Klépierre Aktie

Hello, and welcome to the Klépierre 2025 Full Year Results Presentation, hosted by Jean-Marc Jestin, Chairman of the Executive Board; and Stephane Tortajada, CFO. Please note that this conference is being recorded.

[Operator Instructions] I will now hand you over to your host, Jean-Marc Jestin, to begin today's conference. Please go ahead, sir.

Good evening, everyone, and thank you for joining us. I'm pleased to present Klépierre's full year results together with Stephane Tortajada, our Group CFO. And once again, 2025 has proven to be a remarkable year for your company. Before presenting our detailed full year results, I would like to stress in the first few slides that our strong 2025 earnings build on our sustained track record.

Over the past 3 years, Klépierre has delivered unmatched growth across the board. Our net rental income has risen by 21%, underscoring the exceptionally strong demand from omnichannel retailers, while our EBITDA has increased by 23%, reflecting the significant operational leverage inherent to our business model.

In addition, our disciplined balance sheet management, combined with our operational excellence, has enabled us to grow our net current cash flow per share by 21%. This outstanding track record reflects the unique quality of platform of leading shopping centers located in the most dynamic and affluent catchment area of Continental Europe.

In recent years, we have undertaken a profound transformation of our portfolio to further align with new consumer behaviors and the continuous expansion needs of major international brands. Since 2020, we have completed over EUR 2 billion of noncore asset disposals, allowing us to refocus the portfolio on malls with the strongest fundamentals while also completing three accretive acquisitions. This reshaping of the portfolio has resulted in net current cash flow per share growth well ahead of retail peers.

Over the past 3 years, not only have we significantly outperformed the European property sector, but also the wider European equity market in terms of earnings growth. Specifically, we generated earnings growth 4x higher than that of the top 20 companies of the EPRA Developed Europe Index and up to 20x that of the broad Euro STOXX 600 index.

Since the valuation through, we have benefited from continued appreciation of our assets that have already delivered 20% NTA growth. Today, our top 70 malls account for 95% of the value of our portfolio. Combining these solid capital-driven returns with consistent and uninterrupted dividend growth, we delivered a total accounting return of more than 31% over the last 2 years. Such a performance is 50% above the second-best performer, and twice that of #3.

Now delving into our 2025 performance. Retailer sales across our malls rose by 3.4% on a like-for-like basis, underpinned by solid consumer spending and our ability to attract leading retail brands, while enhancing the shopping experience. This strong performance, once again, translated into market share gains with retailer sales growth running at twice the pace of national retail indices. Over the years, this momentum delivered a 4.6% rental uplift on renewals and relettings and pushed occupancy up by 60 basis points to 97.1%.

At the same time, occupancy cost ratios improved further to 12.5%, providing us clear headroom for additional rental uplift. More income posted a strong 12.1% increase, supported by the continued expansion of specialty leasing and retail media across the portfolio, and once again, our results beat guidance.

In 2025, we have delivered a net current cash flow per share of EUR 2.72, marking a 5% jump year-on-year. This result was well above the initial guidance of EUR 2.60, EUR 2.65 per share. The group has achieved a 5.1% increase in net rental income to EUR 1.120 billion, outperforming indexation by 330 basis points. This performance was underpinned by a 4.5% like-for-like growth and fueled a 5.5% EBITDA growth. This was supported by controlled payroll and G&A, which enabled a 50 basis points improvement to our EBITDA margin to 87.3%.

For the second consecutive year, our NAV grew 9% again. This increase has brought our NAV per share to EUR 35.9, compared to EUR 32.8 in 2024. Overall, this marks a 19% growth over the last 2 years. Such an increase is driven on the one hand by a positive cash flow effect triggered by an increase in net rental income and, on the other hand, by a positive market effect fueled by slight decrease in discount rates during the past year.

Over 2025, as was the case the prior year, Klépierre generated a remarkable total accounting return of 15% or 31% over the last 2 years. Following our strong operational and financial results, we will propose to shareholders at the forthcoming Annual General Meeting on May 7, the distribution of a cash dividend of EUR 1.9 per share for 2025, representing a 6% spot dividend yield.

Obviously, our achievements are the fruit of a clear strategy that allows us to confidently continue growing in the years to come. We strongly believe in our capacity to deliver further growth through organic means, extensions as well as value-creative acquisitions. First, let me turn to our organic growth drivers. We have consistently delivered rental uplift over the past years, and our ability to continue doing so in the coming years remains fully intact. At the same time, mall income represents a major opportunity to monetize our EUR 720 million annual footfall.

Second, our ability to reshape our shopping centers is unrivaled. At Klépierre, we have the expertise to adjust the scale of our malls and fulfill our retailers' constant demand. To accommodate such demand, we are launching extensions when necessary. Every single project we carry out delivers a minimum 8% hurdle rate, strengthening our shopping centers with increased footfall and retailer sales allowing further market share gains in the catchment area. In parallel, we pursue an active external growth strategy.

We acquire assets, for which we are certain we can create value, assets that both strong fundamentals that are endorsed by leading international retailers and for which we see operating efficiency and significant incremental rental growth potential. But make no mistake, the best portfolio is the one that delivers the highest returns for shareholders.

So why do our malls remain so highly regarded? Because our malls are rightsized for their catchment areas and deliver high sales density per square meter, enabling a gradual rental uplift over time. Additionally, investments to create streaming shopping experiences for our visitors remain core to our strategy. These investments are carried in a highly disciplined manner in order to maximize our cash flow generation and shareholders return.

In addition, new supply in prime shopping centers is extremely limited, which increases further scarcity in the quality space. The A asset category is the one and only that benefits from this setup. As a consequence, our occupancy rate has steadily increased over the past years, reaching 97.1% at the end of 2025, and this is 130 basis points higher than 3 years ago.

In the meantime, category killers continue to expand their store size to support their omnichannel strategy and better meet the needs of their customers. And to keep up with the evolving needs of our retailers, we strive to make continuous portfolio optimizations. By actively rotating our tenant mix, we bring in higher productivity retailers, we elevate our offer and seamlessly replace slower-performing retailers. This ongoing rebalancing enabled us to dramatically increase sales density while clearly enhancing the customer experience through the introduction of innovative brands and the expansion of our leisure and experiential offer.

Consequently, we have seen our overall retail mix shift steadily over the past 5 years, moving towards health-oriented wellness and entertainment categories. Our Health & Beauty and Dining segments, for example, have been the fastest growing over the past 2 years. To name a few brands, Rituals, Normal and Aroma-Zone, a fast-growing pioneer in DIY cosmetics, continue to boom. Our Dining options and retailer mix are once again being refreshed to attract and retain a diverse and evolving demographic as the number of households continue to grow and ongoing urbanization brings more visitors to our malls.

