CTP (Euronext:CTPNV) Q3 2026 Earnings Call

0:00 Hello everyone and thank you for joining the CTP Q3 2026 results webcast. My name is Lucy and I'll be coordinating your call today. During the presentation you can register a question by pressing star followed by 1 on your telephone keypad. If you change your mind please press star followed by 2 to remove yourself from the question queue. And if you've joined via the webcast you can ask a text question via the Q&A tab. It is now my pleasure to hand over to Remon Vos, CEO to begin. Please go ahead when you're ready.

0:33 Good morning everyone, it's me speaking from our Prague office at CDP here and happy to report good strong first nine months of the year we've seen lots of leasing compared to same period 25 approximately 23% up year on year that has been good with different clients taking space in different locations Poland has done quite good with take-up from existing clients, but also from some of the Asian companies we work with. We've seen bigger deals of 100,000 square meters in our projects along the German border. We have seen in Hungary, Lenovo. We have also seen in the Czech Republic along the Prague-Pilsen corridor, where we have been able to do deals with companies involved in the pharmaceutical industry. and others.

1:31 Romania and Bucharest have seen significant take-up and deals done, which is good so far. Spread around the region. So far, the different changes and things happening have been good for the region, good for CTP. We've been able to benefit from this, as we can see in the amount of take-up on a year-by-year basis. The drivers of this company are many involved in manufacturing and then CEE is a good place, it's cost effective, business smart. Other is related to consumer spending. We also see supply chain move to the region as we have seen before, but also we see that companies professionalize, they become more maybe lean and mean or different mindset. Some companies still move away manufacturing or activity from Western Europe to Central Europe. The same happens with companies moving in from Asia.

2:21 Yeah, all kinds of different industries. We spoke about it before, free time fashion, PET, but also semiconductor industry. Others are the new car industry, the Tesla factory in Berlin doing quite well. We have companies supplied to that, but of course also have a lot of Automotive industry in the region, the new automotive I mean, so the EV vehicles, active vehicles, which BMW, Debrecen, but also some of the Asian companies who've been active, the Koreans in the region, but also other car makers, which is also part of our business and the clients we work for are involved in somehow. So very much a mix of Thank you very much. And talking about our existing clients, that's also where most of the business comes from. Approximately two thirds of all the leases we do, we've done with existing clients.

3:22 And we are actively hunting for new clients for companies to connect to and actively chasing and doing lead generation, which is quite successful so far. In numbers, 90% of our clients have been able to agree renewals or retention, if you like. Our clients are good, healthy, strong companies. 99.3% pay their rent, mostly on time. And together it's more than 1,700 different companies who we work with. The integrated business models, our CT Park concept, has worked well over the past year. We continue to extend our parks. We also continue to improve and provide different facilities and amenities on site.

4:08 Energy has been important and remains a focus point to make sure that we do have the right amount of energy on site. And also with regards to the energy business, we do not only make sure that we have enough energy on site, but also we look after distribution of energy within the business parks. We store energy in our parks. Thanks for watching! I want to talk to you about the different businesses and activities we have at CTP, as we do talk about operator-developer, whereby obviously the operator looks after the income producing, developer is the in-house construction company. With regards to the operator, that means around €450 million of free cash on a 95% occupancy.

4:56 We are working on increasing occupancy. With regards to the developer, we have around 1.7 million square meters of buildings under construction. So far delivered this year, 561,000 square meters. The 561,000 square meters is around 10% yield on cost. And we will continue to complete more properties during the course of this year. Once we have the 1.7 million square meters complete, that will produce an additional income of approximately 130 million euros. With regards to the growth engine, I can maybe sometimes refer to it as a third activity, the expansion, growing with tenants in other markets, which we have done successfully over the past decades. And one example is Poland, where we entered in 2022, where we have a portfolio of approximately 1.3 million square meters now income producing and growing.

5:48 Other examples are Italy, where we recently entered and we have been able to complete this year 166,000 square meters. And that's located south of Milan and there is a lot of pipeline in Italy also south of Italy between Rome and Naples where we have opportunities but also in Padova in the north where we have started construction with a new project also happy to report that we're making good progress in Vietnam in Asia we see opportunities there to work for existing clients and we have two sites secured and we're working on growing more and doing more I mentioned energy in our parks and there is definitely opportunity to grow that business As we learned from the pilot projects we have done in Germany so far, in Wuppertal for example, which we agreed to allocate another 20 million euro, and we'll also continue with the projects we have in Mulheim and Dusseldorf to make sure that the energy concept will also be implemented in those new developments.

