SmartCentres Real Estate Investment Trust

Good day, ladies and gentlemen. Welcome to the SmartPedras Meet Q2 2025 conference call. I would like to introduce the computer class. Please go ahead.

Good morning, everyone. Apologies for a slightly delayed start. We had a couple technical difficulties on our end. Welcome to our second quarter 2025 results call. I'm Peter Slam, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, SmartCenter's Executive Chair and CEO, and by Rudy Gobin, our Executive Vice President of Portfolio Management and Investment. We will begin today's call with comments from Mitch. Rudy will then provide some operational highlights, and I will review financial results. We will then be pleased to take your questions. Just before I turn the call over to Mitch, I would like to refer you specifically to the cautionary language of our forward-looking information, which can be found at the front of our MD&A. This also applies to comments that any of the speakers make this morning. Mitch, over to you.

Thank you, Peter. Good morning, and welcome, everyone, and so sorry for the delay. As we have seen from our disclosures, Q2 continues the trend started last year. That is a quarter of solid performance across all sectors of the business. That is retail, industrial, residential, storage, and office. Translating into higher occupancies, healthy, sane property NLR increase, respectable and sustainable lease extension rates, and reduction in payout ratios. all with a focus on high-quality covenants from national retailers in our preferred categories of general merchandise, grocery, pharma, home improvement, apparel, financial services, and quick service restaurants. Extending our lead in the area of value and convenient retail. As I said before, the seeds of this positioning and weatherproofing of the business were planted years ago, guided by our belief and first principle that providing value and convenience to all Canadians is good business. The second quarter performance reflects this in many different metrics, such as same property NOI growth of 4.8% all in, or 7.7% excluding acres. Positive leasing spreads of 6.1% all in, or 8.5 excluding acres. 82% of 2025 lease maturities have already been expended. 98.6% occupancy for in-place and executed deals. A reduced payout ratio of 89.4%. Rent collections of over 99%. And during the quarter, Costco took possession of the premises at our 80-acre Winston Churchill and 401 Center, formerly occupied by Rona, and have commenced fixturing with a planned opening later this year. This center is now anchored by Lobos, Walmart, Winners, and Costco. Also worth noting, Walmart's fixturing is well underway on schedule at our South Oakville Center, located at Third Line and Rebecca. With a scheduled grand opening this fall in the old Zellers Target space, this is the first Walmart opening in quite a few years. Value-oriented retail, while not always in vogue, is always in demand. In addition to the metrics mentioned, this is further evidenced by our very active New Build program, where negotiations for new space and existing smart centers develop to expand our 37 million square foot portfolio with the latest in general merchandise, pharma, apparel, and other offerings. Further on the development spectrum are projects now under construction, which I will describe in a moment. And also contributing to future value is our ongoing land use permissions program across the platform with the 59 million square feet at the REACH share already zoned We believe smart centers could possibly possess the largest pipeline of zoned real estate in the country. When the time comes, the ability to quickly execute on this valuable inventory will prove a competitive advantage. Active developments include the 340-unit Artwalk condo project. It's well underway and at grade. As previously reported, 93% of the units are pre-sold with substantial deposits. Our recently completed 458-unit Millway apartment is now 97.8% leased and performing ahead of budget. Construction of our Bond Northwest townhomes with our partner is progressing well, with nine more closings taking place in the quarter. bringing the total to 98 units now closed. Construction continues in a 224,000 square foot Canadian Tire flagship store in Leaside, which will be completed and fixed for opening in Q2 2026. And three SmartSoft self-storage facilities opened in the quarter, two in Toronto, Edmonton West, and Gilbert, and on Jane Street, and also one in Doral in Montreal, bringing the total open facilities to 14, with three remaining under construction. Altogether, this brings the gross square footage of the 17 projects to 2.3 million square feet at 100%. This portfolio continues to perform well, and we intend to continue its expansion. On the capital recycling side, we have made deals on one-third of the planned $100 million of dispositions under negotiations. Closings for this particular part is scheduled for September. While the business continues to grow organically and through new income producing developments, we carefully manage our debt and debt-related metrics. In this regard, we have improved our financial flexibility with approximately $1.2 billion in liquidity, 89% of debt being fixed rate, and an uncovered asset pool of $9.6 billion, which Peter will speak to in a moment. But before that, let me turn it over to Rudy for some more operational highlights. Rudy?

