Hamborner Reit Aktie

Welcome to the Hamborner REIT Q1 2026 Financial Results Conference Call. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Good morning, ladies and gentlemen. This is Niclas Karoff for Hamborner REIT. Thank you for joining our conference call regarding our figures for the first quarter of 2026. I'm pleased to be here today together with members of our team, including my colleague, Christoph from IR. As usual, I will begin with a brief presentation, after which, we will open the floor for a Q&A session. We hope everything will run smoothly from a technical standpoint, and look forward to engaging with you.

Let's start with an overview of the key figures as of 31st of March 2026. Influenced by our disposals over the past 12 months, the income from rents and leases declined moderately by 1.9% to EUR 22.6 million in the first quarter. FFO decreased by 1.6% year-on-year and amounted to EUR 11.7 million or EUR 0.14 per share.

During the first quarter, financial and portfolio figures overall showed a positive development. EPRA NAV and LTV were positively influenced by the stable revenue and also the earnings development as well as value adjustment within the property portfolio, resulting in a value of EUR 9.27 per share and 43.1%, respectively. Operating performance remained resilient, with a vacancy rate and total portfolio WALT at solid levels of 3.5% and 5.2 years. As always, we are going to provide more details on the next slides.

First of all, a closer look at earnings performance. Yes, from the management of our properties, income from rents and leases amounted to EUR 22.6 million. As noted before, the 1.9% year-on-year decline came primarily due to property disposals completed in the first half of 2025 as well as in the first quarter of this year.

In the first quarter, income from ancillary cost allocations increased by 16%, driven by higher prepayments, including effects from the restructuring of our facility management. In contrast, operating expenses rose at a comparatively moderate rate of just 2.1%, which is primarily attributable to the disposal of properties with higher nonrecoverable operating costs.

Maintenance expenses decreased slightly on the first quarter and amounted to roughly EUR 1.4 million. The costs related to ongoing minor maintenance and various smaller planned measures. As in previous years, major maintenance projects and especially larger tenant improvements already announced in connection with our full year guidance are scheduled for the second half of this year.

Personnel and admin expenses increased by around 5% and 12%, respectively. On the one hand, this is due to the expansion of personnel capacities and the filling of vacant positions. On the other hand, the rise in admin costs mainly related to our upcoming Annual General Meeting, where costs in contrast to the past have partly been recognized already in the first quarter of the year. Other operating expenses were lower compared to the previous year, influenced by reduced external consultancy costs.

Interest expenses slightly decreased in the first 3 months -- first months of 2026, mainly due to the refinancing at higher interest rates in the second half of 2025. Yes, they increased in the first 3 months of -- first months. On the other hand, lower interest rates for cash deposits led to lower interest income.

Total FFO for the first quarter amounted to EUR 11.7 million or EUR 0.14, down only 1.6% compared to the previous year period.

On the next slide, we'll briefly review the development of our portfolio key figures. Following the transfer of the recently sold DIY property in [ Ditzingen ] in the first quarter of this year, our portfolio currently consists of 63 assets. Apart from this disposal, the portfolio development was influenced by a value enhancement of our office asset in Cologne, resulting in a total portfolio value of approximately EUR 1.34 billion as at the end of March.

EPRA vacancy rate remained unchanged compared to year-end 2025 at a low level of 3.5%. Total portfolio WALT, as pointed out before, also remained largely stable at 5.2 years, with terms of 6.3 years for the retail and 3.8 years for the office portfolio.

Concerning rent development, on a year-on-year basis, our like-for-like annualized rental income again increased by 0.8%, primarily driven by indexation effects, especially in the office portfolio. The positive impact of indexation was partly offset by a higher vacancy level and slightly lower rent levels for follow-up leases, which are partly the result of numerous indexation-driven rent adjustments over the past 2.5 years.

On an annualized basis, the disposals of our properties in Osnabrück and Lübeck last year as well as the retail asset in Ditzingen this year resulted in a reduction in rental income of EUR 4.1 million or 4.5%. As at the end of March, our annualized rents amounted to EUR 87.8 million.

Concerning tenant structure, compared to the end of 2025, only minor changes happened within our tenant structure, primarily driven by index-linked rent adjustments and property disposals. The combination of sector diversification and the high stability of our top tenants continue to ensure the sound development of our operating business. Yes, even in a macroeconomic environment that remains challenging.

On leasing situation, yes, further aspect of this is the consistently high level of tenant satisfaction, which is shown now on this slide here. Since the beginning of the year, we achieved several letting successes, with a total contract volume of nearly 10,000 square meters. As in recent years, the majority of this was attributable to contract extensions and the exercise of options by existing tenants. Yes, once again, reflected in a high retention rate of around 89%. At this stage, Hamborner does not expect any major cluster risks in connection with upcoming relettings in the coming years. This is clearly illustrated in the lease expiry schedule shown at the bottom of this slide.

On the financing side, our company remains in a very solid position with 43.1%. Our LTV remains at a comfortable level and furthermore, within our current target range. Total debt remains largely stable, slightly below EUR 640 million. The average interest cost slightly increased to 2.2% following our refinancing activities over the last 3 quarters. As we are currently tending to opt for shorter loan terms between 3 and 7 years, the average term has been slightly reduced to 3 years.

Further debt metrics also remained largely stable, with net debt-to-EBITDA ratio at a level below 10 and an interest coverage ratio of 4.5. Yes, regardless of the still challenging financing environment, the high quality of our portfolio and our extensive and reliable network of banks give us confidence in our ability to successfully complete the financing tasks ahead.

And finally, I would like to give a brief outlook. Yes, the company's Annual General Meeting will take place in early June. We propose to distribute 65% of our operating income generated in 2025, which corresponds to a dividend of EUR 0.39 per share. To date, our operational performance has been in line with plans, and we are optimistic about the remainder of the year and confirm our current full year guidance.

Our rental income for the full year 2026 is expected to be with -- between EUR 87.5 million and EUR 89.5 million. And our assumption for the FFO range between EUR 38 million and EUR 42 million. The operating result will be influenced in particular by the cost development in the areas of maintenance, personnel expenses and interest. And with regard to these cost categories, we will continue to act with high discipline and try to achieve a balance between current financial burdens and securing future growth and cash flow prospects.

Regardless of the recently announced strategic adjustments, which include a growth focus on retail properties, a widened acquisition profile as well as a reduction in -- concerning our office exposure, our guidance currently does not take into account any further transactions. We have recently started sales activities for the first office properties and are simultaneously examining further acquisition opportunities. However, based on the current outlook, we expect potential transactions to have only a minor impact on this year's revenue and earnings development. We will keep you informed on our progress, and if necessary, update our guidance during the course of the year.

Yes, and with that, ladies and gentlemen, I would like to conclude the short presentation and open the floor for your questions. Thanks so much for now for your attention.

[Operator Instructions] The next question comes from Thomas Wissler from mwb research AG.

Just wanted to follow up on your recent statement regarding the property disposals. Can you maybe add some colors on how long this process will take? Is it an exercise which might take a couple of years? Or what do we have to expect in terms of time frame of exiting the office segment?

