Grand City Properties S.A.

Good morning, and thank you for joining us for Grand City's results call for the first 9 months of 2025. You can view this presentation on Grand City's website, either on the Home section or under Financial Reports of the Investor Relations section.

With me today will be Chairman and Director, Christian Windfuhr; CEO, Refael Zamir; CFO, Idan Hadad; and Chief Capital Markets Officer, Michael Bar-Yosef. [Operator Instructions] The e-mail address is [email protected].

With that, I would like to hand you over to Christian to start the presentation.

Thank you, and welcome to our Q3 2025 results presentation. We are pleased to present our 9 months financial results, which reflect another quarter of strong operational performance.

The key trends we currently see are that Germany's transaction market is showing signs of recovery following the recent turndown. Meanwhile, the interest rate environment has started to stabilize, which is positively impacting capital markets.

These dynamics are creating a more supportive financial climate. At the same time, we have seen a sharp decline in construction activity, which has intensified the supply shortage driving rents upwards.

As a result of these market conditions, we continue to see growth in rental income and strong operational performance. Our like-for-like rental growth remains solid at 3.7% and vacancy has dropped further to 3.6%, a historic low for GCP.

While the overall residential market is improving, the recovery remains uneven. Many smaller players are under financial pressure.

We see this as an opportunity to capture opportunities and recycle capital on the back of our robust balance sheet, low leverage, high liquidity and wide deal sourcing network. Our strategy continues to be focused on capitalizing on these market [ dislocations ].

We are actively recycling capital, disposing of mature assets at lower yields and reinvesting into higher quality and higher-yielding assets. This approach reflects our commitment to driving operational growth, balancing asset sales with opportunistic acquisitions, while maintaining a healthy balance sheet.

We will now move on to the details of our results in the following slides. On Slide 3, we present a summary of our key financial results for the first 9 months of 2025.

We continue to deliver solid performance with net rental income increasing by 1% and adjusted EBITDA up 1% year-over-year. This contributed to an FFO I of EUR 141 million, remaining stable compared to last year, in line with our full year guidance.

We did not revalue the portfolio in Q3 as a full revaluation was conducted at half year, we will revalue the portfolio again for our full year results. As of September, our LTV stood at 33%, stable from 33% in December 2024 and 4 percentage points lower than in December 2023.

Net debt-to-EBITDA improved to 8.6x and our interest cover ratio remains strong at 5.3x for the period. These figures reflect our disciplined financial management and the resilience of our capital structure.

They also provide a strong foundation from which we can resume external growth. EPRA NTA increased to EUR 4.4 billion or EUR 25.1 per share, driven primarily by positive property valuations and strong operational performance.

Our portfolio continues to show strength with a low vacancy rate of 3.6% and in-place rent of EUR 9.4 per square meter as of September, up from 9.2% at the end of 2024. Like-for-like rental growth reached 3.7%, supported by increases in in-place rents.

We will explore these KPIs in more detail later in the presentation. And with that, I'd like to hand you over to Refael.

Thank you, Christian, and welcome also from my side. On Slide 4, we present some key trends and highlights.

We recorded a like-for-like rental growth of 3.7% year-over-year, mainly driven by strong in-place rental growth, while vacancy was at historically low rate of 3.6%, down from 3.8% in December '24. This operational momentum has also contributed to a positive revaluation result of 1.6% in the first half of the year, underscoring the strength of our portfolio, and we expect valuation to trend broadly in the same direction of the operational growth in the coming periods.

We continue to see revisionary rent potential of 22%, fueled by rising market rents and winding supply-demand imbalance in key metropolitan areas. These dynamics support our long-term growth outlook.

From a financial standpoint, we maintain a conservative profile with a loan-to-value ratio of 33%, a high proportion of unencumbered assets of EUR 6.2 billion and solid coverage metrics. Our liquidity position remains strong, amounting to EUR 1.4 billion and further supported by EUR 200 million of RCFs with no material near-term maturities, and we continue to maintain strong access to capital markets.

Looking ahead, our strong balance sheet and extensive transaction network position us well to capture external growth opportunities. At the same time, we continue to invest in internal growth, capitalizing on high reversionary potential and unlocking value through strategic disposals and capital recycling.

In summary, our market condition and operational remains strong, and we are well positioned for further growth. Moving to Slide 6.

