjan. Thank you, everybody. You're quite numerous today. So good. We'll see it. We'll go first to the core messages that we want to give. And that's the financial highlights. So, as you see, the property investments raised with 3.8%, which is, you know, above the 4 million. That's very good because that means that the investment, as we will see shortly, that we have done the merchandising and the improvement of our centers actually deliver the good results. And you see that also in the increase in valuations. We also have a debt net which is very stable, and that led to a net loan-to-value ratio of 39.8%. That's a very good improvement because it's 1.5% less compared to last year. As a consequence, of course, then the APRA MTA also went up to 42.81. You will see a slide on this which will go much more in detail. The same is for the direct investment results. It went up to 131.8 million. We'll have a slide on that with a nice bridge as you all like. That led to an increase in dividend to 1.83, which is great. And I think one of the things we wanted to highlight was that actually in 2025, we basically had no increase in interest expenses. So we thought there was a very nice message for you to see. As I said, if we look at the valuations, you see the increase to over the 4 billion euros. You see the valuation changes compared to last year. What's very important to highlight is that the net initial yield and the total yield are actually the same as last year. So that means the increase in value actually came from the increase in rental income and the ERVs. So that's very, very positive. If we go to the key metrics, you see the net has been stable over 2025 to 1.6 billion. Interest rate hedging level is at 87. You know that we like it when it's around the 80%. And the direct investment result per share went up, as you saw, with 5 cents. Key financial metrics, they improved. Average cost of debt stayed the same. Interest coverage improved. Net debt to EBITDA improved. Average TV improved. The average loan maturity, we'll have a special attention to that, went to almost five years. So that's a big improvement compared to last year. The average interest rate maturity went down, but it's going to go up because, of course, we are very busy with our hedging policy. Let's see what we did this year in 2025. We were quite busy. It was almost a billion of refinancing that we did long term, and what we basically did, transferred all the debt into long-term. So we basically paid out all the short-term debt, which gave us then a lot of space for the acquisition as we see. What we did was we started with Sweden. We did a 555 million loan in Valbo. Then we attacked with Nordia. Another 20 million euros was done in June. And then we went over to Italy. So we started with Fior d'Aliso, 205 million euros. IGLI and Carosello in December, 270 million euros for IGLI and 200 million euros for Carosello. And we finished with Sweden, where we extended the loan for an amount of 600 million euros SEC. So altogether it's the almost one billion euros that you see. The effect on that is on the long-term borrowings, you see The shift has happened in the expiration dates of the loans. Basically, the main refinancing there in 2029, and we have a small refinancing in 2027 that's with ING. We love them a lot, so we think there will be no problem. I think what these two slides actually show, the one before and this one, is the strong relationship that we have with our banks. So I would really love to thank them for that because, you know, they're numerous. They are very, very cooperative, and they enabled us to do all these extensions which were planned. So thank you to all of them. Then if we go and see what we do with the money, that's always a very important question that you have. So as you can see, we had 190 million euros from cash flow operating activities. Then the disposal that Abertian mentioned, 14 million euros. And then we have the net increase in loan of eight. Where did this all go? It went to dividends, 71 million paid. It went to capital expenditures, which as Abertian said, you know, we used to increase the value and the importance of our shopping centers. And it went to other. And then it all went 31 million to cash. part of the reserves that we're using to acquire Avion, as you heard. If we go down to the net loan to value ratio and the hedge ratio, they are where we'd like them to be, so hovering around the 40%. We mentioned that we expect the contribution, the net increase related to Avion to be more or less 1.5%. The hedging ratio, as you can see also for the coming years, is expected to be around the 80%, so very, very stable picture. Let's go to the bridges that you like a lot. There you see the increase in IPRA MTA for the year. We started from 41.79. Then, of course, we add back the direct result and the indirect result. We take away the adjustment for the deferred tax and derivatives. Then we look at the dividend distribution and the euros that you got as dividend. And of course, there is a component for those of you who choose to take shares. We also have a nice foreign exchange movement that's related to the increase in the Swedish krona with the exchange rate with the euro. So that led at the end to the 42.81. If we then go to the direct investment results, Then you see you started from the 127.9 million. We added the rental income. We were a bit cautious, more cautious on the debt. You see then repair, maintenance, property expenses, and service charges. There is an increase there. That's also, of course, the merchandising projects that we are doing. And also for a little bit to a one-off positive variance that we had in France last year. The company expenses went down, 1.3 million, which we thought you might appreciate. The corporate income tax is negative for 1.7, but that's also related to a one-off positive that we had in Sweden in 2024, and that leads to the 131.8 million that we have today. Positive, what's the story? positive increase in earning per share, positive increase in dividend. And I think the core message that we want to give with this slide is that we are extremely, extremely thankful to all our employees because they've done a fantastic job. They really put a lot of effort in this. So thank you for that. Then we go to the guidance. The guidance, We said, you know, it will range between 245 and 250. We know it's cautious, but we also look at the current situation today. We don't sell scenarios. So we do think it's a good guidance for now. And then last but not least, the financial calendar. That's where we hope to see you again. We have the publication of the annual report on the 17th of April. Then first quarter results. annual general meeting, H1, and then the third quarter results. And on that note, let's send that to the operator.

