Eurocommercial Aktie

Good morning, everyone, and welcome to Eurocommercial Properties Half Year Results Conference Call. My name is Ilaria Vitaloni, and I am Investor Relations Officer at Eurocommercial. I'm joined today by our CEO, Evert Jan van Garderen; and our CFO, Roberto Fraticelli, who will take you through the key highlights of our half year results and provide an update on the business.

With that, I'm very pleased to hand over to Evert Jan to start the presentation. Evert Jan, over to you.

Thank you, Ilaria. Good morning, everyone, and welcome to Eurocommercial Properties Half Year Results for 2026, and thank you for joining us.

On the slide, we posted our 35 years anniversary because we were founded in 1991. And that's a useful moment to reflect on what has created over time, but also to focus, of course, on what we hope and will create in terms of value.

During the first half year of 2026, our centers continued to attract more visitors, our retailers delivered good sales and occupancy remained exceptionally high. And that was all, of course, also a result of our active leasing and asset management initiatives.

Today, Roberto and I will explain how these operational and financial developments fit together and why we believe they provide a sound platform for continued growth. I will begin with the operational review, and Roberto will then take you through the financial review. Of course, after our presentations, we will open the line for questions.

I'll start with a brief reminder of who we are, where we operate and the long-term consistency of our approach. Eurocommercial was founded and listed in Amsterdam in 1991. And actually, we will celebrate that soon with ringing the gong or the bell, as we say in Amsterdam, later in -- at the end of October because it was the 1st of November when we were listed.

And from the outset, the company has pursued a selective long-term investment approach, with our first shopping center acquisition in France, Les Atlantes, followed by Curno in Italy in 1994, which, by the way, we still own, a nice shopping center, in Bergamo. But we then also entered in Sweden with Burlov Centre near Malmö, followed by Belgium in 2018 with Woluwe Shopping. And in April this year, Avion Shopping in Umea became our latest acquisition. Today the portfolio comprises 25 shopping centers across Belgium, France, Italy and Sweden, with a value of approximately EUR 4.2 billion.

Although the markets and consumer preferences have changed considerably over 35 years, the core of the model has not. Own high-quality retail destinations, stay close to retailers, and customers invest where the return is attractive, and manage the assets actively for income growth.

Our portfolio spans 2 complementary formats. At the one end, we have the convenience-led suburban assets anchored by grocery stores and essential services. These centers obviously benefit from frequent visits and serve the everyday needs of our local communities. But on the other hand, we have the destination flagship assets where fresh and premium and international brands, leisure, entertainment create a broader day-out experience.

And between those 2 ends of the spectrum, there are the categories you would expect like health and beauty, personal care, food and beverage, services and social experiences. These categories are important because they support the recurring visit and make the centers relevant for more than a single purchase.

Our strategy connects investment selection, operational execution, financial discipline and value creation. First, the investment strategy. We focus on prime shopping centers in strong European markets with dominant catchments, solid economic fundamentals and long-term growth potential. Selectivity is essential. We do not seek growth for the sake of growth. We look for assets where the quality is really important and where we can see an opportunity to improve the operations.

Secondly, our operational strategy. We actively manage the centers through leasing data-driven insight and targeted asset management. This is where our local teams create value, improving the tenant mix, reconfiguring space, introducing new brands and ensuring that each center remains relevant to its customers.

Third, our financial strategy, which is a solid and robust strategy. Now Roberto will talk about it more in his presentation.

And then finally, that's probably where it is all about, it's value creation. The first 3 pillars must translate into outcomes for shareholders. Rental and earnings growth, attractive returns from capital expenditure, better portfolio quality and disciplined capital recycling.

Yes, Italy, we can't escape from Italy because it's currently our star. And not only because it is a star, it also represents 44% of the portfolio and continues to deliver strong operational performance. Importantly, 75% of the portfolio is rated A by analysts from Green Street, reflecting the quality and competitive position of these assets.

The figures on this slide show how our remerchandising programs have supported performance at the 3 Italian flagships: Fiordaliso, Carosello and I Gigli, evidenced by the important KPIs uplift on renewals and relettings, rental growth above indexation, and retail sales. These results demonstrate that remerchandising is not a cosmetic exercise. It is a disciplined operating tool. By improving the offer, creating the right space, introducing retailers that customers want, we can strengthen trading, improve rental [ tension ] and enhance the long-term quality of the asset.

The remerchandising pipeline, which is shown here, is moving from construction and temporary disruption into income generation. And we see here the examples of CremonaPo with a new Primark store. But also at Collestrada, a new Primark store. And in I Gigli, we will have Lefties and Lidl will opening in October, bringing the present program in that shopping center also close to completion. In France, at Val Thoiry, we're also remerchandising and redevelopment that will take some more years, but it also includes the opening of a Primark store.

And during these projects, affected units can be temporary non-income-producing. That has a limitation in terms of rental growth in 2025 and 2026. But as these stores open and the areas return to full income operation, we expect the income contribution to become increasingly visible, with the full effect of the current major projects expected in 2027.

If we look at completed projects like Woluwe Shopping and Carosello, we have put here on this slide some amounts, and they speak for themselves because after completion, we can really measure the returns, which are nice double-digit figures. If we look at nearly completed initiatives, which are shown here, they also deliver the projected presented results. You can see what we have invested in I Gigli Collestrada and CremonaPo and what the expected rental uplifts are. Obviously, the amounts and, therefore, returns, they vary. But it's also important to stress that over the next years, it'll become even more clear what the returns will be. The spin-off of the remerchandising project will also be noted in the medium and long term.

The important point is not simply that each project is attractive in isolation. Together, they demonstrate a repeatable model. We identify an opportunity in the merchandising mix, design a practical reconfiguration, secure the right retailers, manage the temporary disruption, and then capture the benefit through higher productivity and rental income.

As these projects become fully operational, we expect stronger trading and income contribution during 2027. And we're also assessing further remerchandising opportunities across the portfolio. But we will remain selective and we'll communicate them once the relevant agreements are sufficiently advanced.

Avion Shopping in Umea is our latest acquisition and a good example of the type of opportunity we seek. We completed the acquisition in April for approximately EUR 111 million, adding a modern dominant regional shopping center with around 80 shops and restaurants and a strong mix of national and international brands. As you can see, the turnover growth and the footfall growth of the first 6 months of 2026 are very encouraging, and the property is currently yielding 8%.

We have agreed terms to acquire Mood, a leisure destination adjacent to our shopping center, Fiordaliso, for an amount of EUR 7.5 million. The investment offers an attractive yield of approximately 14%, providing immediate income generation. But the strategic value goes beyond the initial yield. Fiordaliso, the adjacent retail park, and Mood can operate as a more integrated destination. The 3 components offer complementary reasons to visit: shopping, services, food, entertainment and leisure.

This is a relatively modest capital commitment with both immediate income and redevelopment potential, but it is also consistent with the direction of customer demand. Leisure and food and beverage offer increases dwell time, support evening activity and strengthening the relevance of our destination beyond traditional retail hours.

Then we go to the operational results. Here, we see the half year results across the key operating indicators, with rental growth, rental uplift 4.7%, retail sales at 4.6% and still a very low vacancy figure of 1%. A nice OCR stable at 9.2%. And then, of course, footfall, quite encouraging over the 6 months at 3.2%. And without footfall, the rest of the KPIs will never be achieved. So very nice to see that.

If we actually look at the footfall momentum, it was broad-based across the portfolio because we have visitor numbers overall increasing 3.2%. But we can see that the flagship centers performed particularly well. The rounded average figure of the flagships is approximately 4%. But I have to say that I Gigli is excluded from this comparison because of all the works in the shopping center.

By country, footfall increased by 3.2%, as I said before. And that's a healthy pattern. It's not dependent on one center or one market. And it has continued despite construction-related disruption in parts of our portfolio.

When we look at the retail sales growth, the 4.6% I already mentioned, and here you can see the split over the countries. Italy, again, very strong with 7.3%, but also Belgium had a nice uplift of 3.8%. And the other countries still also have a plus.

In the sector mix, it was also encouraging, outstanding performance by services, food and restaurants and health and beauty, but all the other sectors also really a plus. You could say that basically only sports was the only category to decline with a minus 0.9%.

The spread of the growth matters. It shows that performance is not being driven by a single category. You need all those categories to have a nice result overall. Again, I cannot, of course, repeat again that Italy's strong performance with 7.3% reflects the strength of the assets and the benefits of the merchandising work already delivered.

If we look at the rental growth, like-for-like rental growth overall over 12 months, that's how we measure it under our models, was 2.5%, approximately 190 basis points above indexation. Because we all know that 2026 was certainly not a year of indexation. It was very small, in some cases, almost 0. Italy was the strongest contributor at 5.4%, supported by active leasing, relettings and remerchandising. And Belgium delivered 3.5%, which we think is reflecting really the good performance at Woluwe Shopping. The overall result demonstrate that even with low indexation in most markets, the portfolio can generate organic growth through leasing and active management.

When we look at the [ EPRA ] vacancy, again, very stable and low at 1%, really unchanged from the year-end and actually a bit lower than last year June. Italy, of course, with an extremely low vacancy of only 0.2%, but also Belgium below 1%. France and Sweden improved, France to 1.4% and Sweden went from 3.4% at the end of the first quarter to 2.6% now as new lettings were secured.

The brand names on this slide represent a mix of established international retailers and relevant newer concepts. They include fashion, beauty, sports, jewelry, value-led formats. These are brands consumers want, and we offer them in our centers. The common theme is relevance to the local customer. We use group relationship to engage with leading brands, but the final mix is tailored center by center. The right tenant is the one that strengthens the destination, complements the existing offer and can trade sustainability in that catchment.

Over the 12 months to 30 June, we completed 308 lease transactions, compared with 269 in the previous period and a lower figure for '23. And out of these 308 transactions, 207 were renewals with existing tenants, whereas 101 were relettings, with retailers taking new units. Across all those renewals, relettings, we see an average rental uplift of 4.7%. And the additional detail you can also find in the press release.

Particularly, of course, it's interesting that new lettings achieved 7.9% overall in our centers. And to tell you a little bit more about the last 6 months, we completed 160 transactions at an average uplift of 3.5%. And most of that was actually concentrated in food and restaurants, health and beauty and gift and jewelry. There were strong country-level performance as well, as you can see on this slide, with, in Italy, renewals producing 5.2%. So that was a strong figure for renewals. And of course, relettings with Swedish -- which was in Sweden achieved double digit, is again a nice figure to look at.

If we then look at the lease expiry profile, it's, we think, well spread. A large share of rental income is secured beyond 6 years. And as this chart shows, the expiries in each of the first 6 annual bands are manageable. Approximately 35% of rental income or more than EUR 81 million has a lease end date beyond 6 years. And this profile provides useful income visibility and reduces concentration of risk. It means we're not dependent on renegotiating an unusually large portion of the portfolio in a single year.

We cannot escape from saying something about artificial intelligence, AI, and where does it create value for your commercial. We have identified 4 practical areas where AI can create value for us. The first is tenant and visitor engagement. We're using AI to improve marketing, events and leasing effectiveness and to understand the drivers of footfall and sales more clearly.

The second is intelligent data and reporting. We're building data platforms to automate reporting and enable conversational analytics. The aim is to give our teams faster access to consistent information and allow them to spend more time interpreting and acting on it.

The third is process automation. We're targeting repetitive internal workflows such as turnover reporting, invoice processing and contract-related task. And the fourth is workplace intelligence. Enterprise large language models and licenses are available across the organization, and we have today 96% of our total staff using it every day. And that's, of course, nice to see.

We are approaching AI pragmatically. The objective is not technology for its own sake. It's better decisions, more efficient processes, stronger engagement, supported by appropriate governance and human oversight.

During the first half, we completed our advanced several major decarbonization and resilience projects. Across the group, 85% of our shopping centers now carry the EPC rating A, B or C. Renewable electricity represents 97% of landlord control consumption and 64% of tenant control consumption. And we have also integrated asset-level climate risk assessment into our business plans. These measures reduce carbon intensity, improve the energy performance and strengthen long-term resilience. They also protect the competitiveness and value of the assets as regulation, energy markets and customer expectations evolve.

Our priorities fall into 4 connected areas. First, value creation. We will drive rental growth through active leasing and positive rental reversion, completing the current remerchandising projects and do all the other things I talked about: strengthening tenant mixes, remain alert to accretive acquisitions, of course, because that could be an external growth opportunity.

Second, important, cost control. We actively manage our interest rate hedging, optimize property operation costs while maintaining asset quality, and preserve a lean and disciplined overhead.

Third is digitalization. I talked about AI and all the other tools we're using. And therefore, it can improve our overall digital engagement with tenants and customers. And last but not least, ESG. We will continue with the decarbonization road map and do all the other steps as we have discussed and presented in our detailed half year report. The common thread of all of this is, of course, disciplined execution.

And with this, I would like to hand over to Roberto to take us through the financial performance and capital positions in detail.

Thank you, Evert Jan. Welcome, everybody. I mean this is a fantastic opportunity to go through the financials.

We first focus on what we do. So our focuses are on the strategic capital allocation, so the remerchandising projects. And you heard Evert Jan saying all about the work that has been done, and that's also thanks to our fantastic leasing teams, the technical teams. There's plenty of work which has been done. And we look at accretive acquisitions. We've done Woluwe. We've done Avion. We've done Mood. That's great.

