TAG Immobilien AG Aktie

Ladies and gentlemen, welcome to the TAG Immobilien Publication of Interim Report Q2 2026 Conference Call. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Martin Thiel, CFO and Co-CEO. Please go ahead.

Yes, thanks, and good morning, everyone. This is Martin from TAG. Thank you for dialing in for our H1 2026 conference call.

Let's start right away with the highlights slide, and I'm on Page 3 of the presentation. I think it's fair to say that H1 2026 was a very strong half year with results strongly up. So in absolute terms, FFO I was 9% above the previous year level, came out at EUR 100.2 million. Also, our net income from sales Poland was strongly up by 12% and FFO II consisting of the FFO I and the net income from sales in Poland saw quite strong growth at an 11% increase year-on-year. And perhaps you've already seen it in our press release that led us to narrow the guidance for FFO I 2026 at the upper end of the guidance range. So therefore, we expect FFO I more to come at the upper end of the previously announced range.

Operations were well on track, and we saw increasing portfolio values with the half year valuation. So like-for-like rental growth in Germany was quite strong at 3%, in Poland, it was 2.4%, excluding the newly acquired Resi4Rent portfolio, so just for the existing portfolio that we even owned before. Sales numbers were quite good in Poland. We sold 1,350 units in the first half of 2026 compared to a little bit more than 1,150 in the previous year.

Value increase in H1 in the German portfolio was at 1.5%. So that's quite similar to what we've seen in the 2 previous operations, which were at 1.4% in H2 2026 and 1.7% in H1 2025. So a trend or a continuation of the positive trend we have seen in the 2 previous semiannual operations.

As we've already announced, the Resi4Rent transaction closed on 27th of May 2026 after an antitrust approval without any conditions. So we had to wait for this, as you know, for quite a long time. But finally, it came without any conditions. And therefore, we are right now in the process of integrating this portfolio into our platform, into the Vantage platform, and we can tell you that this process is proceeding quite smoothly and will be completed shortly.

The final purchase price came out at EUR 575 million, and that is a 7.5% implied gross yield based on the expected net actual rent in 2026. And the portfolio was for the first time valued also like the other or like the remaining part of the portfolio at the end of the half year, and we saw a 7% value uplift compared to the original purchase price. So that means the Polish rental portfolio after this completion of the Resi4Rent transaction has now a material size with more than 9,100 units, which was, of course, then an important strategic step for us.

Another important strategic step was for sure the ROBYG IPO completed, to the largest part, after balance sheet date, so in July 2026. So therefore, please be aware that most of the impact from this IPO is not in the H1 numbers, but we will give you some pro forma numbers.

As a short overview, after stabilization measures, we had total gross proceeds for the group of EUR 282 million, out of which EUR 188 million was the gross proceeds on TAG level and the remaining EUR 94 million was the gross proceeds on ROBYG level. We still are the majority shareholder of ROBYG, so we are retaining a 67% stake, and we are clearly committed to hold this stake also for the longer time.

As I already said, the IPO transactions are not reflected in the H1 numbers because most of that was effective after the balance sheet date. But just as a quick overview, we're expecting an NTA uplift of around EUR 55 million, so roughly EUR 0.30 per share and a quite strong LTV reduction through the inflow of the gross proceeds from the IPO by around 320 basis points. That means on a pro forma level, including the ROBYG IPO, the LTV stands at 42.2%.

Yes, these gross proceeds are clearly now something that we will use for further investments. And if you ask us about our capital allocation strategy for this year, the main focus, and that's basically unchanged, will be on the further growth of the rental business. We have now not only the liquidity, but also the equity basis tool to invest. And we have basically 2 markets where we're investing as in the past: Poland and Germany.

As you know, we have a kind of natural growth via construction of rental apartments in Poland via our own platform, ROBYG, on the own land bank that we own, and therefore, we'll have natural growth from simply carrying out these construction of apartments in Poland. But we're also looking for acquisitions of rental portfolio in Germany and in Poland, so that will provide us additional growth. So that's the rental business.

But now more or less for the first time, also the Polish bridge to sell business, meaning ROBYG has more opportunities to grow through the IPO proceeds. So that means even though we sold a stake in ROBYG, we expect that, quite shortly, we will have higher results from ROBYG through the growth, through the IPO proceeds so that, bottom line, our proportionate results from ROBYG will also grow despite this partial disposal of shares. So therefore, ROBYG IPO, to make it short from our point of view, a win-win outcome for all segments at TAG.

That's the overview. Let's look a little bit more into the details. perhaps just one short comment on Page #4. I mean you see all the detailed figures. But what I wanted to mention is the acquisitions in Germany. We acquired, basically until the last days, roughly 900 units in Germany at quite good pricing. So a gross yield of around 7.1%. There is some vacancy reaction potential. So the average vacancy rate in this portfolio is around 4.3%. Nearly all units are located in East Germany in regions that we know very well. And these acquisitions will close perhaps more towards the end of the year.

So we will continue also to acquire in Germany. We are clearly a buyer of apartments, but please be aware, we will be selective and disciplined. So we will not look for growth at any price. But yes, we see opportunities. So selective acquisitions in Germany will be part of the future growth.

I'm now on Page #7. This shows the bridge from net actual rent to FFO I. And as I already mentioned, FFO I in H1 2026 was up by 9% compared to the previous year. EBITDA, so the operational result was up by 5% year-on-year. That means we also had a positive impact from the net financial result, which was roughly EUR 1.4 million better as we had, for a longer time, a quite strong cash position where we have been waiting for the closing of the Resi4Rent acquisition. So we had the cash already in the balance sheet. So therefore, we will see some interest income. So perhaps in H2, you will see a contrary picture, so more stronger EBITDA growth, whereas perhaps then the net financial result is a little bit weaker, but that's then a natural change because of the closing of the Resi4Rent transaction.

Next page, Page #8 shows you the development of our build-to-sale business of the Polish sales results. It was quite strongly up year-on-year, and we came out at EUR 18.6 million. If you compare it with the full year guidance, which stands at EUR 92 million to EUR 98 million, please don't be concerned that this is, on a proportionate basis, quite low, but this is a very normal course of the business. So as last year and basically all years before, you should expect that the main result is coming towards the end of the year, especially in the fourth quarter when we hand over the largest part of our apartments. So therefore, we reconfirm also the guidance for FFO II for this year because you should expect a strongly growing sales result, especially towards the end of the year.

Page #9 shows the EPRA NTA development. As I said, the positive impact from the ROBYG IPO, which is roughly EUR 0.30 per share is not included yet. And still, we have a 6% growth year-on-year compared to H1 2025, even after the dividend payment, which was completely carried out in June 2026, so that's fully reflected, and after the capital increase in August 2025, which we carried out for the Resi4Rent acquisition. So therefore, also the EPRA NTA development should be on a good way.

Let's take a quick look at Page #10, which shows the financing structure. Average cost of debt is now at 2.7%. We are very happy that we received 2 upgrades in rating in the last month. Firstly, in May 2026, we received an upgrade from Moody's from Baa3 to Baa2, and following the successful ROBYG IPO, also from S&P Global, which upgraded us from BBB- to BBB. And both upgrades should be a good proof for our very stable and very strong financial structure with, just to repeat this again, in the meanwhile, a quite low leverage. So pro forma after the ROBYG IPO, the LTV stands, as said, at 42.2% only.

Page #11 shows the maturity profile. Looking into 2026, basically, everything is refinanced already. So we will have a larger repayment at the end of this month of EUR 470 million from a convertible bond that is becoming due, but the pro forma cash position is quite strong right now, so more than EUR 1 billion. So we had roughly EUR 0.5 billion in the balance sheet at the end of the second quarter, plus still an inflow net after all costs of around EUR 255 million from the ROBYG IPO, plus some bank loan refinancings that we did after the balance sheet date. So EUR 1.05 billion roughly is the cash position. Deducting the maturities that we have this year of around EUR 578 million, that leaves us with more than EUR 450 million of free cash that we can use for the investments, as I mentioned at the beginning, into our rental portfolio and on ROBYG level to grow the [indiscernible] business in Poland as well.

Page #13 shows you the development of operational data in the German portfolio. So the vacancy rate in the portfolio stood at 3.8%. That's higher than the beginning of the year. But basically, as the years before, we expect a further reduction in vacancy rate. If you compare that with the same period 1 year before, we are already lower. So we've been 10 basis points below H1 2025. And therefore, we are optimistic that we can improve the vacancy rate as in last years in the remaining part of the year.

Like-for-like rental growth, including vacancy reduction, more or less unchanged at 3%, but quite strong was the like-for-like rental growth without vacancy reduction, which came out at 2.9%. And please be aware, as always, just to a very small part, 0.3% modernization-driven. So that means we have a quite strong underlying like-for-like rental growth from rent increases for existing tenants and from tenant turnover without any CapEx spending, and that should be definitely a good sign.

Page #14 shows the portfolio valuation. And as I said, a total value increase of 1.5%. And just to make this clear, this is including CapEx. So that should be very much in line with what you have seen in the peer group. Without the CapEx, this value increase was around 0.7%, 0.8%. And that's basically more or less the same valuation result that we had in the 2 semiannual valuations before. Positive trend continues. We have no outlook yet for the full year valuation, so no indications from the valuers yet.

But currently, we expect a more or less unchanged valuation at year-end because our gross yield is already on a quite, let's say, reasonable level. So 6.6%, which has been now quite stable for the last valuations, should be a gross yield that is, even in this world of higher interest rate, something that still leads to positive cash flow. So therefore, from our point of view, that should be a quite resilient valuation despite the increase in interest rate levels in the past months.

Page #15 shows you more details on the portfolio valuation, but let's go more to Page #17, which shows you operational data from the Polish portfolio. Here on this slide, you see the development in the vacancy rate and the like-for-like rental growth. Again, please be aware that this is the data for the like-for-like portfolio, meaning without the Resi4Rent transaction, so the portfolio that we owned before, which comprises a little bit more than 3,500 units. Still quite low vacancy level, 2.1% for all the units that have been on the market for at least 1 year, which has stabilized. Like-for-like rental growth was a bit lower, 2.4% in H1 2026 compared to 3.4% in 2025.

What we observed in the portfolio is that we have more longer-term rental contracts that are linked to inflation. So more and more tenants are choosing a 2- or 3-year contract. As Polish inflation rates came down in the last months, also the rental growth, therefore, was a bit lower. So yes, lower rental growth, but of course, lower turnover also leads then to a lower cost base and less vacancy between tenant changes. So therefore, we are not concerned that the Polish rental growth is now going in the wrong direction. So we will have also more [ fluctuality ] or more ups and downs in the vacancy rate -- sorry, in the like-for-like rental growth in the future. But still, we are very much convinced that we will see sustainable growth also in the coming years.

Page #18 shows you more data on the Resi4Rent acquisition. I think I already touched the most important points. So now also our rental portfolio in Poland is a significant size, 9,100 units already in the portfolio, more than 1,000 units under construction. More will follow in the next months. So you should expect that in the next 2 to 3 years, we will definitely start construction of between 1,500 and 2,000 apartments a year. So the portfolio will grow step by step over the next years.

Then it comes to Page #20, which shows the Polish sales business. As I said, quite good sales results in the first 6 months of 2026, so 1,350 units sold after 1,158 units in the same period of the previous year. And as you see in the slide, knowing that the third and the fourth quarter of the year also regarding the sales normally stronger than the first half, we are very much convinced that we are coming out to the sales numbers that we predicted. So something between 2,800 and 3,000 units for the full year should be absolutely realistic. So we still see healthy demand in the Polish sales market. Sales prices remain on a high level, and that gives us confidence for the future results.

Page #21 shows the revenue recognition. As said, you should expect as in the previous years that in the fourth quarter, we will have the largest part of our handovers, so therefore, the revenue recognition will pick up more and more as we progress throughout the year.

Let's talk a little bit more about the ROBYG IPO, and I'm now on Slide 22 of the presentation. Again, a quick summary. ROBYG is listed on the Warsaw Stock Exchange since the 2nd of July 2026. And on this date, ROBYG had a post-IPO market capitalization of around EUR 860 million. We own still 67.1% of the ROBYG shares. So therefore, our remaining stake is valued at currently or at the IPO price, EUR 580 million. Total gross proceeds of EUR 282 million for the group out of which roughly EUR 94 million through capital increases on ROBYG level and through the sale of ROBYG shares that we conducted from TAG side, we received on TAG level around EUR 188 million gross proceeds.

And that means both segments, so the build-to-sell segment, meaning ROBYG, and the rental segment, meaning the German business and the Polish rental business have now the possibility to grow. So ROBYG has now significant equity from the gross proceeds from the IPO, is able to buy further land plots, is able to grow stronger than in the past. And as already mentioned, from the sale proceeds from the ROBYG shares that we received on TAG level, we can increase our German and Polish rental portfolio based not only on liquidity, but also based on the equity that we have from the sale of the shares now in the balance sheet. As said before, the LTV will be reduced quite significantly after the IPO.

Page #23 shows you again the pro forma data. So the main impact on the balance sheet, as said, roughly EUR 55 million is the NTA accretion translating into roughly EUR 0.30 per share. And if we look at our total investment that we have done at the value appreciation since we acquired ROBYG in 2022, meaning the cash proceeds that we now realized, the remaining stake that we still own of 67%, where the value is even higher than the total acquisition cost for the 100% stake, we achieved a value appreciation for the total investment of more than 40%, which would be a quite strong result.

One comment on the FFO guidance, our FFO II guidance for 2026. So this remains unchanged. So far, we have only deducted minority interests on project level, and this will be unchanged for 2026. For 2027 onwards, we will change the reporting. So we will deduct the ROBYG minorities from our FFO II or from our Polish sales results. But this will then lead, on the one side, to a reduction in our Polish sales results this year. But as we expect, based on the IPO proceeds on ROBYG level, a quite strong growth, we think that this dilutive impact only lasts 1 year. So that means from 2028 onwards, based on stronger growth, even based on a lower stake in ROBYG, we should have, again, higher results on our Polish sales business. So therefore, as I said, that should be a win-win situation for all our segments.

Page #24, and that's the final conclusion from the ROBYG IPO, shows you that now based on a market valuation of ROBYG and therefore our stake in ROBYG, we're able also to value, as a kind of sum of the parts valuation, at least the implied market valuation for our rental business.

So just another example here shown based on the market capitalization. At the end of last month, we had a total market capitalization of around EUR 2.6 billion. Deducting the value of our stake at the end of July 2026 in ROBYG, the actual implied market valuation for our rental business of a little bit more than EUR 2 billion only and then comparing that with the upper end of our financial year 2026 guidance for FFO I that we published today as the more precise outcome of the guidance, we're ending up at a 10% FFO I yield.

So therefore, that should be still a valuation level where an improvement should be possible. So the ROBYG IPO also makes more visible what our value in this Polish build-to-sell business is and also what at least the implied market value on the rental business is. So we are operating still on a very high FFO I yield.

And then finally, guidance on Page 26. As I said, all guidance for financial year 2026 is confirmed. And after the strong H1 2026 results, we expect now that FFO I for this financial year is coming up now at the upper end of the guidance range, so more towards the EUR 197 million.

That's it for me as an overview for the H1 results. Thank you so far for listening, but I'm now very happy to take your questions.

[Operator Instructions] The first question comes from Marios Pastou from Bernstein.

