Thank you, Alexandra and welcome to our earnings call for the first nine months of 2020. Your hosts today are once again CEO, Rolf Buch; and CFO, Helene von Roeder.

We're in different locations today, so bear with us in case we have slight delays, especially in the Q&A. I assume you have all had a chance to download the nine months presentation.

In case you have not, please go to our website and you'll find it under Latest Publications. In case you are wondering, we have merged the earnings call presentation with a more general investor presentation.

We have one document for different events and situations over the next week to reengage. Relevant today is primarily Part 1.

While Helene von Roeder will lead you through this first part, the results presentation, on the basis of the agenda on page three and of course we'll be happy to answer your questions afterwards. Let's get started then with the highlights and for that I am handing it over to you, Rolf.

Thank you, Rene, and also warm welcome from my side. You hopefully will be not surprised when I tell you that the nine months results stable continuation of the first six months is clearly no big surprises.

We keep running a very predictable business where things do not change very much from one quarter to the next. And while we are reporting these numbers as present of September, I can tell you that even in the light of the increasing COVID-19 concerns this will not change.

But now, let's go on Page 4 over to highlights. Organic rent growth was up 3.6% year-on-year which was a little bit down in comparison to last year's same period.

EBITDA total was up by 7%. Group FFO increased by almost 9%.

This is €1.80 per share which is almost up by 5% based on the higher numbers of shares because we had a capital increase in the period. No big changes in the adjusted NAV in Q3 because there was no valuation for Q3.

We are now at €55.41, but we also will give you a look at on the H2 valuation and we expect an overall value growth for the full year between €4.6 billion to €5.2 billion which is almost between 9% and 10%, so the adjusted NAV of the end of the year will be well above €59 per share. The LTV is at the lower end of the range with 40.6% if you include the perpetual hybrid it is 42.4%.

Net debt to EBITDA is 12.1. We have been making good progress on sustainability and part of this presentation will be to show you what we have been doing, but more on this later.

Our final guidance for 2020 sees us in an unchanged EBITDA range like the guidance and around the upper end of the Group FFO range and the phase is a little misleading, Helene will tell you that this upper end of the range, around the upper end can be even above the upper end. Keep in mind in the period of COVID-19 we as a company are happy not to increase our guidance, so that's why this phase is done and also to show you our composition.

We will propose a dividend of €1.69 also next AGM which is a little bit more than the 70% normal payout ratio if you put it on the corridor and this will also make up a bit positive boost of the capital increase of September. Our initial guidance for 2021 is expected an EBITDA growth of around €100 million.

We estimate the group FFO growth rate in line with what we have initially guided in prior years, so standard dividend payment will be again 70%. You will notice that we added to the guidance total segment revenue since this number affects the full course across our four segments, more on that will come later by Helene on the guidance in detail.

And with this, I hand over to Helene.

So, hi from me and looking at Page 5, primarily because of Hembla our average portfolio during the reporting period was about 5% larger than last year. On that basis, we grew the total EBITDA by 7.6% and the FFO by 8.9%.

For end of period shares, which is our main view because that is the relevant number for the dividend, the Group FFO grew by 4.7% as the number of outstanding shares grew by more than 4% based on our script dividend and the capital increase in September. I know that a lot of you prefer to look at average shares.

On that definition, the Group FFO was up almost 6%. So let's talk about individual segments and start with the Rental segment on Page 6.

Rental income increased by 11.8% or €180 million of which €135 million came from Hembla and the remainder from organic growth by way of rent increase and vacancy loss reduction. Maintenance expenses were €234.9 million, very similar to last year.

As I explained in previous calls, operating expenses were impacted largely by what I would call the Sweden effect, because Sweden does not distinguish between net [indiscernible] and ancillary expenses, both the rental income and the operating expenses include ancillary costs. Rough math suggests it is about €75 million for the nine months 2020 and about €30 million for the nine months last year.

Page 7 shows the main operating KPIs for the Rental segment. Organic rent growth was 3.6% year-on-year of which 0.8% came from the market, 2.2% from modernization, and 0.6% from new construction.

Given the low level of inflation, the [indiscernible] various Mietspiegel coming out a bit lower and so on, we were not really surprised to see market rent growth on this last site. Vacancy however, is down 30 basis points and that is the result of freezing.

Fluctuation has been trending down. Demand for our product remains at elevated levels and our team is performing extremely well especially in the COVID-19 environment, where we often cannot do mass viewing, but have to show apartments individually and partially digitally.

Maintenance expenses per square meter were basically in line with last year. Capitalized maintenance was higher than last year as we've been carrying out some larger maintenance work that accounting wise do not go through the P&L.

