PSP Swiss Property AG

Good morning to everybody, and thanks for attending this conference call of the annual results of PSP for 2022. We're happy to report, I would say, outstanding results.

But before starting the presentation, please allow me to thank all the PSP employees for this outstanding job over the last couple of years. As you know, these were very special times and to be able to report year-on-year those results is really the merit of all the employees.

I will go through -- quickly through all the slides, giving the highlights per slide and then allow really a bit of more time for the questions. As we start with Slide 3, an overview of the portfolio.

I think, here, to remind, we will continue to focus and concentrate on commercial properties in the primary cities of Switzerland, especially in Zurich and Geneva, also through the transactions we did last year, noticeably, the asset swap or the disposal. We will try to concentrate even more the portfolio on the place to be and on the prime locations.

Slide 4, two remarks. The letting market in these locations, especially Zurich and Geneva for prime office are intact.

We're letting well. Rents are solid.

And secondly, the transaction market on this prime segment clearly slowed down a bit, but also here is intact and the yields were stable in 2022. Slide 5.

The main developments, we tried to be active. We did an asset swap with an insurance company.

We did an acquisition and disposal. We continue to dispose the residential condominium apartments in Parco Lago and are progressing well.

Vacancy rate came in at 3% for the year-end and is expected to stay below the 4% for 2023. And we have already renewed more than 50% of the maturities in '23.

On the financing side, I will elaborate a little bit later more, but we did a lot of progress on our sustainability approach underlying our efforts, which we are engaged since many years with a green bond framework and also now, as per today, with a fully sustainable loan concept implemented. And all the credit are green now on the bond side and on the drawn credit lines.

If you go on Slide 7, the highlights. EBITDA increased by 5.4% to CHF 293.8 million.

As you know here, we have also the condominium disposals in, which were, for this year, CHF 25 million and which will be a bit lower in '23. Therefore, the guidance for '23 on EBITDA is a bit lower despite an expected top line growth.

Net income without valuation gains was up 6.6% to CHF 235.7 million. Net income clearly came down due to the lower valuation gains in '22 after record high valuation gains in '21.

The rental income increased by 2.1% to CHF 316.2 million. For us, the most important number, the EPRA EPS was up 4% to 4.66.

On that number, we base our dividend path and distributions, and the Board is proposing to the AGM an increased dividend to -- of CHF 3.80. If you go to Slide 8, on the details of the consolidated income.

The top line growth of 2.1% is reflected by an April like-for-like growth of 2.2%, here mainly due to the completion of the development projects and also due to nonrecurring COVID effects we had in '21. So they were positive in '22.

We are confronted with a solid rental market and clearly also here with a record low inflation rate for 2022. And I'll elaborate a bit later on the valuation gains.

The property sales, as mentioned, were CHF 25.2 million, predominantly the disposal in ground play. It's a development project we have sold in the first half of last year and the Parco Lago condominium disposals.

Here, we are left with a few apartments, which we will most probably sell in 2023. On the cost side, Slide 9, you see basically an unchanged cost development.

We put a lot of focus on operational excellence. We aim to have an EBITDA margin of above 80%, which we achieved also this year.

And you see also the operating expense. Maintenance expense is a very stable line.

We are not so much affected by the energy price increases, and also inflation is not hitting us so much on the cost side. But as you -- just to be aware, the cost side for us is a very important matter to have this discipline and to have this operational excellence in order to have this EBITDA margin of above 80%.

Slide 10, the financial expenses, only moderate change. Here, clearly, this is a number of CHF 11.6 million, which will change in '23.

The interest environment has changed also in Switzerland. Also, for PSP.

We don't see dramatic moves, but clearly also our refinancing has changed. And this, I think, will be after '21, record low financial expense number, we probably will not see in the near-term future.

Tax side, pretty stable average tax rate of between 17% and 18%. Slide 11.

As mentioned, we are proposing a dividend increase of CHF 0.05 to CHF 3.80. I say it often in the meetings, we have a good visibility that we can continue on this CHF 0.05 path over the next couple of years.

I think we have a payout ratio of below 80% at the moment. And if you look at our EPRA EPS projections, we can continue that path despite an increased interest rate environment and financial expense in hitting EPRA EPS will have a top line growth due to development projects, and we have inflation adjustments, which allow us to continue on that CHF 0.05 growth path despite any major positive or negative events which are, I would say, out of control of our control.

