Thank you, and welcome to our financial results call and webcast. We have with us on the line today, Jeremy Lewis, Evert Jan van Garderen, Tom Newton, Peter Mills, Roberto Fraticelli, and Valeria Di Nisio.

I will now hand over the line to Jeremy Lewis.

Thank you, and good morning, everyone. And yes, I think this is probably one of our most interesting years, it's certainly been a very busy one.

As you can see, we've been doing a lot with the portfolio. Some of the results, I'll come to in a moment, are a lot better than they appear to be, and I'll explain why in a moment.

But overall there, I think in terms of the income of the company, and therefore, its dividend, I think we're in a pretty strong position. Certainly, looking forward, we've got plenty of reserves.

I think that rental growth will really start coming in from Sweden, particularly with C4 coming on, et cetera. Okay.

So first of all, we've been very busy selling properties, buying properties. Woluwe is very important.

It is, as we've said, the best center probably in Belgium, but certainly in Brussels with very little competition, and there's a huge amount of work to be done. It's been there for 50 years and some parts of it look it, but certainly the demand from tenants is exciting.

So perhaps Tom will talk in more detail about that. And I suppose, with a mixture of good news and bad news, the bad news we have to talk about is, is Tom deciding at the grand old age of 60 that he wants to have more of a life of leisure, for which I can't blame him, but there we are.

No, we'll miss Tom a lot, but he is going to stay as a consultant for some years, we hope. So we will stay friends for long time, I hope.

Yes, I mean, the earnings I talked about, they're pretty strong, clearly, with a low yield at Woluwe. That's a minus, but equally the debt we've organized to pay for it is even lower yield.

So overall, with the sales and purchases, the earnings are strong. The net property income, therefore, is up.

The net asset value is down a bit, but that's for 2 particular reasons and should not be seem to be a predictor of future capital growth. When you buy a property, you have to pay stamp duty or registration duty, whatever it's called, and clearly, those are big chunk of that in the case of Woluwe, given what a large investment it was.

And the loss in value on that property is entirely to do with the registration tax just under EUR 30 million. We've also, of course, had, which is nothing to do with direct property markets, the Curno loss, and we reckon that's probably, if you add those 2 things, the Curno is about EUR 34 million, we've got about EUR 60 million off the NAV.

So the rest of the portfolio, if you like, in certainly local currencies, has not gone down. There've been some pluses and minuses.

So we think the portfolio is pretty sound. We are going to continue some sales.

We are in negotiation. And the portfolio will be evolving as you would expect.

On renewals and relettings, I think we're doing pretty well. The next question of like-for-like rental growth.

Obviously, this has been an effect that -- which Tom will talk about in more detail of good old H&M, but remember, don't get too worried about H&M, because in total they only represent about 2.5% of our income, but certainly that's a short term, very short-term effect as they departure from the Passage du Havre and from Tours. And again, Tom will go through those numbers.

But those 2 things together add up to about EUR 0.5 million of rent. So that's not insignificant.

And in terms of some -- looking at the markets overall, yes, I mean, we had very, very strong market for some time, particularly in France. And I won't say that the market is weakened in France, but certainly, institutional enthusiasm for shopping centers of any kind has probably waned a bit.

But I think that we would consider that most of our properties in there, in particular, for [Audio Gap] markets. We will continue selling.

We are negotiating on property in France, another one in Italy and in Sweden. So the sales program is on target.

And indeed, we could probably quite easily sell more than we really need to. So there is always a balance between looking at the debt-to-equity ratios and loan-to-value ratios and, of course, rental income.

So if you're selling high-yielding properties and buying low-yield ones then you have to plan for that, which we have. So you should not expect that dividend is going to suffer.

The EUR 2.15, we've announced this time allows for a significant amount of money to be carried forward to next year in our usual, just in case, we're being cautious. But I think if you look at the market overall, clearly, there are some headwinds, but I don't think you should get too agitated about the famous question of the Internet and the sales on the web.

Remember that according to Forrester, probably overall in our markets, sales on the web only amount to about 15%, 17% total. So we've still got quite a lot of sales being done in physical shops and that's going to continue.

So their predictions are for 2023. In other words 5 years' time, but somewhere around 17% will be overall in our market spent on the web.

So rental growth. Clearly, we've got some inflation coming back into the market, not a lot.

So that's going to help a bit. But I think the portfolio is being changed significantly.

Clearly, the opportunity to buy Woluwe was an important one. It does give us a very, very strong presence in that market, and, of course, Evert Jan is working in getting our listing on the Brussels market where most of those stocks trade at a premium to NAV, not a discount.

I don't think that's going to immediately benefit us, but certainly, we're putting a lot of effort into talking to Belgian investors. And indeed, part of that is, as you'll see that, talking of board seats, that Emmanuele Attout, who is ex-PwC for many years, has joined us on the Supervisory Board, and -- but most importantly -- no, equally importantly, I think that Roberto and Peter have joined the formal management board of the company.

Now, clearly, we would have liked Tom to have done that. Tom wants to enjoy life a bit more than he has recently so he's not there.

But we've also directly and indirectly, if you like, made even more independent the boards of the Stichting Prioriteitsaandelen, the proprietary shares, and the Administratiekantoor with the appointment of 2 very, very senior Dutch lawyers who will ensure the independence of those organizations, so there we are. Overall, we've been very busy, I think, the busiest year we've ever had, yes, with some minuses, of course, but you can't everything -- expect everything always to be positive.

But certainly looking forward, I think the markets are going to spend much more than anything else on the direction of interest rates. But certainly for the moment, the expected increases are not there.

At some point, they will, of course. And clearly, we're planning for that by making sure that our debt-to-equity ratios are not overdone.

But you'll see that Evert Jan and his team have made huge efforts and great achievements in significantly changing our loan book to plan for that future. So on that note, I will hand over to poor Tom, who's going to talk about -- finish up my bit.

Tom?

I think, Evert Jan, you'd like to shoot first, wouldn't you?

Okay. Fine.

Go ahead, Evert Jan, go on.

No, that's fine, Tom. That's fine.

I have, indeed, a few remarks, which I would like to make in this call. So good morning, everybody.