Thanks, Mitch, and good morning, everyone. As Mitch mentioned, the second quarter was once again a standout in many areas and related operating metrics. Tenant demand for space remained strong with 148,000 square feet of lease-up completed in the quarter. delivering high-quality income across all provinces, with a leading 98.6% occupancy at the quarter end. Same property NOI continued its strong momentum, with 4.8% growth overall and 7.7% excluding anchors, compared to the same period in the prior year. With 5.3 million square feet of space maturing in 2025, by the quarter end, The REIT had already extended 82%, with rental spreads of 8.5%, excluding anchors, and 6.1% all-in. As also mentioned, tax collections remained strong, exceeding 99% in the quarter. Costco, with a 20-year initial lease term, took possession of the Ex-Rona space at the 650,000-square-foot shopping center at Lincoln Churchill and 401, with an opening schedule for the fall. Also during the quarter, and also with the 20-year term, the grocer and entertainment user could possess some of the ex-low space that is in our bond center with a pines fall opening. As we have mentioned recently, the relaxation of grocery restrictions will not only continue to benefit large open-format retail, but we believe will also accelerate the pace of tenant demand and customers to our centers, maintaining strong cash flow and high occupancy. Generally, we have also been adding to the portfolio and upgrading uses with medical, daycare, entertainment, health and beauty, fitness, pet stores, and more. Our premium outlets continue to excel in driving traffic with improving tenant sales, leading to strong growth in EBITDA and valuation to the REITs. tenant sales continue to improve with a Toronto premium outlet in the top three highest sales performers of all shopping centres in Canada. The fax space, only just disclaimed after the quarter end, will be outfitted with a temporary user for up to a year, while we lock in and expand some luxury names into the space at significantly higher rent. On EFTs, We are advancing several initiatives across the organization as part of our three-year plan, including training for all staff, completing materiality assessments, further defining the net zero framework established last year, implementing utility tracking software, advancing a number of IT initiatives to enhance our governance, improving climate change awareness, and implementing related policies and procedures to address our assessments. During the quarter, we submitted our WESB report, and shortly after the quarter end, we published our annual ESU report, which you can find on our website. Through ESU-specific targets being tied to compensation for all associates, we ensure ESU issues are integrated across the organization and RECO platform. Overall, the REIT continues to grow, strengthening its cash flow and stability while reducing risks. Our strong and expanding relationship with dominant retailers also paves the way for the introduction of new brands in our existing platform, enhancing the customer experience. We expect this momentum to continue throughout the year. Thank you, and I'll now turn it over to Peter.

Thanks, Rudy. The financial results for the second quarter once again reflect a strong performance in our core retail business. For the three months into June 30, 2025, net operating income increased by $10.2 million, or 7.3% from the same quarter last year, primarily due to lease-up and renewal activities. FFO for a fully diluted unit was $0.58 in the quarter compared to $0.50 in the comparable quarter last year. The increase was primarily due to higher NOI and changes in the fair value adjustment on our total returns law, partially offset by a decrease in interest income as a result of the repayment of mortgages receivable and lower interest rates. During Q2, we also delivered and closed on nine additional townhomes in our Vaughan Northwest project. This has resulted in a cumulative margin of approximately 23% for the project to date. For the three months ended June 30, 2025, FFO with adjustments, which excludes the townhome profits, transactional gains and losses, and the total return flow, was $0.55 per unit compared to $0.51 for the same period in 2024, an increase of 7.8%. We again maintained our distributions during the quarter at an annualized rate of $1.85 per unit. The payout ratio to ASFO with adjustments continues to show improvement at 89.4% for the quarter or 93.3% for the rolling 12 months ended June 30th. Adjusted debt to adjusted EBITDA was 9.6 times for the 12-month period ending in Q2, which is unchanged from last quarter and an improvement of 30 basis points compared to the same period last year. primarily due to continued growth in EBITDA. Our debt-to-aggregate assets ratio was 44.2% at the end of the quarter, a 50 basis point increase compared to the same period last year. Compared to Q1, our unencumbered asset pool increased by approximately $50 million to $9.6 billion in Q2, mainly due to fair value increases on existing unencumbered assets. Unsecured debt, including our share of equity-accounted investments, was $4.7 billion at Q2, slightly higher than the prior quarter, and represents approximately 84% of our total debt of $5.5 billion. Subsequent to the quarter end, DDRS reconfirmed our BBB NID rating with a stable outlook. From a liquidity perspective, we remain comfortable with our current liquidity position. As at June 30, 2025, we have approximately $907 million of liquidity, which includes both cash on hand and undrawn credit facilities, but excludes any accordion features. This was boosted due to the closing of a new $100 million revolving bilateral credit facility during the quarter at an attractive cost of capital compared to our syndicated operating facility. The weighted average term to maturity of our debt, including debt on equity accounts and investments, is 3.1 years. Our weighted average interest rate is 3.94%, virtually unchanged from the prior quarter. Our debt ladder remains conservatively structured, and we have ample liquidity to refinance the maturities for the remainder of the year. Approximately 90% of our debt is at fixed interest rates. Just before we open up the call to questions, I want to touch briefly on our development projects that are underway. As in previous quarters, we have updated our MD&A disclosure, focusing on those development projects that are currently under construction. As you will see on page 17, there were seven projects under construction at the end of Q2, down three from last quarter, as Mitch described the three self-storage facilities that opened during the quarter, two of them in Sri Lanka, and one in Dorval, Quebec. The reach share of total capital cost of these development projects is approximately $456 million, with our share of the estimated cost to complete standing at $255 million. And with that, we would be pleased to take your questions. So, Operator, can we have the first question on the line, please?