And with that, back to Rolf.

Okay, thank you. Let's move to Page 8 to the value-add segment.

As you can see the EBITDA came out a little bit lower than last year and there are a couple of reasons. On one hand we are continuing to do well by the expanding of value-add initiatives, more multimedia supply to tenants, more residential environmental service with our own staff and more smart metering for customers in the energy supply to deliver -- to the delivery points.

However, this was not enough to compensate the other effects. First of all COVID-19 slowed us down on the investment side led to less internal revenues and therefore less value creation through our own rent growth.

As we said in the H1 call, extremely mild winter means that there was basically no business in the residential environmental service in terms of shuffling snow and deicing sidewalks. And certainly even as a technical one, the FD [ph] classified platforms €3 million of external income to the rental segment because management makes it just more easy.

So prior year numbers are not unadjusted for this effect because we decided that in the scheme of things these numbers were too small to make a formal restatement so would have impacted almost the full set of numbers. I'm happy to repeat that for the full year I am very optimistic that the 2020 EBITDA for value add will be higher than in 2019, barely showing that this part of the business also continue to be a consequence [indiscernible] and with respect to [indiscernible].

Oh no, sorry, I always have to tell you about the Sales segment as well on Page 9, and we sold 1803 individual apartments for cost proceeds of €296 million, so fair value step up was 40.1% on [indiscernible] and well above our guidance and our new target of 30%. So similar volume, but higher proceeds and fair values.

To us, this is evident of an unchanged positive market sentiment. The demand for condo units is unproven [ph] and that is a strong indication for the overall underlying market fundamentals.

You will see this trend more precisely when Helene shows you the valuation outlook for H2.

So with that, finally on to the development segment on Page 10. This segment includes all new constructions of apartments by way of entirely new business, but it does include additions of floors on existing buildings.

Income from to sell development was down 7% which does demonstrate that this part of our business is a little bit more volatile than the rest, but it is no big deal. Especially when you look at development-to-hold, where we had quite an increase, what you see here is a bit of a shift towards a higher share to hold particularly in Austria in order to ensure tomorrow's rental income.

The bottom line adjusted EBITDA was €68.8 million in nine months 2020 which is up 11% year-on-year. Page 11, gives you more color on our construction pipeline and our completion.

We built 1056 apartments to hold for our own portfolio in the first nine months of 2020 and another 381 apartments to sell. In our construction to hold we have currently identified potential for about 40,000 apartments based on the short, medium, and long-term opportunities across our portfolio today.

For 2020 we still expect to deliver around 1300 apartments in total. The developmental sell part is a useful addition for the to-hold development.

As I have explained before, we often rely on the higher margins from the to-sell projects to cross finance and land costs and make the to-hold developments more economically feasible. The pipeline to sell includes approximately 9000 apartments.

Our target for this year is now to complete more than 500 apartments to sell. So let's move on to Page 12 for the net adjusted value.

Without evaluation in Q3, things did not change much compared to Q2. We did however pay the dividend including the approximately 40% script [ph] element and we had the capital increase in September which we did at more than 7% premium to adjusted NAV.

Including all impacts, the adjusted NAV at the end of September was €55.41 per share. This is up 6.7% since the end of last year and 1.3% since Q2.

What is probably more interesting for you though, is the first glance of what we expect in terms of valuation for the end of the year. For that, let's now go to the next page.

After our H1 valuation with the 5.6% value growth on the two thirds of the portfolio that we revalued, we are expecting for full portfolio evaluation at the end of the year an additional value growth between €2.3 billion and €2.9 billion. That would bring the total value growth for 2020 to between €4.6 and €5.2 billion.

So the upper end will be pretty similar to 2019. Now for those that like to do math, it is well above approximately a net adjusted value of €59 per share, unchanged from what we said in our H1 call in August, we continued to see no material negative impact from COVID-19 and our estimates for the year end are based on the assumptions that this will not change.

And the value appreciation comes across all of our markets with the exception of Berlin which keeps lagging for obvious reasons. But even in Berlin we are currently seeing a small value growth.

We've looked at value growth from yield compression for our German portfolio excluding Berlin over time. That is actually the chart on the lower left-hand side, and that is quite interesting we find.

You can see the clear trend of substantial year compression, but with declining momentum since 2016. For 2020 however, this trend appears to reverse and we estimate the value growth from yield compression for our German portfolio, excluding Berlin, will actually be higher than last year.

I would not want to call this probably a reverse of the trend, but it is remarkable nonetheless and while we make no statements for 2021 or beyond, it appears reasonable to believe that value growth from yield compression will not all of a sudden fall from a cliff. So with that, to Page 14 and the LTV.

