CTP N.V.

And good morning, and thanks for joining on this Q3 call, talk about the results and the things we have been busy with over the past couple of months and maybe start with talking about CTP, a growth company. We enjoy growth.

We like growth, and we see growth opportunities to continue to develop, build for our clients and secure new business. So, growth comes from supply chain professionalization, if you like.

So, we have seen obviously many events over the past decade and you could maybe conclude or say that this whole supply chain becomes more professional. So, companies adapt or adjust to different market circumstances or different events, which we have seen over the past years.

We benefit from that in different ways. That's one, supply chain.

Second is Nearshoring. We continue to see manufacturing coming to Central Europe for the region, for Western European countries as well.

But we also see growth in the markets of Central Europe. So, the consumer spending, maybe when I came here first in '95, 30 years ago, Central Europe was about low-cost manufacturing.

In the meantime, of course, with all the GDP growth, which we have seen over the past decades, the local population have money to spend and they do spend. And obviously, that results in demand for property warehouse, for example, e-commerce, et cetera.

We see also growth coming from defense industry. There's a lot of talk about it.

But in the meantime, we've also seen some concrete demands in our German portfolio. For instance, there is multiple companies who are involved in the defense industry, and they ask for more space.

So, that's good. So, we continue to see mostly from existing clients, strong demand from a diverse tenant base, it's including retailers, pet food manufacturers, semiconductor business, but also demand from automotive-related industry, maybe moving from West Europe to Central Europe to Eastern Europe or Asian companies coming in and set up business in Europe for the European market.

In numbers, we signed 1.6 million square meter over the past 9 months in '25. This is 6% up compared to what it was in 2024, 6% plus.

And we have done that at 6% more rent. So, our rent average per square meter per month has grown with 6%.

Again, we look also forward to continue this trend. And typically, we close a lot during the last part of the fourth quarter of the year as we've done last year and the years before.

So, we're on schedule to close more leases by the end of the year. Stable, consistent growth, 2/3 of our business comes from existing clients, our partners, long-term clients, loyal clients.

It's also them who help us grow in new markets. We get 99.8% of all the rent which we charge is being paid, retention rate, 85% and 80% of all the new construction happens in existing business parks.

Our integrated business model combines the operator. So, I'll talk about how we break down our different business lines.

The operator is the income-producing part of the business. Those are all the properties which we have built over the past years is good for EUR 780 million of rental income around that number.

The second activity, the developer with 2 million square meters of properties under construction with a land bank of 26 million square meter. Those are the people who are busy with building property, constantly improving the quality of the property, come up with different property concepts and innovations, make the properties consume less energy, less maintenance cost.

You want generic design buildings because the building will last beyond the lease term of the first tenant, et cetera, especially nowadays with so many changes going on, it's very important that you get the property right, the location right, and to make sure that you have amenity services, utilities, electricity on site in those business parks to make sure that your clients grow. And that's what happens.

The last, if you break it down and say, okay, we have this operator income-producing developer construction. The last bit, maybe most exciting part is the growth engine.

We have been growing beyond the markets where we are active. Remember, the IPO we did also to raise capital to get access to capital, affordable, cheap capital to grow our business beyond, and that's what we continue to do.

This year, we delivered 500,000 square meters, a bit more 0.5 million square meter. Mostly pre-leased.

We do 10.3% yield on cost. And who are those tenants?

It's LPP for Bucharest, Hitachi for Brno, Japanese client, long-term client, but also Zoomlion in Tatabánya in Hungary. This is one of our Chinese clients.

Thank you very much to the clients for the continuous support, commitment and loyalty and thanks for working with us. We've been able to complete these projects on time and in budget.

Again, end of the year normally is a lot of projects come to the market. We have 2 million square meters under construction, 2 million.

Not all of that will be complete by year-end, but many will and the rest will go to 2026. When all of the stuff which we build and complete this year comes to the market and is leased, and we are another EUR 165 million of rental income at 10% yield on cost, we are well underway to hit the EUR 1 billion of annual rent by 2027.

That is our target, and we are on schedule to hit that target. A couple of highlights maybe on different markets.

What we see good is Czech, stable. We've been here for a long time.

It's our home market, good occupancy, good returns. Poland, relatively new for us, largest economy, of course, in Central Europe, quite important to be there.

We've done well, more than we planned. So, quite happy with that.

Germany, as well, we see more demand over the past couple of months also turn into deals. We signed the lease contracts, which is good and also makes us positive for the future.

Some of you had the opportunity to visit us at our Capital Markets Day in Wuppertal in September. So, you have also seen our projects in Mülheim, Aachen and of course, a couple of other places.

So, it looks like over the past years, we have been able to put a team together. We have secured land and permits that we now can go ahead and build those properties and lease them, which we look forward to doing.

Yes. So, we actually think it's just the beginning of CTP.

I think it's more complicated probably to come from 0 to build 10 million or 15 million square meter portfolio than it is to double from 15 million to 30 million square meter. Let's see, we have systems in place.

We have a fantastic team of people, great relationships with clients, but also with the local authority. So actually, we look forward to hit that 30 million square meter one day.