And in particular, I would like to talk about, of course, the finance transactions, which changed our loan book significantly and the consequences for the equity and debt of the company. As Jeremy said, it was not only a busy year for the property portfolio, but we also had a major change in the loan book due to 9 finance transactions during the year for a total amount of EUR 1.6 billion, almost 90%, actually, of the current net debt of EUR 1.8 billion.

The target for the year was to extend the loan book again. Including the most recent transaction in Italy with Intesa SanPaolo, BNP Paribas and UBI, which we closed in July, the average term of the loan portfolio is over 6 years once again.

Given that the attractive market interest rates did not move substantially compared to a year ago, we locked in-future interest rates by entering into new hedging contracts. And as a result, we achieved fixed rate levels of below 2%.

The largest finance transaction was for the acquisition of the Woluwe shopping center. In January, we entered into a bridge facility of EUR 472 million, 50-50 with ABN AMRO and ING.

Actually, the largest single finance transaction in the 27 years' history of the company. In June, half of this bridge was converted into a 7-year bullet loan, granted 2/3 by ABN AMRO and 1/3 by ING.

And the loan was secured by a mortgage of the Woluwe shopping center. The other half of the bridge facility was already partly repaid in the last quarter, and to date, only EUR 35 million is outstanding, which we expect to pay back in the coming months.

Aside from some amortization in the loan book, there are no noncurrent borrowings maturing for this calendar year 2018 or 2019. The net debt-to-adjusted equity on the basis of proportional consolidation was stable at 81%, and the loan-to-value ratio improved slightly from 45% to 44% since the sale of the 4 Italian properties mid-April.

We expect that with more asset sales, the ratios will improve further, and we'll approach our historically defensive levels again, all else, of course, remaining equal. The interest costs are 78% hedged compared with 72% last year, mostly via interest rate swaps for an average term of just over 6.5 years.

The overall interest rate remained stable at 2.2%. We were very pleased that following the acquisition of the Woluwe center, we obtained the secondary listing on Euronext Brussels in June, improving the visibility of Eurocommercial further in Belgium, both for the property market, but also for the Belgium private and institutional investors.

The trading in our stock has been very actively, recently with major shareholdings being traded, not affecting the free flow in the end, which remains 70%. The adjusted equity of the company was slightly lower compared to the position we had in June 2017, mainly due to a much weaker Swedish krona.

Despite the natural hedging via Swedish bank loans in the Swedish krona, the company reported an unrealized foreign net currency exchange loss of EUR 37 million. The Swedish krona has lost more than 8% since June last year, I'm afraid to say.

The strong rental uplift with only a modest increase in overall expenses comprising property and interest expenses and overhead contributed to a direct investment result of EUR 2.36 per depository receipt. This is EUR 0.13 more than the previous financial year.

But given that we expect a somewhat lower direct investment result per depository receipt for the next financial year due to the planned property sales and the property sales already made, it is proposed to increase the dividend to EUR 2.15 and ensure that the dividend can carry on its historically stable growth path. The change to the Dutch fiscal investment institution rules announced by the Dutch Government prohibiting these kind of institutions from investing in Dutch real estate will not affect the company as it does not own any Dutch real estate.

The company can just continue to make use of the special tax regime. For some shareholders, our stock may even be -- become more attractive as the plans are to abolish the Dutch given withholding tax for -- of 15% as from 2020.

But overall, we think it is not a good plan for the Dutch REIT sector, and therefore, of course, support a strong message given by the sector to maintain the current tax rules. And that concludes my brief observations, and now I would like to hand over to my colleague, Tom Newton, who will talk about Belgium and France.

Okay. Well, thanks, Evert Jan.

[Foreign Language]. And yes, I'm going to derogate from the rule.

I'm afraid I'm going to start with Belgium rather than -- sorry, France rather than Belgium. And -- okay, well, sales growth first.

When you're seeing the figures, as -- and over 12-months, it's not very exciting, it's 0.1%. Over 6 months, it's minus 2.8%.

And in terms of the split, what we've done quarter-on-quarter over the last 12 months, there is no doubt that we had a macro bounce at the beginning of the year because in the quarter to September, we were plus 8.5%, but we're then down minus 1.4% up to December in quarter, minus 1.2% up to March in quarter and a rather disappointing minus 4.3% up to the June quarter. And I think -- but I think it's worth mentioning that minus 4.3% is, we've obviously got the impact from the increased vacancy.

Best-in-class in terms of sales growth have been shops, which continue their stellar performance, but we've also had a decent year at Taverny believe it or not despite H&M and an honorable mention to the Tours gallery as well, which has done well. Fashion for the year, we are down 4.6%, but if you take out H&M, we're actually only down 1.2%.

So that's not too bad at all in the current context. And our best performers are Sport at plus 11%.

And I'm delighted to say restaurants at plus 7% because we've been very work -- working very hard on improving the food offer, the restaurant offer in our shopping centers. So that is bearing fruit.

Rental growth, this is to you, Michel at SocGen because I know you like the splits. We've done 0.2% rental growth and no surprise is the split indexation 1.5% positive.

The variable rent has been flat. The relettings and renewals have produced 0.6% rental growth from the 50 deals, 5-0 deals that Nicolas and Juliette have done at an average uplift of 4.7%.

But I'm afraid, the large nasty, red Swedish fly in New England, Peter will reply in a minute on behalf of his Swedish colleagues. The red Swedish fly is the vacancy, which has actually gone out 1.9% and that has wiped out nice indexation, the nice uplifts from the relettings and renewals.

I'm going to take that head on, where is the vacancy? It's in the Passage du Havre where we've lost, where H&M had 3 -- 815 square meters in 3 separate units.

So not surprisingly, in this modern world, they wanted 3,000 meters [indiscernible] rather than 3 tidgy little stores in the Passage, but they have quit. And I think once it settles down, we will probably leave 175,000 of rents on the Passage because they were paying EUR 1,200 a meter, and I guess, we will end up with EUR 860 on the relettings.

Having taken a bit of a dive in terms of rental income because we bought some much-needed homeware at the Passage du Havre with a rather modern Danish company called Sostrene Grene. That's later opened.