Second focus is earnings growth. So what we do is increase, of course, the income, but also focus on the cost discipline. One of the highest costs that we all have is, of course, the interest expenses. So our 3.2% average cost of debt, the 80% hedging and the refinancing being done as much as possible.

We then go to the resilient balance sheet. So LTV is around 40%, net debt/EBITDA at around 8%. Those are targets that we have. We like to be around those numbers.

And then increasing returns, that you see in the strategic CapEx and what they do, what kind of returns they can deliver. So we're very happy with that.

If you look at the financial results, just to give you the usual highlights, you see that the direct investment result is plus 2.6%, to EUR 68.7 million. The LTV, the net loan-to-value, went up a little bit. That was, of course, due to the acquisition of Avion. The portfolio valuation is -- went up a bit to EUR 4.2 billion. And as you see, the average cost of debt is stable, and we reiterated the guidance at EUR 2.45 to EUR 2.50.

Let's have a look quickly at the investment results. What are the main components? As you see, there is a nice increase in rental income. There's an increase in property expenses that mainly related to Avion. There's also an increase in bad debt. There's some more provision that we took [ upfront ]. Then there is a positive EUR 1.2 billion in the net service charges. That's also related to a one-off that we had in Belgium. The company expenses also improved.

And then you see the [ 1.8 ] higher net interest expenses, and that's partly, of course, due to Avion. We acquired the company, we're financing it with loans, but also partly due to the increase in the Euribor and the STIBOR. You might remember that we aim at having 80% hedged. So 20% of our loans is unhedged. And then you got a little bit of positive news on corporate income tax and others.

If you look at the valuations, valuations increased a little bit. And that's nice because this is a good growth because it depends on the NOI and on the increase in earnings per share and in the estimated rental values of the assets. And the net initial yields are stable. So this is good growth because it's a growth which is based on the increase on net operating income and ERV.

If you go to the EPRA NTA, we are trying to show you just the main impact on the changes of the EPRA NTA for this year. So EPRA NTA, we add the indirect and direct investment results. Then of course, we do the adjustments which are needed for the EPRA. And then you see that the biggest impact is the dividend distribution, the EUR 183 million, which we distributed. There is a little bit of dividend up because, of course, we issued at a premium compared to the share price. And then you see the other main impact is the EUR 20 million negative, which is related to the fact that the exchange rate with the SEK with the krona and krone was lower compared to the Euribor.

If we then go and look at the sources and use of funds, you've seen we acquired Avion Shopping Center for EUR 111 million. Then, of course, there is a part, which is your dividend, which has been paid. Then there is a little bit which is dedicated to the CapEx, the accretive CapEx that we've mentioned. There is a bit of increase in cash. Where does it came from? EUR 40 million came from the operating cash flow and the other EUR 22 million came from increase in borrowings. So you can see the parallel between the increase in borrowings and the acquisition of Avion Shopping Center.

Now let's look at our priorities as well. What do we want to do? We still look at prudent leverage. So the target of net loan-to-value is around 40%, net debt to EBITDA at 8.

Diversified funding, we are still very happy with our banks and that provide us with fantastic funding and a very easy to contract and very reasonable negotiating. So we're very happy with that. We still keep an aim of 80% of hedging. So that gives also a little bit of flexibility of acting into the interest rate market, at the moment that we see that the curve can be more favorable to us than in other times. And we also want to keep the long-term visibility. So the debt maturity profile, you will see in another slide, is really kept at more in the long term.

If we go to a snapshot of what we've done in H1 2026, say the main thing is that, of course, the cost of debt remained unchanged at 3.2%. We increased the leverage modestly, thanks to the fact that we acquired Avion. And we give you, of course, the overview of the key financial metrics, which is more or less in line with some improvements here and there compared to December 2025.

Now this slide, we show you what we've done in 2026. So we concluded the financing that we had signed in 2025, and that's for around EUR 588.5 million. There you also see the new loan on Avion Shopping Center, which was done with debt. We're very thankful to our banks. And we're also a bit showing off with this slide because there is not a lot to do than in '27 and '28, which we will see in the other slide.

If you look at the maturity profile of our loans, you see that 2027 and 2028, basically a little bit of amortization on the existing loans. The refinancing will come in 2029, '30 and '31. So we still have a lot of time in front of us to look at the renegotiations and the refinancing of our assets.

Now a little note also from an accounting perspective, so at 35 years. You see in 1991, we began with a portfolio of, let's call it, 330 million Dutch guilders, which we translated roughly into the EUR 150 million. So we went from there to the actual portfolio size, which is EUR 4.2 billion. The portfolio there was diversified. We had some residentials, we had some offices. And now we clearly show our focus on the shopping center.

We had no leverage at that time, and now we have a leverage of, let's say, 40.9%, which is also helping in increasing the results that we then provide to you. What's really interesting is, of course, since inception, since the beginning of this EUR 150 million, we actually gave a total return of EUR 6.42 per annum, which we hope you are satisfied with. And that's really thanks to all the employees that we have, past, present, all the hard work that they did. So thank you to all of them for all of this.

Let's look at [indiscernible] Eurocommercial, if we look at this year, so the first 7 months of 2026, we actually also then delivered around 15.1% of total return, which is also nice. Here in the table, you can see the increase in the direct investment result, up to EUR 2.44 and the increase in the dividend, up to EUR 1.83. And if you do -- if you could, the direct investment result that we produced in 2025, which is EUR 2.44, and divided by the share price that was there at the end of December, which was EUR 26.05, then you get a nice investment of around 9.4%, which is not bad. We are too cheap.

Then we go to the guidance. Direct investment result reaffirmed, EUR 2.45 to EUR 2.50 per share, with further growth expected in 2027. What we want to stress out is that, of course, you've seen all these remerchandising programs that we have or these merchandising projects, they are fantastic, but of course, they take a toll on 2026. And they will fully contribute in 2027.

Because all the remerchandising that we have done, that we're doing, they are still running, for part of them, in H2 2026. Some of them will open for Christmas 2026, which is also the aim that we and the retailers have. We want to be there for Christmas, do the entire season and all be happy and merry with the result. 2027 is the year where you actually see the full contribution of Avion, you see the full contribution of all these remerchandising projects.

And with that, we go back to the operator. Thank you very much, and we are ready for your Q&A.

The first question comes from Lynn Hautekeete from KBC.

I have some questions on your development pipeline. So in your report, you mentioned that you are in the planning phase of an extension project in both Carosello and [ ETG ]. Do you have any further details, maybe the investment size or the return metrics in return of those extensions?

Yes, we are very hopeful, Lynn, as you know, in Italy, they're very quick with permits, providing them and everything. So we've been doing this for some years. I'd say the hope is that we get a proper approval for these planning in the coming 2 years maybe.

What we would like to do is, of course, come up with the final project once we are sure of what kind of permits we get. So how many square meters, how many licenses, where about, so that we can actually then finalize all the mix. But for now, let's say, we are asking, we've been asking, we continue asking. We have positive vibes. But with politics, you never know. So that's why we're a bit careful on that.

Okay. But 2 years notice. And then secondly, on Val Thoiry, that we are doing on the [ Legrand Marlin ] sites, just there, I think you mentioned that it will take a bit longer than initially expected. And I was wondering if you could give some time line there and maybe some color on the redevelopment.

Yes, Lynn, let's say, Val Thoiry, it's not so much that it is taking longer than expected. It's just a very long remerchandising project, and it involves indeed also '27 and '28, as I said. And that has all to do with indeed Legrand Marlin. Currently, they have, outside the gallery, they have a stand-alone, let's say, unit box, which they rent. But they're now building their own unit, their own store on the other side of the road where they bought the land. And those building works are currently happening. It's still on schedule, but it takes quite some time to really build it.

And then they have to move out. And then we need to refurbish that entire unit to make it ready for the retailers we have signed up, including Primark. So by the time you finish, it will be end of '28, maybe early ' 29 even when these tenants are opening. And particularly one of them is important as well to move there is Decathlon. And then they will leave the gallery, so giving us nice space back for -- which is good space in the middle of the center, to lease to attractive tenants within Val Thoiry.

So Val Thoiry isn't -- is a little bit slower. I would not say it's an [indiscernible] but we will get there. And this is a nice project because Val Thoiry is, of course, one of our centers in France, which still performed very well, so close to the border with location near Geneva. So that's the plan over there.

Okay. That makes perfect sense. And then maybe a last one, if I may, on remerchandising. So indeed your top line has an impact on the strategic vacancy coming from the remerchandising projects. And I think the impact will be slowly phased out in the second half. But could you maybe quantify how much you would expect to gain in total as of the second half when the remerchandisings are ending, in terms of top line?

Yes. Well, I think the second half is not yet the period where we see the full return kicking in. As we said, there are a few important openings scheduled for Q4, typically also Primark, but some others as well, ready for Christmas. As Roberto said, we are always on the same page with our retailers that these openings must happen before really the most important season of the year starts.

So I'm afraid that we really see those benefits appearing in '27, Lynn. So that's why we also -- we reaffirmed our guidance, no problem with that. But the real benefits will follow in '27. Roberto, any comment?

Yes. Some of them are opening end of October, some of them are opening in November. That's really focused on the Christmas. And we're giving them -- we ask them to put their brand-new store, so something very nice and flashy. So we're giving them also the time to build it. But yes, the impact will not be a lot.

The following question comes from Steven Boumans from ABN AMRO ODDO BHF.

I have a couple, let's start with first. So for the new remerchandising projects that you see in your portfolio that you haven't started, what kind of sites are we talking about? It's like EUR 10 million or EUR 50 million or even more in the next 3 years? And do you also expect solid double-digit returns similar to what you disclosed today for that?

Yes. Steven, let's say, the message we wanted to give very clear is, listen, the remerchandising projects, which we have started and are now in nearly completion or have been completed, but that doesn't mean that we will stop or have no further possibilities. As a matter of fact, you will not be surprised to hear that we see more and further potential in Italy. I think, Roberto, you can maybe give some more detail. But also Carosello, these are really big shopping centers where we can do more. And of course, that's the potential we will certainly try to unlock.

Yes. Absolutely right. I mean you've seen the amount of CapEx that we foresee for the current one, so [indiscernible]. There are many more that we are, of course, planning. What we try and do is to select the moment. You might remember the trigger moment. So when we finally achieve an agreement with one of the major retailers to start the remerchandising program. What we do is, of course, we are in negotiations so there's also confidentiality. But once we have agreed the terms, then we can come up also with the project that we would like to do, how much we think we're going to invest. And we do not want to do that in advance because, of course, we have nothing agreed yet. If that makes sense, Steve.

Okay. That make sense. And we'll wait for more hopefully one of the next reporting days.

Compared to the past.

Maybe a different question then, on M&A opportunities in a broader sense. You talked about joint venture of Woluwe. Is that something to expect in the next 12 months? And maybe also the other way around, do you see -- are you currently in acquisition processes? And maybe is it more like the Swedish acquisition or maybe more like Mood acquisition? Can we expect something from that, let's say, in the next 12 months? Any color is welcome there.

Thank you, Steven. Always a good question to ask, of course. Let's say, to start with your first one on joint ventures. As we have always said, we're open to look into joint ventures. We have to. We could do more, particularly probably on our flagships. So that's always on the table.

But currently, I do not expect that we will see there immediately changes. The problem is always, you've seen it with these remerchandising projects, that it's nice that we can put so much effort in it, but it's also nice to, in the end, also have the fruit, the results from it 100% rather than in sharing it 50-50. So there's always a little bit of this dilemma.

But no, I'm not ruling it out. I think it also is linked a little bit to the overall appetite for retail property and probably more and more also for shopping centers, which is being evidenced by more transactions over the last couple of months, year than before, that institutional money is back in shopping centers. So that obviously is important because a long-term investor into one of our centers where we obviously take the lead and do all the management could certainly be helpful and unlock for us funds to reinvest.

And on your other question, we're always monitoring our markets. And indeed, Mood is a result of, okay, you can say it's very close by because it's next to our mall in Fiordaliso. But no, we were always looking at where we can do accretive things. I think Avion is a clear example with an asset where it's yielding at a nice level. We're very active with the leasing there. As you may recall, we have some higher vacancy in that shopping center than we're used to in our other centers, but that was actually the potential.

And we've done already a first nice letting to a toy retailer, [ Alekia ]. And there's more to come. Hopefully, we can announce it at some point. It always takes a bit of time to reshuffle here and there. But no, we're absolutely looking into what is possible. Yes.

Okay. Clear. And then my last one, you mentioned a positive investment market, institution money is back [indiscernible]. Does that [indiscernible] actual revaluations could be higher than [indiscernible]?

Well, let's say, the valuations, what we saw really is that we got uplift in value because we had a higher NOI. So no yield shifts or changes. Obviously, depending on what we will see further maybe this quarter, next quarter in the markets, that there could be some change in yields. If yields don't change, then I think what we will see is just a reflection of further increase in rental income, which obviously suits us because we will have more rental income due to the remerchandising.

But yes, I think it's encouraging to see typically also more in Southern Europe, all those transactions and how active this market is, obviously, Spain, but now also Italy. So that's certainly, I think, a positive signal. Roberto, any...

Yes. No. True. I mean we look at the [ ERVs ] positively because, of course, the remerchandising. We also monitor the Euribor because you never know when the interest curve is and that, of course, has an impact on perceptions. But we might see some improvement of yields in some -- particularly in some countries. But it's -- the valuers will then at the end decide whether they are happy with these evidences or not.