Our LTV at the end of September was 40.6%, but the more relevant number by now is probably the LTV including the perpetual hybrid and that number is 42.4%, so in the middle of our target corridor. We continue to believe that a range between 40% and 45% is the right level for us especially if we include around about AQ [ph] duration for that and the fact that 99% of our debt are hedged okay.

The net debt to EBITDA multiple was 12.1 times. Similar to H1, this is a bit elevated from the end of last year, but we still think it is at a reasonable level, especially if you consider that this number already includes the full debt, but not the full EBITDA potential, which is normal in a growing business.

So we continue to sleep well with this number. A bit more color on the debt instruments.

The ratings are unchanged with BBB+ and an excellent business risk profile from S&P and an A- rating from Scope. Between the triangle of LTV, the extra head debt ratio and the weighted average maturities, I think was striking good balance.

And the 1.4% average cost of debt compares to weighted average over little of 0.8% for the two 750 million bonds we issued in July. Looking at current financing costs, we think that refinancing conditions for secured as well as unsecured instruments are currently even more than attractive than what we saw in July.

We've added the bond covenants to this page you see that there is empty room between where we are at and where we do not want to be. The red bar and the maturity profile on the bottom left presents the perpetual or equity hybrid.

After our ABB [ph] in September, we basically consider it as resolved. It is pretty safe to expect us to take it out with plain debt at the call date in Q4 2021 so that 1 billion piece will be distributed one way or another nicely to fit smoothly in this schedule.

And with that, back over to Rolf.

We have made good progress on sustainability and on Page 16, I want to use the opportunity to give you an overview. There is much more detail in the second part of the presentation on Page 36 to 43.

We are happy to see the progress we have made in increasing the recognized different ESG ratings where we have scored better than last sessions. Additional recognition comes from our inclusive and most of the leading ESG indices.

We have also identified United Nations Sustainability Development Goals that we believe are material for our business and where our actions can have the most positive impact. We are particularly proud to be one of the first real estate companies that has defined binding climate parts and I will explain it on the next page.

Before we go there; however, I would like to act to the sustainability news flow that we have successfully hosted, so Vonovia climate concerns, where we altogether, lawmakers, scientists and late all of you as to what is required to make residential real estate carbon neutral. We also have focus of developing Sustainability Performance Index for Vonovia.

This will be implemented in our management system alongside the financial and performance KPIs. This will be another big step in our commitment toward sustainability and also reporting about our sustainability efforts.

And finally, I have mentioned on previous locations, we are moving along nicely in our energy innovation center in Bochum Weitmar, which we hope to show you at the next Capital Market Day if the crisis is coming to a better situation. On page 17, it is a climate path for Vonovia which we have to define together with a well known Fraunhofer Institute.

This is now the new guidelines for us, where we need to be at what point in time with regard of CO2 emissions in our portfolio. So top line of the chart is the path that Germany is currently based on, based on an average 1% national modernization rate.

The second line is a path based on Vonovia’s modernization rate of around 3%, unite a bit better, but clearly not good enough. To achieve the targets of Paris CO2 emissions, we are looking at three scenarios.

The base case was, continue to do what we are doing today, but with an increased modernization depth as demanded by the European Union. However, that alone will be not good enough as you can see in this slide.

The hybrid case includes a more modernization depth as I have described before, plus gas condensating plus solar thermal technology. But even that takes us to little more than 50% of where we are today and it will not be sufficient.

So only [indiscernible], to get into the target zone of the carbon neutral portfolio is to do intensified modernization as in the cases before and to establish green district heating, including sector coupling, and renewable energy via heat pumps and photovoltaic. Clearly, we are not ready to implement all of this yet today in the year 2020.

Some regulation adjustments still needs to be made and some technology concepts still has to develop further. But the target is now clear and we know exactly what we have to work on and what we have to deliver.

And while all of this is already made perfect sense in the context of climate protection, there's also financial reasons to reduce the CO2 emissions in our portfolio. As you probably know, starting next year, Germany will collect a CO2 tax of initially only €25 per ton of CO2.

To put it in the context, our German portfolio emits around 1 million tons of CO2 per year. It is not yet clear, how this tax will be split between landlords and tenants, but whatever the outcome is, there will be, the less CO2 emissions are better.

As the asset owner, we will be doing our part to reduce CO2 in our portfolio. And we believe that the energy efficiency of the buildings should be a further determination factor, how to define who is paying how much.

And this, I hand over to Helene.

Okay, so before we get to the guidance for 2020 and 2021, I would like to explain you on page 18 one addition we have made. We have been guiding top line growth on the basis of organic rent growth in line with traditional real estate owners and we will keep doing that.