We are -- terms very, very, very advanced with the company with whom we're currently discussing where to put that fridges, so that is an indication of what sort of return it will be coming. And then I'm pretty confident that Juliette will let up pretty quickly the ground floor unit in the Passage du Havre of 100 square meters.

On Tours, I'm afraid our Swedish rents, of course, have been more of a dent because they did have 1,200 square meters, on which they were paying EUR 350 per square meter, and they did create a vacancy, while at EUR 350, they quit. But I think, just to be frank, we're not going to relet 1,200 square meters at Tours or anything like that figure.

So I think we will probably take a bath of around EUR 275,000 on that unit at Tours, which will mean, as Jeremy just said, that we'll lose overall on those 2 H&M departures around about EUR 450,000. And are there any more wolves out there?

[Foreign Language] is the question I can see coming from Valerie. And yes, so the other sort of wolf in the sector, if you like, is our 2 toy shops.

The Toys"R"Us at Tours, we are negotiating, and Pascal is spending a lot of time on that to get the keys back from the administrator at Toys"R"Us, which, I'm afraid, is a long drawn-out process. The Toys"R"Us store at Tour is next to the H&M store.

So between those 2, they will provide 3,800 square meters next to each other, and Pascal together with Nicolas and I've to say our group leasing director is getting involved as well. All are working very hard to find a decent new anchor for Les Atlantes.

And other wolf, no, I hope not. We will be losing La Grande Recre from Bordeaux, but that I think is an extremely welcome development because I'm absolutely positive that we can do a lot better than Grande Recre at Bordeaux, which is starting to come together because we've now got the planning consents.

But in terms of our top 5 retailers, looking forward, are we looking fragile, let's tell you who they are. They are FNAC, Group Casino, Vivarte, GO Sport and H&M.

I guess, you could ask yourself a little bit question about the long-term solidity of Vivarte and, indeed, the past solidity of Vivarte. But I think it's fair to say that they are making efforts to sanitize what has happened in that, and they've sold off some of their less-performing brands and they're focusing quite hard on their major brands, of which probably the best and strongest is Minelli, of which we have quite a lot.

So are we expecting other sort of -- other nasty news in the future, along with that we've had from H&M this year? I think the answer is no.

I hope we can just restrict it to H&M. Right.

Onto valuations, we are down 2.2% this year, which is the first time that has happened, in my mind, in living memory. For the last 10 years, I've been sitting here saying that, institutional demand from shopping centers is stronger and stronger.

There is an interesting -- a little bit -- change in here in that -- our city center properties, which are the Passage du Havre, obviously, Bordeaux and also Grenoble are actually up in value by 1.3%. And our -- Chasse Sud is -- actually, our retail park is up 4.6%, but our suburban and provincial galleries, I'm afraid, are down 4.2%, of which the major hits have been at Tours, Les Atlantes, but let's remember that was valued, no names mentioned by the previous valuer at 4.5%, and the new valuator we've brought onboard, which is Cushman in our normal rotation period, have taken a look at that center and quite rightly, I think they've taken the view that it's a 5% center, not a 4.5% center.

And yes, I mean, I think Jeremy has alluded to it. I think the investment markets in France had softened a little bit, certainly, for suburban and provincial centers.

And with this call coming up, I took the opportunity to consult one of the more thoughtful agents out there who works for -- the green bank, not the red bank, Michel. This [ man ] who works for BNP, and is a very good guy at BNP [ Vass Andreau ].

I asked [ Vass ] on what he thought was behind that sort of current [Foreign Language], if you like, for our -- for the suburban and provincial centers. And his comment was it's not increased interest rates, it's not competition, which is what I've been moaning about for the last 5 years, it's more a perception over the Internet, which is worrying the, perhaps, nonsector specialists and also the fact that, let's say, hypermarkets have had a pretty bad press in France over the last 3 years, you've only got to look at the casino stock price and the capital stock price to see that.

So there is a bit of hesitation. But [ Vass' ] comment was that, I think, given that the income solidity and the resistance of these hypermarket galleries, he thought it was a passing phase, which would correct itself.

So let's hope he is right. Looking to the future in France.

I have complete confidence in our team. We have a fantastic team in France: Pascal will lead it forward, but he's going to be surrounded by triumvirate of extremely capable men in terms of Ambroise, who will lead the extensions; and Nicolas, on the leasing.

And behind every man is a good woman. So there are 3 phenomenal ladies in France: Cecile, who is going to do -- is continuing to do a great job as our Operations Director; and Christine and Emilie, doing the lease renewals and the accounting, without whom, the entire operation would grind to a halt, which it clearly won't.

So let's move on to Belgium. Yes, so we spent -- Evert Jan will correct me -- EUR 470 million, I think, it is, Evert Jan, on Woluwe.

We've been incredibly busy since we bought this. We have bought -- I'm afraid I've stolen from Pascal, our best asset manager, [indiscernible] is now running on a pretty much on a day-to-day basis at the Woluwe shopping center, and he brought with it his vim, vigor and enthusiasm.

And we have also hired a Belgian, which seems to be the sensible thing to do in Belgium, because we've hired Albert Coigne, who is a seasoned development executive. And Albert's job, which he, again, is attacking with great vigor, is to get the northern extension off the floor.

And I'm afraid I'm going to put my head in the noose: in terms of CapEx, I reckon and Albert has done all sorts of numbers, we're probably looking at an extension of around EUR 100 million. The yield which we're currently looking at for the extension is around 6%, but I'm sure that Albert, assisted by the group leasing director, will be doing his best to get rents up and costs down.

In terms of leasing, we've already got stuck in because the group leasing director cannot help herself. She has seen a brand-new shopping center in Belgium with only one retailer -- Italian retailer when we bought it.

Surprise, surprise, we've now got 2 Italian retailers that happened virtually overnight. In terms of valuation, the shopping center has been valued by Cushman at a yield of smidgen under 4%, which is pretty much in line with what we paid for it.