I've got 2 from my side. I'll ask them one by one. So firstly, I think you've allocated -- sorry, had quite a few allocations of capital, reallocation options, post-ROBYG. Of course, German resi acquisition has been started. But what are you currently tracking in Poland on the acquisitions front? How should we think about timing here? And then similarly, what about the ramp-up of potential build-to-hold developments, now that you've got that enhanced capital? I think you were previously ramping this up to around 2,000 unit completions in 2028. Could you, in fact, go faster now?

Thank you for your questions. That's indeed an option also to ramp up the own construction and the build-to-hold segment in Poland. To be honest, the biggest obstacle there is to receive the building permits quickly. So that's that kind of pain, which is not completely new. So you should assume that, I think we have a land bank for further 6,000 units, as soon as we get the building permits, we will start construction. And therefore, we have also more flexibility. So meaning if we get building permits in the next months and quarters faster, yes, we're also happy to start with the construction of more than 2,000 units if possible. So therefore, that's the -- let's say, the focus of the future growth, clearly building apartments on the own land bank.

And regarding potential acquisitions in Poland, yes, of course, we keep our eyes open, and you can assume that we are in the market, and there will be also acquisition opportunities in the future. We are hesitating to guiding you or the market towards timing, so you should not perhaps expect something in the short term. But as we said in the previous calls and discussions, if we look at the market, we know that a lot of market participants are on the market with an exit horizon that perhaps is ending 2027 or 2028. So there will be opportunities, and we are clearly a natural buyer of these assets. And if we achieve reasonable prices, we're also happy to buy, in Poland, existing portfolios. But just to make it clear again that, at base case, the natural growth is coming from building apartments on the own land bank.

That's very clear. And then just switching slightly to the like-for-like rental growth in Poland. You mentioned some fluctuation here. Can I just double check what caused that reduction quarter-on-quarter in terms of the actual growth level and whether we should actually anticipate this trending more in line with that 3%, 3.5% expectation over this year with maybe some -- a bit of a stronger H2? Or what are your expectations here?

Yes, happy to explain this a bit more. So firstly, in Poland, we are in an unregulated market. So that means if we need to make estimates about rental growth, we always have a swing to the upside and to the downside, not so -- and which is more difficult to estimate, for example, compared to Germany, where it's regulated and we know some basis points up and down, that's the maximum swing.

Firstly, we are still very much convinced that we will see very strong and good rental growth in Poland in the future. So when we look, let's say, at average rental growth in the past years, that was perhaps between 3% and 4%, and that should also be a good expectation for the next 2 or 3 years. Now what we have seen, and that's what I tried to explain some minutes ago, that we have more tenants in our Polish portfolio that choose a longer time rental contract, which is good, right? So they're going for a 2- or 3-year contract not only a 12-month contract. And that means the turnover is going down. So we have not any vacancy between tenants. So we're not losing normally a monthly rent for tenant changes. So a very constant rental income.

But on the other side, these rental contracts are normally linked to inflation rates, which are, then in Poland, below 3% currently, which is also good, but then also leads to a somewhat lower like-for-like rental growth in Poland. But again, we are not concerned that we now enter a weaker market phase in the Polish rental portfolio. Just look at the vacancy rate for all apartments that are on the market since more than 12 months, which is still very, very low at around 2%.

The next question comes from Andrew McCreath from Green Street.

I also have 2 questions, please. I'll ask one by one. Firstly, just coming back to capital allocation, and as a follow-up from Marios' question, I appreciate your comments at the beginning, Martin, but I just want to follow up here. So as you lay out on Page 24, the rental business is trading at a 10% implied FFO I yield. Would it therefore not just be a better use of capital on an equity return basis to instead just buy back your own shares rather than acquiring in Germany at a gross 7% or building in Poland?

Share buyback, I would say, is not yet on the table. And you're right. If you look at current implied valuation, 10% would point toward a share buyback. But let's look at the next 3, 4, 5 years. And yes, perhaps the initial yield for a portfolio acquisition in Germany or from a finished construction of a Polish rental portfolio is lower, but we are convinced that these portfolios provide strong cash flow growth, meaning we will have good rental growth. We will have, perhaps in Germany from the portfolios that we are acquiring, also value -- sorry, vacancy reduction upside potential. We will also have, especially in Poland, a good value growth. So we are constructing these apartments at a 7% to 8% gross yield, that's afterwards valued at, call it, 5.5% or 6% gross yield.

So right now, we think carrying out these investments is something that makes sense. Let's hope that the share price is going in the right direction. But as you know, we have done share buybacks in the past. So that's not excluded. Currently, as you see from my quite long answer, it's not the first strategy we have. Let's observe this. And that's something to follow up in the next quarters. But hopefully, our current capital allocation strategy is something that really also leads to a better share price development.

Okay. That's helpful color. And then my second question is just on vacancy in the German business on Page 13. You had a reduction contribution of 10 bps to like-for-like in 1H against a 30 to 50 bps guide for the full year with vacancy itself up 60 bps since year-end and 20 bps quarter-on-quarter. Correct me if I'm wrong, but I believe vacancy is typically flat between 1Q and 2Q in the portfolio. So it would just be helpful, I guess, to understand what the main driver is here? Is it mostly from acquisitions? And then also, are you still confident with the guidance on this line?

Yes. Firstly, we are still confident with the guidance on the vacancy reduction. And yes, you're right, also the acquisitions that we have had an impact of perhaps 10 basis points. So then perhaps I would not look too much on the less basis points. So that's excluding acquisitions, vacancy rate is flat, which is, I would say, normal development between the 2 quarters. So therefore, we're not concerned that this is now going in a different direction. So H2, as in the past years, should also hopefully, in terms of vacancy reduction, be a good second half.

The next question comes from John Vuong from Van Lanschot Kempen.

I just want to follow up on your comments on potential redeployment of proceeds. If I look into your acquisitions in Germany at a 7% yield, it comes in quite comparable to your acquisition yields in Poland. So how do you see the risk-adjusted returns from your opportunity set because the risk profile is quite different looking at how Germany is regulated and Poland is unregulated?

Yes, you're right. So basically, we are acquiring or building at a quite similar gross yield. So you can argue, well, Germany as a regulated market is even at a lower risk, which is correct. But if we really look bottom line, after CapEx, of course, the Polish portfolio is very strong, right? So it's not only that we have a good EBITDA margin because maintenance costs are more or less 0. Also, there's no CapEx needed. And we are buying in Germany, nothing distressed. But as typical for buildings that are some years old, we have to invest from time to time. That's not needed in Poland. It's all new. So therefore, the cash flow bottom line is very strong, and that should be then something that outweighs the, let's say, a little bit higher risk because it's an unregulated market.

Okay. That's clear. And then on your leverage. So the proceeds are going to lower your pro forma LTV to 42%. I appreciate that the target LTV is 45%. But given rate volatility in this market, could you talk about how much firepower you have and how you balance redeploying the proceeds with your leverage?

If I try to keep it really simple, so after the repayment of the debt that is now due in the next weeks, we have a remaining cash position of, call it, around perhaps a little bit more than EUR 400 million, out of which, in round numbers, roughly EUR 100 million are available on ROBYG level, that's basically the IPO proceeds, and roughly EUR 300 million are available on TAG level. That's basically something that we can use for further investments in the rental portfolio.

If we would fully redeploy this into new land bank, new portfolios, then we would end up again at an LTV, which is exactly our LTV target of 45%. So that's what I've tried to explain that we have now really flexibility to acquire and to invest, not only from a cash perspective, also from the LTV perspective. But please be sure that we are not getting, how shall I explain it, nervous and try to invest it as fast as possible. We, of course, need to be disciplined. And by the way, the cash is currently working. So most of that is in stock yield where we get 3.7% interest income. If we wait with further debt refinancing, we are saving more than 4% interest cost.

So therefore, I think we have some months and quarters to reinvest this into acquisitions, that really makes sense, into constructions, as I mentioned, on our own land bank for Polish rental portfolio. But good to have this opportunity that liquidity and equity is there for further investments.

So just to understand it correctly, we'd probably see LTV go back towards 45% in, say, 12 months from now?

That depends, John, on how fast we are reinvesting this. What I tried to explain is if we would theoretically reinvest it tomorrow in full, we would still be at our LTV target. Perhaps that's a better way to explain it.

The next question comes from Nicolas Vaysselier from BNP Paribas.

Hopefully, you can hear me. I have 2 questions. The first one is on your FFO guidance for the year. So you've already achieved about EUR 100 million in H1. Arguably, you will have more positive contributions in H2 from the R4R portfolio and potentially some positive contributions as well from your acquisition in Germany. So why not raising the full year guidance, given the run rate pace?

And then my second question would be on the Poland development to sell business. So you are expecting an acceleration of handovers and therefore, revenue recognition in H2. It seems like, in Germany, this has been a common feature of the results season across your peers to see some acceleration on those businesses in H2, but the transactional environment remains difficult there. So I was wondering what you're seeing in Poland in terms of health of the development markets and transactional environment this year and going into H2?

I'll start with the second question. An important fact is that from the handovers that we expect to come, especially in the fourth quarter, but also to a larger part in the third quarter already, most apartments are already sold. So the only risk that we have for the balance sheet is if they can really finish construction before the balance sheet date, hand it over and can realize the profit. So I don't have the exact number in my head, but I assume that's something -- 90%, 95% of the apartments that we're handing over this year is already sold. So we're not exposed to market risk. We simply need to carry out the construction and hand it over.

And that was, by the way, the same situation in the last year. So we have, regarding this Polish build-to-sell business, always a high visibility on results for the next, let's say, 12 months. And that's perhaps a difference to a business in Germany, where we're selling apartments in a privatization program, we are really exposed to future sales here if these apartments are already sold.

And regarding your comment on the FFO I guidance for 2026, perhaps it's fair to say that it's not aggressive if we say we will end up at the upper end of the guidance range. But firstly, the acquisitions in Germany, they will kick in mostly or to the very last part in 2027. So closing of these acquisitions will be mostly towards the end of the year. Secondly, it's always good to have a little bit buffer for perhaps higher maintenance costs that are more seasonal in H2. But again, your comment has also a point. So therefore, we should be well positioned also for the guidance, even if we say we are coming up at the upper end of the range.

The next question comes from Thomas Rothaeusler from Deutsche Bank.

I think I have 3 questions. The first one is on the ROBYG IPO proceeds and capital deployment. You say the main focus is on rental business, both in Poland and Germany. Just wondering what's the targeted mix between both countries regarding capital allocation. And the second one is on the Resi4Rent portfolio. The first time revaluation puts it at about 7% gross yield, I think based on my calculations, while your Poland portfolio is valued at much lower yields. Just wondering what's the reason for the valuation gap? And my last question is also on ROBYG. You expect an acceleration of the sales business with the IPO proceeds. So what's the sales run rate you expect compared basically to the previous levels?

Yes. Thomas, your first question was regarding the mix of investments of rental -- in our rental portfolio, whether this is more Germany or Poland. We are really here completely focused on, let's say, the numbers. So we would also be happy to buy in Germany a larger portfolio if the numbers make sense. So if we have something in the size of the Resi4Rent portfolio in Germany, just as an example, on the market in regions that we know very well at a yield that is on the level that we had now in the last acquisitions of a reasonable construction quality, yes, we are happy to buy it.

But as I said, we will be selective here and we will be disciplined. And we can be disciplined because we have this natural growth plan from units that we will construct on our own land bank. So even in, let's call it, theoretical case, if we would acquire nothing, we would still grow because we will have these constructions on our own land bank. So we look at both markets. In the last years, investments in Poland have simply given us better opportunities, like the Resi4Rent portfolio, which was, looking back, for sure, a good deal. So we have really now the opportunity to look at both markets, and that's what we will do also in the future.

And then you've got the question on the yield for the Resi4Rent portfolio. Yes, it's correct. We acquired that at a 7.5% gross yield. Valuation brings this now close to 7%. The remaining portfolio has a lower yield. Firstly, as I think we explained before, the Resi4Rent portfolio has also a different structure. So smaller apartments, higher turnover. So this will naturally lead to a somewhat higher yield. But also, to be open, I think we've got also some potential for further valuation uplifts in the next, let's say, 1 or 2 valuations because it's also clear that after you sign such a valuation, you set a kind of market price. So therefore, a huge valuation uplift would be something which could be a kind of contradiction to the price that we actually paid.

So let's just wait the next 1 or 2 valuations and let's see where the Resi4Rent portfolio in terms of gross yield stands, so there should be further improvement possible. And yes, we will give guidance basically with next results also on the sales numbers that we expect in ROBYG or for our sales business in Poland. For this year, in round numbers, we expect sales of around 3,000 units. There's definitely room to improve that. So ROBYG has sold, for example, in 2021, more than 4,000 apartments. So why not go back to this at least in the midterm.

So therefore, the market is there. The platform can do more. And that's also why we think that the sale of our stake in ROBYG will have, perhaps in 2027, just concerning the sales results in Poland, a small and dilutive impact. But with the help of the IPO proceeds, the ROBYG business will grow faster, and we will have, then in absolute amounts, a higher profit from our sales business in the future compared to the situation without the IPO. So we are still very much convinced that this sales business in Poland is going very well also in the future.

The next question comes from Ulrike Dauer from Dow Jones Newswires.

First of all, I would like to know the valuation result. Why did it [ halve ] in the -- well, did it [ halve ] in the first half compared to the previous period? And also, are you able to specify net proceeds from the ROBYG IPO? And my last question would be, have you also experienced higher financing costs as some or probably most competitors do right now?

Of course, happy to answer the questions. With the valuation results, if you look in the P&L, it is indeed lower than in the first half of 2025, and that's not so much coming from the German portfolio. That's mostly coming from the Polish portfolio where we saw a stronger valuation uplift of the existing like-for-like portfolio in 2024, 2025 on the back of strong sales price growth, which was, in Poland, for some 2 or 3 years, exceptional high. So this also then was reflected in the valuation. So we have still a positive valuation result in Poland, but lower than that as sales prices are still growing, but not in the double-digit numbers than in the year before. So that's the reason of the somewhat lower valuation results, which is again still positive.

Yes, the IPO costs, we can give you a rough amount of the total IPO costs that have been the bank fees, lawyer fees and so on, and it should, in total -- so on a ROBYG level, on a TAG level, estimated is around EUR 10 million. So when we're talking about gross proceeds of EUR 282 million, the net proceeds should be roughly around EUR 272 million.

And the final question was higher financing costs. And the answer is yes. So also, we see the higher financing costs not because of increased margins. To the contrary, if you look, for example, at the development of our bond margins, they're coming down, but the risk-free rates are higher. So we're currently financing for 5 years, I would say, slightly below 4%. For 10 years, it's slightly -- for 5 years, it's slowly below 4%. And for 10 years, it's slowly above 4.5%. But we have a portfolio with high yields, so 6.6% gross yield and roughly the same yield meanwhile in Poland, where we really are able to achieve positive cash flows even in this higher interest rate environment. So therefore, we think we're very well positioned even after the increase in the interest rates.

The next question comes from Kai Klose from Berenberg.

First question on the CapEx investments. You have mentioned somewhere in the H1 report that for the first time, you also had capitalized personnel expenses in Germany. Could you indicate for which segment this was and how much and how much we can expect going forward? Second question was in general, the modernization CapEx increased by about EUR 10 million year-on-year. You mentioned also somewhere in the report it was for large scaling measures. You could also elaborate a bit more what -- in which regions and what volumes we can expect going forward? And the last question would be on the LTV calculation. The contribution from joint ventures went down. Was it because of the project that's completed compared to previous year or were there other reasons?