Ladies and gentlemen, we are now ready to answer your questions. If you wish to ask a question, please press pound key 5 on your telephone keypad. If you wish to withdraw your question, please press pound key 6 on your telephone keypad. The first question comes from Steven Bouwmans, ABN AMRO. Steven, go ahead.

Hi, good morning. Congrats with the acquisition and thanks for taking my question. So I have two parts of questions, one on the acquisition and one on possibilities for further M&A. To start with the first, some questions on the acquisition. So one, what is the annualized EPS accretion that you derive from the deal? Two, what is the current occupancy? Three, can you discuss the competitive landscape in EMEA, if I pronounced it correctly? And last, do you consider selling the big boxes, given you disposed some big boxes elsewhere before?

Thank you, Steven. Let's say on the acquisition, obviously we are not the owner yet. We hope to close the deal end of March. And in terms of... The analyzed accretiveness, I mean, there is certainly an accretiveness there, and we also published a yield we would try to achieve. But for 2026, there's only a partial contribution. So in that respect, I cannot give you a figure, but obviously it's accretive. In terms of the occupancy, there is some vacancy in the shopping center. That's around just close to 5%, which we think is an opportunity. So that's actually also why we have to, you know, focus on in particularly with our teams, and we have already quite some good ideas what we can do to advance the return on this investment. But obviously, that's something we will, report further on later in the year once we are the owner and, of course, once we also can really, you know, talk to potential tenants, et cetera, et cetera. This has just been announced, so it's still early stage. Indeed, there are boxes in Sweden which we have sold sorry, one box in Samarkand, we have the possibility to sell boxes at E4 in the shopping center in Krikansta. That has been, that process has started, but we have not yet finished it. There is sufficient demand. We'll see how we proceed with that later. in the year and of course technically you could take a similar view here with Avignon shopping where we also have boxes which are separate from the mall the gallery in that respect slightly different from the other situations because these boxes are actually as you saw on one of the maps they're connected to the gallery not that you can walk through the gallery and then achieve or get into the boxes, you need to go outside, but technically we could also have a look there to maybe dispose it, but for now I think these boxes really add to the strength of the centre, so that's probably more a remote idea. Roberto, do you have anything to add? No, no, I think Ilse's competitiveness. Ah, the competitiveness, yeah, yeah. Let's say this is the only shopping center in UMEA. There is a city center which also has some nice retail, but that's High Street. And then there are basically you could say two zones where there's also retail. One is a box zone where there's an eco-hypermarket, and then further out there is another zone where you have, you know, a Walmart, so the do-it-yourself stores, and some car dealers, so that there's also some retail there, and that is a quite poor zone in another part of the city, but this is really the only shopping center, and you will not be surprised to hear that obviously Umeå in wintertime can be quite cold there, so people prefer to to shop in a covered and nice environment and mall. So that's one of the big attractions, of course. Does that cover your questions, Steven?