But Evert Jan, I hope you won't mind me mentioning it, yes, we have lost the [ DUA ] of 2.5% on the [ DUA ], obviously the [ DUA ], which are attached to Belgium fees. In terms of other CapEx, we've identified, I would guess, probably is somewhere in the region of EUR 6 million of short-term CapEx.

That will be spent on improving the exteriors, let's say, to the pretty awful at the moment on, what we call, the [Foreign Language] in French, which is the customer journey, which Cecile and [indiscernible] are going to do together. Believe it or not, we have some Italian designers, dare I say it, and then onwards -- well, I'm afraid, he's going to be spending a little money -- little bit of money on updating and improving some of the security arrangements in the shopping center, which we feel, perhaps, need a bit -- little bit of attention.

So all in all, a very positive start on Woluwe. Can't stop without mentioning our Head of Research, our Research Director.

She has done no less than 2 surveys already in Woluwe, one in terms of customers, one in terms of retailer perceptions. And we now know where we're heading for.

Plenty of work to be done, but great enthusiasm across the group on Woluwe. And with that, we will cross the Manning Road for the last time, and I will hand over to Roberto.

Thanks, Tom. The relevant transaction in Italy this year was, of course, the sale of our 4 assets, the smaller one, Centroluna, Leonardo, La Favorita for a total amount of EUR 187 million, which was in line, as you know, with the latest valuation.

The interesting thing is that, of course, this sale will free up some of Carlo Romagnoli, our Asset Manager's precious time, which they'll be able to devote our extensive refurbishment and extension program, both increasing the offer and the services to tenants and clients is, of course, an important component of our investment strategies. If we do have a quick overlook -- overview of the -- what we're doing in Italy, that is the refurbishment works at Collestrada that [indiscernible] a good increasing portfolio and turnover.

Just recent -- that last week we opened a new external kids area, further improving our services to family. We've now got -- we also received the preliminary approval from the local authorities for our 19,700 square-meter expansion.

That's an important step forward. And in I Gigli, our investment -- the refurbishment program, it's further improving the appeal of the shopping center.

We're currently seeking approval from the local authorities for the construction of a walkway to connect the 2 piazzas on the first floor, improve access to the Corte Lunga, which is in [indiscernible] for us for the opening of Mercato Centrale, and the possibility of building some leisure, entertainment unit next to the existing cinema. At Carosello, we're working at the extension program in close contact with the local authorities to improve accessibility and to minimize the environmental impact.

At Cremona Po, the new H&M store, is expected to open shortly, and we are finalizing the design for new retail part of around 10,000 square meters, increase our retail and food offer. At Fiordaliso, we're planning to start work shortly for significant refurbishment on the center and to improve our retail offer with parents agreed.

At Curno, construction works for the new food court of over 3,000 square meters lettable area are expected to begin shortly. There would be around 20 new restaurants with preleasing developments and we cover car park, extra parking spaces and larger stalls.

At Val Thoiry, the discussions with the local authorities on the plans for potential expansion have started. But if we look at valuations, say, June valuations showed a slight increase in values with 0.8% compared to June last year and 0.3% compared to December.

And it's fair to say that the decrease in average net initial yield, which is now 5.1%, down from 5.3% last year was mainly consequence of the sale of the 4 smaller properties, which are valued at a yield slightly above 6%. So concerns then rental growth.

Like-for-like rental growth for the 12-month, the June was a good 1.5%. The main contribution to rental growth came from the 109 renewals and relettings, which generate an average uplift of around 11.5%.

So thanks to the Valeria and her leasing team. The best of our results came from Castello, Cremona Po, Collestrada and Carosello, reflecting strength across the portfolio.

And here, maybe a small note for concerns, rental growth and the contribution from renewals and relettings. And as we know, this can vary from month-to-month from quarter-to-quarter depending, of course, on deals that we manage to achieve.

Let me remind you for a step, in the quarter March to June 2017, we had special relettings of large areas, like for I Gigli, where we letted Primark and Zara; or Carosello, where there was Coin, Scarpe & Scarpe, which we introduced. So there were significant relettings in the past quarter of the last year, which we don't ask currently at the moment in this financial year.

It's also fair to say that we are converting some fashion and electronics in [ foods ], household services, and sometimes tenants ask for bigger units. So you have to merge units in order to satisfy their needs, which is good.

So it increases the value, of course, of the shopping center, its attractiveness and all the rest. If we go and look at empty units, we only have 3 out of 700 shops.

Retail sales for the year to June were positive also at 1.5%, with boutiques contributing to this positive performance. Medium units on the other hand recorded a slightly negative performance.

It was mainly due to Telecoms & Electrical. Sales for all hypermarkets were, with some exceptions, mostly negative in the year to June.

We've got the confirmation also what Tom mentioned before. The best performing centers where I Gigli, also thanks, of course, to the opening of Primark and Mercato Centrale, Collestrada and Cremona Po.

The overall numbers of visitors year-on-year in the Italian center decreased slightly. That was partly due to the refurbishment and expansion works, but also partly there was an impact on increased competition.

For example in Fiordaliso and Curno, where we registered significant increase in food court in the centers where we -- where the improvement works have been finalized like Cremona Po and Collestrada. In general, it can also be noted that visitors are coming a little bit less frequently to the shopping centers, but they're spending a little bit more during their visits.

Last, But not least, the occupancy cost ratio further improved from 8.3% to 8.2%. And on this note, I will hand over to Peter.

Thank you, Roberto. In Sweden, retail sales remained pretty robust and increased by 1.4% on the year with most of our shopping centers and sectors again enjoying positive figures.

The rate of growth, however, has declined, as households appeared to have adopted a slightly more cautious approach following recent uncertainties in the housing market and savings levels have been -- have risen. Like-for-like rental growth on the other hand was higher this year at 3.8%, while inflation provided from indexation, by far the largest contribution to this growth, came from the 43 relettings and renewals negotiated during the period, producing average uplift of 20% on those transactions, up from 12% last year.

This rental performance together with full occupancy reflects well on the quality of the portfolio, the skills of our leasing team and their close relationships with retailers at the time when they are facing structural headwinds and reviewing the store network, even closing on profitable units. Valuations increased by 3.1% over the year and by 1.7% over the last 6 months, but the main contribution is coming from the developments at Halmstad and Kristianstad as they near completion.