First, perhaps on the capitalized personnel costs, the amount from German business is quite small. So we are now -- it's not completely new, but since, I would say, 1 or 2 years, are investing also a little bit more in larger modernization measures. So therefore, we started now also to capitalize the cost for people, for our own workforce that are exclusively managing this, so from a technical department. I think in the first half of this year, it was around EUR 500,000. So the very largest part of capitalized personnel cost is still coming from Poland, where we have a large construction department, where we have the engineers and the architects who are purely working on the processes. So the German contribution is quite low compared to Poland.

And then, Kai, you need to help me regarding your question from -- regarding the LTV, if you can repeat it again. It was something in connection with the joint ventures?

Yes, if possible, from JVs. I saw that it was lower compared to last year. Was it that some projects you did together in Poland were completed or were there other reasons?

Yes, that's -- so in the relevant gross asset values for the LTV calculation, we also report our investments in joint ventures because they are completely project-based joint ventures. And when some investments are completed, so when apartments are handed over, then the cash is distributed to the parent company, in this case, ROBYG. So it means our share in the joint venture is reduced as we have received the cash. So therefore, it's then lower compared to the previous period. That's correct.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Martin Thiel for any closing remarks.

Yes. We can only say many thanks for your questions. Many thanks for dialing into our conference call. As always, if there's anything left, please feel free to contact us. We are very happy to answer additional questions. That's it from our side. Have a good day and looking forward to seeing and speaking to you soon. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the TAG Immobilien Publication of Interim Statement Q1 2026 Conference Call. I am Hillie, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions]

At this time, it's my pleasure to hand over to Martin Thiel, CFO and Co-CEO. Please go ahead.

Yes. Many thanks and good morning, all. This is Martin. Welcome to our Q1 2026 earnings call. Let's start right away with Page #3 of the presentation, and I'm coming to the highlights. We think it's fair to say that the first quarter of 2026 was a very good one.

Just looking at the FFO I that came out in Q1 2026 at EUR 49.3 million after EUR 44.9 million in the comparable quarter in the previous year. So that's a 10% increase. So this is definitely a good start into the year.

Looking at some operational figures like-for-like rental growth. In Germany, we came out at 3.3% per annum, which is quite good. And in Poland, like-for-like rental growth also remained quite high at 3.2% per annum. So strong start into the year from the rental business. And also the sales business developed quite well. Looking at the development of the net income from sales in Poland, we achieved in the first quarter of 2026, a net income of EUR 12.7 million. That compares to EUR 5.0 million in Q1 2025, and also the number of units sold in Poland was in the first quarter was 658 units stronger than in the same quarter of the previous year, so then in Q1 2025 with 592 units.

Talking about the projects that we have ongoing. I think that's, of course, very much of interest. The antitrust approval for the Resi4Rent portfolio acquisition in Poland that we signed last year in August is still outstanding, but we really expect now shortly the decision.

So therefore, we still assume that the closing will take place in the second quarter of 2026. So this should now happen really shortly. And what we can tell you is that, firstly, unchanged, we expect a positive decision, so an antitrust approval without any condition. And secondly, the approval is basically the only material outstanding closing condition.

So once the approval is there, the closing will take shortly thereafter, so that's 2 weeks after the approval, we will have the closing. So therefore, as previously communicated, we unchanged expect the closing to take place in Q2 2026.

Second project refers to the sales business. Well, to make it short, we still look into strategic alternatives for ROBYG. Honestly, the main strategic alternative is a potential public offering and listing of ROBYG shares on the Warsaw Stock Exchange. This has continued to be evaluated, so not really very different news that we can give you.

But just to repeat what we have already said with the full year 2025 earnings call. Firstly, we are fully committed to remain the majority shareholder of ROBYG. So this is not a strategic change. So this is not a sell-down of the sales business. You know that we like this business a lot, that it makes for us a lot of sense to continue with both businesses in Poland with the sales business as well as with the rental business. So therefore, in all the considerations that we have, we are committed to remain the majority shareholder of ROBYG.

And the second comment, which is also important for us, this could be an opportunity, but it's not a must. So therefore, if everything remains as it is, if we continue to be the sole shareholder of ROBYG, that's definitely not a bad outcome. So let's look where we end up here, the strategic alternatives are still being evaluated.

Looking into the balance sheet, EPRA NTA, as not unusual for the first quarter was more or less flat, but a quite nice increase year-on-year with a 7% growth. LTV stable at a quite low 41%. But to be fair, the economical real LTV is more the pro forma LTV after the Polish acquisition. So once we have the closing of the Resi4Rent transaction, the LTV will be around 45%, which is still good. So even after the closing of this quite material acquisition, we are more or less exactly at our LTV target of 45%.

A little bit of outlook for the next earnings call, which is the earnings call for H1 2026. As always, we will have also a full portfolio valuation with the H1 figures and what we can give as an outlook is that we expect for the German portfolio valuation result, which is more or less in line with the 2 previous semiannual valuations. Just to remember, we had in H2 -- sorry, in H1 2025, a value increase of roughly 1.3%. In the second half of last year, we had a value increase of 1.8%. So somewhere in that range should be also the valuation result for the German portfolio in H1 2026.

With today's results, we fully confirm again all of our guidance. So FFO I, net income from sales in Poland and FFO II. This is fully confirmed. And as I said, as we still expect the closing for the transaction to happen in Q3 -- Q2 2026.

This is, of course, very supportive for the guidance.

Dividend payout is for the 2025 financial year, 40% of FFO I. So therefore, we will have a decision next week in our AGM on a dividend for financial year 2025, which is EUR 0.40. As in the previous year, a scrip dividend option will be provided for our shareholders. And just to remind everyone for this financial year, so for financial year 2026, we'll have an increased dividend payout of 50% of FFO I. That's it with the highlights, and then let's move quite quickly to Page #7, a little bit more details on the actual results.

Just repeating that FFO I had a quite strong development also quarter-on-quarter. So also comparing Q1 2026 with the previous quarter with a quite nice increase of around EUR 4 million from a higher EBITDA of more than EUR 5 million compared to the previous quarter, partially offset by higher financing costs of roughly EUR 1.3 million. And also on a per share basis, there's also an increase quarter-on-quarter by EUR 0.02. So therefore, we should be on a good way to achieve our targets in financial year 2026.

Page #8 gives some more details on our Polish sales business and the FFO II. And don't be confused that between the quarters, between Q1 2026 and Q4 2025, the results changed. So as always or nearly always, the fourth quarter is the strongest of the year.

So therefore, as expected, Q1 2026 compared to the previous quarter was weaker, but as said at the beginning compared to the start into the year 2025, we're already better this year. And this year, we will have a similar result development as last year. So over the quarters, you should expect growing results with the strongest results then coming to play -- into Q4 this year as most apartments are handed over towards the end of the year as nearly in every year.

Let's take a look at Page #9. EPRA NTA, as I said, remained more or less unchanged compared between the fourth quarters. As I said, we expect, again, a positive valuation result. So this should support the EPRA NTA development in H1 2026. And if you compare the NTA development year-on-year, so Q1 2026 with Q1 2025, that's quite a nice increase of 7% per annum.

Page #10 shows the financing structure. As said, LTV currently at 41.0% pro forma after the R4R portfolio acquisition, we are at 45.3%, so right at our LTV targets. Perhaps we've seen that S&P confirmed its rating BBB- with a positive outlook already in March 2026, Moody's has its rating Ba3 with a positive outlook since June 2025.

We are right now in the discussion as every year around this time of the year with the agency, and in general, we should have on the ratings, definitely a good development as our financial metrics are quite strong. So not only the LTV has in the meanwhile, a quite low level also, and that's also shown on this slide, the net financial debt-to-EBITDA ratio stands at 8.6x and the ICR level of more than 6x. So this should be very good financial metrics also to support further rating developments.

Page 11 shows the maturity profile. And just to explain, as I think we already did in the last conference call, we have indeed a quite strong current cash position of nearly EUR 1.3 billion at the moment, which is good to have, but a lot of that will be used, firstly, for the R4R portfolio acquisition payment price that's around EUR 565 million.

And our main maturity, this year convertible bond due in August 2026 of EUR 470 million will be repaid from this existing cash. So therefore, a lot of the cash that we have in the balance sheet is also designated for the purchase price payment of Resi4Rent for the repayment of convertible bonds.

But still, we are left with a quite sizable cash position, which is good. as we want, as you know, to invest further in our Polish and also in the German portfolio.

Let's take a look at Page #13. Development operationally of the German portfolio was quite good, especially very strong like-for-like rental growth was 3.3% in total. That's for us, I think, the highest like-for-like rental growth that we had in the last roughly 3 or 4 years. And this was mainly driven by higher rents from rent increases from existing tenants, which are basically bigger increases, higher tenant turnover.

So this basic like-for-like rental growth, which is more or less a rental growth without any big investments was close to 3%. That should be a very strong number, plus the help of some vacancy reduction, we ended up at 3.3%.

That should noted that vacancy in our German portfolio increased by some 30, 40 basis points in Q1, but that's a normal seasonal pattern. So you will see in the following quarters that the vacancy rate in the German portfolio will go down, and we expect on a year-on-year basis, a declining trend in vacancy. So as we started the year with 3.2%, you should expect that the vacancy rate at year-end is lower than at the beginning, that would be also in line with what we have guided.

Page #15 gives an overview of the Polish rental portfolio development. Vacancy here in all the units that we have finished for at least 12 months ago. So they are now stabilized that are in the market for a longer time is still at a very low 2%. So that should be a good proof that the demand is really strong. And rental growth is continuously there. So we are currently at 3.2% in Q1 2026 at 3.4% and 2.2% in the year 2025 and 2024.

On Page #16 and 17, we see some figures regarding the Polish sales business. I think I already mentioned that the sales results in Q1 were quite good. So 658 units sold compared to 592 units in the comparable quarter of the previous year. And also the number of apartments handed over, that's on Page #17, with 311 units higher than the 224 units in Q1 2025.

And finally, again, summarizing our statement on the guidance, which is presented on Page #19. We are confirming again all guidance for 2026. So FFO I, the adjusted net income from sales Poland and FFO II should all be as expected and communicated in the past month. That's it from my side. So hopefully, comprehensive and quick summary of Q1 2026. Thank you so far for listening. But of course, now very happy to take your questions.

[Operator Instructions]

First question comes from the line of Marios Pastou from Bernstein.

Just got one question from my side on the FFO guidance range. So if we're now assuming the Resi4Rent acquisition completes at the end of the second quarter, which I think is predicated on one of the slides, do you still think you'll be at the lower end of the guidance range? Or is there upside potential here based on the operational performance being quite strong so far this year?

Good morning, Marios, thank you for the question. Well, first, you're right that when we issued the guidance in November last year, we said Resi4Rent is closing at the end of that the second quarter 2026, that would mean we are at the low end of the guidance. Looking at the actual development since then, I would say there's a good chance that we are perhaps a little bit better, so more towards perhaps the midpoint of the guidance. But let's see, let's have the closing first. Let's follow the development of the operational business in the next month. But at the moment, it looks as if we are very comfortably positioned within our guidance range.

The next question comes from the line of John Vuong from Kempen.

Just looking at like-for-like rental growth in Germany, it is now ahead of that in Poland. If I look at the implied like-for-like excluding vacancy reduction in your guidance, it would suggest the normalization over the remainder of the year? .

So is this rent increases to existing tenants? Is that linked to any specific Mietspiegel this quarter? Or how should we look into this number?

Yes, good morning, John. As you know, we have a portfolio with several locations. So we're not so much dependent on 2 or 3 big locations and, therefore, also not so much dependent on 2 or 3 very important Mietspiegel outcome. So it's really across the portfolio. It's simply true that we are -- that we have started the year a little bit better than expected. But I think our total like-for-like rental growth guidance, the upper range was 3.1%, now we are 3.3%.

So still very close to that. Yes, good that we had this start into the year, but honestly 10, 20 basis points more is perhaps not a big deviation from what we originally guided. We're confident that we keep good rental growth in the remaining quarters of the year.

And then just on that 1.6% that you're increasing to existing tenants. To what level could this go in your portfolio? And how sustainable do you consider it?

I first say that's definitely a strong number. So perhaps don't read too much into it, if, for example, in the next quarter, this [indiscernible] 1.4 or 1.5. So there's a certain swing in that. But basically, as we've always said, we own a very, call it, normal German residential portfolio, although we are located in what we call secondary locations.

And we know since now several years that also in this location, the demand is very strong. So it increases step by step. We have a portfolio where the rents are only very, very few occasions above Mietspiegel levels because we have not had any big modernization programs in the past, so we can really go along with every Mietspiegel increase and increase the rent step by step afterwards.

So difficult to say where is the limit, but -- if you look at that, again, in total, if rents are growing, including vacancy reduction with 3.3%, there should be room for improvement in the future.

The next question comes from the line from Andrew McCreath from Green Street.

Two questions from my side, please. Firstly, on capital allocation, you're at 41% LTV today. 45.3% pro forma post Resi4Rent. So effectively at targets and your share price trades at a meaningful discount to NTA. So I guess my question is, why does buying back equity rank against incremental Polish rental construction and further German acquisitions in your capital allocation framework today? That is the first question.

Good morning, Andrew. So firstly, to be clear, we have communicated that we want to grow further in Poland, especially in the rental business. So we want to start and have already started construction of new rental units this year. So it should be a construction start in total of roughly 2,000 apartments, and this will continue in the future. For this investments, there's no external equity needed. And we have a quite moderate payout ratio regarding the dividend.

So it will be for this year, yes, a little bit more than last year, so 50% FFO I, but we keep the full cash -- the full net profit from the sales business in the balance sheet. And that very naturally allows us to grow the portfolio without hurting the LTV, and if we analyze the LTV development of last year, there was a quite natural deleveraging impact only from the results that we create.

When it comes to German acquisitions, the most likely outcome is that we are buying here step-by-step portfolios of 200, 300, 400 units as we did in Q4 last year. By the way, we are still looking at the market. So we're also happy to buy in Germany as we know the market very well as we can keep the integrators in the portfolio but this is a more opportunistic approach. So we have clearly in Poland as a kind of benchmark. So why should we buy in Germany at lower yields compared to opportunities that we potentially have in Poland. I mean it would also not be excluded to buy a larger portfolio in Germany. It's purely numbers driven, but I think it's more likely that you will see that the small acquisitions.

And then finally, if it really comes to a larger acquisition, whether this is Germany or whether this is Poland, again, like foreign transaction. Yes, this would be the only case where we look into potential new equity as we have done last year, quite targeted moderate equity contribution that kept the LTV on a reasonable level. But that's the only case that we have in mind so let's say, a very strong growth driven by a large acquisition that and only that could require equity.

That makes sense. So to be clear, you would not consider a share buyback at the stage using some of your cash that would be net of the proceeds for Resi4Rent, and then your convertible payback, you wouldn't consider a buyback residual there?

No, not at this point of time. We think we have good growth opportunities ahead of us especially in the Polish rental market.

That's clear. And then my second question is on Polish vacancy. So specifically on the stabilized portfolio, it ticked up to 2% from 1.3% last quarter, I believe. Just curious, what is driving the 70 bps drift in the stabilized bucket? Is it just general market softness, tenant turnover? Or is it something else?

This is purely tenant turnover. And if we follow that with our internal reporting on a monthly basis, any swing between, call it, 1.5% and perhaps 2.2%, 2.3%, something like that is very normal. Perhaps you remember that most rent contracts in Poland have a maturity of 1 year.