Klépierre continued to maintain a very healthy OCR of 12.5%, compared with 15.9% for listed destination peers. This performance is a direct consequence of our retenanting campaigns that focus on introducing the best retail concepts, delivering exceptionally high sales density. In 2025, sustained leasing tension and continued low OCR drove a solid rental uplift of 4.6% after annual increases of at least 4% every single year since 2022.

Let me now stress the other key source of incremental organic growth, mall income. This encompasses our specialty leasing and retail media activities as well as parking and EV charging stations. These levels have been reactivated recently since 2022 and have been growing at an annual average of 12% ever since. We expect further sustained growth going forward. Specialty Leasing through [indiscernible] pop-ups and Retail Media enables our business partner to engage more directly, more deeply with shopping center visitors.

The core premise of Klépierre's offering to retailers and business partners is at annual 720 million qualified audience, I just mentioned earlier. Such a large cohort provides immediate brand visibility, allowing large-scale promotions, whether through pop-up stores during festive season, major promotional campaigns in our malls or even full mall domination by omnichannel on national brands.

Our nascent retail media business model is clearly shifting from a previously outsourced advertising agency type to a hybrid model. We are actively pursuing to regain full control of our mall ecosystem and better leverage our long-standing relationships with brands and business partner. Practically, by accelerating the deployment of digital screens, including the latest giant led screen technology, we are highly confident in our ability to generate significantly higher average media revenue per footfall than currently.

Overall, Specialty Leasing and Retail Media are two highly complementary and synergistic activities, that let me remind you, require very little CapEx. Regarding parkings, we have taken several initiatives in order to introduce paid parking in a number of countries, in particular, in Southern Europe.

Now turning to our other growth pillar, namely accretive capital allocation. We have the means to achieve our ambition as we have a rock-solid balance sheet, historically low leverage ratio and top credit ratings among our Continental European peer group. Our value creative capital allocation consists of critical extension as we continue to accompany and fulfill anchor omnichannel and iconic international retailers demand in their pursuit of ever larger flagship stores.

Beyond the incremental rental income generated by each extension, such projects unlock substantial value, creating a halo effect across the entire center by driving stronger footfall, lifting total retailer turnover and strengthening leasing extension.

Ultimately, such extensions allow us to gain further market share in the best catchment areas. And to be specific, over the past few years, we have launched very successful extension projects. In the Paris region, for instance, we extended our [indiscernible] mall Créteil Soleil. We subsequently initiated a similar transformative operation in Bologna at Gran Reno, and the results speak for themselves. Rents increased by double digit, if not triple digit since the extensions. Both shopping centers recorded a strong double-digit growth in sales density.

If we take the Créteil Soleil example, rents were up close to 30%, and average sales density per square meter for the whole center increased by 20% since the completion of our extension. This demonstrates again our unique expertise to transform our shopping malls into unrivaled shopping and entertainment venues.

In the same spirit, we have recently launched 3 additional major projects that we are confident, will create further value for our portfolio and for our shareholders. Following the completion of the latest French extension at Odysseum, Montpellier, we have initiated two major transformative projects in Italy, at Le Gru in Turin and Romagna in Rimini. And once completed, this extension will raise both assets into the super prime mall category and will boost our rental growth momentum in 2027.

In parallel, we continue to have appetite for external growth. Any prospective acquisition must not only meet our financial criteria, but most critically, allows us to enhance operational performance through reversion, retenanting and the ability to rolling out our mall income solutions.

O'Parinor and Romaest acquisition in 2024 strongly illustrate our strategy and clinical execution with significant value creation of 71% and 64%, respectively. Our most recent acquisition of Casamassima, the leading mall in the Mari metropolitan area in Italy, meets exactly our requirements, and we will be applying the same recipe, and we are looking forward to generating a high single-digit return as early as in 2026.

In summary, we are confident about 2026 as our organic rental uplift and more income drivers are well positioned in addition to our capacity to carry out high-value extensions and selective acquisition come on top.

Moving to 2026. The resilient macroeconomic and consumption environment, coupled with healthy retail sales backdrop underpin a continuous recovery of the European transaction market. According to European retail investment volumes are to reach over EUR 35.5 billion in 2025, i.e., a 5% increase year-on-year. Shopping centers, in particular, have continued to regain favor with investments accounting for close to 1/3 of total volumes since the start of 2025. This improved investment environment was illustrated by multiple prime mall landmark transactions in 2025.

As a consequence, the strong operating performance of our malls continue to feed the expansionary valuation cycle of our portfolio. Over the last 12 months, our total portfolio valuation increased by 4.9% on a like-for-like basis. Our well-anchored growth profile was reflected into a slight risk premium compression in 2025, though remaining well above those of other asset classes. We believe this compression represents the early innings of a durable ongoing trend.

Building on the positive momentum, we disposed EUR 205 million of small-scale assets, 8% above appraisal value and at a 5.6% blended net initial yield. While we enjoy high visibility on long-term rental growth in a more conducive capital environment, our sound financial structure also provides us great comfort in terms of refinancing and remains a key competitive advantage.

We secured more than EUR 1 billion of long-term financing in the past year with an average 8.5-year maturity at a highly competitive blended yield of 3.3%. The proceeds were notably used for repaying a EUR 500 million bond maturing in February 2026, significantly limiting the impact of refinancing activities on our expected net current cash flow generation for the coming year.

Looking ahead to 2026, as we believe a firmer market is set to provide tailwind for capital appreciation, and as we benefit from visibility on the cost of debt, we expect to achieve a minimum of EUR 1.13 billion of EBITDA and at least EUR 2.75 net current cash flow per share.

Thank you for your attention, and I will now open the floor to questions with Stephane.

[Operator Instructions] The next question comes from Pierre-Emmanuel Clouard from Jefferies.

So my first question would be on the guidance, I know that, I don't know, Jean-Marc and Stephane, you never itemized the guidance, but it seems a bit cautious in my view. So it would be nice if you can give us, let's say, the main building blocks of the guidance, especially on the NII like-for-like rental growth that you are expecting in 2026, in light of the deceleration of indexation, especially in France, and maybe also the expected cost of debt increase that we might expect in 2026.

Okay. Thank you, Pierre-Emmanuel. So I will say first that the guidance is bang in line with the Bloomberg consensus. So I'm not sure it's cautious, I would say it's in line with the market expectation. And second point, I will mention also that this is a usual pattern of guidance at Klépierre because you follow Klépierre for a very long time now that, I think, it's a usual pattern of giving guidance at the beginning of the year. I would not say cautious, I would say, just as usual.

