Thank you, Yousaf, and welcome, everybody, to our earnings call. Speakers today are once again, CEO, Rolf Buch, CFO, Philip Grosse.

They will be happy to lead through today's presentation and then answer your questions. With that, over to you, Rolf.

Thank you, Rene, and also a warm welcome from my side. Following a strong quarter -- the first quarter, we have been able to keep up the momentum and we are happy to report a strong first half as well.

Let me start with the half year portfolio valuation. In line with what we have guided, we saw a like-for-like value growth of 1.3% of our standing portfolio during the first 6 months.

Going forward, we largely expect rent growth to translate into organic value growth based on our conviction that market yields will no longer expand. In terms of operation, our market environment and operating fundamentals remain like always, rock solid, which should not come as a surprise to you.

The Rental segment is fully on track, led by organic rent growth of 4.4% year-on-year. In our nonrental segment, we see continuous acceleration of profitability with both with good progress in all 3 segments.

As a consequence, we delivered double-digit growth in EBITDA, EBITA and operating free cash flow. We have continued to actively manage our financing position with EUR 1.3 billion of convertible at very attractive cash coupons and a bond buyback from an aggregate volume of EUR 800 million.

And while it is more of a technicality than anything else, we have completed the DPLTA process, so the domination agreement between Vonovia and Deutsche Wohnen is now in place. Deutsche Wohnen shareholders are now able to exchange Deutsche Wohnen shares into Vonovia shares via their custodians if they want.

This completes the Deutsche Wohnen integration and Vonovia is now a fully integrated company where we can leverage the full potential on the larger scale going forward. I give you a reference, look in the past what happened after the full integration of [indiscernible] into Deutsche Annington, and this will be the future going forward for the joint company.

Based on our good momentum and strong H1 performance, we are confident for the remainder of this year and therefore, increase our '25 guidance as follows. Organic rent growth will be now greater than 4%.

Rental income and adjusted EBITDA total, we will now see at the upper end of the guided range and adjusted EBITDA range will be increased by EUR 100 million. And because this is one of the last calls of mine, not the last one, I hand over to Philip, who will do the major part of the presentation.

Thank you, Rolf. And also a very warm welcome from my side.

Moving to Page 4, familiar overview of the adjusted EBITDA and EBT as well as operating free cash flow. Let me add a couple of comments to put that into context.

All 4 segments, as you can see, are up in a year-on-year comparison. And for the adjusted EBITDA total, the growth translates into 12%.

As expected, we lost a little bit of that performance on the way down to adjusted EBT. That's obviously because of higher financing expenses, but we still delivered 11% growth or 10% on a per share basis.

And since I know that many of you keep a very close eye on minorities, I'm happy to report that the adjusted EBT growth after minorities was almost a percentage point higher than before minorities. The main moving parts between adjusted EBIT and operating free cash flow are the higher cash taxes and that comes from higher recurring sales volume, so disposal driven, higher dividend payments to minorities because now we are seeing the full year effect on those dividend payments for the first time.

On the other hand, we had higher disposal volumes in recurring sales and cash in of some of our development transactions. The net effect is more than 50% growth in operating free cash flow.

You may have noticed that we have also made small changes to the operating free cash flow definition, and that is to better reflect the cash flow from our 4 core business segments. One is the line item change in capital commitment development to sell to more accurately reflect the actual cash flow from changes from the development to sell segment, future cash relevant changes in relation to our managed to green strategy will also be included in this line item for the time being, there is no impact.

The other is the addition of the intercompany profits. As the cash benefit, if you will, compared to the outsourcing or compared to outsourcing the work to third parties.

Let's go through the 4 segments, one by one, and I will start with the Rental segment on Page 5. Here in spite of about 10,000 fewer units due to sales, we still saw an increase of 2.6% in the top line as rent growth overcompensated the smaller portfolio.

Maintenance was a touch higher as expected, and operating expenses were slightly lower, also helped by a smaller tax refund. All in all, we managed to preserve the top line growth on the EBITDA level for a year-on-year increase of 2.9%.

The acceleration of organic rent growth in Q1 continued also in Q2, 4.4% overall and 2.9% from market rent growth again, for the medium to longer term, we stick to our back of the envelope guidance of around 2.5% for the noninvestment driven rent growth. On a similar note, the 1.5% investment driven rent growth is based on more recent investment volumes of EUR 1 billion last year, even less.

So as we look to increase this volume, you can expect a higher contribution on the basis of the operating yield of 6% to 7%, which continues to apply to our investment program. No need to dwell much on occupancy rate and collection rate as both remained exceptionally high and are expected to remain that going forward.

Finally, fluctuation rate dropped a bit below 8%. It generally remains at low levels, and that is a function of the tightness in the markets in which we operate.

Page 6 is the same analysis we've been showing for a few couple of quarters now, only updated for H1. The point is quite simple.

