Cibus Nordic Real Estate AB (publ)

Good morning everyone. Welcome and greetings from a very summer empty Stockholm today. We're talking to you live and my name is Christian Frederiksen and I am joined here as always by the company's long-term CFO, Hija-Lena Oulosson. So let's move into summary of the period. Rental income up 3% and net operating income up about 9% but that includes a one-off insurance payout for a burnt down property in Finland of about 1.8 million euros and without this one-off income point then we have a stable increase in net operating income of about 2%. The profit flow period is about 2.2 million and the values increased by about 4.4 million in the quarter through acquisitions and through FX rate movement but in that figure we have an unrealized change in value of about minus 8.3 million euros which is 0.5 minus. And then moving on to this the favorite slide, Cebus with our slogan and we love our slogan because it says exactly what we do. We create value for our stakeholders by investing in daily goods properties so creating food into yield that's what we like to do and are continuing in doing. This is a slide many of you will remember and recognize. I think our mantra of course converting food into yield and I thought I'd like to share a story with you from earlier this year when we had a company kickoff when I ahead of the kickoff asked one of those AI song bots or song apps to write a song about Cebus Nordic real estate and the lyrics were actually great so hats off to the bot and the song was titled Supermarket Love. That's not going to be our new slogan I think converting food for yield does the job fine but it's amazing to see how AI can help in the creativity and moving along. So the lyrics were great, the beat was terrible so I won't play the song for you and we're sticking to our slogan converting food into yield. And on the map to the right I'm happy to show you the five red dots which are our new acquisitions in Sweden coming back to those a bit later but otherwise things are pretty much the same. We aim to create stable cash flows, we're focused purely on daily goods properties listed since June 2021 on the Stockholm mid cap. We're also listed pure daily goods real estate vehicles in the Nordics. We have a semi-peer now through listed PISMA properties which are about 20% grocery assets but they're more of a development company than we are but it's great to have a peer also in the market. We've grown from our Finnish supermarket portfolios into a Pound Nordic Pure grocery player and we pay monthly dividend to our shareholders. So this is our expansion timeline established 2018 in Finland moving on to 2020 when we entered into Sweden then entered into Norway 2021 and then entered into Denmark in 2022. So looking at our properties at the end of the last quarter we now have 455 assets which is up from 451 as we did the acquisitions. We'll be adding one more asset soon as we take possession of the last asset shortly. Our property values are up 4.4 million euros as mentioned and for the fourth consecutive quarter our earnings capacity that has increased and that's about 3% up quarter on quarter and then our leasable area has also increased by 9000 square meters which is from the acquisitions. On the tenant side of things no change we still have of course the property. So moving on to a bit more about the asset we carried out in this quarter. We acquired six grocery stores in western Sweden in an area called Värmland. The assets are 88% daily goods in rental income. The rest which is not daily daily goods is in the property in Forst which is the Ica property there up to the top left of the six photos where the other which is not daily goods is the Swedish state monopoly for alcoholics beverages which is sustainable auger. There's a restaurant and an IP store. The agreed property value was 87.5 million Swedish approximately 7.6 million euros and the price per square meter paid was about 9800 kronor per square which is about 855 euros per square meter and worth pointing out that that's about half or less or less than half of what it costs to reinstate a supermarket property in Sweden right now. So we think we've done a very nice deal in acquiring these properties which fit well in our portfolio and give us increased cash earnings per share. Looking at the assets there's one Ica store that has a low OCR. OCR of course being occupancy cost rate and that's one of the key metrics when looking at supermarket stores. What's the share of rent towards turnover in the store and this store has a very low OCR. Very happy about that. The rest of the other five assets are leased to a company called Pecos. Pecos is a discount grocery brand present only in Värmland. They have 15 stores. After this transaction we own seven of these and they were acquired by Kup Värmland in 1999 and Pecos is doing very very well. They've been growing steadily throughout the last years to 8% in last year 2023 and 12% up in 2022 and they have very healthy margins. We're very happy about this tenant. There's an ongoing project in Hardforce which is the asset up to the top right and that's the property which we haven't taken possession