Yes, Thomas, thanks for your question. Regarding the disposal plan for and the -- for the office properties. We -- yes, we anticipate a midterm perspective here. And if I say midterm, we are talking about, let's say, 4, 5 years, it might be run up to 6 years, but that's how we define midterm year for us.

So we don't see ourselves to be in a hurry. We want to do it in a disciplined way. And obviously, it's also strongly connected with what we see on the acquisition side on -- concerning the further development of the retail market. So these 2 things always have to be connected.

Great. If I may, just one more follow-up question. If I see your FFO, the run rate in Q1, if I just do the math and simply multiply this by 4, I would get to a number which is exceeding your upper end of the guidance range. Is it fair to assume that in the second half, there will be more a burden coming from refinancing? Or where do you think you will remain with your guidance in the FFO range?

Yes. Thomas, I think there are a couple of things which have an influence here or which will have an influence here anticipated from our side. One, obviously, are the effects from financing costs, which you see more -- or higher financing costs, which you see to a larger extent in the second half.

Then secondly, I mean, if you look at the maintenance history on our side, it's quite usual that typically during the second half maintenance, the part on maintenance is going up. Concerning the overall maintenance throughout the year, it's especially focused during the last 5, 6 months. And on top of that, we also anticipate as of today, higher expenses compared to the first half of the year for IT-related costs, yes.

[Operator Instructions] The next question comes from Philipp Kaiser from Warburg Research GmbH.

Yes. Following up on the maintenance expenses below last year Q1. And you mentioned it also during the presentation that the majority of those planned maintenance is scheduled for the second half of the year. How much of this is already locked in compared to planned in the second half of this year?

Yes, I mean, there are various measures, I think from today's perspective. Obviously, we are talking about several individual measures here. But as of today, I think it's fair to assume that several measures have been locked in already.

I mean for us, please take into account that the overall expense we are planning here are also influenced by tenant improvements. And tenant improvements, apart from other regular maintenance, is sometimes really very difficult to predict, concerning -- because if you're still in negotiations, final negotiations, for instance, with the upcoming -- with tenants for upcoming leases, then there's quite some movement still in there. Who's responsible for the final investments? Is it the tenant of a landlord, for instance, and this can move the needle quite substantially, just as an example.

Perfect. Next one is on your maturity profile, especially on the upcoming years, 2027, 2028. Any concrete plans already to tackle this maturity schedule?

Yes. I mean what we did in the past 2 years was seeing that the stronger refinancing needs to move everything or to start the discussions with our banking partners on the financing side earlier than we did in the past. And that's what we are continuing as well for the next tranches for 2027, '28.

I think we provide a lot of visibility to our financing partners concerning our refinancing. So we start pretty early in the discussions. And also the experience from last year has shown that sometimes rather minor reasons like simply existing resources then for -- on the need for final details, it takes a bit longer than expected, and that's another reason for us to start quite early on those. But this has no fundamental influence or had no fundamental influence finally on the positive outcome. So we are very optimistic as of today.

Okay. And what's your kind of indicative all-in rate on -- for you in -- currently being [ floated ] on 5 to 7 years secured bank debt compared to the 2.1, 2.8? Any major changes expected waiting on FFO?

You mean the total cost now that we are currently based on today's financing level that we have on financing costs for refinancing or?

Yes, exactly.

Yes. So I'd say it's around, let's say, around 4%, a bit a bit higher than 4%. If you look at the current swap rate on a 5-year term, for instance, obviously, it depends on for which term we fix the rate and what kind of assets we are talking about, et cetera, so all the influencing variables here.

But that's yes, that's around the number, let's say, the high 3% and beginning 4%, let's say, between -- roughly between 4%, maybe 4.2%, something that's around 4.3%. And concerning the FFO, we would expect, compared to 2025 financing cost, approximately 10% increase.

Okay. Very helpful. Then on your valuation, you uplift the Cologne office building. Could you shed some more light on the driver behind this uplift? It's quite meaningful, it's like almost 10%?

Yes. Yes. Yes, this was -- that's right. It's a quite meaningful one, and that's that reason, obviously, why we -- I mean, the reason for this is rent related. So we get higher rents, substantially higher rent. And therefore, we really -- this was a conclusion here from the -- on the valuation side. And it was -- yes, that's the reason behind it.

Okay. That's very helpful. And the last one out of curiosity. I think there was this REIT Act in February, allowing REITs to operate in more in renewables and charging infrastructure. Any tangible plans for Hamborner here? Any further thoughts, meaningful changes expected?

I mean, we are still internally analyzing really all the effects from it. And the reason for this is -- I mean, first of all, I'm very grateful and happy that there has more flexibility now. I think it should help us in certain areas. Personally, I don't expect a major wave of opportunities coming from it. But in certain areas, it shall help us.

We are -- we have analyzed the potential internally here that we can take from this. And it would help us, I think, on the energy side, concerning how we handle, for instance, investments concerning solar systems on rooftops, et cetera, it will give us more flexibility on this. But you always have to take into account that apart from the legal framework, you have the situation and the assets itself. So it's not the case that we would be able to install in a large-scale solar panels, for instance, across all our assets and run these technical systems because sometimes you have other burdens that you have to cover.

So it's a mixture across the portfolio. But clearly, it gives us more flexibility in further discussions with our tenants and with business partners here. And we also, clearly, based on our sustainability strategy, anyhow, have the interest to implement as much as possible, which helps us here on our decarbonization target.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes, then thanks so much again from our side and hope to talk to you soon and have a good remainder of the week. Thank you.

Welcome to the Hamborner REIT Preliminary Figures 2025 Conference Call. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Good morning, ladies and gentlemen. Thanks for joining our conference call to discuss our preliminary figures for the financial year 2025. I'm pleased to be here today together with members of our team, including my colleague, Christoph from Investor Relations.

As usual, I will begin with a brief presentation, after which we will open the floor for a Q&A session. As in our previous calls, you now have the opportunity to submit your questions not only by phone, but also via the webcast directly through our web browser. We hope everything will run smoothly from a technical standpoint and look forward to engaging with you.

Let's start with an overview of the key figures as of 31st of December 2025. Yes, despite the ongoing difficult environment and sector-specific framework, we remained broadly on track, and we're able to continue our business as planned in the fourth quarter of the year. Influenced by last year's property disposals, income from rents and leases declined moderately by 2.9% to EUR 90.3 million in 2025. FFO decreased by 5.7% year-on-year and amounted to EUR 48.6 million. This corresponds to an FFO per share of EUR 0.60.

Key financial figures once again showed a stable development with a slight increase in LTV in 2025 to 44.3% and a corresponding decline in the REIT equity ratio. EPRA net asset value development was negatively affected by the year-end portfolio revaluation and amounted to EUR 9.07. Operating performance remained resilient with a vacancy rate of 3.5% and portfolio WALT of 5.3 years. And as always, we will provide more details now on the next slides.

First of all, a closer look at earnings performance. From the management of our properties, we generated income from rents and leases of EUR 90.3 million. As mentioned, the 2.9% year-on-year decline is primarily due to the sale of properties. During the year, operating expenses and income from ancillary cost allocations declined by around 13%, mainly related to the property disposals as well as the restructuring of our facility management. The integration of our new external providers, yes, that led to a temporary reduction in services and associated costs during the onboarding phase resulting in a positive one-off effect of approximately EUR 1.5 million in 2025.