6:45 What else can I report on is the progress we are making here at CTP to become a better company as the focus has been on bigger very much. For us, having reached now this level and getting prepared for the next growth, we want to make sure that we become a better, stronger, more efficient, more effective company so we can do the same amount of work with less people. So that was what we are working on hard. That includes leadership change. That includes also getting new software, new systems, new processes in place, which will make it more competitive and will then support our future and growth plans. I'll head over to Maarten and I'm available to answer any of your questions later on. Thank you.

7:30 Turning to the financial highlights. Portfolio like-for-like rental growth came in at 4.8% for the first nine months. Driven by continued rent reversion capture and indexation. Illustrating our capability to grow our top line consistently. Occupancy remained stable at 93%, with the vault up at 6.3 years and client retention at 93%. The target is to increase our occupancy level. Cross-rental income increased by 12.5% year-on-year to 632 million euros. Net rental income increased by 12.8% to 690 million euros, maintaining an NRI margin of 98%. Analyzed rental income reached 871 million euros. And together with the 130 million euros of potential annual rent from the 1.7 million square meter we have under construction today, we have a clear visibility of our target of over 1 billion euro rental income in 2027.

8:28 This rental income generates a strong free cash flow of over €450 million to reinvest in our business and is the basis for our self-funded growth. Our company-specific adjusted APRA earnings increased by 9.8% year-on-year to €365 million. This translates into €0.75 per share, an increase of 7.4% year-on-year. We remain on track to deliver our full year 26 company-specific adjusted EPRA earnings per share guidance of 1 euro and 1 cent to 1 euro and 3 cents per share. And now looking at the valuation results. For the Q1 and Q3 results, only the investment properties under development are revalued. In the third quarter, our revaluation result was 139 million euros, bringing the 9-month net valuation result to 56 million euros.

9:19 Year-to-date, we have a positive revaluation of €250 million coming from our developments, with leasing and construction progress, more than offsetting the negative revaluation of €150 million in the standing portfolio in the first half. For the year-end, we expect stable yields and stable ERVs. Gross asset value reached €19.4 billion, up 9.8% year-on-year. APRA NTA per share increased to €20.78, up 4% year-on-year. In terms of capital allocation, our focus is to complete the pipeline we have under construction, with limited land bank acquisitions. These are mainly in our growth markets, as in the core markets we have sufficient land. We also announced a share buyback program of up to 100 million euros over a 12-month period. At the current level of discount to APRA NTA, we see repurchasing our own shares as an attractive capital allocation opportunity.

10:16 Execution will be gradual and disciplined, with limited impact on leverage. We continue to execute on our strategy with disciplined talent-led expansion, leveraging our existing international client relationship and applying the build-to-own model that has been so successful in Europe. Growing our recurring cash flow, delivering sector-leading profitable developments and compounding long-term shareholder value. And now I hand over to Richard.

10:46 Turning to our balance sheet and liquidity. In the first nine months, we have raised and refinanced 2.2 billion euros of debt, demonstrating our continued exceptional access to capital markets and disciplined liability management. In August, we issued a new €500 three-year green bond at a spread of just 65 basis points and a coupon of 3.625%. The order book reached €2 billion, four times oversubscribed. This was very attractive funding, particularly in the current interest rate environment. The shorter tenor was a deliberate choice, supported by the extension of our €500 million syndicated term loan earlier this year from 2029 to 2032.

11:34 Our liquidity remains strong at €2.1 billion, comprising €400 million of cash and €1.7 billion of available committed revolving credit facilities. We continue to rebalance our capital structure towards unsecured funding, Currently at 72%, we have a medium-term target of around 80%. We have no remaining maturities in 2026. Our next bond maturity of 500 million euros is in February of 2027. This is our last bond maturity until June 2029. This conservative liquidity structure provides substantial flexibility and a comfortable position in a higher-for-longer interest rate environment.