We target for 2030. Let's see how far we get.

So far, it looks good. Maybe a couple of things about the new markets.

I wanted to talk about Italy, which is another European market, Northern Italy, where we have many clients coming from that part of Italy. We now have an opportunity to get started with some projects, which we look forward to doing, and we hope some of them will already be complete next year in 2026.

So that will happen. We think it's a next logical step in the region.

We obviously already active in Germany and Austria and yes, in Italy, Northern Italy, we see some good opportunities to introduce our full-service business park concept. We'll start with some smaller projects maybe, but there's also an opportunity to accelerate and to come up with a different entry strategy similar to what we have done in other countries, Germany and Poland over the past years.

And then Asia, we definitely like to have a closer look at the opportunities in Asia as we think our company and our clients don't stop in Europe. They go beyond.

They are often global players, and they have asked us whether we would be willing to support them in Asia and Vietnam to be exact, and we have been spending the past 12 months looking at opportunities. And we became more positive and enthusiastic about the idea of doing a project in Vietnam.

So, we expect more to come from that. Don't expect huge things.

We will start with one project and maybe do a second. We learn by doing with existing clients, with pre-leases, but definitely it's an opportunity, it's 100 million population, early 30s average age, so young, very productive with huge FDIs, not only from the consumer electronics industry, but also LEGO and Volkswagen Skoda have just opened up a plant or building a plant.

So, many opportunities we see there, which we want to have a close look at. Happy to answer any questions.

I think, I'll hand over to Maarten for now with some more details on the financials, and then I'm here later. Thank you very much for your attention.

Moving on to the financial highlights. The like-for-like rental growth came to 4.5% in Q3 '25, while occupancy remained stable at 93%.

The net rental income increased 15.4% to EUR 549 million as we continue to reduce our service charge leakage. The NRI to GRI ratio, therefore, improved to 97.7%, while we also continue to improve our EBITDA margin.

Annualized rental income increased to EUR 778 million, illustrating the strong cash flow generation of our portfolio. The company-specific adjusted EPRA earnings increased by 13.1% year-on-year to EUR 305.2 million.

While the group's EPS amounted to EUR 0.64, an increase of 7.2%. Thanks to the deliveries and net development income being backloaded to the fourth quarter, the group is on track to reach it's guidance for the year.

Now looking at the valuation results. For the Q1 and Q3 results, only the investment properties under development are revalued.

Valuation results in the first 9 months of the year came to EUR 802 million. Of this, EUR 385 million was driven by the construction and leasing progress on our developments, but EUR 373 million came from the revaluation of outstanding portfolio and EUR 43 million from our land bank.

The total gross assets value now stands at EUR 17.7 billion, up 10.6% from full year '24 and 16% year-on-year. CTP's reversionary yield stands at a conservative 7% and we expect further yield compression and positive ERV growth in line with inflation or slightly ahead of inflation for the rest of '25.

This is also illustrated by the new leases signed in the first 9 months of '25, where rents are 6% higher than the new leases signed in the first 9 months of '24, which is supported by the undersupplied nature of the CE markets and industrial and logistics space per capita is only half compared to the U.K. or other Western European markets.

The transaction markets continue to recover across Europe as there's more clarity around funding costs. We expect an increase of transactions into next year, especially on the private equity side, where funds are coming to maturity.

We expect to see more turnover. This will offer opportunities for us.

We also remain active in the market for land acquisitions, plenishing the land bank in our existing markets, growing the land bank in countries that we entered recently like Poland, which we plan to enter like Italy and Vietnam, while maintaining our disciplined capital allocation. Our EPRA net tangible asset per share increased from EUR 18.08 at year-end '24 to EUR 19.98 at the third quarter, representing an increase of 10.5% since the beginning of the year.

Year-on-year, the increase was 14%. With this NTA growth and our dividend, we delivered a total accounting return to our shareholders of 70% in the last 12 months, highlighting our superior return profile, which is unique to the real estate sector.

And now I hand over to Richard.

Our funding strategy remains centered on maintaining a stable investment-grade rating. And we are very happy that our improving credit metrics were recognized by Standard & Poor's with their upgrade in September.

We focus on ensuring access to multiple sources of liquidity, meaning attractive funding is available at all times. We have a geographically diversified investor base, now further strengthened by Asian investors added in 2025 and a growing share of unsecured debt towards our target of 80%.

Thanks to our highly accretive developments and proactive debt management, our interest coverage ratio increased to 2.5x. Our normalized net debt-to-EBITDA remained stable at 9.2x, and our loan-to-value stood at 45.2%.

We expect loan-to-value to return to our 40% to 45% target as our development pipeline is completed and revaluation gains are fully booked. As presented during our Capital Markets Day, with our market-leading development yield on cost of over 10%, every euro we invest in our pipeline increases our ICR and decreases our net debt-to-EBITDA, allowing us to grow at our 10% to 15% annually while improving our overall cash flow credit metrics.

This was also highlighted by Standard & Poor's on their upgrade of our credit rating to BBB flat with a stable outlook in September. Moody's have a positive outlook on our credit rating, confirming the positive trajectory of our ratings.

