Warehouses De Pauw Nv

Good morning everybody! You see here in front of you, again, a very happy man. It's not so long ago, and only a week ago, we have presented a unique future project for us and for our sector. And first of all, I want to thank you, all the stakeholders, for the full support we get for this unique project. everybody supports this deal and it is very convincing for us so thank you all for the support and with everyone with who we by who we have discussed this unique project last week all together but besides that it is very well and I'm also very happy that we can show today that De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv in Barendrecht and a showy scarcity of land, we started a new redevelopment of the same location in Veckel for Kühne & Nagel. Kühne & Nagel, who is already 50 years active in that region and just across the Maas factory, the biggest production of Maas in Europe. Well, there we started together De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv or a one-billion-euro portfolio. And that growth was based on cross-border relationships. DHL, come here, growing further together with Cifrigo. Romania, there we extended with existing clients. And we could also attract a new industry client, like Siemens. And above all those fantastic new value-adding projects and developments, acquisitions, we also did asset rotations for more than 100 million. That's clearly a new driver. Some of you ask, why now? Well, because we are big enough to do it. We can do that without pressure on the short term EPS and besides concentrating on the operational priorities we also started with the new building blocks for 2030 we onboarded Spain and Italy 30 managers are in place and helped from the group they are now making their tents in the beginning of the autumn they will come to us and say look this is how the country looks like this is the competition and this is how WDP can make the difference there so preparing for 27 and Germany Germany is really ready for take off now you will see soon and above that adding and onboarding De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv our 500 million euro envelope per year. So, we can manage it all within our plans and extend 2030 projects.

And at the demand level, well, there we can really say that it normalised.

Situation, normalised, but yes, still accepts the more cyclical element, the macroeconomical stock build-up that we all waited for in the beginning of the year but that is postponed due to the war in the Middle East. And indeed, but besides that, we see really different activities. As for example, in Morco France, Libertour, There was a building emptied by an FMCG client. Another new 3P yellow came to us and said, look, I only use part of the site, but I see different vendors. I see possibilities and give me the chance to fill it up by the end of the year. And in the meantime, half of the building is relapsed and he is looking for new vendors and new clients. De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv We are happy with the fact that we could realize a unique step forward on our European platform and that the operations continued and so that we can really grow further all together in the different countries up to the 20 million euro platform.

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Yes. Hi. Good morning. Thanks for taking my question. I guess you can hear me? Yes. Hello? Okay. Okay. Yeah. So my question is really on the impact of the deal and maybe as we are building our models for, let's say, the next two or three years on 27. And I also asked this question on the previous call. De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv is typically expensed in IFRS. Just want to know if that's correct or whether you will capitalize those costs.

Yeah, you will indeed. It's a business combination and then it will remain the same because if you capitalize that in the end on a simple portfolio deal, then it will also be charged in the end through the portfolio results and indeed those expenses De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

Just very easily say then next year will be a 3% growth rather than a 6%. Does that make sense?

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in the total portfolio. So it's about 2% of the total portfolio by the end of 27. So even after that, the distribution of that exceptional dividend.

Okay. Yeah, that's clear. No pressure then. Okay. Thanks for taking my questions and good luck on the integration.

Thank you. Thank you very much. Francesca, the line is now on you. It's your next.

Yes. Hello. Good morning, everybody. Many thanks for taking my questions. I have two. The first one is related to the write-off that I see a little bit in France, in Germany and in Luxembourg. Can you elaborate a little bit on this and is it fair to expect that De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

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Okay, we can live with it. We can live with more competition like we have here in Western Europe. And more competition means that there is more activity, that there is more liquidity, and that you get then also, let's say, better valuations. But for the moment, there is no more competition. But we see some Part is looking to Romania, but for the moment, there is not more competition than, let's say, six months ago. So for us, stable market, good projects, and nothing changed.

Yeah, and supported also by a very good land position with the necessary infrastructure so that we can really have good offering towards prospective clients for development projects on which we focus over there.

Wow, that's clear. Many thanks. And then the second question is on the demand. I mean, I think that your message is very positive and very clear as well. But just looking at the lettings that you have done so far, how much is small tenants need small units and how much is bigger tenants big boxes? Can you give a sense? Thank you.