If we go into the Page 14, portfolio and vacancy rate. As mentioned, you see a stable portfolio demand size-wise.

As we always said, we are not too much focused on portfolio size, although the portfolio grew in the last 3 years by CHF 1.5 billion but we are focused on earnings quality. Therefore, we are clearly looking at a transaction where we can buy or sell at equal or improving yields and improving earnings.

And we have now a vacancy rate of 3%, which is, for us, basically a record low level. On the largest vacancies, Slide 15.

Here, we have to keep in mind, we talked about low numbers. The Poststrasse, the biggest one, has also already been let.

And the Richtistrasse, the later 4 ones in Swiss North, we're working on a rezoning project. We're working on alternative usages.

Here, I think we are aware of the issues. But with regard to valuations, a lot has already been taken into account into the valuation.

So I think here, we are in a level where we can start talking about upside. Slide 16, expiry profile, you see a moderate development.

If you take into account that we have a 5-year lease contracts with options, this is a natural path. More than half has already been renewed in '23, and we are working on '24 and are not so worried about '25, '26, if you look to absolute size.

Slide 17, 18, valuation changes. Second half of '22 was basically unchanged on the valuation, slightly negative with CHF 7 billion, but this is honestly on a CHF 10 billion portfolio rounding error.

So the CHF 124 million, predominantly CHF 90 million investment portfolio, CHF 32 million development portfolio comes out of the half-year revaluation with overall a slight discount rate change of minus 3 basis points. I think here, as I mentioned beforehand, the value looks at transactional evidence.

I think the transactional evidence still holds for the variations we have in the portfolio. We will see over the next couple of months, quarters, what will happen on the transaction market and what the implications are from the value.

Clearly, positive or indexation possibility. We are able to index more than 90% of our rental income.

So that's a positive on clearly, the valuation. Also, the fact that we have development projects, which we are leasing up is a positive.

But I would say the main driver is the discount rate, and this is in the hand of the market. And we will have to observe the market and the value on what is coming from that site.

Allow me a few comments on Slide 20, on our green finance policy. Here, just to start off, PSP's approach to sustainability is a key element since the inception of the company.

Whenever we touch a building, renovate the building, we always look to do it at the most sustainable way possible. Also, due to the local jurisdiction, the local requirements, I think it's [indiscernible] and the standards are very high.

Also, we realized that the market expects from a publicly listed company that you have a certain framework, that you have a certain commitment. So we decided last year that we launched our green bond framework for the bond side.

We successfully reclassified all existing bonds in the third quarter to green bonds, basing -- with the basis of the CO2 emissions and the ESG rating, having two external parties from ISS and Moody's. And then what we did in the fourth quarter, and we completed it now, we implemented sustainably-linked loans for all drawn credit lines and more than CHF 600 million of committed lines.

Here, we have based our concept also on the green bond framework. We have implemented the payaway solution.

And also here, we have an external review report from ISS and an internal opinion from 1 of the big 4 companies. So with that, we have the full debt, which is green.

We will publish a green bond report on the first Q results '23. And then from then onwards, we report on -- publicly on our sustainability efforts and on the funding policy.

On the debt side, if you look on Slide 22, you see that we have a loan-to-value of 32.6%, basically unchanged compared to '21. We have a solid mix between loans and bonds.

Duration came a bit down, but that's something we have anticipated, and we are running at the passing cost of debt of 47 basis points which, however, will clearly increase over the next quarters. A quick glance on some major projects we're working on, Slide 24.

Project Clime Basel is a full body building. We have finished.

We have still only 50% pre-let to telecom company and the restaurant. However, we have quite an interesting line of potential tenants.

And due to the centrality and the quality of the building, we are not worried to be able to let the remaining surface. Clearly, the pickup is a bit slower than expected, also due to the market conditions in Basel.

But if you look at the quality of the product, it's a question of time, but it's not a question of if in our view. Hotel de Banque in Geneva, Slide 25, we have completed the refurbs of the acquisition.

It's basically fully let. We have two LOIs outstanding.

We are left with one floor. But here, we have a very positive reletting situation.

And clearly, these activities contributed to the positive valuation gains of 2022. Slide 26, Project B2B.

It's still not let. Here, we are in discussion with a light industrial company for two floors.

We are in talks with a variety of office tenants for the remaining floors. So here, we are also positive to soon be able to announce letting success.

And we are also here, it takes a little bit more time on the letting as perhaps we have expected. But the product is, in our view, very positive.