The average net initial yield remains to around 4.9% with a narrow yield range reflecting the homogeneous character of the portfolio being regional centers that are #1 in the catchment. Buyers are being more selective, but there remains steady demand for the few prime retail investments that have come to the market, particularly from international buyers.

The most relevant comparable transactions were the sales of Port 73 in Haninge to CBRE GI and Lidingo to Grosvenor, who reported net yields of around 5% and 4.25%, respectively. While the outcome of Henderson's marketing [indiscernible] will also be interesting.

As yet, there is no sign that the yield is rising at the prime end of market despite the continued uncertainty about the future taxation in the property sector, the situation which is not expected to become any clearer until well after next month's elections. We've been busy on the transactional side, and in January, completed the purchase of Valbo shopping center located on the E16 motorway outside the Gavle.

An established regional center, Valbo serves a catchment of 250,000 people and is let to 70 tenants and adjoins and is partly let to IKEA. Based on the property acquisition price of EUR 116 million, the property yields around 5.2% (sic) [ 5.3% ] and provides opportunities for growth through refurbishment, tenant rotation and active asset management, which may include a modest extension.

We also completed the sale of 2 properties, Mellby and 421, Goteborg, which were identified as offering more limited potential to further developments and growth. The combined sales price is just over EUR 100 million.

The give up yield was almost identical to the ingoing yield at Valbo. On the project front, the rebranded, refurbished and expanded Hallarna outside Halmstad opened fully let last October.

Since then, the main focus has been to complete the shorter northern mall of 11 shops, together with an external 4,000 square meter unit for the Norwegian sport retailer, XXL, which opens in June. The 120-room hotel is also in the course of being fully refurbished.

And when all this work is completed by spring next year, Hallarna will provide 44,000 square meters of new or fully refurbished space for around 90 tenants. Meanwhile, progress continues at the 31,600 square meters C4 shopping center located outside Kristianstad on the E22 motorway, which will open on time and on budget at the end of next month.

The center is now around 96% pre-let, and tenants include all the major Scandinavian retailers, such as H&M, Kappahl, Lindex, Stadium and the Varner Group and Bestseller brands. The most recent lettings have included stores for Clas Ohlson and Afound, the latest H&M concept.

Food retail in C4 will be provided by Lidl to complement the neighboring City Gross hypermarket, which will open -- which opened last September. This purchase has been structured as a forward financing, and the final price will be calculated on the actual net operating income achieved capitalized at 6%, a significant discount to current yields for established regional shopping centers.

So looking forward and with yields likely to remain flat, future growth will come from rental growth and from the ongoing and future projects. With inflation now pushing towards 2% and with HUI, the retailers organization, still forecasting retail sales growth of 2.5% for this year and next, the prospects for further rental growth look encouraging while occupancy cost ratios and healthy tenant demand further supports this view.

And on that note, I will hand you back to the operator.

So my first question would be on Italy. Just looking at the trends in the reletting rental uplift coming down to 10% from 20%, I was just wondering if you could give a bit more detail on what is causing this and whether we should see this as a one-off or either this will persist.

That will be my first question.

Yes. I mean, Roberto will obviously answer in much more detail.

But of course, we've got to refer back to the previous year to some extent. But I think from what I understand, there's still plenty of demand out there.

We don't expect our vacancies to increase in any way at all, so. But Roberto, comment?

Sure. Thank you, Jaap.

We -- let's say, the -- we've been looking at the trends, let's say, all over the years, and we'd seen that renewals and relettings has been up as much as 2% and [ MCR ] up to almost 30% during the years. But of course, that depends on the timing when you actually struck a good deal, a big one, and it may be in a shopping center that you felt where you can actually do a lot of refurbishment, introduce new concepts and the rest.

As I mentioned during the call, let's say, if you look quarter-on-quarter, let's say, the difference between a last quarter and this quarter is mainly related to the lack, let's say, of the transaction that happened in March to June 2017. But certainly, we had pretty big relettings in I Gigli with Primark and Zara.

And Carosello they were going [ back to start there ]. So sometimes, these big relettings happen all at once.

Sometimes, they happen over a period of time. That, of course, has a significant influence on the percent, let's say, you can publish on that quarter.

To be fair, if you look at the ERV, we see that there is still a lot of potential for growth. We are very positive on that and also the refurbishment works, which we're working on.

The expansion work for the rest mean to us, it's a clear sign, let's say, that we will be able to increase rental of growth. About timing, I do not know because it depends on how long it takes to make it stick with tenants.

So some tenants, they like you, and you can strike a deal quickly. Some other times, it takes a long negotiation, especially with the bigger ones.

We have been negotiating leases now for -- in fact, for months, which we cannot still discuss. So it really depends, but I fully understand your point of view.

Yes, if I can just ask, I mean, clearly, the turmoil in government at the moment in Italy obviously will have effect -- has had an effect on bond yields. Yes, I mean, I think historically, at least, it has been infamous for turmoil in governments, so it's probably no new thing.

But certainly, the strategy is certainly too [ Castello ] and even [ Valega ]. It certainly seem to be working towards helping the ordinary person and improving income for them, which can only, I would of thought, be good for sales in the shopping centers.

But yes, clearly, it's some institutional uncertainty and bond markets are suffering a bit. So I think, again, like everywhere, there are some pluses and minuses.

But yes, we think the underlying stability and prudence of the average Italian family isn't going to change at all.

Okay. And just for clarity, so there has not been like 1 major re-leasing event in the last quarter that brought down this number so significantly.

This was in a more broad-based...

Yes. I mean, it relates to what happened last year because this -- any increase always depends on how high the previous period was as well as the current period.

But Roberto, comment?

Well, that's correct. I mean, last year, it was very high compared what was historically.

Because if you look historically, we are still around in the region of 10% on average. So last year, we were very -- it was a very good deal with the relettings that we did in I Gigli.

It kind of helped. And we hope to do more.

But forecast on timing is challenging.

Yes. But we've got a very important agreement on our lease, a major international retailer whose name we can't disclose for the moment.

