Warehouses De Pauw

Good morning, everybody. Welcome to our Q3 update.

First of all, this quarter will always be marked as the summer of the sudden passing away of our beloved Tony De Pauw, my company compagnon de route. Together as a perfect complementary couple, we built WDP together since the IPO of '99, based on the fundamentals of his father, our founder.

I can assure you that together with the family, we will continue to build our European dream, a EUR 10 billion plus core Western European logistics and industrial real estate company with an add-on in Romania, based on our ever-lasting principles: being effective, creative and sometimes a little bit contrarian. And in order to create our dream, we added the last missing element onto our financing strategy: a full operational EMTN program based on our new updated A3 rating of Moody's and our inaugural green benchmark bond of EUR 500 million with a unique margin of only 80 basis points.

Once again, we show that we do not only create value with our assets, but also with our liabilities, and it is not included in our NTA. We are sure that this rating and our EMTN program has not only a value for our debt investors, but also for equity investors, especially the generalists.

Since our new credit rating brings us in the top 5 balance sheets of EU REITs. Special congrats to the long-term discipline of Team Finance.

And besides that, of course, we also delivered once again on our promises: a clean sheet across the board. An EPS of EUR 1.15, 5%year-on-year, fully in line with expectations.

Full year guidance of EUR 1.53 EPS confirmed. And as mentioned, of course, supported by the unique balance sheet with liquidity and auto financing in place.

And we also continue to demonstrate the strength of our commercial platform in a stable but owned market within a volatile world, probably for longer, and we will have to cope with it. Volatility will be the new normal.

We realized 400,000 square meters of new leases signed this year across the existing portfolio, ongoing pipeline and new developments, with an occupancy of 97.4%, slightly higher. With all maturities in '25 resolved, 90% renewed, 10% re-leased or in current vacancy.

An investment activity of EUR 475 million, bringing the total investment pipeline in execution to EUR 700 million at a 6.9% NOI yield, 80% -- 83% pre-leased after, of course, the deliveries of the running developments and acquisitions. So as mentioned this summer, we have now all the building blocks in place to realize #BLEND2027 and confirm our '27 guidance of EUR 1.7 EPS.

Almost halfway the 4-year period, we now have to build the house, which means executing and letting. And for those who doubt, let us be clear, #BLEND2027 is not the end.

Our ambition is to create profitable growth with strong total return to go far beyond '27, based on the following foundations: the solid long-term fundamentals of the logistics and industrial real estate sector, and by internal value creation, especially through the E in BLEND, extracting value out of the portfolio by the land bank, rent reversion, indexation, occupancy, upgrades and so on. But now first, time for Q&A with Alexander.

[Operator Instructions] And the first question is coming in from Steven from ABN.

I have several questions on occupier demand. First, a general question, so what do you see happening in occupier demand?

And maybe second, to more...

Steven, can you ask them just one by one? Apologies.

Yes, sure. Maybe start with the specific ones.

So the news that Amazon will invest EUR 1 billion in the coming 2 years in Belgium. Do you expect that to be in existing assets or expand only in their existing -- or sorry, for the existing assets or in new space?

So that's one on Amazon.

Well, on Amazon, I think Belgium is the Benelux, first of all, and indeed, it is across the board in different things. They have some small buildings, which, of course, they will use first.

And above that, they will also stay working with partners like bpost and PostNL. So it will be very broadly.

And let's say, it will be a little bit everywhere within their total supply in their website, in their infrastructure. But let's say, that is not EUR 1 billion in extra space.

I think in the end, if everything is successful, they will need more space, but it will be very broad and it will take some time.

Okay, clear. Then another news item...

In the end, it's always a good sign that a new player because Amazon is almost not active in our region, that let's say, a new player is entering the market.

Yes, very clear. That's good news.

Then maybe another news item is that different countries, including the Netherlands, but also France and others want to add additional costs for small e-commerce packages to target the Chinese e-commerce players. Maybe already as of the 1st of January.

Do you think that would materially impact demand for logistics warehouses?