Ongoing maintenance measures and several larger projects as, for example, roof renovations and modernization of building systems or energy efficiency measures led to maintenance expenses of EUR 10.2 million in the financial year, slightly up from EUR 10.1 million in the previous year. The increase originally anticipated at the beginning of last year has thus turned out to be significantly lower, which is partly attributable to a postponement of measures to the current year.

Admin and personnel expenses increased largely in line with our estimates by around 4% and 14%, respectively, reflecting our digitization efforts on the one hand and workforce changes on the other hand. Other operating expenses rose mainly due to costs related to strategic and regulatory projects, especially in the areas of digitalization and sustainability. Despite the significantly changed interest rate environment, interest expenses slightly declined in 2025, mainly due to the repayment of a bonded loan and loans linked to recently sold assets.

Apart from that, yes, the interest cost development was positively affected by the limited refinancing needs during the first 9 months of last year. On the other hand, declined interest rates led to lower interest income, which amounted to approximately EUR 0.7 million at the end of 2025. So total FFO for the 2025 financial year amounted to EUR 48.6 million, yes, down 5.7% compared to the previous year. And as a result of disciplined cost and revenue management, we were able to exceed our original earnings forecast of EUR 44 million to EUR 46 million.

On the next slide, you will find a portfolio bridge showing the development of our portfolio value in 2025. It reflects the impact of our transaction activities as well as the external portfolio valuation, which was for the first time, carried out by our new external appraiser Savills. Based on the reassessment, the market value of our like-for-like portfolio decreased by 4.6%, with office down 4.2% and retail down 4.9%. The decline was mainly due to property-specific value adjustments, which were primarily attributable to market developments and also increased CapEx requirements at individual property locations. The effects are reflected in adjustments to discount and capitalization rates whose development is shown on the right-hand side.

Despite the value adjustments, Hamborner remains confident in the quality and resilience of its property portfolio with the positive factors outweighing the negative above all, the solid tenant base, including renowned local suppliers and stable office tenants, which is offering consistently stable cash flows.

On the next slide, we will briefly review the development of our portfolio key figures. Following last year's property disposals, our portfolio is currently consisting of 64 assets. Taking into account the disposals and the year-end revaluation of our portfolio, the fair value of the total portfolio decreased by EUR 92.4 million in 2025, standing at around EUR 1.35 billion as at the end of December. EPRA vacancy rate rose slightly over the course of the year and remained at a low level of 3.5% at the end of the year. Total portfolio WALT also remained largely stable at 5.3 years with terms of 6.6 years in the retail and 3.8 years in the office portfolio.

Yes, year-on-year, our like-for-like annualized rental income increased by 0.5%, primarily driven by indexation effects, especially in the office portfolio. The positive impact of indexation was partly offset by the effects from the vacancy increase and slightly lower rent levels for new and follow-up leases, which are partly the result of numerous indexation-related rent adjustments over the past 2.5 years. On an annualized basis, the disposal of the office property in Osnabrück as well as the retail asset in Lübeck led to increase in rental income of EUR 2.8 million or 3.1%.

As at the end of December, our annualized rents amounted to EUR 88.4 million. In 2025, our only small changes occurred within our tenant structure, mainly due to index-based rent adjustments as well as property disposals. The table on the left hand provides you with an overview of the company's 10 largest tenants, which are characterized by high -- overall high stability. As shown on the right-hand side, food retailers, again contributed to more than 1/3 of the company's rental income in fiscal year 2025.

The consistently high level of satisfaction among our tenants is reflected on the next slide. In 2025, we were able to achieve numerous letting successes with a total contract volume of more than 39,000 square meters. As in recent years, yes, the majority of this was attributable to contract extensions and the exercise of options by existing tenants, once again reflected in a high retention rate of around 89%.

Looking ahead, Hamborner does not anticipate any significant cluster risks related to upcoming relettings in the coming years. And yes, this is also well illustrated in the lease expiry schedule shown at the bottom of the slide. Before addressing the financial situation, let's take a quick look at the transaction activities. After the successful disposal of the 2 properties in Lübeck and Osnabrück in 2025, we were able to sign a further sales agreement for retail property in Ditzingen at the end of December. The property is a DIY store that we acquired in 2016 and recently contributed around EUR 0.9 million to our -- to the annual rental income. The property was sold as part of our active portfolio management. And the selling price amounted to EUR 11.9 million, which was around 10% above the recent market value. Transfer of ownership is expected to take place at the end of this month.

On the financing side, our company remains in a very solid position with 44.3%, our LTV remained at a comfortable level and within our current target range. Following the repayment of the last remaining bonded loan issued in Q1 2025, our existing financial liabilities now consist exclusively of mortgage-backed loans. At this point in time, traditional bank loans continue to be the most reliable and cost-efficient form of financing for Hamborner. Yes, they enable a clear structure, high degree of planning security as well as comparatively attractive terms and are, therefore, well suited for our long-term business model.

In 2025, we were able to reduce the financial liabilities to around EUR 640 million, down EUR 41 million year-on-year, and that reflecting the repayment of the bonded loan as well as loans linked to the recently sold assets. Given the limited refinancing requirements during the year, average interest costs remained at a low level of 2.1% with an average loan maturity of 3.2 years. And further debt metrics also remained largely stable with a net debt-to-EBITDA ratio of 9.8% and an interest coverage ratio of 5.0. Over the next month, the volume of expiring contracts will be limited. And as was the case last year, we are very confident that we will be able to complete the upcoming tasks early and on attractive terms.

Let me now continue the presentation with a brief outlook on the next slide. Our rental income for the full year 2026 is expected to be between EUR 87.5 million and EUR 89.5 million and our assumptions for the FFO range between EUR 38 million and EUR 42 million. Both rents and FFO are negatively affected by the property disposals just described. Furthermore, operating results will be burdened by higher expenses compared with the previous year, with the majority attributable to maintenance, essentially in connection with upcoming letting activities in 2026, which are reflected in increased costs for tenant improvements.

In addition, we expect an increase in the operating expenses as a result of the expansion of the scope of our external facility management services to return to a normal level. Following the reduction in total liabilities and interest expenses in 2025, we forecast an increase in the current financial year, which is mainly due to the refinancing of several mortgage-backed loans at higher interest rates at the end of 2025 as well as in the course of 2026.

Further effects on operating results are expected from the expansion of personal capacities and the filling of vacant positions during the last month and in the first half of 2026. Yes. Regarding the strategy adjustments announced this week as well as the information provided on this slide, I would like to provide some additional context. The local supply market for fast-moving consumer goods in Germany, particularly concerning the food segment, has long been characterized by comparatively high stability across market cycles and changing social trends. We have been able to benefit from this during the development of our high-quality retail portfolio and also see attractive prospects for further development going forward.

At the same time, it is a sector that is viewed very positively, not only by us, but also by many of our stakeholders. This assessment is based on impressions gained from numerous conversations in the recent past. In contrast, the office market in Germany is subject to significantly changing requirements on the part of tenants and investors, for instance, with regard to location, building and fitting quality as well as surrounding infrastructure.