However, just like we've gone from FFO one to Group FFO, we've seen that organic rent growth alone is not sufficient to reflect the full top line growth across all segments that we manage. As a result, we will start to guide total segment revenue to capture Vonovia’s full growth potential.

Surely, that growth is relevant as it reflects the full value creation potential of the company and at the end of the day it is the full top line growth that covers costs and delivers EBITDA, FFO and ultimately dividend growth. And finally, you now also have a starting point in addition to the EBITDA total and Group FFO.

So on page 19, you see our final guidance for 2020. The new line item here is the total segment revenue I explained on the last page.

Here we expect to see around €300 million more than last year. Rental income guidance is unchanged from Q2 and we had to take organic rent growth down a notch to now approximately 3.1% to reflect the fact that some which will have come out softer than anticipated, and fluctuation is still rather low.

With certainty now that rents in Berlin will have to be reduced in November will no longer show in the range that as we know that we will reach the lower end of it. For recurring sales we're well underway in terms of volume, and we have increased fair value step up expectations to now more than 35%.

As Rolf said earlier, the condo market continues to perform really strongly. We have kept guidance for the adjusted EBITDA total unchanged with a €1.875 billion to €1.925 billion range and the Group FFO is now estimated to be around the upper end of the range, which is still €1.275 billion to €1.325 billion.

And that Rene just pointed out the range around the upper end of the guidance could be above or below as it is a range. We have decided to set the dividend already now and we intend to propose €1.69 to next year's AGM.

You may have already noticed that it is slightly above the 70% payout ratio, which is on purpose to compensate for a bit for the dilution from the capital income. And finally, the total investment in modernization and new construction to hold is expected to be around €1.5 billion.

On page 20, we have the initial guidance for 2021. I guess that everybody in this space is doing this still early, but we believe it is helpful to you, so we're keeping with our tradition here.

Total segment revenue will grow from approximately €4.4 billion to between €4.9 billion and €5.1 billion and rental income will grow to between €2.3 billion and €2.4 billion. We estimate organic rental growth to be approximately between 3% and 3.8%.

Here, we have a range to reflect the Berlin situation. A ruling from the Federal Constitutional Court is now widely expected for Q2 next year.

If the law is ruled constitutional, contrary to our expectation, we see ourselves at the lower end, because there would be no rent growth again in Berlin. But if the rent freeze is ruled unconstitutional as widely anticipated, we expect to come out at the high end of the range.

For recurring sales, our guidance is in line with initial guidance of previous years with approximately 2,500 units to be sold at an approximate fair value step up of 30%. Obviously, this will come on the basis of higher fair value.

Adjusted EBITDA total is estimated to grow €100 million in the midpoint to €1.975 billion to €2.025 billion. Group FFO is expected to grow €140 million in the midpoint to between €1.415 billion and €1.465 billion.

Now you may have noticed that Group FFO is growing stronger than the EBITDA, at least if you look at the midpoint-to-midpoint observation. So the first thing is that you need to look at that regarding stronger FFO than EBITDA also for this year.

The other thing is that like we had the capital increase, and we have raised a bond in order to replace some of the Swedish loans, which means that we have a positive effect coming through next year on the interest rates. And the last one we feel that it's a nice way to demonstrate in how we think about development to hold versus development to sell.

As you have seen, we had stronger development to hold this year compared to sell. We're expecting a slightly larger development to sell next year.

Now as you know, in our EBITDA number, we include EBITDA from development to hold and EBITDA from development to sell. In our FFO we are excluding the results coming from development to hold.

Why? Because the FFO number is a cash number and if we have development to hold step up flowing through the EBITDA that doesn't generate cash for Vonovia and hence is not showing into the FFO.

So by just adjusting the mix between to sell and to hold, you can now have variations between the growth and EBITDA and the growth in FFO, which is what you're seeing through in our planning here. Our dividend policy is unchanged at approximately 70% of Group FFO per share.

And finally, we are going into 2021 with an unchanged expectation from last year for investments to €1.3 billion to €1.6 billion. And with that, back to Rolf.

Thank you, Helene and I just want to do a small wrap up. Our business continues to perform very stable and fully in line with our expectations.

Impact from COVID-19 remained marginal. The underlying market fundamentals are intact, and the environment in which we operate remains very favorable for us.

We have made further progress on sustainability, including improved sustainability rankings and index inclusions. We have in our climate path our climate conference, and the commitment of 8 out of 17 SDGs.

On the basis of all of this, we remain confident in our ability to continue to deliver growth as per our guidance for 2020 and 2021 as well as beyond. And with this I hand over back to Rene.