It's a little bit, let's say, it's also depending on the region. For example, in Belgium, there are almost no big boxes available. There was somebody looking for a bigot, but he could not find it. So he is now looking for, let's say, eventually two or three places. In other countries, there are some. So it's depending on De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

Good morning. Could you indicate what was the lease renewal rate in the debt activities in the first half and what you expect for the remaining leases expiring for the second half? And second question, the increase in property charges in the first half, this increase by 11% function of the larger portfolio size or were there any specific reasons in some countries?

De Pauw Nv De Pauw Nv our view that we can maintain the 90% minimum operating margin DPD margin.

Thanks so much. You're welcome.

Yes, thank you. Good morning. Actually, I have two questions. The first one is on the Argonne integration. I understand that you want to exercise one option on the land that they have close to Lyon in France. Just trying to understand, do you intend to capitalize interest on the acquired land bank, especially on this one, so the Lyon Land Plus? And is it part of the financial synergies of the millions that you are expecting?

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv And what could be the amount of this capitalized interest? De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

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Okay, that's fair. So just to understand, in 2027, our best case is to have a vacancy that will remain below 3%, right?

Sorry, Pierre-Emmanuel, can you repeat the question?

Yeah, sure. Just to build our business plan for 2027, we are basically basing our estimates with a vacancy that will remain below 3%.

Yeah, yeah, yeah. That's what we also guided for, that from now in a normalized market, we should also be able to generate a normalized occupancy rate between 97% and 98%, so less than 3% vacancy in the

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

De Pauw Nv De Pauw Nv The output is fundamentally good because the construction costs are much lower and we just need also that stockpiling again and that cyclical element to kick-start again and then there will be a pressure, an upward pressure.

Have you just said that the construction costs are going down?

No, no, no. So there are indeed some upward pressures on the components of the building materials, but today the overall building cost for the new build development is stable. Why? As opposed to a few years ago when we came out with COVID, then there was really also very strong demand, but now the order books of the construction companies are very low, De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

Maybe just a general question because if I look at the evolution of the portfolio value since 2025 actually the portfolio has been evolving below inflationary trend and could be the case again in H2 I assume on the basis of your comment on ERV. So De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

I think we can definitely say that our cash flows are inflation-protected. We have inflation-linked leases. We are well below ERVs. Yes, ERVs are today flat, but I think that's also logical given the wider economic situation. But there is also a scarcity element building up, so we are confident in that our cash flows De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

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De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

Good morning. Could you indicate what was the lease renewal rate in the first half and what you expect for the remaining leases expiring for the second half? And second question, the increase in property charges in the first half, is the increase by 11% a function of the larger portfolio size or were there any specific reasons in some countries?

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv that we can maintain the 90% minimum operating margin, EBD margin.

Thanks so much. You're welcome. You're up next.

You're now unmuted.

Yes, thank you. Good morning. Actually, I have two questions. The first one is on the Argonne integration. I understand that you want to exercise one option on the land that they have close to Lyon in France. Just trying to understand, do you intend to capitalize interest on the acquired land bank, especially on this one, so the Lyon land plot? And is it part of the financial synergies of 10 million that you are expecting?

No, because it hasn't been bought yet. That's the good thing. They have limited land in their balance sheet, mainly for extensions, and that's limited. And there, for these assets, for these projects which you are referring to, it's an option on the land. And what could be the amount of this of this capitalizing trust? That's simply in function of the volume of land you buy in the future. It's like our whole portfolio as well. When we buy land and we do a project, we start capitalizing land, capitalizing interest on it in function of the capex.

Okay. And for the rest of the 750,000 square meters, are you intending to capitalize some interest for the rest where there is no land option but already owned by Argonne?

if you start to work on it, yes. But that's a very limited time. It's a very, very limited amount. Okay.

It's not making the difference. Yeah.

Okay. Thank you. The second one is on the 2027 experience. So just to have a bit of color here. So approximately 10% of your portfolio is due to renewal in 2027. Have you already received any termination notices from tenants so far?

No, not specifically. And that's only typically not be them. We don't have any specific indication. And now, let's say, in the second half, that group will start for 27.

Always starts just ask from September. It's never before. Most of them are, let's say, six between six and nine months in advance. And 27 is really starting as from as from September, not early.