No, it will have no impact on the warehouses. Let's say, that can make that some players, but let's say, who are just importing, it can only make the existing European e-commerce business bigger, let's say.

So we don't see any negative impact on that.

Clear. And then maybe zooming a bit out just in general, occupier demand.

Is it better today than 3 months ago, 6 months ago?

Well, like we said, I think let's look last year after summer. Then everybody came back from holiday and everybody was looking internally, okay, we go towards the end of the cycle.

And we go into a little storm or a more heavy period, how can we protect what we have, protect our supply chain. Let's say, everybody looked inside and now since June, let's say, since the summer, now people are indeed, they reorganized, they optimized and now they are ready to look forward again.

They look forward again. They are looking how can I optimize further?

How can I invest in my supply chain? But of course, they wait for consumer spending to really do and make the decisions, but everybody is looking forward again.

And I think this is a big difference versus, let's say, a year ago. But indeed, we have to wait until consumer spending is really getting up here.

And on the contrary, for example, in Romania, you see that consumer spending is growing, and then we can do developments like, for example, action who is there entering that market.

The next question is coming from John from Kempen.

On your credit rating, your latest bond issue demand was quite strong. Like you said, I think it was 80 basis points credit spread.

What's the difference in the spread between being A rated and BBB?

The difference between the previous rating, BBB+ is around 5 to 15 basis points and it will be around 50 basis points versus a BBB.

Okay, 5 to 15. And how does it compare to your underwritten cost of debt in your #BLEND2027?

I suppose this upgrade to A rating is not necessarily part of the #BLEND2027 plan.

No. But indeed, it will not change the '27 outlook, but indeed, there is a financial cost synergy to be captured because our existing debt.

Has a credit spread of around 120 basis points and for an average historical of duration of 7, 8 years. And now we signed based on the A- rating.

We did on the A3 rating of Moody's, we did a benchmark bond of 5 years at 80 basis points. So there is some synergy to be captured, but over the horizon of the maturity of the debt, obviously.

It's like a rent reversion. It will come, but it will take time.

Okay. Clear.

And just on your commentary, I think in the press release, you're talking about that momentum is healthy for smaller units of up to 10,000 square meters. Would you consider adjusting your pipeline with the product that you're building to capture this demand?

Yes, but it's broadly. It's also in the existing portfolio.

It's in the new demand, like, for example, the development in Prinsenhil, which was all more urban high-end logistics spaces, but less than 10,000 square meters. And there, indeed, we feel that, I would say, almost a normal market, but it is in the bigger demand that there is still very selective.

But yes, a lot of our sites are indeed constructed to be able to rent them. Let's say, if we have a 30,000 or 40,000 building -- square meter building, sometimes it's really already foreseen in the building that we can split it up.

For example, for sales of 10,000 square meters. So we have always been flexible to, let's say, to capture the demand.

I think this is very important that we are, as a company, as a commercial team and with the buildings, very flexible, able to capture the demand of the moment.

A good example is the building of Ericsson, where we had the break of Ericsson just prior to the delivery and for which we were fully indemnified, of course. That was the news of end of last year.

But look at that building. It's a top-notch building, 30,000 square meter, and we can split it up in units of 10,000.

We can use it for standard logistics operations or for semi-industrial. So that's a good example of how we build multifunctional warehouses.

Okay. Clear.

And just as you alluded to the demand for the existing portfolio, you signed 100,000 square meters in Q3. I suppose part of it is also on the existing portfolio.

What reversion did you capture on that?

On the -- so that everything is signed at ERV. So it's not a question about price.

It's a matter of does that client need to take a decision already? And everything is signed at the ERV.

And for the units signed in the existing portfolio, that is consistent with the reversionary, so plus 10%.

The next question is coming from Marios from Bernstein.

I've got 2 questions. I'll ask them one by one.

So firstly, as we approach 2026, can you make any comment on the progress with lease renewals for the first part of next year? Or is it are we still a little bit too early?