Certainly. As a reminder, if you'd like to ask a question, please dial star 1 on your phone's keypad. The first question is from Mario Terry from Push Capital. Please go ahead, Mario.

Hi, good morning. Thank you for taking my questions. I just have a couple of them. First one, Mitch, I think on the last call you noted a 50% chance of closing up to $100 million of non-IPP sales this year. Can you maybe give us an update on those figures and any kind of incremental broader market changes in terms of appetite?

Yeah, I mean, it's above 50% for one of the one of the deals, one of the transactions. I would say it's maybe below 50% for one of the transactions at the moment. But I don't think it's actually a reflection of the market. I think there's a market improvement since we last spoke about this, notwithstanding the one that would be, I think, a little bit less likely And that's just due to the particular purchaser that we contracted with. That particular asset, while maybe not sold to, maybe lower than 50% for this particular buyer, I think is well above 50% to a buyer as a project. So, giving you the specifics that they reported activity last quarter has you know we have more you know visibility on it so I think one will be probably a little bit you know delayed and the other is imminent but the general capital recycling program I think has improved you know the prospect of capital recycling the climate has improved slightly since we last spoke and quite a bit 12 months ago

Okay. And then when you think about recycling opportunities on the one that may be imminent, how would you prioritize your capital allocation priority? What looks most attractive in terms of you deploying the proceeds today?

We'll just repeat that.

Yeah. Okay. My second question is more on the operation side. There was a mixed employment report in Canada today. I appreciate smart centers as part of the last to see any weakness in its portfolio given the consumer staple nature of your tenant base. With that said, I'm kind of curious about which kind of tenant demand leading indicators you're focused on and what are those indicators telling you today?

Yeah, I mean, we are not directly or proportionally affected by those types of Trends or data points, I mean, our tenants, the no-frills, the blah-blahs, winners, so on, I think thrive. I think they thrive in all markets. I mean, there's an underlying, very strong underlying reliance on value and convenience. across the country. But when there's a perceived belt tightening going on, then there probably is even a little bit more rush to value. So we do see an increase in leasing activity for new space from our core retailers going on right now. We will report on more specifics about that in the coming quarters, but we're anticipating, you know, doing a fair amount, if not quite a bit, of leasing for new spaces as well as occupancy. So I think we're ultimately kind of beneficiary. We're sort of in the right place for the trends that you're referring to.

Okay. My last question would be for Peter. The canned cost recovery ratio was up 200 basis points to roughly about 94% based on our numbers. Human occupancy is now back more than 98%. Are you essentially at a peak cost recovery ratio today, or is there more applied there? Mario, there is a little bit of seasonality to that, but I think our year-to-date number is a pretty good one right now. Okay. Don't just focus on the quarter, but look at the six months. Got it. Okay. Thank you.

Okay. Thank you. As a reminder, if you'd like to come up to ask a question, please dial star one on your phone's keypad. The next question is from Lorne Palmer from Vigel Bank Capital Markets. Please go ahead.

