Custodian Property Income REIT (LSE:CREI) — Investor Presentation

0:00 Good afternoon, and welcome to the CUSTODIAN PROPERTY INCOME REIT PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to make the following poll, and I'd now like to hand you over to Richard Shepherds Cross, managing director. Good afternoon, sir. Good afternoon, everyone, and, and welcome to this, webinar. We're talking about custodian PROPERTY INCOME REIT. As the name suggests, income is a key focus for us.

0:49 And we have set out to be the real estate investment trust of choice for those private and institutional investors looking for high and stable dividends from a well diversified UK, portfolio of real estate. As we go through, you'll see a number of pictures. All of those properties are properties in the portfolio, and perhaps that's the best way to describe what we mean when we talk about regional smaller properties. We're not talking about workshops under the arches, corner shops. These are mainstream commercial properties, often modern, certainly fit for purpose, and let to, more often than not, household name tenants.

1:40 So these numbers are, as at the September 30, portfolio of 610,000,000, spread, as you can see in this pie chart, between, the industrial and logistics sector that makes up nearly half the portfolio by value, retail warehousing or out of town retail, which has been a very robust part of the retail sector. Some offices, I can hear, over the airwaves, people sucking wind through their teeth, but I've got some good news to tell you about offices. And then a spread of the balance of the portfolio through those assets that fit into none of these sectors, making them other, but that might include children's day nurseries, car showrooms, restaurants, hotel, and some high street retail properties as well.

2:33 So it is a proudly diversified portfolio, over 300 tenancies in a 159 properties spread across The UK. And as I said before, a very strong focus on income. So as at the September 30, our annualized earnings per share, 5.8p, and that was supporting a dividend of 5.5p. And importantly for us, that dividend is fully covered by earnings. Target gearing, 25. Loan to value, currently 29.6. So we are a little bit above our target, but not so meaningfully that we feel need to panic.

3:23 We do have some prop properties under offer to sell with a specific intention of bringing down that, some of the variable rate debt we have in the portfolio. We'll look at debt a little bit more as we go through. Just before, we get into the detail, I just want to talk about worth, versus value. There is an awful lot of analysis, carried out by an awful lot of, I'm sure, very bright, people looking at commercial property values and, real estate investment trusts are all too often valued by reference to net asset value. So the aggregate aggregate value of all the properties in the portfolio.

4:09 But I don't think that net asset value is a very good measure of worth. And after all, the valuation of our properties is what the properties could have sold for three months ago. So it's backwards looking. And what we should be looking at is, in a forward projection of how much, income the portfolio can generate. And perhaps this chart is a good example of of what I'm what I'm talking about. The blue line in the chart looks at the net asset value of our portfolio going back two and a half years, and you can see how values grew really quite sharply in 2022, which was a pretty difficult year for real estate. Because in the final quarter of the year, we saw values fall back, losing all those gains that have been made over the previous, twelve to eighteen months.

5:04 So that net asset value, that apparent worth turned out to be nothing nothing more than Scotch Mist. Here today, gone tomorrow. Happily, the shareholders of CUSTODIAN PROPERTY INCOME REIT, didn't allow the share price to chase that net asset value figure up to those dizzy heights, but much more kept the share price as a much as a more constant metric, as a multiple of earnings. And if you look at the red line, that is the annual earnings per share from CUSTODIAN PROPERTY INCOME REIT over that same period. And you can see it was doggedly consistent. And as we look forward, we can be reasonably confident of consistency of earnings, if not some earnings growth into the future because we have a portfolio of, properties that are less on average for about five years, and that's contractual income that we know we are going to receive.

6:04 So I think if you want to be a happier investor in real estate, focus on earnings as a metric, not net asset value. It's forward looking. It's more predictable, and it will lead to a less volatile experience of investing in real estate. And it will mean that you have acknowledged that you're investing for income, which is exactly how you should look at real estate. The good news in the market at the moment, and I said that there might be an opportunity for future earnings growth, is that there is rental growth, in real estate. And I think there's been a real disconnect between the investment market, which is very has very poor sentiment towards real estate investment at the moment, and you can see that, writ large across the share prices of of of not only custodian property income rates who are trading at a slight discount to net asset value, but many of our peers and and some of whom are trading at much greater discounts to their net asset value.