If you look at the spread between the recent market rents and our regulated levels, it's absolutely no surprise that the rental KPIs I showed you on the previous page are the way they are, and they will continue to develop strongly because they are the consequence of the structural supply demand and balance in urban markets, giving us -- and that is for me the key point, very, very good visibility on strong rental growth for effectively the next 10 years plus. Page 7 on our value-add segment.

Here, as you can see, both internal and external revenue is up double digit. As a result, overall contribution from value add was slightly more than EUR 100 million, which represents an increase of 77% year-on-year.

The main driver behind this positive development were the increased modernization and portfolio investments that benefited our craftsman organization. On top, we have also seen positive business developments in particular on the energy side in a year-on-year comparison.

Recurring sales, that is on Page 8. We have sold slightly above 1,100 units in H1, almost 25% more than last year.

Margins were also up to more than 29%. So we are on a very good trajectory towards our ambition of a gross margin of 30% to 35%.

This recurring sales segment will also be the segment where we will report earnings from the disposals of assets that we have managed from brown to green. Here, we have made the first small acquisition of the pilot project in Cologne.

It's just about 130 units for an in-place rent multiplier of 21x. We will now do the modernization work and the energy efficiency improvements before we sell it back to the market at a multiple that we expect to be substantially higher and also based on higher rent following the green CapEx and the respective quality improvement of the building.

Finally, on our Development segment, Page 9. As I explained in Q1, we have largely sold off our inventory and are currently in the process of refilling that pipeline with construction start of around 3,000 units this year.

So much of H1 our 2025 disposals were land sales. And if I look at the remainder for this year, a meaningful contribution to the development EBITDA will probably also come from further disposals of land.

The key focus for our Development segment is the reduction in construction cost as we have also dwelled into quite some detail in our Capital Markets Day. The new government is working on some promising initiatives in our view to reduce cost, and we remain very focused on reducing the cost items that we can control, at the end of the day, that is what it is all about.

The demand at the right price point is enormous and the lower the construction cost, the larger the addressable market for a product that is in urban areas desperately needed. We have been making good progress on that front towards our target of around EUR 3,500, and that is all in cost for new build.

And we have started the first project in Berlin and Dresden, where we are -- will be able to deliver new constructions at or even below these target costs. If you then look at our land bank locations, we are quite optimistic about the upside potential of our development activities.

So much about the segments. Let's move to Page 10, that is on valuation.

The first 6 months brought a total value growth of our outstanding portfolio of EUR 1 billion or 1.3% on a like-for-like basis. If you look at the evolution on the lower left-hand side, you can see that the turnaround in asset values has been completed, and we are now on track to see rent growth translating itself into organic value growth based on our conviction and that is backed by market evidence year-to-date that yields are no longer expanding.

As of June this year, we also had the initial recognition of the QBI land bank that we have acquired in the debt to asset swap we reported with full year 2024 results. We have made the initial recognition of the QBI and Land Bank based on our conservative valuation approach, mainly relating to cost assumptions that results in an impairment of around EUR 300 million in H1, plus a provision of EUR 85 million for part of the transaction, which has not yet seen closing, netted against the value growth of plus EUR 1 billion and the currency impact, the gross asset value at the end of Q2 was 82.9%, up EUR 0.8 billion from year-end 2024.

So nice development, as I said initially. Let's move to Page 11 for the debt KPIs.

The bottom line is that we consider our leverage well under control measured by what the rating agencies expect us to be safe on our BBB+ rating with a stable outlook. Accounting for the transaction signed but not yet closed, our pro forma cash position is EUR 3.7 billion.

So very comfortable in light of the upcoming refinancings with the recent closing of the disposal of Deutsche Wohnen stock to follow that position actually increased by EUR 1 billion. You will have seen the two convertibles that we have issued in May with a total volume of EUR 1.3 billion and a cash coupon of less than 50 basis points, we expect the annualized interest cost advantages to be around EUR 45 million compared to a straight bond.

To be very clear, I consider convertibles, as I always said, as pure debt instruments in line with the TMCs, and that is also how we have accounted for them in our balance sheet. Second, we also, as announced, completed another liability management exercise in June and bought back EUR 800 million across 2 bonds that mature in 2027 and 2030, respectively, running at slightly higher coupons than our current marginal cost of debt.

When it comes to the 3 main debt KPIs, LTV was at 45.9 on a pro forma basis. So accounting for the cash from disposals signed but not closed yet.

The downward trend of this metric is very much intact. But of course, we had the dividend payment that accounted for roughly 80 basis points increase in H1.

Net debt-to-EBITDA was 13.7x, year 2, the dividend payment was responsible for a 0.2 mutable points increase, but in a way that the KPIs keeps moving in the right direction. Different point in cycle require a stronger focus on some KPIs more than others, and we are at a point where our main attention moves from LTV to both ICR.