So indexation, you're right, will be lower in 2026 compared to 2025. We may expect indexation around 0.8%, we had 1.8% in 2025. But as Jean-Marc just explained, we feel that we have a lot of levers internal growth first, but also extension plus the acquisition we have just completed end of December in Bari that obviously will be positive for 2026. And for the, you mentioned also the cost of debt, as we have said, we have already covered all the financing for 2026. So you should not expect a big jump in the cost of debt in 2026 for sure.

Okay. And my second question is on obviously your firepower. So if you can give us a view on your current firepower today, in order to keep your A minus rating? And what's your minimum yield requirement, when you are ready to buy assets, I would say, I'll take my chances, but if you have anything to say about the [indiscernible] portfolio, it would be interesting. And also on disposals, what's left in the noncore bucket in 2026 in your view?

Okay. Thank you, Pierre Emmanuel. You have exceeding the 2 questions, but...

It's a blended one.

Yes, and I will answer with pleasure. I think the -- and I will add on the guidance. When we elaborate a budget, we do it very carefully, and we do that at the end of the year in September, October. And what we have also -- and we take what we know for certain, and we have done some disposals also that will have a full year impact, and we have integrated, as usual, no acquisition in 2026 and development project that we have launched, even though they are not very long in terms of construction, they will deliver in 2027.

When it comes to acquisition, we have been quite successful over the recent past to seize some very interesting opportunities where we can really create value. So to the question of what can we do, we look at different type of opportunities. We are extremely selective in terms of pricing. Pricing, it's a combination of, obviously, accretion day 1, compared to our financial metrics, but also the reversionary potential that we can deliver in, I would say, in the next 3 to 4 years. So it's difficult to indicate kind of a threshold that will apply from Scandinavia to Portugal or Italy or France.

I would say we have -- we think we still have some opportunities to look at, but for the time being, there is nothing ready to go. And we don't really comment on rumors. So on the portfolio, you mentioned it's market knowledge that this is for sale. We suspect there is a lot of competition on it. And as you know, we don't really like competition. So we cannot comment. It's a very slow process, we will see.

For disposals, we are still doing it one by one. So just as a reminder, the top 70 assets, that's 95%. So by telling it, we said that there is 5% that are noncore, 5%, it's EUR 1 billion, and EUR 1 billion, when you sell it at EUR 200 million every year, it will take quite a distance to finish it, but we have no pressure to do that. We do it at a good net initial yield above appraisal value. We don't like the impact of dilution. So we tried to combine it with acquisition. So we do it steadily and try to protect the shareholders' return. So yes, we will continue, and it will take some couple of years to finish.

The next question comes from Florent Laroche-Joubert from ODDO BHF.

Actually, I would have a first question, a follow-up question on the guidance for 2026. So I agree with Pierre-Emmanuel that it seems to be very first. And actually, I just looked at what you published last year at the same day, and it was actually quite more the same type of guidance, and we can see that today you deliver plus 5%. So maybe, could you please tell us how you beat your guidance, so we understand that you just put things for which you are maybe sure at 100%. But how can we take into account, for example, some growth, I don't know, in more income or some growth due to revisions, maybe that would be very useful.

No. Thank you, Florent, and happy to see you are in line with Pierre-Emmanuel, but -- the -- on the guidance, as I said, we build and we take what is certain, okay? So most of the time, if we do better than the guidance is because we are delivering what we have at work. So in this presentation, we have remind, I think, the main cylinders for the growth. But this is under construction and needs to be done and to be delivered.

So there is a very high visibility on our rental, on our occupancy, on our rent collection. But on mall income, retail media, retailer sales, also we always assume that retailer sales will be flat because we can't do better than that. And most of the time, we are delivering more than expected, but as this is under construction, we take it as it comes.

So we update the market on our performance on those cylinders. So what we can say that the beginning of the year in terms of sales is very good. We have a good sales for January which allow us also to be more optimistic, even though it's only 1 month. So the sale-based rent, the appetite from retailers is also quite linked to the sales environment. So -- and that's where most of our overall performance come from.

Okay. That's very useful. And maybe a second question on the valuation of assets. So we can see that you have a significant increase this year. You tell us that maybe this is the beginning of cycle. Could you maybe give us maybe more color on your discussion with appraisals on that?

Yes. The first building block for valuation is the cash flow. As you have just said, in 2025, we had better cash flow than expected 1 year before. So just because when you have a better cash flow, it directly translates into a better valuation. This is the first point. So it plays. Second point, it's obviously the fact that we have seen more and more transactions for very prime mature assets in various geography, France, Eastern Europe, Spain, at a very compressed yield starting by 5.

So for the appraisers, it gives really them the comfort to decrease the risk premium they add on the discount rate because obviously, a few years ago, 3, 4 years ago, they were quite cautious because they did not see any significant transaction. Now we see more and more transaction coming. So it gives them the comfort just to decrease the risk premium. So I think when you add these 2 building blocks, it gives us a lot of confidence in the path of decreasing the net initial yield and increasing the valuation going forward.

[Operator Instructions] The next question comes from Frederic Renard from Kepler Cheuvreux.

First, maybe, can you comment on the performance of your mall by geography, which area currently the best and, which are doing worst?

Thank you, Frederic, for your question. It's a very wide question. So are you talking about retailer sales or organic performance or?

Yes.

Yes, retailer sales, I think the pattern is for the last 3 years, I would say, and 2025 is just a confirmation of this pattern. Sales have been increasing everywhere in all geographies, but in Germany. We have a very small exposure in Germany, but the only exception where our sales have been slightly declining, it's Germany. All the rest is positive.

The second pattern is that it's more dynamic in South Europe. So clearly, the Italy, Spain, Portugal are doing more than the average. And together with the Netherlands, it's not really country-specific, it's more asset-specific than country-specific, but that's to answered your question. And there are some variances in Scandinavia. It's below the average, but it's positive.

And France has been a bit more lukewarm, I would say, in 2025 and also beginning of 2026. This is not only in our malls, I think it's something you have been able to see with other release. But overall, I think this is a remarkable year. And when it comes to the segments, they have been all positive, all positive. There is only from time to time, I would say, an accident in some segments like electronics or home equipment on decoration, but even fashion has been positive. And the beginning of 2026, it's everywhere, it's positive, but Germany, every segment is positive, including fashion.

