Aedifica Stock

Ladies and gentlemen, welcome to the Aedifica Half year 2026 Results Conference Call. [Operator Instructions]

Now I will hand the conference over to the speakers. Please go ahead.

Thank you. Good morning, and welcome to this very first half year webcast for the combined and new Aedifica Group. As usual, we will walk you through a couple of highlights, financials that will be presented by the CFO. I will dive into the portfolio and hopefully tackle some of the key messages, and then we will switch to the outlook and end with a Q&A.

Now this being said before Ingrid will start presenting the results for the first half year, perhaps looking at some of the highlights of the first 6 months of the year. And no surprise, of course, a lot of attention went to completing the offer on the Cofinimmo shares and having the merger done by the 1st of July. These are things that you know, may be zooming in into the integration and the synergies, which probably will be the main attention points. At this point in time, I think there, the message is very clear. We are well on track in terms of integration. So ExCom and the Board of Directors are in place. Countries have been appointed now for all of the 9 countries. Our target operating model has been updated and is being rolled out throughout the group. We will be, in September, start working on the organizational chart, meaning that the n minus 1 layer will be appointed and teams will be decided in the next coming weeks and months.

We have selected all IT systems that we are using and will be using within this new combined group. So we are absolutely on track. And the positive thing here also is that it starts to translate into synergies. Based on what we see and know today, we can confirm that we will reach at least EUR 16 million of run rate synergies in 2027, but already also expecting that in the course of this year, roughly EURO 5 million or even a bit above EUR 5 million of run rate synergies will already start kicking in, in 2026. Other than that, we've not only been working on the Aedifica Cofinimmo integration. I think that the teams stayed in the market and we're also active in terms of new investments. Taking into account the summer months during which a couple of these deals have landed. We're now at almost EUR 200 million of new investments, combination of standing assets and projects that we are adding to the development pipeline, and we've seen 13 projects out of the group. The development pipeline being delivered in the first 6 months. So this gives you an idea of what we have been doing.

Switching now to the financials.

Hello. Good morning. So when we have a look on the income statement, you can see that for the first 6 months, Aedifica report an EPRA earnings per share of EUR 2.71 per share, which is an increase of 5% compared to the first 6 months of 2025. So this is demonstrating that the combination of Aedifica and Cofinimmo was EPS accretive on day 1. When we look a little bit more into detail in the income statement, you can see that rental income was up at 62%, resulting in an EBIT margin of 86.6%. This EBIT margin is slightly influenced by the fact that some pretax items on the Cofinimmo side dated from the pre-change of control and were not included in the income statement. If we calculate a more normalized EBIT margin, we would come to an EBIT margin of 85.5%.

Average cost of debt is still very attractive at 1.9%. Later onwards, when I talk a little bit about the financial debt, I will also give some outlook how we see this evolving in the coming 2 to 3 years. Then going from the EPRA earnings towards the net results. So the main items that are included in that calculation are the changes in fair value of the investment properties. Globally, we can say that the valuation of the portfolio is slightly positive, mainly driven by the impact of the U.K., the Netherlands and Spain based on strong operator performance, but also the indexation.

Then we have the contribution of the bargain purchase price gain -- the bargain purchase gain, the so-called badwill, which was already included in the income statement at the end of Q1 and which is actually the difference between the equity value of Cofinimmo, including the PPA adjustments, minus the market price of the new issued shares. But in itself, no difference in comparison with the Q1 consolidation. Then we move over to the integration costs, which are excluded from the EPRA earnings as they are nonrecurring, and they represent after the first 6 months, approximately EUR 5 million.

Now looking a little bit more into the rental income. So on a like-for-like basis, there is an increase for the portfolio as a whole of 1.7%. This can be split in 1.9% coming out of the indexation, plus 0.2% coming out of rent reversion and minus 0.4% of the FX impact. When we purely look at the health care portfolio, then the like-for-like stands also at plus 1.9%. But we do see differences between the countries, and we will go a little bit through the different countries in which Aedifica is invested. So first of all, when we have a look on Belgium, you can see that the like-for-like is slightly below what you would expect based on the indexation and it is slightly influenced by some rent renegotiations that took place in the Belgium portfolio.

Then we move over to Germany. So in Germany, you will see that inflation always kick in with a delay because indexation of the rent contracts only happens when a certain threshold is reached and it is also kept. So depending on the contract between 60% and 80%. We do expect that going forward, like-for-like in Germany will continue to increase. But like I said, it will never be the full impact of the inflation and come with some delay. Then we move over to the Netherlands. So Netherlands a very high like-for-like, 5.1%. This is influenced also already mentioned at the end of Q1, there were 2 assets in the Netherlands where we changed a little bit the business plan, the business model. So we went from a B2B model towards a B2C model. This means that we are leasing directly to the residents, and that also means that the rental income goes up.

