Wereldhave Nv

Ladies and gentlemen, good morning. Welcome to the WereldHaf first half 2025 results webcast. I'm here today with our CFO, Dennis de Vrede, and we'll take you through the highlights of the results via a presentation. Let me start with the key messages of the first half. I think, first of all, the direct result per share. We have increased the guidance from 170, 180 to 175 to 185. You'll see later in the presentations all the drivers of the increased guidance. But in short, I can tell you, of course, the acquisitions in Luxembourg and a small acquisition in Tilburg. But in addition to that, the strong operational results, amongst others, driven by plus 6% growth in like-for-like net rents. From a capital rotation perspective, we have sold 108 million of assets in the first half of the year. You've already noticed in the first quarter that we sold shopping center Winkelhof in Leiderdorp for 56 million euros. But in the second quarter, or basically after the 30th of June, after the reporting date, we have sold the Roselaar in Roosendaal and two non-core Belgian assets in total for 52 million, all in line with their latest book values. We'll get back to that later. I already talked about the operational strength. We noticed plus 2% growth in retail sales, which I think is nice. But even more nice, of course, is the plus 6% growth in like-for-like net rents. The debt profile, we already communicated this. We raised an additional 125 million. Dennis will get back to it later. The Fitch rating of BBB stable has been reaffirmed in the second quarter of this year, which is also good news, of course. Then, on the joint venture side, we announced in June our first Dutch joint venture together with Sophie D. Dikkerhout. And the full service center transformations for 2025, Kronenburg and Evel, are well on track in terms of budget and letting. And finally, we are screening acquisition opportunities in both Belgium and Luxembourg. We'll get back to that later as well, but that's also, of course, part of the second phase of the Life Central strategy. Then we can go to the numbers. I'm not gonna read them all out, but the direct result per share, you can see an 8.3% increase versus last year. That's amongst other driven by the acquisitions as mentioned, but also by the fact that all the bankruptcies we faced last year and a little bit in the beginning of this year have mostly been refilled. You see actually that our occupancy rate is now higher than in the first half of 24. They are driving the 8.3% growth in the direct result per share. And I think, If I look back about two, two and a half years ago, when it was announced that we would lose the REIT status in the Netherlands, and we will pay five, six million of taxes this year, I think it's quite remarkable that despite all the taxes being paid, we will still achieve an 8.3% growth in the direct result per share. Also important to mention is the loan-to-value. You can see the call-out here. You can see 44.9%. That does not include the disposals which are signed that I just talked about. If you include the Roselaar and the two non-core Belgian disposals post-balance sheet date but already signed, you will arrive at 43.7%. And Dennis will elaborate further in the second half of the year with the disposal of Sterreburg that we expect in Dordrecht. We will be more around 42%. With that, I'd like to focus on the operational results. Like for like at plus 6%, I already mentioned that. Here you see the drivers in the call-out. We had many questions about that in the past couple of quarters, so we thought to provide you the information upfront. Of course, indexation with 3.5% is still a very important driver, but also other rental income. You can think about specialty leasing, the kiosks, the solar panels on the roof, which are more and more generating income. but also the EV charges on the parking lots. I was thinking about the parking lots recently because of course in the past they were always a cost center because they are mostly free, but now they become almost a gas station because we are generating more and more revenues and we still have a lot of potential. So I think for the second half of the year you can expect even more growth in the other rental income, which is becoming more important I think for retail investors like ourselves. Occupancy has also contributed, I've mentioned that, and also a little bit to cost savings. I think what you generally see with these results is that the top line has grown nicely, whilst the cost base of the company has remained roughly stable. Dennis will tell you more about that later. With that, I'd like to go to the individual countries. If we start with Belgium, here you see an MGR uplift, new rent versus old rent of plus 1.4% in the first quarter of this year, or the second quarter, I have to say. What we can see with Belgium is that previously we had higher rental uplifts, but I can mention that particularly in the first half of this year, we noticed that most of the leases signed were in Genk, a more difficult location in the portfolio. We're very happy with a lot of new leases with New Yorker, Viromoda, with Skechers, raising