Southern Europe is doing above the average, and for January, the sales that we have just connected is above 2025 numbers, so for 2025 was at 3.8% and January, it's above. So it's quite interesting. What has maybe sometimes when we look at the month to month. So sometimes, months can be a bit slow and the other one, much stronger. So there is quite a bit of volatility from a month to another, but overall, October has been very strong. November has been very strong. December have been weaker, January is very strong. So that's -- there is -- so the geographies are not really meaningful to us because they are all positive.

Okay. Understood. And maybe a second one, I'd like to come back on the capital allocation, if I may. I mean, the stock price has been clearly on fire over the last 3 years on the back of very good assets and liability management, still liability management that put you in a very good shape. But today, it seems to me the capital structure is inadequate and the net debt to EBITDA will continue to go down. And actually, as you mentioned, that you have a good lever from an organic point of view and that will continue like this. So you mentioned that we didn't like competition or you don't like competition. But actually, competition is increasing a bit everywhere for retail. So are you afraid of missing the right opportunities in this market?

Never. Never. No, I think we take it easy, I think, okay? We are in a long-term business, okay? And if we look at the capital allocation, I think there is one strategy, which is very clear. 2025 was the 10th anniversary of the big transformation at Klépierre. You remember, we did the disposal of convenience shopping centers in '15, we acquired Corio. We had, at that time, 300 assets we acquired 57 from Corio. We are left with 70% for 95% of the portfolio. So the capital allocation that's something you build step by step, okay? And you have to make it carefully.

There are so many examples of people going big time, okay? So we do it carefully. So our net debt to EBITDA -- our balance sheet -- and that was -- is, I think, a good achievement is that even though we continue to grow the EBITDA, grow the earnings, grow the dividend, uninterrupted, we deleverage the company, okay? So this is not an objective to deleverage the company. It's just a consequence of managing very well the capital allocation.

So the -- we have a lot of room for maneuver. We have done a very good acquisition, as you have seen in my presentation, where we have created 71% value in O'Parinor, 50-something percent in RomaEst, Casamassima will be there. So we are very -- I don't know if we are selective. We do it a try. Timing is always an issue. It's going to be this year, going to be next year, we'll see, okay? So we invest for the long term. We invest for our shareholders, and we want to find the right product where we can build the rents up quite quickly. So I hope it answered your question. So we are in a strong position, so we cannot regret that, but we will not rush.

The next question comes from Alexandre Xerri from All Invest.

Just one question on my side, also on the capital allocation. With current very limited discount on net asset value. Does this advantage could influence your M&A strategy? And could you consider, in other words, acquisition using equity markets? Thanks to this advantage.

Thank you for the question. That's a question for which I don't have an answer because there is nothing on the radar. There is nothing to build on that. I think the performance of share prices, the testament to the quality of the portfolio, the testament to our capacity never to disappoint to continue to grow, to pay dividend, to have a very strong balance sheet. And as you said, we have ample opportunities to raise capital. So we have easy access to debt, low cost of debt. So unfortunately, your question is too broad, and I can't really answer to that.

But maybe what I could add is that the most accretive way to make acquisition is to be financed by debt. And we have a lot of room of maneuver of firepower is huge today, really huge, because when we increase our EBITDA, we increase our firepower, because -- to keep the same rating.

So I think what we will first do is to look at our internal resources to make it very accretive if we make acquisitions. And then if we have really some very large acquisition, we may think about equity capital market, but the first stage will really be from internal resources.

Okay. Understood. So maybe have you fixed an LTV level, you will not go beyond?

No. We do not really think about LTV. We are more focused on ratings and net debt-to-EBITDA. Net debt-to-EBITDA today is 6.7x, which is the historic low at Klépierre. The rating is the best ever at Klépierre. It's A range, for sure. So basically, we want to keep a high level of rating and have net debt-to-EBITDA, which is in the right range to be A-rated. So basically, we target net debt-to-EBITDA 7.5 around, which is the right place to be for the rating.

Now let me hand the conference back to the management for any written questions.

We have an incoming question regarding taxation on dividends for 2025. So if management could provide us some answers as to whether or not it includes an emission premium.

Yes. So for 2025, we have a SIIC dividend from Klépierre French tax-exempt activities of EUR 0.87 per share and non-SIIC dividend of EUR 1.03 per share. So we do not use the premium in 2025 to answer your question. And the SIIC dividend from French tax exempt obviously, is not eligible for the 40% tax rebate in the tax -- French tax code. .

So thank you, Michael, for your question. .

The next question comes from Tom Berry from Green Street.

A couple of questions really. I guess how many on a capital allocation front, how many more Casamassima style opportunities do you think are out there in the future? Do you think your focus is more tilted towards the value-add side of things? Or do you think maybe more on a stabilized portfolio basis? And then a second question just on the French operating market is obviously a little bit weaker than the others, such as Italy and Spain. How much does that sort of poor macro weigh on your '26 forecast and reversionary potential?

Okay. Thank you for your question. I will try to be specific. So for the I think for the acquisition, if we will only look in countries where we already have a very strong footprint, we think we have a very strong underwriting expertise in France, in Italy and Iberia, probably better than the rest of Europe. So that's probably where we have done a lot very recently. And if we come look 5 years ago, we bought 2 malls in Spain. I think we -- the criteria for us to invest are very simple. It's a big city, regional malls, lifestyle malls, a good set of retailers, strong leasing demand and high sales per square meter. And from there, what can we build? Can we add value? So we try to find something which is not really value add. It's more very strong performance, very good fundamentals where we can roll over our expertise.

And so we will never compromise too much on the fundamentals, okay, and the sales per square meter. And if the OCRs are too elevated or there is not so much a reversion, probably, we are not a good buyer for that. So this is what I would say on the capital allocation profile we are looking for. And I missed the second one, that's for disposals or?

But what I could say maybe on the French environment because you say it looks tough. But when you look at 2025 and if you look at the NRI like-for-like geography. In France, we had plus 4.6%, which is really strong. And in Southern Europe, which is the strongest true, 5.1%. So in terms of NII growth, France was just slightly below Southern Europe, but at a very strong pace. So what I would say is that the French market, there is a lot of buzz about politics, macro, blah, blah, blah, but at the end of the day, consumption is fine. And what we see is that we gain market share in our catchment area.

So, so far, we say the French market is more an impression and a feeling of being weak, but on the ground, in the number, it's fine.

The next question comes from Celine Huynh from Barclays.

Mark, I do apologize in advance for this question. I know you're not going to like it. Simon Properties, the management of Simon recently mentioned on the earnings call, having issued EUR 1.5 million of Klépierre shares. So I was just wondering if you could comment on that? And what are your conversations like with Simon currently regarding the stake?