Thank you, Helene and thank you Rolf. And I will give it right back to Alexandra to open up the Q&A, please.

Yes, thank you. Good afternoon.

I've three questions. The first one is on, given that the Constitutional Court has rejected the complaint to sustain the rent reduction in Berlin last week, just was wondering what your reading of this announcement is, do you interpret it as a ruling on the formality?

So rent reductions can go ahead on 23 of November, but without any further costs on the substance? And on a related point, are you hearing that is rent free is invalidated, it could be only potentially a partial invalidation?

Thank you.

So to be very clear, I think I would see this as a formality. I don't want to go in legal impact here and discussion it here, but it is a formality.

It will go very much in detail. It's just I think this has no prediction for the ruling in the next year.

But I keep in, but please keep in mind, this one reasons for people I know that now the whole market appreciates and anticipated the full legislation in Berlin will be tiered down. There is a lot of lawyers who are saying it partly can be also existing.

There's also very few lawyers who are saying it's completely constitutional. But so, that's why there is still some room for surprises coming in the H1 next year.

I just wanted to add this. And for the values, I think what the market is doing today is more or less the market is looking who is under whole rental regulation in Berlin and that's why they keep the market value stable.

Okay, thank you. And then on the last selection 2021, you said the range is for Berlin.

The way I calculate the 80 basis points ranges, maybe 50 basis points for the rent reduction component of the [indiscernible] reversing and then possibly in terms of the rent freeze aspect, if it's full in Q2, it would be roughly maybe 3% like-for-like on roughly 10% of the portfolio. Time weighted it would be perhaps 15 basis points.

So I just was wondering if there is another 15, 20 basis points for some other news is [indiscernible] or any sales justifying this wider than usual rent.

So Helene should I do it or? So actually to be very clear, part of it is reversal and second part is that we learn, of course we will continue to do modernizations in Berlin.

And there's also a catch up for the rent, Mietspiegel because you know we have not increased rent after the next Mietspiegel and then of course after the law is still in the news or will be gone. Of course we will use the rent increases we have not done in 2019.

Does this answer your question?

Yes. Thank you very much.

I have a final question. You mentioned addition of another new KPI that looks beyond rental signals.

But looking at your acquisition target you are still on the EBITDA rental yield. So I was wondering if you would align your acquisition targets as well on these new KPIs that look beyond rental aspect?

Thank you.

No, no, no, no, this is too much interpretation. We keep acquisition targets as they are.

This is just to give you a little bit more information as Helene has explained, because we think that just like-for-like rental growth is showing the success of one segment out of four segments. And that's why we think overall, as the new figure actually reflects that cause on all four segments, this is the only reason.

It has nothing to do with acquisition.

Thank you.

Hi, good afternoon. I've got some questions, please.

The first one is something that Helene mentioned on the like-for-like rental growth for this year, in which she said that the Mietspiegel impacts have been lower than anticipated. Is it true that the Mietspiegel increases have been lower in 2020, not just from yourself by not increasing rents, but just more as a market development?

So what does the market development for Mietspiegel and how do you expect it going forward? And the other one is on Page 17, in which you obviously make some very impressive targets with regards to ESG.

Basically, the way I read into it is that quite a lot more CapEx needs to be spent on the portfolio in order to get to your -- in order to get to your target. How should we read into that?

And what kind of CapEx programs are you thinking about, basically over the next years or is it just a difference in mix in what you're currently spending?

So probably to the last one, we are happy and you have seen us now investing €1.3 billion to €1.6 billion, which is more or less the money which we can afford year-by-year from our cash flow profile. And I think we are happy to continue to invest exactly this and this we can deliver the graph and do additional investments.

So I think there is no change in the capital need. We just have to proceed with the investment and we have to shift a little bit investment to watch more energy production.

So that's why there is no impact.

Okay.

On your first question about Mietspiegel, and you'll see that we are living in a very low inflation environment. And of course, as you know, rent increase in Germany is not directly linked to inflation.

Of course, low inflation also impacted more or less. The negotiation offers is a part which is definable by as the politician.

So it is much easier to come out, there is a strong Mietspiegel and environment of high inflation, than to come out with a Mietspiegel environment of low inflation. So this probably is an explanation that Mietspiegel are a little bit weaker in the moment and I think this is also correct.

I repeat myself, you cannot build a sustainable business on the assumption that on the long run you are in your rental course you are well above of your inflation. I precisely on an organic rental course for existing apartments, I exclude some modernization because they have changes in product.

But the normal bread and butter for the long run cannot be massively besides deflation because then sitting tenants would have to spend more money and every year higher percentage of the income for housing and this is not sustainable.