7:11 Investors have turned away from real estate, and I'm convinced it's because a lot of them had a very bad experience in 2022. And you could see that if you had been following a valuation metric, you would have seen values rise in the early part of the year and then fall back very sharply at the end of the year. And that, did an awful lot to discourage people from considering real estate. But on the ground, the occupation market's pretty strong, and we're seeing rental growth. And, actually, valuations have been pretty flat through 2023. I think in our portfolio, value's down just over 4% in the year, so not a significant move in what has been a pretty torrid time for macroeconomic markets, interest rates most particularly.

8:03 What this chart is showing is the net initial yield of our portfolio sector by sector, so that is the rent, divided by the current value, and the equivalent yield, which is effectively a weighted average yield between the initial yield and the reversion yield, so taking account of future rental growth and the timing of that rental growth. And you can see that there is quite a big step up in yield as we pick up the rental growth that's in the market. Across our portfolio, that's about 6,500,000 or 15% of the rent roll. And these numbers are important, when you consider debt. If we look at debt, and you absolutely should look at the debt of any property investment company at the moment, not least because it is debt and the rising cost of debt that has made a lot of investors turn away from real estate.

9:02 CUSTODIAN has always taken a long term low risk attitude to debt. And you can see in this chart, we have four tranches of of debt. We have a short term revolving credit facility. Cost of that is about six and three quarter percent today, which is why if we sell properties and we have a number under offer to sell at the moment, and we pay down that debt, and we are giving up less than six and three quarter percent income, to save paying out six and three quarters in debt, then that will be accretive to earnings. But the majority of our debt, nearly three quarters of our debt, is fixed fixed rate.

9:48 Fixed for an average of six and a half years at an average cost of 3.4%. And you set that against our initial yield of 5.8 and an equivalent yield picking up that reversion of 7.3, you can see that debt, is still accretive to the earnings of custodian property income REIT, and that's why we are not particularly concerned that our current level of gearing is a little bit, over target. One of the reasons it's over target is because values have fallen. So that is a simple mathematical equation. And the other reason is that we have remained committed to our capital expenditure program to invest in the assets in the portfolio, and we'll talk about that a little bit more as we go through.

10:37 But I don't consider that discretionary spend. I think it's absolutely essential that you keep your properties up to date and in in so doing, making sure they hit the best possible energy performance criteria, a minimal carbon output because it's those sorts of buildings that are gonna attract the best tenants, secure the best rents, and protect value over the long term. And we've remained committed to that program, and that has seen gearing creep up a little bit through the last twelve months. What has this strategy done in terms of relative performance? Well, it's led to outperformance by CUSTODIAN against its peer group of diversified property investment companies.

11:29 And we think it's largely due to that focus on income and that stable, relatively high level of earnings, which comes from our specific property strategy, which is smaller regional properties. And this is the bit to remember. This is the bit that's at the center of our strategy and the the the bit of our strategy that I think will lead to long term outperformance. What the chart is showing is, looking at whole market data going back to 2000. It's looking at the net transaction yield, so the net initial yield of properties traded in the market with a lot size of less than 10,000,000, that's represented by the dark blue line, and properties of greater than 10,000,000 represented by the light blue line.

12:25 So if you look at the first ten years of the chart, there was a very consistent and quite narrow margin of about 75 basis points. Now detractors might say that's the risk premium. That's the additional risk you take for buying smaller properties. And I'm prepared to accept that some of that is risk, but an awful lot of it is just hassle factor. People don't want to manage a large portfolio of small properties if, in fact, they could have a large portfolio of larger properties, so fewer assets to manage. So let's say let's be generous to my detractors and say that there's a 50 basis point risk premium and 25 basis points of hassle factor. What happened in 2010 and for the the the subsequent thirteen years?

13:14 We saw it's not much longer than that, isn't it? Gives me time has passed. Anyway, we've seen this huge divergence in yield, not because the smaller properties have become higher risk or indeed the larger properties have become lower risk. What we've seen is a change in the supply and demand dynamics in the market. So from 2010, we saw the, open ended funds, the property unit trusts, actively buying as they recovered post global financial crisis, and they are now in rapid retreat. But at the time, they were actively buying. We saw pension UK pension funds up waiting to real estate. We saw overseas investors, both sovereign wealth funds and private equity, all buying relatively large, relatively prime assets.