12:23 Importantly, 99% of our debt is fixed or hedged, with an average maturity of 4.5 years. Our average cost of debt is 3.3%, and most of the repricing of our historic low-coupon debt is now behind us. As bonds issued before March 2022 represent only 16% of our total debt stack. We therefore expect only a limited increase in our average cost of debt, even if market rates remain elevated. Turning to our key credit metrics, our loan-to-value stood at 46.6%, slightly above our 40-45% target range.

13:09 Our normalized net debt to EBITDA decreased to 9.5 times, and our interest coverage ratio remained at 2.5 times, comfortably above covenant levels. Over time, our growing recurring cash flow and profitable development combined with disciplined capital allocation will bring leverage back within our target range. We do not rely on asset disposals or additional equity to fund our current development pipeline. And as completed projects start generating rent, they support both interest coverage and the deleveraging of our balance sheet. Our growth remains underpinned by the growing cash flow from our standing portfolio and our healthy development pipeline where we target a 10% yield on cost.

14:05 We remain focused on growing income, improving our credit metrics and delivering long-term shareholder value. Thank you for your attention. We now welcome your questions. Thank you. If you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad now. If you change your mind, please press star followed by two to remove yourself from the question queue. If you've joined via the webcast, you can ask a text question via the Q&A tab. When preparing to ask your question, please Hi, good morning. Thanks for taking my questions.

14:50 On the share buyback, I appreciate that your view is driven by the wide gap to intrinsic value. At the same time, leverage is still a discussed topic. And you obviously said that LTV is going to move back towards your target over time. But I think at the CMD, you also mentioned that you are open to selling a couple of standing assets where there's little value creation left for you. This, I suppose, would also help addressing leverage while supporting the share buyback. So I'm curious, how far are you in identifying these assets? Hi, John.

15:29 It's Marta speaking. You want to say that? Sorry, sorry for the echo.

15:58 So on the question regarding the assets, yeah, we have a clear view, of course, on our assets because we are reviewing them and our accounting management teams are reviewing them on a yearly basis. We are now also working, for example, on our budget for next year. So we are going through the assets that we are having. Where is the value creation potential in terms of development? Where are the leases coming up for expiry? And can we basically get that reversion potential? So that's a normal process which we do on demand. On a yearly basis, actually, or even more frequently as we are looking to the assets. But that doesn't mean that we, of course, we are open to the idea of selling some of the drier assets. But at this stage, we have nothing planned.

16:50 www.patreon.com On some of our assets, that shows that there is liquidity in the market, that shows that there is value, and we'll execute them when we think the time is right. Okay, that's fair. And then on the quarterly leasing numbers, I suppose it suggests a bit of a softening in the month, which you already mentioned before, I think.

17:36 I appreciate that quarterly numbers can be quite volatile, but Looking forward at your leasing pipeline, should we expect an acceleration in leasing momentum already in the next three to six months or is this something more for next year?

17:53 Hi Sean, it's Remon. Well, we have done so far good Q1, Q2, you saw that. And if you add everything together, we're still 22% plus. So it's not bad. It's better than it was last year. And typically, yes, indeed, Q3 is a bit slower in terms of take-up and getting things signed. and maybe also during the holiday season. But normally Q4 is more active when it comes to closing and signing leases. And we are optimistic for when it comes to closing leases. Leases and we continue to see an increasing demand. If you look at the amount of proposals we do, that's much more than a year ago.

18:44 Also in Germany, by the way, there also we see more demand. And yeah, we believe that these requirements will turn into deals indeed. Yes, so we continue. We believe the trend will continue. And maybe it's 30% plus by year end, let's see, compared to previous period last year.

19:09 Yeah, and John, I would say if you look at the comparison 25 to 24, we were 8% up this time on a year ago, this time last year, and this year we're 23% up. You know, so we do think that we see strong leasing, as Remon said. So, you know, one quarter can be a little weaker, but overall, there is, you know, ongoing strong leasing demand. Yeah, that's fair. So given that you said that 30% up by year end could be possible, it just sounds like Q4 could be another quite a strong quarter, if I understand it correctly.

20:26 What is it? 56 million versus 28 in H1 while the development pipeline came down. Can you explain whether you changed the accounting approach here or what happened? My first question.

20:39 Yeah, no, there's no change in the accounting approach. What you see is that as projects approach completion, which is what was happening in Q3, and then as we do more of the construction, the amount of interest that we're capitalizing goes up because the amount of money that we've invested in the iPad increases. Okay, that is clear. Then on the yield and cost that came down, could you please elaborate why that is and provide the yield and cost for your most important countries and how that changed?