Okay, that is very clear as from the Mietspiegel, especially just one quick follow up on that investment plan. You say that basically you can lead with €1.3 billion, €1.6 billion going forward.

What about the return mix? Do you expect as a result of shifting that CapEx makes a change to your return profile that you're receiving on that CapEx or do you expect that they remain broadly similar compared to what it is now?

For assumption for your model, more importantly, similar is, I think, a good assumption. What actually happens is what we call fuels switch, actually, we are replacing traditional gas by more clean heating, which comes in this high subsidies.

But this relatively low investment, because of heating system only. It's not a massive investment which we have to do the buildings.

This is more or less unchanged.

Okay, perfect. Thanks very much, guys.

Yes, hi thanks. First one on the valuation gains and leverage and the way you think about things going forward.

So obviously, the gains are above expectation for this year. You already hinted on?

Likely. I'm not sure what your words are.

But it is that this we should probably continue into next year. Then looking at your LTV and your net debt to EBITDA, I think you already started posting both numbers next to each other, signaling a higher importance for net debt to EBITDA, so with a declining LTV and faster than your net debt to EBITDA based on these valuations.

Are you going to prioritize net debt to EBITDA in your decision making and then you're spending? How should we view that strategy, left side into the next two to three years?

Let's get into the next two, three years.

Helene this for you.

Hi, I have done this, and so you are indeed right with rising yield compression, you also need to look at the cash conversion of the assets. And at some point, and I'm not saying that in the next two to three years, but at some point, LTV becomes a tricky measure, because you simply don't have enough revenue generation to cover your debt levels.

At the moment, I'm sort of looking at the sort of like range around net debt to EBITDA. And I'm sort of looking at both numbers equally.

It's not sort of like trending too far apart yet. But it's something that we have a watchful eye out.

I think that's the way to think about it.

Right? Sure.

And then on the CO2 tax, if I listened correctly, then your potential maximum head is 25 million, if you have to pay for all of it. Is that already in your guidance or did you somehow counter that already?

No, sorry Rolf, go ahead.

No, no, no, no as lot, I could not say better, to be very good to give you a little bit more explanation and more flavor on it. Normally, CO2 tax is something which we will pass on to the tenants.

So we say existing law, it will be passed to 100% to the tenants. There is some debate in the moment in Germany, if a part of this should be paid by the landlord.

But this is completely open. And that's why we do not have any estimate how it is distributed.

Anyhow and this is our mark when you CO2 is a good thing. Because even if the tenant pays directly an 100% actually, if we help him to reduce CO2, the value of the building is increasing.

So I think it's open and that's why we cannot include it in the guidance. What is probably more important is 25 is the starting point.

There will be an increase in the CO2 tax in the next years, which is predefined, I think until 25, so 2025. After 25 as the system will be an open system like CO2 emission trading modern, which can have actually a massive impact on the cost of CO2 for the buildings.

And so, the €25 pass is on for us is only been an amount of money, which is still in the guidance guide or in by 25 this can be much more important. And that's why we think it is now time to reduce CO2 emissions.

And that's why we are so happy is that we are well advanced in comparison also to some of our peers of the CO2 emission targets and what we have achieved in the last years because we have efficient buildings is something that was helpful in the future.

Great, thanks. And then maybe my final question.

I think it's like you're in again, pretty helpful, politically, not to hide your guidance. And so, I can see basically, FFO, probably comfortably be around or even the high end high end of your range.

But actually, the organic growth is at the low end so or even just under shooting a bit what you said at the start of the year. So in that kind of bifurcation, get the kind of surprise come from finance only, or were there other positive one offs?

No, I think that's why we show you the overall revenues and new figures. If you're looking on the like-for-like you are exploring completely our development business.

You are completely excluding our recurring sales business. So that's why we include, the revising gave you was a revenue future because this gives you a good feeling of what the company's really going on?

So thank you very much for the question. It’s a very good question.

And the reason is, of course, as Helene explained, there are some positive impacts on financing. But there is definitely positive impact from costs of the whole business niche is not like-for-like rental cost.

All right, I will take now look at the Page 18 thanks.

Good afternoon. Thank you for taking my questions.

And two questions, if I may, one on acquisitions issue can you give us an update? I mean, you mentioned you were looking at smaller scale acquisitions in the past any evolution there?

The second question is to go back to your investments, are you still guiding to 1.8, 1.6 going forward, and obviously, arguably, your leverage is going to come down at least from the LTV perspective. Thanks to those evaluation gains you're pointing to this year and next year as well.