Here, we are currently at 3.5x. So the internal target threshold that we have set for ourselves based on our internal projections.

However, we will be at this level or slightly better over the year and also medium term. So while this KPI is currently the tightest one, we feel that it's also well under control.

Let me also take the opportunity to again explain how we look at leverage. Our focus, as I said initially, is to make sure our debt KPIs are in line with the BBB+ rating and therefore, to further move the debt KPIs in the right territory or even further better than the target corridor for the period of time.

There will be market faces where we are better than the rating derived target ranges in particular, for the net debt-to-EBITDA multiple this law will apply. Last, from my side on guidance, Page 12.

We essentially made five changes to reflect a higher ambition level in line with our good progress during the first 6 months and our general confidence looking forward we expect both rental revenue and adjusted EBITDA total around the upper end of the original ranges. We are increasing our guidance for organic rent growth from around 4% to greater than 4%.

The same goes for the SPI, which is now also greater than 100%. And as Rolf said, we are increasing the range for adjusted EBT by EUR 100 million.

That is now EUR 1.85 billion to EUR 1.95 billion, which we expect for the running year. One more word on the rent growth, which is now greater than 4% for both the 2025 guidance and the 2028 outlook.

To be clear, there is a material difference between these two because the targeted investment volume for 2025 is EUR 1.2 billion. And for 2028, it's EUR 2 billion.

So there's a substantial ramp-up in our investments. And it's safe to assume that by 2028, our organic rent growth with those additional investments will move towards the 5% like-for-like growth.

One last word on the domination agreement with Deutsche Wohnen, as Ross said earlier, the domination agreement between Vonovia and Deutsche Wohnen is now in place. This completes the Deutsche Wohnen integration, and we can now leverage the full potential of a larger scale going forward.

As you will remember, in order to protect Vonovia shareholders we have set up a vehicle together with Apollo that will hold 20% of Deutsche Wohnen shares so that the look through stake that Apollo holds in Deutsche Wohnen is just above 10%. That vehicle is now in place and we have received the EUR 1 billion cash from Apollo, which we can use to delever and save interest cost in the magnitude of EUR 40 million per year.

Because of Apollo's 10% stake in Deutsche Wohnen, our adjusted EBT after minorities will be impacted by an additional 10% of Deutsche Wohnen's adjusted EBT, so an annual earnings impact of a little over EUR 50 million, and that is based on Deutsche Wohnen expected EBT for 2025. For Vonovia, this is then a small dilution of the adjusted EBIT per share after minorities of around 3%.

And this excludes any positive contribution from the safe interest cost, thanks to the EUR 1 billion of cash from Apollo. If I move to a per share basis, it actually does not really matter how many Deutsche Wohnen shareholders accept the exchange offer and change their shares into Vonovia shares.

Here, a higher tender ratio means fewer minorities and more new Vonovia shares and vice versa lower tender ratio means more minorities, but fewer new Vonovia shares. These are essentially communicating vessels, and therefore, basically a wash with no impact on adjusted EBT per share after minorities.

So story short -- long story short, the minorities will continue to represent roughly 10% of adjusted EBT. And with that hopefully, clarification back to Rolf for some concluding remarks.

Thank you, Philip. Before we go to the Q&A, let me briefly summarize the relevant point from our H1 update.

Market environment and operating business remains rock solid like always. The rental segment is fully on track, like always, and we see a continued acceleration of profitability in our nonrental segments, which underline the strategy 28.

As a result, we are able to deliver stronger financial performance with double-digit growth in EBITDA and adjusted EBT. The positive H1 valuation confirms the turnaround for asset values.

And the DPLTA process has been successfully completed, and Vonovia is now a fully integrated company. Going forward, we can leverage the full potential of this large scale in the advantage of our shareholders.

And that's why we have increased our '25 guidance and we are confident not only about the near term, but also about the mid and long-term development for Vonovia. And this is back to manage the Q&A to Rene.

Thank you, Rolf and Philip, and I'm happy to open up the Q&A as in past calls. We will be limiting questions to 2 per participant.

Thank you for your understanding. And with that Yousaf if you can start the Q&A, please.

So my first question is about asset value. I just wanted to clarify that your report of 1.3%.

Is it including or excluding CapEx and on the same topic, I wanted to ask, you mentioned some evidence on the market during the call. So if you could share them with us?

And if you're seeing any large transaction or large portfolio on the market at the moment. That's my first question.

And my second question is, thank you for the update on the domination agreement. I just wanted to ask if you could give us the ratio of people that have accepted the offer, I understand the acception rate.

I understand that you said this has limited impact, but if you could tell us what is that.

Okay, Valerie, thanks for your question. I go through them one by one.