So for example, when we started a project some time ago, rented it out, perhaps a lot of contracts are ending to the same time after 1 year, so that in 1 month, a little bit more renewals and in the next month, a little bit lower. So everything that is, let's say, around the 2% is a very normal vacancy rate number, which is, again, a quite strong one. So a vacancy rate in stabilized portfolios of around 2% is from our point of view, a good confirmation for the strong demand in the Polish market.

[Operator Instructions]

The next question comes from the line of Thomas Rothaeusler from Deutsche Bank.

A couple of questions. First one is on the Polish PRS market. I mean, just wondering if you see further players keen to divest. Wondering if you see further acquisition opportunities basically. And also what magnitude would you be willing to execute?

Good morning, Thomas. In the Polish residential market, I mean, firstly, most landlords are private persons, not that different to Germany. But of course, you have also other institutional players in the market.

I think in total, institutional landlords own currently around 30,000 apartments. This number is growing. And a lot of these institutional owners are backed by private equity. So their investment horizon is perhaps naturally some 5, 6, 7 years, ending perhaps not everything this year, but in the next 1, 2, 3 years. So there will be opportunities on the market. And of course, we will look at that. So also to make clear, an acquisition like last year's Resi4Rent transaction with 5,300 units is unusual in its size.

So we will look at such portfolios. That's very clear. We are a natural buyer. the acquisitions normally should be perhaps a little bit smaller size, but that could be a very nice add-on to the growth we have ahead of us anyway because we're building on the own land bank, and that's perhaps also important to repeat. It's not a must.

So we have a quite natural growth plan by building every year, let's say, 1,500 to 2,000 apartments on our existing land bank with the existing platform. And if acquisitions are coming on top at good terms, then yes, of course, we will look at that.

So should we see the planned IPO or the potential IPO as a way to reallocate capacity or capital from build to sale to build-to-rent? Is it correct?

Which would not be really a new strategy, right? So as it is currently, we produce a lot of cash in the sales business, which is then more or less flowing into the rental business. And whether this is then from proceeds of potential disposal of shares, so part of that or whether this is year-by-year via dividend that ROBYG or the sales business is producing is basically the same. So of course, with a different timing, but the overall strategy, the overall thinking would be unchanged.

Second question is on the Resi4Rent approval by the Polish authorities. I mean, assuming it would not get approved in total, how could potential conditions look like? Do you have any idea?

Well, firstly, to make this clear, we do not expect this. So therefore, we are not speculating about potential conditions because we think our arguments and our position is very strong. So yes, after this acquisition, we are Poland's largest landlord with them in total, a little bit more than 9,000 units out of 1.2 million rental apartments in Poland. So we are far away from a situation where we can dictate rental prices.

So therefore, we are unchanged from the very beginning, very positive on this. We can understand and believe me, for us, it's also very hard that the time is now -- has been extremely long. So we are waiting now for the decision since it's 8 or 9 months. But hopefully, it's really coming shortly. And of course, we will inform the market once the decision is there.

My last one is on Poland rental markets overall. I mean, do you see any initiatives for rent controls?

No, that's not the case. And perhaps this is not the case because the rental market in Poland is definitely much smaller, for example, compared to Germany.

As you know, in Germany, roughly 50% of the people are living in rented apartment. In Poland, it's around 15% -- so therefore, when we follow discussions about rent -- about the residential market, let's call it like this, it's more about perhaps a potential support for buyers of apartments, but not so much about rent controls. So we don't really see here the discussion in Poland currently.

We now have a question from the line of Kai Klose from Berenberg.

I've got 3 quick questions, if I may. The first 1 is on the DTS, develop-to-sell portfolio in Poland. If I saw it correctly, you have estimated now -- or estimated now with a total investment cost of around EUR 2,300 -- at least from memories, it was about EUR 2,200. Is this because of higher land costs and/or of higher construction costs. You have already [indiscernible] And the second question is -- sorry, please go ahead.

Sorry, Kai, if I interrupt you. But if I answer it quickly. Yes, we have always inflation in construction cost and land prices. Currently, this is still moderate. But the number that we are presenting here is really the actual construction cost for all the apartments under construction and in the sales process. And that could also be then a difference depending on which location is under construction on sale and which land price, the underlying location has. So therefore, there's quite overswing from the product mix and that leads to the EUR 100 per square meter difference.

And second question is on the Service segment. Could you indicate if we might see a bit of a swing or there's a stronger increase from higher energy costs that you use or could use also for higher income in your service segment in Germany, or is it more coming in 2027?

This is perhaps more something for 2027, but you're right. So if this development -- that would be something positive with higher energy prices, I mean, we don't like to see it because that drives inflation and then increase in costs. But that's for the energy business, as in the past years, that could be indeed helpful, but that's more something for 2027.

All right. And the last question would be on Page 22. You mentioned that the cash effective income tax in Q4 were at EUR 9.6 million and EUR 4.9 million in Q1 2026 this quarter. Could you just explain, is it reduction because of your tax initiatives you had at the end of the last year?

This reduction is because in Q4 last year, we had more handovers in the sales business. therefore, high tax burden from that. So it's purely coming from higher tax expense in the sales business in Q4 last year.

The next question comes from the line of Stephanie Dossmann from Jefferies.

Can you hear me?

Yes.

Sorry for that. So yes, most of my questions have been already answered, but maybe a follow-up on the vacancy rate in Germany. I was wondering about the assets you bought last year. Have you been able to reduce this vacancy? Or I mean the increase in vacancy is driven by this portfolio or other locations and so on? And how much is the vacancy currently on the assets acquired?

And maybe second one, a follow-up on the price development in Poland and so on. What would be your expectations going forward? And what kind of gross margin can we expect on the sales business going forward, please?

Well, regarding the first question -- first is correct, all the acquisitions that we have signed in Germany in Q4 last year have closed in Q1, already at the end of Q4 or the 1st of January this year. So there's also a slight impact from that, that could be out of the 40 basis points, perhaps 10 basis points.

So therefore, it's perhaps a little bit higher than this increase in vacancy rate in previous years. As far as I remember in the last 3 to 4 years, you always had an increase of let's say, 20, 30 basis points in the first quarter, which is a quite kind of seasonal development. Also perhaps some of the modernization programs or most of the modernization programs that we have for vacancy reduction is then more finished in the third or fourth quarter of the year.

In the acquired properties between or some weeks after we have just closed the acquisitions, we don't see any movement in vacancy, and that's very natural. So therefore, the reduction of that will come, perhaps even not in the next weeks, but more towards end of this year or in the course of 2027. But yes, good to have this opportunity, good to have portfolios acquired where we can reduce the vacancy rate in the future.

And regarding the Polish sales business, at the moment, that looks quite strong. So the demand is there. Sales prices are even slightly increasing. And that's good to see. Of course, a little bit unknown is the construction cost. Mostly perhaps a question also for 2027, 2028, and the unknown is, of course, the development of energy prices. If you ask us, do we see already something like stronger construction price inflation? No, that's not the case.

Yes, clearly, this could happen. But yes, at the moment, we are optimistic that we can keep our margins. Let's see how this develops in the next weeks and months. And we receive clearly this question now more often very naturally. And one answer that we also gave is, if we are wrong, so if we see more construction price inflation in the future, we still have a buffer for that.

So we're operating to gross margins that are, in many cases, close to 35%. So if these margins are weaker in the future, that would still be a very profitable and good business.

[Operator Instructions]

We now have a question from the line of Kanad Mitra from Barclays.

I have a couple of questions. Is there a potential for a valuation uplift for the Resi4Rent portfolio acquisition, given that there have been 5 rate cuts in Poland, and you signed it back in August? That's my first question. And the second question is what is the potential EBITDA margin for that business? And what kind of margins can you help manage at in the future once it's integrated in the portfolio?

Yes, happy to answer this question. As you know, we acquired the portfolio based on a gross yield for the rent that we expect for this year of around 7.5%. That should be, for us, a very good at reasonable price, and now it will come then after the closing, which is hopefully then taking place soon, first time for valuation of the portfolio. .

In general, we are convinced there should be room for valuation uplift. The question is are we really realizing this or part of this already on day 1 because the natural discussion that we will have with the value is that we more or less acquired the portfolio just recently, now everyone so this is one of the advantages that we have that we have a longer period between signing and hopefully soon coming closing.

So it's between August and today, indeed, there have been interest rates cut. So yes, there's potential, but honestly, I just can't speculate about this. So we have obviously no valuation results yet. But in general -- and let's take a more midterm view over the next 1, 2, 3 years, we should have a good valuation development, especially in this portfolio.

And the EBITDA margin should be quite high or that very specific the incremental EBITDA margin. So we guided already for 80% EBITDA margin because we're taking here over the portfolio, perhaps also some people that would help us with the day-to-day business, but we're not taking over management. We're not taking over back office or administrative functions.

We are fully integrating this into our quite strong team and platform. So therefore, this acquisition, all projects that are finished in the future, all potential acquisitions in next year will contribute quite strongly to the EBITDA margin from the rental business.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Martin Thiel for any closing remarks.

Yes, many thanks from our side for dialing in for listening to the call and for the questions. As always, if there's anything left, please feel free to contact us any time. That's it from our side. Have a good day and talk soon.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the TAG Publication of Annual Report 2025 Conference Call. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Martin Thiel, CFO and Co-CEO. Please go ahead.

Yes, many thanks, and a warm welcome from our side. This is Martin. Many thanks for dialing in into our conference call for the full year 2025 results. I think today, we can present a very decent set of results. Presumably, you have already seen our press release announcing that we have exceeded all guidances that we just have basically raised back in November last year. So, therefore, we are quite happy to guide you a little bit more through the details.

Let's start on Page #3, the highlights slides. And perhaps we start with FFO I, our rental result, which came out at EUR 181 million. That's a 3% increase year-on-year, even a little bit better than the guidance that we raised in November, which was EUR 174 million to EUR 179 million. And I think it's fair to say that this was mostly driven by a strong operational development. So the EBITDA from the total rental business was also at the upper end of what we assumed, driven by very decent like-for-like rental growth in Germany, still at 3%, unchanged to the previous year and an increased like-for-like rental growth in Poland compared to the previous year, which came out at 3.4%. Last year, we had 3.2%.

Vacancy rates in both countries are effectively very low. So in Germany, we are down to 3.2% at the end of the year. We started at 3.6% at the beginning of the year. For those of you who are following TAG since some more years, this is for us quite a change. So in the meanwhile, we are at very low vacancy rates that we achieved throughout the years coming back from vacancy rates that have been, of course, quite higher in the past. Vacancy rate in Poland in all the units that we rent out for at least 1 year is basically at the lowest rate possible, 1.3%. That shows the strong demand that we have in this country.

Continuing with Poland and looking at the sales results, the sales result was also a little bit better than expected. So it came out at EUR 68 million. That's also a 3% increase year-on-year, slightly above the guidance. As expected, the fourth quarter was strong in terms of handovers. So as planned, we had a quite strong increase in the sales result in the fourth quarter due to this increased number of handovers. And in general, the result was also stronger than expected because the gross margins that we have achieved on the back of strong sales price developments in the past is in the meanwhile quite strongly above 30%. So that was also a little bit better than expected, therefore, this increase. Number of units sold in Poland amounted to a little bit more than 2,800 units. So that was exactly more or less what we have planned.

Looking at the acquisitions in financial year 2025. Firstly, you are all aware that we signed in August 2025, a contract with Resi4Rent to acquire 5,300 new build rental units. We are still waiting for the antitrust approval. We expect this now to happen in the second quarter of 2026. I know that we originally expected that earlier. We can tell you that there's basically nothing new. So simply, we need to be patient. We have to respect that the Polish antitrust authority takes its time to make its own market research to look at the market themselves. But unchanged, we are very confident that we get an unconditional antitrust clearance. So, therefore, we hope that now in the course of the second quarter 2026, this clearance is coming, and this is basically the only condition for the closing.

But also, in Germany, we increased the portfolio. So we signed acquisitions for around 1,200 units, mainly at the end of the third and in the course of the fourth quarter in 2025, mainly in core regions where we already are. So that means in Eastern Germany, high gross initial yield of around 10%. I think I already mentioned in the last call that some of these portfolios that we have acquired have a certain CapEx backlog. Taking this into account, the gross initial yield is still around 9%, which would be attractive. So that means we are also growing in Germany, of course, not in the dimensions currently like in Poland, but we are very open to take advantage of some opportunities that we see here in the market and to grow our portfolio also in Germany.

EPRA NTA showed a quite strong growth, up by 10% even after the dividend payment and after the capital increase that we have taken up and carried out in August this year and stands now at nearly EUR 21 at year-end. The LTV ratio came down significantly from 46.9% to 41% at the end of the year. But to be transparent, it's perhaps reasonable to look at the pro forma LTV in this case because after the expected closing of the Polish acquisition, the LTV stands at 45.3%, which is still a good ratio because that means even taking into account the closing of the transaction, we have basically already achieved again our LTV target.

Today, we are confirming our guidances for financial year 2026. We are also confirming that the payout ratio for the dividend for financial year 2025 is as communicated 40%, and that leads based on EUR 1 per share FFO I to a dividend per share of EUR 0.40. We will offer again a scrip option for our shareholders, so everyone can choose like last year between a cash component and new TAG shares. This is something that we think in our sense, as we are growing the business, as we're still investing, makes sense. So that gives a little bit more equity into our business, and the higher share count that could come from that share option is already taken into account for the guidance range.

Then, let's move on to the financials. So perhaps we can skip the next pages and move on to Page #7, where we show more details on the FFO I and EBITDA calculation. As already mentioned, also EBITDA increased quite strongly in -- from a rental business in both countries. So in Germany, and of course, in Poland, where we have a growing business, that means we have finished some units again this year. And, of course, the larger increase will come hopefully quite soon in the course of 2026, when the Resi4Rent transaction is closing.

Again, FFO I came out at EUR 181 million after EUR 175 million in the previous year. And one thing that we want to clarify, because we received some questions in the last quarters, is the one-offs you see here are more detailed splits on the right side. And you can see that we are treating subsidies that we get for energetic modernizations in a way that we're excluding this income from subsidies in FFO I. The rationale behind it, we are capitalizing the expenses. So the CapEx doesn't affect FFO I. So, therefore, we think it makes sense also to exclude the related subsidies from FFO I. So don't be surprised that we are reducing our FFO I with these one-offs because we think that is simply something which is systematically correct. In AFFO, this is included because also here the related expenses are deducted. So just to clarify this, but this is a treatment that has been the case also in the previous quarters.

Coming to Page #8, you see more details on our FFO II development. FFO II is basically FFO I, so the result from the rental business plus the result from the sales business in Poland, which was, as already mentioned in the fourth quarter, quite strong, so more than 90% increase quarter-on-quarter due to the higher number of handovers.

Page #9 shows you the development of the EPRA NTA. I already mentioned that the increase was quite strong with 10%. And that's important to point out that a large part of the NTA increase is really coming from the operational business, that means from the net profits. So we see this here on the right side of the chart that this was an impact of plus EUR 1.60. Yes, of course, the portfolio valuation result helps when it comes to the NTA development, but it's fair to say that our ongoing results, so the rental business in Germany and in Poland as well as the sales business in Poland, are really contributing to a strong EPRA NTA per share growth.