We see a good lineup. So here, we will soon be able to announce some results.

Slide 27. Bahnhofplatz, Zurich is last piece of the whole development side [indiscernible].

Also let, I think with that, we are completing the whole refurb at the main station. On Slide 28.

Just as an example, a refurb close to the lake on the Bellevue. We had outgoing rents before refurb around CHF 400.

We are now office year at CHF 850. Majority is pre-let and we are in final negotiation for the remaining office space.

Last, but not least, the last start in Füsslistrasse, that's next to the Banostrasse, a refurbishment of an existing building, which we just started. And also, here, we have a very good lineup also from retailer.

And here, with that, I would end my comments on these projects. We still see a solid demand for prime retail in Zurich and in Geneva, clearly, as soon as we move out of the city centers, it becomes also here a bit more difficult.

Slide 30, you see the sum up of these existing projects. This will add an additional CHF 15 million to the top line in the next 2 years.

And if you go on Slide 33, 34. These are the two projects, which we are currently working on.

One is on the Bellevue and one is in Basel. These two projects will add up another CHF 11.5 million within '25.

So we have top line growth coming from the development projects. Also, the overall project pipeline is moderate.

But as you know, we are working always on the investment portfolio to reconvert assets, improve assets, and we have some good visibility also going forward. With that, I would go to Slide 38.

On our projections and outlook, we guide for an EBITDA in 2023 of CHF 285 million. The underlying is that we see top line growth but have a bit less condominium sales.

And we guide for a vacancy rate of below 4%, which is not far off from the 3% we have reported in 2022. I think that would end my initial remarks, and I would like to open for questions.

I have three questions, and I would take one after the other. The first one is with regards to the reletting success for the 2023 expiries.

What was the average increase of rents? And could you pass on all the inflation-related increases without any concessions?

And then an add-on to that one would be what is now the rent-free period for a typical 5-year contract? And if you manage to get 10-year contracts, what would be the rent-free period there?

So your inflation question, we have a full adjustment of the inflation. We had no discussion or discussion on that.

So we could pass on the full adjustment.

Sorry, the question was solely related to the relettings. So if you basically say you relet the contract in 2023 and the run rate is 100, could you pass on the inflation without any problems in a reletting situation?

Yes.

Okay.

For the full set of the portfolio. On your second question, on the first one, on the reletting.

On the ones with identical -- the identical tenants, we are slightly 2%, 2.5% above. That's exactly the indexation.

I think here, it's difficult to increase the rents, selectively. Whenever we do something with the assets, as mentioned beforehand, we have significant upside potential, but this is clearly not representative for the full portfolio.

On rent free, it depends really on the location. But we would say, if you are in the super prime location, you talk about 2, 3 months of rent free, I think here, the incentives are stable.

The second question is with regards to financial structure. And the question is where will you go over the next 2 years with your fixed in period in years?

I think we will -- that's something we will decide along the lines of interest rate development and expiries. As I mentioned last time, due to the strength of the balance sheet, due to -- of the quality of our earnings, we are not worried if the duration comes a bit down.

If you know historically, we had a duration, which was much lower. We will see how the curves look, but it could be that we are above 4 years.

It could be below 4 years. It depends really on how long we would do a bond, if we do a bond.

But as I mentioned last time, we are not so worried about affordability for PSP. And having said that, also with the dividend capability, which comes out of it.

Okay. And the final and last question, could you give us more granularity on your vacancy guidance, please?

I think it's difficult to give more granularity. We say below 4% for the full year.

I think that's a solid number. Honestly, we are working on our expiries.

We have the Project Clime, which comes into the portfolio. B2B, which will be completed.

We have to see if this comes into the portfolio, and these are the drivers of the vacancy rate. I think what I can say, it has basically no impact on our EBITDA guidance.

So I'm not worried on it. It could be 3.7%, 3.8%, 3.9% or 3.6%, I think this is -- we don't know.

We are convinced that it can be below 4%.

I have only one additional question on the renewal and expiration profile. So currently, there are 55% of the leases that are due this year already renewed.

Compared with previous years, this seems rather low number. Could you elaborate a bit on the reasons do you sense a reluctance from existing tenants to renew at this point of time?

No, I don't sense a reluctance. You have to see that there are many, many contracts which come to an expiry.

We have already agreements with some, but the lease has not been signed. So I think here, we have a visibility of basically another 30% to be signed, which will come in then in Q1, Q2.