So no, there's a lot happening. I repeat, we don't expect vacancies to increase in any way at all.

So yes, I think we can carry on at around our average rate, I would have thought.

Good. Great.

And then maybe on France, the H&M effect. Given that to my understanding, your like-for-like is forward-looking rent roll.

Does that mean with the next set of results, the H&M effect is already out of it or if they're continuing?

Mostly, I think, but, Tom -- and there will be a mix. I mean, clearly, we've already relet the majority of their space in the Passage du Havre, with one -- the smallest part there, their [ ex-Nico ] shop to be done.

But that, I think, will result in a rent increase, not decrease. So yes, Tom, comment?

Nod to that. Yes, I repeat.

I'm asking -- on the fact that you're asking, that space will let out pretty quick and -- but our overall lot, there's going to be EUR 175,000. At Tours, it's a bit more complicated because we have tried to -- we're probably going to end up twinning in some shape or form the H&M unit with the Toys unit, which is next door.

But the Toys unit, frankly, is actually not that small, over rented, maybe a smidgen but nothing major. Now our loss at Tours, it's going to be the EUR 275,000 from the, let's say, the over renting retention we had put up with for the last few years.

I wouldn't discount completely, although negotiations are always tough, should I say, with H&M these days, but I wouldn't discount completely the possibility that they may come back into a bigger unit there, but we'll see. But we won't say anything until and when a lease is actually signed.

But yes, we're pretty positive on Toy. The fascinating thing was for the boutiques when H&M left, actually, their turnarounds went up, not down.

So then it's so well positioned, so we're very confident in the center overall.

Okay. And then maybe finally, on disposals.

I know that it feels maybe for you more like you have to sell because the share price doesn't allow you to hedge funds in a different way. But considering, let's say, the market view, how kind of steadfast are you in that position?

And would you ever be kind of tempted to just sell a few more centers in France just to prove your point? Or is it something you're not entertaining?

No. We already have quite advanced negotiations on 1 center in France, and we're just starting negotiations on another, and I won't say which, just in case, I suppose.

But no, we would expect to achieve around valuation. And overall, on our sales, that's the result, a couple slightly above, a couple slightly below, et cetera.

But no, I think our valuations are pretty solid. So yes, I certainly, say, you'll expect 2 to come in France probably.

But again, being the cautious people we are, until there's an actual contract signed or mostly the money are in the bank, I'm not going to say anything. But -- and initially, one more.

But certainly, 2 planned further sales in France and possibly a third.

If I listened well, please confirm that this should be going around book value?

Yes.

Some of the questions I've had been answered on behalf of -- on Jaap's questions. But a few things actually.

So in the Belgium, there's a plan for adding apartments to the center, which is an ideal or perhaps, in which some of your competitors also think about adding apartments to centers. Can you first, well, maybe talk about this plan, in particular, whether you expect this will add?

And is this something you could potentially also do for other centers or...

Yes. No, we already have.

At the Passage du Havre, we have apartments. In Grenoble, we have apartments.

So it helps to create a sense of community, but most importantly, in Woluwe, we believe there's very strong demand given, as we've said, that's positioned over a Metro station and close to Schuman, et cetera. And certainly, the local authority is very keen.

Yes. I mean, where it's sensible, we will do it.

But some places, it's sensible, and some, it isn't. I don't think in the off -- suburban areas, you would contemplate it.

But certainly, in the places with high quality, I know it is. I'd love to do a few more.

We have about 150 planned. No, that's very -- we've certainly -- if -- the only thing that will stop us doing that is if we don't get a planning consent, but that will be staggering, I think.

So no, we're very serious about that. It's always good to have consumers on your doorstep.

But there's a good solid market there, especially for the sort of apartments we're planning, which will be a mix. But yes, where we can, we will.

On the other hand, one has to say that managing them can sometimes be a bit of a pain, especially if you got smaller apartments as we have in Grenoble with students, but you just have to accept the job maintenance cost are going to a bit higher. But yes, certainly, where we can, we will.

Absolutely.

And so in this plan for the road is 150 apartments, which are in planning. But did -- is there any time frame you can give on...

Well, they'll occur at the same time as the extension. So no.

I mean, the planning application is going in as we speak. But I'm not sure how long things take there.

I would guess we're aiming to start building in a couple of years.

Right. Yes.

All right. And I have another question on the changes in the board and also a related other changes in the Administratiekantoor and Stichting Prioriteitsaandelen -- I can't translate that.

But can you give us a bit of a background to why you are proposing adding members to these Stichting and also adding people to the management board?

Well, yes, I won't go into details of -- our board. But certainly, we think it is sensible.

And had Tom been still with us, He would have been on that board, too. But no, I mean, I'm just being blunt.

I don't how -- I'm certainly going to be around for at least 2 years. But after that, we've got to plan for the future.

And that's why we want to strengthen certainly the management board but in practice, of course. Tom, Peter, Roberto are the committee that decides on the property acquisitions, management, sales and everything, really.

They are very important. So I see no reason why they should not be part of the formal management group.

So I think that's a logical progression planning for the future. In terms of the Stichtings, yes, I mean, there have been criticisms from time-to-time that certainly, the Prioriteitsaandelen that Richard J.

Lewis is -- has too much influence, which I've never believed, but they're adding some delight out there is certainly going to reinforce the independence of that organization, which is very powerful. We will ever give up delete, remove the priority share foundation because it's there to protect the minority of shareholders.

So people can't make cheeky bids at low prices on 27% as had happened in the past. So if somebody wants to bid for the company, they're going to have to bid for the lot.

So minorities are a great percent, we will not change that. But I think there has been some mentioning, especially from some U.S.

that are sort of not used to the Dutch way of doing things, so we will keep doing it the Dutch way but a bit more -- we have certainly a very learned gentleman on the board there, unless he comes from I suppose the same team. It is an independent organization.

Yes. And people have made the comments in the past.

It would be best to have 3. So fair enough, it did.

Yes, so nothing spectacular there. I suppose we're trying to -- especially if the party shows -- meet some market concerns.

We've always thought to be ill judged. But nevertheless, we try to be receptive to people's feelings.