Switching now to the financing structure, which is shown on Page #10. I already mentioned that the LTV is down to 41% after 46.9% at year-end 2024. And yes, it's true that the capital increase that we carried out in August this year helped in reducing the LTV, but also here to make clear that our operating business has also a significant impact on the LTV. That means if we look at the impact that the operational results had in this LTV reduction out of the 5.9 percentage point reduction, roughly 1.8 percentage point was purely coming from the business that we are conducting, that means from the cash that we generate from the German and the Polish business. So that means we have a quite natural deleveraging process, which is, of course, important to know for us in the future. So that means we can invest as in 2025 without hurting our LTV ratios. Net financial debt to EBITDA was at a strong 8.8x. ICR also at a strong 6.1x, but this has also been quite strong in the previous quarters.

Page #11 shows the maturity profile. And here, perhaps just a quick comment from my side. You see larger maturities come up in 2026, but this is basically as of today all refinanced, especially the EUR 470 million convertible bond is already refinanced in a way that we currently sit on a strong cash position of EUR 1.3 billion, which is then used, of course, to pay the purchase price for the Resi4Rent transaction, which is around EUR 565 million, but also to repay this convertible bond of EUR 470 million. So larger maturities, but even larger cash position that we currently have in the balance sheet, just to make this clear.

Coming to the German business, and I'm looking now on Page #13. As said, vacancy rate development was quite strong. So in 2025, a development like in the previous years. So in the first 1 or 2 quarters, even a slight increase in vacancy rate and then a strong reduction. So we were happy that we could reduce vacancy on a like-for-like basis by 40 basis points compared to the previous year, which is a strong result. And if you ask us, is there more potential to reduce that? Yes, we are convinced that we can bring vacancy to a lower range. So perhaps we are quite soon even at 3% or below that number. Like-for-like rental growth in Germany was also quite decent. So 3% if we include the impact from vacancy reduction, but excluding this effect from vacancy reduction, it was also at 2.6%, slightly better than in the previous year where we had 2.5%.

Page #14 shows you the development in the portfolio valuation. So basically, the value increased a little bit. We recorded a value increase of 3.1% within the German portfolio after 1.4% in the first half of 2025, which is, as far as we see, in line with the overall market with peers and which is a good development. So the years of portfolio devaluation are clearly behind us. I mean, clearly, today, we have more uncertainty in the market, how interest rates are developing on the back of the Iran war, which is now taking place since a little bit more than 2 years (sic) [ weeks ]. But whatever is coming, we are not concerned about our portfolio valuation that we have a portfolio with a high yield. So 6.6% gross yield that is really something that also would digest increased interest rate environment as we have shown in the past.

Just to mention that we have changed our valuer this year. So the year-end valuation for 2025 was for the first time carried out by JLL. So after, I think, 12 or 13 years cooperation with CBRE, we decided to change the valuer, but this has not really a special background. We simply thought after such a long time, it's good to have a fresh pair of eyes to look at the valuation and to change the valuer from time to time should also be from a corporate governance perspective something positive. If you ask us, has there been really any change in the valuation results? We can tell you that, that has been not the case. So we have seen that valuation results between JLL and CBRE are very close together.

Moving on to the Polish business and looking at Page #16. I already mentioned at the beginning that the vacancy rate in the portfolio for all apartments that we have on the market for at least 1 year is very low. So it came out at 1.3% at the end of financial year 2025. And very positive was the development in the like-for-like rental growth. So we came out at 3.4%. That means rents are still growing despite still really exceptional growth that we have seen in 2022 and 2023, where rents have increased in total by more than 30%, and that should be a strong sign for the market.

Looking now at the sales result in Poland. And the third and the fourth quarter of 2025 have been quite strong. So we sold -- you see this on the top right of this slide, Page #17, more than 800 units in each quarter. And we see that there's more demand in the market. So interest rates have gone down in Poland, all discussions around potential subsidy programs that we have followed for some months in 2024 and 2025 are now off the table. We have received a lot of building permits. So we have an attractive offer at the moment. And, therefore, we are selling simply more and are very confident that we have a potential to grow these numbers even in the future.

Next slide shows you the handovers. As expected, revenue was strong in the fourth quarter of 2025. As planned, the largest number of handovers was taking place in this quarter, and the total number of handovers was, I think, exactly in line with what we have planned.

One comment to an announcement that we made today in our press release, perhaps you've seen, that we communicated that we're currently looking into potential strategic alternatives for our Polish subsidiary, ROBYG, including capital market transactions. And one of these potential strategic alternatives is an IPO of ROBYG on the Warsaw Stock Exchange.

Please understand that at the moment, we cannot comment this really in detail, and we can't confirm that we are looking into such options. We can't confirm that this could be something that makes really sense for ROBYG to grow the business to take advantage of really the tailwind that we currently see in the market. What we can also confirm is that for us, as TAG, in all alternatives, this would not be a strategic shift. So there is no plan to say that ROBYG, we, I think, already commented in today's press release, that we will stay -- we will be the majority shareholder of ROBYG also in the future. So give us some time to look into these alternatives. We are not under pressure, but we think it's worth to evaluate such options.

And then some final comments on the guidance, and I can here be short. You see on Page 20, the summary of the guidance for 2026, which is unchanged to what we communicated back in November when we published the Q3 results. So we can confirm, as of today, everything that we have forecasted back in November. That means we are expecting quite strongly growing results for the next year.

Just to clarify for purpose of the guidance for the FFO I guidance, the closing of the Resi4Rent transaction is assumed if you look at the midpoint for the 31st of March. If you look at the lower end of the guidance, the closing is assumed for the 13th of June. So, therefore, we have enough buffer in our guidance range to the expected closing.

That's it from my side. Thank you so far for listening. But of course, I'm now very happy to take your questions.

[Operator Instructions] The first question comes from Andrew McCreath from Green Street.

Two questions from my side, please. First, on the potential ROBYG listing, I appreciate that you can't give too much detail here. But could you give us a sense of the timeline and also help us understand the structure? Is it purely a primary raise? Or would TAG also be selling down part of its stake? And also, what kind of valuation are you internally contemplating? That is the first question.

Yes. Andrew, as I said, I cannot clearly comment on this in detail. I mean, you should think about a timeline for everything we look at in the course of 2026. So nothing for you now that will show up shortly in the next weeks, but let's say, in the course of 2026, we will come back to everyone with a conclusion. If potentially things stay like they are, so let me clearly say this is also an alternative, right, so we are very pleased how the business is running. ROBYG is a great company. As I said, the market is quite strong. So this is also an option. So we are not under pressure. But let's say, in the course of 2026, we should have clarity on this.

And then, in case of an IPO, of course, all options are on the table. So from a primary component for ROBYG as well as for a second, third component for TAG. But to make this clear again, in all the consolidations that we're looking at, TAG is committed to remain the majority shareholder of ROBYG.

Okay. That's clear. And secondly, are you seeing any early signs of disruption to unit sales in Poland from the war? Any pressure on construction material costs coming through the supply chain? And also, have credit spreads in Germany or Poland started to move out as a result?

So the answer is no. On the other side, that just started 2 weeks ago or 3 weeks ago. So that would be quite, quite early. I mean, we have some -- unfortunately, some experience with such horrible developments. Just think about the war in Ukraine in 2022. I don't want to compare this directly, but we've seen at that time how robust the market is in such an extreme scenario like at that time. So hopefully, this is nothing comparable. But if you ask us, are we concerned about this? Of course, we are concerned about the war per se, but not so much about the business.

And looking at interest rates in Poland, yes, longer-term interest rates have increased in Poland, like in Germany, but looking at the shorter end, that has not really moved that much. And so far, we have no signs that this is affecting our business.

The next question comes from John Vuong from Van Lanschot Kempen.

Martin, just on the acquisitions in Germany. So you acquired a couple of assets at 9% yield, including the backlog and CapEx, which is quite a bit higher than what you're acquiring Resi4Rent. So could you comment a bit on the risk profile of these assets? And do you see more opportunities like these in Germany? And maybe as a follow-up, how do you think about capital allocation split between Germany and Poland going forward?

Yes. John, let me start with the capital allocation split. We have a clear path of growth in Poland. So, for example, we are planning to start the construction of 2,000 rental apartments in Poland this year. We are looking at -- in the future for sure, at further acquisition opportunities like the Resi4Rent portfolio in Poland as well. So let's say, the focus of capital allocation, I think it's fair to say this is still Poland, and in Poland, especially the rental business as communicated in the past.

In Germany, this is more opportunistic. So why shouldn't we buy something in Germany, where we know the regions very well, where the construction quality is reasonable or if we price in some CapEx, then afterwards, the construction quality is reasonable. These opportunities are, I would say, rare. Perhaps this is also good news when it comes to the regulation point of view. So the market is not flooded with great portfolios that you can buy at a great price, but there are opportunities. And this 1,200-apartment acquisition size was not one transaction. I think the largest one was around 500 or 600 units. All others were smaller.

And perhaps this is also something, if you ask just for a base case, what should you expect for 2026, that we continue to buy smaller portfolios in Germany, where we know the regions very well and where the risk profile is okay. That means, we can really have a clear view on are we able to bring down vacancy, is that a good construction quality, do we know the regions very well, and then, we're happy to buy.

Okay. That's clear. And then, looking at your Polish rental portfolio, it screens that values have increased and yields came down a bit over H2. So I suppose that's part driven by the rate cuts by the Polish central banks really on the short end of the curve. But the yield is now at a quite a wide spread to the 7.5% yield that you're paying for Resi4Rent. Could you provide a bit more color on your thoughts on the valuation of that portfolio and whether there's room for valuation uplift?

Yes. Firstly, your observation is completely right. So the yield has come down from 5.3% to 5.1%. Honestly, if you look very specifically that it's a little bit of rounding. So I think it's slightly above 10 basis points and rounded, right, that from 5.3% to 5.1%. But still indeed a slight yield compression. I think we already commented when we acquired Resi4Rent or when we signed the contract that the Resi4Rent portfolio is a little bit different, not in sense of locations or construction quality, but this is a portfolio with smaller apartments and this is a portfolio where the turnover is somewhat higher. And so more focused on single households.

So, therefore, one should not expect that the yield is coming down from 7.5% acquisition yield to 5.1% within some months. So that will always have a high yield. But honestly, we think there's definitely room for a lower yield in our accounts. That means for an upside impact on our NTA. We cannot specify it, and we will do the valuation of the Resi4Rent portfolio once we know the closing date. And I think one should expect that perhaps not on day 1, we record a significant valuation gain, but I think there's a high chance that over 2, 3, 4 quarters, step-by-step, this year it is coming down from the acquired portfolio.

The next question comes from Marios Pastou from Bernstein.

Martin, I've got 2 questions from my side. They're actually linked, so I'll ask them together. First of all, on the antitrust approval, I just wanted to check the confidence on the updated timeline expectation for the second quarter. Is that based on discussions you're having directly with the competition authority and request for information there? So any news on that would be helpful.

And then just on a follow-up to that in terms of the earnings range provided based on the timing, so you've been acquiring, you beat on the 2025 guide. So is there actually room to be ahead of the lower end of that guidance range even if that acquisition is maybe delayed beyond your expectation?

Marios, first, a comment on the process. I mean, in such processes, you never get a confirmation from the authority that they say at the latest, at this stage, you will have the decision. But the estimate that we have that is coming in the second quarter is based on what we hear from our lawyers. It's an estimate, but hopefully, now we are really in the final stages, unchanged. The confidence is very high because what is the question behind this proceeding. The question is, are we, when we acquire Resi4Rent with then 9,000 units, able to dictate rental prices in the cities where we are operating in Poland? But in fact, we are owning then 9,000 apartments out of 1.2 million rental apartments in Poland. So we are far away from being someone who can define rental prices. We are competing not only against other institutional landlords, especially we're competing with all the private landlords.

So for us, I think all the argument is on our side, and if you ask why does it take so long, we simply have to respect that this is the first transaction of this size that the Polish antitrust authority has on the table. So, therefore, already in November, they decided to do an own market research, which is time-consuming. They have sent out questionnaires to a lot of market participants. I think most of the questionnaires have returned in the meanwhile. Again, we're still confident, but we need to be patient, but second quarter of this year should be a good estimate.

And the guidance range is indeed broader. So, as I said, if the closing happens on the 13th of June, so end of June -- end of the second quarter, we would be at the lower end of our FFO I and FFO II guidance. As I think the start of 2026 was not that bad, so we have overachieved our guidance by better-than-expected operational development. We should have perhaps any -- some additional buffer in our numbers. But let's just hope that we have a decision soon, that we have an unconditional clearance, and then, we can be perhaps also a little bit more precise with the guidance.

The next question comes from Celine Soo-Huynh from Barclays.

Martin, I just have a question about ROBYG and construction costs. And I do appreciate that you answered the question partially already, but if you could be a little bit more concise. We've seen housebuilders selling off 25% due to the sensitivity to energy-related costs involving the construction process. You've mentioned earlier the Ukraine war, and it was 20% headwind to earnings back at the time, but ROBYG saw a demand boost that kind of offset some of the cost. So I was wondering if you could say anything related to the recent increase in energy prices, if you think you can maintain or keep increasing that gross margin going forward? And how sensitive do you think your business is to increasing energy prices?

Celine, so we are very confident that we keep -- can keep the gross margins. So as mentioned in the presentation, we are selling now at gross margins quite strongly above 30%, in some cases, even closer to 35%, which is stronger than at the time when we acquired ROBYG back in end of 2021, beginning of 2022. I remember then the gross margin was more something 27%, 28%. So that means -- let's assume we are wrong, and we have overseen something, there is definitely buffer. So that would still be a gross -- strong gross margin if something shows up that we are not seeing today.

If we look into forecasts for sales price development that brokers have for this year 2026, people are expecting further price increases in the sales prices. This is in line with our affordability ratios. So also Polish economy is doing well. And salaries are growing quite fast. So, therefore, I think we have included in our guidance a 2% sales price increase. I think the market expects in the meanwhile even more. So, therefore, we should have a good basis to digest for everything that may come, but let's hope that this is not a deja vu from 2022. And we simply are operating in a strong market. And when I perhaps may answer this a little bit more general, since we are in Poland, we have seen COVID, we have seen the Ukraine war, perhaps now we see a new development, and through all the times, we have always achieved our results, and results were always strong. This market has simply strong fundamentals, and therefore, we are so happy to be invested there.

Okay. Can I follow up on that? So my understanding is that 2026 should not be impacted too much because of the presale and because some of the costs are already locked in. But things -- if things keep worsening, when do you think it'll start hitting your P&L in Poland?

The first question is absolutely correct. So 2026 is to a large part, so everything that we want to hand over already sold. Construction costs are to the largest part already known as of today. So that means everything that we sell today normally comes in the P&L 12 to 18 months later. So, therefore, what we sell today affects the P&L, at least to the largest part, 2027, 2028. But again, there's also an upside chance in this development.

Okay. And my third question, Martin, is about the IPO for ROBYG. And if I look at some of your peers in Poland, it doesn't look like they're trading at better multiples than TAG at the moment. So why are you thinking about IPO-ing currently in this current context?

As far as we have observed it, the share price development of Polish developers was quite strong in the past 2 or 3 years. So, therefore, this is an option. As commented, we have also other options. One of them, just to repeat this, is that we continue with being the sole shareholder of ROBYG. So we're not under pressure to do it. We wanted to communicate this today, and I think ROBYG has communicated with its results 2 weeks back that we're looking into such options if that makes sense for ROBYG to have access to, let's say, cheaper capital. And for our shareholders, then yes, we're happy to do it, if not. And therefore, we ask for your patience, give us some weeks or months to come back to you, then we're not under pressure to do anything.

The next question comes from Thomas Neuhold from Kepler Cheuvreux.