In our opinion, this will result in continued concentration between office locations with the prospective consequence of a declining number of suitable investment locations in the future from a growth perspective. Such a dynamic environment requires to put even our successful previous strategy to the test. And against this backdrop, we have, therefore, further developed our corporate strategy accordingly. In the future, as part of an asset rotation process, we will focus consistently on expanding our exposure to local retail and DIY stores, building on our long-standing expertise and strong network.

Based on the quality of our existing portfolio, we intend to add attractive core and core plus properties with stable yields, supplemented by selected assets with a matched core profile. As a result, we are aiming step-by-step for a medium-term reduction of our office exposure to 10% to 20% of the total portfolio. The task at hand will be a disciplined rotation while simultaneously exploiting opportunities that arise.

Yes, talking about future opportunities. On the next and last slide, let me provide you with an overview of selected adjustments to our existing acquisition profile. We have updated this profile, for example, by adding core-plus properties to support the overall return profile without jeopardizing the overall balance of the portfolio. In addition, we are expanding our regional focus to include attractive midsized and major urban centers as well as rural locations with strong local supply.

We are also opening up our -- to smaller transaction volumes below EUR 10 million, now starting at around EUR 3 million, which will clearly be reflected in our respective pipeline, including more food retail assets. Furthermore, we intend to diversify our tenant structure, for example, by targeting further nonfood concepts. And overall, these adjustments will help us identify significantly more attractive investment opportunities and further diversify our portfolio.

Yes. And with that, ladies and gentlemen, I would like to conclude the presentation and open the floor for your questions. Thanks so much so far for your attention.

[Operator Instructions] The next question comes from Kai Klose from Berenberg.

The first one is on the CapEx [indiscernible]. Could you explain why you were not able to spend as much as you were initially planning? And did it come out of the blue in Q4? Because [indiscernible] if I was quite on track. And [indiscernible].

I'm sorry, Kai. This is Niclas. Sorry, you're pretty hard to understand, at least on our side. Sorry, the connection is pretty poor. So I don't know. Is there any chance maybe that you could kindly repeat?

[Operator Instructions] The next question comes from Philipp Kaiser from Warburg Research GmbH.

Also one question with regards to the maintenance CapEx. I think this also what Kai was asking with regards to the visibility. So you reiterated your guidance with the 9-month figures. So came the less-than-expected maintenance spending as a surprise in the last quarter? That would be the first one.

Yes. Thanks for the question, Philipp. So I think also that Kai wanted to raise a similar question on the same question.

Yes, concerning maintenance, I mean, I tried to explain it in the past because we obviously -- we had this issue not only in 2025. This is -- this includes, on one hand, so many different measures across the portfolio. So -- and secondly, what we have is that we have during the course of the year, various measures which I have been started and where it's not really clear if they can be finished or not, on the one hand, and it's not untypical that until in the second half, especially towards end of the year, there's a larger bundle of measures, which needs to be executed or where we are not sure if the services can be provided in the last quarter or not, and when the bills will be sent in and when the services are ready with their work.

So I can tell you it's something that we are intensely working on. And hopefully, in the future, this will work out better than before because it's always -- it's a lot of hassle for us internally, as you can imagine, -- and yes, that's all I can say. And especially if you have also larger measures which are being taken out -- I'm sorry, which are being executed like we have them in the past, we sometimes talk about also larger volumes to the end of the year if measures can't be executed anymore.

Okay. Then my second one is on the restructuring of the external facility management and the positive one-off. So that's just only from the integration and the current income from pass on cost is not the run rate we should implement in our models for the coming years. Is that correct?

Yes, that's correct. And that's exactly -- that's one reason why we want to be very clear on that, that this is a one-off effect in 2025 based on, as I pointed out, on certain services, which have not been executed from the servicers. And for that reason, we have -- yes, we don't have the effect on the P&L side. But we think that we are going to step up to the regular base during 2006.

Okay. And the delay was caused by the first-time integration or any other problems?

No, this was -- I mean, from our point of view, this was clearly connected to the transfer now and implementation of the new service provider. I can tell you it's a highly complex project because we changed our service providers across the entire portfolio.

And there are a lot of things that you need to keep in mind here. It was a project which took quite a long time, but also the implementation, not only the preparation, but also the implementation, obviously takes a bit longer than originally expected.

Okay. Perfect. Understood. And my last one with regards to your strategy update published on Monday. So the shift more towards the retail properties and dispose the kind of parts of the office portfolio.

So the office market in general remains highly competitive also the transaction volume itself remains muted. Do you already have any visibility or attract any interest for some of your office portfolio already? Or you just kind of start screening the market for possible exits...

Yes. No, I mean, we are active already on the sell side here coming from our existing portfolio, clearly. However, we are also going to prepare additional assets now for entering the market in the upcoming months.

I mean we have seen some more activity recently, clearly on the office side, on the transaction side. So therefore, from today's perspective, yes, we are looking positively generally on a -- yes, let's say, coming from a lower level as the market has presented itself recently. And based on the overall quality existing in our portfolio on the office side as it is today, also, we are pretty confident that we will attract also interest on the side. But we will do this step by step, and no reason to rush here. So we will carefully look at the market what kind of product in which locations under which circumstances will attract the market and then react accordingly here concerning our preparation.

Yes. And just maybe I'm not sure if everyone was aware. Oh yes, I think Kai is back on the line. So then because I would just want to hint that he dropped off the line.

The next question comes from Kai Klose from Berenberg.

Two questions from my side. Could you indicate again on the maintenance side? Is the reason that we saw quite a strong fall in values also for retail that you were not able to spend as many maintenance and CapEx as you wanted to?

I'm sorry, could you repeat what connection for retail? I'm sorry, I didn't get it right. Could you repeat it again? I'm sorry, Kai.

I was asking the strong fall in values like-for-like, was this driven that you were not able to spend as much maintenance as you wanted to?

No. That's -- I don't think that there's a direct connection associated to this. This -- no. I mean this is -- I mean, obviously, the valuation is driven by so many individual -- the overall valuation is driven by so many individual effects on the asset side.

But there are no major drivers here, which influence the overall valuation. It might be on 1 or 2 assets, but nothing that's on top of my head here. So it's mainly ongoing maintenance, which has been postponed.

Kai, I'm sorry, do you have another question? You had 2 questions, I think, right?

No.

Okay.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. Then thanks so much for your attention during this call, which was a bit more content here concerning our strategy update as in the past. And thanks for your patience. Whenever you have questions, please do not hesitate and give us a call and/or contact us in other forms. And so far, thanks on behalf of our team, and talk to you soon. Bye-bye.

Welcome to the Hamborner REIT Q3 Financial Results Conference Call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Yes. Good morning, ladies and gentlemen. Thanks for joining our conference call regarding our financial results for the third quarter of 2025. I'm pleased to be here today with members of our team, including my colleague, Christoph. As usual, I will start with a short presentation followed by a Q&A session. As was the case last time, we now have the opportunity to not only ask questions via the phone but also via the webcast directly in your web browser. We hope that everything will run smoothly from a technical perspective and look forward to interacting with you. So let's start with a look at the key figures as of 30th of September 2025.