There's also some additional property management costs that are included as well. But what you see here in the top line is the increase of the top line. When we would exclude those 2 assets, then the like-for-like of the Netherlands would be slightly below 3%, so more in line with what you would expect based on the inflation. Then we have the U.K. So U.K., a like-for-like of 5%. So this is a market where traditionally we will see a floor at 2% and a cap at 4%. Still, we can show a like-for-like above the level of the cap, and that is based on the profit trends and the hardwiring of some of the profit trends that we can realize in the U.K. following the strong operator performance.

Then we move over to Finland. Finland, a low like-for-like 0.4% related to the fact that almost all lease agreements in Finland are indexed at the beginning of the year and January had a very low inflation in Finland. Then we have Ireland and Spain, where we follow the inflation of the country. France is also showing a somewhat lower figure related as well as Finland to the fact that in France at the beginning of the year, there was slightly negative indexation. So gradually, we do expect that in the course of the year, France will start to improve somewhat. Then you will see that we report a slightly negative like-for-like on Italy. As a reminder, there are only 8 assets in Italy, and there was a lease extension combined with some limited rent reduction that were applied retroactively since the beginning of the year on one asset in Italy. Then we have the offices, negative like-for-like of 1.3% related to some departures and renegotiations. And then finally, the distribution network, so the pubs that follow the inflation in the [indiscernible].

Moving over towards our debt-to-asset ratio. So at the end of June, Aedifica reports a debt-to-asset ratio of 42.7%. This is influenced by the fact that in Q2, there was a payment of the dividend. So the debt-to-asset ratio is a little bit at the higher end where we expect it to be. Having said that, we have a financial policy of keeping the debt-to-asset ratio around the 43%, where we consider 45% as the absolute maximum.

Then we will talk a little bit about the financial debt. So in total, Aedifica has an outstanding financial debt of EUR 5.3 billion. During the first 6 months, we have been very active on the refinancing and total refinancing has been completed for more than EUR 900 million. This is including a new syndicated credit facility, sustainability-linked of more than EUR 600 million. We have also been negotiating -- renegotiating some bilateral credit facilities, and we did work on the short-term treasury notes. So anticipating the merger with Cofinimmo on the 1st of July, the CP program of Aedifica has increased in size from EUR 600 million to EUR 1.5 billion, taking into account that the program of Cofinimmo will stop after the legal merger that happened on the 1st of July.

It is our internal policy to have the CP that is outstanding below 20% of the total outstanding debt and the CP paper is fully covered by committed credit facilities. When we look at the graph, you can see that the combined entity can benefit from diversified sources of funding. So bank financing is representing 44% of our sources of funding of debt funding and debt capital markets, so including the short-term treasury notes stands at 56%.

When we look at our financial debt KPIs, so the main points to highlight, first of all, the credit rating. So immediately after the change of control, the credit rating has been increased towards a BBB+. And during the annual review that took place in July, S&P has reconfirmed this credit rating as a BBB+ with a stable outlook.

Now when we look at the interest cover ratio, a very strong interest cover ratio, 7.6x. Net debt-to-EBITDA slightly went up following the combination with Cofinimmo, so currently at 8.3x. It is important that I mention here that this net debt to EBITDA is not adjusted for the fact that in the debt, there is already debt included for projects that are still under development, under construction, but for which CapEx has been spent and funded with debt, while the EBITDA is not adjusted for the fact that in the future, this will lead to additional rental income. 61% of all of our financial debt is linked to sustainability KPIs or linked to the sustainability financing framework. The debt is on an unsecured basis and the average cost of debt, as mentioned, stands at 1.9%.

When we look at the debt maturity profile, you can see on this slide that we have currently a debt maturity profile of 3.3 years. There's not a lot of refinancing that still needs to be handled in 2026. There is plenty of headroom available on the committed credit facilities that can cover the liquidity needs in the business plan, at least up to January 2028. Having said that, we do believe that it is important that we work on the weighted average debt maturity with the intention to extend it further. So we are considering issuing a bond in the second year half. Average cost of debt currently of 1.9% without taking into account issuing a bond, average cost of debt would stay around 2% in '26 and '27 and then gradually start to increase towards 3% by the end of 2028, 2029.

Now if we start to work on the average debt maturity, that process will go a little bit faster. So that means that the average cost of debt probably already in 2027 will be somewhat above the 2% and that the increase that we are anticipating towards the 3% by the end of 2028 might kick in a little bit faster. On the hedging, so there, we can say, currently, we are well protected with a hedge ratio of 90% and a weighted average hedge maturity of 3.4 years. We have a policy that we should be covered for at least 60% for the coming 2 to 3 years. You can see that we are above the 60% until the end of 2028. So also considering to work a little bit on additional hedging starting from 2029 onwards.