Well, it's still very early. We just ended '25, let's say, at the end of July, and that's the -- when you close '25 and then you start up '26 in the beginning of September.

So let's say, we just started up on that, and we start talking with our clients. But let's say, based on those first client -- on those first talks and conversations with our clients, we expect today that we can keep the normal retention rate around 90%.

And above that, for next year, specifically, there are no large concentrations in our tenants. The largest contracts are around EUR 2 million, so only 0.5% of the rental.

And based on that, we have the confidence to keep the minimum 97% occupancy, as mentioned earlier. But of course, it is very early.

And indeed, we will be able to give a first real detail and a first real forward-looking in our full year results at the end of January.

That's very clear. And then just secondly, I see there are a couple of projects in the Netherlands that have been delayed to the end of 2027.

Is this isolated? Or is there a risk that, that could extend to others as well?

No, that is just linked to the connection with the grid. In the Netherlands, there are -- it's very difficult to get grid connections.

And we are, let's say, now in good talks to get the grid connection, but it will take longer. And that's specifically for Schiphol case.

So yes, it is a little bit lower, a little bit further, but only due to grid connection.

The next question is coming from Francesca from ING.

I'd like to have your thoughts on Germany because you are halfway to your 2027 plan, and you clearly reiterated your German ambition. We see other companies, other competitors pointing to Italy and Spain as interesting market at the moment for acquisition.

Also, you had some time to get familiar with the Nordic markets via Catena that you entered in 2022, 2023. Can you share your thoughts on these markets besides Germany?

The BLEND project that we would, let's say, enlarge the Benelux with France and Germany. So we are fully focusing on those markets.

And for the rest, of course, there are a lot of good markets besides that. And within every market, there are good places and less good places, but we focus on our strategy.

And indeed, so we cannot comment on, let's say, all the other European companies or European countries, sorry.

But do you see interesting opportunities passing by coming from Italy and Spain, for example, or is something that is totally...

We are concentrating -- Francesca, we are looking to deep. We are making a team in France and now building up a team in Germany.

Let's say, we have no people in other countries. So we don't look at those countries.

We are fully concentrated on our own operations. And let's say, we don't look at all the other 20 countries in the European Union, where there could be -- there are good things to do everywhere in every market, but we concentrate on ours.

That's fine. I'm asking just because it seems Germany is difficult, not just for you, but also for other players.

That's it.

Yes, of course, Germany is difficult, but it's not because it's difficult that we don't have to continue. Romania was also difficult 15 years ago.

And the first 10 years, we did 100,000 square meters, but the next 8 years, we went up to 2 million square meters. So you have to continue and to persist in your long-term strategy and even when it's difficult.

And do you think that -- I saw that you opened the office and you had hired a country manager. Do you think you have enough resources to cover such a big investment market?

One by one, we do it. We start at the beginning of the year with one person, the Country Manager in France.

In the meantime, we have there a fully equipped team of 7 persons. So there, we are, let's say, in full force.

And now, yes, indeed, in Germany, we have only 2 persons, but we started now as from the 1st of September with our Country Manager. And for the moment, he is fully assisted by the Dutch team.

So he can do -- he can start up. But yes, we will also, let's say, go for a full team in Germany.

And let's say, now we can start. And if I say 2, it is already 3 because we have also already a third person now for Germany.

So yes, our country manager will build up his team full by now.

Okay. And do you see the investment market changing over the latest months?

Or is the situation seen there to the beginning of the year?

I think the situation in Germany is still the same. It's still very difficult, very difficult because prices stay very high.

And we want to grow, but only in a profitable way. We don't go for growth or growth.

And yes, with the team, we will come to -- we have a basis, we are building up the team. We have time, and we want to do it in a good way.

And in the meantime, we have France.

Yes. And another little question about the pre-letting ratio because I see it seems to be stable compared to Q2.

Is that impacted from the summer season? And how do you see this evolving by year-end for, let's say, for the coming months?

Pre-letting in the existing portfolio, in the pipeline.