So the 1.3% growth is not accounting for CapEx, if you deduct CapEx plus some other impact that will lead you to our valuation result of EUR 520 million. So including CapEx, we are roughly at 70 basis points growth.

In terms of evidence in the market, looking at H1. We have seen a year-on-year increase of roughly 50% in transaction volume.

So that is comforting. Here, however, there are only few larger transactions, I think, in total, we have seen 3 transactions above the EUR 100 million threshold.

So by that, you can see it's backed really by a number of bigger transactions. But I always consider very interesting, and I think we've made that point also in the last call is that, typically the institutional market follows with some time delay in the market for condominiums.

And if I look at the pricing dynamic in the market for condominiums, it's more than twice what we see in multifamily homes and all of that are comforting signs. On your last point, the domination agreement, we have essentially -- I think it was last Friday registered the domination agreement, that is the point in time where theoretically investors can exchange shares into Vonovia if the banking system is already equipped to proceed that.

Realistically, my assumption is that I not necessarily expect a lot of tender volume for now at zero soon. Because if you do the math and you look at dividend expectation on Vonovia adjusted for the exchange ratio, it's for the time being sensible, rational in my view, for Deutsche Wohnen investors to remain invested in Deutsche Wohnen given the guaranteed dividend of EUR 1.03, which is the alternative to exchanging they're holding into Vonovia shares.

Maybe first on the value-add segment, and there was quite an acceleration in Q2. Is this sort of like a more normal run rate?

Or can we even see a further acceleration throughout the years -- throughout the year and the years to come.

Yes, this is a normal acceleration. We want to go to 20%, 25% of EBITDA.

We are not there yet. So -- but all our programs, which we carefully follow guiding in the same direction.

So -- but I think this is a proof point that we are coming, I think now from 9% last year to 15% this year. So we are on the right way.

But as announced in the Q3, we will go on, and this will come to 20%, 25%.

And specifically, I mean, sort of like, you saw that Q2, the EBITDA contribution was already significantly higher than Q1. Is that normal run rate for Q3 and Q4 as well?

So I would not go now from quarter-to-quarter exactly. So I think you should look at a little bit longer term, but it will go up.

But don't do the run rate quarter-by-quarter but then we would be ending much faster than 28%, and sales objective is 20% to 25%.

Okay. Clear.

And then maybe Philip one follow-up on the domination agreement will a bit fast or didn't fully understand, but the guaranteed dividend distribution to Deutsche Wohnen holders? Or which line should I actually see that?

Is that sort of reflected in the minority side after EBT?

Correct. Yes.

Deutsche Wohnen shareholders, again, as a reminder, have two options. They can either remain invested in Deutsche Wohnen shares in which case they will receive a guaranteed dividend of slightly above EUR 1 per share.

And this minority.

And that is -- that number for the outstanding shareholders, you will find in the cash distributions in the operating free cash flow and accounting-wise in the EBT post minorities. And the alternative is that they can exchange their shares at a ratio of roughly 0.8 into Vonovia shares.

And then you find it in the EBT in minority...

On a per share basis, right?

Just one following up on the domination agreement. So just so I understand it, if I'm a Deutsche Wohnen holder, as you said, I've got 2 options, I can either go for exchange, it's roughly 0.79 Vonovia shares for Deutsche Wohnen share or I can go down the route of getting the cash option, which is just over EUR 1 post-tax.

If I go for that cash option, does that mean -- if all the remaining Deutsche Wohnen shareholders went for that option and didn't go for the swap into Vonovia shares. Do I need to model an incremental cash outflow in the -- or an EBT post minorities outflow compared to what is currently the kind of pro forma situation, if you will.

I'm just trying to think in terms of my forecast for FY '25. And then the second question was in terms of Divi, I appreciate it's 50% of EBT plus surplus liquidity.

Remind me how you calculate or think about that plus liquidity element of your earnings, so I can think about that for the full year.

Not sure I got your first question right. But essentially, you will find the EUR 1 guaranteed dividend in the operating free cash flow in the line item dividends and cash payments to minorities and that is purely a function of a tender ratio.

If I'm right with my assumption that there is going to be little tender ratio than based on roughly 60 million minority shares. It's up to EUR 60 million of cash burden in a given year.

So between 0 and EUR 60 million depending on the tender ratio. And that is also the line, if you will, which ultimately impacts the excess liquidity for distribution.

But just a cautious note on that topic. Keep in mind that we are significantly scaling up our investment volume.

So my assumption that there is a lot to not expect for in terms of excess liquidity is probably an aggressive one. The -- at least over time, the dividend will move towards the 50% of EBT full stock.

A couple of questions -- or two questions, sorry. And the first one is on your upped earnings guidance.

Maybe you could provide some color on the key drivers there? And the second one is on development, the development segment.