Thanks. Good morning. Maybe just going back to the discussion around the transaction market. Of course, I missed it when I was queuing in for – questions. But, Mitch, what do you attribute the improvement over the last, you know, couple quarters to?

I would say, well, to clearly just look at the last 12 months, I would say it's just there's less uncertainty, even though there's uncertainty. I think the world, A, the Canadian economy The Canadian market, I think, is less concerned about consequences, ultimately, whereas a year ago, I think people were thinking in more dramatic, if not even catastrophic terms. Maybe six months ago, even, that continued on. In the last six months, I think capital is a little bit more comfortable. with the next six to 12 months. So we're getting inquiries. We feel some convective energy in the area that would result in capital recycling for us. It's really a question of what we're willing to do. or department, I think there's a market for our product. Particularly given what's going on, particularly with the sales results of the food stores, the Walmarts, Costcos, and so on, our assets are particularly attractive, I think, to capital. So I think it's a combination of the uncertainty that's not as wobbly as it was before, and the strength of value-oriented assets.

So just to be clear, because again, I missed it, so sorry if I have to repeat yourself. The dispositions you're looking at, they are income-reducing properties?

Yes. One of them, yeah, you must have missed it. One of them is pretty far along, better than 50-50, sort of close. The other one, I'd say, has gone from 50-50 to below 50-50. And that one is an asset that's not complete, but will be an income-producing asset. But they're not our core assets. It's not a core at Walmart Acres Shopping Center. We're not talking about that. These are assets that are non-core or for other reasons that we are looking to sell. But not our core, you know, not our core assets.

Okay. And then I guess maybe following on that, how much, you know, value-wise portfolio do you believe there is of these non-core, you know, disposition targets?

I mean, you know, these assets would probably total, I guess, $150 to $200 million if they were all sold, ones that were actively in negotiations on. We'd like to sell, you know, $300 to $400 million of assets. So we just want to get these done, and then we'll go, you know, we might actually not even wait for these to get done. The market's looking more interesting right now, so we're not going to part with assets that are a little closer to our core without, you know, the right cap rates. So we might, you know, we might start looking at some capital recycling on the next tranche of, of assets given the improvement in the cap rates and the interest out there. But we haven't really – we're nowhere on that. I mean, that's just something that might happen in the next few quarters. So you're looking at best-case scenario, you know, $150 million to $200 million, but short-term, very short-term, you're looking at under $100 million.

Okay. Thanks for all the comments. I'll turn it back.

Okay, thank you. The next question is from Dean Wilkinson from CIBC World Market. Please go ahead, Dean.

Thanks. Morning, everybody. Can we just question around the balance sheet in general? And Mitch, you said things aren't as wobbly now. What would have to happen for you guys to say, look, there's enough opportunities here to maybe gear up a little, move it from this mid-40% range and move Just how are you thinking about the optimal capital structure here, just sort of, you know, debt relative to where your units are trading against NAV?

Yeah, I mean, I think we're more comfortable with lowering the debt. We are feeling pretty stable. I mean, you know, you see our occupancy, our rent collections. There's definitely positive trends. but we want to lower debt. So, well, I don't think you're going to see us looking to, you know, to get, you know, to leverage up. I don't think that's certainly not in our plans, and it's not in our DNA. So I think we'll play it a little bit more conservatively as it relates to debt.

And then would you have a target as to where you want to see that get down to?

uh, well, zero, but, um, uh, I mean, uh, we're comfortable with where it is, but, um, you know, you know, under, uh, at or, you know, below 40, uh, you know, is, is pretty conservative. Um, we've always been, uh, sort of in the low, well, we've always been in the low 40s, I think, uh, So, you know, we'd love to. We'd get pretty excited if we could get down to 40 or a little below 40. Okay.

Perfect. So I'll head. Thanks, guys. Head on back.

Thank you. As a reminder, if you'd like to queue up to ask a question, please do so. Start watering your phones. Keep at it. The next question is from Sam Gagliani from TD Securities. Please go ahead, Sam.

Thank you, and good morning, everyone. Here's the first question just on the same property and why. Rudy, I didn't catch it if you did, but did you guys reiterate your outlook for a 3% to 5% for this year on same property and still looking at the lower end of that range?