In the first 9 months of 2025, we signed EUR 1.7 billion of unsecured debt to fund our organic growth. This included EUR 1 billion in dual-tranche bonds issued in March, an inaugural JPY 30 billion Samurai loan equivalent of EUR 185 million and a EUR 500 million syndicated term loan facility signed in June, which had commitments of over EUR 1.2 billion.

Together with the 6.5-year, EUR 600 million bond we issued in October, this continues to demonstrate our ongoing strong market access. We continue to actively manage our funding costs.

And over the past 12 months, we have renegotiated or repaid EUR 1.6 billion of our most expensive bank loans, including the prepayment in June of EUR 441 million of expensive unsecured debt. CTP maintains a conservative debt profile.

The EUR 272 million of bonds maturing in June and the EUR 185 million maturing in October were both repaid from available cash. Looking ahead, maturities remain limited over the next 3 years with a EUR 350 million bond due in January '26 and a EUR 275 million bond in September '26.

Our cash position stands at EUR 1.1 billion, including our EUR 1.3 billion RCF, our liquidity totals EUR 2.4 billion, more than sufficient to meet our cash needs for the next 12 months. The average debt maturity stands at 4.8 years and the average cost of debt at 3.2%.

This represents only a minimal increase compared to year-end 2025 as our current marginal cost of funding remains below 3.5% for 5-year money. We remain confident in the outlook for CTP.

We have a strong tenant lead list. In addition to what we have already pre-let within our development pipeline, we have 151,000 square meters pre-let for future projects for which construction has not yet started.

We continue to see rental growth across all of our markets, supported by the nearshoring trend and ongoing e-commerce growth, particularly in the CEE region. Our tenant-led development pipeline remains highly profitable.

With our industry-leading yield on cost of over 10%, we are able to deliver sustainable and profitable organic growth, while maintaining a robust financial position. We confirm our EPS guidance of EUR 0.86 to EUR 0.88 for 2025, which due to an intended acquisition in Romania not proceeding, is now expected to come in towards the lower end of that range.

Thank you for your attention. We now welcome your questions.

I have two questions from my side. So, I see leasing is up over the first 9 months.

It's marginally down in Q3. I think you mentioned that you want to have a good final quarter, but I also see that last year, that final quarter was also very strong.

So, do you expect to be up in terms of leasing volumes for the year as a whole? And then secondly, can you just remind us why the intended acquisition in Romania didn't proceed as planned?

I will take the last question on the Romanian acquisition first, and then I'll let Remon comment further on leasing. So, it comes back to antimonopoly reasons where there were two restrictive conditions for us.

So, we decided not to go ahead with it. We see enough opportunities in terms of acquisitions across Europe.

We continue to buy land. So, we always do also relative capital allocation where it doesn't make most sense for us.

In the end, with the restrictions here, it didn't make sense. So, we decide to prefer to invest in other opportunities.

We didn't answer the second part of the question with regards to leasing. If you like...

No, I can give some color on that. Anyway, with reference to what Maarten just said, well, even if we wanted to buy, we can't buy, because that is very complicated with the competition and antimonopoly whatever, which actually is not bad because there is other places where we can invest money.

That's why I think, we waste a lot of time on that P3 acquisition, which didn't happen. But as I said, at the end, maybe it's even better without.

With regards to the leasing, yes, as stated, we continue to see demand and that will turn into deals over the rest of the year. And yes, which is good.

So that is often the case that fourth quarter is more takeup than first or second. I don't know exactly why that is, but it has been historically like that, and we think that trend will continue for '25.

Yes. So, we did sign some leases just now in Poland, which is good.

And in Romania as well, in Germany. So yes, overall, relatively positive, I would say, I think, and we are on schedule to hit the occupancy target for end of '25.

On Vietnam, you said that you -- well, that we shouldn't expect huge things with only one or two developments. So just trying to understand here, over what time line do you expect to start these developments?

And if you're really excited about the opportunities in the country, why only start with one or two and not with like a park strategy like you are in Europe?

Good question. Well, it's definitely going to be a park concept.

So, we think of using or doing the identical thing or similar thing to what we do in Europe. So, park concept and business park, full-service business park with different property types.

But -- so that is definitely the case. But you need to also get ready in terms of setting up a team.

And so, we are now in the middle of recruiting people for our Vietnam office or Vietnam team. And that will take a bit of time.

So, that's why I think, honestly, the recruitment process has started. We have met people.

People came over to visit us in Europe in order to make themselves familiar with what we do, how we do it to get to know other people in the organization. So, it's also part of the recruitment process.

And yes, it takes time until these people will actually join, which some of them will join in Q1, beginning of next year, Q1 of '26. And simultaneously, we have agreed an option on four land sites, and that would give us the opportunity to develop around 300,000 square meter.

It will be very nice. And I think some of that we can start next year in '26, but those buildings will come to the market in 2027.

And so, that is what I think now. So, that means 300,000 square meter, EUR 150 million.