The pre-letting, I think there is -- the pre-letting stayed the same. And of course, the third quarter is always, let's say, the quarter with the less activities then you finalize, let's say, Q2, the end of July, then August is holiday and then September, you just restart.

But okay, because indeed, we are with the same pre-lettings, but we could add a new nice development in Romania. So that's also then it was not a higher pre-lease, but a higher -- with a new pre-let development.

And also, it's difficult to forecast on a quarterly basis. What is important is that we believe in the project.

We have confidence in leasing of the projects, and so you should rather see towards the end of the project and everything that we have delivered so far has been fully occupied, fully leased up at delivery. And it's also a very limited portion of that pipeline versus the overall portfolio.

The next question is coming from Vivien from Petercam.

I hope you can hear me. I wanted to have a follow-up question on John regarding the smaller units.

I just wanted to understand from your vacancy, how is the share of small units? And to that extent on occupancy, where do you see occupancy going by year-end?

I think that you improved it from the low point of Q2 that you referred in the Q2 result. But could we expect further improvement by year-end?

I know that your target is 97%, but I would assume that a quarter of letting should improve the overall occupancy by year-end. That's my first question.

Well, let's say, we -- it depends on let's say, it doesn't matter where a client rents. If it is in the occupancy or, let's say, as a new pre-let in the developments.

So it will depend on where we can sign things. Yes, we are negotiating different files with different clients, but it's, let's say, difficult to say now if this will be in the existing portfolio in, let's say, in developments ongoing, not let, or in new developments.

That's too early and too difficult to foresee. And on your other question, which is the portion for smaller units and bigger units, that's also, let's say, like we mentioned before, it's very flexible and it can be a whole of 50,000 square meter, can be rented as a DC of 15,000 square meter or can sometimes be leased 3x 5,000 square meters or 10,000 and 5,000.

So -- and we can adapt those buildings. That's the flexibility and the power of our commercial platform, we can put an extra wall in it.

So there too, it's not -- we cannot say and we can change that depending on the place on how the building is. So it's not that [ 6% ] is smaller units, y% is bigger units.

It really can depend.

Okay. Then I have another question on the investment market and the opportunity in value-add or core plus assets.

Do you see any increasing competition that could put pressure on price? Is there any sizable portfolio you see on the market?

Just feeling about how much opportunity you see currently on the market?

Well, there, let's say, the good thing, we -- of course, we look at the market. We see things happening in the market.

And the big advantage for us is that we don't need to do anything. And we can look at it if there is something interesting, complementary value adding to the portfolio, we can do it, but we don't need to do it.

We can concentrate on the existing portfolio, the pipeline. So -- but indeed, there are -- but yes, value add that it also has to have a complementary value within your portfolio.

But it is a normal competition and not -- that did not change, let's say, versus a year ago. It's the same market.

Okay. Then I have a final one.

I'll kind of address everything in the room here as we approach end of the year and that #BLEND2027 is fully secured. You put forward the auto financing capacity to seize additional opportunity beyond this plan.

What will happen if you see very large attractive opportunities? Do you think you could raise capital at this stage at these price levels -- share price level, sorry?

I will quote a famous Belgian politician who said, "It's a hypothetical question, and we will deal with it when it comes." But then we will do like we have always done, can we create value?

What is the return we can achieve? What is the earnings per share accretion we can achieve?

What is the total return we can get on this deal? Is it complementary to the portfolio?

What is the marginal cost of capital to fund it based on constant capital structure? That's how we look at it, and then that's how we have always done it with a strict discipline to allocate capital and with a strict discipline on the financial side.

The next question is coming from Suraj from Green Street.

Just a quick couple of questions from me. So the first one is just digging into the 2026 lease expiries a little bit more.

I know you gave some color. Is it possible to share what kind of splits are across your markets or maybe asset types if possible?

Just any color there? That's the first question.

It's really broad-based and very general, a perfect representation of the portfolio, I would say. And it's also, as you said, in the 40% of leases maturing, it's really scattered across the portfolio of types of buildings and maximum rent in one building of one client is 0.5% of the rental.