14:05 And because of the cost of debt at the time, you also had debt driven investors in that large prime market. Prime yields were still above the cost of debt, so those purchases could be funded with debt, which was unusual. And, again, it's unusual today, because that situation is reversed. You cannot fund prime assets with debt in the current market, and that is a new normal or indeed a return to normal that I think we should all learn to live with. So you saw this huge increase in demand for a relatively small supply of large prime assets, and it's demand and supply that's driven that yield divergence.

14:50 So we have been able to secure a 150 basis point margin through that period for pursuing a smaller lot strategy. But if we were accepting that only 50 basis points of the margin for the first ten years was risk premium, we're getting a 100 basis points of margin for taking no additional risk. And that is, why we do what we do, why we go to the effort of managing a portfolio of small properties. One of the benefits of a smaller lot strategy is that in 610,000,000, you end up with a 159 properties. And if you look at the rent roll, you can see in this chart the amount of rent that is paid by any one tenant in the portfolio, and it is sufficiently diverse that no one property led to any single tenant represents more than one and a half percent of the rent roll. So this is genuine diversification.

15:50 And if you look at our larger tenants, most of whom names you will recognize, let's take Menzies Distribution, our largest tenant, We've got eight properties left to Menzies. So there is further diversification within that blue slice of the pie, and the same is true as you go around. We have three properties left to Wix, three to BNM Bargains, two to BNQ. So the diversification, continues. So our top 25 tenants make up only 38% of our income. If you looked at a number of our peers, their top 25, tenants might make up 50 to 70% of their total income. So much more, concentration of income, which is, the opposite of what we're trying to achieve.

16:40 One of the challenges that is sometimes laid at our door when we say we are pursuing a smaller lot strategy is that we must have poorer quality tenants. This is something that we look at very closely. We don't believe that's true. And, the Experian credit ratings that you can see in front of you, I think, bear that out. And here, you can see in this chart that 89% of our tenants are rated lower than average risk by Experian. Those of you who are glass half empty might be looking at the imminently failing tenants that represent 3.2% of the rent roll. When I look at that, I see opportunity.

17:27 Because when one of our tenants fail, we get the property back. It's not like an investment in the underlying business when if the business fails, you lose everything. If the tenants if our tenants' businesses fail, we get the property back. And I'll show you an example in just a moment of how that can work out quite well for us. So we believe that you don't have to forego the quality of property, location, tenant, just because you are pursuing a smaller lot strategy. Indeed, we think that there are positive benefits to shareholders of of pursuing this strategy, spread of risk, stability of cash flow.

18:14 And a slight quirk of smaller properties is that we believe you get a higher percentage of your investment secured in the underlying bricks and mortar and less in the lease contract. And that's a good thing because the lease contract is depreciating every single day. It's getting a day shorter. And why is that? It's because even when some of our smaller properties and that's not the case across the board, but for a large number of our smaller properties, even vacant, there is demand from owner occupiers. And that is not the case of of larger buildings. It's very rare, unless perhaps you're a Goldman Sachs or you might want to own your own office building in the city.

19:01 It's it's rare for most businesses businesses to want to own their real estate. They tend to be leases of property. But in the smaller property sector, there are owner occupiers, particularly in the industrial sector, but also in in offices. And that does give us greater residual value in the underlying real estate. The asset management of the portfolio is a three hundred and sixty five day a year operation. We may be time off a good day if you're at Christmas, but we're pretty busy all year round. And this image you can see here is a CGI of what we have, in fact, now, refurbished to exactly the standard of an office building we bought in Manchester in lockdown.

19:53 Brave, you might say, even foolhardy. But we believed that there would still be demand for offices, and indeed there is. And we believe there was a real opportunity to provide the sort of offices that the modern occupier requires, particularly in small plate small floor plate formats. Very often, these smaller occupiers had to put up with secondary buildings, buildings where they needed to put an awful lot of capital expenditure into fit out, while the big corporate occupiers were enjoying brand new, well fitted offices in large, large floor plates. So we acquired this building on Fountain Street in Central Manchester.