I think construction cost will be a bit lower in Vietnam, what you see at the moment it's going to EUR 500, it's more going to be like towards EUR 400 per square meter. And we think of, of course, doing that at 10% plus yield on cost, so above 10% yield on cost.

But that is the base plan. And maybe we see opportunities to accelerate and to grow more through some acquisitions as we have done before when we entered a new market, that we do our organic growth, buy land and develop or maybe here and then buy something which would help us get a bit more volume.

But yes, so that is how we see it now. So, we will need time to get familiar with the market, to put up a team, to get started.

And we want to do that carefully. And -- but once we get going, so from '27 onwards, maybe there's an opportunity to do 200,000, 300,000 square meters per year, maybe.

The market is big enough by 100 million people, there is hardly any stock. There are, of course, a couple of players, that's GLP or SLP, they have been -- they are Frasers, Mapletree.

It's not -- so there is, of course, a significant amount of developers. But if you look at the stock compared to the amount of inhabitants, 100 million people.

And if you look at all the opportunity, then the market is very -- yes, it's at the beginning. And as I explained, demand coming from our clients, we think it's a good opportunity to proceed with.

But that's how I can -- I will continue, of course, to update you on how far, how quick we can get. But that's for now how I see it or how we see it.

Okay. And just on the 10% yield on cost, is that net of land leases, given that you cannot own land in Vietnam?

Correct, it's 50-year leasehold or concession. So, what if we calculate as very primitive and as very simple.

So, we add the concession cost for 50 years. Then on top, we add cost for everything related out of pocket to develop the property, so infrastructure, construction costs and all of that.

So yes, that is included. And we think yield on cost in Vietnam is more towards what we do in Serbia.

So, well above the 10% yield on cost.

Okay. Great.

So right.

It's included.

But John, so in Serbia -- in Vietnam, like Remon says you're looking at kind of like Serbian type of relationship where you're developing at trying to get to 12% and revaluing 8.5%.

Just a quick one. It's on leases again.

So the new leases signed at rent levels 6% higher than last year. But it seems lower in Serbia, Hungary, Romania and Bulgaria.

I appreciate there may be some nuances here, but would you be able to just share some color as to why this may be the case.

That's always what we say. Some years will be up, some years will be down.

It depends a lot on which leases you are signing, especially for the smaller markets, it depends a lot on which projects are coming online and when they are exactly coming online, in which quarter you are signing the leases. To be honest, you always see volatility.

Last year, for example, we did less leases in Czech. This year, Czech in terms of absolute amount of leases is doing very well.

Same with what we had in Hungary. Hungary, we did last year, a bit more leases, this year, a bit less.

That's the normal business cycle. You can lease the space only once.

You try to lease at the highest rental levels possible to what we think our clients which add value for us long term in our park model. So, it really depends on what is the opportunity building set you have for leasing.

So, there is no -- if you look across the markets, there is no structural trends in either one of them that is really for us a point of concern. Some markets are better than worse.

That's year-on-year. Overall, what you see is, we do more leases, we do them at higher rents, and that comes really back to the demand drivers, which are long term, and they won't change from one day or another.

The demand drivers that were in place last year are still in place, and it comes back to the nearshoring, that comes back to the growth in domestic consumption, et cetera. But it depends a lot on which quarter you sign with specific deal.

That's always been the case also if you look back historically. So overall, that's what Remon also said, we are confident in our occupancy targets to hit by year-end.

And the leasing is progressing well towards that. Also, that's why we confirmed basically the guidance for our deliveries between 1.3 million and 1.6 million square meters for the year.

So, we are very well on track. And with the amount of hope that we are doing and the conversations that the team on the ground has, we have confidence in getting there.

And some markets will contribute a bit more than others, but that's normal.

I have two. So the first one, a follow-up on the expected leasing numbers.

Do you think that the average rent per square meter will rise above the EUR 6 per square meter per month for Q4? And what about '26?

Maybe that's the first one. I do another.

It would be good if they are above EUR 6. In some markets, they will be.

I don't know, maybe Maarten has the average number. Where do we see rental growth?

We see a lot of rental growth in the German Deutsche Industry portfolio. Remember the old buildings we bought or older buildings we bought.

Of course. Why is that?

Because we bought relatively cheaper. When we bought, the rents were quite low, EUR 3.5, so let's say, EUR 42 per year.

And that we see that going up to, yes, EUR 70, EUR 60, EUR 70. That's true.

We have to also invest in those big properties. But just yesterday, we did a deal at that kind of number.

So it's around EUR 6 per square meter for the Deutsche Industry. I think we see rental growth throughout -- also Romania because the other question was that, we do less in Romania.

I don't think so. We have seen a lot of rental growth in Czech.

So yes, Czech, I would think it's EUR 6. Maybe, Maarten, you can add some on that, whether it's EUR 72 or EUR 70 per year on average, maybe throughout the portfolio.

I mean, big box logistics in Bucharest, you will not get to EUR 6 for sure, but something smaller in Czech, you will definitely get to EUR 6. Poland, you will not get.