the occupancy. but they were signed roughly in line with previous rents, and that's why the figure is a little bit lower this time. I think in the second half of the year, we expect a more positive figure in Belgium. Still, nicely 7% above ERV. In the Netherlands, a similar picture, about 0.5% above old rent, and that, I think, I keep repeating that, is a very nice comparison with the past. I think between 2012 and 2023, we had negative leasing spreads in the Netherlands, but we're finally stabilizing and even a small plus, and 11% above the ERVs. Luxembourg, we signed the first leases, roughly in line with the previous rents, but also 8% above the ERVs. I think in the second half of the year, we have also a couple of nice leases in the making, which will underpin what we talked about back in February in Pomerloch, the reversionary potential in discount fashion and in health and beauty. We will crystallize some of that already in the second half of this year. So you will notice that when we're going to talk about Q3 and Q4. France, much more of a mixed picture. As you know, what you see, particularly in the Miriadec Center, is that we are able to lease, but still a little bit over-rented. It's only seven leases, of course, that we talk about here, but it is a more difficult rental market for us at the moment. If we then go to the full service centers, as usual, we break down the portfolio in three categories, full service centers in transformation and traditional shopping centers. Of course, the Luxembourg acquisition has been added and the disposed assets have been taken out. I'm not gonna go through all the numbers, but I think at the bottom you can see tenant sales, one of the best forward-looking indicators of performance of assets. plus 2.5% for the full service centers versus 0.8% and minus 1.2%. I think that stands out very nicely and also shows that completed full service centers help retailers to grow their revenues above the market, above the rest of the portfolio, which should bode well for future rental growth. If we then go to the footfall, I think roughly in line with the market in the Netherlands a little bit above, also in Luxembourg a nice plus, I think the figures speak for itself. Focusing on tenant sales, Belgium at plus 1%, but in the Netherlands plus three, I think underpins what I've talked about previously is that the Dutch Occupier market is improving, not only from a rental perspective, as we talked about, but also from a retailer sales perspective. Particularly nice to see that food and beverage, which had some difficult years after the high indexation, the high energy prices, shortage of labor, a lot of red signs, is now finally recovering with plus 8% in the first half of the year. Daily life, as you know, is our way to gauge, basically, the defensiveness of our portfolio. Daily life retailers has a percentage of total rents, or convenience, or non-discretionary. It's at 67%, a touch lower than with the full year 2024 results. It's because of the acquisitions and disposals that we made. What you will see, of course, going forward is that the assets that we acquire, like the two in Luxembourg, will be transformed into a full service center. So with that and also with the rest of the portfolio, the daily life percentage will continue to increase going forward. If we look at the leasing, I already mentioned in Belgium, you can read through all the bullets yourself, but you can see here, for example, the leases in Shopping One in Genk. Veromoda, Skechers, extension of New Yorker, very important for the company, great performance by the team. In the Netherlands, I want to mention the new lease we signed with New Yorker in shopping center Middenwaard in Heerhugowaard. We've been working on this lease for a long time, difficult negotiations, but I'm very glad to report, and it's a fantastic performance of our leasing team in the Netherlands, that we finally signed this lease because it will help the other fashion in the center to perform better And it's basically the starting point, the key starting point for the entire transformation of Middenwaard and Heerhugowaard. So that's a very important lease for the company. If we then look at the sustainability of the rents or the gorge for future rent growth, the occupancy cost ratio, Belgium roughly stable, but in the Netherlands, important to mention, if you look back at the full year 2024 results presentation, there's a decline from 14% to 12%. And amongst others, that's driven by the fact that particularly some of the leading Dutch fashion retailers had very strong growth in retail sales. And you can see 15% occupancy cost ratio for the fashion. I think that is very healthy. In addition to that, you see in the homeware and household the removal of Blocker. They used to be in the portfolio, this larger Dutch homeware and household goods chain with OCRs of 25-30%. They went bankrupt in 2024. We filled all the stores, of course, with tenants with a much lower OCR, also not always in the same category, of course. For that, the OCR is now, I think, at a very healthy level. With that, I'd like to hand over to Dennis for the direct results.