This slide highlights the persistent and structural imbalance in the German housing market. Germany residential market continued to face structural challenges.

New constructions remained subdued, especially in urban areas, while demand is keeping grinding. With permitting activity still low and completion declining, supply sources are likely to persist, keeping vacancy rate low.

At the same time, rental prices continue to trend upwards, particularly in Germany, main metropolitan areas. Those fundamentals reinforce the resilience of the residential market and highlights the long-term opportunity in well-positioned urban assets.

Slide 7 highlights the strong fundamental of the London residential market. London continued to offer a compelling environment for rental growth.

The regulatory landscape allowed us to respond quickly to market shift, capturing rising rents more effectively than in other regions. Our focus on affordable and mid-income growth has positioned us well to benefit from this momentum.

While some of London's rarest areas such as Westminster, Kensington and Chelsea have been price corrections, demand in more affordable locations remain strong. Combined with persistent undersupply of new homes, those fundamentals support a healthy outlook and give us room to unlock further values.

Slide 8 highlights the continued strength of our operations, supported by solid rental growth and historically low vacancy rate of 3.6%. Like-for-like rental growth reached to 3.7% with particularly strong performance in Germany at 3.4% and 5% in London.

As of September 2025, our portfolio in-place rent stands at EUR 9.4 per square meter, reflecting a compounded annual growth rate of 4% since December 2021. Annualized net rent increased to EUR 425 million, and we have seen further growth in the market rental value of the portfolio, which brings our annualized market potential to rent of EUR 518 million as of September.

This indicates an upside potential of 22%. We expect to unlock this potential primarily through revisions upon reletting, supported by continued upward momentum in the market rents and additional value-enhancing measures we plan to execute.

Turning to Slide 9, we provide an overview of our portfolio. As of the end of September, our investment properties portfolio amounted to EUR 8.8 billion, with the overall distribution remaining stable.

Berlin continued to be our largest location, representing 23% of the portfolio, following by NRW at 21%, London at 20% and Dresden/Leipzig/Halle at 14%. The rest is spread across other strong metropolitan areas.

Over the first 9 months of 2025, we completed disposals amounted to approximately EUR 140 million, including deals signed in the previous years. Those transactions were executed at a slight premium of 0.3% with assets sold at rent factor of 19x.

The properties sold were primarily located in Bremen, Frankfurt and noncore regions, along with selected condominium units, mainly in London. Those disposals reflect our ongoing strategy to streamline the portfolio and recycling capital into higher quality and higher yielding opportunities.

Now I hand over to Idan to present the financial results.

Thanks, Refael. On Slide 10, we present our results for the 9 months of 2025.

Net rental income amounted to EUR 320 million, primarily driven by strong like-for-like rental growth and acquisitions completing during the period, partially offset by the impact of disposals between the period. Adjusted EBITDA increased by 1% to EUR 253 million, reflecting continued improvements in operating margins.

The company recorded a one-off deferred tax income in the 9 months of 2025. This was the result of the positive impact related to changes in the corporate income tax in Germany effective from January 2028, where the rate is gradually reduced from currently 15% to 10% by 2032.

As a result of which the deferred tax impact of past positive revaluation has reduced, resulting in a one-off deferred tax income in the current period. This positive impact was partially offset by deferred tax expenses connected to the positive revaluation result in the current period.

We recorded a profit of EUR 410 million for the 9 months of 2025 compared to a loss of EUR 17 million in the same period in 2024. This was primarily due to the strong operational results as well as positive portfolio revaluation recorded in the first half of 2025, and the one-off deferred tax income.

Profit was further supported by improved operational performance, partially offset by higher finance expenses and other financial results. Basic earnings per share for the period came in at EUR 1.84.

Turning to Slide 11, our FFO performance. FFO I amounted to EUR 141 million, remaining stable, primarily as a result of higher adjusted EBITDA and slightly lower perpetual notes attribution resulting from the exchange and tender offer executed in 2024, which were offset by higher finance expenses.

FFO I per share was EUR 0.8, slightly lower compared to EUR 0.82 in the comparable period of 2024 due to the sale of treasury shares in December 2024, which increased the number of shares outstanding. FFO II came in at EUR 195 million, up from EUR 142 million in the comparable period of 2024, driven by stronger disposal margins.