of yet. We're waiting for the project to finalize but I was reading in the media that Pecos they're investing about one million euros in that asset and you can do the math by yourself there. Kind of figure out what we've paid for these various assets on average. So I think that shows how important these stores in general are for the grocery players. They invest heavily in the stores and therefore are long-term in many stores even though the Waltz may say something else. So happy to have got that acquisition under our belt during Q2. And then moving on back up to the site. Let's see this top level. What do we mean by creating stable cash flows? Well if you look at the left part of this slide as an income statement or a profit and loss we try and create stable cash flows on every single line of the income statement. So starting with the top line we focus only on daily goods properties, create stable income, it's strong tenants as you know, it's a story well told. It's also very non-cyclical daily goods business of course proven to be resilient in all times of economic volatility. People might need to buy food in all terms of the market up and down terms. 84% of our rental income is from daily goods tenants and 97% of our 455 properties are anchored by daily goods tenants and when we say anchored we often that means the only tenants. As you see our average property size is 2200 square meters and what we have there is in effect a single standalone supermarket. A standalone could be in a building with residential on top etc. but the tenant is 100% in most properties a daily goods tenant. Looking further down the P&L then we protect our growth through having 99% of our rent linked to CPI and that's worked very well throughout this high inflation season. We have a steady wall it's now come up from 4.8 in the last quarter up to five years again and PLN will tell you a bit more about that later and one of the most important things also is of course store location stability which is prevalent in supermarkets. The store locations are very important for the grocery chains. They need to make sure that people can find the store, get into the store, purchase things and leave in easy accessible places. Very important for the chains often many decades in one place and a unique characteristic of supermarkets and daily goods assets is that if a chain or grocery decides to move out often one sees that there's someone else banging on the door ready to take over. Maybe one of the other chains or maybe a more local or independent player working on a small one to two shop basis. But what is important is that sometimes there are vacancies in supermarkets. Some locations do become obsolete. It's cut through competition among the grocers. Perhaps the infrastructure changes or demographic changes in the region which means that a store is obsolete. That's part natural part of our business and what's important to remember is to have a very big portfolio. Otherwise risks can be big if you only own a few supermarkets but earning 455 assets in four countries where they're all very small means that we have a great diversification of our income stream. Well again we have 90% of the net. There are some property increases. So on the cost side we try through these lease structures which is that we get the increase in but have a stable cost basis. We also want to make sure we have stable income when it comes to the bottom line to a 97% interest rate hedged and we use diverse funding sources. Next slide please. Thank you. Earnings capacity as mentioned many times before is one of our key metrics and drivers and I'm very happy to share with you that for the fourth consecutive quarter we've now managed to increase our earnings capacity per share. So in total since the dip in Q2 or the July 2023 we've now increased the earnings capacity for share by 7%. And this quarter what has happened, what are the main changes? Well we have the top line indexation growth coming through in certain of our regions. In Sweden for example indexation only comes through once a year but in other countries it comes through on a rolling basis. So we can see there were top line indexation growth and we've done a couple of rent renegotiations. What's also coming through is the outcome of the bond refinancing that we've carried out and told you about earlier and then the acquisition in Sweden also helping earn capacity for share. Looking at our share price performance and our traded volumes it's a very liquid share about 60 million Swedish kronor turnover per day about 2,400 transactions per day which is a very high number liquidity for a company of our size and so I'm happy that we have the liquidity in the market. Looking at our shareholder list you will recognize many of these names as a very stable shareholder list and we're proud of our shareholders with many are well known professional investors but we also have a very large number of smaller investors and looking at the number of shareholders we have now at the end of the quarter it's about 51,000 shareholders which is up 3,000 shareholders since the end of last quarter. And handing over to Bja Elena for the financial evidence.