Absolutely. Absolutely. Very clear. Thank you for that. And if I may, one other set of questions. the potential of more M&A. So can we expect more deals like this in 26? Maybe to provide more color, are you today in any other due diligence processes and how does that number compare to, let's say, a year ago? Maybe also what's the maximum LTV that you're comfortable with? And would you also consider similar deals to do that in shares, so with an equity raise? So maybe some color on those questions, please.

yeah no no thank you stephen well would we in be in due diligence then i would probably not be allowed to think about that but no i think this is clearly for us a very important step because we have been quite active in terms of monitoring the markets we looked at basically all the transactions which you have seen in our four markets you know we we looked at it and this was Actually, this transaction was not on the market at all. It's an off-market deal. So we're very pleased that we could enter into a transaction with a very important and major group like Inca, who obviously is a well-known property owner themselves around the world. So that was very nice that we could do this deal, and it really fits to our plans. But we will not stop here, Steven. Obviously, we'll go on with seeing what is available in the market. We have some possibility, as we discussed earlier, on the boxes to sell, and maybe we can do some more rotation. And yeah, which market that will be, because I think in general you could say that all our markets are opening up, particularly also Belgium. We have seen a number of transactions in Italy and Sweden. I think there we see also much more activity. So that's the plan, but in terms of where we will then be raising equity doing it just with our existing resources obviously depends on the size of transactions but for now I think we're very happy and trying to first get Avion Shopping on board end of March and then start with all the works and the plans we have and Steven of course next week that we meet him we'll come back with 73 proposals of merger and 84,000 acquisitions and sales stuff

That's going to be very interesting, yeah.

Maybe only on the LTV? To which level are you ready to go?

Yeah. Well, let's say the acquisition, if we then arrive at early April and close the deal, obviously it is an estimate because it depends a bit on an exchange rate for Swedish krona, et cetera, where we are exactly. with our collection in rent and so on, but we expect this to be 1.5, 1.6% uplift in LTV ratio. So that's of course still very acceptable because we then stay below 42%. We of course still have 40% as a sort of a long-term target, but are not getting nervous if it's a little bit higher. But we will, you know, cautiously follow, of course, the debt levels. And again, in June, we'll see more about valuations. But we feel comfortable with this acquisition, the way it's funded. Thank you so much.

And also, Steven, if we look at the ES, the net, then APRA yields, We haven't moved in our case, but the market, of course, is more on a positive stone. So there could be some nice evaluation coming up in this year, for example.

Okay, that's clear. Steven, yeah? Yeah. Thank you. The next question comes from Stefan Afonso from Jefferies. Stefan, go ahead.

Yes, good morning and thank you for the presentation and for taking my questions. I'll have them one by one. So first, I understand that you refinanced nearly 60% of your debt this year with no impact on your cost of debt. So should we assume that your cost of debt will remain broadly stable this year and going forward? So in other words, is the 3.2% your marginal cost of debt?

well that's a very good question uh stefan uh let's say reality is of course we did these transactions um uh the last ones are the 525 millions we did them in december and we um draw down the facilities in in january so we will see of course the effect of these throw downs in 2026 what you will see is of course a change from short term line into long term line So there will be an increase, let's say, because we will hedge them with interest rate swaps. You will see a slight increase in the interest expenses. What's very nice to say is that the margins are really in line with the margins that we had before. So on that side, we are looking at a stable picture. looking ahead for the year we are also look taking a good look at the curve there is a lot of flexibility in this financing so we have a lot of time when we can fix the interest rate for the amounts and the length that we like so we're monitoring the interest rate curve so far it looks okay now it's been a little bit of a hike as you've seen in the past week due to certain circumstances So, we're monitoring. So, we do expect a little bit increase, but not too much, but we will see.