20:42 It's a very core office location. Rents in the building were £20 a square foot at the point of acquisition. We have cleared out all but one of the tenants. The final tenant was happy to remain in while we refurbish the building. We have created fully fitted offices in the style that you can see here. So not your typical grays and whites of of of most modern offices, but more homely, warmer tones, nice furniture. On the Top Floor of this building, we have created a business lounge, roof terrace, additional meeting room, and breakout space for all the six floors of the the building that sit below it. And that's for you for the use of all the tenants. It's additional amenity.

21:30 In the basement, we've got hotel quality showers and changing rooms and bike storage and electric charging points for for vehicles. And the expectation is that we will, on the fully fitted office space, get rents of not £20 a square foot, but £42 a square foot. And we launched this building two weeks ago. We have strong interest in one floor already. I would love to tell you this story again in six months' time and tell you that the whole building had been let, and I wouldn't be surprised if that were the case because this is the sort of quality of space that simply hasn't been made available to the market, but appears to be very much the the focus of of occupiers' demands at the moment.

22:19 That doesn't make up a huge part of our portfolio. You know? It's about 10% of the portfolio, but it's not all bad news. And and, unfortunately, all we hear in the in the press is bad news about offices, but I think we have reason to be optimistic. When we consider asset management, we also have to consider about energy energy performance. And probably six years ago, if you'd asked me about environmental strategies, I would have said that, yes, we had an environmental policy, and it was in a drawer in the office, but I could find it if you were particularly interested. And maybe three or four years ago, probably four years ago, we had that environmental policy out on the desk, and we were considering the ramifications for us as property investors and implications for shareholders.

23:09 Roll forwards to today, it's just how you manage real estate. If you don't manage real estate with a keen eye on environmental performance, you are both missing the moral imperative to improve the quality of your buildings. But perhaps more importantly for shareholders, you're missing out on the huge financial opportunity that is there for providing the highest quality buildings to your tenants. Through the course of the last quarter alone, we improved our weighted average energy performance certificate or EPC from 58 to 56, and there is an ambition to be compliant with legislation, by 2030 and have all of our properties rated b or above.

23:57 And for the most part, we have asset management plans in place to achieve that. I said the market occupational market was strong at the moment. If we look at what happened over the last quarter, nine new leases agreed. All of those leases agreed on average at 24% ahead of the previous rent, so strong rental growth. Of those nine new leases, a million pounds of that new income was, thanks to new lettings. That's adding to the rent roll of the portfolio, and another 700,000 was lease renewals. They all had a positive impact on valuation, and we're also reducing our vacancy rate, or indeed occupancy, if you're more optimistic, which was 90% at the start of the year as we were recovering from that sort of post COVID, tenant failures. And happily, there weren't many, but there were one or two.

24:59 Occupancy has increased to 91%, and we expect it to be 93% by the end of the year. So really strong and positive progress. Rents are growing. Estimated rental value, so that rental growth is also growing, and that's grown from 48 to 49,000,000 in round terms over the last six months as well. So the overall rental potential is growing. So here is an example of an imminently failing tenant that failed. This was a Pizza Hut, on the outskirts of Leicester, on a retail park. They failed to trade through lockdown and then put the business into company voluntary arrangement immediately post COVID.

25:50 We don't like tenants that enter into a CVA. We think they clearly don't respect the landlord and tenant relationship, which we believe needs to be a two way street. So we exercise our right to repossess repossess the building. We spent 200,000 on it, improving the EPC from d to a. We added a drive through lane and let the building to Tim Hortons as a coffee shop or drive through coffee shop, doubling the value from 1 to 2,000,000 and increasing the rent by 35%. So an imminently failing tenant that just needed to fail so we could take the building back. Actually, one of the great strengths of real estate as an investment is that you always have the underlying property.

26:38 Another example, slightly larger asset, and this property had been let to H and M. It was a distribution center for them in Winsford and Cheshire. Barelys came to an end. We have a dilapidations claim with with them, so they paid to put the building back into the condition. They took it at the start of the lease. Over and above that that dilapidations payment, we have invested 1,900,000 into the building, and it is now fully electrified. So we have a gas supply, but we've capped it off. The offices are heated with air source heat pumps. You can see on the roof, there are now solar panels. And we have leased this building to the Zavi Group. Rent has gone from 423,000 a year to 740,000.