21:21 That's to do with the country mix. So we target to get above 10% or 10% across the whole portfolio. We were a little bit higher in the first half of the year based on the countries where the The deliveries came in Q3. Two of the larger deliveries were in Italy, where we know we don't get the 10%. So we're happy that we did 561,000 square meters at 10% yield on cost. So far this year, we expect to be at the 10% across all of the deliveries for the year. Overall, markets haven't really changed. We can't get 10 in Germany, we can't get 10 in Italy, we can't get 10 in Poland, we can't get 10 or better in most of our other markets.

22:19 Okay, clear. So to be clear, for your biggest countries for your delivery pipeline, yields and costs have been flat?

22:28 Yeah, we don't see those really increasing, but we don't see them declining either.

22:34 You also see that even in the yield on cost, if you look to the pipeline, that will remain stable. So it's country mix in which quarter you deliver which assets. If you look to the pipeline, that will remain also at 10%. So the 1.7 million square meter remaining we have. Okay, clear there. And last one, one of the 50 million devaluations on standing assets. Could you please break that down in ERV and yields and also the changes of the key countries there and what we can expect in Q4? You basically already said that should be broadly flat, right?

23:13 If you look to the valuation of the standing, that's the H1 figures you are referring to. Because in the Q3, we only do the devaluation of the iPod. So what you see is that we are now getting two positive revaluation results of 56 million in year-to-date Q3, which is driven by the positive revaluation we took in the third quarter of nearly 150 million on the iPad. The standing revaluations happened at the H1, where we, of course, discussed, among others, Romania. You know. Yeah. Oh yeah, clear. Sorry for that. Clear. So for H2, you already guided flat ERVs, flat yields, probably.

24:01 Correct. For H2. Okay. That's it for me. Very clear. Thank you. Thank you. The next question comes from Marius Pistone of Bernstein. Your line is now open. Please go ahead. Hi, good morning. Thank you for taking my question. Just one from my side. So you've been targeting a return to double-digit EPS growth. If you think of the pace of the growth we've seen this year and the fact that some of that has been supported by capitalized interest, does that double-digit pace return next year, given you have some refinancing to consider, or does that get pushed further down the line? Thank you.

24:44 No, I think we said in the press statement that we expect to get back to WG going forward. And I think if you look at what drives that on the revenue side, it's the growth in the portfolio, it's the indexation of rents, also improvement in occupancy, which is something that we want to get over the next 12, 18, 24 months. and regarding the funding costs, we showed you at the capital markets that we've basically taken all of the hit in terms of higher interest costs. There's only a very marginal change in the average cost of our funding.

25:33 The one bond that we have to repay in February of next year. We then don't have another bond to repay until the middle of 2029. So compared to the peer group, we're in a uniquely positive position now. Thank you. And that also factors in a slightly lower pace of that development that you're now tolerating for this year and potentially for next year as well, if you can comment on that.

26:02 Look, if we deliver at the lower end of our target, we'll come in just under 10% growth year on year. We're doing that at 10% yield on cost, so that's going to increase our rental income next year very nicely. Okay, very clear.

26:23 Thank you very much. You have to figure that there's always a delay, Marius, between when we... All our deliveries this year will produce nothing in 2026, effectively, and they will only start producing in 2027. Okay, that makes sense. Thank you. Thank you. The next question comes from Lynn Hortkeet of KBC Securities. Your line is now open. Please go ahead.

26:54 Hi, good morning, everyone. I have a question on your pre-let level. So you were at 55% in Q3. Usually you're a bit higher by Q3, more in the 65% region. And then from the earlier question, you're already quite bullish on Q4. And I think you should already have also the figures of October. Just to be sure, do you already see the actual acceleration in the October figures of the take-up?

27:26 Yeah, I think...

27:32 When Richard said 30% average per year, I thought maybe 30% up compared to Q4 last year. Anyway, let's see what we can do. We are cooking deals, yes, and we are hopeful that we get things signed. But I will obviously not now. I cannot go into details with regards to October, but so far it looks positive and good. This is in line, as you know, so we are building buildings, that's what we do. We adjust to demand and supply and we react to that.