Yeah. Okay, thanks. And one question on indexation. So, given that we are already in March, you should have a pretty good visibility on indexation. So, what level should we expect for this year?

I think, Stefan, we all know that the indexation will be lower again than last year. If we look at France, it's basically zeroer. And for Italy, we have a 1.1 indexation, and it was 0.9 for Sweden. Belgium, let's say that's a monthly indexation, and we have in our budget a sort of a Assumption 1.5 to 2%. So the indexation for 26, I think that's probably the case for all our peers, will be quite modest. And these are the numbers which we have to apply and we are applying. We have already used the percentages in the billing for the first quarter and Italy will use that for the second quarter, that percentage.

Okay, that's clear. And just maybe one clarification on the acquisition yield of the Avion. I think it's 8%. Are we talking about gross yield, net yield?

Let's say this is obviously a yield which, I mean, the text hopefully was clear after we have done some further work on the Tennessee mix and so on. but it's in principle unleveraged yield. It is unleveraged.

It's a net. Okay. And just to be clear, does the guidance include the acquisition?

Well, let's say the guidance we published yesterday evening, the day before we did the acquisition announcement, and we have included Obviously, we did a bit of scenario analysis effect of the acquisition in our guidance, but I repeat, also given what happened over the last, let's say, 10 days, or maybe even less, seven days, obviously, that put us in, let's say, conservative, cautious mode. So, let's say, for example, I mean, the energy prices or rises up and so on, that will not so much affect us in the business because, you know, we no longer have or hardly have any gas anymore in our centers, our service charges, where energy is a component. Most of the energy we produce ourselves or we do, for example, Sweden, we have a number of, also in Avion, geothermal, way of getting energy, but it is probably more what will it do to consumers and so on. Therefore, we have been cautious.

I understand the cautiousness, but the beauty of the business model is that you have a strong inertia thanks to the deleteration. My question is just simple. Is the acquisition embedded in the guidance?

Yeah, let's say, but it is, of course, it's only kicking in, hopefully, when we close in April. And then, of course, in order to achieve the 8%, we need to do some work as well. So we have to finance it. I mean, we're financing it with short-term lines, which are cheaper than long-term. So, you know, we've just taken a cautious stance and maybe we can improve the guidance already later in the year. But, yeah, I mean, I think that's probably where we are today, which is still a guidance up against, you know, the actuals we reported. But we understand some comments that maybe it's a bit shy. I saw the word shy. Okay, let's be shy then. Yeah.

Okay. And maybe one last question. Could you elaborate a bit more on your acquisition strategy going forward? So when I look at the Swedish deal, it appears that you had to push further north to secure an acquisition. So should we read that as a sign that assets available at similar pricing and quality are hard to find at the moment? Or if not, in your view, roughly how many assets that are currently in active sales process in Europe could potentially be fit your investment criteria?

No, I mean, let's say UMEA is not that, you know, UMEA is not on the map or it's so north. This is a very nice center, and as I said in my speech, for us it's also plug and play. Inka has a number of shopping centers in Sweden, and this is a strong one. and it happens to be a bit further north, but, you know, it's still technically, you could say, in the middle of Sweden. So, no, there's not sort of, you know, that you say, oh, you bought something and there was a discount because of the location. I mean, we believe in the location and, you know, it has its merits. It has also a proven track record. I mean, it's been there for 10 years and now with the boxes added to it, it will even grow further. I mean, we have the highest footfall here in our Swedish portfolio, well over 4 billion. So I think that's certainly not something to ignore. In terms of the other centers, I think in Sweden there could be any city. There are more cities of this size where there are still nice shopping centers. I would not read anything into the location of EMEA in this case.

Actually, Steven, I mean, the amount of centers which could come on the market that could be of interest to us is larger because we've seen the yields going down in several countries. So that means that people once were not even thinking of putting their asset on the market, they now see that the prices have increased. So it's a nicer market to start looking at options. And the transactions that we do, they're usually off-market. So there's plenty of opportunities. We know the assets that we want. And sometimes you need to be patient and wait for the right moment to be able to strike.