Martin, there's actually only one left, which is related to the guidance on the breakdown on Page 21. Firstly, thank you for providing so much details. I was just wondering looking at the guidance for the growth in the rental EBITDA in Germany of only 1%. Why is it so low? I mean, we have around 3% rental growth. You have been a net acquirer last year. Probably rental growth is exceeding CPI. So I was just wondering why you don't expect a higher EBITDA growth in Germany in the rental business next year?

Yes. Thomas, perhaps the answer is quite simple. So this is a comparison between the actual results 2025, which are, in fact, better than expected and the unchanged guidance for 2026. So, therefore, we don't want to update the assumptions for the guidance every quarter, but I think it's fair to say that the assumed range for the EBITDA in Germany 2026 appears quite conservative on the back of what we have achieved in the last 3 months. So coming down, for example, from the vacancy rate to 3.2%, operating on a vacancy, which is now 3% or even more next year. So take this as a more conservative range and perhaps we are better in the course of the year.

The next question comes from Thomas Rothaeusler from Deutsche Bank.

A couple of questions. The first one is on strategic options for ROBYG, what you referred to. I mean, what could be alternatives to an IPO and to the status quo?

Thomas, you mentioned the most important alternatives, but you can assume in such strategic reviews, also other options are on the table. But let's be clear, because we mentioned it, an IPO is an alternative, a serious alternative to look at. As I said, a serious alternative is that we continue to be the sole shareholder of ROBYG. If there are also other options that we will look more deep in, let's see. So give us some time to come back to you with the final conclusions.

Okay. Then, again, on Poland, I mean, what have been recent dynamics at the beginning of this year? I mean, did it continue what we've seen in the fourth quarter or in the third quarter? Any material change?

I would say that the strong trend is continuing. I mean, it's clear that in every year, January-February sales numbers are okay, perhaps not as the strongest in the year, but I can say that we are absolutely in plan. If we look in the broader market, and you know that also a lot of other Polish developers are listed on the Warsaw Stock Exchange. So we've got quite good transparency on what other companies are achieving. I think, everyone has good sales results. And -- I mean, we are convinced that we have one of -- definitely one of the strongest platforms in the home market and one of the strongest teams and a great -- and big land bank. But the whole market is really doing well. And the strong reduction that Poland has seen in interest rates. So in the last year, I think interest rate cuts amounted in total to 200 basis points is, of course, a good tailwind for the current demand. So yes, we are optimistic.

Okay. And then on further acquisition opportunities in Poland, I think last call you referred to, just some update would be helpful. Wondering if you see any larger portfolios in the market currently?

There will be definitely opportunities in the future, but for us, it's clear. So let's get the closing of the Resi4Rent transaction first, which is now hopefully taking place in the second quarter. I'm sure we will integrate this portfolio quite quickly. So now, we had enough time to prepare for it. And then also, we are ready for further growth also via acquisitions. But the base case is that we build apartments on our own land bank. So even without further acquisitions, we will grow the rental portfolio in Poland further. As I said, we want to start construction and have already started a certain part with construction of 2,000 apartments this year. A number between 1,500 units and 2,000 units per year should be a good estimate for the future.

And then on top, if we see opportunities in the market, yes, we will look at it. And if you look at how the market looks like, so looking at larger landlords in Poland, a lot of them are invested in Poland, perhaps not with an extreme long investment horizon. So there are some private equity money still invested, and perhaps for them, like in the Resi4Rent case, exiting after 5, 6, 7 years is something natural. And then, I'm sure that we have such opportunities on the table, and then, we will look at them as we did with the Resi4Rent transaction.

Okay. My last one is on the Poland BTS business. What is actually the CPI assumption you have in your model?

So the rent -- the increase in sales prices that we have in our model is 2%, and the construction price inflation is in line with the inflation rates that we had when we did the forecast. And I think it was 2.5%. So very, very similar to the sales price growth that we assumed.

The next question comes from Kai Klose from Berenberg.

I've got 2 quick questions. The first on Page 23. Could you explain the slight decrease in the income from services? There was a rise Q-on-Q in Q4, but over the full year, a slight decrease. Is this related still to lower energy costs compared to '24?

And second question is, also on the same page, the footnote #5, the increase or -- yes, the increase in other operating income, where you mentioned higher income from temporarily rental of existing buildings in Poland. Could you give a bit more details on how many units we are talking about? And what kind of temporary letting this is about?

Kai, to answer your questions, firstly, you're right with the analysis, the reduced net income from services is due to a lower net income from the energy business in Germany, which was, let's say, perhaps exceptionally high in 2024. So I think still on a very decent level, but 2024 was simply something perhaps extraordinary. And the other operating income from properties that we are temporarily renting that's not extremely huge, but we have, in some cases, land bank that we acquire where there's an existing building on it. So let's say, an existing smaller factory or an existing office building where we are going for rezoning. And until we get the zoning and the building permit, this building is continuing to exist. We collect some rents. But once we have the building permit and the rezoning is done, we will tier down these buildings and then start the construction of residential portfolio. Therefore, temporarily, we have some rental income, which is shown under other operating income as this kind of rental income is not the core business.

And what kind of amounts we're talking about? Is it single-digit, double-digit million?

No, I think these are some hundred thousands of euros. So it's not very significant.

The next question comes from Manuel Martin from ODDO BHF.

Three questions from my side, please. The first one is a bit on the balance sheet. The LTV might come out in roughly at 45%, as you commented after the closing of the R4R acquisition. From that point onwards, would you like to further decrease the LTV? And if yes, by which means? That would be the first question.

Manuel, I think it's important to repeat again that we have a quite natural deleveraging process with our strong cash generation on the one side, clearly from high-yielding portfolios in the rental business in Germany and Poland, but also from the Polish sales business. You know that we are paying out our dividend solely based on FFO I, currently 40%. Next year, it will be 50%. We keep the full cash from the sales business in the balance sheet. So, therefore, we have a quite natural deleveraging process, or if I put it differently, we have enough headroom to invest. So this year's acquisition or last year's acquisition, Resi4Rent is a good example. So we signed a contract for the portfolio, and hopefully, now, the closing takes place soon.

We have put a certain portion of equity in there. But in fact, from the EUR 565 million purchase price, EUR 186 million was the equity contribution and the rest was then, in fact, paid from existing cash or from a certain debt portion. And still, the LTV came down this year, if we compare beginning of the year LTV with the pro forma LTV, by roughly 150 basis points despite paying out a dividend and so on. So therefore, that gives us really flexibility. We are currently happy with the LTV target of 45%, which is something that we have already achieved.

Let's see how valuation gains develop. I think what is clear, if we see further positive valuation trends, especially in the German portfolio and the LTV, is coming down. Yes, we would use that to go down step-by-step with the LTV, but that's too early to think about potential new lower LTV targets.

Okay. And regarding valuation results, do you have a feeling what could come out in 2026? Will it be rather somehow coupled to rental increases? Or what's your feeling there?

Yes. I would say that the base case for 2026 is that yield should be more or less unchanged. And on the back of the rental growth that we see in our portfolio and on the market, just to give you a rough guidance, a similar valuation result by 2025, where we had roughly a 3% value increase should be a kind of base case. Now, I mean, it's clear we have to look at the development of inflation and interest rates. This development in Iran is very young.

When we look back at 2022, these developments come not into our results and valuation results on the very first day. But whatever is coming, and I'm happy to repeat this, we think we are prepared with our portfolio for that. So even if interest rates now start to increase with a 6.6% gross yield, we are able to digest also higher interest rates if they're coming. But let's see what is happening. For now, we continue with an assumption that we will see another slight value increase in the course of 2026.

Okay. My third and last question, maybe on the P&L. Sorry for that one, but it jumped into my eye. There's a tax position in the P&L of minus EUR 337 million. I didn't have the time to go into the notes to be honest. Maybe you can tell quickly something about that because it seems a bit high, the income tax position there.

Yes, you're right. It's indeed higher than the normal. It completely refers to deferred taxes, and this will be something that just only happens now in 2025. You should not expect similar impacts or effects in the future. What happened there? We changed the way how we account for deferred taxes in the future. That means in the past, we have only accounted for deferred taxes on corporate tax. Now, we also included deferred taxes for all assets and liabilities regarding trade tax, so the German Gewerbesteuer. This is something that we have honestly discussed with our auditor in the past, you find both possibilities on the market. So we know that one larger peer is doing it the way we are doing it now. One other larger peer is doing it the way we have done it in the past.

So now, we are following more the conservative approach because we think for tax purposes, for accounting purposes, looking into the next 10, 20 years, it's appropriate to account for the full tax impact. And honestly, this year, we had perhaps also a chance to have this compensated with another effect on deferred taxes because perhaps you've seen this also at peers. We have a reducing impact on deferred taxes from the future lower corporate tax rate in Germany, the German Gewerbesteuer. And, therefore, we decided to do it at once. So this is purely accounting-driven. This is a noncash impact. This has no impact on LTV, NAV or FFO I. And this is just something that now was taking place in 2025. You should not expect something similar in 2026 or later.

The next question comes from Stephanie Dossmann from Jefferies.

Can you hear me now?

Yes. Stephanie, we can hear you.

Okay. Sorry for that. Martin, just coming back on the acquisitions you've done in Germany, would it be possible to elaborate a bit on who the sellers are? I understand that you acquired several portfolios. So I was wondering if it's coming from same kind of sellers, or well, who are they concrete? And maybe if you could give some color also on how the investment market overall is behaving currently? Do you see more activity and so on?

Yes. Stephanie, perhaps to start with the first part of your question, like what we can tell you is that the larger part of these acquisitions, so the 500-, 600-unit portfolio I mentioned was coming from private equity. Because now we had this one transaction, is it fair to say that this is a trend that some private equity investors who were acquiring asset management intensive portfolios in the past are now starting to sell? I think that's too early. But that could be an opportunity in the future.

You know that some investors who entered Germany in the past, where value increase was fulfilling their business plan, are now back to the hard day-to-day business, where it's all about asset management and a longer-term investment horizon, which is exactly our business model. So that could offer us opportunities in the future. But again, that was one transaction. So perhaps we see other opportunities, but let's wait for that.

On the transaction market, I mean, obviously, I'm sure you know all the market reports, so transaction volume is still, I would say, moderate. But this is okay for us. Yes. We are looking into this really opportunistically. More important, we are not under pressure to sell anything to reduce the LTV. That's done. That has been completed in 2024. So, therefore, yes, we observe the market and look for opportunities. We would, of course, also be open to buy something larger, but I think the more realistic case is that we deploy as in the past 3, 4, 5 years, most of our capital into Poland.

All right. And maybe another question on the P&L. If I'm correct, I saw that the personnel expenses have increased by more than 10% this year. I was wondering if -- I suspect there is no Resi4Rent impact on that. So what is the reason behind that, please?

Yes, I would say that's a split between regular salary increases that we have and indeed a higher number of people working for us in Poland because both businesses are growing, right? So the rental business is growing as well as the sales business is growing. So, therefore, that's a development, which was not unplanned. So I think when we compare it with our internal planning, we have more or less achieved exactly the numbers that we expected to end up with.

Okay. But without -- I mean, restated from the Resi4Rent, what should we expect for '26, excluding Resi4Rent, I mean?

So let's -- I try to give you a sense of, let's say, like-for-like personnel cost increase. So if you take perhaps something between 3% and 4% or 5%, perhaps that's a good estimate, which is then driven by salary increases in Germany and salary increases in Poland, which are perhaps because the absolute amounts are a little bit lower, it's a little bit more pronounced. That's perhaps a typical like-for-like development. And with the Resi4Rent portfolio, we are also taking over around 80 people. And this has been included in all the numbers that we have published when we acquired the portfolio, so regarding EBITDA and so on because clearly, we need also some people to manage the portfolio on the operational side. So therefore, there should be higher personnel costs, but of course, higher rents. And perhaps you remember our announcement in August, we are operating this Resi4Rent portfolio on an EBITDA margin of around 80%. So, therefore, that should be a quite efficient integration.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Martin Thiel for any closing remarks.

Yes. Many thanks to everyone for dialing in into our conference call. And many thanks also for the good questions. As always, if there's anything left, please feel free to contact us. We will be happy to answer, and we are happy to see you in the next weeks and months on roadshow and at the latest after our Q1 results in May. Many thanks, and have a good day.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the TAG Immobilien Publication of Interim Statement Q3 2025 Conference Call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Martin Thiel, CFO. Please go ahead, sir.

Yes. Many thanks, and good morning all, and a very warm welcome from our side. Many thanks for dialing in for our Q3 results. As always, let's start on Page #3 of the presentation, which shows a comprehensive overview about our results in the first 9 months and also gives a first outlook on the guidance for 2026.

Let's start with the operational development first in the first 9 months of 2025. FFO I in the first 9 months of 2025 came in at roughly EUR 136 million compared to the previous year, that's a 4% increase. And that's important to point out that this increase was mainly driven by a higher EBITDA contribution from our rental business in Germany and in Poland, which increased by 6% year-on-year.

Looking at the sales result in Poland, we had a result that was more or less on the previous year level, so a little bit reduced EUR 34 million was the sales result compared to EUR 38 million in the previous year. But as already stated in the previous conference calls, we expect that in the fourth quarter of this year, we will have a large number of apartments handed over. And as you know, as the result is realized when we hand over the apartments, we expect a quite strong increase in the fourth quarter 2025 for the sales result in Poland. But very positive, the development in the sales number. You see this on the right side, we sold in the first 9 months, 1,973 units in Poland that compares to 1,435 units in the 9-month period in the previous year and especially the third quarter was a very strong one. I will come back to this a little bit later.

Looking at the LTV development, it's quite strongly down at 42.3%, also driven by a capital increase that we conducted in August 2025 already to partially finance the Resi4Rent acquisition, we issued 7% of the share capital, total net gross proceeds at EUR 186 million, but also the operational development was quite helpful in reducing the LTV. Of course, fair to look at a kind of pro forma LTV post the closing of the R4R acquisition. This pro forma LTV would stand at 46.1%, so even after the acquisition, the LTV is down compared to the beginning of the year and already very close to our LTV target of 45%. So in a normal course of business, we would expect that we quite quickly, perhaps in the first 1 or 2 quarters of 2026, already at the LTV target of 45%.

Looking at the guidance, firstly, for 2025, we increased the FFO I guidance to EUR 174 million to EUR 179 million. If you look at the result that we have achieved in the first 9 months, that should be all on a good way. As always, we expect in the fourth quarter of a year, a little bit more maintenance in the German business, so therefore, perhaps the Q4 result in FFO I is a little bit weaker than in previous quarters or will be a little bit weaker, but clearly better results than expected in 2025 for the total year on a per share basis, taking into account the higher share count after the capital increase, FFO I guidance is then more or less unchanged.

For 2026, we expect a quite strong increase. So the guidance range for 2026 is between EUR 187 million and EUR 197 million. It assumes a closing of the R4R portfolio at the beginning of the second quarter or at the end of the first quarter. I will come back to this a little bit later in more detail. So this is a quite strong growth that we predict in the FFO I, 9% in absolute amounts, 4% on a per share basis.

Even stronger is the growth that we expect in the FFO II guidance. So firstly, we also increased a little bit the FFO II guidance for 2025 following the increased guidance in FFO I. But if you look at the results that we predict for the Polish sales business in 2026, where we expect nearly 50% growth, you see that the increase in FFO II that we expect for 2026 will be quite material. So the new guidance stands between EUR 279 million to EUR 295 million. That's an increase of 19% in absolute terms and still on a per share basis of 14%.