I think this depends a lot on the size of the expiries, but we don't sense any reluctancies of tenants.

My first question would be on the guidance on EBITDA. Just to understand what -- my understanding, there will be almost no income anymore from property sales.

Is this right? And is this the only reason why the EBITDA is down year-on-year?

Or do you see also -- it's also due to the vacancy increase due to new projects?

We are typically not giving guidance on the sales of the inventories. But as I mentioned, we had with CHF 22 million, roughly CHF 25 million of disposal gains.

In our projections, we are roughly half of it for 2023. But as I mentioned also, we -- despite the fact that we are vacating Hochstrasse, Globus in Bellevue and Limmatquain which costs us roughly CHF 10 million of rental income.

Despite that, we see a top line growth, which comes from inflation adjustment and relettings of last year. The vacancy rate increase comes more towards Q3, Q4 and has less of an impact on the overall EBITDA guidance.

Okay. The two buildings, sorry, which are going to be vacated, are CHF 10 million each or CHF 10 million total?

No, no, together -- together, the 3 or 8 -- CHF 10 million Hochstrasse and Globus on Bellevue are roughly CHF 8 million.

Okay. Then my next question is on the indexation for 2023 -- or '22, also what the inflation indexation part was in your like-for-like growth?

Because the 0.8 like-for-like rent growth seems more at the low end of your historic average. So to see if you're -- if there is an acceleration with the indexation or if you don't see it at all in the rent growth?

Yes. Let me step back quickly.

When we do inflation adjustment, we take the November CPI. So October to October, and then the public November CPI.

So for '22, we took the November CPI of '21, which was roughly 0.4%, 0.5%. So in '22, you see little inflation adjustment.

For the '23 numbers, we took the November '22 numbers, which was an inflation of 2.9%, and we were able to transfer roughly 2.7% to the tenants. So you see the first indexation effects really in '23 and not in '22.

Okay. Can you give us a guess of the reversion -- rent reversion for the whole of your portfolio?

I would say it will -- yes -- I think we have positive rent reversion. I think on the size of the portfolio, whenever this materializes, I wouldn't say it's neglectable year-on-year.

It's sizable for assets. But overall, it takes years to materialize.

As I mentioned beforehand, in Wallisellen, I think we are low with the market rents, but it takes time to materialize. Overall, if you look at the values report, I think we are at market or slightly even below market.

But I would say what you see like-for-like is coming predominantly, the out of indexation. And then the top line growth, on top of it, comes due to refurbishments and the increase in rents out of refurbishments, like the Globus on Bellevue, where we increased the rents from a bit more than CHF 4 million to roughly CHF 7 million.

So that's where then the top line growth additionally comes from these refurbs.

Okay. On your portfolio valuation outlook for this year, do you have an idea on what kind of cap rate expansion we could expect?

Or if you should consider the same pace as H2 given the transactions you're seeing in the market conditions?

Yes. I think without offense, but this is not in our view up to the management to say.

The valuer is responsible for the valuations in our case. We have a view that we are letting well.

The underlying market is solid. We can pass through the indexation, so that's a positive contribution.

What then happens on the transactional market and how the value applies those transaction yields to our portfolio, I think, is a bit outside of our control. And in our view, it's also the main driver of the overall valuation.

I think what we can say is that we have positioned PSP that we can go through the cycles whatever happens on the valuations, without expecting now any shocks. And that our dividend capability and dividend path is independent of the valuations.

So from that end, I have to pass on these questions. We'll see what the market does.

And there are various public statements from the various valuers on this subject. We are working on our operating activities.

We are working on our disposals. We are looking at acquisitions, but I think I will not make statements on valuation expectations.

Yes. Makes sense.

And last question, but more personal one. I saw you reported the new EPRA LTV metric, which is very appreciated.

I just wanted to know because some of your peers are giving a lot of pushbacks, saying it's complicated. It takes time.

So just to know how time consuming or difficult it was really actually to implement this new metric?

For us, it was absolutely not critical. I think also, here, we have to say we have a simple business model.

So from that end, it was absolutely easy. I think in the majority of the cases, it shouldn't be a problem.

We have plenty of time. There's plenty of guidance from the EPRA.

I think here, I think it shouldn't be a big issue, but there might be circumstances JV structures where it's perhaps a bit more difficult. But for us, it was easy.