Okay. Thank you very much. The next question comes from Valerie Jacob from Bernstein. Valerie, go ahead.

Hello. Good morning. Good morning, Roberto. I just have a follow-up question, you know, on the acquisition. I mean, you say, you know, in the press release, and you've said that, you know, in order to get to 8%, you're going to have to, you know, do some work and spend some money. If I look at recent acquisitions by your peers in your market, in France or in Italy, it seems that there was some acquisition that were already yielding 8 cents or above as a sort of net initial yield. So I'm just curious to understand why you think that this acquisition, seems to have a lower yield is better suited to, you know, your portfolio than other potential acquisition at above 8% in some other countries. Is it the choice because you prefer Sweden as a market or is there another reason if you could elaborate on that? Thank you.

Yeah, thank you, Valerie. Thank you for your question. No, very good question. In one word is quality. You know, with the transactions we've seen in our other markets, I think you're still looking at slightly different type of assets with also another risk profile, and in some cases also with things that we always say if there is a possibility to acquire maybe at a higher yield, then there's probably something you need to fix. Otherwise, there is not this high yield. And then the question we ask ourselves is, are we the party to be able to fix it? And in a number of cases, we said, you know, that's not for us, and maybe others can do that, but not for us. And I think the fundamentals here are for us very good. We like Sweden. I mean, the macro at the moment is also quite good compared to maybe some of our other countries we're active in. and overall that brought us to the decision to proceed and again this property was not on the market and we are quite proud that we could do this deal with INCA centers because basically they asked themselves the question who can be a good neighbor for us in UMEA and your commercial with our reputation and expertise They said, you know, let's go ahead, because obviously we are neighbors. The IKEA store is owned by Inka Center, and it's therefore a long-term partnership, which we are very excited about.

And it's a nice asset. That's 10 years, so the amount of capex that we perceive is not even related to the amount of capex that you know for the other transactions.

Okay. Thank you. And just maybe a clarification on your guidance because, I mean, you just said that the acquisition is included in the guidance. The guidance is, you know, at midpoint sort of 1% growth. So if we exclude the acquisition, then that would mean that without the acquisition, your cash flow will have gone down this year. I mean, is it the right way to say it, or am I missing something?

No, let's say it's not going down, but we just discussed taxation, which obviously is hardly existing in 2026. We're not alone there. That's for all our peers, I think, the case. We do have also to take into account that our interest expenses will take up a bit because of the long-term financing instead of short-term. And so we've just built in a buffer, I would say, in order to get to this guidance. And let's say once the avenue of shopping is on board and we can really, you know, we need some time maybe to work on the tenancy mix and so on. It's really that conservative approach which we have taken and maybe, you know, in three months' time or six months' time, we can improve and say, you know, we can really enjoy the maximum from this acquisition. But for now, this is where we came up with and feel comfortable with. But look what happened in the world. I mean, it's not. We're sailing a little bit in the mist, I must say.

Okay. Thank you, . Thank you.

The next question comes from . Thank you. The next question comes from Alex . Alex, go ahead.

Hi, team. Thank you for the presentation. The question on your has been discussed plenty. On the re-merchandising projects that's going on, what's the rent loss in 2026?

roberto maybe yeah let's say it's a very good question the the reality is in it really depends on how you calculate it because of course you have the loss let's say that you have realized on the previous trend you also have the loss that you realized let's say if you consider the new rent let's say more or less and we will be around the one and a half million euros That's a bit of an estimation. The thing is that, of course, when you do the calculations, you do not know exactly when the units are going to be re-let. So there's a lot of uncertainty related also to the works that the tenants perform. So that's a bit more or less the amount that we can think of, yeah.

Okay, thank you. Does that give you a fair idea or? Yeah. Yeah, that's perfect. Thank you very much. And then, yeah, so the fact that you bought in Sweden last year was a bit of a lesser performing market versus Italy or Belgium. Is it sort of a vote of confidence from your side also that the operations should improve further in that country?