As we already announced, we want to increase the payout ratio for our dividend for the first time for a dividend paid for the financial year 2026. So this is a dividend that is paid out then at the beginning of 2027. And the new payout ratio is set at 50% of FFO I compared to 40% of FFO I for the guidance for this year. And this translates into a quite strong growth in the dividend of nearly 30%.

On Page 4, you'll find more details on the financial performance and the German portfolio. I don't want to discuss with you every figure, but perhaps interesting at the bottom of the page that we have begun also to acquire in Germany again. So yes, it's still a quite small number. So 367 units acquired until end of October 2025, but perhaps there's more to come in the next week. So we are finding opportunities, yes, on small sizes on one side. But if I look at the average acquisition multiple or a gross yield that we achieved around 10%, so these are really high-yielding assets, quite attractive portfolios, still vacancy rate in these portfolios, locations that we know very well in Eastern Germany. So we're happy that we acquired also some units in Germany. And yes, of course, we have to invest into these properties, but not massively. So therefore, we see opportunities in the German market as well, although clearly, as already mentioned in the previous calls, the main capital allocation is currently happening in Poland.

Let's jump to Page #7 of the presentation, where you'll find more details on the FFO I development. I think I already mentioned the main highlights of increase by 4% year-on-year. Just as an explanation, if you look at the table, you'll find also one-offs that we eliminate. In this case, we're eliminating gains, in a negative number is EUR 1.9 million. So just as a background, you find also more details in the interim report. We’re eliminating subsidies that we received for modernization work. So therefore, we have, for the first time since longer ago also already one-offs that we eliminated here.

Let's go to Page #8. Page #8 shows you the development of FFO II, which is based on FFO I plus the Polish sales business. As said, the third quarter was already a good one. So the adjusted net income from sales in Poland came in at EUR 17.6 million compared to EUR 11.6 million in the second quarter. And I think the first quarter was even lower. But once again, we expect now for the fourth quarter as a result of high handovers, a quite strong result. So therefore, we are very confident that we achieve our full year guidance for the sales result in Poland.

Page #9 shows development of the EPRA [NTA/NAV] also on a per share basis. We still had a growth in the third quarter despite the capital increase conducted obviously below the NTA, but this impact was not meaningful. You see this on the chart. So the dilution effect on a per share basis was EUR 0.35, that means the net profit that we achieved during the first 9 months was far higher than this smaller dilution effect.

You see that we had in the first half a positive impact on the NTA per share from the portfolio revaluation of EUR 0.69. If you remember the numbers, we had in Germany a value increase of 1.4% in the first half of 2025. If you ask us what is the expected valuation result for a second half 2025, I mean, obviously, as of today, we have not a precise number, but we expect that the value uplift in our German portfolio should be very similar to what we have seen in the first half. So something around 1.4% like in the first half of 2025 is that's a good estimate. And that's, yes, of course, on one side, still a small value increase, but important that we are now seeing the third valuation in a row in Germany where values are growing again. And that's, of course, helpful not only for the NTA, but should also support the LTV development at year-end 2025.

Then I'm on Page #11 of the presentation that shows the maturity profile. And what I wanted to explain here is our quite strong cash position that we had at the end of the third quarter. So in total, the group had available nonrestricted cash of EUR 1.35 billion, which is, of course, for us, quite exceptional high. But out of this EUR 1.35 billion, roughly EUR 565 million is then designated for the purchase price payment of the Resi4Rent portfolio, which is still outstanding.

And we have a larger maturity next year, which is the EUR 470 million convertible bonds maturing in August 2026. So we have the cash already in the balance sheet, and we will use part of our cash position to repay these convertible bonds. So a kind of normalized cash position after payment of the purchase price for the Resi4Rent portfolio and after the repayment of the convertibles is around EUR 300 million, EUR 350 million. And that's still a good cash position, but it's good to have it because we still want to grow and want to continue to grow, especially in the Polish rental portfolio and the cash will be, of course, the basis for this.

Let's come to the German business, and I'm now on Page 13 of the presentation. Quite good development that kicked in, in vacancy reduction. So as always, in the first quarter of the year, we had a slight increase in vacancy, so we started the year at around 3.9%. Now here, we present also the vacancy rate from October, which is already down to 3.6%. And when we look in our business in the last days and weeks, how this develops, we clearly expect further vacancy reduction until year-end. So therefore, the German portfolio, which should perhaps not be a surprise, is still performing very well.

Looking at the like-for-like rental growth in Germany, that was a little bit reduced compared to the previous year in the first 9 months. So 2.3% in the basis like-for-like rental growth and 2.6% in the like-for-like rental growth, including vacancy reduction. But as I said, firstly, we expect a stronger impact from vacancy reduction in the fourth quarter. And secondly, regarding the basis like-for-like rental growth, it's not a trend that this is going down in the future. So therefore, we should also see here an improvement in the fourth quarter of 2025. There's simply also kind of seasonality in there depending on certain rent increase you do in a quarter or do not in a quarter. It's clearly on an increasing path and the guidance for 2026, which I explained a little bit later, will also confirm this.

Let's look at the Polish business, and I'm now on Page 15 of the presentation that summarizes the Resi4Rent acquisition. I mean, we have presented this back in August when we signed the contract, but perhaps some [indiscernible] that are necessary regarding the closing. As you perhaps know, with the press release after the signing in mid-August, we announced that we expect the closing to happen at the end of the third quarter or in the course of the fourth quarter 2025. And basically, there's just one main condition for the closing, which is the approval by the Polish antitrust authority.

We have to accept that the Polish antitrust authority extended the process for looking at this project, this is something where we have not really a chance to accelerate this. So that's still all on a good way, so we expect the approval to happen, we expect the closing to happen. But as it is the first transaction of this kind in the Polish rental market, so there has not been an acquisition of this size before as it is basically the first time that the Polish antitrust authority needs to look at such an acquisition and at such a market, the Polish antitrust authority told us that they now want to conduct their own market research. So that means they will reach out to other landlords, they will do some investigations around customer behavior, and that should take some time. So therefore, as a base case, at the end of the first quarter 2026, beginning of the second quarter 2026, the approval and the closing of this transaction should happen.

Let's look at Page #16. So after the acquisition closes of the Resi4Rent portfolio, we are almost at our strategic target that we announced some time ago. So close to 10,000 units will be the rental portfolio size at the end of 2026, but that does not mean that we are stopping now the growth in our Polish rental business. So we already have units under construction, and we want to start additional construction of around 2,300 units in the course of next year, so in the course of financial year 2026. And as construction takes roughly 2 years, we will finish them in the course of 2028.

So that means we will continue to grow in the Polish rental sector even behind the acquisition of the Resi4Rent portfolio because we simply see the market is attractive. We have a great team and a good platform there. We have a good cash position, as already mentioned before. So a large part of this 2,300 units that we want to start to construct next year is basically already financed from the cash that we have on the balance sheet. And therefore, the further growth in the Polish rental sector is clearly a target for us.

Page 17 shows the operational development of the Polish rental portfolio to keep it short, that's still very good and strong. So the vacancy in the units that have been on the market for more than 1 year is still at a low 2.4% and the like-for-like rental growth is still at a very good 3.4%. So that means rents in our Polish portfolio are still growing despite the really exceptional growth that we have seen in 2022 and 2023, and that gives us, of course, confidence for the further development of this portfolio. So that was the rental business in Poland.

Then a quick look on Page #18 regarding the sales business and look especially at the sales results. So as already mentioned, the number of units sold in the first 9 months and especially in the third quarter of 2025 was higher than in the previous period or in the previous quarter, so we sold 815 units in the third quarter compared to 566 in the quarter before. And it means another quarter or another number of units sold in the fourth quarter like in the third quarter would bring us more or less exactly to a full year's guidance of 2,800 units. And we also see that the sales volume is increasing. So it's not only the pure number of units sold that is stronger, also the sales volume saw a quite strong increase.

So if you add up the first quarter, first 3 quarters of 2025, we are at a sales volume of EUR 327 million that compares to EUR 261 million in the previous year. And we are very happy about this, that we simply observe still quite strong margins. So we're selling in Poland still at gross margins and expect also this to happen in 2026 above 30%. So sales prices remain on high levels, and that creates quite exceptional results in the Polish sales business today and in the next year.

And that brings us more or less to the guidance for 2026, which is shown on Page #21. So firstly, a look on the FFO I guidance for 2026. As I said, an increase by 9% in absolute terms and by 4% on a per share basis. The range that we set for FFO I guidance is quite broad this year. So from EUR 187 million to EUR 197 million, so EUR 10 million and the reason for this is simply the estimate that we needed to do for the Resi4Rent closing. So the guidance assumes that the Resi4Rent closing is happening at the 31st of March, that would be exactly the midpoint of the guidance. So if it happens a little bit earlier, so more in the beginning of the first quarter, then we would be more at the upper end of the range. If we close more towards the end of the second quarter, then we would be more or less more at the lower end of the range. So therefore, the little bit broader range in the FFO I guidance.

But again, still despite the little bit delayed closing, an increase 9% in absolute terms, 4% on a per share basis. Strong increase, as said from -- in the net income from sales in Poland that we expect. So nearly 50% increase as a result of higher handovers next year and as I said, high sales prices and good margins that we currently achieve in Poland and also the joint ventures that we have in Poland now since, I think, 3 years create for us a quite nice service income that also add up to this good development. On FFO 2, it's a quite strong increase, 19% in absolute terms, plus 14% on a per share basis. And as already mentioned at the beginning, you should also expect a quite strong increase in the dividend on a per share basis. So an increase that should add up to 30%.

Page 22 of the presentation explains in more detail the development in the expected FFO I for 2025, which we also increased a little bit today and the expected FFO I for 2026. And as said, the Resi4Rent acquisition is not effective in for full year. You see this year that we assumed the closing for this purpose of the 31st of March 2026. So that's, of course, a main driver for the overall FFO I development, but also the existing German business and the existing Polish rental portfolio, which will grow as discussed strongly in the future contribute to this development.

And finally, a look at Page 23, where you find the key assumptions, the underlying assumptions that we expect for our guidance for 2026. Of course, also the EBITDA in more or less all businesses are expected to increase, so quite strongly if we look at 2026 numbers. Just to mention 1 or 2 things. So firstly, we still expect further vacancy reduction in the German portfolio. So whatever we exactly achieve at year-end 2025 will not be the end of the development, so there is further potential in the portfolio. As you see, we expect that also the like-for-like rental growth in Germany should be better next year compared to this year. So perhaps not surprising trend that the rents in Germany are increasing.

Rental growth in Poland should still be above 3%, so we still see growing rents there in Poland and not only rental business, but as mentioned, especially the sales business is running very well. So when we look into, for example, the sales number of the sold units that we expect next year, we expect that we sell around 2,900 units, and that should be even on the basis of a little bit higher prices. So the sales volume that we expect in Poland 2026 should be close to EUR 0.5 billion. That's it from my side and a quick overview about our 9-month results and the guidance for financial year 2026. Many thanks so far for listening. But now I'm, of course, very happy to take your questions.

[Operator Instructions] Our first question comes from Marios Pastou with Bernstein.

I've got 2 questions from my side. Firstly, on the FFO II for next year, I see that's being supported by quite a significant ramp-up in the level of target handovers. Are you able to mention how many of these handovers are already presold and fixed? And then secondly, on the delayed closing of the acquisition in Poland, is there any risk that they place additional requirements on the deal for it to close or that it potentially gets delayed beyond your expectations? Any further comments here will be helpful.

Yes. To answer your first question, first, it's absolutely correct, so we expect quite strongly increased number of handovers next year. So as shown on Page 23, this number of units should be around 3,200 units, so including what we handover in joint ventures compared to 2,100 for this financial year. So that's, of course, the main driver of the increase. The presale ratio is quite high, so that should be today almost at around 80%. So we have very high visibility on our results for next year. And as you know, it's more only technical risk is that, as always, a larger part of the handover should be in the fourth quarter next year, and we need to hand it over until the 31st of the financial year to realize the profit in the balance sheet and the P&L. So if it's handed over on the 1st of January, then it would be next year. But economically, we have a quite high visibility on that result for 2026 already.

And regarding the Resi4Rent closing, I mean, we're very confident that this closes and why are we? In fact, we are, yes, on the one side, after the acquisition, Poland's largest landlords with roughly 9,000 units, but if you look at the overall market, we are a very small part. So we have 1.2 million rental apartments roughly in Poland, out of which we own 9,000. So that means we are far away from dominating the market. We are far away from a situation where we can set prices. We are really price taker and we are competing really against a large number also of private landlords.

So therefore, all the arguments on our side. But what we have to respect, as already mentioned, is that it takes time that the Polish antitrust authority basically says, well, this is the first transaction of this kind. We have never looked at the rental market before. We need to or we want to do our own market research. And this is something where we not have the influence on the timing. But the estimate that we've given, so something around 31st of March 2026 should be the best estimate that we have as of today.

And then just sorry, as a slight follow-up to my first question. If you're now kind of looking at selling around 3,000 units or just below 3,000 units for next year, could we then think of around that level being a good kind of sales and handover assumption beyond 2026?

Yes. Perhaps we are even a little bit more optimistic because we see a very good development in the Polish sales market. I mean, as you know, the overall fundamental data is quite excellent in this market. But now if interest rates are going down in Poland quite significantly, we see simply more buyers coming back to the market for more people, let's say, more affordable also again to buy apartments. So as of today, if you look after 2026, we're even more optimistic that this number is potentially also something we can increase.

The next question comes from Andrew McCreath with Green Street.

Two questions from my side, please. Firstly, on capital allocation, how are you thinking about this with respect to both the build-to-rent and build-to-sell platforms in Poland? Are you seeing better relative returns in build-to-sell right now? And then my second question would be on the dividend. So announced back in August, your intention was to increase this to at least 50%. And today, of course, you've confirmed this. Does this decision to bump up to 50%, therefore, mean that you aren't seeing much in the way of further acquisition opportunities? And then also perhaps just a bit more color on why 50% given your pro forma LTV?

Yes. thanks for the questions. Perhaps I'll start with the second one. So we are currently -- which is a little bit related to the first one. So we currently pay out or want to pay out 50% FFO I for the dividend for financial year 2026. That's correct. That means we are paying or we have the payout ratio defined in relation to FFO I. So that means we are keeping the full sales results in the balance sheet. And that simply helps us to grow and to grow more or less in two businesses, firstly, in the state business; and secondly, perhaps strategically even more important for us to grow in the rental business.

So 50% FFO I is, in fact, as I say, a smaller part of the total cash flow that we generate here and that's how it should be. So with an increased payout ratio, we are not hurting our ability to grow and we are not hurting our LTV target. So that means in a kind of base case, so we construct apartments on our own, we don't need really additional equity. I mean the equity issuance that we did this year in August, that was clearly on the back of, let's say, exceptional acquisition like the Resi4Rent portfolio with EUR 565 million. But this dividend policy allows us really to grow.

And regarding capital allocation, I mean, on TAG level, we are supporting quite significantly the growth of the rental business because here, you need or you cannot finance debt in full, it's very clear, so you need additional funds or kind of equity proportion for the construction of the apartments. Whereas in the sales business, this business is to a very large part, financed via customer prepayments. And the business, as you can see from the numbers, is generating a lot of cash surplus. So therefore, just to give you an additional comment, as of today, there's no single shareholder loan in our sales business, meaning in our subsidiary, ROBYG. This company is really funding the full growth on its own and is able to grow. So therefore, we are not shrinking or limiting the sales business. We're very happy if this business is growing as well, but it's doing this based on its own cash flows.