Does that mean that ultimately you could probably potentially do more than 1.6, particularly in light of the fact you've done 1.5 this year with COVID, which has been a slowing factor? And are you perhaps having a bit more visibility to the stage on any subsidies coming from either Germany or EU on your sustainability investments and energy in particular?

Thank you.

So far the subsidies actually, I'll start with third question, as for the subsidies we are fighting hard. Actually, there's a lot of subsidies out to already for this type of business.

But there's still a problem for us to get the subsidies because this is anti unfair competition trading in the EU and we are loving in the moment. So as EU cannot push on one end a subsidy system forward and then say we cannot give it to companies because this is unfair trading subsidies.

So I think there is a high willingness in the commission to change it. But this has to be changed.

And of course, this would help us enormous, for example of finding new modern energy, providing systems which are highly subsidized as a second loss of investment, I think it is fine to assume that 1.3 to 1.6 was a good corridor, I would not go to speculate of a spending of more than 1.6. Keep in mind that this is not only a question of availability of funds, but also availability of cost and availability of management and we are fine this our climate path.

It doesn't help us if we go too fast and because we also have to wait probably for some technical knowledge development, which occur in the next five or 10 years. So that's why I think we are now on a clear path and this is a good path for us.

Sorry if I may interrupt you on this 1.3 through 1.6, will that be enough to meet your accelerated path or does this mean that there's other industries that you won't be able to make effectively?

No, we are happy as I said before, we are happy with our investment capacity to live as a person.

Okay, very clear.

Because again, as I said before, the remaining investment is relatively low investment and this is more intelligent business. And this investment will be finally partly financed by not using gas anymore.

So this actually takes a part of consumables which is paid by the tenant out and brings it to rental revenues. And your first question was, I forgot it so?

Acquisitions?

Yes, acquisition so I'm not again, I'm not going to discuss with you my acquisition pipeline. As, we have actually as the main market and two additional markets.

Two additional markets are Netherlands and France. So we are actually able to do acquisition in five different markets.

We have an acquisition department, which is following clearly all the acquisition opportunities, which occur. We have our criteria, we are working through this.

We are optimistic that we will do acquisition in the next years, smaller, bigger ones. But again, our business, our guidance, our whole gross perspective is based on the fact that we assume that there is no acquisition.

So acquisition is an additional add-on, on what we are guiding.

Okay.

I repeat myself. Our management team with an acquisition target is very dangerous for the capital -- for the investors.

That's why I'm not putting me in the under pressure, not by incentives or not by giving guidance for acquisitions because I need to be relaxed and not to be forced into acquisitions which is very…

Sure, on the seller point about…

How to pick there, and that's why we will never give you a flavor that some acquisition is up in the sky. We are doing our job and we are doing acquisition only if it makes sense for you shareholders.

All right, fair enough. Thank you.

Hello, good afternoon. I have a first question regarding also acquisitions and more of a conceptual.

How are you thinking about larger acquisitions, seeing that your stock today trades at a discount to what is probably going to be a year end NAV of 60 or maybe more euros per share?

It's very clear, we have our criteria, we have to be net asset value accretive. So if we want to buy in the situation, we have to buy with a discount to NAV.

Fair enough. And my second question is about your develop to sell business.

Looking at the results for first nine months, there's a bit of a shift towards Germany and away from Austria as you mentioned as well, there's more developed to hold. But is this a permanent or is it the transitory shift in your completions mix?

I think Helene mentioned it already, this is volatiles. So for example, keep in mind, we are just building a skyscraper in Vienna.

This will be sold one day, and then we will see a lot of development revenues and EBITDAs out in Austria. So this is just because it's not as a stable part not as a stable pipeline every year.

And this depends just about the delivery time of the building, so not to be worried at all.

Okay, and you also mentioned condominium market doing really well and I think those comments were more about those older buildings that you are selling from your portfolio. But is this true also for new builds in developed to sell?

Just because looking at the cross margin development quarter-over-quarter it has come down, just it's a question of whether it's because of pricing, or is it because of cost inflation?

I don't think that you can really lean it on the development to sell because there's also mixture of apartments that you are selling. To be very clear, it is very simple.

In cities where we have an imbalance between supply and demand, and we are only located in cities where there is an imbalance between supply and demand. And actually, as long as there's more supply than demand prices are going up.

And in combination with long term low interest rates, this actually I think is for me not a surprise. The buyers, the condominiums are going up.

There is enormous demand for condominiums in the big cities.

Actually, if I may add, we've really seen that despite the corona crisis, and even in the really dark days of the corona lockdown, the demand for condominiums, both in Austria and in Germany in Berlin, continues to be unabated. It's quite amazing what is going on there, so nothing to read into it.