No, sorry. You did not miss it. We would reiterate that same outlook and that's the same range. We think we will probably... as a forecast or as a run rate for the rest of the year, be closer to the middle of that range. So we had a great quarter on a run rate basis, look to the middle of that range as, you know, our guidance.

Appreciate that. And switching over to the premium outlets, and maybe specifically Toronto premium outlets, you know, the NOI growth there has been very strong in recent years. and you've got here an opportunity with the former HBCs or the FACS office. Is the NOI growth starting to slow a little bit there, or do you think the growth that we've seen in recent years is sustainable over the next few years?

Yeah, I mean, I think the most, The outlets in both Toronto and Montreal continue to, you know, amazingly improve. But I think most significantly in Toronto, we are looking at a possible expansion, another expansion there. So we're in the approval process right now. And if we're able to do that, I think you'll see, you know, significant increases there. There's a lot of demand, obviously. That's why the expansion. So I think, Rudy, do you want to make any comments on the organic growth?

Yeah. As we mentioned, in the outlist space, the rental bumps and the rental lifts are annual. And as a result of that, you're going to see annual growth in NOIs to the extent that the property is almost fully leased. And then when there's a little bit of churn, like there is with the track space, that gives us opportunities, especially this particular space, to do something bigger. So the NOIs are going to continue to grow. The sales, as I mentioned earlier, is in the top three in the country. and it's one of the highest performers even in the assignment portfolio, they tell us. So performing really, really well, which is why we're looking at an expansion of that center. And you can imagine the expansion of that center and the current construction costs, what the rents would have to be, and there is a list of parties that are already interested and new names that would come in that would be names that you would see south of the border in the bigger outlets. So, you know, the property continues to do really well. Existing tenants are wanting to expand into larger spaces and pay higher per square foot rent as well. So all of that bodes well for continued growth in TPL.

Yeah. That's helpful. And I guess just on the snack space, I mean, you're commenting about the rents growing annually. It's kind of geared to sales, perhaps? more so than a regular shopping center, such that obviously the tax base, I think everyone would probably agree, hasn't seen the kind of sales growth that many of the rest of the tenants have enjoyed. So there's a big reset potential there.

Yeah, and their rent was, I would say, substantially below market. I mean, they just happened to have a lease that was below the average rent in that place to start with in their sales. But You know, that turned into an opportunity. I would also add that Montreal is also, there's things going on in the Montreal Outlet Center and around our Outlet Center there that are going to make, I think, move the needle in Montreal as well, the Outlet Center in Montreal. There just happens to be a lot of growth in the area, in Mirabeau. And, you know, we've got surplus lands there. So we're anticipating that there'll be things happening because, you know, we're in negotiations. That'll, you know, add some voltage over there as well. So there's some potential NOI increase over there at the material.

Interesting. Yeah, there's been huge population growth up there. Last question for me is just on the distributions. The last bump was right before the pandemic. And, Peter, you know, you mentioned the improving payer ratio. You know, how are you guys feeling about reinstating annual distribution increases today perhaps versus six, 12 months ago? You know, what's needed to sort of make that decision, you know, more real for the board?

So 7-2 is not good enough then. We think – I mean, I'll turn it over to Peter, but – Yeah, I mean, we're very comfortable with the security of our distributable income, our recurring income. But, you know, that's a decision anyway that's made. Basically, you know, between monthly and quarterly. So, you know, we will obviously be considering it each time. But I think, did he confirm, did we announce anything yet? No. All right, well, anyway, that decision has not been made. But, you know, I'll turn it over to Peter to... We don't have much to add, Sam.

The care ratio continues to improve. We're pleased to see that. We certainly, as it improves, grow more confident in the sustainability of the existing distribution, and it leaves us more room, and ultimately the board will have to make a decision on what to do with distributions. But no change is currently contemplated.

Thank you all, and I'll turn it back.

Thank you. The next question is from Gaurav Mathur from Green Street. Please go ahead.

Thank you and good morning, everyone. Just one question from me on self-storage. Now, we're hearing that there are certain operators in the market that the new entrants that have come in that are flashing rents very quickly just so they can shore up occupancy As you're delivering units, more storage units to the market, is that somewhat changing how you're thinking about underwriting all these assets? And is there any change in the pricing strategy at your end?