On Slide 12, we provide an update on our maintenance and CapEx activities. Our focus continues to be enhancing the asset quality of our portfolio.

Over the 9-month period, we invested EUR 19.5 per square meter in repositioning CapEx and maintenance compared to EUR 18.5 per square meter in the same period last year. Additionally, we invested EUR 17 million in pre-letting modifications.

These projects include the creation of new rental space and other initiatives beyond the scope of repositioning CapEx aimed at generating additional rental income in the upcoming period. We also invested EUR 3 million in modernization projects during the first 9 months of the year.

These targeted investments are designed to improve the quality and appeal of our portfolio, supporting higher rental rates. These investments include initiatives such as adding balcony, installing elevators and upgrading technical infrastructure to ensure optimal power, water and heat supply.

Investments focusing on improving energy efficiency and reducing CO2 emissions, such as replacing windows and upgrading heating systems are categorized based on the nature and scope of each project. Adjusted FFO for the period was EUR 81 million, lower compared to EUR 83 million in the same period of 2024 as a result of higher repositioning CapEx.

On Slide 13, we present an update on our EPRA NAV metrics. EPRA NRV per share increased by 2% to EUR 28.4.

EPRA NTA per share increased by 3% to EUR 25.1. EPRA NAV per share increased by 6% to EUR 22.7.

The increase in EPRA NAV metrics was primarily driven by strong operational performance and positive property revaluation in the first half of the year. EPRA NDV was additionally supported by the one-off deferred tax income related to the change in Germany tax regime, which didn't have a material impact on the other metrics as the add back most of the deferred tax liabilities already.

On Slide 14, we turn to our financial profile. Our LTV ratio remained stable at 33%, same as of December 2024.

The LTV increased slightly compared to June, mainly as a result of currency fluctuations on the London portfolio, which reduced the euro value of the value side, while the debt remained unchanged as well as from the impact of acquisitions completing during the quarter. The EPRA LTV ratio, which fits perpetual note with debt declined to 45% from 46% at the end of 2024.

Our hedging ratio remained stable at 95% as of September 2025, helping us maintain a low cost of debt and protecting the company from market volatility. The interest coverage ratio stands at 4.3x and additionally, EUR 6.2 billion or 69% of our portfolio remains unencumbered, supporting strong access to bank financing.

As of September 2025, our cash and liquid asset position was at EUR 1.4 billion. Our cost of debt remained low at 2%, increasing slightly due to the repayment of lower-than-average debt and EUR 32 million of bank debt taken in the third quarter.

The average debt maturity is 4.4 years. And lastly, during the reporting period, we repaid the remaining balance of our Series U and Series E bonds using existing liquidity.

And with this, allow me to hand over to Christian to conclude the presentation.

Thank you very much, Idan. Allow me to point out that in the appendix of our presentation, you will find more detail on our strategy, our portfolio distribution and some more data on the German and London housing market in general, ESG, financial policy, analyst coverage, et cetera.

Finally, on Slide 16, I would like to conclude with our guidance for 2025. We confirm our guidance 2025 at FFO I between EUR 185 million to EUR 195 million, FFO I per share between EUR 1.05 to EUR 1.11 and total net rent like-for-like growth around 3.5%, with an FFO of EUR 141 million or EUR 0.80 per share, we are well positioned to meet our guidance in the final quarter of 2025.

Thank you for your attention, and allow me now to move on to our Q&A.

Before we invite your direct telephone questions, we would like to answer questions that we have received by e-mail prior to this call. For simplicity reasons, the team has taken liberty to group similar questions in order to answer as many questions as possible.

Allow me now to read out these questions. What are your views on the current macroeconomic environment?

How do you see this impacting on transaction volumes for German residential?

We have continued to observe positive market development supported by solid long-term supply and demand fundamentals. We continue to see a downward trend in new building permits in Germany, which in turn points to a decrease in the number of completions in upcoming years.

Meanwhile, housing demand remains high across our portfolio locations, driven by urban population growth. We expect these positive drivers to continue supporting strong internal growth going forward.

We also continue to see an overall improvement in the transaction market. With the stabilization of interest rates and the macroeconomic situation observed in past periods, we see a positive impact on the total cost of debt with capital markets open and debt spreads tightening.