Sorry, you were fading slightly away. Alex, could you repeat your question?

Yeah, yeah, that's no problem. So the fact that you bought in Sweden over the last year or so, it's been more a bit of a weaker performing market if you compare it to Italy or Belgium. So the fact that you buy here, should I see that as a vote of confidence from your side that you expect operations to improve there?

Yeah, yeah, yeah. No, sure, Alex. We are now quite optimistic about Sweden at the moment. If you look back, certainly in the first quarter, second quarter, Sweden was, you know, was okay, but not so spectacular. But we have seen now that, you know, the sales and then also footfall, et cetera, is all developing quite positively. I think particularly the macro environment helped a lot. As I said in my speech, you know, the government is at the moment actually doing a lot to, to be nice to the population because there are elections coming up in Sweden. So there are some tax breaks which have been already granted to individuals, whether that's a savings tax or income tax. And as from the 1st of April, the VAT on groceries, which is 12% at the moment, will go down to six. So there's a lot of stimulus for consumption, which obviously is something we like. And last but not least, interest rates in Sweden have come down even more rapidly and actually the official rate was at 175. The moment of the Riksbank is helping, of course, again the spending, because still many Swedish families, they have mortgage loans at a floating rate, so that helps them in their wallet. And there's even, I don't know, but maybe even talk about the Riksbank making a move downwards. Let's see how that develops. And next to that, obviously, in terms of the country as a whole, I mean, they're exporting country. They have quite a strong defensive sector as well, which currently is quite a lot of focus on. So no, we like Sweden where it is today. And yeah, also more local elements in this case. We're talking here about a city with a growing population, you know, the low competition we have, the density is low in the area in UMEA. So, no, it all ticks many boxes, Alex.

All right, good to hear. Then, yeah, just one final one to confirm. So the 8% yield that you wrote down, that's a net yield, and is it in line with APRA practices?

Yes. Yeah, let's say it's, well, it is basically, so it's unleveraged and it's a net yield which we will achieve if we do a few more steps. But it is, let's say, the initial yield of this investment is obviously not far away from this 8%, but we... We need to do some more work on the tenancy mix, which we think we can achieve, but that will take some time. Yeah.

All right. Okay. Thank you very much.

Thank you. The next question comes from Benjamin Legrand from Kepler-Chevreux. Benjamin, go ahead.

Hi. Can you hear me?

Yeah, we can hear you, Benjamin.

I just have a question again regarding the acquisition and actually bouncing back on the yield you are mentioning. The current portfolio is yielding at a much lower EPRANET initial yield, around 5.7%. I was just wondering what was the difference with this property. Obviously, it's more north, but you seem to be, very confident about the location, and it's been built very, very recently. So I was expecting, I mean, I'm just wondering why there's such a difference, and also the second question related to this is, do you expect some positive and immediate reevaluation coming from it in H1-2026? Thank you.

Thank you, Benjamin. Yeah, let's say we reported for Sweden APRAnet initial yield of 5.7 and a top up yield of 5.9. Let's say that that's lower than what we have reported here. But again, you know, there are some things to be done in this shopping center. I don't think that this transaction will as such lead to any, changes really in the valuation of our other sources. Maybe in due course, actually, as Roberto said, our impression is that valuers also in Sweden are actually maybe thinking about some compression. But no, let's say it's not that there is something wrong with the center. To the contrary, it has very good fundamentals. But there's also a little bit of vacancy, which I talked about.

and which which is is there and and obviously if if we improve the occupancy then then we can create further value yeah and there's also of course there are numbers benjamin there's also the feeling when you add a little bit of spicy and salt it makes it it makes it nicer and so we think that's also what those are the ingredients that we think we can put in So if you look at the difference in yields, then because we saw the potential. So you correctly said, you know, if the average in Sweden is 5.7, should we expect to hover around those things with those values? We do believe that in the medium run, after we've done our things, that should be a good expectation.