Thank you, Matthijs, and also a warm welcome from my side. On this slide, I'd like to give you a bit of an insight in how the direct result was built up. I think the 13% speaks for itself between last year and this year. But if you would exclude the acquisitions and disposals, you would still get to a very healthy 8% increase of our direct result per share. I think mostly driven by, as you can see, the Netherlands and Belgium, and that in itself is driven again by the occupancy increase Matthijs was just referring, but also the indexation, obviously. I think on the negative side, as you can clearly see for the first time in history, basically, we start paying taxes in the Netherlands, which has an unexpected 1.9 million negative impact on our direct result per share. nicely compensated as you can see by the other buckets. For 2025, referring also to one of the key highlights, we are increasing our direct result per share guidance with five cents to 175, 185. clearly visible on this slide. On the dividend per share, we keep the guidance at this moment at 130 per share over the financial year 2025. This is slightly below our dividend policy, which is about 75% to 85% distribution. But given the fact that we're not at our net LTV target of sub 40 percent, we will always try to stay a little bit conservative here. Moving on to the transactions, a busy first half year. We mentioned already the two assets in Luxembourg we acquired. We did sell, obviously, the Winkelhof in Leiderdorp asset in the Netherlands, but also glad to repeat, basically, that we have been able to sell the last non-core asset in the Netherlands, which is the Roselaar in Roosendaal. Last Friday, we signed the SPA. In line with the book value, and I think if you look at all the reasoning, the rationales behind this disposal, a few things jump out. One is, we don't see this as a full service center potential. Secondly, we've seen the vacancy increasing in this asset over the last few years and certainly also it is a challenging retail location in Roosendaal in itself. So all that made us sell this asset and luckily against the book value last Friday. With this disposal, we have been cleaning up the Benelux retail portfolio completely. As you can see, over the last five years, we did about six transactions, different divestment rationales behind it, but happy to say that we have been able to sell all these assets and can focus on the full service center transition of the rest of our portfolio. Also, at the bottom of the sheet, you can see all these assets did not meet the 8% IR internal threshold that Matthijs was already referring to. As part of the phase two of our life central strategy, good news, we are entering that growth phase to start with earlier this year already with Luxembourg, late 23 we did the first acquisition, the Polderplein and Hofdorp as part of that strategy, but also now small adjacent acquisition we did in Tilburg next to our assets already on the Pieter Vredeplein, all paid in kind with shares, so also slightly improving our LTV. The bigger one, obviously, which we put out a press release late May, is our first JV with Sofidi, a very reputable French investor. We have taken a 15% stake in this Statshard Zutomir asset, We will be making around 15% cash on cash yield on this investment we did of 15% stake. We will be acting as the asset property and leasing manager. So combine those fees with the direct income out of our 15% stake and this will result in around 4% direct result per share impact on a annualized basis. We will be adding our expertise in turning assets into full service centers also in Zoetermeer. Here you see a number of proven concepts which we have been developing over the past few years and introducing in the completed full service centers. These are also the concepts we will be pushing into Zoetermeer over the next years. I hand it back to Matthijs for the live central update.