Okay, and from the cost side?

Cost and the development hold areas are pretty stable and according to plans as a CFO, I'm actually looking at it and I'm not worried at all. The team is really delivering point on.

Okay, thank you very much. That's all from me.

Hi, good morning. Yes, I have a question on rental growth.

You have sort of reduced guidance and basically referred to lower rent tables. So it seems that investment driven rent growth can't compensate for this.

What rental growth, I mean, considering this, what rental growth can we expect more in the longer term? Is it what you say, is it a 3% level we currently see or could it be even lower?

So I think you're asking a very, so I will probably see this 3% is fine. Probably, we will also see if inflation would go up, we would see an higher level.

There's still a lot of volatility due to the Berlin effect. So there is of course COVID-19 fluctuation has gone down dramatically.

And so literally, I talked to our colleagues on the board and Fittkau, yesterday he told us actually, that he has to, now he needs really desperate new apartments, because he is letting out organization has nothing to do anymore. So and this of course, has some impact on the rental cost.

If COVID-19 is gone, I would think and assume that fluctuation will go up and then we will see also higher rental costs in the normal rental business.

And can we see actually or expect higher contributions from the investment driven rent growth?

No, I think this is a function, of the investment of rent cost is actually a function of how much we do for modernization, how much we do for new construction. Again the nature I think we have discussed it before, the nature of new constructions that you have a relatively low initial yield.

And then because of rental cost in the new construction the yield will go up in the further yield years, while the modernization, who started as a higher initial yield, but then the yield stays the same.

Okay, thank you.

It has to do with your property valuation gains. Do you think it is likely to see a goodwill ride off in the second half of the year in the course of the property valuation gains?

Hi, so I can take that question. We have basically written down most of the goodwill.

There's really nothing more to come. So I'm pretty relaxed on that one.

Okay, thank you.

Hi, yes, good afternoon. I just had a followup on the CapEx chart that you show on page 30.

I appreciate you’ve already told us that the return on CapEx is broadly similar, despite what looks like quite a material change in CapEx mix. But specifically for construction to hold, could you just be a little bit more specific please with your, what your what we should assume for your gross rental yield on investment from that piece please?

I know there was a different mix for Austria versus Germany. But if you could just help us understand the difference between the gross yield on the new construction to hold relative to the gross yield on CapEx from modernization, please?

Helene, do you want to do it - very long.

Isn't that the same question or the another way to ask us around the sort of like yield and then we keep answering around sort of like actually look at an overall, I tried it on our overall investment program.

I'm not so interested in the IRR. And just as we try to model rental growth, how strong the rental growth is relies on what the yield on the CapEx is.

So because the mix in the CapEx is changing, I'm trying to understand whether the rental yield on the total CapEx envelope should change and how it, how quickly it should change, given the change in the mix?

And today this is like, again we don't guide that number. And I know it's annoying and we keep giving the same answer because if we just look at initial yields, and if we look at IRRs and we look at the overall CapEx, I want to retain the freedom around deciding what goes into what bucket, which is why we continue to give you a lump sum and always the same answer.

And also to be very, on the operational front, really should we not do an acquisition of a new building, because we have given you the long guidance. So I think we have to earn our investment program also a little bit based on opportunities.

So we have a normal underlying investment program, which comes from the energy efficiency and from the cooperation of elderly -- apartments for elderly people. But in the end, then we actually do different things development to hold and other things, so this is very difficult and this can change from year-to-year.

This is also opportunities.

Okay, thank you.

And there's also difference in initial years in new construction. I can tell you, if you are buying a new construction in Munich, you will have a low, very low initial yield.

While you would buy an initial - a new construction somewhere in the [indiscernible], you will have a high very initial yield. So this is too much mixture to give you guidance.

That's fine. We're just trying to model rental yield on CapEx – value creation from CapEx?

Yes that's fine.

It's probably very difficult to guide and this is long, if math should have more should be long term guidance, which is even more difficult.

Yes, okay, thank you.

All right, thanks, everyone for joining today. As a reminder, the full year 2020 results will come out in March 4, until then we'll be engaging quite a bit obviously virtually for the time being.

Our financial calendar is on Page 76 of today’s presentation and the most up-to-date version is always on our IR website. You may have also seen our save the date for the 2021 Capital Markets Day on June 29 next year.

At this point, we're not sure about the format yet, but we do hope you'll be joining us either physically or online. As always, feel free to reach out to me or the team with any questions or comments you may have.

We’re looking forward to staying in touch. That's it from us today.

Have a great day. Stay happy and healthy.

Thanks.

Thank you. Bye-bye.

Thank you.