Okay. All right.

Okay. Well, my congratulations to Roberto and Peter, and good luck to Tom.

Well, I guess. We'll miss Tom day to day, but hopefully, we will see quite a lot of him in Belgium, so.

This is Robert. Actually, one nitty-gritty question on Page #18.

If I look at the cost structure, it went up quite a bit, with I think, if you look at salaries, it was up direct and indirect, plus 17%. Is there any one-offs in these costs?

And what can we expect for, let's say, 2019 because the year-on-year increase of 17% is quite a bit?

Yes, especially bonuses. Would Evert Jan comment?

Let's say, the bonuses do play an important role this year, Robert, and not so much that they have increased because the bonus levels are similar to last year. But the allocation is different this year because the, as you know, at least, we disclosed that fully on the website and in the remuneration report, that the bonuses are mostly determined by formulas depending on growth of NAV, dividend and relative outperformance of the stock.

And this year, as you can imagine, there was no contribution really from the growth of NAV overall for the company because there wasn't. And that meant that, actually, bonuses have now been for this year more allocated to the direct investment result and less to the indirect investment result, so you see a higher amount here.

But again, in the investment expenses, it's lower. That is the main effect.

And next to that, it's also fair to say that some of the, let's say, functions, which were previously performed in Amsterdam or in London have now been performed in the local offices. So that means that actually, the people employed are in the payroll over there and therefore, again, the property -- in the property expenses line.

So that is the main explanation.

Okay. But the thing that confuses me a little bit here.

You mentioned that in the indirect property expenses, the salaries and wages were down due to lower NAV growth. But if I look at the line itself, it's actually up EUR 1 million from EUR 6.3 million to EUR 7.4 million.

So I don't understand that.

No. I mean, let's say, it's not that we have booked.

There aren't any salaries booked in the investment expenses. It is purely -- if there are, then bonuses are included in that.

So there is nothing of salaries at all in that line. It's purely an allocation method.

But I can -- let's say, we haven't produced our annual report, of course. So -- and there, you will find much more details.

So I'm sure you'll then see the complete allocation, but I can show you. I mean, if you look in the -- on Page 14, you see that there is investment expenses of EUR 3.4 million for this year, and last year, it was EUR 4.3 million.

So there is clearly a lower amount there.

Okay. That's clear.

What can we expect for 2019 assuming equal performance? Is that -- is this a little bit a line that we should take into consideration or...

No, let's say, as I said in my introduction, I mean, the bonuses for this year are either similar level as last year but differently allocated due to the fact that this year, no NAV growth. But this year, we have a relative outperformance for the stock at June 30.

We were at the 10%, total return. And the peer group, 10 other retail property companies was minus 6.

And there is, of course, gap in these formulas anyhow because otherwise, you'd get excessive outcome. But we clearly outperformed the peer group as per June 30 on both the returns.

Hence, bonus is being increased by that performance, but obviously, bonus is down because there wasn't any NAV growth. So overall, similar level but different allocation in the books.

And God knows what will happen next year. I mean, I think probably looking forward, we would expect stability in NAV.

Our earnings growth, we're fairly comfortable to carry on at historic levels. But what next happens to the stock price, God only knows.

That's -- I don't know what to do with you and your colleagues at Auchan.

I mean, Robert, just to add on to that. I mean, about NAV this year, it was really, for the company, the overall NAV was down.

But of course, at France, France valuations were may be quite a few new properties, a bit disappointing. But the effect was really for the NAV for the group was the weaker Swedish krona and obviously, we hope it will bounce back.

And purchase cost you lose on a big investment like Woluwe, which, if everything else being equal and valuations don't change next year, we will not have that effect.

Pierre Paren from BMO. Regarding valuation in France.

If I understood well your comment in the introduction of the presentation. Passage du Havre saw a positive revaluation and actually, most of the negative valuation was on the regional centers.

How do you -- thank you for the comment from BNP people. And I think things are erring on food, retail sector and provincial centers, there is some pressure there.

My question is, how does that fit with what we are seeing from some of your peers, which still report some positive revaluation for this kind of center. It seems to be quite a large discrepancy between these comments and the negative revaluation you get on these centers.

And I understand some part of that is leaning to H&M for Tours. Other factors, the change of area.

But broadly speaking and putting into perspective the comments from BNP, how do you look at this discrepancy because I think for -- I tried to take a [ peak ], like, necessarily saw then some positive result on some provincial centers. So yes, what's the market like?

Neither saying the truth. It's a ways and just to get a clearer picture and again, to reconfirm that we had a positive reval on Passage du Havre because I had expected maybe like a flat value or slightly negative.

This is Tom. I'm going to jump in.

Yes, please do. Yes.

Yes, well, I think -- yes, I mean. Look, on the fact that you have -- we're up a smidgen.

It's not a major increase. Let's be clear on that.

It's flat but up a tiny bit. Yes, I mean, on the suburban and provincial centers, I mean, the major hit has been Tours.

We have changed value at Tours, and we have changed value at Taverny and we have changed value at Amiens. And clearly, a fresh pair of eyes.

But yes, what I didn't say is I think what we've seen this time for the first time ever is a bit of a discrepancy in valuation approach depending on which valuation, how it's valuing the asset. But up until now, there tended to be a pretty much clean consensus across the values in France.

Because of that, there seems to be a little -- a [ pretty face ] is what we see in there. In terms of our decreases, I mean, the major hit we've had has been Tours.

Three reasons: a, fresh valuer; b, I described the loss of income from H&M at Tours, which is EUR 275,000. And we've also got a little bit of a question mark coming up in terms of the Toys "R" Us situation, which is pretty well-documented.

So I think that had an impact. Well, I think the other thing, Pierre, let's be blunt.

I mean, Tours was valued and again, no names mentioned -- I've been a bit queasy about this over the last few years, at 4.5%. And I think that 4.5% was probably the problem rather than the 5% it's now valued at.

If you look at the other decreases, it has been at Taverny and Moisselles. Moisselles was a little bit valued at 5-ish and sort of has come out to 5.5%.

I haven't got the sheet in front of me, but forgive me if I'm a couple of basis points out. And Taverny, again, was sort of valued at mid-4s, and that's now mashed up a bit.