Yeah. Thank you, Dennis. I think on this slide, the mixed use percentage in the bottom is the most important one. We're now at about 16 percent. As you know, we will gradually grow towards 20 percent, a nice increase also in the first half of this year, so we will see continued growth here. The two major transformations for this year are Nivelle and Kronenburg. Nivelle in Belgium that you can see on this slide, one of our best centers in the Belgian portfolio. The development is fully pre-led. We're on target in terms of cost, but also in terms of unlevered IRR. We will open these assets in the beginning of October, so actually pretty soon. And I think that will have a very positive effect on the center itself. Next to that, Konenburg in Arnhem, our largest asset in Arnhem and also one of the largest assets in the Netherlands. We will transform this asset in phases. This is phase one. We will complete it towards the end of the year, almost entirely pre-LED, and also in terms of cost and in terms of IRR all in line with the budget. The biggest new retailer here is the Jumbo Food Market. It will open towards the end of the year and we think it will have a very positive effect on the rest of the center. CapEx, as you've seen in previous presentations, the CapEx of the Life Central program is nearing, is coming basically to an end. However, we will be adding new assets to the portfolio as we did in Luxembourg. And of course, these assets will also be transformed into full service centers. So what you will see with the full year 25 presentation and onwards is that there will also be new CapEx, of course, coming to the pipeline as we've always communicated in our strategy. Our unlevered IRR framework, as you know, all the assets you generate above 8% unlevered IRR. Benchmark is 7.4%, which is the weighted average of Green Street Advisors, Continental European, Universe, so our assets should be above that. We have no more assets in the sell bucket, as we have sold the Roselaar now. But we will sell one full service center in the second half of the year, Sterreburg in Dordrecht, which you can see on the left-hand side of the slide. And in the middle bar, you can see the two assets in the whole bucket. We will try to tweak the cost and the letting assumptions in order to achieve 8% plus. Also in terms of yield shift, I think we keep outperforming the market, as you can see on this slide. Residential profits, it's a little bit of icing on the cake, as you know. We still expect three million for this year, and about 30 million in the years to come. We're mostly working on the Tilburg project, on the Arnhem project in Kronenburg, but also in Nivelle. We have a pretty sizable project that we are working on. With that, I'd like to hand back over to Dennis.

Thank you, Matthijs. A few slides on the financing and the valuations to start with the latter. A nice, I would say, increase of almost 1% valuation increase of our core portfolio in the Benelux, as you can see here. France pretty much stable, offices also pretty much stable. But if I would go to the two outliers almost in this slide, you can clearly see that Luxembourg has been driving this increase in our core portfolio, not unexpectedly. We have been saying that already earlier this year when we acquired the assets, the two assets in Luxembourg. The seller even put it themselves in the press release, they were selling below book value. I think clearly visible here in the first half of the year, this revaluation, the 12 percent increase. The Netherlands, there's a one-off we put out in the call-out box. We were able to conclude to sign a package deal with a retail formula. which led to an increase of the lease maturities to 10 years, but we had to lower the lease values and that resulted in a one-off write-down for this asset in the Tilburg city centre. Moving on to our LTV slide, very much visible here, the increase between full year and half year, 25 to 44.9% net LTV. As Matthijs mentioned, 43.7% after the disposals we signed after the 30th of June. But certainly also when we are able to dispose the full service at the Sterrenburg at the end of the fourth quarter, I should say, we should be getting more towards the 42 percent net LTV, which would then be more or less in line with the 2024 net LTV number. We keep focusing on reducing the LTV to sub 40%. That's our 35% to 40% target. How do we get there? Well, definitely, we still have the two French assets we need to sell ultimately. And of course, we can keep doing some of those equity-backed transactions, which will also lower our LTV. On the debt profile, a snapshot of where we stand today. Well, also here, very visible the increase of our interest-bearing debt, which is basically following the acquisition of the two Luxembourg assets we acquired early this year. which was 167 million transaction, and we partially financed that with 35 million share issuance. The rest was debt, clearly visible here. Stable average cost of debt, the LTV we already talked about, and we are well within the covenants of our banks at the bottom of the sheet, as you can see. The new European private placement we did with Akon Asset Management, we are very happy with, as a 10 years deal has stabilized basically the debt maturities 3.4 to 3.3 years. Moving on to the maturity overview 2025-2026, no major maturities as you can see on this slide. The focus will be on 2027 where the corporate RCF, our 300 million corporate RCF will mature. We have already kicked off the project just a few weeks ago. After summer we will be working hard on the refinancing and I would expect that we will be able to refinance 300 million already in the first half of 26. With that to ESG, ESG we keep focusing on, obviously it's one of our priorities within the company. We have put on the left side a few nice examples of where we are pushing and clearly you can see that we keep installing more and more PV panels, solar panels. We did 376 solar panels earlier this year for Jumbo at the corporate week, and we signed also a leasing deal for that. We keep also looking for other tenants which specifically is asking for solar energy and see where we can basically put some lease contracts in place. Primarily in Belgium, we are accelerating the rollout of over 350 new charging points for electric vehicles that should be finished by the end of 26. Basically also driving some additional income, Matthijs was referring to, in our portfolio by making better use of our parking spaces. The green leases, another target for us as a company. We have been able to increase the green leases as part of our rent roll from 74 to 76 percent, and we keep pushing for a higher number. With that, I give it back to Matthijs to tell us a little bit about the management agenda.