The following question comes from Kai Klose from Berenberg.

I've got 3 questions, if I may. The first one, you mentioned a slight increase in bad debt and provisions in the first half. Could you give more details for which region and a certain group of tenants that side?

Second question is on Page 33 of the release, where the ERV of the portfolio compared to December was slightly lower. Is this because you captured some of the rent reversion? Or is there any other reason for?

And the third question is on Avion in Sweden. Is there any potential -- could you have some details, is there potential for any future remerchandising or no?

Yes. Well, thank you, Kai, for your questions. For the bad debt, I'll hand over to Roberto to talk about that.

Yes. Let's say we highlighted some tenants in particularly in France. And we said, well, maybe let's take an extra provision for them just to be on the safe side because we've seen some tenants where their financial statements and where their balance sheet was deteriorating a bit. So we decided to take some extra provision just in case.

For concerns the Page 33, the lower -- what was your question?

The ERV.

That's maybe related to France, from memory.

Yes. And I think, obviously, we follow the EPRA definitions carefully. So we have to put the analyzed net rents in. And in the case of France, the heavy amount you see in the table is a bit lower than at the end of December, reflecting also some of the deals we had to do, we've done in France in terms of getting nice good brands. And in some cases, we then not did achieve the passing rent. But that is the effect. I mean, other countries is different. But in France, you can see that.

And then Kai, on Avion remerchandising, yes, indeed, I mean, the remerchandising, if we can use it a little bit more as a, let's say, a container for all sorts of leasing activities, major leasing activities to improve the occupancy to improve the tenant mix, then Avion as an example typically where the vacancy, which is there higher than in our other centers, that's exactly the opportunity. So we are quite excited about reducing that vacancy. We see a lot of potential. We are in a lot of discussions at the moment.

Hopefully, we can be more vocal on this later in the year because that is then a big plus if we reduce the vacancy in Avion, particularly on the first floor of the gallery. Ground floor is fully occupied, but the first floor, that is where the potential is. So that's certainly one element.

The other element for Avion is that we also have a possibility to increase the food and beverage offer outside on the parking. There is currently now a McDonald's, but we can do more food offer there on a plot of land, which is included in the deal. So I think those are the 2 special features of Avion where we can create value.

Perfect. And the very last one, if I may. The appointment of a new Group Leasing Director is a reflection that more international tenants ask for different type of contracts? Or is it more for the evolution of the group going forward?

No. Let's say, we're very happy to have been able to announce this appointment because, as you know, we're active in 4 countries. And we see a lot of the retailers who are active in our countries, and we see some going from north to south. Maybe not too many yet going south to north, but hopefully, with Laurent on board, we can help them a bit.

No, I think it's really important that we are acting as a group and coordinate the leasing, making sure that we really, of course, country by country, doing deals. But in some cases, it's also very good to look from a group level, international level as the retailers do. So I think we are very happy to have Laurent with us. And it will further help in all our leasing and remerchandising activity.

I think the number one key activity of Eurocommercial is leasing. So we will maximize efforts to perform.

The following question comes from [ Peter Kronaval ] from [indiscernible]

I got a question on the additional rent that you published on the 3 remerchandising projects. Does that take into account the temporary disruption? So in other words, does the rental uplift there reflect incremental higher rents compared to no remerchandising? Or does it reflect the incremental higher rents compared to a vacant unit?

Yes. What we try to do and we try to describe it on the top is we're comparing, let's say, 2027 rents, which we know because we signed the contracts, was the rental income before the -- we started with the entire operation. So that you [indiscernible] moments which are unaffected by the work. So what is the rent in 2027? And we take out inflation, just not to cheat, so that we can show you the increase then that is achieved also, which is going to be achieved, that's for the future, with the remerchandising and the renewals and [indiscernible].

Okay. That's very clear and quite spectacular. And lastly, on the...

You can do the math to see what is the -- is in percentage. But we thought we'd just give you the amount. Yes. For [indiscernible] to be completely and totally fair, of course, we replaced the [ hypermarket ]. So the step-up that you do compared to other retailers is higher.

Yes. Okay. And one on the OCRs. So year-on-year, these dropped like 90 bps to 9.2%. And in the same period, the retail sales were up by 3%. So what's -- that explains less than half of the drop, the higher retail sales. So what are the other drivers then in the drop in OCR?

Yes.Well, you're correct, so this increase is sales. But also more efficiency for concerns the service charges. So that also helps. And of course, that is countered by our greed to increase the rent. But I'd say the 2 main factors are, of course, the increase in turnovers, which is driven by the increase in footfall, which we are trying to achieve also with this project, and also all the ESG that you've seen and the solar panels, the refurbishments and everything that's all aimed also at try and manage in a more active way the service charges so that we can provide lower the service charges in the future because we improve the production, for example, of electricity [indiscernible].

The following question comes from Benjamin Legrand from Kepler Cheuvreux.

Just a couple for me. You just mentioned the agreed to increase the rent also considering your OCR, which is pretty low, let's say, lower than it used to be. I'm just basically wondering how much high go in terms of pushing the rent in terms of rental uplift. Can you actually go higher to what we are seeing before? Or should we expect this reversion to stabilize now?

And also related to the, let's say, like-for-like rental growth. In some of your peers, we see that the like-for-like is boosted compared to your performance, while if I look at the operational performance of your retailers, you're actually better. And I think a lot of it comes from initiatives, talk about screens, you talk about marketing fees, et cetera, et cetera, which is not something you really mentioned a lot. So I'm just wondering if it's some potential for you guys also to push your like-for-like rental growth higher in the future. So that would be my 2 questions.

Yes. If we look at the like-for-like rental growth and then also look at the uplift on renewals and relettings and then you say, of course, there is some connection, but we should not forget that the renewals relettings is just a proxy of the whole portfolio around, you could say, almost 20% of our minimum guaranteed rent. That is basically what you can do because these contracts either expire and you renew or you find new tenants, whereas the rental growth is the whole portfolio. And the rental growth we measure is also including any -- if there is a lease incentive, a step-up or maybe a short rent free, it's all in there.

In the renewals, relettings, obviously, you really measure what your future rent will be. And we basically also I know that some of our peers use ERVs, but we still keep an eye on the passing rent. So I think that is quite a difference, but good to mention, I think, for the explanation. If we look at income from screens, income from electrical cars as some of our peers call it specialty leasing. Yes, we do that as well. But it's basically included in our rental income because we are not operators as such, but we try to lease space or surface or whatever it is. And we don't show a special line -- income line for that, which also has to do with our Dutch REIT status because, in the end, we are a REIT, but we can only be a REIT if we invest in property and lease property. And that's what we're doing also in the specialty leasing.

So be assured that we do all those things, meaning that we -- whatever we can lease, we do lease in space, but we're not operators or certainly turning ourselves into a marketing company or a parking company or an electricity company.

Maybe also to add, if you look at the future, of course, there was also the remerchandising projects we had an impact on the like-for-like. And also the impact that you will see, and that's what we're building now. it's actually for the renewals and reletting of the future.

So right now, we are building new revamped shopping malls to attract more people to increase turnovers. But then, of course, let's say, around between 15% and 20% of the leases are actually under negotiation every year. So what you will see is that the turnover is increasing for the retailers. So by the next round of negotiations, and we will be able to increase the rental income by a higher percentage because, of course, the benefit for -- from the results of this remerchandising, if that makes sense, Benjamin?

Yes, it makes perfect sense. But yes, for the specialty screens just because some of your peers, it sounds like it's the driver of the like-for-like performance. I mean a portion of it at least. And I'm just wondering if it's going to be a real driver for you too or if it's just following the same pace as your, let's say, standard rental income?

Yes. Let's say, we are busy with screens. We're busy with a lot of stuff with parking as well. But that's all included in the rental income we see that as leasing of spaces within the shopping centers. So that's -- if you look at Tesla, of course, they install new car charges, they pay a lot of money. If you look at screens, you can rent them out and they also provide a lot of money.

What we try and do is, for example, use part of this money for the service charges, part of this money is really rental income depending on also on who does the investment. Sometimes you ask the provider to put the screens on and you accept a lower rental income, but then you also have a lower CapEx. And sometimes you agree to install the screens and then you can ask for a higher rental income. So it depends from a lot of things.

Our final question comes from [ Tom Barry ] from Green Street.

Just a very quick question for me. I wonder if you could just provide a comment on the new development that may come online in 2028 in Brussels, very close to your flagship the Brooks development and just how you're thinking about that from a competition standpoint?

Yes, Tom. Indeed, a project which has been there for many, many years and which has now been more activated because after a number of rounds, there's finally a permission to build, let's say, retail there. But also from memory, there can be a data center and other types of property. It's a big plot on the ring, Brussels.

Obviously, I can only refer to public information. But let's say, what we understand that the project is being promoted, that they're looking to, obviously, for tenants and also look for planning to build it according to the latest news, at least the plans have been extended or, let's say, postponed for another year. And yes, let's say, if it happens, we have to see what in the end will be built there and how it is leased.

I think it's also a fair comment that this is in Flanders and aimed at customers in Flanders, whereas catchment, which Woluwe has is mostly in the East and the South of Brussels. So there will be maybe some overlap, but our catchment is Francophone, French-speaking people in Brussels and in Woluwe. So whether there will be competition, difficult to assess. But for now, we don't see that really as an issue for Woluwe. We'll see what the future brings, but that's all I can say about blueprint.

It appears we have one more question from Amal Aboulkhouatem from Degroof Petercam.

Just to come back on France and the performance. I'm just struggling to get -- to reconcile the footfall increase with the retailer sales increase with like 12% footfall increase and 1.4% retail sales. Is there any specific explanation here?

We probably need to stop them to shop. But no, Amal, I mean, it's indeed, it's not always a clear correlation or that more footfall translates into more turnover. I think so far, we're happy that at least the footfall is growing, and that's a good sign. But the turnovers hopefully will follow. But indeed, we spotted the same, let's say, I'm not saying anomaly, but there is this gap. So hopefully, those turnover numbers do improve as well at the same pace as the footfall is developing.

Roberto, any?

True. And we also look, for example, if you take I Gigli, of course, there's a negative footfall and negative on the turnovers, because if you close the hypermarket, for example, I mean, that has a lot of footfall and also quite a significant turnover. But for us, let's say, the income at the end it is not really a huge income because, of course, they pay lower rent than the normal tenants. So for example, if you go to the hypermarket in, then you will see a decrease in visitor numbers, which is higher than the decrease in turnover.

So those are things that could also play because this has been, as last year, a bit of a year of change with all these remerchandising projects. So we are, I think, as curious as you are to see what will be in 2027 when we get rid of all these disruptions and to see what is the real impact on footfall and what is the real on turnovers. If that makes sense, Amal.

Yes, it's not linked to [indiscernible] for example, which has a specific situation on the way to the [indiscernible].

I mean, let's say, Roberto was talking about Italy and you particularly also looked at France where -- I mean, you mentioned [ Passage ], actually there, the figures are quite encouraging in terms of also the footfall, but then we know it's Passage. So as I said before, we need to stop those people in Passage to make them shopping. And we're doing that by also some changes in the tenant mix over there. So hopefully, we're successful.

The conversion [indiscernible] point, that's also maybe...

And then just on France. Would you consider asset disposal or asset rotation to finance future growth [indiscernible] successful to acquire in Sweden and Italy and is clearly weaker than the other markets. So you are looking at if the market is not easy.

Yes. Let's say, we -- asset rotation, obviously, is on our agenda. But that also means that you have to see where are the opportunities, where are the markets. And as I said before, we see that a market like Italy is opening. France is quite soft, you could say. It's something which may have to do also with the macro politics, et cetera.

And therefore, we're very glad that we are acting in 4 markets and not in so that we can still make use of our country ratings. And as you have seen by just one transaction, yes, let's say, in Sweden, now Sweden is the #2 country in the portfolio; in France, #3. I mean these things vary. I'm sure France will recover, and it's a big country, it's a big market. But at the moment, yes, probably a bit more struggling than our other markets.

So we'll focus always on all our 4 markets. Asset rotation is always nice to do. So let's see where the opportunities are. But for the moment, I think in France, we don't see a lot of transactions. Maybe that improves, I hope.

Then the last question on my side. Just on the guidance, if you see the pressure in H1 and we are already above the guidance. Is there anything to expect in H2? Or is it just out of caution that you didn't raise the guidance?

Yes. Indeed, H2 this year, you could say caution. There are a few elements which play a role for us. Of course, timing of when rental income kicks in. We already talked about opening of stores mostly before Christmas, but that, of course, will then not contribute so much in this year. We monitor the Swedish krona, which is a volatile currency was quite strong or relatively stronger in the first half, but now has weakened is above 1 again for some time, which always has an impact on our earnings. It's all marginal, but these things all add up.

The other effect Roberto talked about is an increase in the 3 months Euribor and the 3 months LIBOR, not massively, but compared to -- if you look at Q1, by the way, when we did quite some swaps. So we're very happy that we did so. But we have a part it's only 20%, even less than 20% of floating debt. But obviously, we roll it over on 3 months Euribor and 3 months LIBOR. And therefore, the expense will also be a bit higher.

So yes, all in all, we said let's just -- we reaffirm the guidance, no problem, but we also need to be realistic. And as you know, we're always try to deliver what we estimate in a proper way.

That was our final question. I would now like to hand the call back over to Evert Jan for any closing remarks.