Thank you for the question. And obviously, I will not be upset, why should I? So I know, I think, if the -- as you know, Simon, is a shareholder of Klépierre and if you have any question regarding their shareholding, I can only recommend you to ask the question directly to them.

So when it comes to the Simon implication in the company, it has been of great support so far, including yesterday where we had our Board meeting to close 2025. So they are still on Board. So on this question, I'm neither upset or surprised, but if you want answers, you should ask them.

There are no more questions, so I hand the conference back to the management for any closing comments.

So thank you very much, all of you, for attending, listening and understanding our fantastic 2025 results and our guidance for 2026. Thank you for your questions. And we will take the road and meet our investors in London and in Paris, and looking forward to do so. Thank you very much.

Hello, and welcome to the Klépierre 2025 Half Year Results Presentation.

I will now hand you over to your host, Jean-Marc Jestin, to begin today's conference. Please go ahead, sir.

Good evening, everyone, and welcome to the presentation of Klépierre 2025 first half earnings. Together with Stephane Tortajada, CFO, we appreciate you joining us today. So let me start saying that I'm pleased to report a strong set of results. The performance this year was driven by a very intense leasing demand for our leading malls and a solid acceleration of the business in the second quarter.

Once again, we delivered outperformance on the net current cash flow that increased by 5.3% year-on-year to EUR 1.32 per share. Similarly, NTA per share ticked up 4.6%. Year-to-date, we already delivered to our shareholders a total accounting return in excess of 10%. Our key demand drivers are steady, and we continue to see several green shoots in private consumption in the countries we operate. Indeed, the strong labor market is contributing to real wage growth, which in turn is supporting resilient consumer spending in Continental Europe.

On top of this, in the context of global macroeconomic uncertainties, our discussions with retailers reveal a clear trend. They are seeking stability and visibility, leading them to favor Continental Europe in their expansion strategies, which is an encouraging development for our business. In an omnichannel world, we offer retailers profitability in our prime venues and support them in raising brand awareness, optimizing logistics and gaining additional customer in the most effective way. With online pure players operating under tight margins, stores with a combination of click & collect and drive-to-store initiatives emerge as the most efficient strategies, and Klépierre malls are at the heart of the retailers' expansion plans.

Our [indiscernible] clients, shoppers, also widely favor our venues. Indeed, physical retail is a reference for Europeans. And according to the last OpinionWay study, shopping centers are by far the most popular destination for 40% of the respondents. This is particularly true among young generations. Easy-to-access malls are the preferred places compared to other types of retail, as they offer a wide range of goods and services and exhaustive dining selection, entertainment and leisure concepts.

Against this highly favorable backdrop, our malls are continuously capturing market shares with retailer sales up 3.5% over the first half of 2025, twice higher than national indices and footfall up 2.5%. What is even more positive is that the trend has been strongly accelerating in the second quarter of 2025, with retailer sales up 4.5% and footfall up 4%. With higher sales productivity and growing traffic, our venues are attracting leading retailers now focusing on fewer but larger and better stores in the context of scarcity of performing and profitable formats. Our malls are also the preferred launchpads for trendy retail concept. Among others, Zara, Lefties, Mango, Primark or New Yorker are continuously increasing their footprint, while occupiers demand is also firm in the health and beauty, dining and sports verticals. As such, with rising in-store sales, Sephora, Aroma-Zone, JD Sports or restaurant chains are embracing our distinctive value proposition, which supports their profitability and growth. Similarly, entertainment, leisure and experiential concepts are playing a greater role to enhance dwell time in our malls.

Let's mention our last major success story with the opening in April of Imagi Park at Val d'Europe, the leading mall in the Eastern Paris region, welcoming more than 20 million visitors a year. Spanning more than 13,000 square meters, Imagi Park is Europe's largest indoor amusement park, offering a wide range of attractions from electric karting and bowling to gaming, restaurants and fitness and complementing the unique SEA LIFE Aquarium already located within the mall. And these trends are perfectly illustrated by our leasing activity with 60% of the deals signed in the first half of 2025 made with those category killers and innovative brands.

High leasing demand fueled 4.1% rental uplift on renewals and relettings, while occupancy further stepped up by 80 basis points over 1 year at 97%. Meanwhile, gains of market shares in recent years translated into sequentially improving occupancy cost ratio now staying at 12.5%, 10 basis points below December 2024 level. This very affordable level paves the way for further rental uplift. Naturally, structural tailwinds, supportive macro backdrop and strong operating performance continue to feed the expansionary valuation cycle. Over the first 6 months, total portfolio value increased by 2.6% on a like-for-like basis, while EPRA NTA was up 4.6% to EUR 34.30 per share. Meanwhile, EPRA net initial yield was down 20 basis points to 5.7%.

Factoring in this positive momentum and surging investment volumes in retail, appraisers have started to lower risk premium applied to our portfolio for the first time in more than 5 years. Nevertheless, note that they remain ahead of any other asset classes, suggesting potential for further compression going forward. Not only we enjoy a high visibility on our rental growth with 90% of our long-term leases based on index minimum guaranteed rents, but we relentlessly unlock other sources of revenue through the monetization of our 700 million annual visits. As such, mall income combining digital and print advertising, on-site events offering, specialty leasing and mobility activation is a powerful growth lever for Klépierre. This fast-growing activity increased by 48% over the last 3 years and was up 9% in H1 2025. As we speak, we already generate EUR 100 million annual mall income revenues that directly contribute to our EBITDA, and our ambition is to continue to outperform in this field.

The other engine for growth is our disciplined capital allocation strategy that creates long-term value to shareholders with investment in high-return acquisitions and extension of top-performing malls to drive long-term growth as well as continuing to prune the portfolio through targeted disposals. As such, we closed or signed disposals across Europe for a total amount of EUR 155 million in the first half of 2025, 12% above appraised values for a blended net initial yield of 5.5%.

In 2024, we also invested in 2 very accretive acquisitions, O'Parinor and RomaEst, 2 leading malls in capital cities. They are the perfect illustration of our investment strategy. In line with our solid track record and thanks to significant occupancy gains and higher collection rates, we have been delivering above expectation performances in both assets. In H1 2025, year-on-year, net rental income was up 25% at RomaEst and 20% at O'Parinor, only 1 year after acquisition. Same high standards apply to mall extension, always delivered on time, always delivered on budget.