Yes, despite the ongoing difficult environmental and sector-specific framework, we remain broadly on track, and we're able to continue our business as planned in the third quarter of the year. Following recent property disposals, income from rents and leases recorded a moderate decrease of 2.8% to EUR 67.9 million in the first 9 months of 2025. Influenced by property sales as well as the projected cost increases at the operational level, FFO came down by 12.2% and amounted to EUR 36.7 million.

This corresponds to an FFO per share of EUR 0.45. Key financial figures once again showed a stable development with a slight decrease in LTV during the third quarter to 43.3% and a corresponding rise in the REIT equity ratio. Operating performance demonstrated continued resilience, as I think, reflected in a vacancy rate of 3.4% and a portfolio WALT of 5.5 years. And further details will be outlined on the following slides. On a year-on-year basis, our like-for-like annualized rental income rose by 1.5%, mainly reflecting the impact of indexation adjustments, particularly in the office portfolio. The positive effects from indexation were partially offset by slightly lower rental levels.

Due to the numerous indexation-related rent adjustments over the past 2.5 years, we have recently noticed that some lease renewals are taking place at slightly lower rent levels. On an annualized basis, the disposal of the office properties in Hamburg and Osnabrück as well as the retail asset in Lübeck. This led to a decrease in rental income of EUR 3.2 million or 3.5%. As at the end of September, our annualized rents amounted to EUR 88.6 million. On the next slide, we will provide a more detailed overview of our earnings situation. As highlighted earlier, rental income declined by 2.8% to EUR 67.9 million, primarily reflecting the impact of asset disposals. During the year, we saw a slight reduction in the balance between operating expenses and income from ancillary cost location, mainly due to the restructuring of our external facility management.

Yes, following a tender process completed last year, we expanded FM services, including improved on-site support and systematic property data collection. Although this led to a temporary increase in nonrecoverable costs, we expect efficiency gains and a significantly enhanced property data infrastructure, supporting future operational improvements and also data-driven portfolio management. Maintenance costs rose by approximately 9% in the first 3 quarters, largely in line with our assumptions at the beginning of the year. As several planned measures are currently being carried out or scheduled for the fourth quarter, we still expect an increase in maintenance costs of around 10% to 20% for the full year 2025.

Admin, administrative and personnel expenses also increased in line with our estimates by around 8% and 19%, respectively, reflecting our digitalization efforts on the one hand and workforce changes as well as inflation market-related salary adjustments on the other hand. Other operating expenses increased mainly due to costs associated with strategic and regulatory projects, particularly in the areas of digitalization and sustainability as well as the use of external personnel. Despite higher interest rates for the recently refinanced loans, interest expenses slightly decreased in the first 9 months of the year. which is mainly due to the repayment of a bonded loan and loans associated with the recently sold assets.

Declining interest rate environment led to lower interest income, which amounted to approximately EUR 0.6 million in the first 3 quarters here of 2025. Overall, and as pointed out before, funds from operations fell largely in line with our full year guidance by around 12% and came in at EUR 36.7 million. On next slide, a few words on the development of our portfolio. Following the completion of our latest transactions, including the 2 sold properties in Osnabrück and Lübeck, our portfolio is currently consisting of 64 assets. As already highlighted in our last call, we made selective fair value adjustments for 4 properties, as always in close consultation with our external appraiser.

The value changes were primarily related to the respective location and letting situation and resulted in a decline in fair value of EUR 7.3 million or 0.5%. Taking into account the property disposals and the impairments in H1, the fair value of the total portfolio decreased by EUR 34.7 million in the first 9 months, standing at around EUR 1.41 billion at the end of September. EPRA vacancy rate fell slightly over the past 3 months to 3.4%, reflecting several follow-up lease agreements, especially with office tenants. Total portfolio WALT remained largely stable at 5.5 years during the third quarter with terms of 6.7 years in the retail and 4.0 years in the office portfolio.

The tenant base overview on the next slide is nearly unchanged compared to the end of June and underlines the largely stable performance of our operating business. Since beginning of the year, we saw only minor adjustments within our top tenant and sector allocation lists mainly resulting from our disposal activities and the ongoing impact of indexation. As illustrated on the next slide, we achieved several letting successes in the course of the year with a contract volume of more than 25,000 square meters. Office space accounted for the vast majority of this volume. As in the past, we were once again able to record a remarkably high retention rate of around 95%. With 0.7% of annualized rents up for renegotiation or reletting during the remainder of the year, our remaining rental tasks are manageable.

With that, let's move on to the company's financial situation. Total financial liabilities declined substantially in the first 9 months of 2025 and amounted to around EUR 630 million. As already indicated, the decrease is primarily due to the repayment of our remaining bonded loan in March as well as the loan repayments in connection with our latest property disposals.

Yes, given the limited refinancing requirements during the first 3 months of the year, average interest costs remained at a low level of 2% with an average loan maturity of 3 years. Following the increase during the year as a result of the dividend payment and or influenced by the dividend payment and the value adjustments within the property portfolio, EPRA LTV declined -- I'm sorry, following the increase during the year as a result of the dividend payment and the value adjustments within the property portfolio, EPRA LTV declined by 100 bps over the last 3 months and amounted to 43.3% as at the end of September.

Accordingly, REIT equity ratio is 55.8% compared with 55.2% as at the end of December 2024. Key debt metrics, EBITDA ratio of 10.2% and an interest coverage ratio of 5.1. We are currently finalizing our remaining refinancing tasks for 2025 and intend to sign the outstanding loan agreements shortly. As part of our strategic sustainability road map, we continue to pursue the goal of reducing energy-related greenhouse gas emissions across our business model. Our decarbonization strategy is driven by 3 core levers: reducing energy consumption, mainly through property-specific energy efficiency measures, then increasing the use of renewable energy source as an additional lever and improving data quality to support implementation as a third.

The 2024 GHG balance highlights measurable progress. With an energy-related emission intensity of 45.1 kilogram equative, we remain well within our target corridor and continue to implement our reduction pathway as planned. Total energy-related emissions have been significantly reduced over the past 3 years. Scope 1 emissions decreased by 15.4%, primarily due to efficiency gains and heating system optimizations. Scope 2 emissions also saw a notable reduction and the largest share of emissions remains within Scope 3, particularly tenant-related energy use.

Here, the emissions fell by 10.1% and tenant-related energy consumption, by the way, remains the primary source of emissions, accounting for 83% of total energy-related greenhouse gas emissions. Thanks to improved data availability, the emission intensity for 2022 and 2023 are now below the thresholds of our defined reduction. In 2024, the annual target was again met, confirming that our trajectory remains intact. The sharper decline in emissions compared to energy consumption in 2024 is largely attributable to improved external emission factors, most notably the German electricity mix.

And looking ahead, maintaining our target corridor will increasingly depend on external developments such as tenant behavior and further decarbonization of energy supply. In this context, close collaboration with our stakeholders remains a key success factor for the continued implementation of our decarbonization strategy. And with that, let me now finish the presentation with a short outlook. Yes, despite the still challenging market environment, we remain fundamentally positive about the remainder of the year and are, therefore, able to confirm our full year guidance.