This improvement added to the strong positive trend in rental growth, position the rental yields with a good spread over the cost of debt, especially when including the revisionary rents, which are substantially higher than the current rents. Accordingly, this is reflected in the increasing number of transactions recorded across the market, and we are seeing an uptick also in activity for larger ticket transaction.

We expect these positive developments to continue going forward with rental growth supporting the value growth.

Thank you, Christian. Will GCP benefit from the new construction law, the so-called Bau-Turbo and the intention of the German government to boost construction?

The aim of the Bau-Turbo, which is a German government initiative launched in 2025 is to accelerate the construction of housing in response to a deepening housing shortage. And the main way this is envisioned is by reducing bureaucratic hurdles such as by introducing fast-track building approvals, reduce complexity, improve affordability and cut construction time lines.

The law not only applies to new construction projects, but also deliberately includes alterations and changes of use. The latter options of simplified change of use offers potential, particularly for the conversion of commercial space into residential space or for densification.

Looking ahead, the effectiveness of Bau-Turbo will be measured by how much it will actually increase housing supply in the next 2 to 5 years. The law is initially to be introduced as a so-called experimental clause until the end of 2030.

We view this as a positive development as increased supply could reduce some of the social pressure and improve liquidity in the letting market, which may also increase our tenant turnover and allow us to capture rent upsides faster. In addition, it could result in increased attractiveness of our development rights and make densification within our portfolio more economical.

That being said, we expect to continue to focus on creating value through extracting building rights and permits and sell them. We do note that the final implementation will be done on the municipal level, and municipalities may not have enough capacity or willingness to implement changes in such a way that it would result in a significant improvement.

Thank you, Christian. Can you please elaborate on the like-for-like rental growth?

In which regions do you see growth? How do you see the market development?

And what is your expectation for your performance going forward?

As we mentioned, we continue to record strong operational growth across all our locations, supported by a strong macro dynamics. For the last 12 months ended in September 2025, like-for-like rental growth reached to 3.7%.

This was mainly the result of an in-place rental growth with 1.4% driven by indexation, 2.1% driven by re-letting and 0.2% from occupancy growth. Vacancy remained at record low rates, decreasing further to 3.6%.

We note again that this rental growth come at low CapEx and high accretion to cash flow, and it is not the product of significant modernization projects or new construction. Positive long-term fundamentals in our portfolio locations continue to support rental growth.

In Germany, strong rent increase were recorded across all our key regions with total like-for-like rental growth reaching 3.4%. The highest increase were recorded in Berlin, Mannheim, Frankfurt and Nuremberg, Fürth.

We also recorded strong rental growth in London with like-for-like growth amounting to 5%, with softer rent regulations that allowed us to unlock faster the revisionary potential of our portfolio, with occupancy growth supporting internal growth. Vacancy in London portfolio stands at 2.3%, reaching a new low and down from 3.1% a year ago.

Going forward, we expect to continue unlocking gradually the revisionary potential through re-letting with a supportive environment and solid operational performance, positioning us well to keep growing. We expect like-for-like rental growth of over 3% for the foreseeable future.

In the London portfolio, as vacancy reached to structural low level just above 2% and the significant increases captured in past periods are reflected, we expect to have similar rental growth as in our German portfolio, stabilizing at a level of 3% to 4% rental growth.

Thank you, Refael. Could you provide an update on your external growth strategy?

Do you expect to be a net buyer or net seller?

While we see overall improvement in conditions in the past periods, we also observed an asymmetric recovery among market players with smaller players facing increased financial pressure. We see this trend stronger in the London area, which generally has a shorter financial cycle compared to Germany and owners are coming under more pressure.

We see this more with developers as they have less financial headroom. This has the potential to open us opportunities to acquire high-quality properties at attractive pricing.

In this context, GCP benefits from preferred buyer status and a solid reputation, which added to our extensive deal sourcing network provide us with good opportunities to execute accretive acquisitions. We currently have an increased acquisition pipeline of over EUR 150 million in London alone.

We still do not see such accretive opportunities in our main German locations as not much development took place in recent years. We still expect that once funds will reach their lifetime and will be obliged to sell, we could find accretive transactions also in Germany.

As such, we intend to continue disposing of mature assets at lower yield, mainly in Germany to opportunistically recycling the capital into high-quality opportunities such as in London. Long-term, we expect our German footprint to remain over 2/3 of our portfolio with the remaining in London and other locations.