Yes. Thank you very much, all of you who listened into this conference call and also all those analysts who asked the questions, all very useful. So we're very happy that we could today communicate our results and have this call. And yes, I think on balance, we can say very happy with the operational results and all the other facts we talked about. So from us, Roberto, myself as the Board, we would like to thank everybody for the interest in the company, and we wish you a pleasant day.

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

Good morning, everyone. Thank you for joining us today. I will start with the acquisition of Avion Shopping in Umea, Sweden, and then move to our operational results for 2025. Let me start with Avion Shopping, a highly strategic acquisition for Eurocommercial. On Wednesday, we announced the acquisition of Avion Shopping in Umea for a total investment of around EUR 110 million. We expect to complete this acquisition on 31st of March 2026. The map shows where Umea is, fairly easy to reach from Stockholm by airplane, actually easier to reach than some of our other shopping centers in Sweden.

Avion Shopping comprises approximately 45,000 square meters of gross lettable area, around 80 shops and restaurants, and 7 newly built large format retail boxes. Most importantly, the center benefits from a direct internal link to IKEA, which significantly enhances Avion's destination character and regional pool. It has a catchment of around 270,000 inhabitants and the city is around 130,000 inhabitants, but with a growing population.

Believe it or not, Avion Shopping even attracts customers from Finland who can reach Umea by ferry. Umea is one of the Swedish fastest-growing cities. It has a young and highly educated population, driven by Umea University which has more than 40,000 students. This creates a structurally stable and recurring footfall base. The city has a dynamic and diversified economy, strong public sector employment and continued population growth. Demographic growth in Sweden has been concentrated in regional hubs like Umea and Avion is positioned directly at the heart of this growth.

Within 30 minutes, the center serves approximately 50% of the catchment population. That is a very strong accessibility profile, particularly for a regional shopping destination and Avion is a dominant region of shopping destination. It is anchored by IKEA with direct internal access, which is critical. IKEA is not just a tenant, it's a structural traffic driver -- from a local retail scheme into a true regional destination. The presence of IKEA drives high, stable and recurring footfall, which in turn supports tenant sales productivity and leasing dynamics.

By the way, the nearest other IKEA store is almost 400 kilometers away. Beyond IKEA, the tenant mix is attractive and diversified combining fashion, sports, lifestyle services and food and beverage. The 7 newly built retail boxes provide flexibility and adaptability to evolving retail formats, which we consider strategically important in today's retail landscape. The gallery was built in 2016 and is BREEAM Excellent certified.

The retail boxes are brand new. The total asset is modern, well configured and fully aligned with our ESG strategy. In short, this is not a turnaround project. It is a high-quality, modern, dominant center with embedded growth potential. Here, you will find a map of the shopping center showing the gallery and the adjoining retail boxes and the IKEA store connected to the mall.

There are 2,600 parking spaces, which we jointly own with Ingka Centers, the owner of the IKEA store of 30,000 square meters. You can see where the major brands are located. The pie chart shows a well-balanced tenant mix with the usual mostly Nordic brands and a good restaurants offer. You should not forget that this offer includes the very popular IKEA restaurant with its famous meatballs and fish dishes, which, although not part of our property improves the dwelling time of the visitors of the center.

From a capital allocation perspective, this acquisition is highly disciplined. In July 2025, we disposed of the EKO megastore, part of our shopping center Samarkand in Sweden, a non-core single-tenant asset. That disposal released capital at an attractive point in the cycle. With Avion, we redeploy that capital with some additional fresh capital, of course, into a multi-anchor dominant regional center with significantly stronger long-term growth characteristics.

This is asset rotation in action. We reduced single-tenant exposure and increase exposure to diversified destination-led retail. We improve portfolio quality. We enhance geographic balance and we create additional income with growth potential. With the acquisition of Avion Shopping, the country ratings will change, increasing our exposure to Sweden to 23%, reducing our exposure to France to 20%, and with the ratings to Italy and Belgium relatively stable. This transaction represents a clear step forward in strengthening and upgrading our Swedish portfolio.

With this acquisition, Sweden becomes our second largest market, reinforcing our long-standing conviction in the resilience and structural attractiveness of the Nordic retail market. We operate exclusively in established resilient European economies, Italy, Sweden, France and Belgium. Across these markets, consumer recovery is underway when we look at the retail sales figures.

Importantly, since 2023, online penetration has stabilized at approximately 12%. In addition, Sweden remains one of the most transparent and institutionally stable real estate markets in Europe. There is GDP growth, there is an improving household purchasing power recently boosted further with the tax incentives provided by the government, and there are also dominant centers, which continue to consolidate market share.

Our portfolio consists of dominant retail destinations in resilient [indiscernible]. We operated 2 complementary formats, 5 flagship regional centers, experiential and destination-led, attracting visitors from a wide demographic area and 20 hypermarket anchor centers, essential, convenience-driven and deeply embedded in local communities. These 20 centers are the first choice retail destinations in their catchments. They benefit from strong footfall, diversified tenant mixes and high sales productivity. Avion Shopping fits perfectly in this last category. For us, it is plug-and-play.

Let me now turn to our broader results review. 2025 was operationally strong. Like-for-like rental growth reached 3.4%. Rental uplift on renewals and relettings was 4.8% across 297 lease transactions. Retail sales increased by 3.4%. Spectacular key performance indicators are the reduced OCR for the portfolio down to 9.4% and the reduced vacancy down to 1%, showing a healthy property portfolio. Our collection rate stands at 99%. Footfall increased by 6.2% in flagship centers and 2.8% across the portfolio despite temporary disruption from ongoing remerchandising in some of our shopping centers. Woluwe Shopping showed an outstanding increase in footfall of 10%.

Last year, retail sales in our shopping centers increased by 3.4% compared to 2024, with all 4 markets producing positive growth. Belgium performed particularly well as a result of the remerchandising at Woluwe, a process we internally refer to as the musical chairs. If we look at the various sectors, we see that most sectors performed well last year with some clear winners, which were health and beauty and hyper and supermarkets. January 2026 showed that the positive trend continues with a 6.5% retail sales growth for our portfolio. This time, Italy produced a remarkable 9.5% growth.

Like-for-like rental growth was 3.4%. The growth was driven by a material portion of organic growth and by indexation, although the indexation -- in 2024 due to much lower inflation. The right-hand table shows the rental growth per country with Italy's contribution being the highest. The company has always been known for its low occupancy cost ratios, and we are, therefore, pleased to report at 9.4% occupancy cost ratio for our portfolio as per the end of December 2025. This is lower than the OCRs we reported during 2025 and is clearly the result of growing retail sales, whereas rents increased modestly.

This percentage is still one of the lowest in the industry and implies that the rents are affordable and sustainable as is also confirmed by the full rent collection figures that we have again reported. Healthy OCRs will in due course, enable us to negotiate higher rents when renewals or relettings come up. Low vacancy is usually a good indicator of the quality of the properties. Over the last 5 years, we have reported vacancy rates in our property portfolio ranging between 1.2% to 1.8% and with an average of 1.5%. We are proud to report that at December 2025, we were at 1%, the lowest number reported since December 2020.

We are pleased to be able to report that on 297 renewals and relettings, an average rental uplift of 4.8% was achieved on top of indexation. These lease transactions represent 40% of the minimum guaranteed rent of the portfolio. And we were able to attract new tenants with our 101 relettings, achieving a much higher uplift of 8.8% and confirm the continued strong demand from retailers to open new stores in our centers. The highest uplifts were achieved in Belgium and Italy. Over the last 12 months, the Italian leasing team signed 92 new deals, resulting in an overall rental uplift of 7.9%. 48 of these transactions were new lettings, producing an overall increased rent of 13.1%, with the highest uplift achieved in I Gigli being 16.4%.

In Belgium, at Woluwe Shopping, the leasing team successfully concluded 15 lease renewals and relettings, resulting in an overall rental uplift of 5.8%. And these figures demonstrate that our prime portfolio continues to be well positioned for leasing retail space to expanding tenant base under sustainable conditions and at affordable rent levels.

This slide provides an interesting overview of the sectors where we signed deals. The majority of the deals we concluded last year were in the sectors health and beauty, fashion and food and beverage, i.e., restaurants. Our merchandising mix remains balanced. The main sectors are hypermarkets, which are our anchors, recurring daily traffic. Fashion provides strong destination appeal, whereas services and food and beverage enhance dwell time and customer experience. The diversification over a number of sectors obviously limits concentration risk.

This slide provides the increase in gross lettable area of the various brands in our portfolio during 2025. Strong fashion brands like Zara took 51%, whereas in the health and beauty sector, brands like Rituals and Normal and Medi-Market took 32%. We continue to attract powerful brands such as Inditex, Rituals and Primark, reinforcing the dominance of our centers. Three more Primark stores are planned, whereas Rituals is present in all our centers, except for one. We welcomed the Inditex Group last year again with a number of stores, and the group is now represented at 35 stores in our portfolio. Remerchandising has been and is a very important driver of internal growth. We completed remerchandising projects in Woluwe Shopping and Carosello. Work for 3 centers in Italy and our French center, Val Thoiry, the remerchandising projects are ongoing. Remerchandising remains a key value driver.

Look at the results. At Woluwe and Carosello, the completed project delivered higher footfall, double-digit turnover growth, occupancy close to or at 100%, and a strong rental uplift. I Gigli in Florence is a prime example of proactive asset management. We are reducing the hypermarket footprint and introducing new international formats. A new full format Zara store has opened, a new Pull&Bear store has been added and the opening of Lefties, the answer of the Inditex Group to the Primark formula is scheduled for the fourth quarter of 2026. The project strengthens I Gigli's dominant position in Tuscany, enhances the customer journey it offers and expands its catchment. You can see the highlights on this slide.

ESG is embedded in our strategy. What have we achieved in 2025? Scope 1 and 2 carbon emissions reduced by 40%. Scope 1, 2 and 3 carbon emissions reduced by 23%. Renewable energy reached 93% in landlord controlled areas, whereas waste to landfill declined by 7%. More importantly, we have nearly removed all gas installations in our portfolio. All assets are BREEAM certified. 83% of our assets have an EPC label A, B or C. Green financing reached almost EUR 1 billion. We continue to future-proof the core property portfolio while enhancing sustainable financing. We make a significant effort to engage with our customers in our shopping centers, hence, our good score on customer satisfaction. Obviously, we are participating in a number of independent ESG assessments, resulting in scores and awards as posted on this slide. This is not just ESG reporting, it is a competitive edge. More and more retailers and consumers demand sustainable environments and Eurocommercial is delivering.

And now is the moment to hand over to Roberto to discuss our financial results.

Thank you very much, Evert Jan. Thank you, everybody. You are quite numerous today. So good. We'll see it. We'll go first to the core messages that we want to give, and that's the financial highlights. So as you see, the property investments raised with 3.8%, which is above the EUR 4 million. That's very good because that means that the investments as we will see shortly that we have done the remerchandising and the improvement of our centers actually delivered the good results. And you see that also in the increase in valuations. We also have a debt net, which is very stable, and that led to a net loan-to-value ratio of 39.8%. That's a very good improvement because it's 1.5% less compared to last year.

As a consequence, of course, then the EPRA NTA also went up to EUR 42.81. You will see a slide on this, which will go much more in detail. The same is for the direct investment results. It went up to EUR 131.8 million. We'll have a slide on that with a nice bridge as you all like. That led to an increase in dividend to EUR 1.83, which is great. And I think one of the things we wanted to highlight was that actually in 2025, we basically had no increase in interest expenses. So we thought that was a very nice message for you to see.

As said, if we look at the valuations, you see the increase to over EUR 4 billion. You see the valuation changes compared to last year. What's very important to highlight is that the net initial yield and the top-up yield are actually the same as last year. So that means the increase in value actually came from the increase in rental income and the ERVs. So that's very, very positive. If we go to the key metrics, you see the net debt has been stable over 2025 to EUR 1.6 billion. Interest rate hedging level is at 87%. You know that we like it when it's around the 80% and the direct investment result per share went up, as you saw with EUR 0.05.

Key financial metrics, they improved. Average cost of debt stayed the same. Interest coverage improved. Net debt-to-EBITDA improved. EPRA LTV improved. The average loan maturity we'll have a special attention to that went to almost 5 years. So that's a big improvement compared to last year. The average interest rate maturity went down, but it's going to go up because, of course, we are very busy with our hedging policy.

Let's see what we did this year in 2025. We were quite busy. It was almost EUR 1 billion of refinancing that we did long term. And what we basically did, we transferred all the debt into long term. So we basically paid out all the short-term debt, which gave us then a lot of space for the acquisition as we see. What we did was we started with Sweden. We did a [ EUR 555 million ] loan in Valbo, then we attacked with Nordea, another EUR 220 million was done in June. And then we went over to Italy. So we started with Fiordaliso, EUR 205 million, I Gigli and Carosello in December, EUR 270 million for I Gigli and EUR 200 million for Carosello. And we finished with Sweden where we extended the loan for an amount of SEK 600 million.

So altogether, it's the almost EUR 1 billion that you see. The effect on that is on the long-term borrowings. You see how the shift has happened in the expiration dates of the loans. Basically, the main refinancing there in 2029. And we have a small refinancing in 2027, that's with ING. We love them a lot. So we think there will be no problem. I think what these 2 slides actually show the one before and this one is the strong relationship that we have with our banks. So I would really love to thank them for that because they are numerous. They are very, very cooperative, and they enabled us to do all these extensions, which we have planned. So thank you to all of them.