27:28 EPC from c to an a. And in addition to the rent, we also have agreed what's called a power purchase agreement where whereby the tenant will buy their the electricity that we generate from the solar panels from us. They get a discount on the retail price of electricity, and we get an estimated seven year payback on our solar panel installation and, importantly, an additional line of revenue from a property that we already owned. So it just shows you how by making these investments, improving the environmental credentials of the buildings, you are ticking a lot of boxes, both from an ESG and a cash flow perspective, and indeed valuation.

28:23 If we just think, forwards, what's the outlook? Values have been pretty stable through this year. There's been quite a lot of poor press against real estate. I think it's some of that is still very backward looking. There are, of course, fears about interest rates, But perhaps, the example that we saw last week, ten days ago maybe, when the interest rates were kept on hold by the Bank of England and inflation numbers came out much better than expected, we saw across the whole listed real estate sector, share prices jumped by about 5%.

29:14 I'm happy to say we've hung on to most of those gains that were made. But what is that telling you? It's telling you that there is money waiting in the wings, waiting for that absolute certainty that interest rate cycle has peaked, because investors can see the stability of income and the rental growth, importantly, that is coming through as we let up vacant space and settle rent reviews and drive rents on at lease renewal. We remain committed, as I said, to our capital expenditure program. We have, over an eighteen month period, £28,000,000 of investment into 23 separate projects. We expect that to deliver around about a £10,000,000 profit over above the cost of the works.

30:05 And, of course, at the same time, we are creating the buildings that are then set fair for the future. Fundamentally, though, our diversified earnings base supporting fully covered dividends and with an entry point of the share price today with an earnings yield of north of 6%, that feels like a pretty good place to to start if you are investing in real estate. So that's all from me. There have been, I hope, some, questions, which, have have gone through, on the screen, and I will pick, some of those up, and do my best to answer them.

30:53 So the first question is given the strong leasing activity and rental growth, what specific strategies and sectors are driving this growth, and how sustainable do you view these trends to be? Half our portfolio is in the industrial and logistics sector, and that is the sector that is seeing the strongest level of growth. If you took a typical regional, industrial property in most towns in the country, built a few years ago, rents would be £5.50 to £6.50 a square foot. If you were to build a brand new property in that location, probably rents would be 10 to £12 a square foot.

31:42 So you can see significant growth if you can provide those brand new, low energy rated, highly energy efficient buildings. And particularly our market, that sub 100,000 square foot industrial and logistics space, has been completely undersupplied with new development. Really, very little development since 2006. Most of the development that has been has been in a big box format, large format logistics units. So for the smaller units, there is a distinct lack of supply. And if new buildings are gonna command rents of 10 to £12 a square foot, good refurbished buildings, probably 7 to £9 a square foot, passing rent, $655.50 to $6.50, you can see there is an awful lot of latent rental growth.

32:33 And we're not yet seeing an increase in the development of the sort of space that the market is demanding. So in terms of how sustainable is that trend, I think it is it is it's got a good few years to run. And at the same time, with very little development really since 2006, which was seventeen years ago, there are quite a few buildings that are falling off the end of their useful life. You know, they will the buildings that are forty, fifty years old. Yeah. So supply is actually shrinking, and we're not replacing that that built supply. So that's where we see the strongest growth, I think, in retail warehousing. Out of town retail, there is room for growth.

33:20 It proved to be the more resilient side of the retail sector as opposed to shopping centers and high street retail, and rents are at very affordable levels. So I think potential for further growth there as well. Happily, those are the two largest components of our portfolio. Next question, which is split into two. How does the asset recycling process fit into the company's overall investment strategy? And how do the current capital expenditures and redevelopment projects enhance the portfolio's value, and what are the expected returns on these investments? I think the second half, perhaps answered, 28,000,000 being invested. We expect to see about a £10,000,000 profit on that 20,000,000 28,000,000 invested, plus we're gonna see higher rents, plus we will have more environmentally efficient buildings.