Thank you, Dennis. The last slide of the presentation, we call it the new management agenda, but it was actually already new with the full year 24 results back in February, but still relatively new. I think we touched most of this. We're creating the scale, expanding in Belgium and in Luxembourg. The total return, 8.3% for the first half of the year. Capital reallocation, we talked about finalizing the last transformations, but again, new transformations will come because we're growing the portfolio. ESG, Dennis just touched upon. Face-out France, to mention it, the investment market is very quiet still, so we don't expect anything for the second half of the year. And of course, the last phase of the balance sheet de-risking, I think Dennis touched upon that. We had to record this webcast again because we had some technical issues this morning. We had a lot of questions this morning. I will try to briefly go through the Q&A and give you the answers straight away so that you're still able to hear what the answers to those questions were. There was a question on the 2025 dividend. Dennis already mentioned €1.30 per share is what we expect. As long as the loan-to-value is above 40%, I don't think it would be prudent to increase further because we still want to reduce the LTV below 40%. The 8 million negative revaluation in Tilburg we touched upon was mostly due to the extension of leases with one retailer with several formats in our portfolio. We chose for the lease security 10-year leases, but that had a negative effect on the rent, new rent versus old rent, and as such also on the valuations. In Zoetermeer, there was a question, do you expect a revaluation? On the recent JV, that will be more for the second half of the year. And for Roselaar and Sterreburg, what we mentioned with Roselaar is that the book value was already 39, 40 million. At the end of 2019, what you saw with the rest of the Dutch portfolio is that those values have been increasing since 22, 23. The Roselaar is still at that 40 million level, but we think selling at that book value is a good achievement. Sterreburg, we have not communicated the value, the quantum of that disposal. What we did disclose is that we think the net initial yield will be around 6%, maybe even a little bit below. And with that, we've answered a lot of questions. Also, we had some questions on the 6% like-for-like net rental growth. Is that sustainable for H2? More or less, yes. Of course, indexation will be a touch lower, but we expect acceleration in the other rental income, as I already mentioned in the earlier part of the presentation. In Luxembourg and Belgium, we are growing. There was a question about the opportunity set. We think at the moment there's at least 500 million for sale in those two markets. Our primary focus for now is Belgium. We're working on a specific project for H2 at a net initial yield above 8%, so I think very compelling, particularly considering the yield I just mentioned on the disposal of Sterreburg. Question on the JV with Sophie D. Is that our only partner? Well, we've just started the cooperation very well, I have to say. a very professional JV partner, but we'll see in the future. It could also be the case that we find an asset that is interesting for us, but not for Sovidi. And then, of course, we can also partner with other investors and the same for them. I think the French assets, the sale we already mentioned, don't expect anything for now. And then lastly, there was a question about maybe a special dividend. Dennis was pretty clear on that, that we don't have any plans for a special dividend at the moment. The LTV is still above 40%. I think that is the simple answer. It increased because of the acquisitions and dividend payments. And finally, we had a question regarding the catalyst for H2. I did mention, of course, Sterreburg disposal and acquisition in Belgium. I think those are the major catalysts. But in addition to that, we expect an acceleration of the auto rental income, which could also be a nice catalyst. With that, I'd like to thank you for listening to this webcast. Again, apologies for the technical issues this morning. From Dennis and myself, I wish you a fantastic summer and hope to see you on the roadshow, APRA conference or any other occasion. Feel free to reach out. The details of our investor relations are on the website of Wereldhaven and enjoy your summer holiday. Thank you. Thank you.