Taking into account the assumptions shown on the right-hand side, we still forecast rental income for 2025 in a range between EUR 89.5 million and EUR 90.5 million. The operating result is expected to be between EUR 44 million and EUR 46 million. And with that, ladies and gentlemen, I would like to conclude the presentation and open the floor for questions. Thanks so much for your attention so far.

[Operator Instructions] The next question comes from Philipp Kaiser from Warburg Research GmbH.

Just a couple smaller ones. Starting with the income from passed on cost, you already elaborate the changes compared to the previous year period. Can we take the current levels kind of a range for the coming years? Or do you see any major changes in the next month with regards to this line?

I may answer directly, Philipp. Yes. Actually, I think, first, we have to see until we have the full year behind us. I mean what we are seeing at the moment is that we make now the first experience after we changed our providers here, and we get now all the billings in-house and then have to make our estimates. And what's also included in this cost at the moment in our estimates are onboarding costs that we have here. So I think we will be able to be more precise looking ahead once the full year is completed. Yes.

Okay. Perfect. But do you expect any major changes from current levels for the last quarter kind of billing-wise or anything else what could increase or decrease the number in the last quarter of this year?

Not at the moment. Currently, we work with our assumptions based on what we have received so far.

Perfect. My next one is on maintenance expenses. You already reiterated the kind of the increase between 10% and 20% on the cost base. How much visibility do you have on maintenance expenses for the last quarter? Because if I do kind of quickly the math, the majority of maintenance costs will then be coming in the last quarter, I mean at least roughly EUR 5 million, even a little bit more how much of this cost you already have kind of booked or visibility on...

Yes. Thanks for the question. Look, I mean, I know in the past, it was sometimes quite difficult for us to do the estimates here because it often depends on so many influencing factors like when the individual tasks have been started, when the billing is coming in and sometimes some service delays, et cetera, et cetera. So -- and this in combination with a high number of measures from smaller ones to bigger ones. So it's always quite a struggle here. But for this year, we are -- I think we have pretty good visibility on what's ahead of us here for the last quarter. So from today's perspective, I think whether we will clearly be in the range and might tend to be more -- a little bit more on the lower side, but it's not fully clear at the moment, yes, but definitely within this range as of today, yes.

Perfect. Very helpful. And my last one is regards to the market values. I mean you concluded a smaller valuation with the H1 results. Have you any first indications for the full year for the entire valuation impact? And then with regards to the overall market sentiment, any insight would be helpful here.

Yes, nothing that I can say at the moment. We are in the middle of the process. As you may know that we have changed the service providers, the valuer during the course of this year. So we have a new one on board. And for obvious reasons, this new valuer has to make up his mind for the first time across our portfolio. So I mean, we use them already for our communication, and we were in contact with them already for half year valuation topics. So it's not that they see the portfolio the first time. But obviously, it takes a little bit until they are really deep into everything. And therefore, at the moment, I can't say anything. We have our clear process and we will be in very close communication once the first results are on the table here.

The next question comes from Thomas Neuhold from Kepler Cheuvreux.

I actually have only 2 questions. The first one is on the letting market. You mentioned that due to the higher indexation effect in the last year's reletting rents were slightly lower than in-place rents. We also saw a slight increase in the vacancy rates. So obviously, you don't have a lot of short-term rent maturities, but I was wondering if you can share some light on your view how the letting market might evolve next year.

Yes, Thomas, thanks. So letting market, I think my comment during my initial part here was referencing to certain individual contracts that we see. I mean it's not across the board. I mean you see obviously different kind of letting agreements and results here on an individual basis. But I just wanted to give a little hint to the fact that or remind everyone that based on the higher inflation environment that we had in recent years and the consequence that a lot of contracts have been changed based on the indexation rules here within contracts. Some tenants are -- they come from a higher level now if we talk about letting agreements and additional new leases.

So there's to a certain degree, a higher sensitivity also on this topic. On the other hand, you also -- I think we -- overall, we are pretty happy on the letting side. What we still see is that letting agreements, especially on the larger side, that's at least my impression, tend to take longer. So negotiations tend to take longer. And this can have obviously an impact on if you have a vacant space that it potentially stays a bit longer on the vacant side, and that's something also which we typically reflect in our internal planning. And a part of this, it's also a little bit more complex in negotiating the rental agreements overall because you have additional topics like, for instance, sustainability-related topics that take more time sometimes in the communication and the negotiations with the tenants.

Perfect. Understood. And my second question is on the financing market. Have there been any changes recently in terms of how banks behave, what spreads they're charging, or is it pretty much unchanged?

During the course of this year, no major changes that we see. I think we are very, very good -- continue to have a very good communication here with the financing partners, at least on our side here. I mean what we have seen during the course of the last, let's say, 12 to 18 months was yes, being some institutions a little bit more selective maybe concerning their preferences and tend to -- at least partners we talk to tend to be interested more in larger volumes concerning the financing. And what we also see is concerning, again, the topic of sustainability, financial institutions here be more detailed, more precise on what they expect. So they have meanwhile, a very clear view on what kind of information and what kind of standard they expect concerning the sustainability strategy and the measures and the data. So it's getting all more and more detailed than if you compare it to, let's say, 2, 3 years ago.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes, I keep it short. Thanks on behalf of my colleagues also, thanks for your attention. And yes, I hope to talk to you soon. Sorry, one more question.

The next question comes from Norbert Dr. Kalliwoda from Dr. Kalliwoda Research GmbH.

Can you hear me?

Yes, I can hear you.

Just a quick short question about ESG and future topics. Can you repeat what is the next -- can you shed some light on this topic for coming year? Can you give us a figure with costs? Or is it already communicated with what you do next year in regards of ESG?

Yes, I can hear you. Yes. I got your question. And yes, we have -- just maybe as a little reminder for everyone, we have communicated our cost estimates for sustainability measures. And you can, by the way, find it in our standard presentation on the website where we give a preview on the -- based on the expenses in 2024 for this running -- for the current year for 2025 as well as for 2026 and 2027. And we have divided this into expenses for maintenance on the maintenance level as well as for CapEx. So you find pretty detailed or at least, I think, a good overview with this split up here.

And we split it up also in -- typically in measures exclusively for maintenance so that you can compare it with our other maintenance tasks and another 2 buckets where we divide it into measures exclusively for carbonization or measures which have at least as a part decarbonization components in it. And just give you a number for 2025, our expectation for measures exclusively for the decarbonization is within a range of EUR 400,000 to EUR 800,000 concerning maintenance and for CapEx-related measures for EUR 300,000 to EUR 500,000.

Okay. And with that, then if there are no other open questions, just go for sure. Then thanks again for your attention and hope to talk to you soon, and have a good remainder of the week. Thanks.

Welcome to the conference call. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Yes. Good morning, ladies and gentlemen. This is Niclas Karoff for HAMBORNER REIT. Thank you for joining our half year results conference call. I'm pleased to be here today with members of our team, including my colleagues, Sarah and Christoph. As usual, I will start with a short presentation followed by a Q&A session. While in the past, participation in the Q&A was only possible by telephone, you know also have the opportunity to ask questions via the webcast directly in your web browser. We hope that everything will run smoothly from a technical perspective and look forward to interacting with you.