So it's really very much distributed.

A normal year.

Okay. Perfect.

And then the second one, more of a general question. Is it possible you provide some color perhaps on how construction costs are trending real time across your key development markets.

If you've got any sort of anecdotal sort of information you share there, that would be very useful.

Let's say, as there is, in general, less new developments, let's say, there is less construction work for the construction companies. So they are all very well willing to build.

So if there, I could say that there is a little pressure on the prices, but not that, let's say, will really change the yields of our development yields. But let's say, it's not negative.

It's more positive than negative for the moment. But it won't change the NOI yields on developments, or not really.

The next one is coming from Wim from KBC.

I have some additional questions on the project that's now being auctioned or that's being negotiated, which is called the Audi site in Vorst. Maybe first to start off with, can you give kind of a status?

Are you in it? Do you expect this to be finalized this year, middle next year?

So yes, let's start with that one.

Well, let's say, as you know, when there is a fire, we have to sign NDAs. And of course, we can never comment on running tenders like this one and others since we are, let's say, forbidden to do that due to the signing of NDAs.

Okay. So I know that you signed an NDA, that's already interesting.

Now maybe just generally, because you have a big site in the Renault side, the old site. Is there anything general you can say this is either different, whether you are maybe better placed for this one than the other one?

So how do the two of them compare? Is that anything you can...

They totally not compare. They are not comparable, Wim.

Let's say, Renault Vilvoorde is 20 hectares in the north, and that's fully let. That let's say, there, the factory is closed 25 years ago, and that's fully let.

And there, we bought a yielding land bank with, let's say, now after 25 years for the next 25 years, we have to redevelop it and it's an enormous redevelopment potential in time. But in the meantime, we have a 7% income on, let's say, that land bank.

So it's a very interesting yielding land bank. And Audi, that's just -- they are still closing, let's say, the factory.

And then you have to restart from 0. And Audi is 3x bigger, and that's 60 hectares.

Vilvoorde is north of Brussels and north in Brussels City, the big Brussels region, it's north of that. And Audi is fully within that.

So it's fully within Brussels, which is, let's say, also a different dynamic -- dynamism there. And it is, let's say, you buy empty spaces without any rental income.

Those are the two big difference between those 2 sites.

Yes. Can I just...

So not comparable.

Yes, yes. And what I was trying to understand about this site, the Audi site is and you explained it well, so there's no rental income.

So obviously, prices will be a lot lower because it's not yielding. But then I wonder because it was an operational factory not so long ago, whether if you compare it to other, let's say, real old brownfields, like we visited recently from CTP and also VGP, which have to be completely deconstructed.

Can you say about what percentage would have to be deconstructed? Is it a total deconstruction?

Or would you be able to use buildings as they are?

Therefore -- let's say, like I said, we signed NDAs, and I don't know the details of the site. But if you look at the location of the site, question is, what will you be able to do there?

It's in the middle of Brussels, don't forget it. It's not in the middle of nowhere, let's say, like you have some brownfields.

And I think you referred to Germany, where you have some brownfields, let's say, on the country side, this is a brownfield in the middle of Brussels, just the other side for people who sometimes take the Eurostar to Brussels, it's just the other side of Brussels South. So it's in city, it's an inner city location.

It's not a brownfield, a big industrial brownfield somewhere in the middle.

Then we have one more person in the queue, which is coming from Frederic from Kepler.

Just a few questions on my side. Maybe the first one, can you comment a bit on the acceleration of the revaluation from appraiser in Q3 versus ETRA?

I don't think Frederic, that is a real acceleration. The underlying it's in absolute terms, it was a bit higher the revaluation, and in total, it was let's say, 0.5% for the first -- plus 0.5% for the first 9 months.

But what you see is in terms of trends is that the underlying portfolio has been year-to-date flat in terms of ERV, in terms of yields applied and that what you see is either we had a small minus in Belgium because we had a bit more vacancy in Belgium, but we could do more pluses through active portfolio management by leasing up vacant space, by capturing rent reversion, by doing small upgrades and it's really the plus you see is really through active portfolio management.