Okay, that's fair. So just to understand, in 2027, our best case is to have a vacancy that will remain below 3%, right?

Sorry, Pierre and Manuel, can you repeat the question? We have a small technical issue.

Yeah, sure. Just to build our business plan for 2027, we are basically basing our estimates with a vacancy that will remain below 3%. Yeah, yeah, yeah.

That's what we also guide for. That's from now in a normalized market, we should also be able to generate a normalized occupancy rate between 97 and 98%, so less than 3% vacancy in the

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv The outlook is fundamentally good because the construction stocks are much lower and we just need also that stockpiling again and that cyclical element to kick off again and then there will be a pressure, upward pressure.

As you just said that the construction costs are going down?

No, no, no. So there are indeed some upward pressures on the building materials, but today the overall building costs for the new build development is stable. Why? As opposed to a few years ago when we came out of COVID, then there was really also very strong demand, but now the order books of the construction companies are very low. and so they want to keep their machine ongoing and they absorb the cost increase of the materials in their margins for the time being. Obviously it's also linked to the wider situation and duration of the situation geopolitically that we don't have a crystal ball of course but if it would increase it would also be immediately go hand in hand with the rising ERP because we would charge it through to the tenants.

Maybe just a general question because if I look at the evolution of the portfolio value since 2025 actually the portfolio has been evolving below inflationary trends and could be the case again in H2 I assume on the basis of your comment on ERV. So De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv but um there is also a scarcity element building up so we are confident in that our cash flows will be inflationary but obviously we don't have a crystal ball about where interest rates are going um that's the i think yes that i can say real estate is following inflation but not linearly and not every quarter and that's taking sometimes time uh

De Pauw Nv De Pauw Nv De Pauw Nv De Pauw Nv Paul, you're up next from Barclays, so the line is now open for you.

Hi, guys. Sorry about that, and apologies if the questions have been asked. I've been a busy morning. Just a quick one, a couple on actually the Argonne situation, and apologies if you can't answer, but just wondered what rental growth or rent Are you assuming gross rent? Are you assuming in your modeling and forecasting for 2027 for Argonne? Just to assist in our own modeling, that'll be great. And then the second question, obviously you're acquiring Argonne, which is a more levered business post their special payment. And that obviously will have an increasing effect on your own leverage. I just wondered what your targets are in terms of moving that leverage down and whether working on the Argonne situation precludes you from doing any other transactions or whether you still remain very active in the market looking at other things. Thank you.

So what we took for Argonne is a relatively flat occupancy rate for at least 99% plus De Pauw Nv on the rents for 27. And then, yes, we are cognizant that due to this exceptional dividend, our goal leverage will be higher. And this will have some effect on the consolidated leverage of the group. But that's exactly why we said we will also execute 250 million euro of disposals so that the impact is actually quite minimal with only 1% and impact on LTV and 0.3 times on adaptive EVDA and on adaptive EVDA will then be still one of the strongest in the sector. And we will continue to operate within our 500 million envelope, of course, which we can do each year on a standalone basis. Do note that each year we already have 300 billion of retained earnings De Pauw Nv De Pauw Nv De Pauw Nv have not changed. They stay the same. We maintain our policies and also our credit ratings have just been affirmed by both rating agencies.

Which is also a good sign.

Cool. And just to confirm, the deal doesn't preclude you from doing any other equity funded transactions or doing accelerated book builds on your own stock So just because you're issuing shares for Argonne, there's nothing in that deal that precludes you doing other things sooner. Is that correct?

Yes, but we will obviously now focus on executing the transaction and continuously replenishing our pipeline for which there is room enough because we have also a lot of incoming cash flow in the second half of the year. Next year, we have again the 500 million envelope. And so today we can really see good opportunities of continuously replenishing that pipeline within that 500 billion envelope.

And we will first try to, let's say, close and integrate as soon as possible. This is now the first priority, of course.

And then, let's say, we are ready for the future.

Okay.

Thank you.

Thanks Paul. As a reminder, if you want to ask a question, it's hashtag FICE. In the meantime, we have a written question from from Bernstein, and he's asking the following. So it sounds as though Germany is next on the cards for WDP. What is driving this decision, and should we expect an acquisition of existing assets or portfolio, or will this be development-led growth?

Well, of course, De Pauw Nv