Okay. Thank you very much. The next question comes from Lynn Hartekiet from KBC. Lynn, go ahead.

Hi, Lynn.

Hi. Good morning, everyone. I have a question remaining on the acquisition in Sweden. Just wondering how long it took you to finalize this deal and also if there is any possibility of an extension on this asset further down the line to create more value.

The possibility of extending, there is a bit of, let's say, if you look at the map, obviously the boxes have just been built and actually the last one is being finalized and then also the tenant will fit out there. There's still a little bit of land left where there can also be maybe another restaurant offer or so on. So there can be put some more real estate on it, but overall I think it's pretty well served and the building itself also allows us to be creative and improve maybe the tenancy mix further. Let's say it's not that we can build a lot of more boxes on the site, Lynn, but I think overall what it offers in terms of space, you know, it's good stuff. And, of course, within the gallery, which is also it's, okay, it's 10 years old, but you could say still, you know, very modern, let alone the brand new buildings. It gives us a good opportunity to do some further value creation. In terms of the timing, have we talked a lot? Yes, we have, of course, been talking a lot over quite some time to get to where we are today. As I said before, Inca Centers is a very reputable organization with real estate all around the world. Of course, IKEA is a huge group, so they know exactly what they're doing. And so also, yeah, as I said before, we're very proud that we enter into a transaction with them. But that obviously needs also trust, and you have to obviously take it step by step. For them, it's part of their strategy. They also have to take into account the interest of IKEA as a retail group. There are many, many IKEA colleagues involved. So, yeah, that means that the process needs time. But, no, we're very happy with the end result and, again, that both parties could do it in this good spirit. with a lot of trust, because I said before, we are in partnership, we're neighbors, and that's for the long term.

Okay, clear. Thank you. And then the last question is actually on your rent collection. So I noticed it improved versus the third quarter. Third quarter was 97, actually. Now it went to 99. And the driver behind that is France. So just wondering what happened there, if you can give some color. Thank you.

Rent collection in France, let's say, was hovering between the 96%, 97%, and so that's a bit where we are. Of course, as you know, Lynn, the contracts in France are quite rigid, so there's not a lot that you can do. But we think the rent collection is actually progressing quite well. I mean, it is in line with the rent collection that we also showed in the past. What we do, just to be extra sure, let's say we took some extra bedettes, just in case. But from the information that we have from our French colleagues, let's say the rent collection should be to proceed a little bit as normal. We have some of the old tenants, which are difficult cases, but we've known them all along. So those are, this is a bit the situation.

Yeah, and, Lynn, there is always also an effect typically for France that when there is a tenant who is in financial trouble or even insolvent, then what we can do in France, you can still send your invoice, bill them, and you don't lose the VAT. which in other countries where you send an invoice, you already have to pay the VAT, and then if the tenant is not paying, then to recover the VAT, it takes quite some time. So they're there for you, the collection, because what is it really? You know, you compare what you have invoiced against what you have collected. So if you are free to with invoicing, even if a tenant is financially in trouble, then you create your own gap. You see what I mean?

I see what you mean. That makes no sense on the VAT. Okay. Thanks for the questions.

Okay. Thank you. Thank you. Thank you, Lynn. Just a reminder, you can press pound key 5 on your telephone keypad at any time to ask a question. And with that, I will now turn the call back to Evert-Jan van Garderen for any closing remarks.

Okay, well, thank you so much, everybody asking questions, but certainly also everybody listening to the call. Hopefully it gave some further color on your commercial, its results, and where we are today. I would like to thank everybody, including also all the colleagues who have prepared this presentation and all the material behind it. And hopefully we see some of you who were in the call, particularly analysts in the near future, but also investors when we're on the road to talk further about the results. For now, I wish everybody a nice afternoon. We're just behind 12 o'clock. And have a wonderful weekend. Thank you so much. Thank you.

Thank you.