Staying true to our principle, we commit only limited amounts, maintain a controlled level of risk and target a threshold of at least 8% yield on cost, guaranteeing high returns. Again, our track record speaks for itself with recent successful completion across Italy, France and Spain, including Gran Reno in Bologna, Grand ‘Place in Grenoble and Maremagnum in Barcelona. That's why I'm also delighted to confirm that we delivered the first phase of the extension of Odysseum, the large mall in Montpellier, welcoming more than 12 million annual visitors. In H2 2025, it will host a flagship Primark megastore as well as a dozen of new banners to offer an even more complete experience to shoppers. Yield on cost of this project is 9% for a total investment of EUR 56 million.

The other highlight of the period is the announcement of a new extension project at Le Gru, the iconic shopping center in Turin, welcoming more than 11 million visitors a year. By 2027, a full set of new anchors will be added on more than 7,500 square meters of retail space. This EUR 81 million investment is expected to deliver a 10% yield on cost. Thanks to our solid rental growth and accretive capital allocation strategy, EBITDA expansion has accelerated in Q2, generating a 6% increase in H1 2025, driven by a 5.3% jump in net rental income and a 40 basis points improvement in the EBITDA margin, reaching 86.1%. And once again, this marks a clear acceleration in the second quarter.

Meanwhile, Klépierre capitalized on its A ratings at both S&P and Fitch, ranking group at the highest standards with the European-listed real estate space to raise EUR 505 million at a highly competitive blended yield of 2.85%. Consequently, the cost of debt remained low at 1.8%. Long term, we are convinced that our rock-solid financial structure is a key competitive edge with net debt-to-EBITDA now standing materially below 7x and offering full flexibility to navigate through all cycles and seize opportunities to grow.

Klépierre has consistently delivered bottom line growth with net current cash flow up 9% over the last 2 years and 5.3% in H1 2025. And I think this is quite a distinctive performance. In this context, we are confident in accelerating like-for-like net rental income growth with sequential improvement in H2. Additionally, we are revising our guidance upwards and now expect to generate 5% EBITDA increase instead of 3% and net current cash flow between EUR 2.65 and EUR 2.70 per share in 2025.

To conclude, I'm sure that Klépierre's focus on operational excellence will continue to deliver. We offer an unparalleled value proposition for retailers in an omnichannel world, relying on high revenues predictability and multiple growth levers. In parallel, our unrivaled credit profile enable us to pursue a highly value-creating capital allocation strategy, perfectly suit to combine -- to continue to serve our shareholders.

I will end my remarks on this note and open the floor to questions. Thank you very much for your attention.

[Operator Instructions]

Okay. Maybe we will start by a question on the webcast. First question from a French asset manager. How do you assess the consequences of U.S. tariffs applied to the goods from European Union on your business?

Maybe I will say first that the vast majority of the goods sold by Klépierre tenants are not directly affected by trade tariff and U.S. trade tariff. And we discuss extensively with our clients, the tenants, and we assume that the direct impact should be extremely limited.

And maybe second, I would say that the impact on GDP is very different from one country to the other. What we understand from economists is that Germany should be the most affected. And as you know, the German market is a quite negligible stake of our EBITDA.

On the other hand, France, Spain, Italy, which are our 3 top markets will be quite less affected and the impact on GDP should be quite negligible. So even on an indirect manner, we don't see really an impact on the consumption of this U.S. tariff. Question on the phone, yes, please?

The first question comes from the line of Pierre Clouard calling from Jefferies.

Yes. Several questions for you. So the first one, we know that you are being more and more vocal on acquisition, and would be helpful if you can describe what is your acquisition strategy today or if at least we can have an update. Do you see a lot of opportunities currently in the market? And if yes, in which countries?

Thank you, Pierre. Jean-Marc speaking. So as we just clearly stated for quite a while, we think we have the balance sheet to seize opportunities, and we have already done. So we are currently monitoring different -- like always, different situation. But there is no information to provide you with today, and we'll continue to monitor.

The different target will have to fit the strategy. So large malls in, I would say, countries where we have already a very strong platform and where we can deliver growth. So as you have seen, O'Parinor and RomaEst, it's not only just buying at an attractive yield is to be able to deliver growth. So that's what we try to achieve. So -- and we have seen quite interesting transactions a bit all over Europe, but none of them were really fitting the strategy for the time being at Klépierre.

Okay. I see. My second question is on -- you are also being more vocal on the further rental uplift due to your low occupancy cost ratio. Can you estimate the achievable OCR today? And in how many years are you able to reach this level? Or let's put it in a different way, what is your estimated reversionary potential today?

We don't really give that number as a whole. I think what has been interesting over the last 2.5 years is that 2023 and 2024, we have seen retailer sales in our malls going up by 10% over the 2 years. And the first half of 2025 is very encouraging. So what we are just stating is that the OCR is going down, which I think was the most interesting post-COVID discovery that retailer sales were going faster than our rents. And that give us confidence that we will continue to deliver growth.

So when we look at where OCR could be, we see quite a significant embedded reversionary that could be taken over the period of the lease. On average, leases are 6 years, 5 to 6 years. So that gives you a sense that this is quite significant and also on a quite short period of time.

And Pierre-Emmanuel, you could note also that the rental uplift in H1 was 4%. So it's also a good sign of what we can achieve.

On top of indexation.

On top of indexation.

Okay. That's clear. And my last question is on -- coming back on your Slide 17, where you are mentioning new growth levers, of which one is retail media. So do you have a ballpark figure in mind on how much incremental new revenues that could be generated with these new growth levers? And if you can give us a rough breakdown would be useful.

As you know, we -- and sorry for that, we don't itemize the business. So what we are just indicating here is just to show how dynamic is the monetization of our footfall. So we have 700 million footfall. So I think the -- just to step back a bit, I think the last 2.5 years, what we have really seen and which is really encouraging for our business is that we have seen a high demand, a very strong leasing tension. And clearly, the polarization is driving occupancy, is driving reversion and to a certain extent, make us feel that our reversionary potential is probably going to increase over time due to this polarization.

The second aspect of the business is that we have never been very vocal on the monetization of footfall because this is part of our business. Yes, we have clearly quite a significant amount that goes directly to EBITDA, so no leakage between the number we give and what you can read in our EBITDA. So it's EUR 100 million. And it's mainly, as we said, it's different sources of revenue. It comes from retail media activation. It can be events organization. It can be specialty leasing, ancillary income. It can be parking revenues. It can be other mobility revenue sources. So it's a lot of things.

I think the -- if we look at what is the potential for that, we see quite a very significant potential. And if I had to say where we could probably go even further, it's on the retail media. I think that's probably where we have been a bit not slow, but we have quite a lot to do. So I'm very enthusiastic also to increase that component into the EUR 100 million.

The next question comes from the line of Eleanor Frew from Barclays.