Then if we go and see what we do with the money, that's always a very important question that you have. So as you can see, we had EUR 190 million from cash flow operating activities. Then the disposal that [ David de Jong ] mentioned, EUR 14 million. And then we had a net increase in loan of EUR 8 million. Where did this all go? It went to dividends, EUR 71 million paid. It went to capital expenditures, which as [ David de Jong ] said, we used to increase the value and the importance of our shopping centers. And little bit went to other and then it all went EUR 31 million to cash. So that's also part of the reserves that we are using to acquire Avion, as you heard.

If we go then to the net loan-to-value ratio and the hedging ratio, they are where we like them to be. So hovering around the 40%. We mentioned that we expect the contribution, the net increase value related to Avion to be more or less 1.5%. The hedging ratio, as you can see also for the coming years is expected to be around 80%. So very, very stable picture.

Let's go to the bridges that you like a lot. There you see the increase in EPRA NTA for the year. We started from EUR 41.79. Then, of course, we add back the direct result and the indirect result. We take away the adjustment for the deferred tax and the derivatives. Then we look at the dividend distribution and the euros that you got as dividend. And of course, there is a component for those of you who choose to take shares. We also have a nice foreign exchange movement that's related to the increase in the Swedish krona with the exchange rate with the euro. So that led at the end to the EUR 42.81.

If we then go to the direct investment result, then you see you started from the EUR 127.9 million. We added the rental income. We were a bit cautious, more cautious on bad debt. You see then repair, maintenance, property expenses and service charges, there is an increase there. That's due also, of course, to remerchandising projects that we are doing and also for a little bit to a one-off positive variance that we had in France last year. The company expenses went down EUR 1.3 million, which we thought you might appreciate. The corporate income tax is negative for EUR 1.7 million, but that's also related to a one-off positive we had in Sweden in 2024, and that leads to the EUR 131.8 million that we have today. Positive there is -- what's the story? I mean, positive increase in earnings per share, positive increase in dividend.

And I think the core message that we want to give with this slide is that we are extremely, extremely thankful to all employees because they've done a fantastic job. They really put a lot of effort in this. So thank you for that. Then we go to the guidance. The guidance, we said it will range between EUR 245 million and EUR 250 million. We know it's cautious, but we also look at the current situation today with on several scenarios. So we do think it's a good guidance for now. And then last but not least, the financial calendar. That's where we hope to see you again. We have the publication of the annual report on the 17th of April, then first quarter results, Annual General Meeting, H1 and then the third quarter results.

And on that note, let's hand back to the operator.

[Operator Instructions]

The first question comes from Steven Boumans, ABN AMRO. Steven, go ahead.

So I have 2 parts of questions, one on the acquisition and one on the possibilities for further M&A. To start with the first, some questions on the acquisition. So one, what is the annualized EPS accretion that you derive from the deal? 2, what is the current occupancy? 3, can you discuss the competitive landscape in Umea, if I pronounced it correctly. And last, can you -- do you consider selling the big boxes given you disposed some big boxes elsewhere before?

Thank you, Steven. Let's say, on the acquisition, obviously, we are not the owner yet. We hope to close the deal the end of March. And in terms of the annualized accretiveness, I mean, there is certainly an accretiveness there. And we also published a yield we would try to achieve. But for 2026, there's only a partial contribution. So in that respect, I cannot give you a figure, but obviously, it's accretive.

In terms of the occupancy, there is some vacancy in the shopping center, but that's around just close to 5%, which we think is an opportunity. So that's actually also why we have to focus on in particularly with our teams, and we have already quite some good ideas of what we can do to advance the return on this investment. But obviously, that's something we will report further on later in the year once we are the owner. And of course, once we also can really talk to potential tenants, et cetera, et cetera, this has been just been announced. So it's still early stage.

Indeed, there are boxes in Sweden, which we have sold -- sorry, 1 box in Samarkand. We have the possibility to sell boxes, actually 4 in a shopping center in Kristianstad. That has been -- that process has started, but we have not yet finished it, but there is sufficient demand. We'll see how we how we proceed with that later in the year. And of course, technically, you could take a similar view here with Avion Shopping where we also have boxes which are separate from the mall, the gallery. In that respect, slightly different from the other situations because these boxes are actually, as you saw on one of the maps that are connected to the gallery, not that you can walk through the gallery and then achieve or get into the boxes, you need to go outside. But in technically, we could also have a look there to maybe dispose these. But for now, I think these boxes really add to the strength of the center. So that's probably more remote idea.

Roberto, do you have anything to add to it?

No, no, I think he also spoke competitiveness...

The competitiveness. Yes, yes. Let's say, this is the only shopping center in Umea. There is a city center, which also has some nice retail, but that's high street. And then there are basically, you could say, 2 zones where there's also retail. One is a box zone where there's an ICA hypermarket. And then further out, there is another zone where you have a [indiscernible]. So do-it-yourself stores and some car dealers, so there's also some retail there. And that is a quite poor zone in another part of the city. But this is really the only shopping center.

And you will not be surprised to hear that, obviously, Umea, in wintertime is -- can be quite cold there. So people prefer to shop in a covered and nice environment and mall. So that's one of the big attractions of course. Does that cover your questions, Steven?

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

Yes. No, no. Thank you, Steven. Well, would we be in due diligence then I would probably not be allowed to say anything about that. But no, I think this is clearly for us a very important step because we have been quite active in terms of monitoring the markets. We looked at basically all the transactions, which you have seen in our for four markets. We looked at [Technical Difficulty] and this was actually -- this transaction was not on the market at all. It's an off-market deal. So we're very pleased that we could enter into a transaction with a very important and major group like Ingka who obviously is a well-known property owner themselves around the world so that was very nice that we could do this deal and it really fits to our plans. But we will not stop here, Steven.

Obviously we'll go on with seeing what is available in the market. We have some possibility, as we just discussed earlier on the boxes to sell and maybe we can do some more rotation -- and yes, which market that will be a question mark because I think in general, you could say that all our markets are opening up, particularly also Belgium. We have seen a number of transactions in Italy and Sweden. I think there we see also much more activity. So that's the plan. But in terms of where we will then be raising equity or doing it just with our existing resources. Obviously, it depends on the size of transactions. But for now, I think we're very happy and trying to first get Avion Shopping on both end of March and then start with all the works and the plans we have.

And Steven, of course, next week there will be meeting. So we'll come back with 73 proposals of merger and 84,000 acquisitions and sales. So that's going to be very interesting.

Maybe only on the LTV, to which level are you willing to go?

Yes. Well, let's say, acquisition, if we then arrive at April and close the deal Obviously, it is an estimate because it depends a bit on an exchange rate for Swedish krona, et cetera, where we are exactly with our collection in rent and so on, but we expect this to be 1.5%, 1.6% uplift in LTV ratio [Foreign Language]. So that's, of course, still very acceptable because we then stay below 42%.

We, of course, still have 40% as a sort of a long-term target, but are not getting nervous if that's a little bit higher. But we will cautiously follow, of course, the debt levels. And again, in June, we'll see more about valuations. But we feel comfortable with this acquisition the way we it's funded.

And also, Steven if we look at the net, then EPRA yields, we see they haven't moved in our case, but the market, of course, has more -- is more in a positive tone. So there could be some nice valuation coming up in this year, for example.

The next question comes from Stephane Afonso from Jefferies.

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

Well, that's a very good question, Stephane. Let's say the reality is of course we did these transactions. The last ones are the [ EUR 525 million]. We did them in December and we draw down the facilities in January. So, we will see, of course, the effect of these drawdowns in 2026. What you will see is, of course, a change from short-term line into long-term line. So there will be an increase, let's say, in the -- because we will hedge them with interest rate swaps. You will see a slight increase in the interest expenses.

What's very nice to say is that the margins are clearly in line with the margins that we had before. So on that side, we are looking at a stable picture. Looking ahead for the year, we are also taking a good look at the curve. There is a lot of flexibility in this financing. So we have a lot of time when we can fix the interest rate for the amounts and the length that we like. So we are monitoring the interest rate curve. So far, it looks okay. It's been a little bit of a hike as you've seen in the past weak due to certain circumstances in Iran. So but we're monitoring. So we do expect a little bit increase, but not that, not too much, but we will see.

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

I think, Stephane, we all know that the indexation will be lower again than last year. If we look at France, it's basically 0. And for Italy, we have 1.1 indexation, and it was 0.9 for Sweden. Belgium, let's say, that's a monthly indexation, and we have in our budget sort of an assumption 1.5% to 2%. So the indexation for '26, I think that's probably the case for all our peers will be quite modest. And these are the numbers which we have to apply, and we are applying or we have already used the percentages in the billing for the first quarter, and Italy will use that for the second quarter, that percentage.

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

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

Okay. And just to be clear, does the guidance includes the acquisition?

Well, let's say, the guidance we published yesterday evening, the day before we did the acquisition announcement, and we have included some. Obviously, we did a bit of scenario analysis effect of the acquisition in our guidance. But I repeat also given what happened over the last let's say, 10 days or we may even less, 7 days. Obviously, that puts us a bit, let's say, conservative cautious mode. So what -- let's say, for example, I mean, energy prices rises up and so on, that will not so much affect us in the business because we no longer have or hardly have any gas anymore in our centers, our service charges, where energy is a component, most of the energy we produce ourselves or we do. For example, Sweden, we have a number of also in Avion geothermatical way of getting energy. But it is probably more -- what will it do to consumers and so on. So therefore, we have been cautious.

Yes, I understand the cautiousness, but the beauty of the business model is that you have a strong inertia in your -- thanks to the lease duration. So my question is just simple. Is the acquisition is embedded in the guidance?

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

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

No. I mean, let's say Umea, it's not that -- Umea is not on the map or it's so north. This is a very nice [Technical Difficulty] center. And as I said in my speech, it's -- for us, it's also plug-and-play. Ingka has a number of shopping centers in Sweden and this is a strong one, and it happens to be a bit further north, but it's still technically, you could say, in the middle of Sweden. So no, there's not sort of that you say, oh, you bought something in there, there was a discount because of the location.

I mean we believe in the location. And it has its merits. It has also a proven track record. I mean it's been there for 10 years. And now with the boxes added to it, it will even grow further. I mean the highest footfall here in Swedish portfolio, well over [ 4 million ]. So I think that's certainly not something to ignore. In terms of the other centers I think in Sweden, there could be any city. There are more cities of this size where there are still nice shopping centers. So I would not read anything into the location of Umea in this case.

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

The next question comes from Valerie Jacob from Bernstein. Valerie, go ahead.

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

Yes. Thank you, Valerie. Thank you for your question. No, a very good question. In one word, is quality. With the transactions we've seen in our other markets, I think you're still looking at slightly different type of assets with also another risk profile, and in some cases, also with things and we always say, if there is a possibility to acquire maybe at a higher yield than there's probably something you need to fix. Otherwise, there is not this high yield. And then the question we ask ourselves is, are we the party to be able to fix it. And in a number of cases, we said that's not for us and maybe others can do that, but not for us.

And I think the fundamentals here are for us very good. We like Sweden. I mean the macro at the moment is also quite good compared to maybe some of our other countries we're active in. And overall, that brought us to the decision to proceed. And again, this property was not on the market, it's really -- and we are quite proud that we could do this deal with Ingka Centers because, basically, they asked themselves a question, who can be a good neighbor for us in Umea? And your commercial with our reputation and expertise, they said, let's go ahead because, obviously, we are neighbors and the IKEA store is owned by Ingka Centers. And it's therefore a long-term partnership, which we are very excited about.

And it's a nice asset at 10 years. The amount of CapEx that we proceed is not even related to the amount of CapEx that you know for the other transactions.

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

No, let's say, it's not going down, but we just discussed the indexation, which obviously is hardly existing in 2026. We're not alone there. That's for all our peers, I think the case. We do have also to take into account that our interest expenses will tick up a bit because of the long-term financing instead of short term.

And so we've just built in a buffer, I would say, in order to get to this guidance. And let's say, every -- once the Avion Shopping is on board, and we can really that we need some time maybe to work on the tenancy mix and so on. So, it's really that conservative approach, which we have taken and maybe in 3 months' time or 6 months we can improve and say, we can really enjoy the maximum from this acquisition. But for now, this is where we came up with and feel comfortable with, but look what happened in the world. I mean it's -- we're sailing a little bit in the mist, I must say.

The next question comes from Alex Kolsteren from Van Lanschot Kempen. Alex, go ahead.

I have a question on your guidance, I think I'll leave aside has been discussed plenty. On the remerchandising projects that's going on, what's the rent loss in 2026?

Roberto, maybe...

Yes, let's say it's a very good question. The reality is it really depends on how you calculate it because, of course, you have the loss, let's say, that you have realized on the previous rent. You also have the loss that you realized, let's say, if you consider the new rent. Let's say, more or less, we will be around EUR 1.5 million. That's a bit of an estimation. The thing is that, of course, when you do the calculations, you do not know exactly when the units are going to be relet. So there's a lot of uncertainty related also to the works that the tenants perform. So that's a bit more or less the amount that we can think of. Does that give you a fair idea or?

Yes. Yes, that's perfect. And then, yes, so the fact that you bought in Sweden last year was a bit of a lesser performing markets versus Italy or Belgium. Is this sort of a vote of confidence from your side also that the operations should improve further in that country?