I'll start with two questions on your outlook statement in the press release. You say that the demand for office space is likely to remain high in the economic centers of Zurich and Geneva.

Could you please make a statement with regards to Basel, Bern and Lausanne, especially that you now do a change of usage in Basel means a city that was still seeing quite positivity, I think, just a few months ago? And the other question on the outlook is that you also with some restrictions, you are -- you see no impact on the transactional market.

Could you maybe add some color on what you mean with some restrictions?

Yes. On the first question, I think if you take Basel, Bern and Lausanne, I think they are a bit smaller market.

So it's really also sometimes 1 or 2 lease agreements can change a bit, the sentiment. We were critical last year, fill the publication.

Then all of a sudden, we were able to fill up the growth pay for towers. We had some letting success in the city center.

So this turned us a bit more positive. I think what turns us positive is that we have a good product.

However, we see that the overall market is not so solid as Zurich CPT or Geneva CPT. Bern, we are letting well.

I think we also are now in [indiscernible], which is not a prime, prime spot. We have some letting successes.

I think we are a bit, but this is also from, I would say, almost a bit from the hips or from the stomach, at the moment, a little bit less positive for Lausanne, but also this is sentiment-driven based on demand, based on responses. But as you know, it's a minor part of our portfolio.

I think here, this is often that you have one region or one area, which is a bit more positive than the other bit less. I would say, at the moment, Bern is solid in our portfolio.

We are moderately positive Basel, perhaps a little bit more concerned on Lausanne but this is really a bit at the edge. The second comment on the transaction market.

What we observed, and we observed some transaction, that prime yields hold up. We see some yield widening on selective transactions.

It's still a little bit of an illiquid market. So to have a full evidence is difficult.

On the other hand, if you're saying with some restrictions, we see what interest rates did and we don't see it in the transaction market. So also we are here a bit observing and looking on what really goes on, on the transaction market.

Okay. Then I have two questions with regards to specific properties.

I'm sorry if I missed your comments on the new development in Basel. So the 50% pre-let that is for the service department, is that correct?

And the other 50% is that then with the ground floors where you would need an office tenant? Or is that the way to think about that one?

Yes, we start the project with the serviced apartment concept and then we really provide, I would say, grade A office space and we start with that. We are having there clearly, a bit of a parking space and a bit of storage, but it's predominantly 5,000 square meters of office, which comes in our view, modern office space in a good location.

But the start is with the serviced apartment concept.

I wanted to ask on Wallisellen, but I'll give you a pass given the comments you made. Maybe this time, can I ask about Moosstrasse and Rüschlikon, because I also checked it on Google Map and Czech look at 3Q and this is somewhat an unusual property in your city-centric portfolio.

What are the plans here?

Andreas, so you passed Wallisellen, so I pass the Rüschlikon. No.

Sorry for the joke. We have more than 180 properties.

And there are always some. There's always one on the bottom.

Rüschlikon, it's not one of our, I would say, key objects and key properties. We have a vacancy there.

We are working on that lake. It's clearly the plan that once we fill it up, we might sell that asset.

Now this is one of the assets which was good as long as it was full. It was not really a priority to dispose it.

Now we have it. If you look at the overall value of the assets in neglectable in the portfolio, but it's clearly -- it's a pain for the property manager and for the letting team.

It's not so evident, but we don't feel it in the P&L. More important Wallisellen here, we have -- I think we have a conviction that we can change a bit the zoning.

We're working on it. If we are then able to do it, we will see.

But clearly, we put a lot of efforts in it. We have also some interested potential tenants, which coming up now.

So also here, as we were perhaps on the pain side for the last 2, 3 years, perhaps we have a lucky punch now, and we have some new lettings. Both assets are not relevant for our guidance.

Okay. And finally, on valuations on your external value.

And I take fully note of your comment that this is not management's job. However, I would like to just point out that in the past, when discussions were on external valuations, there were always two angles, transaction market and the model view.

Now I haven't heard anything about the model view where the interest rate environment would be a driving factor. I mean, if we now do an external valuation, 100% driven only by the transaction market, completely not taking into account the interest rate environment, wouldn't that then mean that going forward, the external valuations should get much more volatile given that the slightest change on the transaction market should immediately one-to-one get effect into the external valuation, similar to what we see in other European markets, where then also share prices react much more volatile to slight changes in transaction markets.

Well, I think I mentioned the both sides. I mentioned the positive contributors, which come out from inflation indexation, higher indexation, rent growth, development projects, which we are letting.