Thank you. Okay let's start with some significant events during this quarter. We had the AGM the 15th of April where the board was re-elected. The first of May it was announced that the board had repurchased warrants of the 2020 program. It was conditional of that the holders reinvested the repurchase consideration in CBA shares using the retaining warrants and 1,396 new shares were right. On the 28th of May CBA acquired six grocery anchored assets in Sweden for 87.5 million CET that Christian talked about just a minute ago. And then on the 29th of May CBA announced that CBA wanted to exercise the right to prematurely redeem its senior unsecured green bond loan 102 and it was made early July. On the 31st of May CBA announced that we had increased the total number of shares and votes due to the aforementioned exercise of the 2020 warrants. Here are some key figures for the quarter. Rental income was 30.4 million euros and net offering income also 30.4 million euros. Net financial items was minus 16.7 million euros and profit from property management 10.3 million euros. We do have items affecting comparability on several lines in the P&L so let's look at the next page. In the second quarter service income included an insurance compensation of plus 1.8 million euros for a fire damaged property in Finland. The property was subsequently sold in the second quarter. FIBUS reported a non-recurring expense of minus 1.1 million euros of which minus 0.4 million euros was based on the resolution by the AGM to subsidize the option premium for the 2024 warrant program. And minus 0.6 million euros was based on the board's decision to repurchase the paid premiums for the 2022 warrant program. All warrants for the 2022 program were subsequently canceled. Net financial items include a non-recurring expense of minus 3.6 million euros for tender offer when buying back bonds that mature 2024 2025. Net financial items also include a positive exchange rate change of plus 1.3 million euros. Profit from property management excluding non-recurring items and exchange rate effects amounts to 11.9 million euros. Unrealized changes of property value was minus 8.3 million euros. The negative change in value was mainly attributed to Finland and Denmark. Unrealized change in value of derivatives was minus 0.3 million euros. Our current earnings capacity shows a net operating income of 114.7 million euros. Property expenses is the same since the last quarter due to gain through energy efficiency in our ESG investment. Indexation and acquisitions have increased the rent. Profit from property management plus expenses from the hybrid bond was 52.7 million euros. Adding back non-cash items, profit from property management was 0.97 euros per share, which is an increase of 0.01 euros per share since the last quarter. Looking at the net operating income in a comparable portfolio, we see that the effects of indexation and other rent increases amount to plus 4.4 percent. Indexation going forward will increase the NOI and cash flow while financial expenses are 97% capped. The biggest segments are countries. Finland is the largest market with 70% in the second quarter. NOI this quarter is however somewhat inflated for Finland due to the insurance compensation. So without it, Finland would be contributing with 68% of the NOI, Sweden and Denmark 14%, Norway 4%. CISR strategy is to give a shareholder strong dividend on a monthly basis. The AGM in April decided on unchanged dividends of 0.90 euros per share divided into 12 payment locations. The dividend yield on the closing share price of 157.8 CEC at the end of the quarter was 6.5%. Looking at the balance sheet, property value was .000.000 euros. Secure debt was .000.000 euros, giving a loan to value on secure debt of 50.3%. Unsecured bonds amounted to .000.000 euros and this includes the loan 102 that we called and paid early July. Also the other bonds that can be callable during 2024 are included. So if they were to be called, paying the cash that we have on hand, the bonds would amount to .000.000 euros. Our net asset value for NRW was .000.000 euros or 11.8 euros per share. Our remaining lease time was back at five years at the end of the second quarter. We have extended nearly 50 grocery and daily goods leases during the quarter. Regarding funding, 77% is bank financing with a weighted average floating credit margin of .6% and an average weighted capital maturity of 1.5 years. All bank loans with remaining terms of less than 12 months are currently being refinanced. I estimate that they will be all refinanced during the second half of 2024. Close to 21% of external funding was the end of the second quarter unsecured bonds. Taking the called bond in July plus the callable bonds during 2024 out with the cash that we have on hand, unsecured bonds would be 17% of the funding sources. Our hybrid bond amounts to .6% of funding resources and has first call in September 2026. Based on the earnings capacity and taking all interest rates hedges into consideration, an increase of the market interest rate with one percentage point would affect profit with about minus 0.5 million euros annually. An increase with two percent points would affect profit with about minus 1.1 million euros annually. Looking at some key metrics, LCV was .9% at the end of the second quarter. We continue to operate in the lower part of our internal policy range between 55-65%. The covenant in the MTM program is LCV of 70%. Interest coverage ratio was at 2.2 times and will continue to be 8.5. The covenant in the MTM program is 1.5 times. As an alternative to the LCV, we look also at the net debt to EVTR. We have high yielding properties and net debt to EVTR was 9.8 times during the second quarter.