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

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

Yes, yes, yes. No, sure, Alex. We are -- now we're quite optimistic about Sweden at the moment. If you look back, certainly in the first quarter, second quarter, Sweden was okay, but not so spectacular, but we have seen now that the sales and then also footfall, et cetera, is all developing quite positively. I think particularly the macro environment helped a lot. As I said in my speech, the government is at the moment actually doing a lot to be nice to the population because there are elections coming up in Sweden. So there are some tax breaks which have been already granted to individuals, whether that's savings tax or income tax.

And as from the 1st of April, the VAT on groceries, which is 12% at the moment, will go down to 6%. So there's a lot of stimulus for consumption, which obviously is something we like. And last but not least, interest rates in Sweden have come down even more rapidly and actually the official rate at 1.75% at the moment of the Riksbank is helping, of course, again, the spending is still many Swedish families, they have mortgage loans at a floating rate. So that helps them in their wallet.

And there's even -- I don't know, but maybe even talk about the Riksbank making another move downwards. So let's see how that develops. But -- and next to that, obviously, in terms of the country as a whole, I mean, they are exporting country. They have quite a strong defensive sector as well, which currently is quite a lot of focus on. So no, we like Sweden where it is today. And yes, also more local elements in this case. We're talking here about a city with a growing population. The low competition we have, the density is low in the area in Umea. So no, it all ticks many boxes, Alex.

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

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

The next question comes from Benjamin Legrand from Kepler Cheuvreux.

I just have a question again regarding the acquisition and actually bouncing back on the yield you are mentioning. The current portfolio is yielding at a much lower EPRA Net initial yield, around 5.7%. I was just wondering what was the difference with this property? Obviously, it's more north, but you seem to be very confident about the location, and it's been built very, very recently. So I was expecting -- I mean, I'm just wondering why there is such a difference.

And also the second question related to this is, do you expect some positive and immediate revaluation coming from it in H1 2026?

Thank you, Benjamin. Yes, let's say, we reported for Sweden, EPRA net initial yield of 5.7% and a top-up yield of 5.9%. Let's say, that's lower than what we have reported here. But again, there are some things to be done in this shopping center. I don't think that this transaction will, as such lead to any changes really in the valuation of our other [indiscernible]. Maybe in due course, actually, as Roberto said, our impression is that [ failures ] also in Sweden are actually maybe thinking about some compression. But no, let's say, it's not that there is something wrong with the center. To the contrary, it has very good fundamentals. But there's also a little bit of vacancy, which I talked about, which is there. And obviously, if we improve the occupancy, then we can create further value.

And there's also, of course, there are numbers, Benjamin. There's also the feeling when you had a little bit of spice and salt, it makes it nicer. And so we think that's what -- those are the ingredients that we think we can put in. So if you look at the different yields, then because we saw the potential. So you correctly said if the average in Sweden is 5.7%, should we expect Avion to hover around those things with those values. We do believe that in the medium run, after we've done our things that should be -- make a good expectation.

The next question comes from Lynn Hautekeete from KBC. Lynn, go ahead.

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

The possibility of extending, there is a bit of, let's say, if you look at the map, obviously, the boxes have just been built. And actually, the last one is being finalized and then also the tenant will fit out there. There's still a little bit of land left where there can also be maybe another restaurant offer or so on. So there can be put some more real estate only, but overall, I think it's pretty well served and the building itself also allows us to be creative and improve maybe the tenancy mix further.

So let's say, it's not that we can build a lot of more boxes on the site, Lynn. But I think overall, what it offers in terms of space, it's good stuff. And of course, within the gallery, which is also it's -- okay, it's 10 years old, but you could say still very modern, let alone the brand-new buildings. It gives us a good opportunity to do some further value creation.

In terms of the timing, have we talked a lot. Yes, we have, of course, been talking a lot over quite some time to get to where we are today. As I said before, Ingka centers is a very reputable organization with real estate all around the world, of course, IKEA is a huge group. So they know exactly what they're doing. And so also yes, as I said before, we're very proud that we enter into a transaction with them. But that obviously needs also just trust and you have to obviously get step by step for them, it's part of their strategy, but they also have to take into account the interest of IKEA as a retail group.

There are many, many IKEA colleagues involved. So yes, that means that the process needs time. But no, we're very happy with the end result and again, that both parties could do it in this good spirit with a lot of trust because I said before, we are in partnership with neighbors, and that's for the long term.

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

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

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

I see what you mean, that makes a lot of sense on the VAT.

[Operator Instructions] And with that, I will now turn the call back to Evert Jan van Garderen, for any closing remarks.

Okay. Well, thank you so much, everybody asking questions, but certainly also everybody listening to the call. Hopefully, it gave some further color on Eurocommercial, its results and where we are today. I would like to thank everybody, including also all the colleagues who have prepared this presentation and all the material behind it. And hopefully, we see some of you who were in the call, particularly analysts in the near future, but also investors when we're on the road to talk further about the results. For now, I wish everybody a nice afternoon. We're just behind 12:00 and a wonderful weekend. Thank you so much.

Thank you.

Good morning and welcome to the Eurocommercial Half Year 2025 results conference. [Operator Instructions]

I would now like to hand to Ilaria Vitaloni, Investor Relations officer of the company.

Good morning, everyone, and welcome. I am Ilaria Vitaloni, Eurocommercial Investor Relations Officer. We are very pleased to have you with us today. This call will be hosted by our CEO, Evert Jan van Garderen; and our CFO, Roberto Fraticelli, Together, they will present the half year results, covering our operational performance, financial position and strategic progresses. After the presentation, we will open the floor to your questions.

With that, I hand over to our CEO, Evert Jan van Garderen.

Thank you, Ilaria. Ladies and gentlemen, good morning, and welcome to our half year 2025 results presentation. It's a pleasure to share with you the progress we have made in the first 6 months of this year. At Eurocommercial, our strategy is clear and consistent: create vibrant shopping destinations, deliver resilient growth and generate long-term value for our shareholders, tenants and communities. .

Today, I will walk you through our operational highlights, leasing activity, remerchandising projects and sustainability achievements. And afterwards, my colleague, Roberto Fraticelli, CFO, will talk about the financial results and the guidance.

Let me begin with our operational highlights. In the first half of 2025, we achieved like-for-like rental growth of 3%, supported by healthy leasing demand and resilient retail sales. We signed 296 lease transactions in the first half with an average uplift of 2.9% on renewals and relettings. Notably, our new lettings, 110 in total, achieved a much higher uplift of 6.6%. This reflects the strong demand from leading retailers to join our centers and expand their formats. As the press release highlights, nearly 20% of lettable units were either renewed or relet during the period, a remarkable level of activity. Let me be clear, this is not just about numbers, it's about strengthening the tenant mix, securing the most attractive brands and ensuring our centers remain dominant in their catchments.

Occupancy across our portfolio remains extremely high at 98.8%, with a collection rate of 99%, which figure you will find on the next slide, evidence of the strong fundamentals of our assets and the affordability of our rents.

Retail sales increased by 2.6% with notable strength in health and beauty, services, supermarkets and books and toys. In July, retail sales increased by around 5%, confirming a positive trend already observed in June with growth of 4.7%, led by outstanding results in Italy and Belgium. In July, all countries recorded further improvements with the sole exception of Italy, where sales remained broadly in line with June strong performance.

Our OCR for our occupancy cost ratio stands at 10%, which is both sustainable and competitive. This ensures our retailers are profitable and committed to our centers for the long term.

We continue to work closely with some of the world's most attractive retailers: Inditex, Primark, MediaWorld, Rituals, Normal and many others. These partnerships are visible in the 296 deals signed, which included first-time entrants and new formats across Belgium, France, Italy and Sweden. For example, Skins first store in Brussels and Sandro's first store in a Belgian shopping center, Besson's new format in Les Atlantes in Tours France, Bershka's new store in Milan and Unit extensions in Sweden like the store for Hemtex. Here, you see some examples of new arrivals in our shopping centers in Belgium and France. And this confirms that Eurocommercial's assets are top priorities for retailers' expansion strategies.

Our success also rests on being relentlessly customer-centric. We're not just filling units. We are curating the right mix of fashion, food, health and beauty and services to meet the evolving consumer expectations. As the chart on this Slide 7 shows, the deal signed span a broad range of categories: 23% in fashion, 18% in health and beauty, 16% in gifts and jewelry, and strong contributors from restaurants, sports and services. At the same time, we are modernizing our centers, introducing full format stores, introducing new brands and redesigning layouts. This keeps our assets fresh, relevant and resilient.

Our leasing results highlight the strength of demand for space in our centers. In Italy, renewals and relettings delivered an average rental uplift of 8.2%. Belgium achieved 1.9% uplift while Sweden and France were relatively stable. Overall, the 296 transactions produced an uplift of 2.9% with particularly strong results in new lettings, where the uplift reached 6.6%. This confirms the ability of our portfolio to capture rental reversion, securing both current income and future growth.

Now let's move to our remerchandising pipeline, which is critical -- a critical engine of long-term value creation. In 2025, we launched 3 major remerchandising projects in Italy: Collestrada, I Gigli and CremonaPO. We are reducing the hypermarket here and reconfiguring units to bring in MediaWorld, Zara, H&M, Primark and Tezenis and this is happening in 4 phases. With this phase plan stretching to late 2026, this will cement Collestrada as Umbria's leading retail destination. Its unique merchandising mix makes it bulletproof.

Tuscany's most visited shopping center is undergoing another wave of remerchandising. The reduction of the PAM hypermarket will result in expanding Zara into a flagship concept store and adding Pull&Bear. This will strengthen I Gigli's dominance and widen its catchment. We see growing visits from more distant areas.

A brand new Primark is replacing Unieuro, which we have successfully relocated to the adjoining retail park. Primark's arrival at CremonaPO will broaden the offer, extend the catchment to neighboring provinces and appeal strongly to a younger customer base.

These 3 projects built on the outstanding results we saw from Carosello and Woluwe completed in 2024. It is the evidence that value is created. As a result of the remerchandising project at Carosello, retail sales increased by 14.9%. Rental uplifts reached 14.5% and occupancy stands at 100%. Zara, Stradivarius and Bershka all expanded, reinforcing Carosello's dominance in the Eastern Milan region. On top of that, Zara closed stores in competing centers. The remerchandising project has increased its catchment area and has diminished competition. Its activity towards the city of Milan has grown.

At Woluwe in Brussels, retail sales rose by 9.8%. Footfall increased by 13.8% and occupancy is virtually full at 99.3%. The remerchandising in Woluwe introduced premium brands, the latest concept of Zara, Massimo Dutti and C&A, a refurbished INNO department store and a new Carrefour Market, making Woluwe a leading premium shopping destination, and these are all powerful examples of how remerchandising creates both short-term growth and long-term competitive advantage.

No less important is our commitment to sustainability, which remains central to our strategy. 100% of our centers are now BREEAM In-Use certified, either excellent or very good. We achieved a 62% increase in green loans, secured a five-star GRESB rating and improved our carbon disclosure project rating to B.

In operational terms, solar production is up 41% year-on-year, 87% of landlord-controlled electricity comes from renewable resources and carbon emissions are down 12% compared to 2023. Importantly, green lease clauses are now included in about 60% of our leases, aligning our tenants with our sustainability objectives. This is not just ESG reporting. In our mind, it's a competitive edge. More and more retailers and consumers demand sustainable environments and Eurocommercial is delivering.

Now is the moment to hand over to Roberto Fraticelli to discuss our financial results.

Thank you very much, Evert, and welcome, everybody. As always, thank you for being here. Let's have a look at the financial highlights for today. So here, what we do is we give an idea of the core highlights that we want to discuss, and then we'll go more into detail in the coming slides.

So as you see, at the end -- in H1, we refinanced shopping loans for EUR 415 million, which is a good result. And we are making further progress in the loans which are expiring then in the second half of 2026. The loan-to-value ratio is down to 40.5%, which is also a very nice result. As Evert mentioned, we sold the Grand Samarkand for SEK 158 million, which is around EUR 14 million, which is above the book value.

Now if you look at valuations, it's nice because what we see is that overall, the value are increasing in all the portfolio. What's very interesting is that, of course, this is not coming from the fact that net initial yields are higher. Actually, net initial yields are flat, but it's really sustainable growth because it's growth of the NOI, it's growth of the ERV. So the rental income is increasing, and that is the base for the increasing value of our shopping centers. So that's healthy growth in all our portfolio in all the countries.

If you look at the financial position. What we highlight is, of course, the lower LTV to 40.5%. That's down from the 41.3% we had in December. And that's due to 2 facts. First one is, of course, the increase in the value of the portfolio, and that increased, of course, the value of the loan to value, and the second one is the fact that the net borrowings basically stayed the same. So stable borrowings, higher value, lower LTV.

Another thing that we need to highlight here is the long-term loans, which we extended. So we're talking about Fiordaliso, which is EUR 200 million loan which we extended for 5 years and a portfolio for assets in Sweden, which was due to expire in 2027, but we already renewed it and extended and actually, it went from SEK 1.8 billion to SEK 2.4 billion, which is roughly EUR 250 million, and we extended that for 3 years. Good progress is being made on the remaining loans. So we're very positive on that, but we will come further news once we have very good news to tell you about.

If we then go to the next slide, we see, as always, our beautiful EPRA NTA bridge. So we started in December from EUR 41.79. We add the investment result. We add the indirect investment result, which is negative, and we'll see it in the next slide. Of course, we do the correction for the first deferred tax for the value, the market value of the financial instruments, and then we do have the impact on the dividend. So we distributed a dividend of EUR 1.80. And of course, part of this dividend was also done in stock. So this is the double effect.