Thank you, Ingrid. Now walking you quickly through a couple of features of the portfolio, but also allowing me to zoom into some of the more key attention points. But maybe starting, first of all, with probably things that you know already quite well. The segment breakdown of the portfolio. As such, there is not much new information on this slide. Maybe pointing out that 75% of the focus of the company today is on elderly care, senior housing and combinations, which also in the future will remain the core of the portfolio and the percentage of 75% seems to be a quite healthy percentage. Also, as you know, pointing out that 11% is about noncore activities that will be divested, and that will open up a bit more room for diversification within the health care space, and then we're targeting amongst others, fewer centers that you also see popping up already today in the portfolio.

When looking at the geographical spread of the portfolio, you see both the spread based on the total portfolio, including noncore assets on the slide, which leads to a quite high percentage for the Belgian market, 33%. But when looking only at health care, you will see that the Belgian market represents 26%. Germany, 20%, but all other countries well below 20%, which to us means that this opens really a lot of opportunities to grow in some of the countries that we think are quite promising today. And you heard me saying on quoting in the past that countries like Ireland, U.K., Spain, Southern Europe are looking quite promising to us, and we do not have a lot of exposure in most of these countries today.

Then switching to what I consider to be one of the key messages of today's webcast is basically confirming that the positive trend that we've seen in Europe in terms of improving operator performance is clearly continuing and is clearly confirmed also this time. Looking at our exposure, well, no surprises there. If you look at the top 10, you will find the somewhat bigger European, very often French origin players that are also in our portfolio. You will find a lot of local heroes in the portfolio, and you will see some not-for-profit even public operators popping up like, for instance, the Finnish municipalities. All in all, I think this is a very well-diversified portfolio, not showing any overexposure on one of the specific groups. But then switching, I think, to the underlying numbers, which are even more important.

First of all, occupancy. I think I should stop saying that occupancy recovered in Europe post-COVID because we're now back at levels that we've seen pre-COVID. If you look at the average for the care homes in the portfolio for which we have sufficient information, we're now at 91% occupancy. So I think that we totally normalized in that respect. We've also seen that over the period in most of the countries, occupancy kept improving and is now at a very healthy levels in all of the countries, once again, for which we have sufficient information. And even when we look at the public available numbers from the bigger players like Clariane, emeis and Attendo, we do see the similar healthy occupancy levels popping up. So I think that in that respect, the market is totally back to a normal situation and that the pressure from the aging population that will accelerate, by the way, in second half of '20s will probably keep putting pressure on -- upward pressure on these numbers. But that translates in very strong rent covers throughout the portfolio.

What you see on the slide are the countries for which we have sufficient information. And I can confirm that it is and remains the ambition of the company to keep improving the quality of that information, also meaning working towards the point in time that we can offer that type of information for all of the countries that we're in. But based on what we know today, I think this shows a very good well, average of what you see happening in Europe with the very strong rent covers that we see in the U.K. and Ireland, also ramping up in countries like Ireland and for instance, Spain, which is not on the slide, going very, very quickly once new premises are being delivered.

Also, the Netherlands are now showing a quite strong rent cover, even though you would have -- probably have noticed that the country has a somewhat lower occupancy rate. But nevertheless, that allows the operator to come with a very strong rent cover. And then the countries that probably suffered a bit more from the COVID experience and everything that happened in 2022, Belgium and Germany, but Germany back at 1.5x, which we consider to be a normal rent cover, Belgium at 1.4x, which we believe is a decent rent cover but should improve in the future. But all in all, I think Europe is now showing once again a quite strong operator performance throughout the portfolio.

A couple of other slides now, lease maturity, no surprises to what you've seen in the first quarter update. So the average WAULT of the portfolio standing at 15 years. If you just zoom into the health care portfolio, it is 16 years. You also see on the slide what is the situation in all of the countries for the health care portfolio with typically countries close to 20 or even above 20-year WAULT, typically countries where you have quite long initial durations and then some of the countries showing a somewhat lower WAULT, typically countries where initial lease terms are somewhat shorter.

Then going into the yields on fair value and then immediately switching to the like-for-like, which is probably more interesting. But looking at the whole of the health care portfolio, we are now -- actually, I should say the whole of the portfolio, we are now at 6% average yield on fair value. But as I said, switching maybe immediately to the like-for-like portfolio valuation. What you see on the slide, starting on the left side of the slide is the evolution quarter-to-quarter, knowing that since the first quarter of 2026, you also will find the impact of the Cofinimmo portfolio, including the noncore assets, offices and pubs. And you will see that in the second quarter of 2026, we've seen a 0.1% positive like-for-like valuation.

If you would zoom into only the health care portfolio, these numbers become 0.27% for the first quarter and 0.15% for the second quarter. So it shows the stronger underlying performance of the health care assets. And then looking at a 6-month period, which leads to a somewhat different scope from the Q-to-Q analysis, then you will find that health care valuation increased with 0.5%, and it gives you an overview of what is happening in the countries with perhaps no surprise, the U.K. popping out based on the very strong operator performance in the country, but also the Netherlands, probably for the similar reasons as what Ingrid just explained when she zoomed into the like-for-like rental growth.