I mean, most of the operating profit in the first half was driven by a one-off sale of a land plot, just wondering by when do you expect more meaningful underlying contributions there?

The development to be very clear, we have a land bank because of the history coming to this Deutsche Wohnen, Waterberg and Bubolandbank, that the land bank is too big, and that's why we are well advised to reduce the landbank by disposing land. So this will continue, and this will generate profits which we will see.

And as Philip said, at the same time, we are now building up and constructing new buildings filling up the pipeline. And part of them, you will see immediately in the results and perhaps you will see especially if it's block sales in the moment we are selling it.

So this brings then the development back on track. But don't forget, we need to sell land because we have too much land at the moment.

Yes. To your first question, Thomas, what are the key drivers of us upping our guidance on EBIT by EUR 100 million roughly 1/3 is interest saving, and that is very much a function of the convertible bond.

I was referring to an annualized impact of EUR 45 million but adjusted for issuance in May, it's slightly above EUR 30 million. And the remainder, is basically across all segments, with a strong, strong focus, however, on the rental segment, where rental growth exceeds our expectation.

And that is what you also see in our upped guidance, if you will, in terms of EBITDA total and rental revenue where we are moving towards the upper end of the range in the tightened guidance, if you will.

Two questions for me, please. Firstly, on the Development segment.

I appreciate some questions have been asked already, right? But given this is such a crucial part of what you're doing, right, you clearly talk a lot about where you want to grow the net rental or the nonrental EBITDA.

Can you help us a little bit and understand kind of what is the how big was this land plot going from EUR 70 million to EUR 209 million. And maybe for us and I think for the market, it would be more helpful if you actually split that out a little bit more in detail, right, to say like what are the margins we make on development to sell because selling a land plot is not really development to sell.

So a long way of asking, what is the -- can you split the EUR 209 million by land sales and by actual homebuilding and what was the margin on your homebuilding? That will be my first question.

Bart we will get you in a second, but just because it's a complex question you asked. So just to be clear, value the development piece is one piece of our non-rental business, it's not the major piece.

So that's why I just get this in context. Because at the moment is coming actually from the customer organization from the heat pumps and all these things.

So just to make a perspective. And now I hand over to Philip to give you the details or give you some better answer for the development financials.

Yes, just to add on that, I think we've been giving longer-term guidance of what we expect from our development business. And that is that we move back towards an annual investment of EUR 1 billion with the expectation of achieving gross margin of 20%.

Now what is currently different is that by managing the crisis and deleveraging the balance sheet, we have essentially sold our entire inventory. So there is nothing which is ready to sell because it's sold.

At the same time, we have seen our land bank increasing fairly significantly. And it is essentially because of the full integration of Deutsche Wohnen.

So in other words, in our view, we have too much capital tied in the development space, which is why we are selectively selling land plots, which is fulfilling two goals. One is to reduce capital deployed; and two is to bridge the profit delta between now and then the projects we are now starting to build are actually generating or starting to generate EBITDA.

But again, medium term, and that should be your expectation is that we are targeting gross margins of 20% for annual investments of EUR 1 billion but the cost of the platform of, let's call it, EUR 40 million. We are targeting roughly EUR 160 million of EBITDA from our Development business.

Yes. All right.

And then my other question is on the Deutsche Wohnen integration. I mean it sounds very good that you can lever the full potential.

I don't know. Maybe I'm not smart enough to understand it, but can you give me two or three things, specifically, what that actually means levering the full potential?

What are kind of the first two or three priorities for Vonovia now that you've got full control, the full range of Deutsche Wohnen. What are you going to do?

So the biggest is, as you know, Deutsche Wohnen is still subcontracting a big part of the craftsmen organization to B&O, this will now be integrated fully in the [Foreign Language], which will generate actually the margin B&O is doing today, and they are charging higher price than our internal price, which we are charging with our [Foreign Language]. So this will lead actually to more profit than the bigger [Foreign Language], which will generate more EBITDA and more value in the whole Vonovia Group.

And the next one is, of course, cash pooling. We now have no issues with moving cash around the cash blocked in the Deutsche Wohnen is over.

These are two major things. And again, if we are coming bigger, I would advise you to look on a figure which we are looking now in the sense of the second Vonovia, which is the gap between gross asset yield and net asset yield.

And there you see a big difference between us and our peers. We are consuming much less.

And the reason for this is because we have higher purchasing volume, we have higher scale. That's why we can buy better and things like Copus, where we are actually building the new buildings on Deutsche Wohnen plots also contribute to the value.

So the story which we started, I think, with the first integration will go on. And now it is clear because we have no governance issues anymore between Vonovia and Deutsche Wohnen.

And this is in the guidance, right? So the better efficiency than the [indiscernible] integration...

This is in the long-term '28. So you will not -- so, so to be clear, these are 1,000 craftsmen and this is not coming from one day to the next.