28:17 We have been very enthusiastic over the past couple of years, very tripled in terms of flexible areas in the listing. And now sometimes you think, well, we have a lot of stuff on the construction. We accelerate if we see demand, we slow down. And it all has to do also with finding the right balance on the occupancy. And we have been around 93. It would be nice to be 95, maybe north of 95. So that's what we are. that's what we are doing and that's mostly for obviously if you have a custom build or pre-lease that's a bit different but leasing is on the way and as I said and the numbers are a lot right so we do 22% more and I think indeed we're going to do more Q4 this year than we did last that's what I think from looking at the different negotiations we are perhaps we're having And that should result in a higher occupancy going forward into next year and during next year, 2027. I think that is a fair statement.

29:25 Richard?

29:26 Yeah. Yeah. Okay. Overall, we continue to see strong leasing demands, just what you said earlier.

29:39 Okay, so the 55% that you are reporting right now does not necessarily mean that Q4 deliveries will be at the lower end of the 80% to 90% pre-debt range.

29:54 No. We're always going to target higher if we can.

29:59 Okay, that makes sense. Thank you so much. Thank you. The next question comes from Jonathan, Accountant of Goldman Sachs. Your line is now open. Please go ahead.

30:14 Good morning. Thank you for taking my questions. Just for some of these questions and questions The point that you just made, Remon, about you reacting to demand out there and occupancy, it's really the first time you're seeing the pipeline coming down in construction from 2 million to 1.7 million. Why is that ultimately a sign of lower confidence in the market going forward? Or is it just a strategy to increase your occupancy toward this higher level and perhaps slightly pausing on the development process or just slowing down the pace for a moment?

30:58 Yeah, I think like that. So it's like any company. So you react to the market, you adjust to the market. as good as you can. We have been super enthusiastic over the past years with building a lot of space and we've delivered a lot of space. Then also you need to consider your user cost targets, because if there is a lot of space out there, we are market leaders in most of the markets where we operate. So I think it's important to balance. It's not good that there's too much space on the market and that because that brings prices down. And if that happens, then we cannot hit our usual cost. We like to see a bit more rental growth. So there's also reasons why less supply is not necessarily a bad thing or maybe slow down a little bit.

31:49 Yeah. Focus on becoming a better company. Don't rush into new projects too much. Be a bit cautious and careful.

32:00 Yeah.

32:01 So that's at the leadership here at CTP International, but also in the different countries, is a bit of how we look at it at the moment. That's one. I think the other point is, as you know, the German portfolio, in Mulheim we are going full speed. Other locations like Dusseldorf, even if we would want to build, we can't because we are waiting for zoning and permitting. And similar thing goes for Brno, where we have been able to acquire more land But yeah, there also we are in the pre-construction, so in the development, design and permitting phase. And yeah, so that is a bit of, indeed, as you said, that's how we read the market, how we think about the market.

32:47 I mean, you've seen on the Capital Markets Day event when we had also some of our clients come over, also to give you guys a bit of a flavor and feel for what our drivers, where does demand come from. Yeah, good. And yeah. It's easy to accelerate, let's put it that way. If we feel tomorrow like, okay, let's go for 2 million, it's a lot of work and headache and stuff, but I think the organization is also capable of doing that. Yeah, so we can always do that.

33:15 And it's also timing. For example, in October, we bought a new site in Serbia, just north of Belgrade, very good location in the city, which we directly started. You might have seen the press release as well. So, as always, those timing movements over the quarter. In Q3, we had the night delivered in Italy. In Q4, we start a new project in Italy. But that's not yet in the 1.7.

33:45 Yeah, that's right. Perhaps one other question. I think you highlighted some good results in Germany from a leasing perspective. How is occupancy progressing in Germany? Are you able to increase that level closer to the rest of the group?

34:05 Yeah, good question. Well, if we speak about Germany, we talk about two different business lines, right? We have the Dutch industry, the portfolio we acquired, and then we have the new build. Maybe to start with Deutsche Industrie, there's some good take-up. We have spent money on refurbishments. We had a budget of €12 million for this year. We have not been able to spend all of that. I think we're now around €6 million and by year-end will probably be around €8 million. That is important because the Deutsche Industrie portfolio will perform better if we invest in refurbishment. So that's one thing. In the meantime, we know the portfolio inside out and we continue to lease it out. But in order to get rental growth, we will have to invest in some modernization and other things. Other projects within the Dutch industry portfolio have been demolished. One is in Wolfsbachhausen in the south of Germany. a good location where we're going to do a new development.