Although the -- by the way, the small stuff we do in Warsaw, so we have SBU, small business units. Obviously, that is higher than EUR 6, but those are small units of 1,000, 2,000 square meter units.

So, lower than 5,000 square meter units. The square meter price will be significantly higher than a large 10,000, 20,000, 30,000 square meter warehouse building.

So, I think there is also the difference in the rent per square meter per month. But that is going quite well, the smaller units, which also, yes, we like because there is good demand for it as part of the -- what's going on in the region of Central Europe, and of course, you have small and medium-sized companies, that segment is growing.

But there's also big multinationals taking smaller units here and there. Yes, so then they pay more rent.

Maarten, do you have some more details on the average?

Yes. You can see that also in the presentation.

If you look on -- Steven, if you look on Slide 10, you see exactly the rents that we are making per country. Whether we in the Q4 will be above EUR 6, like Remon said, it depends a lot on which market we are signing.

If we are signing more in Czech, yes, we will be above EUR 6. If we sign more in other markets, it will be a bit harder.

But that's normal. So what we are looking is what is the real underlying rental growth country-by-country.

And that's ultimately -- that comes back to the 6% that we are showing. And smaller countries, as I said before, it depends sometimes a bit on location, because whether you're leasing the capital city, whether you lease indeed, like Remon said, smaller units or bigger units.

So in Poland, we have, for example, seen the increase there. So, the leases which we did this year were on average at EUR 5.50.

But that includes some smaller stuff, includes, in some cases, some extras that we do for tenants. But on average, Poland, we see some rental growth coming through.

Romania as well, if you look an underlying, while if you look maybe to the absolute figures, they look flat, but that because there is a big unit again in this year's numbers. So big units typically pull it slightly down.

But if you look -- and I know it's harder for you than for us, because we look at it on a unit-by-unit basis when we are doing the deal, when the leasing team sits down to speak to the tenant, we look, okay, what is the ERV of the unit. We continue to track towards that.

And then, when we -- we look on that detailed level, we continue to see the rents creeping up in countries like Romania, in countries like Poland, in countries like Serbia, et cetera.

Okay. To ask a bit differently.

So -- and to fully understand. So, like-for-like growth per country is, let's say, inflation like, maybe a bit more, but let's say, inflation.

And then the mix you don't want to commit that, that will change materially as of today. So, the mix should be broadly similar.

It could be a bit better or a bit worse. Is that correct?

Yes. That's correct.

Look, what we see is -- what we said is we expect market rental growth indeed to grow in line with inflation. The mix depends indeed where we sign leases.

That's hard for us to commit. If you look on a year or 2-year basis, yes, we can give a rough split, but not on a quarter-by-quarter.

That doesn't make sense. That's not also how we run our operations.

So, that's harder to determine. But the underlying rental growth remains there, and that's also the confidence we have, and that's also -- you see reflected in the like-for-like rental growth coming through in the P&L.

So, it's not only the market rent. It's also if you look to the like-for-like when we are really capturing the reversion of leases coming up for expiry.

Yes. Steven, I think that the big picture is, we see increasing demand, and we see that increasing demand at higher rent levels pretty much across the markets in which we operate.

If you look at the more granular data, you will find something that looks a little bit worse. But the overall trend is the one that we would try and highlight, which is continuing strong growing demand and that at higher rent levels.

I hope you can hear me. I have two.

Maybe on the first one, it's a follow-up on Vietnam. Just wanted to understand a bit what will be your target in terms of tenants?

I would assume that you will mostly look for existing tenants that you already have in CEE for the first project. And secondly, what level of pre-let will you feel comfortable before launching such a project?

Thank you. Yes, we hear you loud and clear.

Good questions. Indeed, so what we want to do in Vietnam is very similar to what we do in Europe, full service business parks, whereby we offer a variety of different property types.

In Vietnam, they use the word ready-built factory and they use a ready-built warehouse, and they refer to build-to-lease. And we call it a little different.

We say CT box, CT Flex, CT Space, but it's similar. So let's see -- let's test the market.

We want to go out with a pilot. Yes, around 50% pre-lease.

I think that is the kind of thing. But as I explained, the four of the locations which we have secured, you could do 300,000 square meters of total lettable, say, assume that you can start construction mid of next year, second half next year.

You may start initially with 100,000, 50,000, let's see, in one location. And locations, I referred to maybe also a bit more to explain.

And we are -- we do a paper. I think we have a paper, Vietnam paper, which we can share with you.

It's going to be online. So, also to get a bit more background on what is the economy like, FDI, what is the market like and why do we see opportunities and where do we see opportunities.

But to explain a little bit, we could talk about one location close to Hanoi in the north of Vietnam, which historically, it's a concentration. There's a lot of people living there.

As I mentioned, total 100 million people in Vietnam. So in that part, in the northern part, a couple of dozen million people, so it's quite large.

But more importantly, there is many of our clients with different activities. So, if you refer to the Vietnamese semiconductor industry, companies like Wistron or Foxconn, who are our clients, they have facilities in that part of Vietnam already.