So I think -- I said -- or I really think it is, it will change your values and perhaps our previous values were erring on the side of optimism. So that would be my explanation.

Jeremy, you may wish to add to that.

No. I'm sure that's the case.

But yes, I mean, we obviously can't comment on what Moisselles do or don't do and what their future is, et cetera, et cetera, et cetera. But -- yes, I mean, we've -- [ if value ] was coming up with a figure we just accept and full stop.

And sometimes, that's good, and sometimes, that's bad. Maybe last year, we shouldn't have accepted 4.5%, but they are independent.

It is their opinion. So yes.

Okay. So if I reenter the line, it's a readjustment or a rebase, and then following a tender value.

And we shouldn't, all else being equal, and if the situation doesn't change, it might early next year, we shouldn't expect a massive downward movement. Is that really a trend that you're seeing ...

No, I don't think so. No.

I mean, I think if you look at Moisselles, I think they've got a mix of centers. I'm certain that overall, our portfolios, their centers are rather better than those.

But I'm sure they'd disagree. So no, I think it's a pretty sound portfolio.

There are all the talk about hypermarkets, where we can get space back we're delighted to get it back because we use less of -- a good rent if the tenants are higher, and if they're not, at least we get some extra income and more importantly, a new tenant there. But there, the hypermarkets are pretty solid, I think, generally.

But of course, they're changing their mix and reducing their nonfood. But there is -- I don't there's an oversupply of hypermarket share generally in France.

I think it's broadly in balance. And some people would say they've got a cartel.

But I'm sure that's not true. Tom, comment?

Yes, Jeremy, nothing to add.

Going -- continuing with the discussion about hypers and supermarkets, can you shed some extra light what is driving the small but still decline in sales in hyper and supermarkets and maybe also how is that distributed over countries? And do you believe that's more a cyclical thing or is part of that structural shift maybe through, I don't know, pickup points or increasing signing out?

No. I mean, they've all got their drives of one kind or another, which is usually a side door of a hypermarket.

So I don't think that's affecting their overall sales to a great degree. I mean, obviously, it's nothing like the U.K.

and the U.S. It's completely different of course.

But no, I think that the hypermarkets are having to look more carefully what they're doing. The market is a difficult one.

I mean, their margins are very small. Coop have really turned things around, I think, in many ways in some of the hypermarkets.

Certainly, the refurbishment we've seen them doing at our portfolio have been very positive. I think you might say that Oysho are probably due to -- have a bit more refurbishment.

Some of their stores are looking a bit old and how much they focus on the rest of their very good retail portfolio and how much of the hypermarkets were, I can't tell. But no, I don't think there's any major structural shift as far as the presence of hypermarkets.

What's changing is the mix within the stores. Some of them have got to ridiculous sizes of some 18,000, 20,000 square meters when of course there was nothing else 30 years ago.

But now they are slightly reducing in size. In some markets, some of the ALDIs and the Lidls are penetrating the market.

But again, the hypers are combating that with having more smaller stores. The proximity question in France, of course, is important.

So no, I mean, they are a vital part of the mix, especially in provincial cities in France and Italy where they're easy to get to as opposed to much more crowded countries like, I'll say, U.K. and The Netherlands.

But Tom, would you like to make any further comments?

I mean, let's be -- the hypermarket is not about to disappear. That's all I'd say.

And the -- are there large differences between the sales growth per country or is this closer to your margin?

Well, Peter, would you like to comment on the Swedish hypermarkets?

Yes. Well, we tend to end rather a lot more because we tend to enter the whole center.

And specifically, in fact, the food sales this year in our hypermarkets are plus 2%. And that's excluding one, which picks up an example Jeremy just mentioned, which was a very big hypermarket who brought some, let's say, a transaction in Val Thoiry for food, where they have the right to put to us their 3,000 square meters, which they have, and we're delighted to take it back because that is their nonfood, which they had given up and actually closed.

And we're now building it for a very major international retailer that we've talked a lot about today, but I can't mention. So it's a great -- they are a very good, a very good provider of floor space to us.

They're also, I think, still a very important entrant. Yes, they've all -- all the hypermarkets I'm talking about mainly -- obviously, Auchan and Coop are prepared to go downsize a little bit.

Their nonfood has become less important. But their food is still very important.

We are -- and then particularly, well, obviously, the Systembolaget fits with them as well, the state liquor store. And they're still a very important provider of foothold.

And of course, the Internet has made absolutely -- look, all right, it's less than 3% in terms of food retail in Sweden. So it's still a very important part of the landscape for us.

But initially, we've got space back from the hypers. The latest one is Cremona, which we've, of course, already relet.

I mean, one thing one has to stay, especially in markets where planning consensus are difficult. In most markets, it is difficult.

Obviously, the large the lot, it's easier. If you can, in effect, do some internal expansion by getting space of the hyper, whether you own it or not and getting new fresh tenants in.

So we see them as expansion potential rather than a worry.

Well, that's correct. I mean, our industry for super, so if it's a [indiscernible] or you had actually changed or they're changing the strategy, which was not effective.

We see Finiper also reacting a lot and of course, we already mentioned construct stores and [ Oceania ]. Probably, we need to be -- we also got ALDI coming in, which is a novelty compared to last year.

So I mean, there's a lot of competition going on and some, with the change, are reacting better than others.

Did I hear somebody say that was the last question or can we have for some more?

Okay. All right.

Well, let me finish up by saying clearly, as always, there are pluses and minuses in what we're doing. We're very, very convinced that overall, there are far more pluses than minuses.

Yes, dear H&M have been causing a bit of trouble here and there. But remember, we still have a very strong portfolio.

We still have the lowest vacancies in the business. Our financing is very, very secure now with all the work that Evert Jan and his team have done.

Our earnings are pretty strong this year and the dividend will continue its stable growth. So overall, I think despite some -- not leaving minor short-term problems, we're pretty happy with the portfolio in total.

So -- and we hope, eventually, you all agree. So thank you.

Thank you. That concludes our call today, and thank you for joining us.

And operator, please close the line.