So let's start on this slide with a look at the key figures of 30th of June 2025. Yes, the real estate sector continued to face headwinds during the first half of 2025, at least overall, yes, and with a challenging financing and interest rate environment, increased complexity of rental markets, yes, persistently high construction costs and transaction market development, yes, that still hasn't reached previous levels overall.

Regardless of this, HAMBORNER's business performance remained largely on track in the first half of the year. As a result of the recent property disposals, income from rents and leases decreased by 2.1% to EUR 45.7 million in the first 6 months of this year, influenced by the property sales as well as increased costs at the operational level, FFO came down around 12%. Key financial figures showed moderate changes with an LTV increase to 44.3% and a corresponding decline in the REIT equity ratio to 55%. Operational performance remained largely resilient with a vacancy rate of 3.5% and the portfolio WALT of 5.7 years. Further details, yes, as usual, will be shown here on the following slides.

So let's move on here to the rent development. On a year-on-year basis, our like-for-like annualized rental income rose by 1.4%. Yes, it was mainly reflecting the impact of indexation adjustments. The positive indexation effects were partly offset by slightly lower rent levels on the reletting side, mainly within the office portfolio. The disposal of the office properties in Hamburg and Osnabruck as well as the retail asset in Lubeck resulted in a rent decline of 3.5%. At the end of June, our annualized rental income amounted to EUR 88.6 million.

Yes, on the next slide, a more detailed look at our earnings situation. As already mentioned, income from rents and leases declined by 2.1%, which is primarily attributable to our strategic asset sales. As already predicted in our initial full year forecast, we saw an increase in maintenance costs in the first year -- first half of the year, yes, which amounted to approximately 27% compared to previous year. The expenses related to ongoing maintenance activities as well as several larger measures implemented or initiated in the first half of the year. Administration expenses rose by approximately 17%, primarily driven by the continued further development of our IT infrastructure.

Personnel expenses increased by nearly 15% year-on-year, reflecting workforce changes or changes within the workforce over the past 12 months. Other operating expenses increased by approximately EUR 2 million, mainly comprising costs associated with strategic and regulatory projects, particularly in the areas of digitalization and sustainability. And declining overnight deposit rates led to lower interest income, which amounted to approximately EUR 0.3 million in the first half of 2025.

Yes. And all in all, funds from operations totaled to EUR 24.8 million in the first half of the year with a corresponding FFO per share of EUR 0.31 per share. Yes. Going on to the topic of disposals with the transfer of ownership of the properties in Lubeck and Osnabruck at the beginning of the second quarter of this year, the most recent disposal activities have been successfully completed. The disposals were realized approximately at the level of the most recent market values and corresponded to a total transaction volume of EUR 27.4 million.

In connection with our full year forecast published in February, we had announced another property disposal, which, however, has not been completed as anticipated in the first half of the year. Accordingly, this property will remain in our possession for the time being and will continue to contribute to rents and FFO in the remainder of the year.

Let's now turn to an overview of the portfolio KPIs. Following the closing of the transactions in April, the number of assets has been reduced to 64 at the end of June. Due to the changes in the respective rental situation, we reclassified 2 properties in our managed to core portfolio at the end of the first half of the year, a retail property in Hallstadt and a smaller office property in Darmstadt. In contrast, the previously existing managed to core property in Lubeck was sold, meaning that the sub portfolio now consists of 5 properties, which account for 5.7% of the total portfolio WALT.

As at last year's half year reporting date, we did not carry out a portfolio-wide external asset valuation. Nevertheless, in consultation with our external appraiser, we made save -- selective fair value adjustments for 4 office and retail properties, which were primarily attributable to the respective, yes, location and living situation. In total, the adjustments resulted in a decline in fair value of EUR 7.3 million or 0.5%. Taking into account the property disposals and the impairments, the fair value of the total portfolio decreased by EUR 34.7 million in the first half of the year, standing at around EUR 1.406 billion as at the end of June. The EPRA vacancy rate increased slightly to 3.5% during the course of last month, mainly caused by additional vacancies within the office portfolio. The total portfolio WALT remained stable at 5.7 years during the second quarter with terms of 6.9 years in the retail and 4.1 years in the office portfolio.

Moving on to the tenant base. Yes, the largely stable performance of our operating business is also reflected here in the consistency of our tenant structure. There have been only smaller changes in our top tenant and sector allocation list, yes, and these shifts are primarily attributable to our sales activities as well as indexation effects. Going on with the leasing situation, yes, as illustrated on this slide here, we achieved a number of leasing successes in the first half of the year, signing contracts for more than 12,000 square meters.

Office space accounted for the vast majority of this volume, representing approximately 94% of the total letting results here. At around 95%, the retention rate remained at an extremely high level, yes, we think, once again, reflecting, yes, continued overall satisfaction among our existing tenants. With regard to the rental volume, only 0.9% of the annualized rents are up for renegotiation or reletting during the remainder of the year. Yes, this puts us in a comfortable position. And at the present time, we are confident to be able to complete our remaining rental tasks here.

Yes, let's move on to the company's financial situation. Our financial liabilities declined substantially in the first half year of 2025 primarily due to the repayment of our remaining bonded loan in March as well as the loan repayments in connection with our latest property disposals. Following the dividend payment in June and the individual value adjustments within the property portfolio, EPRA LTV rose 0.6 percentage points year-to-date and yes, amounted to 44.6% (sic) [ 44.3% ] as at the end of the second quarter. And accordingly, REIT equity ratio slightly declined to 55%. Yes, given the limited refinancing requirements during the first half of the year, average interest costs remained at a low level of 1.9%. Average loan maturity, yes, has slightly declined to 3.1 years.

And concerning key debt metrics, EBITDA ratio of 10x and interest coverage ratio of 5.3x. The 2025 debt maturity schedule indicates only minor refinancing requirements in the next weeks. We are currently finalizing the refinancing of the loan expiring in September, and, yes, we intend to sign the corresponding agreement shortly. The loans expiring in the fourth quarter are due at the end of December based, yes, on our financing strategy for each asset, we are predominantly already in advanced discussions with our -- yes, with credit partners.

Yes, let's now turn to the outlook for the second half of this year. Yes, despite the ongoing macroeconomic challenges and also uncertainties, the company remains fundamentally positive about further business development in the remainder of the year, positively affected by the suspension of the disposal process already mentioned before, which had been included in our initial forecast for 2025. We now expect a slightly higher rental income for full year 2025 in a range between -- sorry, EUR 89.5 million and EUR 90.5 million. Our slightly adjusted revenue forecast is not only influenced by the sales activities but also affected by higher income from rental agreements signed during the year. Yes, taking into account the expected increase in operating costs, we continue to expect the full year FFO in a range between EUR 44.0 million and EUR 46.0 million.

And with that, ladies and gentlemen, I would like to conclude the presentation and open the floor for your questions. So far, thanks so much for your attention.

[Operator Instructions] The next question comes from Thomas Neuhold from Kepler Cheuvreux.

Yes. I actually have 3 questions, and I think the best is to take them one by one. I would like to start with the guidance. You slightly increased your revenue guidance by midpoint EUR 1.5 million, but you did not increase your FFO guidance. Does that mean that your cost base will also increase by a similar amount this year? And what is the reason for that? That's the first question.