Thank you, D. Elena. Looking a bit into the future now. In the outlook, it's been a busy time in grocery and daily goods. There's lots of things happening in the market. Takeovers, fight for market share, food prices moving. I've written a bit about that in the CEO comments in the report, so I won't dig into too much about that now. The outlook going forward, for us, earnings capacity started to grow in the second half, as mentioned, and our strategies continue this development. There's still inflation in our markets, so the figures look to support continued growth in rental income through indexation, which proves our business model that we have inherent growth built into our business model. There's stable development in the daily goods business. What can be seen in the market is there's several new retail growth initiatives that could lead, among other things, to more sane and nice backs. What we see in their examples of that is, for example, in Sweden, Lidl have said that they want to increase their number of stores by 50%. They've been around for a long time in Sweden and have been managed to build 200 stores. They've now said they want to increase by a further 100, so that's a significant investment for them. Listed tenant Axfood with Billis, their discount brand, is doing very well in the Swedish market, and they want to grow that substantially. They also want to grow by them by Citygos, which is a small privately held hypermarket player in Sweden with about 3% market share. Axfood had bought that structure, looking for more stores apparently, and they're waiting for the competition authorities to give them the green light later this year. In Finland, we've also seen the very cut throat and strong competition between S Group and Kesko, together have more than 80% market share in Finland. Kesko stated that they want to grow and they have stated that they are want to do a store investment program of approximately 250 million euros per year. That's a significant number. My take on all this activity, and there's also other activity in Norway and Denmark, is that if the grocers are building balance sheets now, then sooner or later there may be more opportunities for sale and lease backs as the grocers are building up their balance sheets and want to offload assets going forward. There's also transaction volumes are starting to pick up in the market in general, which also helps. One thing also I just want to mention, and I mentioned we moved out our Walt back from 4.8 to 5. It's been around the five-year mark since inception of Seabass, as you've seen. I think a great strength for us, being such a large company specialized in one asset class, is that we can renegotiate leases in packages. Our tenants are big corporates used to procurement, used to negotiations, that's what they do, right, by groceries and daily goods and sell them on. By being a large player like ourselves, we can manage to negotiate packages, which is a win-win for both our tenants and us. So for example, in Finland, we have negotiations, one of those 50 leases which we mentioned, with our three main tenants in Finland. So it's good to negotiate in packages, we feel, and it's good to be big. Looking at the market in general, falling interest rates should mean stabilized valuations and increased transaction volumes across our markets, all other things being equal. I think that evidence of falling interest rates is a great business opportunity for us. We've seen in general an increased investor appetite for stable cash for operational sectors. I think there's evidence of that through the IPO of the Prisma properties I mentioned earlier, and then multiple transactions in several markets, especially Sweden has seen a much more liquid transaction market for in our segment, both from institutional players, but also from private capital. In general, of course, strong support from equity and bond markets, as well as support from senior banks, which in general in the market, I think will facilitate transactions and movement going forward, and we feel strong support from our backers as well, which is great. We're a motivated, competent, and agile organization ready to react. We've done one transaction as seen, and we are looking to do many more in all of our Nordic markets and also following other key European markets closely.