35:09 And that maybe brings me to the next activity in Germany. There is a new pipeline, and those are the sites in Krefeld, the SBUs, the small business units, but Mulheim as well as Wuppertal and Rostock. And that is now coming to the market. And for example, Krefeld, but also Rostock as well as Wuppertal, there we see some take-up. And so far, that is positive. and in line with our expectations. More will come to the market. It will be complete next year in 2027. And that also includes obviously the Mulheim project, which we talked about. In the meantime, there's some other companies which will be part of the Mulheim project. And we've been able to sign some leases for Wuppertal and for the new build, what we call Highlands.

36:05 Overall, good progress and if we talk about demand, definitely in Germany we have seen more demand over the past months compared to the same period a year ago. Okay, thanks Berkley. Thank you. The next question comes from Vivian McKett of DeGroof Petercam. Your line is now open. Please go ahead.

36:34 Yes, good morning. Maybe a quick follow-up question on the capitalized interest element. So you will confirm the appropriate guidance including these. Just wondering now that there is only one quarter left, could you maybe quantify it on the earning per share, the impact of capitalized interest? You initially guided for 9 cents per share. I think that going the pace that we've seen of booking, which would more end up around 12 cents. Any chance you can quantify that so we can fix that? and just see what the underlying is moving.

37:12 Yeah, I think we will comment. Yeah, so it might be slightly on the higher end, but let me confirm the exact figure to you.

37:23 I will drop an email. Okay, thank you. And then I understand that from the comments of Remon that you cannot comment on the leasing negotiation, If I'm looking into what needs to be signed in order to reach the lower end of the delivery guidance while keeping the pre-let around 80 to 90%, it means roughly 200,000 square meters of lease to be signed in project to be delivered by year-end. Just wondering in that volume how much are related to especially large space like, I don't know, 30,000 or 40,000 plus. Just trying to understand to Thank you very much. Thank you.

38:25 But there are always a few big ones and we need to work hard to get those. But that's normal, that's each and every quarter. And some of the big ones we don't get, some of the big ones we get. And that overall gives us the confidence on what Remon earlier referred to. Thank you. Thank you. The next question comes from Paul May of Barclays. Your line is now open. Please go ahead.

39:05 Hi, guys. Thanks for the questions. Just three for me. Just on the first one, capital as interest, just wondering if you could just remind me, apologies, I'm relatively new to the name. What is the policy on capital as interest in terms of the rate Do you capitalize that and what is it you capitalize on? Is it land or is it just work in progress in terms of these things under development? Can you answer my other question?

39:29 It's the average cost of debt that we are having. So that's 3.3% at the moment. So I would say that's conservative method. The marginal cost of debt, as you know, is slightly higher. The capitalized zone is indeed a work in progress and the land that we have the planning permit and we start with the infrastructure.

39:57 Perfect and then similarly again just a short thing on the normalized net debt 2BITDA because obviously your standard net debt 2BITDA is significantly higher just wondering what the calculation is on the normalized and what is the target for reducing that you've sort of mentioned obviously LTV but The adjustments in the Net Debt Avidar, basically we annualize the rent on the completions for the past 12 months, then we add the rent for the completions that we expect within the next

40:45 and on the income side. And then on the debt side, if we need to borrow more money to complete the buildings, we add that to the amount of debt. And in terms of, you know, how do we improve that? We improve that, you know, Euro by Euro, every time we invest a 10% yield on cost, because investing a 10% yield on cost is investing a net debt on David Daaf, Somewhere around 6.5 versus our current ratio of 9.5. So as we grow with investing in a 10% year-on-cost, we're improving our cash flow credit metrics, both the net debt to EBITDA and the ICR.

41:35 On that future net debt two bits are on development, just in terms of your own cost of this debt fund, it is 10 times net debt two bits are roughly. Just wondered what it is the assumption on the equity side of things, is that free cash pre-dividend or is it free cash post-dividend on the equity side, just to understand how you're calculating that six and a half.

41:57 I think we can share with you the calculation. We've had it in most of the presentations. We had it in the last one for the Capital Markets Day, so we can share that with you, David.

42:10 Apologies, a bit of ignorance on my side. No, no, no, don't worry.

42:13 It's easier if we just share it with you. Yeah, no, no, perfect.