If you add to the health care portfolio, the offices and distribution where we've seen some slightly negative valuation, then for the whole of the portfolio, you will find that during the first half year, like-for-like valuation increased by 0.25% but I think the message is clear. Valuation remains very stable, slightly, slightly increasing in today's market.

A quick zoom on the noncore assets. I'm not going to walk you through every number on the slide. But importantly, I think for more important when looking at the offices, as you know, this is a portfolio that today is very much focused on Brussels CBD, showing a 6.3% fair value yield. And when looking at the distribution networks, this is a Belgium Dutch portfolio, where we have some asset rotation ongoing. And each time we are able to sell these assets above fair value, looking at a fair yield of 7.4%.

Now I'm going to use this slide to zoom into our divestment ambitions because we're now talking about the noncore assets in portfolio. I think it's very clear that we can in terms of priorities, start with the EUR 300 million of Belgian care homes that we need to sell because of the requirements coming from the Belgian competition authorities. This is by far our first priority in terms of divestments. Situation today is quite clear. We have identified the portfolio that we will be selling. Vendor due diligence is in place. Structuring is in place. Tax rulings are being applied for. Today, we are still in an off-market phase, meaning we have very limited contacts with very selected number of interested parties, which we are talking. But if that does not give us sufficient certainty that we will be able to land the deal within the period that we want to see deal landing, we're going to that immediately, then we still can switch to a structured more public open market process. But as we speak right now, it is totally off market.

The ambition of the company is very clear. We want to see land this deal in Q1 2027. Then going to the offices, which probably is our second priority in terms of divestments. There the situation today is that we are focusing within the company on building a business plan for the whole of the portfolio so that we can mark the portfolio as a whole, but based on our own assumptions and our own assumptions also about the future potential of this portfolio. We have off-market contacts, so we are being approached by parties that we think are very valid co-investors or investors in this portfolio, but it is totally off market at this point in time. No intention to start any structured process in the very near future, preferring to keep working off market at this point in time. Ambition there is also very clear. We want to see this land in 2027. Not specifying which quarter probably will be more towards the end of 2027, but we're working with that time line in mind.

And then finally, talking about the pubs, but no pun intended, but that we have put on ice today. It's not our priority at this point in time to sell off the pubs. There is a lot of interest going to that part of the portfolio. But for lots of reasons, not our first priority and amongst those reasons, also the fact that it is a quite high-yielding portfolio. So we're not in a hurry to sell that portfolio today.

Now having given some -- added some color to the divestment program, of course, when we start divesting and recycling capital, we will have to make sure that we are able to redeploy that capital. So looking at the portfolio growth in terms of developments and investments. Well, basically, we're working with some sort of 3-layer approach of the market. I think the first layer of the future growth of the Aedifica Healthcare portfolio is coming from the development pipeline. We are constantly refueling the pipeline. We target a pipeline on average of EUR 500 million to EUR 750 million at each point in time. So it is normally rotating relatively fast compared to the past at this point in time, and we're targeting 6.5% yield on cost when talking about refueling the development pipeline.

There is a next slide that we will zoom into the pipeline as is today. But on top of that, the teams are working, and this is what we call our daily ongoing investment activities. So they're working on acquiring standing assets focusing on small to medium-sized portfolios, could be from a single asset to smaller portfolios. You probably have seen popping up some examples in the first half of this year. Of course, the advantage here is that it is immediately cash flow generating and that allows us also to make sure that the deals that we do should also immediately be EPS accretive. And then thirdly, bearing in mind that the numbers in terms of divestments become a bit bigger one once you start thinking about the office portfolio. We are also working on potential M&A deals, meaning large-scale opportunities.

We have a set of targets that we keep monitoring and that we can accelerate if needed or if we see that the divestment program is also accelerating. So that's the way that we are approaching the combination of the divestments that we need to do and the investment that needs to follow to make sure that we remain accretive or limited dilution coming from timing gaps between divestments and investments.

Mentioned the development pipeline. You've probably seen the numbers in the press release this morning. A couple of things to point out here. There's a lot of focus right now on the Spanish market in terms of new developments, also on Finland and the U.K. You also see Germany popping up again with a more important number. That is basically a combination of projects that we're looking at, but also typically in the German market, the standing assets for which we already have signed a commitment to purchase, but we're waiting for some of the conditions to be fulfilled, they pop up in the development pipeline. This being said, when looking at when these assets will be delivered, there's a lot that still is going to happen in 2026, but also in 2027. If you look at the amount of buildings or projects that will be delivered in the next probably maximum 18 months.