34:19 But the asset recycling process, we are, for the most part, long term holders, if indeed that's the thrust of the question. We're not really in the business of buying poor assets, improving them, and selling them. That's typical property company trader activity. We're long term investors. So if we recycle assets by improving them, we've then created the assets that perhaps we always wanted. So we tend to be holders of those assets once they have been improved. But one of the, I think, quirks of how we all deal with environmental performance at the moment is that the way environmental performance is measured is very static and absolute.

35:10 So if we were to replace all our current properties with brand new, newly developed BRIAM excellent rated EPC a grade buildings, we would score very highly from a certain e and an s perspective, maybe not so much for a g. Because in doing that, we have sold all the properties that we can't be bothered to refurbish and sold them to someone who perhaps doesn't have sufficient resources to improve those buildings and bought buildings where the embedded carbon in building those new buildings hasn't been considered because there's an absolute focus on operational carbon, the amount of carbon that's generated during the running of the buildings. I think that needs to change, and I think we need to give credit to ourselves, and indeed our shareholders need to give us credit. And when I say us, I mean we as an industry, and indeed us in particular, for improving the buildings that we've got.

36:11 And every time we improve a building, we are making a difference to the overall carbon intensity of the portfolio. So if it's that sort of recycling that the question was aimed at, I hope I've I've answered that as well. The next question is how does the company manage relationships with tenants to ensure steady rental income and minimize vacancies? The first thing to say on that is we manage this portfolio in house. We collect all our own rent. It's not something we outsource, which means we have a one to one relationship with each and every tenant in the portfolio. We will start speaking to tenants comfortably two years before the end of their lease about what their future intentions are.

36:57 We have approached a large number of our tenants in recent months and indeed years offering to improve the environmental performance of their buildings through the adding of solar PV on the roof. And you can see this image in front of us now, the solar PV on the roof of that building. And the offer is that we will suffer the we'll make that capital investment to to put the solar on the roof, and in return, the the tenant will enter into power purchase agreement to buy the energy from us. They will make a saving on on their electricity bills. They will be able to improve their environmental performance and claim that they are a greener business than they were as indeed can we, and we get an additional cash flow.

37:52 So it's a it's a partnership relationship. I think the days of adversarial landlord and tenant relationships are are are really should be in the past, and it's not the way we approach things. And if we I mean, if you take a look back three years to when we were in the in the depths of of COVID, in the in the year itself, we collected 91% of the rent that was due without falling out with a single tenant, and while it was not contractually required to pay rent in that year. And that was largely based on on those relationships. And in terms of minimizing vacancies, it's about keeping one step ahead, speaking with the tenants well in advance, and making sure that when you do get the properties back, you make the investment to make them attractive to current levels of demand current.

38:53 The next question, when some owners are converting offices to residential, what do you believe the future for office ownership is? And will you be buying any more in this sector? This is something that's talked about a lot. And the the the the words that I hear again and again when people talk about offices, stranded assets. The trouble is you can't just dream up a new word for an old problem and claim it's a new problem. All a stranded asset is is an obsolete asset, and obsolescence in real estate has has been a fact of property investment forever, and it's been particularly acute in offices.

39:39 Buildings wear out. They become unfashionable. The plant and machinery in them wears out. We come up with better ways of heating and cooling, and we need to make sure that we're keeping buildings up to date. There are parts of the office market that I don't want to own, out of town offices on business parks, but there are parts of the sector that I'm only too happy to own. And as I said, we acquired offices in Central Manchester. We acquired offices in Oxford, But I think it will always be a smaller part of our portfolio. I'd be very surprised if it was ever more than 20% of of our portfolio given our portion for the industrial and logistics sector and for retail warehousing, which I think will always make up the bulk of the portfolio.

40:32 And I think there is a future for for offices. I'm sitting in our office in London today. The train this morning was busy, busy, busy, busy, and I don't think they're all going Christmas shopping. I think people are coming to the office. And whether you come to the office three days a week or five days a week, those businesses still need offices to accommodate their staff on the days that they're in. So there is a future, but it's a market that is changing and perhaps will always change. That's the end of the questions. So thank you very much. I hope that's been interesting, and, I hope, I'll see you on a webinar again before too long.

41:21 Perfect. Richard, thank you very much for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of CUSTODIAN PROPERTY INCOME REIT PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.