Can you comment maybe on the ERV evolution year-on-year in your respective market?

ERV has been year-to-date flat.

And what's your view going forward regarding ERV? Because if you have a flat portfolio valuation, I mean, in terms of yield and flat ERV going forward, is your portfolio in organic terms going to underperform the inflation, I would say?

No, that's something we don't think because if you look at the supply-demand dynamic, that's looking favorable over the long term. Yes, there is a bit lower demand today, but also construction start has slowed down massively.

There is still a lot of land scarcity. And we believe that after the strong rise in ERVs over the last couple of years, we have now -- we are going out because of the short-term market backdrop a bit through a stabilization phase in the short term.

And then in the midterm in the, let's say, 1 to 2 years, we should -- for the next 1 to 2 years, we think it should grow again in line with inflation. And beyond that, we definitely believe it will grow with inflation plus because of the supply demand dynamics and because of the scarcity element that is at play.

Maybe just 3 small question just on the corporate governance. I'm sorry to ask, but is there any news regarding new member for De Pauw family in the Board?

Well, let's say, there is not news yet, but we can say like we mentioned before that, let's say, Tony will be replaced by somebody of the family by the Annual Shareholders' Meeting in April. And so at that moment, he has to be replaced and he will be replaced and the family is now preparing and is looking internally who will take this role.

And let's say, as from the moment that is finalized, we will come with the results. But indeed, they are well preparing it, and he will be replaced by a new family member in April.

Okay. Then a question, you saw probably there was a big deal in the Netherlands, DSV being the seller of a large portfolio for, I think, was close to EUR 300 million plus.

Have you looked at the portfolio? And why haven't you made a move if this is the case?

Like I had to say to Wim, when we are looking at the file, we have to sign NDAs. And as having signed an NDA, we cannot comment on running tenders.

Okay. So it's not over just in the race.

I have not, I think me, like you, we have not seen a result in the market. So I think it is not done.

It is not finalized yet if I look into the press. But indeed, we have to follow the rules.

No, absolutely. I wonder -- I know too much on that, but just...

It should be not logic for such a building, we should not look at it. Of course, in our -- and that's in our existing markets, we look at every deal and sometimes we go deeper, sometimes we go not deeper.

That's the difference between our existing markets and the other 20 markets in Europe.

Okay. Clear.

And then maybe a very last one, but that could be a recurring question in the coming quarter as well. But you are obviously becoming bigger and bigger today with the portfolio of EUR 8.5 billion, you want to reach obviously EUR 10 billion at some point in time.

I'm just willing to know because in the past, of course, adding EUR 500 million out of a portfolio of EUR 6 billion, EUR 7 billion, EUR 8 billion is relatively consequent. But as you grow, adding only EUR 500 million will not move too much the needle, still a big advancement, but not moving too much the needle.

Just wanted to pick your brain on what you think going forward? And is your current geographical footprint enough to maybe as a plan to grow much more aggressively in the years to come?

Long question, sorry.

In any way, the existing markets by adding France and Germany, the market is -- our market is big enough to go above, let's say, the EUR 10 billion. That's what the idea was we go from the Netherlands, from the Benelux and Romania to -- we add France and Germany.

So -- and with these 2 new markets, we can easily go above EUR 10 billion, and we don't need any new markets to do that. And indeed, we have an auto financing capacity of EUR 500 million.

This EUR 500 million is what we can already do each year, standard, without impacting our net debt to EBITDA because we have, let's say, round numbers, EUR 100 million of retained earnings, EUR 100 million of scrip dividend and EUR 50 million, give or take, contribution in kind each year, that's EUR 250 million with including leverage, you can already invest around EUR 500 million at the current returns. We invest without impacting your net debt to EBITDA.

So that's a very good model. And also do not forget that, yes, in the past, let's say, for the last 20, 25 years until the start of this growth plan, we were more dependent on volume growth, but with a connotation profitable volume growth, of course.