Then we have the effect of -- positive effect of the foreign exchange. That's mainly in the SEK being higher in value compared to the euro. And the other is just a slight effect of the dividend distribution because, of course, not everybody took the EUR 1.80, which we distributed, so you end up to the EUR 41.46.

Let's go down to the income statement. So as you see, rental income increased, and that's also notwithstanding the fact that we -- as Evert mentioned, we had all the remerchandizing projects going. So there was an important impact, but our rental income increased. What's also interesting to see is that the net interest expenses are also unchanged. That's thanks to the -- our hedging policy, of course, because we are still at the 80% hedging policy that we have. We are actually 81%, but that's around the 80% that we want to have.

Then the negative indirect investment results, that's mainly due to the substitute tax that we paid in Italy. Every once in a while, the Italian government is very kind and offers to reduce the tax burden through the payment of some taxes at discount rate, and what we did in the past, we had done some fiscal revaluation of the assets, which have created reserves, and now we are making this reserve distributable to the entire company, to the entire group. Direct investment results has also increased up by slightly.

If we then go to the bridge, which we all like. We see that we start from the EUR 66.28 million in December, then we add the rental income, which is EUR 3.30 million. We have higher corporate income tax compared to last year, and that's mainly in Sweden and in Italy, and that's also related to the increase in rental income. We have lower net service charges. So that means that we invoiced our tenants less than what we used to invoice last year, but that's also due to the refurbishment and all the remerchandising that Evert mentioned because as you see, some units are empty when you're moving the different retailers, so that's different.

Then company and other expenses is EUR 0.47 million, but that's mainly related also because we are comparing it to last year. Last year, we had a positive effect of bad debt, and this positive effect because we have booked too much, so we have to release part of the booking that we have done last year, and we do not have this effect this year. So we end up to the EUR 66.88 million.

Very important, of course, is the direct investment result guidance. Evert and I and the whole company, we're very happy with the results. So we are quite positive, and we decided to upgrade the guidance that we gave in -- update the guidance that we gave in March 2025. So we now believe we'll be at the upper part of the range between EUR 2.40 and EUR 2.45 per share.

And maybe one last slide, just to recap on the core missions of Eurocommercial. As Evert said, we are customer-centric. Our growth is focused on our customer. We do a lot of work. Ilaria does a fantastic job in the search and analysis of our customers. So what we do is we prepare our assets so that they can offer really the best possible services to our clients and our retailers.

Value creation. Evert has given a lot of examples of value creations where we're focusing, what we're doing. We are really trying to build the best assets that we can to make them bulletproof. It's always a strong word, not to make them very strong also in light of the future.

Sustainability. Evert Jan stressed it, how important it is to have sustainability for us, and we really believe it builds a competitive advantage also for us.

And then what's, of course, at my heart, which is the financial discipline and strength, nice loan-to-value, nice NOI growth, good refinancing, a solid stable financial platform.

Then last but not least, we are hoping to see most of you at the Capital Market Day on the 11th of September in 2025.

And with this one, I'll hand back. Thank you again, and then I'll hand back to you, and thank you for all our guys because we did a fantastic job, and back to the operator.

Thank you. Ladies and gentlemen, we are now ready to take your questions. [Operator Instructions] Our first question comes from Stéphane Afonso from Jefferies.

Yes. I have 3, if I may. Firstly, could you share the CapEx on block for the remerchandising projects and maybe also the targeted yield on cost. Regarding the guidance, I'm just trying to understand what is driving your decision to low-target the upper end of the range. And finally, on refinancing, what has been the average cost of debt achieved so far? Thank you.

Maybe Roberto, you want to start?

I'll start with the finance, because I like it. Let's say the average cost, as you've seen, stayed the same, 3.2%. Of course, let's say, the margins are, as you know, Stephane, we do not communicate anything on the margin because we have a confidentiality agreement with the banks, but they're really in line with the financing that we currently have.

Of course, what we are monitoring is the long-term interest rate where it moves. But so far, the refinancing has been on good terms. We have a lot of demand. [ Felora ] shopping centers, so there was good competition among different banks. We always had at least 3 to 4 banks to select from. And that really gives a good impression of the value maybe of our assets, but also on the refinancing moment on the market. So we're very happy with the discussions that we're having with the banks.

Does that answer your question, Stephane?

Okay. Okay. Yes.

Yes. Maybe then a few words on the guidance and our update today that we expect to be at the upper end of the range, as indicated by Roberto. I think it's a combination of a couple of factors, which we took into account. The first one is the Swedish krona, which is always volatile, but sort of seemed to be a bit more stable and slightly stronger than we had in our budget. So that obviously always helps a bit. But we also saw the good progress in the project. And next to that, actually some vacancy reduction, obviously, again, helping us in the forecast for the full year. So all in all, these are the sort of effects, which we took into account to bring us to an update of the guidance.

And then your last question on the CapEx involved in the remerchandising. Again, I think it's -- these are projects which quite differ from case by case. Obviously, we have our building works, but we're working in an existing building. So that is not immediately triggering a lot of CapEx where we do have some CapEx is, for example, fit-out costs, which we have for the tenants.

We create, of course, new units and where we have costs which involved to make a unit relettable not to the specific tenant, but to a tenant, then as obviously our bill, our account, but I don't see that we have to spend millions and millions to do the remodeling, but of course, there are some amounts involved, and they are also spread over in some cases, more than a financial year, of course, but particular disclosure per project, I cannot give, I'm afraid.

We will continue to our next question, which comes from Lynn Hautekeete from KBC.

I have 2 questions. The first one is on Belgium. So in Woluwe your rental uplifts on renewals and relettings decelerated in the first half of 2025 versus 2024 from 6.6 to 1.9 and I was wondering if you could give some color on this because I remember the uplift on new deals was around 6.6 in Belgium in the second half of '24 of your remerchandising projects. So I was wondering if you have a figure for this in the first half of 2025.

Yes. Lynn, thank you very much for your question. And I expected the question because you also mentioned it this morning in your report on our numbers. And to give a bit more color what happens in Woluwe is that actually, we did 17 deals in the reporting period as we always say, renewals relettings is a matter of measuring what is happening 12 months. It's a rollover 12 months. So this is from the 30 June looking back 12 months, 1 year, that is where you measure the renewals relettings.

And actually, out of those 17 deals, we had only a few actually. If I look at the list, you could say that there were 2 deals which were negative, where we replaced a tenant which actually left the center. If I look here, it has to do with Desigual, JOTT and Superdry and we got back tenants in the units, which obviously strengthened the whole center. But these are really, yes, one-off.

So if I look back at the 6.6%, obviously, there were some of the previous deals included and not this one. But it is a matter of just changing 1 or 2 tenants out of the 17. The rest is all plus. But of course, an average in the end is an average. So these 3 deals in a negative territory, brings us to the 2%. But don't -- again, it's always difficult.

I don't think we should read into this the trend that when we do relettings renewables in Woluwe, that we do that at a lower increase or uplift than in the past. I mean, we're still very pleased with what we can do and including the latest Skins, Sandro. These are really nice brands to have in Woluwe, and obviously, we'll dive a bit more deep into the Woluwe tenant mix and what's happening there when we have our Capital Markets Day on the 11th of September, and you're most welcome.

I look forward to that.

You have one more question, I think.

And then -- yes, yes, I do. I do. I will ask my second question now. So you had 1.3% fair value uplift and the main driver there is obviously the increase in your net operating income, but it was also mentioned somewhere that your exit yields were flat or actually went up. I was wondering if you could explain the drivers behind the increase in those exit yields, and if it was maybe related to certain assets.

Yes. Thank you so much, Lynn. You always have very good questions, unfortunately. I mean, the -- as you say, the value -- the increase in value was the NOI and that was, of course, different center by center. What we tried to do was to -- in discussion with the valuers, what they gave us was the impression on the market and the rest, and what they thought was that they did not see any particular transaction, which would actually change their mind in a dramatic way from the yields that they published and they used until now.

So it's really a minor maybe for some smaller assets where they increased a little bit the net initial yields or sometimes just the net exit yield, it really depends on the valuers and on the way they value the asset, but really nothing significant in any of the shopping centers to be fair.

Okay. Clear, and then maybe related to that, could your risk premium go up in France in these exit yields, given the political situation? Did you already discuss that? Or is it too early to tell?

It's too early to tell because you've seen the movements in the markets, interest rates and property values as well -- sorry, the value of the shares of all the companies also investing in France. So I think it's a bit too early to tell also because we do not know what the end result will be. At the moment, of course, there is a lot of turmoil, which is not very good for the market. But I think we need to look at what actually is going to happen in France and see how they come out of it. So for once, I can say that I'm happy with the Italian situation. .

Okay. That's clear. Well, thanks for explanation. See you on the 11th.

Thank you so much, Lynn.

The next question comes from Valerie Jacob from Bernstein.

Can you hear me? So I have 2 follow-up questions from what have been asked. The first one is on the projects, I understand that if a project is different and that you cannot give the detail, but maybe if you could share the overall envelope. Like are we talking like a few million? Are we talking tens of millions or give us a range and also give us a range on the returns you expect from these projects. I think that would be useful. That's my first question.

Yes. Thank you, Valerie, for the question. In terms of the envelope, what you have been doing is, if you look at our overall direct result and the payout we use for the dividend, which is targeted at 75%, there's obviously an amount left, which is sort of our key envelope, which we think we could overall in the portfolio dedicate to capital expenditure. Obviously, there's a bit of ESG involved as well. But mostly the remerchandising projects do tap out of that envelope.

So -- but of course, it's not only one, I think we have a few of those. But overall, if you look per project, I think it's more a matter of some millions than really double-digit amount, and there is a spread -- at the moment, we're spending a bit more in Italy than in the other countries, as you can imagine.

If you come to your next question, what is the return? I think short term, what we see it is, in most cases, a flat operation. But obviously, it's very important for us to think about the medium and the long term where we do see the benefit.

Obviously, when we are stronger against our competitors when we have new tenants coming in, where we can show that we have a bigger footfall, more turnovers and therefore, tenants are prepared to accept better conditions from our perspective.

And on top of that, I think where we do see some further potential uplift is that with the big brands. There is a component. It's of course, minimum guaranteed rent. But on top of that, the component of turnover and then we do benefit from their success, and I think our expectation is that for the years to come, we will see probably a higher component of turnover and in our overall rent roll. So that's basically the picture, Valerie.

Okay. That's very clear. And my second question is on reletting and renewals, and you've got some slight negative numbers in France and Sweden. You've just mentioned a couple of negative transactions in Belgium. So I was wondering, do you think all these deals were sort of one-off over the past 6 or 12 months? Or do you see a trend that overall, the market is a bit more difficult now and that your portfolio is on average probably fairly rented.

Well, Valerie, we just talked about Belgium, and I understand that we're always focusing on negatives or minuses. In Belgium, we had a few, as I said, 3, 4 deals, which were negative. I also have deals where we have an uplift of 32%, 23%, 12%, 22%. So it's really a case-by-case picture in Belgium.

France, I would say there, we obviously still have an effect and we're not alone there because it has an impact on all the landlords of some of the changes, which go into bankruptcy, recently Claire. I think everybody, all payers have Claire, so do we. But also in the past, it's all started with Camaieu, but we've seen recently Naf Naf again. So I think there's an impact of that kind of situations, which we don't have at least not in our portfolio, let's say, in Belgium or in Italy or in Sweden. So France is probably slightly different.

And if you then have that situation, yes, we think it's important that you get if a unit becomes available, the good brands back and that means that in some cases, you have to probably accept a lower rent. Also given the fact that in some cases, maybe the sector changes that you go to another sector where they cannot afford the rent level. You got out of that specific unit. I think that sometimes may be an element being forgotten that if it's all fashion again and you lease to fashion, then you can maybe say, okay, there's a negative trend because of the fashion sector, but it's also sometimes the change, which is, by definition, almost resulting into either a minus or a plus.

Roberto, anything?

In Sweden, of course, as we mentioned in the press release as well, we had a lot of inflation in the past year. So when you just look at the renewals. And then, of course, they already absorbed over 23% of inflation in the past year. So that was also related to that. But in the renewals, you see that there is a strong increase at plus 6.6%.

Valerie, any more questions?

I don't think Valerie had any more questions. We will go over to our next question, Arianna Terazzi, Intesa Sanpaolo.

Good morning, everyone, from my side, too, and thanks for your presentation. I had a question on the return you expect from the project in Collestrada, I Gigli and CremonaPO, when they will come to completion. But I think you already covered this topic previously. Then I have another one on asset disposal. The transaction in Sweden was completed above latest valuation. Should we expect further noncore asset disposal in the coming quarters?

Thank you, Arianna, for your questions. And indeed, the disposal we made in the summer, it was a small transaction but still relevant for us because we have created that megastore for ACO leased it out on a 10-year lease and it opened all very successfully. So that was for us a good timing to sell that asset. We do have another position in Sweden with similar big box, which we were absolutely investigating to see whether that could also be a good transaction to consider.