In addition to our acquisition pipeline in London and Germany, we continue to explore other major international cities, evaluating the opportunities to create excess value. Capital recycling remains a strong driver for external growth, creating stronger operational performance and higher returns.

In the reporting period, we executed approximately EUR 140 million in disposals, mainly in Bremen, Frankfurt and noncore locations as well as condominiums, which were executed at attractive average sales factor of around 19x, while we acquired EUR 85 million of high-quality residential assets mainly in London at attractive yields with an average acquisition factor of 13x. The acquisitions are mostly newly developed in strong location in close proximity to public transportation and embedded further upside potential.

We note that we do not have disposal volume target, and our acquisition strategy is opportunistic and guided by asset quality and the potential for value creation and strong FFO accretion. However, we would consider disposing further properties if we can continue and achieve good pricing for disposals and recycling the proceeds into quality assets at attractive pricing.

We maintain a significant pipeline of attractive opportunities and currently see a good window for potential deals mostly in London. We do expect this year to remain a net seller in terms of value.

But as we are acquiring quality assets at very attractive yields and strong operating margin, we expect that on the EBITDA basis, we will start to see acquisitions become a net contributor over the coming periods.

Thank you, Refael. You have not conducted a portfolio valuation in Q3.

However, what are your perspectives on the valuation in the full year? Do you expect to see yield compression in the following period?

This is correct. We have not conducted a portfolio revaluation as part of our Q3 report.

We have conducted a full external revaluation of our portfolio as part of our H1 report, and we will carry out another full revaluations as part of our annual audited report. As noted, we continue to observe positive development in the market with increased liquidity and a higher number of transactions, particularly of larger portfolios, supporting valuations.

In addition, stabilization of interest rates, especially in capital markets, has resulted in an attractive spread over in-place rent compared to historical levels, while the additional embedded upside stemming from Germany regulatory environment provide a stable rental growth path in coming years, making the current value rates more attractive. Looking ahead for the following period, we expect organic value growth to continue reflecting the operational growth of the portfolio with yields remaining stable.

While we also see the potential for yield expansion in coming periods, we continue to view the possibility over a long-term.

Thank you, Refael. Do you expect to pay dividends next year?

Are you considering a share buyback?

In the past periods, we have seen a sustained improvement in market conditions, which added to our proactive actions have resulted in a notable improvement in our position. As such, we are confident about resuming dividend payments next year if the current market conditions continue.

The decision will be taken next year ahead of our AGM. Regarding a share buyback, we view it as a relevant option in the event that we will continue to dispose properties at attractive prices and don't find attractive transactions to recycle the capital.

Thank you, Christian. How do you view your current leverage position?

Do you expect significant changes?

We have maintained our leverage in 2025 with a conservative LTV ratio of 33% as of September 2025. EPRA LTV has been reduced to 45% as of September, down from 46% in December.

While our leverage metrics provide comfortable headroom to support external growth, we expect leverage to remain low, achieving growth through capital recycling in the coming periods, where there can be fluctuation as a result of timing impacts of transactions. As always, we remain committed to maintaining a conservative financial profile, which we view as a key element in the success of the company.

We expect our leverage position to remain at low levels, enabling flexibility going forward.

Thank you, Idan. Have you seen changes in your financing conditions from your last report?

Our access to capital markets remains strong and continued positive bond performance has further improved our refinancing outlook. Notably, the spread on our bonds has even tightened to levels below the margin on secured bank financing, reflecting the favorable market sentiment.

We have seen a very strong bond market in the past month, with many of our peer's raising debt at attractive pricing and benefiting from very strong demand, significantly better than the conditions a year ago. Looking ahead, we are in a no near-term need to raise fresh debt as our liquidity balance is very strong.

However, we may explore issuing debt as part of an LME if the conditions are right.

Thank you, Idan. Could you give an update on your 2026 perpetual note call date?

And what is your expectation here?

We see the capital markets improving, including bonds and perpetual notes, namely, Aroundtown executed a successful perpetual note transaction and got positive market response. We view the transaction very positively and are encouraged by the good results, which is a reflection of the improved sentiment we have seen over the last period.

Our next upcoming call date is in mid-2026, and our base case scenario continues to be the issuance of a new perpetual note and either tendering or calling the existing one, thereby replacing the perpetual note. We believe that this option will be possible for us at a reasonable price, significantly better than the conditions we have seen in the last time we were facing a first call date for one of our perpetual notes.