Historically, because they have a China Plus One policy, many of those, which means that not all of the manufacturing facilities are in Vietnam or in China, some in China for Chinese market, some outside of China for South Asian market. And that is -- those are Taiwanese clients who we have been working with for more than 20 years, especially in the Czech Republic.

Anyway, those are there, and they have suppliers and subcontractors and all of that ecosystem. And that's one of the target groups, which we would, which we talk to and say, okay, yes, we will build properties in and around Wistron, Foxconn facilities in the region of Hanoi.

But in Hanoi, obviously, you can imagine there's also consumer spending. So there's also FMCG, there is a need for warehouses.

There is e-commerce. There is all kind of that.

So, our clients who are involved in 3PL logistics -- involved in 3PL logistics or supply -- so that's the kind of ecosystem of the clients we have, which we will plan to work for in Vietnam. So yes, indeed, mostly existing clients, but could, of course, also be new clients.

But there's many of our existing clients who have facilities in Vietnam or who are considering opening up facilities in Vietnam.

Thanks very clear and looking forward for the Vietnamese paper. Then second question is on, I think that you commented that you expect very strong ERV growth for H2.

As I remember, we don't value the standing assets in Q3. So just to understand in which country you expect the biggest ERV growth?

And how is it based to your recently signed lease? I think that we comment a bit on the rent level left and right, but just wanted to get from a valuation perspective, when do you see the biggest discrepancy between what you -- at what level you are leasing and what the valuers is assuming as ERVs?

Yes, sure. So, what we said is that, we expect to grow it in line with inflation or slightly ahead of inflation, the ERVs.

And that comes back to where we are signing the rents as we are continuing. As I said earlier, to sign the rents 6% higher.

We also have indexation coming in. So, we see market rents growing in line with inflation or slightly ahead.

If you look on a country level, there will be less ERV growth in Czech. In Czech, the opportunity for us, we have commented on that before, is more to capture the reversion because in Czech, we have one of the largest reversionary embedded potential as the market rent there already has grown quite a bit.

And of course, with our leases, when they are 10 years or 15 years, it can take some time a while before you can capture that. So, you need to go through the world.

And we expect more ERV growth in countries like Romania, for example. So, the more upcoming markets.

We'll also see some ERV growth in Poland. In Poland, there will be really a divergence between the new and the old.

There has been different build quality. As you know, we are a long-term owner.

We commit to locations. We build buildings that will last because we have the commitment to own them long term, both vis-a-vis our tenants, but also vis-a-vis our municipalities.

While in the past, the Polish market was more dominated by trader developers. So, what you see there is more a divergence where you might have given more incentives on really older product or lower quality product.

While if you look to new product that is coming to the Polish market, you can lease at good rates, and that's what you also see reflected in the rental growth that we are doing. So, there will also be some ERV growth.

But in general, also across some other markets like Serbia, we expect some ERV growth to come, Bulgaria. Hungary, I don't think so.

Hungary is a bit more vacancy at the moment, especially around Budapest, but there is also a split between the region and Budapest and the other areas of Hungary see a bit stronger rental growth than Budapest at the moment. So, there's always those local factors.

But on average, we expect to grow in line with inflation or slightly ahead of inflation.

And if I may squeeze a very quick third question. You could deliver up to 1 million square meter in Q4.

Just wanted to understand how much of new projects you expect to launch in Q4? Keeping, I would say, the 2 million square meter of development pipeline, I would say, unchanged?

Or could it be split a bit more into the beginning of 2026?

It will be relatively unchanged. I don't expect our pipeline to materially change.

It comes also back to next year because for next year, as you know, we guide to 1.4 to 1.7 million. So we also need to start those projects.

Simple projects will take us 9 to 12 months. If you have a simple logistics building.

In some cases, you can even do it a bit quicker. But there are more complicated projects if you do some extras for tenants, et cetera.

So, we will always run a pipeline, which is slightly ahead of next year's deliveries, taking into account the time to complete.

Just two questions on my side. The first one is on the reversion, which has come down 120 bps Q-on-Q since Q2.

Can you comment maybe on that? And then second question is on occupancy rate.

You are still at 93% versus the target of 95%. I see that client retention is at 82%.

It's a good level, but it's for me the lowest figures you had over the last 2 years. So, is there more downside risk on occupancy rate than upside risk?

And then have you any specific concern on some countries?

So regarding the reversion, that's partly driven by the fact that we don't reset ERVs in the third quarter. In the third quarter, as you know, we don't revalue our portfolio, only the developments.

So, if you don't reset your ERVs and we are capturing reversion as leases are coming up for maturity, naturally, the reversionary potential comes down in those quarters. It's more a mathematical effect than anything else.

Then your question regarding occupancy, yes, we remain stable around 93%. And that's also what we explained during the Capital Markets Day.

The two main markets which are below are the two market entries, Germany and Poland. Poland, we expect end of this year to be more around 90%.

And then into next year, we will keep up to the 95% target. Same with Germany.

So that's part of the market entry strategy. We target to be around 95%, especially for our mature markets.

In some markets, you even would want to be a bit above. And why do we target around the 95%, maybe also good to remind you, that's really to have the growth opportunity with existing clients.