We're talking above EUR 450 million. So that in itself already is compensating for the divestment of the Belgian care home portfolio. And then I think another very important feature of this pipeline is it's not speculative development. All of the projects that we're starting are 100% pre-let. So we're not taking any risk there. In terms of yield on cost, we had a minor setback because of some legacy deals in Spain, which is now bringing the yield on cost to 5.8%, knowing that we already were at 6.5%, but we're working to bring it back as soon as possible to 6.5%, knowing that we are targeting a 6.5% yield on cost on all new deals that we're adding, when I say 6.5% on average on all new deals that we are adding to the pipeline. But that is, as I already mentioned, work in progress.

And then this brings us to the outlook. I will let Ingrid go into that.

Okay. So the outlook, as you have probably all seen the guidance for the full year 2026 that the company has given this morning is EUR 5.35 per share. This is slightly above the consensus in the market that stood at EUR 5.33 per share and represents an increase of 4% compared to 2025. So DPS, there, we already announced at the Q1 results publication that we are expecting a dividend of EUR 4.20 per share for the full year 2026. Well, this outlook takes into account rental income of EUR 656 million and EPRA earnings of EUR 436 million. We expect that by year-end, the debt-to-asset ratio will be close to the 42%. There's already impact from the synergy savings. So for the full run rate synergies, we expect EUR 60 million in the course of 2027. But in the second year half of '26, we expect that there will already be an impact of EUR 5.5 million.

When we look at the asset rotation, so the business plan includes the, I would say, the ongoing asset rotation that is around EUR 110 million, out of which half of it has already been done at this point in time. Stefaan has commented on the strategy for the Belgian health care. So there will be no impact of the disposal of the Belgian health care assets on the rental income in 2026. Then average cost of debt in this business plan is estimated to be around 1.9%. I explained later earlier in this presentation that we might consider issuing a bond in autumn. That will lead to some additional financial charges, but would still be able to get to the EPRA EPS of EUR 5.35 earnings per share.

We did not include assumptions in the business plan as usual on the portfolio valuation and GBP is estimated at EUR 1.15. We continue to repeat that we believe that the fundamentals in our sector for elderly care are still very strong. First of all, there is a demand that is driven by the demographic evolution, but there will also be a replacement of outdated stock that will drive demand for new care facilities. Secondly, this is backed by the improving operator performance that we see that is still continuing in all of the countries where we are currently present.

Taking all of these elements into account, I think that we can round it up, and it's up to me to invite you to the Capital Markets Day that will be organized at the end of November and where we will give you a little bit more insight in the strategy and how we see Aedifica evolving in the coming months and years.

I think we can open the Q&A at this point in time.

[Operator Instructions]

The next question comes from Vivien Maquet from Degroof Petercam.

So 2 questions on my end. Maybe the first one is on the off-market, on-market comments of the health care portfolio. Just trying to understand at what point and what will be the criteria to adapt from an off-market to an on-market structure approach for the portfolio. If I understood correctly, you aim to get that done by the summer, if I heard correctly, for the health care portfolio. So what time frame do you have in mind to switch from off-market to an on-market structure?

Okay. Without going into too many details because we will start explaining in too much detail our own strategy that could, in the end, be held against us. But this being said, the main criteria will be deal certainty and timing. And the off-market process that we are running is really limited to a very small number of investors that might have an interest in this portfolio has also allowed us to structure the whole portfolio, make sure that we have the right assets in place, make sure that we have the right structure in place, also allowed us to come up with this tax ruling that we have applied for.

So that is also one of the positive benefits coming from these off-market conversations. But at a certain point in time, you need to have deal certainty, meaning that this will lead to something and you're not just talking for the sake of talking. And secondly, timing, I mentioned that the ambition is to see this land somewhere in Q1 2027. So that means that if you do not have the deal certainty we want coming out of the off-market talks, we still have the opportunity to switch to a structured process. And okay, without being too specific, but that means that a structured process, if needed, could start before the end of the year.

Okay. Very clear. Then maybe just on the operator profitability. So you commented that indeed, we see improved occupancy. But if I compare rent cover versus end of the year, I see some slight decreasing left and right, very small, but just trying to get the full picture there, if you can, on what do you see from operator profitability?

Yes. But I think that we're now reaching the point I mentioned that I should stop talking about a market recovering from COVID and everything that happened in '22 and '23. It's now a market that's going into, I think, more normal business mode, which means that in some countries in terms of occupancy and rent cover, you will start to see kicking in some, for instance, seasonality, what we already saw before COVID, meaning that -- and not want to sound too cynical, but winter or very hot summers can lead to a bit of excess mortality, which then will reflect in the numbers depending on what your cutoff date is. So what we now see in the numbers is nothing that makes us believe that there is a change in the trend, far from it. It's more things that we also saw before COVID referring to, in some cases, some seasonality.