Yeah, I don't think... First of all, we are often the ones with the lowest rental rates going into the market. We're very competitive in that regard. I think, in fact, we're a bit of a disruptor when we open around existing storage. But the big picture, Canada is still substantially below the average square footage per capita storage than the U.S., for example. So... Yes, everyone's going to respond to market forces. There might be some aggressive competitive that's going on in any given market. But overall, I think we're very cognizant and we're watching very closely about overbuilding and storage. And most of our locations are pretty tough markets to get into if you look at it. are Gilberts or Dorval, DuPont, Victoria, Burnaby. These are really land plays that we've been able to get approvals for. I doubt anyone's going to be building nearby or down the street any time soon on the majority of our stuff. A lot of the other stuff, A lot of the other storage locations are on our shopping centers, on our smart centers. And that's just a choice that we've made as we went into the storage business to give our storage network an advantage. So we're already drawing massive amounts of traffic to our smart centers. And then we're putting storage on that site. That is a very strong competitive advantage. So in those cases as well, our competitors are opening and unable to open down the street. So I think in most all of our cases, we're well-positioned, but nevertheless, we're watching closely to make sure that we're not committing a folly in terms of storage and the storage industry here in Canada as it grows.

Thank you for the call.

I'll turn it back to the operator. Thank you. We have a follow-up question from Mario Seri from Solicit Capital. Please go ahead, Mario.

Hi, thank you. Just really quickly, coming back to the central dispositions, the $150 to $200 million kind of best case 3-4 assets, can you comment on kind of the blended cap rate that you're hoping to achieve on that? Presumably it's a mixture of different types of assets.

Okay, yeah, I mean, you don't need to do a calculation of what we're giving up and what we're gaining. The ones that are happening right now are on lands where there's no actual income at the moment. They're buildings, but there's no income. So the reason for that is when we started this capital recycling program, it was just a tiny little flickering glimpse of a market. and there was just no interest in selling our core assets at then cap rates. So these are the assets that made sense. Now, and you'll see in the foreseeable future, there seems to be a little bit more energy, you know, cap rate compression, and we might start to entertain the sale of properties where there is actual income. But we're not sellers at any price. although we're motivated to recycle capital, we're waiting for the cap rates. Those were the only assets that made sense at the time, given market conditions. And I would not plug in $150 million any time soon. This is going to be a step-by-step process. But when it happens, when the market does come around, we'll be... we'll have lots of options and the numbers will be significant. But for now, we would plug in in the short term, you know, well under $100 million and hopefully not too distant future, you know, closer to $100 million. And then, you know, when we turn the corner in the new year, maybe, you know, maybe the balance of the $100 to $200 million.

So if I understand you correctly, on the first little bit, essentially the cap rate is zero, and then as we add properties to it down a little over the next year or two, then your cap rate comes up a little bit. But initially, that's how I think about it.

I'm not sure I understood that, but... But everybody here is nodding. I didn't quite understand it, but I'm going to just go along with it.

In the short term, buildings that are being sold, effectively there's no income associated with them, but over time as cap rates for the building that you may look to sell, as they come down and have income on them, over time the blended cap rate on those homes will nearly go up because there's no income on them.

Yeah, yeah, absolutely, yeah, yeah, yeah. But, you know, the answers we're selling are, one, you know, a vacant building. It's being bought by somebody who wants to use it, but we have no income on it. The other one, I don't want to say too much about it. It's, you know, it's kind of, you know, we don't want to, you know, but there's no income on it. At the moment, we could. keep it and generate income on it. We decided to sell it for reasons earlier stated. If the deal doesn't go through and we think it makes more sense to just complete it and generate the income, then we might do that. We're really waiting for the market to get a little bit better. It needs to be moving in the right direction. And when it does, you know, we will seize the moment and we'll be looking to do more than what we're kind of just kicking around and playing footy on right now. It's just the only things we feel make sense at the numbers that we've been able to achieve. But that day will come and we will act on it. And I hope that will be, if this trend continues, I hope that will start to happen sometime in the next six months.

Okay. Thank you, Mitch. All right. Thank you. There are no further questions in the queue.

Great. Well, thank you all for participating in our Q2 call. Please feel free to reach out to any of us if you have any further questions. In the meantime, have a great rest of your day and have a great weekend. Thank you.

Ladies and gentlemen, this concludes the SmartCenters REACH Q2 2025 conference call. Thank you for your participation, and have a nice day.