This is the case as long as market conditions remain as is and do not reverse significantly.

Thank you, Michael. Could you provide your latest guidance for 2025?

Do you expect any changes? What can we expect for 2026?

We confirm the guidance published in March, and we guide for [indiscernible] to be in the range of EUR 185 million to EUR 195 million, with FFO I per share of EUR 1.05 to EUR 1.11, reflecting around 10% yield on the current share price. With an FFO I of EUR 141 million in the first 9 months of 2025, we are well positioned to meet the guidance.

Our solid operational performance in the reporting period was in line with expectations in our provided guidance. We expect the strong operational momentum to continue with a like-for-like rental growth of around 3.5%.

We expect to continue unlocking internal growth gradually through the high reversionary potential of our portfolio as well as capitalizing on accretive external growth opportunities if they fit to our acquisition criteria, although this impact is most expected in the coming periods and will not have a significant impact on 2025 results. Regarding financing expenses, our expectations remain unchanged, and we expect them to increase slightly compared to 2024 due to the impact of the bonds issued in July '24 and the lower income earned on cash holdings, net of repayments of debt.

As to 2026, we will present the guidance for the next year as part of the 2025 full year results. In general, we expect to continue seeing increasing EBITDA driven by the internal and external growth, while interest income will be reduced, and the perpetual note attribution will increase with the first call date coming up mid next year.

Thank you, Michael. Before we invite your direct telephone questions, we would like to answer questions -- sorry, apologies.

Those were the questions that we received prior to this call. We can now start the open session for your questions.

We would appreciate if you can ask all your questions at once, and we will answer them one by one.

Interesting to see that you clearly have more opportunities in London perhaps at this stage versus Germany. Any willingness to grow your net exposure to London over 20% in doing that?

Or would you keep recycling and finding disposals opportunity to maintain ultimately your exposure to 20% if you're finding more acquisition opportunities in London?

Jonathan, thank you for your question. Yes, look, in the past, we've been up to 25% in London.

We gradually went down with disposals over the past 2 years. So we were comfortable being at 25% around that level.

Yes, we could continue seeing disposals. We see good transaction market in Germany.

We see also a good transaction market also in London. So we might have also disposals in London.

But most of the pipeline we see now is in London. So we could expect a certain increase in London in the next period.

However, at a limited level, right? So we're not going to see a very big change, maybe towards the 25% I mentioned earlier.

We want to mention again that we will keep the German portfolio at the around of 2/3 of the total.

Two from my side, please. Just to update a bit.

Can you give us some news or an update on your plan with the fund or if you're going to do joint ventures when it comes to acquisitions? That would be the first question.

Second question, maybe you can elaborate a bit on how have your plans regarding a possible expansion to the U.S., how has that evolved? Is this something that you're going to follow, which is or is it something that you put it aside for the time being?

These are the 2 questions, please.

Manuel, thanks for your questions. First, regarding the fund, yes, there's not a significant update here.

The fund still up to $400 million. The acquisition we did in Q3 was not through the fund, but we clearly could use the funds also for acquisitions we see in residential.

As to your second question, look about U.S. or other markets.

As mentioned, we see Germany holding very well. Transactions levels are good and picking up.

This is great for the business. It's good for valuations.

It's good for disposals as well, but we don't see many opportunities in Germany. As mentioned, London is pretty similar.

We see a bit more opportunities. We're entering the sweet spot where we see a good transaction market there, but also, we see some smaller portfolios come to developers, which gives us the opportunity to buy at very attractive prices, high-quality assets in good locations.

But that being said, we are also looking to grow further. We want to have the option to grow further similar like we did with London 7 years ago or so when we saw Germany being expensive, we were disposing, and we wanted to recycle that capital to a new location where we see good fundamentals and we enter attractive pricing.

So we are looking a bit outside the traditional locations. We're still looking -- U.S.

is one of the locations, but currently, we're still exploring this option. But just yes, as Refael just mentioned, I mean, Germany will continue to be our main focus with 2/3 of the portfolio.

And outside of London and Germany, we're seeing up to 10% in this -- in a potential new location. But naturally, this will be a gradual increase once we find the place and we start to build scale.

Next question please.