Maybe also pointing out that if you look at the underlying trend in most of the countries where occupancy was a bit lower, it keeps improving a lot. So you see that the drivers, meaning that there's more demand coming from the market and a market where there hasn't been a lot of supply over the past couple of years is putting pressure on occupancy. And we do see in countries like, for instance, Spain and the U.K. that operators still are able to -- well, because of the pricing power they have to show very strong margins. So the trend remains totally intact.

The next question comes from Steven Boumans from ABN AMRO, ODDO BHF.

I have 2, ask them separately. The first is on the Netherlands. 5% like-for-like growth and positive revaluation seems very strong. Could you please provide some more color if we can see more of this going forward, especially you mentioned the contribution from changing B2B to B2C. So what proportion of the portfolio is currently B2C? And how can we see that mix evolving going forward? It's a Dutch thing or maybe more than that?

Yes. Okay, first of all, I appreciate that you appreciate the growth in the Netherlands, but this is amongst other things, the result of an experiment that we're running. We experiment is maybe the wrong choice of words. But as you very well know that in the Netherlands, a lot of the institutional investors that are looking into health care real estate, they are applying more a B2C model where they acquire buildings and go into a relationship as landlords directly with the end user, so the people living in the buildings and the operators being some third party providing care but are not becoming the tenants of these landlords. Given the fact that, that is very -- something that we see a lot in the Netherlands, we had a look at a couple of the buildings that we own that are basically also more focusing on independent living where we could apply a similar model. And having run the numbers and talk to people in the market came to the conclusion that it will -- well, if you do it well, of course, it will have a positive impact on your rental income.

So basically -- and I'm talking net after costs, you get a bit more current cash flow out of it. And secondly, it has a positive impact on valuation because for lots of appraisers, you're basically showing to them that this building has a value in terms of lot for lot sales, which has a positive impact on valuation. So we started turning if I'm not mistaken, 3 buildings in [ Antoven ] from a master lease with the operator into a B2C model where we are the landlord having a relation directly to all of the people living in the building, but having also some sort of master agreement in place with the operator that will keep providing the services. It's something that we think we might be doing more if this goes well in the portfolio in the Netherlands. Whether it opens up possibilities to other countries, that remains to be seen. It really will depend on local markets.

Okay. Clear. Let's see if we see more of that in the Netherlands. Then a different question on Belgium. The EUR 300 million disposals, could you provide some color whether you expect that to be at the disposals, anything neutral, anything accretive or dilutive versus year-end '25 NAVs? And what assumptions on expected private exit yields underpin that broadly?

Yes. For one or other reason, the line is a bit less clear. So I didn't really understand everything you were asking about, but this was about the Belgium divestments. So to add some color there based on the conversations that we had and depending on the structure that you can put in place because in the end, as you all are aware of, there's always tax leakage involved and if you can limit that, that has a positive impact. But from what we know today, we can work within a structure that allows us to limit tax leakage. So that means that basically, we are not expecting that this will come at important discounts or higher discounts or discounts at all. So that's the basically the assumption under which we are working today. That's one thing.

Secondly, also back on simulations is that normally, we should be able to reinvest the recycled capital coming out of this transaction into markets where we have access to similar net yields. And I'm partly also referring, which I did during the presentation to the development pipeline, which is already building up and already will lead to deliveries up to EUR 450 million in the next 18 months. So to a certain extent, already preempting the question.

So all in all, maybe to summarize is that we're actually aiming for at least a neutral impact in terms of EPS and hopefully NAV, but actually have the ambition to do somewhat better than that.

Very clear.

[indiscernible] how the market evolves in the next couple of weeks and months, of course, yes.

The next question comes from Frederic Renard from Kepler.

I hope you can hear me properly. My first question would be on the outlook and the guidance. I mean, in the past, you have been guiding relatively prudently to the market. According to you, what could be a positive element of surprise going forward leading you to beat that guidance? And I mean, specifically on the EUR 60 million synergies, I remember last year, you were quite optimistic on that figure. So is it still the case? That's the first question.

So I do think that today, we clearly have a path to go to the EUR 60 million. When I look at the guidance for '26, it might be that we -- currently, we have included EUR 5.5 million. We might go a little bit faster on that. So that could be a potential for some upside that can be identified. And there is also some possibility that we might go above the EUR 60 million. So we have a clear path to get to the EUR 60 million and the fact that we already have that today in place gives us a certain comfort to say that we will have at least the EUR 60 million. Then on the outlook itself, what are the other elements that could be a little bit contribute on the positive side. That is on the costs as well, property management cost as overheads.

There might be a slightly positive impact going forward, I would say. There was always the impact of GBP. So currently, like we said in the business plan, we assume EUR 1.15. Currently, GBP is trading a little bit higher. So if that continues for the coming 6 months, that will also have some slightly positive impact in our rental income. So there is some potential that we will be above the EUR 5.35 per share that we have announced for '26. But of course, there can also be incidents that occur in the second year half. So there always will be some kind of buffers in the budget as well and in the guidance.