42:22 and then just on the operational side just you've been seeing some pre-letting going down and down and down sort of each of the reporting periods and pre-let at completion also slightly ticking down appreciate it's still within the target at what point does that become a concern is this something that is likely to continue going down or is it you're going to cut back materially on development in order to support those numbers Just wondering what the thought process is from your side. Are you happy at the current levels where they are or not?

42:55 Yeah, they're not wildly out. We've been a similar level. Sorry then. Go on. You want to go?

43:01 Yeah, we can go. I can go. I'm not going to build anything off the blog without releasing it. So yeah, that's it.

43:11 OK.

43:12 So cool. Thanks so much. Yeah. And we have grown beyond the, the, the, yeah, but I can send, Edmond sent us to that. We've grown beyond any other, what we ever, uh, presented in the prospectus back in 2021. We tripled. We see zero recognition or appreciation for that in the share price. Um, so no, we're not growing. If we don't want to grow, we don't grow and we don't see a need to grow. We have a lot of land. We sit on it. Cost money. Yeah, clear. There will be one day when we develop it or we set it off or we do something else with it. Um, There's a... That's for you. And we will come back to you with the numbers of what we have been able to achieve.

43:52 Perfect. Thank you very much. Thank you. The next question comes from Pierre Clouard of Jefferies. Your line is now open. Please go ahead.

44:03 Yes, thank you. Good morning. Two quick follow-up on my side. Just coming back on expected deliveries for this year. Just a clarification, so you're aiming for the low end of the range and you get the target around 1.5 million square meter during the CND. Is this 1.5 million already obsolete? Do you think and should we have been magnifying closer to 1.4 million for this year? And Raymond, you mentioned during the CND that there are risks of history on the market as always, but do you see a greater risk now than a month ago?

44:44 Yeah, so in terms of the delivery, the other 1.4 is the right orientation.

44:52 All right, understood. Clear. And the second one is for 2027. How should we view, again, the leverage target given the drop of square meter under construction in this quarter? So do you expect the pipeline to rebuild materially over the coming quarters? and consequently, should we expect a decline of capitalized interest next year?

45:25 I don't give guidance for the full year. You know, we always do. So when we have the full year figures and we show you how much we have delivered, we'll give guidance for next year, both in terms of deliveries and where we are coming in terms of earnings. You know what our priorities are. Increasing the occupancy and with that, of course, what we said before, we'll try to grow as much as possible, given the supply and demand.

45:51 Okay, but just for me to understand, how much time does it take you to rebuild the square meter and dark construction, because I imagine that if you are basically pushing towards the end of the year to deliver more square meters, then we should expect also square under construction to not materially improve. So consequently, we should also expect potentially capitalized interest to decline next year, right?

46:26 If there is less under construction, yes, capitalized interest will be lower. Clear? But like I said, we're occupying the full area every time. And then we take it from there. OK. Thank you. As Remon said earlier, we can accelerate quite quickly. So we have a lot of projects that we could start if we wanted to.

46:55 And can you quantify that? You can give us a broad range, but just in terms of quantification.

47:07 Yeah, we can take the pipeline back up significantly above 2 million tomorrow if we want to, but we don't, because we don't see the, we don't think that it is consistent with what we said earlier in the call. Yeah? Okay. So we have the ability to go very fast if we want to. Okay. Thank you. The next question comes from Eduardo Gili of Green Street. Your line is now open. Please go ahead. Good morning. One quick question on my side on potential disposals, which I'm glad to hear that you're potentially exploring. How do you think about prioritizing your book values versus the potential urgency to selling assets, considering where your share price is? So how attached are you to book values?

48:02 considering also that it could impact your LTV if you were to dispose of assets. Thank you.

48:10 There is no urgency. So we will do like always, be careful execution on our strategy. Okay. Thank you. Thank you. The next question comes from Greg Simpson of BNP Paribas. Your line is now open. Please go ahead.

48:33 Yeah, morning. Firstly, one technical one, sorry. The release this morning says you delivered 561,000 square metres at adding 23 million of contracted annual rental income. The H1 release said 245,000 at 21,000. Thank you. Yeah, let me come back to you on the rental. I think there's a mistake there. And yeah, on Vietnam,

49:23 Since the Capital Market Day event and also since the announcement last year, September of 25, we are making good progress in Vietnam when it comes to preparing the sites with design permitting. and we plan to start construction works either later in Q4 or early in Q1 of 27. Yeah and those will be pilot projects right so where we want to go with some of our existing clients is demand driven as we talked about some pre-leases yeah and That's what we are working on and then there may be opportunities to accelerate.