You have to build the 1,000 craft. That's why it's like you're always seeing it will temporarily improve the result.

And that's why I reversed to the GAA merger. This was the same with the Dutch merger.

In the two following years after the completion of the mergers, you have seen a significant reduction in cost per unit or in yields. And this is a fact.

So it's come not immediately, but it comes over time. And this you will see also, for example, the FS case in the next 2 or 3 years, and this will help us for the '28 objective.

Two questions from my side. One -- first question is on the rental increases.

According to a survey from [ Aquila ] Institutechft, they were saying that offering rent increases have been slowing down in the second quarter. There seems to be a bit in contrast with your very strong points in your rental business.

How do you see the rental market evolving? And are you decoupling from the general market with your investment program?

Aquila Institute is probably you have to be very careful this as offer for new letting rents, which are beyond any legal framework. Anyhow.

So this is nothing which is in the legal framework in the mid-price. You have seen today also just today in the German newspaper an analysis which is done and saying rental are going at 40%.

So -- but these are all the official -- the official an -- in Germany, we are saying [Foreign Language] so this is what you see in the Internet. This is all above what is legally allowed.

So what is legally allowed, I think Philip showed it to you. And if the [Foreign Language] is going a little bit higher or lower, it really doesn't matter.

It is very clear that for the next 10 years, we will see, especially in the big cities and imbalance of supply and demand and massive pressure on rent and we will do the legally possible, which will lead to our rental guidance. And legally not possible, it's much bigger, but we will not do it because it's legally not possible.

But there are others out which are charging EUR 20 and more in Berlin, while we are charging for the same apartment, EUR 11.

And just to add, Martin, if you look at Page 6 of our presentation deck, we have shown the market reality across Germany of almost EUR 16 per square meter. And that is where this slowdown in growth is referring to.

Historically, we have seen asking rents growing twice as fast as the regulated rents. And so the discrepancy, which is today 100% is now kind of hopefully starting to shrink a bit.

This might also be the case because probably more people are deciding to be legal.

Okay. I see.

My second and last question it's a bit on the balance sheet on the financials. I saw that there was an impairment loss of roughly EUR 340 million in the first half year on project developments.

Maybe you can elaborate bit on this, what's standing behind and could we see more such impairments to come?

Yes. That is what I briefly addressed in the presentation.

We have restructured our equity participation quarter back last year. And in that context, that a debt to asset swap.

And with H1, we, for the first time, based on closings, recognized these acquisitions. These swaps, if you will, and applying our more conservative assumptions, in particular on the cost side that resulted in that impairment.

To your second question, do I expect more to come? Clear answer is no.

I think we have taken here on purpose, a very conservative stance and left and right, as we have discussed we see markets moving in the right direction in terms of development of property values.

And also to be very clear, if we manage as we can show you in the first project to get the construction cost down this has, of course, a positive impact on the valuation of the land lots.

Two quick ones from my side. First one is in regard to your sales, you mentioned around EUR 1.7 billion signed but not closed -- how many of those were signed in the last fiscal year 2024, and are those on track?

And when do you expect those to be closed? And the second one would be, you mentioned in the rental segment that fluctuation rate decreased, is there any particular region where you can say that dropped a bit more, for example, in Berlin?

And what do you expect going forward? Do you expect this to continue to decrease.

Yes, Simon, on your first question, that EUR 1.7 billion that applies to transactions, all of them signed has been seen signing in 2024. One has seen signing early 2025.

Now when do you expect the money to come in? Today, it's not EUR 1.7 billion.

Today, it's just EUR 700 million left because we have seen meanwhile closing of the disposal to Apollo of an economic stake of 10% in Deutsche Wohnen and the remainder of EUR 700 million is predominantly related to our nursing home portfolio, which was sold to the city of Hamburg that we'll see closing in September. And HIH, those are the development packages, if you will, which have been sold last year.

Those will see closing partially in this year, partially next year. But it's only, I think, some 10%, which we'll see closing beyond 2025.

So you will see that the pro forma numbers and the true numbers are moving very close to each other. So hopefully, very soon, we can skip that additional layer of information and just report it as is.

On your second point, sorry, on your second point, in terms of fluctuation rate, Look, I mean it's as low as we have ever seen it. It's very much a function of, yes, in that number, I think you can see that regulation as it were currently is actually not working because it has an embedded incentive for people not to move.

Our assumption, however, is that this rate will remain at that low level for the foreseeable future. As we equally do not expect that the supply-demand imbalance in our market will disappear anytime soon.

We, however, also have not the expectation that the fluctuation rate will come under significant additional pressure and move down.

So to be very clear, the normal fluctuation rate, you should expect a normal market should be somewhere around 10% and plus. Because just of test rate and normal change in unemployment and moving your normal movement.