We want to have always some space available to grow with existing clients in our existing parks, because that gives us -- if a tenant comes to us and say, I want to expand in an existing park, that gives us much more negotiation power than when you have to build a new unit. So, that's why we always target around 95%, and that's why our pipeline deliveries, we target to be 80% to 90% to always have that space available to grow with existing clients.

If you also put it in perspective, on a yearly basis, we will sign more than 2 million square meter. If you look to the occupancy, if you take it from our portfolio, if you take 5% of a portfolio of 30 million square meter, that's 700,000.

We leased 3x as much in a year. So actually, yes, we have a bit of occupancy, but that gives us an enormous amount of flexibility.

And given the amount of leasing that we are doing, that's not a concern for us. It's just an opportunity to have those long-standing client relation and to leverage that to drive rents higher.

Then on your last question or last part of your question, which was the retention rate. Retention rate was indeed slightly lower this year, correct.

No fundamental issues, but there are, of course, sometimes you can have individual tenants who decide to leave. For example, if 3PL has a client and they want to consolidate or they want to move to a different location, they might terminate.

It's not a reflection of your business, but it's more a reflection of sometimes the change in supply chains. Of course, we try to keep all our tenants.

Sometimes actually, also, for example, we see in Germany, it's sometimes better to replace tenants if we really want to capture that upside potential, for example, in the Deutsche Industry portfolio. So, there we are sometimes actually happy when people move out and we can replace them for a higher paying tenant.

So it's always a case-by-case analysis, of course, that we are doing. The absolute figure is slightly lower, but there is no fundamental underlying driver, which would mean that the rent retention rate will be lower going forward.

It depends on the leases we signed in the quarter.

Yes, I can confirm that. So, I can just confirm Maarten said some of the leases we had to terminate in Germany, because we -- yes, the relationship was not great, and we felt that we would be better off with a new tenant in that building, doing some refurbishment and get more rent out of the property.

So that happened in Germany and is still happening while we speak, which is part of cleaning up the portfolio in Germany. And also with regards to vacancy, yes, we have been at around 93%, 95%.

Sometimes also, you don't need to be in a rush to lease it immediately. Sometimes certain areas need some time for the market to absorb some space.

And then I'd rather have 6 months of vacancy cost and then do a better deal as pushing down on the rents. And so, we also need to balance and understand the market.

And if there's no demand, there's no need to push, then you'd rather wait until there is demand or until the market has been able to absorb the space, which was available. But I think overall, also, we see from a supply side that yes, here and there, some of our peers and colleagues stopped or slowed down or there is no land or things like that, which is good.

So long term, you -- we believe that these properties, which we have built are good quality properties, and they will continue to generate and produce income, which values may go up and down, it depends on the interest rates and so on and so on. But the income from the property so far has always grown, and we continue to see that.

And that is more important to build the cash flow and to make sure that we create this income in time at the correct level. So yes, you play with the supply and demand and balance around the 93%, 95%.

But yes, not huge. And overall, good, we are gaining market share, which is good, which also later on give us more opportunity to grow rents.

It's good.

And maybe just last one on my end. Can you remind us the size of the acquisition in Romania that you didn't do?

What was again...

The quantum of investment was around EUR 250 million.

A few questions go one by one. So just to confirm, was the Romania acquisition explicitly baked into your guidance?

And is the acquisition not happening going to impact your GLA target for the year of 15 million square meters? And moving forward, do you have any annual acquisition assumption guidance we could use?

In terms of GLA, that's mostly driven by our development. So, we confirmed our guidance on terms of development between 1.3 million and 1.6 million square meters, which means indeed, like Remon already mentioned, we will deliver nearly 1 million square meters in the fourth quarter, which will bring us probably rounded towards 15 million, whether it's exactly 15.0 million or whether it's 14.9 million or 14.8 million, we'll see.

It depends more on where we end in that range of the deliveries. That's ultimately the key one.

So, that's with respect to the GLA target. If you look to acquisitions, no, we don't guide for a specific amount of acquisitions, because it's really opportunity driven.

If we talk land, yes, we will do each year around 200 million, 250 million, in some years, maybe 300 million of land. Because that's a lot of individual plots and that as I said, it's part of replenishing the land bank in some of the existing markets, but also growing the land bank in markets which we entered recently or plan to enter.

So, that is a more stable acquisition pipeline on the land bank side. On the standing assets, it's really opportunity driven because, yes, we like to do acquisitions, but they need to make sense in capital allocation.

So, that's why we don't guide for a specific target. We will be there opportunistically.

We are not the ones who want to pay a full price. We want to do things which make strategically sense for us.

We can do things off market. That's much more our sweet spot in terms of M&A rather than committing and then forcing ourselves to buy 600 million of standing property per year, that will not drive shareholder returns for us.

We need to be focused on what makes sense, where is pricing realistic and where can we add value. Because we are not an investor in buying simple core product, there needs to be value-add opportunities.

Yes. And I think, Eleanor, you asked if the Romanian acquisition was part of our EPS guidance for this year.