Of course, you've reiterated your guidance today for this year. Based on where you're trending, are you able to point at which end of the guidance range you expect to be for 2025?

We expect to be around mid-guidance. That's how we see it now.

I mean we still have time and some moving parts, but we feel that around mid-guidance is where we expect to be by the end of the year. The acquisitions we did and the acquisitions we may carry in this year and potential some Q4 won't have a big impact this year.

So we don't expect to see a big change to where we are. So around mid-guidance is where we expect to be.

Three quick ones for me. You disposed 1,300 units year-to-date and acquired 300.

I think the number of units in your portfolio has actually increased by 220. I assume it's just a timing thing in terms of the disposals coming through maybe in Q4.

Second one, you sold at 5.3 and acquired at 7.7. Just wondering, do you have any proof you mentioned the transaction market is supporting your valuations.

Just wonder if you can point to specific transactions that support your 4.9, obviously being much tighter than the yields you're selling at and the yields you're acquiring at. And then the final one, just in Q4, do we expect a big pickup in repositioning CapEx in Q4 similar to last year?

Just noting, obviously, the run rate year-to-date is trending below where probably you would expect it to be. So I just wonder if that's going to all come in Q4.

Thanks, Paul, for your questions. First question on the unit number.

So the disposals and acquisitions reported all happened and they are in the balance, but we don't include the held-for-sale portfolio that we sold and the EUR 140 million we sold was out of the held-for-sale portfolio and therefore, not presented in the units and the acquisitions we did are inside. And as we pointed out, they are there.

Look, as to valuations, I mean, the proof for the transactions is what we see. So we're selling -- selling at book value even at a slight premium.

Also negotiations we see, we are seeing around book value is also higher in some instances. So we're comfortable.

And as we mentioned, we're acquiring very specific kind of assets from very specific sellers. These sellers are under financial distress.

They have their considerations. As I mentioned, mainly they are developers.

So these developers don't have the access to capital we have. They've been rolling debt for quite a while.

Rates specifically in the U.K. and London have still been elevated and they wish to make a fast transaction, and this is where we come in.

As to repositioning CapEx. So we slightly increased from last year, actually.

So the trend is a bit going up. We see a bit of cost inflation there, and we are also feeling more comfortable to spend a bit more, but we are around this level, right?

So we are at EUR 15 per square meter for the 9 months and we expect to be EUR 20 per square meter also for the year. And also, I think that's a good run rate, maybe with a small uptick upwards going forward, but nothing significant.

Next question, please.

Just coming back to the dividend, firstly, I appreciate that you're confident about resuming the payments. But are you able to share some color on what the payout ratio will look like?

Are you going to stick with 75% or revised lower in line with your peers? That is the first question.

Second question on your cash position. How are you thinking about this?

I mean you're sitting on a substantial cash pile and have been for some time now. Is that driven by credit agency requirements?

Or is it more of a strategic decision? And then following on from that, you have a fair amount of debt maturing over the next 3 years.

And while debt markets are open for refinancing, as you say, that will likely be a high 3% coupon for you. Would you therefore consider repaying some of that debt instead or exploring a convertible?

Thank you, Andrew, for the questions. I'll go one by one.

As to the dividend, our policy stands where it is. It's at 75% of FFO I per share.

We may evaluate closer to the AGM, and that will be depending on opportunities we have on acquisitions on the one side and also if we see more disposals on the other. So 75% is currently where we are, but that's subject to maybe a bit of rethinking from our side.

In terms of debt, I think actually the second and third question go together. Look, we have a substantial amount of cash on hand.

It covers up to the next 3 years. So 2.5 years, so we have no real need for refinancing at this stage.

We tried to buy back our debt in the past, but the pricing wasn't right, which maybe is a positive thing. It depends how you look at it.

So currently, we're benefiting from income on this cash balance, and we pencil most of it to repayments. It also will be some firepower for acquisitions.

But also, as I mentioned, we expect to see some capital recycling. So in general, most of that cash we have now will be were paying, and we don't expect to need to have more cash for refinancing in the next period.

So unless we'll do a liability management, also, we don't expect to go to the market and do a new bond. Thank you.

Yes.

Okay. This seems to be the last question that we had.

And therefore, I would like to thank all of you that participated in this call and the questions that you raised before and during the call. I wish you all the best and say goodbye from the team here in [ Velen ].