Could you give us a little bit more color on the step-up in retailer sales and footfall over Q2? Was there any particular driver there like low comps, a bit of seasonality? Or was it just a general improvement in the consumer environment?

No, I think the -- I don't know if I have the Q2 per country. So before we -- I get that, I think the -- when we look at the retailer sales, and I invite you to go to the appendix to the presentation, but let me go through that. I think the first takeaway is that the retailer sales by region, they have been positive everywhere. So Iberia, the territory that we call Northwest and Central Europe, which is the Netherlands, Germany, Poland, Czech Republic and Turkey; but also France, Italy and Scandinavia, which is Norway, Denmark and Sweden.

So clearly, on that document, you can see there is quite a big push from 2 territories. So Iberia with a 9% retailer sales increase. We see the territory, which is Netherlands, Germany and Central Europe, 7.7%. That's quite remarkable. It's a bit also quite driven by the Netherlands, where we still have a fantastic outperformance of our largest asset in the Netherlands, Hoog Catharijne. And then France has been also -- in the continuation of 2024 has been also growing.

The second takeaway of the presentation is that when we look at segment, all the segments are positive, are delivering growth. I think the -- it was not on top of the list in the last 12 months, but the segment where we include groceries, entertainment and fitness is doing 7.5%, which I think is quite remarkable, mainly driven by groceries and the retenanting to brands like Mercadona, Lidl and Grand Frais, for example. We have the health and beauty sector, which in the continuation of the last 36 months is doing plus 6.4%. Restaurants, so very interesting also for the dwell time and the traffic, it's going up by 5.9% and fashion, which has been up and down over the semester is doing almost plus 2%.

So positive in all territories, positive in all the segments. And I think the rule that it has been accelerating in the countries and in per segment applies to both -- to all countries and all segments.

Yes. Maybe to give you a bit more detail over Q2, we had a very strong performance in terms of retailer sales in Iberia, plus 13.6%. Very strong also in the Northwest and mainly in the Netherlands, plus 9%. And then France, Scandi were between 2.5% and 3% and Italy above 1%. So basically, it's true that the performance over Q2 in total in retailer sale was plus 4.5% with some very strong number in Iberia and the Netherlands.

Very clear. Then looking at your portfolio valuation, I see it was up 4.2% like-for-like in Northwest and Central Europe. Maybe could you break that down by the country, so how Netherlands and Germany faring in that?

No. So we don't disclose it by country, Do you -- do we?

No.

So we don't. Sorry for that. And -- but to give you maybe -- if you have inside this, okay, to see what is going up and what is flat or slightly going down, I will tell you the Netherlands is going up. Hoog Catharijne is, as I said, doing extremely well. So it's going up in the Netherlands. It's still going up in Central Europe, okay? And it's a bit more flattish in Germany, I would say, or even slightly negative.

Final one for me. So thinking about capital allocation moving forward, do you see more opportunities in developments and extensions? Or are you still looking towards those larger standing assets you just alluded to?

It's -- I think we do it step by step. So the -- I think the total shareholders' return, that's what drives us, okay? So I would say that we see probably more potential on acquisition than on development. Development pipeline takes time. We are historically very risk averse on development. We want only to commit on our best properties and to have -- to make sure that we can deliver high returns and that we are not overbuilding. So I will say that it will be a combination of both. But I will say sometimes it's easier and goes quicker to do acquisition than doing development.

Yes. And maybe to give you a bit more granularity. Basically, as you know, for us, development is only mall extension and not greenfield, obviously. But if you look at what is ongoing like in Montpellier and what has been just launched because we have discussed Torino in the presentation, the rest of the pipeline is in excess of EUR 500 million of mall extension that will be delivered over the coming 4 to 6 years, I would say. So it gives you an idea of what is in front of us in terms of pipeline of fully controlled land.

The next question comes from the line of Jonathan Kownator calling from Goldman Sachs.

I hope you can hear me. Just going back on the operational performance, how should we think about like-for-like rent growth going forward? You obviously highlight a very strong trading environment, a 4% reversion. Is that likely to grow or not? And particularly, obviously, indexation, is that going to be flat or potentially coming down a bit from current level? So how should we think about like-for-like rent growth from here, please?

Yes, Jonathan, I will say that over H2, as we have said in the presentation, we expect the like-for-like NRI growth to accelerate. So we expect the full year like-for-like NRI growth will be higher than in H1. This is the first point.

Second point, you're right to mention that indexation in 2026 should not increase compared to what we have seen in '25. It's still a bit early to give you some numbers for indexation next year because, as you know, in some countries like Italy, it's not set. So it's a bit too early. But we think the trend will not be up for sure.

And as you know, also, because we have just discussed this, we have the mall income business, which does not wait on the shoulders of our long-term tenant, which is growing like 9% a year around. So obviously, it will give a boost to the like-for-like growth over the coming years also.

Okay. Very clear. Perhaps one more question on acquisitions. Obviously, you're seeing obviously the template that you're highlighting, i.e., opportunity to better manage assets, increase rental income. Do you see many of those assets still potentially on the market? Or is that becoming more competitive as we see more transactions? Is it holding the transactions at this stage? Is it [indiscernible] on pricing or just the ability to identify some of these assets, which are harder to combine?

Thank you, Jonathan. I think number one, the number of assets that could be eligible to, I would say, our strategy is rather limited in Europe. So by definition, it's -- there is quite a scarcity of those type of assets. So -- and we have to be very careful in what we buy. So I think there are more opportunities to come, even though it's a bit speculative, what I'm saying.

So we feel comfortable that we can be an option for, I would say, owners either to a joint venture as we did on O'Parinor. I think we have a very strong track record of delivering growth. So that's what we try to put in place. So that's not an easy business to acquire. And we are not also in a rush to do acquisition that will not fit the strategy. So we will see when it comes, and we will let you know when it happens.

Of course. Any geographies where you think the likelihood that this could happen is bigger or where you're more interested, maybe Southern Europe or Central Europe or Nordics perhaps as well? Where do you see perhaps the best opportunities at this stage?

Well, if -- I can tell you where I think we will not. So I think Germany, okay, that's not a country where we are strong. Central Europe is not really a territory where we have a strong footprint. So we need to build our acquisition strategy, our development pipeline strategy on where we are strong so it's easy to read. So we are strong in France. We are strong in Iberia. We are very strong in Italy. So -- and in Scandinavia, to the extent we can focus on capital cities, which limits a bit the options, we may have plenty of opportunity. We are less interested by opening new countries, which -- because we think it can be a bit more of a headache for tax, legal structure and so on. So let's say that we want to capitalize on the 4 markets, so Iberia, France, Italy and a bit of Scandinavia.