So this is the positive contribution. On the second element are the yields, and the yields are coming from the value that are based on transactional evidence.

Now if it is one single transaction? Do you need to have more evidence?

I think this is really a question for the valuer. I don't expect more volatile values going forward.

But clearly, we are in a lower yield environment, and that means that if the yields move on that end, that the movements are a bit bigger than perhaps 10 years ago. But as I mentioned, I think it's evident that we are coming out of a ride of 10 years of yield compression and that sooner or later the yields could or should move up.

Considering, however, the market constituents, the limited leverage the little for sellers, I would expect that if that happens, that, that happens over quarters and not all of a sudden. However, as I mentioned at the beginning, I think this is the valuer's job.

And we, as a management company, have to make sure that we can live with all possible scenarios, which come out of that site. And considering our earnings quality, considering the vacancy rate, considering the debt profile, the loan-to-value, I think we are very well positioned for all the extreme scenarios.

If you mentioned that inflation protection. I mean, in my simplified Excel sheet, I mean, yes, you get a higher rental income, but compared to last year, your inflation component is also 50 basis points higher.

I mean does that then really have net-net positive impact? Or is just the higher rent being offset by the higher interest rate component in the discount rate?

I think it has a certain protection but clearly not the full protection. It takes up a little bit of yield widening.

But as soon as yields move up a bit more, I fully agree with you that this is a limited protection. But it's a positive element into the pot, not a negative.

So how positive it is? It depends on how much the yields move.

But here, I fully agree. It's only a partial protection, but we never said it's a full.

Just a quick question. Just a bit more of market color.

I know Zurich has been a bit of a, let's say, tech hub in recent years. So could you just give me a bit more color about kind of the evolution of demand technology companies?

Yes. You're absolutely right that clearly -- especially Zurich has moved to become a tech hub.

However, in relative perspective, so size-wise, not so comparable to, I would say, other cities here. It's very much linked towards the technical university and concentrate on the 3, 4 companies.

But clearly, the new pickup came predominantly also from Google beside other companies, like Apple and the likes. And we have to see on how this evolves.

This global hiring freeze and stop of development projects globally from Google is valid, as we understand, also for Zurich. That means not -- we have not heard that from the Zurich teams.

Clearly, they're evaluating on this -- on the future. I think if we look at the size of their position and the importance of what you hear from key people, know-how, development, research and development university, we are not negative on the future outlook.

But I think they are generally somehow to stop and to evaluate where are we going here. From us, it has no major impact at the moment.

We have renewed our contract. We have one expansion project on the [indiscernible] side, which will probably be postponed.

But that means also the CapEx will be postponed, that we will not vacate the property. So here, we are also a bit on the observing modus.

And generally, positive on the future development of Zurich and stay a tech hub because it's knowledge based. It's, as I mentioned, very strong linked to DTH and it's still quite limited headcount-wise.

Can you hear me well?

Absolutely.

Great. You provided details on why the consolidated EBITDA is going down in 2023 versus '22, which is mostly driven by lower property sales, if I understood correctly.

Is it fair to assume that despite consolidated EBITDA going down year-on-year, EPRA earnings, on the other hand, should see a positive growth mostly driven also by positive top line growth? Should we look at it like that?

We never give the EPRA EPS outlook. However, if I would look at it, you have clearly a negative impact for increased financial expenses, which could be slightly higher than the top line growth.

So having said that, I would expect -- I wouldn't say an almost equal EPRA EPS. Perhaps, from today's point of view, slightly lower.

However, still EPRA EPS, which is fairly above a potential future dividend increase and dividend payout.

Okay. And so on the higher financing costs, what would it be driven by?

What are the assumptions behind it?

Well, we changed the interest rate environment. We had a passing cost of debt to 47.

We did a great new bond at 2%. I think this will go direct into the financial expenses.

Clearly, as I mentioned, we can offset the majority of it or even a bit more with the inflation indexation. But if we had CHF 11 million of financial expenses, we -- this is an internal forecast, we forecast CHF 20 million for '23.

But this is based on the new financial environment. However, as I said, we capture it on the top line.

So we think this is net-net going through.

Okay. No, it's fair.

So yes, bottom line is stability on the EPRA earnings implied by your current EBITDA guidance if we exclude property sales, that would be fair.

Yes.

Okay. I would like to thank everybody for attending the call, and I wish you all a great day.

Thank you. Bye-bye.