And just to be sure, your outlook to account the bond you [indiscernible] right?

Yes. Like I said, so when we estimate the impact that a potential bond issue could have on the EPRA earnings, it can still be included and keeping the EPRA EPS at EUR 5.35. So the impact, I need to be a little bit clear on it that we estimate that it could still have in '26 would be between EUR 500,000 and EUR 1 million in the financial charges, but that would still allow us to have the EPRA EPS is EUR 5.35.

Okay. Clear. Then maybe a second question on the office portfolio. So I see it's down 0.8% year-to-date. I would love to have a bit more detail on your discussion because you're mentioning for the last year that you have been approached for that portfolio. I'm a bit surprised because I don't see would be a natural buyer for assets to be honest. So maybe can you give a bit more color on that?

Yes. As much as I would love to answer that question, I don't want to scare away the parties that we have in mind at this point in time. Maybe adding to that without dropping names because that's something I'm definitely not going to do. But what we are working on today and the assumption under which we are working today is that we had some quite interesting inbound from a limited number of parties, to be quite honest, that showed an interest in the total portfolio, but we're also very open to structure a deal that would make sense for everybody involved, meaning Aedifica and people willing to step into the equity behind this portfolio. So this is an avenue that we're working on with indeed a couple of names in mind. It's not a long list, fair enough, but it is a list of people that have at several points in time confirmed their interest in the idea of working with that assumption. So that is basically what we're preparing and doing at this point in time.

So I hope this will shed a bit more light on the [indiscernible].

And maybe if I may, a last one, totally not related to that, but you are referring to some renegotiation in Belgium, which brought the like-for-like below inflation. And Italy, you have seen some renegotiation, as you mentioned, of course, limited number of assets, but still like-for-like going down. I'm just wanted to touch upon first on Belgium. Do you think it's over in terms of negative renegotiation, sorry? And then maybe for Italy, is this -- can we conclude that Italy, whenever you will have some renegotiation, you will be in a weak position to renegotiate rent at market rent?

No, I think for Italy, it was really incidental because actually, the renegotiation that took place was more than one asset, the lease extension, and there was only one where there was a rent reduction. So it's certainly not to be generalized for all those assets, all those still limited to 8 assets. So it was a very specific case there. When we look at the Belgium portfolio, I think the market is aware of the fact that Armonea has been renegotiating. And this has -- I think we also disclosed this in the half year report that we had discussions on a limited number of assets within the portfolio.

Some of the operational activities have or will be transferred in the coming months. And there was also some limited rent reduction because we can still show a positive like-for-like in the Belgium market. So also there, it should not be considered that going forward, you have to take into account that there is still a lot of renegotiation that is up. There might be some cannot be excluded. Like we said, there might be incidents also in the coming months, but not expecting that the like-for-like would -- that you normally would expect based on the inflation to occur that it would completely be jeopardized by rent [indiscernible].

Yes. I might -- just to maybe add some color to this. First of all, specifically for the Belgian market, we do see rent covers now, well, as I said, not at the level where we want to see them. We would love to see them a bit higher in the Belgian market, but they're definitely in a very decent zone. So I think that the issue for the whole of the Belgian market is that it is not an issue as such for the whole Belgian market. It's more incident related. And when you look at the like-for-like growth for the whole of the portfolio, in the end, we do still have positive rent reversion on top of inflation in the portfolio. So I think that underlines what Ingrid just said. Incidents can happen, probably will happen, but it's not as such a trend that we see or expect to the whole portfolio and not even to the whole Belgian market.

The next question comes from Veronique Meertens from Van Lanschot Kempen.

Perhaps first one follow-up on that rent cover of Belgium. You mentioned indeed it should improve in the future, but occupancy is actually relatively high. So what makes you more comfortable? What should drive that improvement in the cover ratio in Belgium then?

Okay. Revenue per resident. Without going into too many details because I can talk about it quite long, but I think if you look at the situation in Belgium, it's quite similar to the rest of Europe, facing the same issues and the same challenges, meaning there's a lot of pressure now starting to kick in on the occupancy of lots of these houses. I think that what should improve in Belgium is that the pricing flexibility that operators have should improve and now it's becoming more technical, but part of the income of a Belgian operator is directly coming out from social security money. Now I'm not expecting to see a huge increase coming from that side because the country has other issues to tackle in terms of public debt, et cetera. But part of it is coming from what people living in these homes are paying themselves or their own contribution. And there is a lot of regulation in place, which makes it very difficult for an operator to increase these prices at the same pace as the real cost increases that they are facing today.