50:17 We are looking at the market as we've done when looking at other markets previously, how to best enter and become part of the logistics or industrial property market in Vietnam or in Asia. And also, as you know, We also see demand coming from China for our European portfolio being active in Asia with our land acquisitions in Vietnam. That brings obviously closer to Asian and Chinese clients so that being here, being more active here helps us also to get connected to Chinese Asian companies who are planning to set up business in Europe for Europe.

51:14 And that's part of where growth comes from. We remember one of our clients at the panel discussion the other day in Warsaw. And yeah, so that's happening and so far so good. So it's not just being in Vietnam for our existing clients to develop, but also side effect of being in Vietnam, in Asia, closer to Chinese or other Asian companies who think of going to Europe and that we now connect to them and extend our Thank you. The next question comes from Neeraj Kumar of Barclays. Your line is now open. Please go ahead.

52:03 Good morning, everyone. A quick one from my side. So you have 500 million bond maturing in Feb next year. Just wanted to get thoughts on how do you plan to refinance it? Is it going to be through bond market or bank market? I mean, I appreciate you have great facilities, but I guess you're not going to use that to repay the bond.

52:23 We haven't decided yet. We'll see where we are later on. But we have access to both markets, so we'll see which one we think is more attractive. As of now, we would need to go to the markets to open in advance of time.

52:40 Correct. Let me rephrase it the other way around. The margins I'm seeing on the screen is around 150 handle for a five, six-year bond. Is that something you're seeing in the bank debt market as well, or that's materially different?

52:52 The bank market will be cheaper today.

52:57 Correct. Thank you. Thank you. Moving on to the next questions. The first is from George Velikov of ICM Investment Management who asks, Martin mentioned that you expect both ERVs and valuation yields to stay relatively stable until the end of the year. Have you observed any movement in cap rates in your key CEE countries and the Czech Republic more specifically since Q1 this year?

53:25 No, we haven't. Actually, if you look to the Yields that are published by the brokers, so they lowered the yield in the Czech Republic. I don't expect that to happen in our portfolio. We don't want to push valuations, but that's also where our belief comes from, stable yields in the second half. Thank you. And the second from George. You have continued to be very active in terms of leasing activity in Romania. Have they validated your revised estimate of ERVs for the Romanian market? And should we expect no further downgrades to the ERVs for your Romanian portfolio?

54:11 Yes, so I would honestly think that we would adjust a little bit upwards the ERVs. But anyway, let's see how we can close. We came down with some of the target rental prices because we wanted also to hit occupancy and we felt that maybe with a bit lower we could fill up buildings sooner and quicker and secure some business. I think maybe a bit of oversupply vacancy will go away over time and then I mean one or two quarters maybe into mid next year. Anyway, and then I can see that we can maybe think of increasing. And if also not so smaller units can get maybe a higher price in the big box, maybe get a bit more under pressure when it comes to rental prices.

55:07 But yes, do not expect to come down further. I would rather believe that we will be able over the next, say, six months to go up maybe sooner. Thank you. The next is from Eustace Desjardins of Wilgro who asks, would you be open to increasing the buyback and proceeding faster with the existing program should the share price discount to EPRA NTA remain at this historic greater than 35% level for Q4 2026 slash Q1 2027?

55:36 Yeah, we think at this share price level it's an attractive opportunity. We are, of course, bound by the liquidity in the share. We act under the safe harbor rules of the MAR. So there is a limit to what we can buy on a daily basis. But at this level, it's clearly attractive. Thank you. At this time, we have another question from Peter Crizon, who asks, do you think Do you come to other markets like Denmark, Croatia or France?

56:21 No, we are not. We are always monitoring different opportunities and markets, but the focus is on, for short in Europe, on what we have in terms of locations and countries and land and projects. And I think there's not now an urgency or a need or an opportunity to go elsewhere at this moment. Thank you. This concludes our Q&A session, so I'd like to hand back to the management team for final remarks.

56:51 I would like to thank everyone for their attention and their questions today. I wish you all a good day. Thank you very much.