The fact is that in Sweden at the moment, the market is actually quite active for this kind of product. We also did these kind of sales in the past when we had retail boxes as we call them, which, of course, are for us, nice to have. But once you have got your tenants in there, you've got long leases, there's not so much you can do, not so much value you can add. That was also in the case of the Samarkand deal, and then we know that we have that retailer anyhow on our retail zone. So it does create traffic you want. And then we can focus on the gallery. That's really where we want to be. There we can add value there, we can work on the tenant mix. So we do hope to maybe see a more -- one more disposal in the, let's say, the coming months, but it's the kind of product, which, of course, we like to produce, but once it's there, then we could maybe better reinvested in our galleries.

Our next question comes from Steven Boumans from ABN AMRO - ODDO BHF.

I have three, maybe first also to clarify some earlier answers. I hope you can quantify answers a bit better. So to start on the remerchandizing projects, what is the net annualized rental uplift that we can expect for the three projects combined? And also given you, say, Carosello led to 14.5% uplift, what will -- what was that number for Woluwe?

Let me see here, Steven. Yes, I'm afraid that I'm -- let's say, for -- otherwise, we would have published it, if we would have exactly the net annualized income for the next 3 years of each of our remerchandising project. So I'm afraid I cannot comment more than what I said in the call earlier when other colleagues of you asked similar questions.

If we look at Woluwe, I think there, we do also have a different situation than Carosello where, of course, in the case of Carosello, we now have the new tenants also up and running. That was already the case a bit earlier in Woluwe. So I think in 2025, we can probably be more precise on the numbers.

But on Woluwe, Steven, I assume that you will also see us in the Capital Markets Day soon. But if I look at renewals relettings over the last periods, it was 16.6% in December, 10.8% in March and now it's 4.1%. So that's in the reletting is the case. But the average which we gave in Carosello, yes, that's also depending on the deals we did there.

Maybe, yes, Steven, those are always good questions, and it's always great to hear. Let's say, on the remerchandizing, I think what is important is some of our peers, they give their expected return. And they based on a series of assumptions, which is then not shared with everybody. I mean, we also have the expected yields, returns that we have on the remerchandising. And those, of course, are let's say, at least in line with those of our peers.

What is interesting for us is that, of course, there are several components of this increase in value. The first one is when the contract that you're signing, for example, with very big tenants, and so you have a component which is the MGR, but there's also the component on turnover rent, which is also a very important component.

We all, as the retailers have expectations on the turnovers that they're going to realize. And most times, what we've seen, and then we've seen with Carosello, we've seen with Woluwe, the actual turnover that they realize are beyond our expectations. So we're very happy with that.

On the second hand, there is also the renewals and relettings because, of course, once you've made your center more attractive, then you also have an increase in the number of visitors and you have an increase in the spend. That's the medium- to long-term strategy that we discussed also several times. So what we see is a strong increase in what will be -- what we expect, and we hope to see is the strong increase in rental income and in visitors and a strong effect on the renewals and reletting. So well, others are telling you I'm going to have a yield of 8%, 9% or 10%. We are saying we are doing this, and we are confident that it's a good investment.

But please let us realize these expectations as so that we can communicate with them, and that's also what we did with Carosello and what did we Woluwe. We did the project and now we're sharing with you the results that we're getting. So it's not that we want to be to tricker that we are expecting remerchandise -- sorry, cost return on investment of 2%, on the contrary we are expecting a good return on investments. Just that we want to share the real results and not what will be a fantastic expectation on this investment.

That's to answer your question, Steven.

Yes, that provides a lot of clarity. So thank you for the background. If I may, I also have one other question, maybe you can quantify that a bit better. So total CapEx, what do you expect for the, let's say, '26 or the next years and maybe categorize it broadly. Maybe also some color on which part of sustainable investments, for example, like solar you are needing.

Well, let's say, Steven, there. Again, we have our sort of rule of thumb that what we do not pay out as dividend, that's obviously cash flow we can use for CapEx spread over the portfolio, but not more than that, otherwise, you would also see gearing going up or whatever. So that's sort of where you should put us and this is -- if I look for the next period, obviously, it's -- the majority of that will be Italy. There will be, if I look at our internal tables, there's not that much happening in Sweden. There is maybe a bit more happening in France, depending on developments there.

But that's, of course, something we realize ourselves. We can't do all those projects at the same time. It's not only about the CapEx and the availability of that, but it's also about the income and we have to accept that when you are -- and that's why we deliberately put some of the photos in the presentation that we're really doing a lot of work, and that means that you cannot lease that space out.

So temporarily, you have a revenue which you're missing and that you have to plan carefully through the portfolio to make sure overall, at group level, obviously, our rental income is still steady or increasing with indexation and other matters, and that's what we have to plan very carefully .

Steven, I mean, to give you the -- as we always discuss the CapEx, say its around the EUR 40 million, more or less. Of course, we invested a lot of CapEx in ESG, and that's also very important because we want to keep on achieving our targets.

But we really did some major investments in the past. So when we look at the future investment, there is still a lot, but there's also a lot of reserve which we can invest in these kind of projects that we are doing in Carosello in Woluwe, in I Gigli. So there's plenty of opportunities for us.

It also depends, if you remember from the contribution from the government like in Italy when we get -- we got the contribution if we invested in green refurbishment. So -- but so far, as Evert Jan say, this is what we are planning to -- those are the resources that we would like to invest, being careful. We're not doing too much. We're not doing enough. So always trying to find the balance where we can add the best value to the portfolio, that is prioritized.

Okay. Very clear. Then my last question, a simple one. Vacancy is obviously low. But just to push you on the contrary with some vacancy being Sweden, could you provide some color here? So is that mainly from the former ICA in Ingelsta, any comments on what we can expect from the vacancy in Sweden?

Yes. Steven, indeed, the vacancy in Sweden is mainly in Ingelsta Shopping where ICA Maxi moved over the road and built a new big hypermarket, and that space has been relet to Coop and Normal, and there's still a residual part, which we actually were in Sweden early this week and also to discuss a number of deals, which they have been on the table, they're all back in Sweden a bit earlier than in the other countries, and we do hope that we can feel that, I should not say feel, but have a nice new tenant for the space. .

We have a few options, and we just have to see which one will fit the best. But it is, of course, a lot of space. It's quite deep. So it's not space, which is available for a number of tenants. You need some specific tenants who can take up that kind of surface. But no, we are positively looking at that, and if that is happening, the deal, then obviously, Sweden is back on the levels where the rest of the countries are.

In the other centers, we don't have a lot of vacancy. We're doing some nice lettings in Sweden to also a bit more in the surface sector, health care sector. So in that respect, I think the market in Sweden looks quite nice for the second half of the year.

The next question comes from Alex Kolsteren from Van Lanschot Kempen.

Just one question remaining from my end, I got one question remaining. So if you look at some of your peers, they've been active in the transaction market, and I think investors are appreciative of that, and then your LTVs are close to the 40%, your target. So I was just wondering what's your view on adding assets to the portfolio?

Yes, Alex, we do have on our agenda, the items like indeed what about asset rotation, joint ventures, and we've seen some transactions by peers. At least we have now also done a disposal, which I think if you talk about asset rotation is probably the first step you need to do in order to rotate.

We're keeping an eye on the market. We do have some, if you look indeed at our balance sheet, it's stronger than it was. LTV down. So we are in a position where we can look at various options, but don't expect us to jump into any assets which is now coming to the market. I think we do want the good quality we have in the portfolio.

Obviously, we're very much focusing on the remerchandising projects. But the kind of deal, which we would like for our portfolio, we haven't seen, but maybe they're coming. It's, I think, more and more activity in Spain and maybe that flows over to Italy, who knows. And Sweden, I think there, again, we see more activity. We were one of the deals, of course, which is the effect of lower interest rates.

I mean, in Sweden, the STIBOR has come rapidly down. It's now 2%, maybe one more rate cut there, and therefore, the fundability of assets is much better. We see a lot of appetite among the banks to finance property. We bump into that as well when we, of course, internally discuss it and have our conversation with the bank. So I think the lights are more green for transactions in the Nordics as well. So who knows? Yes.

The next question comes from Francesca Ferragina from ING.

I have two questions. So first one, there was a change in ownership of Carrefour in Italy. Could you maybe provide more color on any impact this might have on your Italian assets?

And then the second question, coming back on the portfolio revaluation. You already mentioned that the portfolio revaluation is related to the operational performance and not the yield compression. But to what extent do you see the remerchandising projects translating into the asset sales? So reevaluations in Italy increased by more than 2%. But what extent is this impacted by the remerchandising of Carosello? And also what impact would you expect on the revaluation of Woluwe as this was only -- was up slightly 0.7%.

Very difficult question, the first off. Let's say, of course, it's third parties Carrefour did this deal with NewPrinces, which is an Italian investor who has acquired plenty of companies in the past years. Let's say, what -- it's very interesting on this side is, of course, that as all these products that is now able to sell through the Carrefour operations in it, and so if you sell cheese, for example, and you really have a very limited amount of space in the supermarkets, well, if you can double it, of course, that's extremely interesting for your turnovers for the entire company.

So they have reached that agreement. They haven't finalized the transaction yet, which is expected to happen at the end, before the end of the year, possibly at mid-November. So we are, of course, in discussion with Carrefour. We know NewPrinces, but we haven't got contact with them yet. But let's say, with Carrefour, of course, we only have one asset, which is Carrefour -- which is Carosello. And in Carosello, we have done all this transaction. And of course, yes, premarketing Carosello is quite large, so it will be nice to reduce. This could offer possibilities. Let us put it that way.

For concerns, your second question on valuations and obviously taking into consideration the potential value created by the remerchandising efforts that we did. Well, it is in some form because, of course, the -- depending on the value and the way they do the valuation, some of them use the discount of cash flow. If you use a discounted cash flow, of course, you already start taking into account the ERVs. So do you expect the rental value for the future. So in some cases, we -- the value has already taken into consideration, the ERVs for the future, how they could change, how they could increase, how they could decrease. Those are all the assumptions based on the feedback that we could provide them and that is mainly on the timing and when we think that an operation can be finalized mainly on some of the contracts which have already been signed.

And on that basis, then you can formulate or she can formulate her or his own hypothesis on what is the future rental income going to be. And on that base, then they use the cash flow projections to determine the value that they expect the centers to be. And then, of course, they discounted that. So it also depends a lot on the discount rate, which are still very high. So the effect that you have, of course, been discounted, it's lower and lower the further in the future you go.

Does that answer your question?

Yes. Thank you.

Our next question comes from Kai Klose from Berenberg.

I've got two quick questions. The first one, after you had a couple of refinancings in Italy and Sweden, could you indicate what the LTV on an asset basis is compared to the group level? Maybe just as an indication, is it marginally higher or lower or significantly higher or lower? That would be helpful.

And the second question, you mentioned that in terms of the company and other expenses, there were some passing effect in the first half, which explains the increase. I didn't get that in full, if you could explain that again in a bit more detail.

Yes, yes, yes. So let's say for concerns, the refinancing in Sweden and Italy, the loan to values, it really depends on the banks. Usually, they're between the 40% to 50%, and that's a range that we usually have. We also have some existing financing, which are, of course, the lower loan to value, and that's because during the -- in the time the property increasing value and the loans stayed the same. We had a small amortization. So there's also where you create a gap, but when we refinanced, that's what we're looking at between 40% and 50%, that's where we aim.

And I think Kai, in the case of Sweden, we -- because obviously, the Swedish krona is a foreign currency to us, so if at asset level, we could go at 250, 255, we would not mind, because that gives us a bit more natural hedging.

So I think for Sweden, we have may be quite keen on a slightly higher LTV at asset level. But of course, we have to, overall, bear in mind that 40% LTV ratio is something where we feel comfortable. So that it all adds up. But that's, I think, a bit where we are, sorry.

No, no, no, absolutely. The last one is the bad debt. Let's say, what we had last year we had accrued that. I'm just making up a number, EUR 2 million for bad debt because there were several retailers which are facing difficulties. So we thought let's be prudent and accrue for this possible protection of bad debt.

After a year, we had to realize that actually the agreements that we have reached some of those tenants that were perfectly fine. So there was no need for the accrual, with some others we actually agreed a bad debt which was lower than the one we have provided for. So we had a correction. So instead of having a negative EUR 2 million for the bad debt, you had a plus EUR 1 million for bad debt because we actually had accrued too much. .

Is that helpful?

Yes. Yes. Got it. got it.

I see that we have one written question, Evert, do we still have time for that?

Yes. No, sure. I can read out the question and then we will also provide an answer. And the question is, please could you provide some color on why like-for-like sales for food and beverage and sport are negative, having been among the best categories in recent years.

No, thank you for this question. I think the short answer is that in this case, these sectors were impacted by the works when we introduced the new operators, and it's, of course, just a temporary thing you measure against the previous where you measure against last year, 1 month or 3 months or 6 months. You see it varying and we expect this to improve again. So it's a temporary effect, but it all has to do with where the particular works in the malls are happening at the moment.

All right. That was our last question, and I will hand the call back over to Mr. Evert van Garderen for any closing remarks.

Okay. Well, thank you so much. All the participants today who listened in and of course, all the analysts who asked questions. Thank you for asking these questions, which makes it, of course, a very interactive and hopefully interesting conference call.

We look forward to our Capital Markets Day mentioned before in Brussels on the 11th of September, on Thursday, where we will, of course, show Woluwe, what happened there and also go into some more detail on this particular merchandising project.

But for now, I would like to thank everybody for participating, and of course, not last but not least, all our colleagues who worked very hard behind the scenes to get all the numbers and presentations ready, and I wish you a pleasant Friday. Thank you so much.