Yes. And that's also why we say that as a consequence of the Romanian transaction, not happening, we now expect to be at the lower end of our guidance range.

Great. Then on the reasoning for that portfolio falling through, does that impact your growth plans otherwise in Romania, i.e., is that region now saturated for you?

And is there a risk on future permits maybe? And then on top of that, are there any other markets where you have a position that could prevent you from acquiring in scale?

No, I don't -- it won't affect our ability to continue to grow organically in and around our existing parks by land to start new parks. So, that we don't see that as an impediment to continuing to grow our business in Romania through 10% plus yield on cost developments.

And we don't have any other market where we would think that we would have a problem.

Yes, thanks for the question with regards to Italy. I don't know how you see it, Maarten, but I think it's a bit too early.

We don't go -- we don't disclose too much details there. What we can say is that, we have been looking at Italy for the past years.

And we -- as we communicated back in 2021, when we did our IPO, we said, okay, we would like to go to Western European markets, which we said initially, we're going to look at the Netherlands and Germany. Germany worked out well.

Poland, less. Happy with the ALC property in Amsterdam, which is -- there's been some good take-up, and that's okay.

But besides that, we have done very little in the Netherlands. No, it's not the place where we see opportunity.

So, we put -- we slow down. But we always communicated we wanted to do more in Western Europe.

And Italy has been on our wish list. We now see a good opportunity to enter.

I think we are ready for it in terms of -- we have the money, we have the capacity, we have the team. But more importantly, we have also identified the opportunity.

So, what we have done in the meantime, we have established a small team of people. We currently work on securing land.

And yes, and it's not in any of our pipeline projects. So, it's the base plan, the 26 million or 20-something million square meter land bank.

There's nothing in Italy. It doesn't include Italy, so it's on top.

But I think we will keep the good news for later. That's what I think, Maarten, let me maybe add or comment on anything you want to share at this moment.

Yes. So, we'll announce the transaction when it's there.

We always announce it when we have -- when we close something. But in general, we are looking at broader opportunities.

Where we add most of the value is through land, whether that's greenfield or brownfield, we can do both. It comes back to what is the location.

That's a key thing. Whether it's greenfield or brownfield is not a massive factor in that.

It's just a bit different in terms of, do you have to take in account demolition costs, et cetera. We are looking for the right locations in Italy, which can give us a kick start.

And we are looking for sizable opportunities where we can develop our park model, which is important for us. So, not only small land plots, but more sizable ones in line with our strategy.

What we see in opportunities in Italy is a couple of things. There's a very strong manufacturing base.

And if you look to our portfolio, we do a lot in manufacturing. Roughly 50% of our portfolio is manufacturing.

So, we see opportunities there as many of our peers here in Italy are more focused on logistics. So, that's an opportunity for us.

We see some opportunities in more some smaller business units closer to town. Italy has quite a lively SME environment.

So -- and then, you know what we have done, for example, in Brno. So, you can think of doing certain of those projects here in Italy.

So that's the opportunities that we see and that is the land plots we are looking for. And as part of each market entry, we are looking at, of course, a broad set of opportunities.

And hopefully, we can update you later this year more specifically.

No, the LTV is not of our concern. And the vacancy is around 93%, 95%.

We talked about it before. We're not going to repeat.

Also historically, has been around the same number. We wait for a good moment to do good deals at higher rents.

And for the rest of the questions, I refer to what has been previously discussed. Thank you.

Yes. Regarding the ICR, I think we reported earlier that we already took most of the repricing from the higher interest rate environment that we have today compared to the environment 2019, 2020, 2021.

We see our ICR bottoming out at 2.5x. That's also what the rating agencies are saying, and we've consistently highlighted that everything that we invest in developing a 10% plus yield on cost is incremental to our ICR.

That's also one of the reasons that the rating agencies are comfortable with where we are. And despite that ICR of 2.4x at the time, Standard & Poor's gave us a rating upgrade.

So no, we don't see any problem with those ratios, and we expect that to improve over time.

So rating upgrade is always a priority. I think -- and we are happy with the upgrades we got from S&P to BBB flat, which I think reflects our ambition.

We want to be a solid BBB flat company. We think that reflects the underlying of our business with the stable cash flow that we are each year able to generate, where Remon also referred to.

We target to have a rental income of EUR 1 billion by 2027, which gives us an enormous amount of stability for the group, and a very good coverage basically of our ICR and net debt-to-EBITDA. So clearly, it's a priority for us to also work on Moody's.

I cannot speak about the time line. We plan to deliver on the plan like we always do.

Moody's has given us a positive outlook, but it's ultimately up to them, of course, to take the action. We work as hard as possible to get there.

And then, I'll let Remon comment on the defense opportunity.

I don't know.

Yes, we do. We have confirmed the guidance we have given at the Capital Markets Day.

No change. We are on track for this year.

So, we are also -- with the leasing we are doing on track for next year.

Thank you all for attending. If there are any follow-up questions, don't hesitate to reach out to us.

We are also doing quite some of the conferences and roadshow in the coming days. So, we're always happy to continue the dialogue with our investors.

So thank you for now.