Yes, Thomas, thanks for the question. Yes, let's put it this way, where we decide to be a bit more cautious here on the FFO side because we have various influencing factors here on the cost side, starting on the -- concerning technical investments, for instance, which obviously represents a large portion within our cost structure. And we were facing here during -- just to give you an example from the operating side during the first half of the year for a few properties, some additional measures that we hadn't planned. No big deal, but still, you can't -- concerning the amount -- the number of measures, which are behind so many assets here so that we are a bit more cautious here. Just to give you an example. And on top of this also, obviously, we have a number of running projects here internally, which also provide additional cost, a lot of -- and therefore, we decided to keep the FFO, yes, forecast as it was before.

Understood. My next question is on this revaluation loss of 0.5%. I think you mentioned that only 4 assets were revalued. Can you give us an indication what the like-for-like revaluation on these 4 assets was?

I mean don't fix me exactly on the numbers, but I think it was in a range between -- it started around 4% on the lower level and I think on the upper level, it has been around 9%. Yes, so between 4% and 10%.

Okay. And just to remind me, in the past, did you carry out revaluation at the half year or you only did it, I think, if I remember correctly? So this was driven by assets.

Yes. Actually, we looked at it -- it was different across the years. Sometimes we didn't do any revaluation during the half year. There have been 2 incidents when we did a full external revaluation. This was just as an example during COVID. And also, it was, if I remember correctly, during the phase when we had a lot of movement influenced by the development of the interest rates. And last year, we were applying the same. So we were looking -- I mean, obviously, we look through our portfolio on a regular base and -- but picking individual assets, that's something we did as well last year.

Okay. Understood. And my last question would be on the rental market outlook. What is your expectation how the rental market will evolve for the next 6 to 12 months?

I think hasn't changed a lot. We see that rental contract negotiation sometimes takes longer. Certain topics that have to be covered in a wider sense relating to sustainability issues. I mean, for instance, energy management related and data related so that we hopefully get more access to data with the support of the tenant, which we then need for our further internal [ levels ]. Just give you a few examples, and these are things that tend to take longer in the discussions. But overall, fundamentally, no major changes during the last 6 months.

The next question comes from Andre Remke from Baader Bank AG.

Yes. Basically, 2 questions left. First is on the planned but not materialized disposal. Could you give some color on the reason here? And is the property still on the disposal list? And probably more in general, could we expect any disposal activities this year? The first question, please.

Yes. I mean maybe with the second question -- to answer the second question first, Andre, we expect no further impact from disposals for this year as of today. And concerning your first question, I mean, as we always pointed out, yes, we want to keep discipline also not only on the acquisition side, but also on the disposal side. And I mean, there can always happen something on the disposal side during the transaction where we finally then say that we don't come together with a potential buyer. And on top of this, for this asset, which we talk about here in the last couple of weeks, we decided apart from our strategic approach concerning this asset, concerning sales and that there might be reasons as well to keep it or yes, that might make it more attractive to keep it on our balance sheet. And therefore, we are in a phase at the moment where we have to make up our mind if we give it back to the sales process again or if we maybe do something else with the asset here from a strategic asset management point of view.

Okay. And coming to the asset side, the acquisition side, in the last call, you mentioned that you had a lot of potential acquisitions on your table. Is it still the case?

I would say, I mean, it's not that we have a huge pipeline, but we are currently -- we are, let's put it this way, a bit more active on the acquisition side here, but it's too early to go into detail at the moment. Yes, so fundamentally, not much change in the market, but obviously, based on the fact that we are scanning the market intensely, once in a while, they come attractive asset across on our table, and then we have to decide if we look at them on a more detailed way. And at the moment, it's a bit more active than during the first half, let's put it this way.

Yes. Okay. Brings me to the last question. You have a cash position as of June of only EUR 9 million after the dividend payout. How would you finance potential acquisitions?

I mean, obviously, we have our refinancing going on. And this refinancing also gives us for -- in certain cases, gives us the option to add additional debt. And therefore, we could generate here additional cash flow, which we could use for -- also for an acquisition. In addition -- yes, I'm sorry. Yes, and on top of this, just to let you know, we also have some unencumbered assets here on the balance sheet.

And do you also have a credit line?

We also -- we have also a credit line, but that's -- we typically -- the credit line we use -- we have in place at the moment, that's really as a reserve. That's something we don't use for acquisitions as of today, yes.

The next question comes from Kai Klose from Berenberg.

Yes. I've got 2 questions, if I may. The first one, you say on Page 4 in the H1 report that you had a slight decline in like-for-like rents of minus 0.3%. And then you say on Page 7 that you had higher income from tenancy agreements signed in the course of the year. I just want to understand how this can be bridged that you had a negative like-for-like and higher income from tenancy agreements. And last one, as a reason for the slight write-down on a few assets, you also mentioned that this was due to, yes, leases adjustments. Maybe you could help us understand to bridge these aspects.

Okay. Concerning the first question, I mean, it's a matter of what you look at. We are talking about point-in-time calculation versus a time period. And then we are talking about lease agreements that we have agreed on during the first half of the year, for instance, where the increase of rents and the effect from it comes in the future during -- starting in the second half. So therefore, based on this, you can get some differences here. Yes.

Okay. But when you mentioned as a reason for the EUR 7.3 million write-down, the changed discount and capitalization rates and rental factors. So I would assume that is because of you have assigned or you expect some kind of lower rents in relettings in future periods?

Yes. I mean rental factors had an influence here on this one. And I mean -- so there were different individual situations for these assets. And yes, there is not one reason for which goes along all the assets that we -- where we did a revaluation here.

Okay. And second question

Just to give you an example, if you have an asset, if you have a certain change in market rents, then you could have an effect on this individual asset. Yes.

Okay. And second question, the 150 bps we've seen in vacancy rates in offices in Q2, how much of the 6.1% vacancy rate -- EPRA vacancy rate in office as of June is now structural?

I'm sorry, did you say it's structural? I'm sorry, I did.

Yes. How much of that you would regard as structural vacancy rate?

I mean no -- as of today, from my understanding, there is no associated -- no structural vacancy associated to this.

[Operator Instructions] The next question comes from Philipp Kaiser from Warburg Research GmbH.

Yes. Actually, just one small additional question left from my side also with regards to the planned disposal, which did not materialize. Are there any negative implications on your KPIs coming with the potential delay of the planned disposal, I would guess that as it was earmarked for reason for sale. So any major maintenance, which you now have to carry out in the foreseeable future or no real negative implications? That would be my question.

I mean if you talk about KPIs, say, 2 KPIs that are relevant here. On the WALT side, yes, I mean, if nothing else changed within the asset, it would have an impact on the WALT. But I mean, if you see the overall WALT situation across the portfolio, the impact should be really very, very minor. And secondly, on the FFO, I mentioned it already before during my presentation, we obviously expect a positive impact because of the rents that we are able to generate here for the time being. So that's what I can say. So no major deal from our side. Yes.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. Then also on behalf of our team here, thanks so much for joining today's call. And should you have any additional questions afterwards, please feel free to contact Christoph and our team here. And with that, thanks again, and have a good further week. Bye-bye.