So being significantly below 10 actually shows what Philip explains but also shows that there is a issue of illegal subletting also in our portfolio. And we are working on this.

Because it is not fair that somebody is renting an apartment from us for EUR 11 and letting it out for EUR 21, which happens today, which is illegal, and we are working on this also this technology.

I had two questions. I guess, firstly, hitting on just operating expenses.

You sort of mentioned that there was, I guess, one-off tax impact there, which is helping the operating expense line, but I was just wondering, can you provide perhaps any general comments about underlying organic expense trends for how you see it sort of near and medium term. And I guess, especially thinking also about staff costs as minimum wages, I guess, are expected to jump quite a bit in Germany?

So first of all, minimum wages are relevant for our gardening division, but this is a pass-through item. So this will automatically be compensated by higher fees to the tenants.

The craftsmen are above the minimum wage level, so this is not an issue of the minimum wage. In general, you have seen that with our scale, we managed in the past to manage down inflation by efficiency this should go on in the future, especially if inflation is going down at the moment.

So yes, others will see increasing operating expenses -- our target is to manage it down by more efficiency. This comes back to the question beforehand what happens if you now have full indication of Deutsche Wohnen and Vonovia.

Understood. And then my second point would be about, I guess, just the sales market generally.

I mean, you have two business lines, firstly, recurring sales, which seems to be rebounding with volume, especially in the first quarter and then with pricing seemingly in the second quarter. But then in development to sell, you sort of said that you don't have much projects, I guess, ongoing or not least in the completion stage.

But just wondering, is there any sort of different trends that you're observing there in terms of existing sales to the condominium market and then new build apartments? Or is it actually the case that with the new builds as well as you're doing presales, the demand seems to be good.

The demand is enormous because -- if somebody wants to live in a city and he does not find a rental apartment actually is the only option that he can do is to buy an apartment. So a used one, which is for the lower price and a new one for a higher price.

So we see enormous demand, and we will see because we are not the only one who follows the strategy not to start new construction and to sell everything what you have. And we have seen a lot of bankruptcy of big developers in Germany.

So the shortage of available ability of apartments to sell is enormous, but there's just no product. And that's why there is not an issue of demand.

It's an issue of supply, very clear. The delay, it just takes you 2 years.

The buildings we are starting now will be ready in 2 years in '27. Of course, we are selling some of these apartments beforehand and then we recognize also some EBIT in this.

But the availability of new apartments is close to 0 in Germany at the moment.

Understood. And then just a quick follow-up.

I guess, you are sort of starting new projects en masse now. So 2027, we should start to see more of those sales flowing through.

To be very clear, we are in the apartment in the condo sales, we can recognize sales effect even if we are selling it in '26. So the project is completely finished but you're also recognizing some revenues and then some EBIT.

And so this will not be '25, '26, and then '27 upwards. The reality when people can move in the apartment is more on '27.

For example, so it's a little bit more complex also to make clear. For example, the two buildings we are building now in Berlin, as I mentioned with this [ group ] will be finished much earlier.

Because they are serial construction. So this will probably be filled with tenants in the end of this year -- in the end of this year or even probably middle of next year.

So this is not just '25 and '26, nothing and '27, everything.

I have two quick questions on disposals. Firstly, which portion of the EUR 1.5 billion noncore portfolio left or you plan to sell this year?

And the second one is on the development land bank. You mentioned it's too big, which portion of your development land bank is potentially up for sale?

And what is a realistic time frame for land bank disposal.

Thomas, to be very clear, you are asking for the speed of noncore in both questions, it's noncore land noncore assets. And we are not actually setting out a time line, a strict time line.

So we are selling to optimize the price and not necessarily the volume. The time where we have sold assets to delever the balance sheet is over.

So now we are optimizing price and that's why it would not be wise from our side to give you a target. But of course, you can be assured that we are selling at a reasonable price as fast as possible.

Okay. But can you maybe give us an indication which portion of your development land bank is up for sale?

By how much is the land bank too big, you think?

Look, again, on that point, Thomas, no guidance. The market for development or for the disposal of land bank is a tight one.

So I think we are very, very well advised not to bump that into the market at a point in time where we truly think that we currently see tough valuations. In terms of noncore we can be probably a bit more specific.

Beginning of this year, we have been talking about EUR 1.6 billion of noncore. We have said that roughly half of that, hopefully, by the end of this year, the other half by the end of next year.

This remains the target. But to reiterate what Rolf said subject to appropriate pricing also for the noncore product.

Just a couple of questions. Just hoping you can help me with your minorities methodology, just getting the difference between that, which affects EBT and that which affects the OFCF obviously, quite a big difference in the number in the first half.

I appreciate there's some timing issues. But which is the more relevant effectively to understand the economic impact on Vonovia?

Is it the cash distributions? Or is it the minorities, the EUR 85 million?