Yes, this is working with different ESG activities, all to reach the goal to be climate neutral in 2030. In the second quarter, we have completed our double materiality analysis, and it's preparing for including ESR reporting in the sustainability report for 2024. During 2024, we have issued three bonds under the new, more ambitious green framework that was launched during 2023.

Thank you. When it comes to environmental impact, the best thing we can do is work and have energy in focus. We have net leases, as you know, so we're working side by side with our tenants to create energy efficient buildings. During the quarter, we've added additional two solar cell panels on two of our roofs. We have installed about 50 of our locations loading base or charging base for electric vehicles, so 50 store locations in Finland and Sweden. We've signed you in the quarter. For the S in ESG, of course, daily goods, real estate, important part of play in everyday life. It's part of a sustainable and resilient society that people can get edibles and can go to the store and both meet people and buy food, of course. It's also an important physical meeting place in the modern world, and by some, it's considered social infrastructure and a very important part of society. And what are we working on there? Well, again, together with our tenants, focusing on important social aspects of daily goods, portfolios, creating accessible and safe marketplaces. So what are our focus areas going forward? To continue to grow earnings capacity per share, our main focus, to continue to provide stable cash flows and dividend paying capacity, looking at and carrying out cash earnings per share, creating potential transactions and continue to optimize our balance sheets. And on the ESG side of things, continue to work with social infrastructure. We want to retain and create accessible daily goods locations as a meeting place, work with energy efficiency, become climate neutral in 2030, and then as a whole, continue to work with our tenants. Primary reasons to best in the TB share, high and stable yield, potential for favorable value growth, monthly dividends, segments with long-term resilience and stability. And just to summarize, then what should be the main takeaways from the Q2 report? Stable underlying cash flows, as mentioned, daily sector still doing very well. Of course, we're receiving index growth, renegotiating packages, our wall has moved up. The earnings capacity continues to grow. Very happy with that, of course. We feel the strength of tailwinds from the financial markets, which should allow us to carry out more transactions going forward. And we're back in growth mode. We've done one acquisition and looking for more. Thank you from us.

We open up for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Svante Croxers from Nordea. Please go ahead.

Good morning, Christian and P. Elena. Thank you for the presentation. I have to first, I have to ask first if we can find the Siebes bot song anywhere or do we have to find one ourselves?

I'm not quite sure of the copyright rights for this AI song bot, but we had a lot of fun. So try it during the summer. Just put in a link of what you think the song should be about and in about one minute you get a song. Amazing.

Great. Then on a more serious note, you have some bank loan renegotiations coming up and I guess you had a 1.5 percent margin on those on average. What should we expect about or what do you expect about the discussions now for H2?

Yeah, the margin is 1.6 percent because margin on the bank loans. Yeah, I mean we have very good discussions with the banks and there's large interest with the bank that they have a cooperation with today and also new interest also. So we are looking at a good negotiation with the banks. But that we'll see and we have the aim to finalize the refinancing in the second quarter, now second half year of 2024. But really good discussions with the bank. They're happy to support us going forward and also since the bond market has opened up and shown so strong, that also gives us negotiation power with the bank.

I mean in general, one could say that supermarkets and groceries are a very likable asset class from banks. Stable tenants, semi-long vaults geographically and by number diversified portfolios which create stability in cash flows. So no, it's a very preferred asset class in my feeling when it comes to this asset

class. Thank you and then your refinancing has been quite extensive. Do you want to comment anything about hedging activities after Q2?

I mean we will continue to have a high degree of hedging. That's important for us to continue to deliver stable cash flow and hedging is a part of that. That's something that we will continue to do and the refinance activities that we did with bonds of course is giving us a good platform to start from and to grow from going forward. We will have benefits going forward also in the earnings capacity when we're able to call the bonds when they become callable. So we have one loan 103 that will be callable in early September, second of September and then the other loan 104 loan will be callable in December. So replacing them with lower margins on the existing bonds and having longer maturity.

Thank you and you had quite a lot of renegotiated lease agreements. Can you describe with the tone in those discussions? Has it been tough as usual or even tougher?

I'd say on the contrary it's business as usual. In most cases one simply extends the lease. We get the index growth, the tenant gets the stable store location they can carry out their core operations which is selling daily goods. My feeling is that it was and what I hear from our team is that of course it should be a tough negotiation. That means everyone should be happy when they leave the table. But I understand we have a good cooperation with our tenants and reach some good negotiation points for everybody.