Next question comes from the line of Frederic Renard from Kepler Cheuvreux.

Just two questions on my side. Can you explain a bit what is driving the yield shift from appraiser in your portfolio? And coming to that, just wondering how appraiser in France have been taking into account the increase of 50 bps in notarial fee.

Yes. I think we were in a situation where appraiser were applying very high discount rate when looking at the valuation. And this discount rate compared to the current 10-year money were like more than 500 basis point risk premium. So basically, the performance of the business, the operating performance of the business in the last 3 years has been very strong, first. And second, we have seen also more investment in the retail space for very core properties. So basically, these 2 effects helped the appraiser to understand that maybe the risk premium was a bit too high, and it was time for the base small in our portfolio to come down a bit.

But if you look at the discount rate today compared to the 10-year money, it's still 500 basis points. It's not above 500, but it's still 500 basis points risk premium, which is still very elevated, especially when you compare to other real estate asset classes. So I think it's the start of a trend, and we will see in the coming campaign where the appraiser want to land in terms of discount rate. But I think it's the first signal. And for France, to be honest, I think they did not look so specifically on the OAT change. They really look at the 10-year money, the risk premium. The risk premium, as you know, embeds both the politics, et cetera. So it's -- I think it's not so.

I think the question was on the transfer tax increase. So this has been taken...

Sorry.

This has been taken into account into the valuation, obviously.

Yes, it's mechanical. I could show you.

And maybe a second one for me on the disposal. Just curious to hear where the disposal happened. So where was it in terms of geography? And in terms of yield, I see a 5.5% blended net initially, which is very strong. But can you comment on the occupancy rate of those assets?

Sure, we can do that. So it's also maybe to rebound on Jonathan question where we are not going to invest. So we have sold in Greece. We had 3 assets in Greece, so sold. We have sold 3 small secondary assets in Poland in Rybnik, [ Huta ] and Sosnowiec to be specific, land in Denmark, some assets in France. Most of them are very small assets. When you add all them up, then you have a non-negligible amount. The net initial yield, it's above appraisal value. So it's a combination of some assets that were yielding quite high, okay, and some which were like -- and some nonproducing assets like land. So all in, this is above appraisal value and the blended yield is 5.5%.

The next question comes from the line of Florent Laroche-Joubert calling from ODDO BHF.

I would have three questions, if I may. So my first question would be, so could you please give maybe more color on how you have been able to increase revenues at O'Parinor and RomaEst since it's quite significant.

Okay. So to your -- we -- I think as I said, we -- when we bought them, it was at a time where the previous owner were just a bit not really managing it properly, I would say, or intensively. So it's a combination of two main elements, so occupancy. Both of the properties at the time we bought, around 9% vacancy. It went up to almost 4%. So -- and then rent collection was also a bit shy of 91%. So it's now 99%. So when you add up all the numbers, that makes 20% and 25% plus reversionary potential that were embedded into short-term expiring leases. So good accretion.

Okay. And should we expect more increase in this coming period or now you are already at a high level?

It will probably not be as much as we have seen, but that -- but we will -- but those assets have very good fundamentals. As we said, they are 100,000 square meters. They all have the backbone of international retailers. They have retailer sales, which are above national averages. They are, I would say, Tier 1 assets, whatever we think. They have low OCRs, and there is a lot of asset management initiatives that can be put in place. So I'm positive on delivering further growth, but probably not as much as we have done in year 1.

Okay. And so my second question, so we have seen that you have been able to make some significant volume of disposal in H1. So for H2, have you seen any ongoing discussion for further disposals? So shall we take into account some more disposal in H2?

Yes. On disposals, so we are committed to prune the portfolio. We started with 330 properties 12 years ago. We have a bit more than 70, [ now driven ] 95% or 95% or 96% of the portfolio. So we still have a bunch of small assets that are -- we need to reallocate that capital into our extensions and acquisitions or give it back to the shareholders. So I think this will continue. It takes a bit of time. But as you can see over the last 5 years, we did that quite progressively, always above book value and at a decent yield. So this is going to continue.

And so maybe my third question would be on your investment or acquisition activity. So we understand that you are not -- you have no project to discuss today. But what we can see is that now your share is trading close to NTA. So if needed, would the capital increase could be an opportunity to finance any significant acquisition if you are looking at significant acquisition?

There is so many if in your question that it's difficult for me to answer. I think the Board will reflect on that if it has to happen. I think the concern for the management of the company is the shareholders' return and the accretion to the cash flow of everything we do. So depending on the circumstances, depending on everything, okay? I think the Management Board of the company will take the right decision. So I cannot comment on something which is not on the table or even not an option today.

Now we are going back to the phone. So the next question comes from the line of Sam King calling from BNP Paribas.

Sorry, just one more on acquisitions, please, and the hurdle rates that you look for on returns. And correct me if I'm wrong, but previously, you've spoken about looking for a yield of at least 7%. And I appreciate there's a number of other factors that you look for. It varies on a case-by-case basis. But if we take a step back, clearly, there's more competition in the market this year. But at the same time, your cost of capital has also declined. Share price has been strong. You've had the credit rating upgrade. So the question is, how do you think about acquisitions in the context of having a lower cost of capital? And does that change the absolute hurdle rates that you look for and essentially mean you can be more aggressive on price?

Thank you very much for the question. I think there is a lot of question about acquisition and for something that we have no news on that. And once more, we will do what we think is right, okay, and never in a rush. So -- but to your technical question, I think the answer is in the question. I think the target of return depends on our share price and the cash flow yield of the company. So I cannot really comment on that. I think what we have seen on the market, there is a bit more of transaction. There is a bit more of yield compression compared to, I would say, 18 months ago. So I think it's also supportive to the valuation of the retail assets we own, but I cannot really comment. It's a combination of many things when we do an acquisition.

And maybe, Sam, also, you will note that we have detailed in the presentation the fact that we have been able to increase the NRI meaningfully on both O'Parinor and RomaEst. And when we look at stabilized yield, of course, we look not only the initial yield at acquisition, but the initial yield plus the reversion we're able to extract. So -- and this is what is meaningful for us in terms of accretion. So you should look at the stabilized after reversion yield and not only the initial figure looking at an acquisition, I think.

There are no further questions, so I will hand you back to your host to conclude today's conference.

There is one question on the screen which why not consolidating the space with your commercial? Makes a lot of sense for you. I have no answer to that.

So thank you very much for participating to the call and to your questions. And we are looking forward to meeting you tomorrow in London, for those who are in London and soon for the others. And for those who are leaving for holidays, I wish you the best summer break ever. Thank you very much.

Thank you.