Or is it as I say, the EUR 175 million, just to get a better understanding on that. And moving forward, will we continue to have such a big differential between those two figures?

Or will they converge either towards the higher or the lower of those 2 numbers? That's the sort of first question.

And the second question is, I appreciate, obviously, you changed your KPIs. I think a lot of investors still look at the old KPIs as best as they can, given they are impacted by post-tax numbers and so on.

And just noting your AFFO on a sort of an old definition was up by about 3%, I think, per share and AFFO is actually down quite materially year-on-year, just going by sort of old definitions of how one would look at things. I just wondered whether you had any views on that and whether that was sort of influencing some of the changes in the KPIs.

Yes. Paul, on your first question, I think it kind of depends on you what is more relevant for you, the accounting EBT or the cash -- sorry, the accounting minorities or the cash minorities.

The difference really is what is actually being paid in cash to minority shareholders. And the biggest discrepancy is because of the Apollo JVs here the cash share is higher than the accounting share because we pay a disproportionate share of the net cash flow as a dividend to Apollo, which, however, as a reminder, is protected by a call option we have on our hand, which is capping the IRR which we have to deliver to Apollo to initially 7% over time, up to 8%.

For me, more relevant. I'm a cash guy, is the operating free cash flow and the respective guidance we have given on that front.

Now on your triggered discussion on old versus new KPIs. Just as a reminder, I mean, comparing our business to those of peers, it's more complex because we have a value-add business because we have a development business, we have a recurring sales business, and that impacts cash flows, where the old FFO is not an appropriate metric to capture that.

Now if you look on the tech side, I think it is important to remember that part of the cash we paid to tax authorities is driven by disposal activity. So if I look at our cash taxes, if you will, based on our pure rental business and making that comparable to also the peer universe, the rate vis-a-vis EBITDA is roughly 4%.

Keep in mind that the higher the investment volume, the more beneficial it is to us because higher investments based on tax accounting, is not going to be capitalized to a very, very large portion. So in other words, it's reducing the taxable income and it's essentially saving tax.

The bigger portion slightly above 5% is because of disposals where essentially, if I look at recurring sales to certain portion are monetizing the value uplift we have seen in the past by deferred tax liabilities, which are counting against that.

Okay. And the -- so sorry for my ignorance here, the reason that taxes increase I think you seem to indicate that these will have a sort of beneficial impact on one hand in terms of tax reducing the tax benefit.

Sorry, if I misheard that because tax has gone up obviously quite materially year-on-year.

The tax is going up because we increased significantly our disposals, but disposals also positively impact our operating free cash flow. Because we are monetizing also on the embedded asset values.

And as part of that, also addressing deferred tax liabilities.

So Paul, in reality, a big part of the tax is deferred taxes, which are paid out because assets are sold and that's why the deferred taxes are realized.

As the value growth, which is inherent with that because of which deferred tax liabilities have been created.

So the first one is coming back on your operating cash flow calculation. And I'm trying to assess where it could land by the end of this year because there is a lot of moving parts there.

Actually, the working cap played a big role in H1. So if you can drive us through your expectation in H2 would be useful as well.

And also on the dividends paid to minorities. So where roughly ballpark figure would be useful to see where it will land.

This is my first question.

Yes, I think on the operating free cash flow, we have actually guided that it will be ignoring the impact of movement in the working capital, just a notch below last year. .

Now if you look at H1 numbers, you can see that we have positive movement in the working capital of roughly EUR 350 million that will not go away. So it will be a very, very decent number as a result of that.

In terms of cash dividends, not much change. I would argue to what you've seen in H1, we have seen the full year impact in terms of Apollo JV.

So the EUR 80 million times 2 is what you can expect for the entire year. you have EUR 40 million of the usual payments to red blocker as we've been guiding towards -- and you will additionally see, but there's also no news.

The EUR 70 million based on the dividend we pay for the 10% economic interest in Deutsche Wohnen to the red blocker. We have installed in preparation for the domination and profit and transfer loss agreement.

That's clear. And my second question is a technical question.

So on your financial results. Can you remind us what are the accrued interest of EUR 132 million and if they are included in your ICR calculation or maybe if they are also included in the calculation of S&P and Moody's?

In ICR, we look at cash payments, so do the rating agencies.

Okay. And should we expect this figure to move significantly going forward?

To the extent we refinance, I mean, we have average debt cost of 1.8%. Our marginal cost of debt secured as unsecured is for 10-year tenor slightly below 10%.

So unless we issue more convertible bonds, our marginal cost of financing will be higher, and you will see the expense line for interest costs gradually increasing over the next 5, 6 years.

Thank you, Yousaf, and thanks, everybody, for dialing in. As always, any follow-up questions, you know where to find us.

That concludes today's call. Stay safe, happy and healthy as always, and speak to you soon.

Bye-bye.