Thank you and then a question regarding valuations. Do you want to give some comments on the property valuation cycle and differences between countries?

Yeah sure. Now as seen we had a value decrease this quarter also 0.5 percent. In general I think there's a lag in the market. The value was inherently and the way that the value should work is they need transaction data. So therefore in both upturns and downturns valuations are lagging in my view. We've seen a turn in Sweden just as in many other sectors as seen among our listed peers who have reported over the last weeks. We see that values in Sweden have stabilized and are starting to grow. Transaction volumes in our sector are picking up. The several buyers of the buy side as mentioned and we see that valuations have bottomed out and are just slightly starting to pick up. In the other countries we have as Norway, Finland and Denmark then we see that we're still lagging there this development in Sweden. The largest movement we saw was in Denmark. And why are yields still moving up when interest rates are falling and there should be more confidence in the market and financing costs are going down in general? I think it has to do with the lag as mentioned, the need of transaction data. But in general as interest rates continue to fall there should be more and more buyers willing to put and assume lower financing costs going forward in their calculation and their investment ideas. No one wants to catch the falling knife but if the knife hits the floor then there should be more people wanting to come and pick it up. So I think with a turn of the market, I think that's the sentiment in the market. And when it comes to valuation decreases, even if it were to continue with the lag, then we still counteract this with extending leases as mentioned, which extends the world, which moves things a bit in our direction. Indexation is coming through of course in our sector and then we try out some new lettings and trying to create new income streams for example from EUV charging facilities.

Thank you and the last question you mentioned the OCR or dependency cost ratio. Have you disclosed what it is? I can't remember, I have seen that number. Could you elaborate a bit on that? What kind of ranges you have there?

Yeah, no that hasn't been disclosed and not for us and not for that transaction. In general in the market, if the retailers and the chains don't want to tell us, the market or other competitors what turnover is in an individual store. Because the turnover is what really drives the long-term attractiveness of the store location. But if, in example Ikea, every store is owned by an independent retailer. So you can find out in looking backwards at these annual reports what the turnover was in an individual store. And that's what we've done in this case before that position. Found out what the turnover is in the future. Both mean stability in store location because the store is doing very well, the retail is doing very well. But in time should also mean a potential for rent increases.

Thank you, that is all from me.

Thank you. The next question comes from Victor Rudd Stenfo from ABGSC. Please go ahead.

Hi Christian, hi Pia-Lena, can you hear me?

Yes, very

good. So you stay positive on your outlook for acquisitions here going forward. Any colour on what markets are looking more attractive at the moment?

A strength of Seabass being a pan-Nordic player is we look at all markets simultaneously. So it's difficult to say where we can find the most attractive yield, the yield spread. But we're looking at all markets.

Very good. And you've mentioned this before and also earlier here on the call, saying that you look at other markets outside of the Nordics as well. Is that just out of curiosity or do you see potential transactions out of sight of your core markets?

Yeah, we've expanded from Finland into three new geographies. So that is part of our DNA to potentially move into other markets. What's interesting about the grocery daily goods market is it's very similar in most European economies in that you have a number of key players fighting it out, maybe a handful, maybe three, four, fighting it out for market share. So the dynamics of the market are very similar. Shopping habits are similar in that everyone needs to buy food and competition is restaurants, fast food, etc. But everyone needs to eat. There are differences in the markets, of course, on the real estate side of things, legislation, etc. And also, of course, on zoning planning. In some countries, it's very difficult to build hypermarkets. So hypermarkets are not there in the markets, for example, Norway, such a market. But also the consumer, the consumers themselves, hypermarkets are not really their thing in Norway, for example. So there's no customer demand. But looking across European markets, many of the characteristics are the same. And therefore, further international expansion could be part of our natural growth story.

And so any specific markets that you're looking more closely at at the moment?

We're looking at several markets, seeing just as we look across the Nordics, where we can find interesting potential situations and deals.