The next question comes from John Wong with [indiscernible] Kempen.

Just on that Resi4Rent delay, when you're talking about that the antitrust authorities conducting their own market research, what do they consider as the market? And what's the risk that they consider institutional market in isolation?

Exactly that's the purpose of the market research that the antitrust authority is conducting that they simply want based on their own research, an overview of how does this rental market in Poland look like? So how many landlords are on the market? Is there a differentiation between the landlords? Are there really different segments? Or is it one rental market? In the end, the view of the customer is the deciding one. So that's the purpose of this antitrust approval. So if the customer tenant is looking for an apartment, is there only one type of landlord he normally rents from? Or is it a broad market? And the second option is the case, right?

So we know from customer service that, of course, most important for the choice of the customer is the price of the apartment, location of the apartment, standard of the apartment. So a decision is more or less never really based on from whom am I renting for and if you look at Internet platforms and you cannot even select offers based on who is renting out the apartments. But this is something that you can read currently in reports issued from [indiscernible]. In fact, the antitrust authority and we have to accept this says, okay, that's all good. We see this, but we have not investigated that on our own. So therefore, we have to accept that this takes them sometime weeks and therefore, the approval and the closing of the Resi4Rent transaction is postponed.

And just at the -- looking at the development start for build-to-rent, it's quite a significant step-up compared to what you historically have been -- have had under construction. At the same time, you said that there's scope for more units in the build-to-sell segment. So just trying to understand, are you growing your overheads? Or was the platform underutilized? And how should we think about the run rate of developments per annum for both segments?

Yes, the platform is definitely able to do this. So an additional 2,300 units construction start in the rental business compares units under construction that we had in total, for example, when we have taken over ROBYG, was, I think for sales business, was between 6,000 and 7,000 always units, and it's not far away from that today. And yes, we have in 2022, 2023 after we also sold at that time with lower number of units reduced the number of employees, especially construction department, and we have increased this in the past month. But it was never a change in overhead or as already mentioned, we have never weakened our margins by doing that. So the platform has definitely the potential to do this. So we are not concerned that with this new construction start, we are, how should I say, overstretching the capability of the platform.

And just on run rate, how should we think about it in, say, '26, '27 in terms of new development starts?

Yes. If you want an outlook for the rental business, firstly, we decided to give this year by year. But as we said, we want to grow further. So perhaps 2,300 units construction start is a little bit more the upper end on what could be a future run rate. So if you ask us for a base case, let's assume that perhaps around 1,500 units, perhaps a little bit more is a good estimate for something that we can start every year.

And again, this number of units could be financed purely from the cash surplus that we get from the sales business, plus, of course, from the now really growing cash flow from the existing rental portfolio plus then some additional debt that we get back from TAG level without hurting the LTV target. That's for us important. We have a very visible growth opportunity based on cash flows that we produce in the portfolio already based on financing assumptions that are not aggressive, and we know that the LTV is not going up while we carry out this plan.

Our next question comes from Thomas Neuhold with Kepler Cheuvreux.

I have two. The first is on the Polish build-to-hold portfolio. If I compare Q3 figures with Q2 figures, obviously, you reduced the number of units, which you want to build quite significantly. I was just wondering, did you move units from build-to-hold to build-to-sell? Or did you just reduce the speed of the rollout after the acquisition you just did recently? That's the first question.

Yes, indeed, with some projects, we beat it a little bit because although the cash position is quite good to be too aggressive to start construction with a lot of units. And then on top of that, the acquisition without having the financing in place, that could have been perhaps a little bit too, too aggressive. But now, more or less, the plan to grow the portfolio is still unchanged. It's a time shift of some months. But overall, it has not really changed. Perhaps it's a little bit more, as I said in the answer before, what we want to start in 2026 compared to what should be the run rate in the future, but the plan is clearly to grow the rental portfolio further.

And my second question is on the 2024 FFO I guidance. If I do a simple math, that implies an FFO of EUR 39 million to EUR 43 million in Q4. You achieved EUR 45 million last year in Q4. So I was just wondering, you mentioned there's a certain seasonality and modernization spending. Is this seasonality stronger this year? Or is this just a conservative guidance?

[indiscernible] obviously comfortable to be more on the lower end or more on the conservative side. But also to make clear that there should be a little bit more maintenance in the fourth quarter. So therefore, the range EUR 174 million to EUR 179 million makes us -- is really something that we absolutely believe in and it should not be – but not be aggressive. And so therefore, we think it's appropriate to set the guidance in this range.

The next question comes from Sheetal Jaimalani with Deutsche Bank.

Can you hear me?

It's Thomas. Actually, one -- two questions on the German business. I mean you referred to attractive acquisition opportunities, and I think you mentioned yields of 10%. What would be the maximum amount you would allocate here? I mean, let's assume there would be an opportunity to acquire a large German portfolio.

Yes, then we would also do more. But is this a very realistic case that in such years, you find large portfolios. And again, to be fair and to be fully open, the 10% growth yield is, of course, a little bit -- needs to be seen in relation to some additional modernization work that we need to spend. So after the modernization work, perhaps we are ending up at a sustainable growth yield to call it like this of perhaps 8%, which is still good. But the situation in the German acquisition market is that you find such opportunities, but more in the smaller sizes.

If there would be something larger on the market, we are happy also to take this opportunity, always having in mind that we have good growth perspectives in Poland and you know our growth yields there, but we did not, how should I say, stop the acquisitions in Germany. We are not saying that we only want to acquire in a certain size, it's really dependent on the market. So if you ask me for a realistic estimate, yes, we will continue to acquire in the course of 2026. If we have a chance to buy something larger, happy to do it. But you should expect more something in the sizes of some 100 units per quarter.

And the second one is on the Poland rental business. I mean, you plan to grow further through constructions. I mean, how about acquisition opportunities like we saw with your recent portfolio acquisition?

That's definitely also in a future an option. Resi4Rent acquisition was, of course, regarding the size, exceptional. So a portfolio of 5,320 units in Poland is not on the market every quarter. But as already mentioned in the past, we are not the only larger landlord in Poland. If you look at other larger landlords, like Resi4Rent, for example, most of them have an investment horizon of perhaps 5 or 7 years. So in some cases, also private equity backed, they will exit at some point in time. And yes, we will definitely look at such portfolios and also happy to acquire in the future. If then the pricing fits, that's another question. But generally, we are very open to further acquisitions in the Polish rental market as well.

Our next question comes from Celine Soo-Huynh with Barclays.

Can I ask you two questions, please? The first one is about -- you raised the capital in August for the transaction closing now in end of March, best case. What are you planning to do with the cash until it gets deployed? So that would be my first question. And then my second question is, can you tell us what you have assumed regarding the rolling of the convertible bond maturing in August? And also if there is any scrip dividend assumption into your FFO I and II guidances?

Firstly, you're correct, we raised the capital for the acquisition. So the capital increase plus the bond issuance already in August. This cash is currently on the balance sheet in our bank account. That's the reason why we have the strong cash position. We've already converted this into zloty because we need to pay the purchase price in zloty. So there's no foreign currency exchange risk into that. Good news is that currently, we get on deposits in zloty interest income of around 4%. So that reduces a little bit the earnings impact from the delayed closing.

Better situation regarding cash for the Resi4Rent portfolio and for the convertible bonds maturing in August 2026, and we are simply repaying this convertible bond from the existing cash position. So as I mentioned, the cash position -- strong cash position that we currently have will be reduced in 2026 by, firstly, the purchase price payment of Resi4Rent and secondly, the repayment of the EUR 470 million convertible bonds in August. And after that, we still have a cash position of around EUR 350 million, which we then use for the further growth in the Polish rental portfolio.

And then regarding the last question, we have based our guidance for financial year 2026 on the current number of shares outstanding. If we again opt for a scrip dividend will be decided in March, so we will give you a guidance with the full year figures. But if you look at the impact from the last -- from this year's scrip dividend, that would not change our per share guidance. So it's not that meaningful. Let us decide, please, in March where we stand there, if we say it makes sense to support a little bit the growth further by another scrip dividend or if we change back to a full cash dividend, that's not decided already. But again, the impact is not that material.

The next question comes from Manuel Martin with ODDO.

Two questions from my side, please. On the Polish business as it is growing continuously, have you thought about zloty hedging one day because for the time being, I think TAG is unhedged. Might it make sense to do that one day? And if yes, at which point?

Firstly, perhaps to explain our financing structure in Poland. The Polish sales business is fully financed in zloty. So on the one side, of course, a main financing or main financing is coming from customer prepayments, which are obviously in zloty. Secondly, we have local bank loans also issued on the Warsaw Stock Exchange, some bonds in zloty. So that's fully financed in Polish zloty. Regarding the rental portfolio, it's financed in euro. In absolute terms, even after the Resi4Rent portfolio acquisition, I think the total debt, which is allocated then to the Polish rental portfolio is around 10% of our total debt. So that's not -- but it's still a manageable portion.

For now, every zloty that is earned in Poland stays in zloty and is reinvested. This will change in some point of time. So at some point of time, the rental portfolio will be even more meaningful. That will be the point in time where we transfer cash from Poland to Germany, for example, to pay out a higher dividend for our shareholders. And at that time, which is perhaps not 2026, we will look into hedging strategies for this cash flow. But as we are a long-term investor in Poland, we don't need to hedge any equity portions or other things at one point in time right now, it's more about the future cash flows that we will then start to hedge in the future.

And second question from my side. The potential value increase of the TAG portfolio in the second half of the year, this plus 1.4%, is this including CapEx measures? Or is it -- or is this what we might see as a value increase coming from the market? And do you have any view on that for the time being?

Yes, this includes the CapEx impact like in the figures before, so the 1.4% that we had in H1, I think it was 0.9% in H2 last year is the like-for-like value increase so after CapEx measures. If you eliminate that, the pure valuation result that is in the P&L is a little bit lower. So it's not perhaps 1.4%, it's more 0.9% or 1.0%. So that's not a super huge impact, but it includes CapEx.

The next question comes from Kai Klose with Berenberg.

Three quick questions, if I may. The first one is on Page 15 of the 9 months report. The impairment losses were in 9 months, EUR 3.5 million. So EUR 1.5 million in Q3, so a little bit higher. Is this mainly -- I assume it's mainly for the German portfolio, but maybe you could explain what is the reason for the slight increase Q-on-Q? Second question is on Page 17. We had quite a strong increase in other services for the joint venture in Poland. Could you remind us, is this now more or less completed? Or can we expect any more or significant contribution in Q4? And last question is on the government grant of EUR 3.4 million, this was EUR 1 million in H1. Could you also remind us what can we expect for full year and maybe beyond for this item?

Thanks for the questions. First, to explain the volatility in impairment losses. Firstly, that's more or less purely from the German portfolio. We are always doing in the third quarter of a year an update, so compare what we have seen in the past 9 or 12 months in reality compared to our estimates, and therefore, there's always an adjustment. I think this year, it's a little bit up. Last year, if I remember well, it was a little bit down. So there's a slight volatility always in Q3. But overall, if you compare that on an annual basis, and this is also true for the definitely next year to come, there's overall not an increase in impairment losses in German portfolio. I mean, to the contrary, I think this number is getting a little bit better year-by-year. So that's more technical as we do this update every year at the end of the third quarter.

The other services in Poland indeed contain the services that we do for the joint ventures in the sales business. What are we doing here? So we own normally 50% of the joint venture company, and we do, in addition, the full construction work, we're doing the full planning process. We're doing the sales. We are doing the customer service. And for all this, we get then fees. There's some volatility based on the number of apartments sold in the JV. So if we sell more in 1 quarter, obviously, the service fee is higher. But also here, perhaps it makes more sense to analyze that the full year figure -- so what we have already seen 2024 and what we will see in 2025 is perhaps a good estimate for the years to come. Perhaps to give a general flavor of the size of our joint venture business, we are selling all that -- in the sales business, I would say there's between 20% to 25% of the total sales business currently within JVs and the remaining part, so 75% to 80% is really for the [indiscernible] part.

And regarding the government grants, that's difficult to predict because this is then coming once we really receive the approval from the government. This is mostly related to subsidies for modernization work. And as I explained during the presentation, if this happens, we are eliminating this from FFO I because as we are capitalizing the expenses, it makes no sense, although it would be, of course, some positive impact, but it makes no sense conceptually to include this grants or the subsidies in FFO I. So whenever it comes, we will eliminate this from FFO I.

And just a second question, where do I see the elimination in the FFO calculation?

In the FFO bridge. So you'll find this in our interim report. And if you look in the presentation on Page 7, you also see this elimination.

[Operator Instructions] Our next question comes from Simon Stippig with Warburg Research.

First one would be on Page 5 of your presentation. You show the Polish portfolio overview and more precisely on the rental business, you show your gross asset value of EUR 700 million -- almost EUR 730 million. So in regard to that, my question would be what's your LTV on that portfolio, your gross debt? And I would also be interested in the debt split. So how much of the debt is, for example, in shareholder loans?

Well, to give you the figures here on the Polish rental portfolio, we have bank financing of EUR 119 million and the remaining part is then shareholder loans. And we are deciding for shareholder loans because in the meanwhile, it is cheaper for us to issue on TAG level bonds and then to grant to our subsidiary in Poland, this proceeds of shareholder loans because the margins that we have in our bonds today are lower than the margins that we get from bank loans in Poland on the rental business.

Just to give you the dimensions. So currently, a 5-year TAG bond is trading at a margin of around 120 basis points. That's more or less exactly the margin that we get from German banks. Perhaps German banks are a little bit cheaper, but difference is not that huge anymore. Polish bank loans would be margins of perhaps EUR 180 million to EUR 200 million. So therefore, we are financing that to a larger part for this economic reasons from group perspective by shareholder loans.

And if we then grant the flows to the financing for the Polish rental portfolio via shareholder loans, as I explained or if we put in some equity into our subsidiary in Poland, that's more or less completely tax driven. So at the moment, I think we have roughly EUR 200 million of equity remaining part of shareholder loans and as I said, EUR 190 million of bank loans.

And for 2026, you -- do you plan any net investments from Germany into Poland due to your ramp-up in the rental portfolio? Or you cross finance that only from your sales business in Poland?

Yes, we use also part of the existing cash from that. So if I simplify this a little bit, what we have as cash position in the balance sheet as of today is enough to finance the construction work for the rental portfolio in 2026 and 2027.

And last question would be in regard to FFO. I think it's Page 7. There you show on a quarterly comparison from Q2 to Q3 and also 9 months '25 to '24, you AFFO decreased materially. I think it's EUR 16 million on a 9-month period basis. And then obviously, you have higher modernization CapEx, but could you comment on that? What are you using it for? Is that a run rate for the future in regard to CapEx? That would be much appreciated.

Well, I mean we are now on a level where modernization CapEx for basically energetic modernization of the buildings in Germany has reached a level that we expect it to continue in the future. So we have ramped that up more or less year-by-year. It's not a linear function. So also this CapEx has a kind of volatility depending if we start new projects or if we do it a little bit later or earlier. But we are now simply on a level that we basically already predicted when we published our decarbonization strategy back in 2021. So you should not expect, how should I say, a very strong growth in the years to come.

Ladies and gentlemen, this was our last question. I would now like to turn the conference back over to Martin Thiel for any closing remarks.

Yes. Again, many thanks for dialing in and for listening to our call. As always, if there are any questions left, please feel free to contact us. Happy to answer that any time. Have a good day, and hope to see you soon on conferences or at the latest in March next year for our full year results. Many thanks.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.