But now as from this plan, and that's what we try to explain over the last 2 years already is that to create further value and value being defined as earnings per share, consistent earnings per share growth and realizing strong total returns on a risk-adjusted basis then you need to blend. That's the slogan of our growth plan is just not because of it, it's because it's actually necessary to create further value in this market with higher cost of capital and with higher cost of capital and with the market going through a normalization phase.

But the good thing is we will then be dependent on not on one driver, but on multiple drivers. We should not only look at what's outside WDP, and yes, that external growth we will continue to do and will be a very important element, preferably pre-lease developments supplemented by value-add acquisitions, but we also need to look at what's in front of us and what's in front of us is a portfolio of more than 8 million square meters, which is under-rented and all of which you can repeating your words extracts more through indexation, rent reversion, sustainability linked upgrades, upgrading of buildings, energy investments.

And so it will be a combination of internal and external growth, and that's how we see also the way forward. And this in a bigger geographical market by adding -- having added France and Germany.

But for us, it's not going about going from as fast as possible to EUR 10 billion, EUR 11 billion, EUR 12 billion. No, it's about -- it's not about growth, it's about profitable growth, profitable growth, earnings per share growth.

Absolutely.

And if we finalize this with EUR 9 million, we do it with EUR 9 billion.

Thank you, Frederic. We have 3 more written questions that we will go over to.

The first one is coming from [ Shita ] from Deutsche Bank. So as we mentioned, there were 2 projects with a delay due to the congestion of the electricity grid.

Is there any further risk that we currently see in the existing pipeline and execution that could have an impact on the timely execution of the overall pipeline?

No, those are the 2. Just those 2 grid connection.

Next question is coming from Nadir from UBS. How confident are we that the occupancy indeed have bottomed out in the second quarter following the 10 bps improvement we saw in Q3.

We saw a similar plus 10 bps rise in Q1, which was followed by minus 80 bps in the second quarter.

But I want to add that minus 80 bps in Q2 was largely guided well in advance because last year -- 1 year ago at the Q3 results, we already warned for that because we said that we had some notices in the existing portfolio end of last year in Q3, which are some units falling vacant in Q2 and that would mark the bottom in the occupancy rate. Well, that has happened.

And based on, as Joost explained, based on our conversations, which have only now started after summer with clients for '26, we see already the normal retention rate of 90%, and we are confident in our message. We can confirm that message that we see the occupancy rate of 97% having bottomed out at Q2.

And plus 10 basis points are just mathematically. They are just because we added new rented space, we bought something during Q3, and we delivered some projects.

So based on those extra buildings fully let, automatically, let's say, your occupancy goes up. So as a matter of fact, it was stable, but the 10 basis points are thanks to acquisitions and finalized developments.

And then we have a final question from Michelle Plick, who is asking whether we see any opportunities as a result of the increasing congestion on European highways from multimodal locations, so along railroads because of tax measures that could be taken by public authorities.

Yes, Michelle. I think everybody still hopes already for more than 20 years that railroad will be the future or at least part of the future, but it stays very difficult.

It's not flexible. It's not -- it still stays difficult in Europe.

It's not one Europe. And I think today, it still works like so many years on fixed lines on long distances, for example, from Belgium to Italy, through the Alps or from Belgium to Romania.

Long-term fixed distances with fixed full trains, and you always need a full train on a fixed distances. So it will not help congestion, let's say, between Antwerp and Limburg because there, for example, you cannot work with railroads.

So yes, it can have a puzzle, but it stays very limited and see the results of Lineas that also it's one of the biggest cargo airlines in Europe, and it stays very, very difficult. I think then there is more to say and there is more flexibility in -- along the water with container terminals along waterways.

And with that said, there are no further questions at this time. So Joost, unless you have any concluding remarks.

Thank you all for listening. And I think we can say that we finalized '25 as promised, and we just started up '26.

And let's focus on that, and we will come with the first outlook at our full year results at the end of January. And in the meantime, we will focus on our clients and our operations.

But anyhow, our balance sheet is ready for the future. Thank you, and see you all soon.