Right, understood. So then you had a one-off item in the quarter relating to the insurance compensation for that fire incident. You sold that property. Do you have any color on the yields or anything about the transaction that you could say? It's a bit of a special case, but still interesting.

Yeah, it was very small, as you can see on the realized change in value. So the transaction was very small. And it was sold back to Kesko.

So I guess, I don't know, I'm guessing now, but they bought back the, so it was a burned down property. They bought it back, I guess they're opening a new store there again. But this is guessing from my side. They bought it from us,

please. Understood. And then you also mentioned Lidl's plans here to grow Biangio stores. Do you have any up on that? Is your understanding that they will be building or growing through new development or leases in existing properties?

It's our job to speak with all major and smaller grocers in all of the Nordic markets. But as I understand from what I was reading in the press from Lidl, it looks like it's going to be new construction, right? But again, I don't know exactly what their thinking is. I just saw that it was a large number and they have a pretty aggressive growth plan.

Understood. That's all from me. Thank you.

Thank you. The next question comes from Victor Hockenhammer from Pareto Securities. Please go ahead.

Good morning Christian and to Elena. Thank you for taking my questions. I have to ask you a follow-up. If you were to continue to acquire properties in Sweden or Finland, for example, who do you view as a typical seller of your asset types?

Sorry, can you repeat the first part of your question so I can hear you?

Sorry, if you were to continue to acquire properties, who do you view as a typical seller?

Well, the market is still very fragmented in all of the Nordic regions. We are one aggregator, there's not that many around. So there are several sources for our kinds of assets. One is from the retailers themselves. If they've bought or built a new store, stabilized it, and then they sign a long lease and sell it. So as a sale and lease back, that's kind of been one way that many of the grocery and daily goods assets we see in the market across the Nordic have come to the market, initially through that route. We also see a number of private individuals and investors who, now that the market is thawing, you can actually transact again, bringing their assets to the market. And then there's a number of smaller portfolio builders who've kind of built a portfolio and it's been time to offload that asset. In Finland, we've seen quite a few assets being sold from funds who are, I guess, coming to the end of their life and the transaction market has come back, so they've sold. We've seen a number of listed players in Sweden, as they've been working with their balance sheets, sell off a couple of their assets. In Denmark, we saw the big sale and lease back from Ream 1000, which they bought back some of it themselves, actually, but they brought in a large number of different sources, but both professional, institutional, and also the change themselves. It's a mixed bag of sellers.

Perfect, sounds good. And then I follow up from Victor's question. How does the valuation yield differ in other markets, like in Germany, for example, compared to your reported yield?

In general, it's about the same all across Northern Europe. Okay,

perfect. And then finally on financing, a question to you, Pielja.

How

do you reason today in terms of having a credit rating? I think it was a target of yours a few years ago.

Yeah, it was a target before, but for now and in the midterm, we don't aim to have a credit rating. We had the goal previously to go to investment rate. That goal is no longer valid. So now for the short and midterm, we are not looking for a credit rating. Okay,

perfect. Thank you very much. I move for the questions.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. Okay, do we have? There are no more questions at this time. So I hand the conference back to the speakers for any written questions or closing comments.

Just one written question, which is a question about we have two big tenants. Do you plan to wait gradually? I'd say that there's no reason to decrease towards one or two or three tenants. There's no strategic reason to do so. The cash flows are very safe. And also there's the economies of scale, which I mentioned earlier about talking about renegotiated in packages. We understand them. They understand us. However, as part of a growth situation, if it is from a country where that tenant isn't located, then there will of course become a natural dilution of our current tenants. But there's no strategy to lower the wait gradually. So there are no other questions. Well, thank you everyone for listening. Thank you for your questions. We will be returning to you with our Q3 results on

the 5th of November.

So stay tuned. And until then, and for those of you up here in the Nordics, please, who were some holidays are kicking off quite soon. I wish you a happy summer and I wish everyone a happy summer who's listening. Take care. Thanks. Bye.