But when you look at the reality of the Belgian society, people living in these houses do have the wealth or the means to pay these higher prices. So I think that what is happening in Belgium is that the day prices people are paying in care homes are artificially low because of regulation and should go up to keep track with the increase in cost. It is -- by the way, not something that I'm telling the market. I think that most of the operators, including the not-for-profit operators are very much aware of this and are signaling these matches more and more towards the authorities in the country.

So in that respect, I'm absolutely not afraid of the Belgian market in the medium or long term. There is -- the means are available. It's just a matter of regulation and political will to make sure it happens. And at a certain point in time, it will happen because the pressure on the existing system will become -- when I mean -- and when I say pressure, occupancy will become an issue. And I mean an issue that people will end up on waiting list, and that will keep -- will increase even more pressure on the decision-makers in this country. So it's a matter of, in my view, time.

Okay. Clear. And then perhaps on the acquisition side, could you give some color on what you're exactly looking at? Is that mainly care rooms? Or how seriously are you also looking into further diversification within the health care space, let's say, private hospitals?

Well, obviously, because a lot of the deals that we are doing, and I'm not talking about somewhat bigger M&A, I'm really talking about the day-to-day business, refueling the pipeline, adding cash flow generating assets to the portfolio is generated through the countries. As you know that we have a decentralized operating model with country teams that are our first line also in terms of -- not just in terms of managing the portfolio, but also in terms of identifying potential deals. Okay, they're all very deep into their local care home markets and senior housing markets. So that is something where we do see the portfolio growing, I would say, even organically in the future. The zoom on the cure market is more coming from the top of the company, meaning from the investment team that we have here in Brussels, where we are clearly sending out signals to the market and looking at potential deals outside of the typical care home senior housing space. You mentioned hospitals. We already have looked at some. So this is -- yes, we're absolutely open and very interested in these markets.

The next question comes from Aakanksha Anand from Citigroup.

Two questions from my side. I'll take them one by one. The first one, I think this was partly answered by, but I wanted to focus more on the disposals of offices and the distribution networks. So just wanted to understand what kind of discounts can we expect on the sale of the offices and the distribution networks portfolios that you might be willing to accept? And would the potential EPS dilution be broadly offset by the cost base synergies that we might expect once these assets are disposed? That's the first one.

More than glad to answer the question, but just was thinking, given the fact that I mentioned that there are some off-market conversations ongoing also for the office portfolio. I'm not that much inclined to start being very specific on what could be a potential discount that we would accept to make the deal happen in terms of the offices. This being said, I think that -- first of all, we should -- this is also what we said when we made the offer on the Cofinimmo shares. So we have a quite realistic understanding of what the illiquidity of the Brussels office portfolio means also in terms of pricing. We're definitely not trying to sell this portfolio to people that are going for very high double-digit discounts will not work for us, will not happen either. Not going any further than that. But this being said also, in the modeling that we did, taking into account a discount that we think should be fair in this market.

And the fact that we will redeploy the capital that is coming out of this deal in the health care real estate space at yields that we can find today and probably also focusing a bit more on countries where tax leakage is somewhat more limited. It should allow us to at least keep this EPS neutral. So that is what we are trying to go for when talking about the office portfolio. The pubs is a totally different situation. Looking at the asset rotation that is in place already today, it's a very limited number. I think you've seen in the slides that we sold 12 pubs, we're talking EUR 3 million, but that is always at a price above fair value. So basically, there, we're more expecting that if we would sell, but I also mentioned that we're not in a hurry here, it would come at rather a premium to fair value than a discount to fair value.

Okay. And then you referred to the synergies. To be totally honest, in the modeling that we have done and still are doing regarding a potential divestment of the office portfolio. We are more focusing on trying to find some balance between the price and the conditions at which we sell and what we can do in terms of redeployment of the recycled capital coming from the portfolio. So we're not so much focusing on whether or not the synergies should compensate potential dilution coming from a sale. So I don't have an immediate answer to that question to be quite honest.

That's clear. The second question is just on -- I mean, I think we -- you were talking about previously on the Belgium market and the occupancy and the wait list. So just given the strong demographic tailwinds, is it reasonable for us to expect a more widespread indexation outperformance in other Aedifica markets apart from just the related ones where we are seeing it right now like the U.K. over, say, next 5 to 7 years?

Okay. You're talking that horizon. Okay. But this is now really me expressing my opinion of how the care home market or senior housing market in Europe could evolve over the next 5 to 7 years. So we're definitely talking medium to long term. Yes, I definitely would expect that the market will become more and more private. I'm pretty sure that most of the countries will -- in terms of social security spending will have to focus much more on the high care needs and financing those types of care and probably will spend less public money in financing lower care needs or typical residential care needs and definitely not residential care infrastructure. So that will, I think, create a somewhat different dynamic to what you've seen in the past. And I referred to the Belgian situation.

Now I'm not naive. I don't think political authorities given the sensitivity of this segment. They will never totally deregulate this segment. But they know, and I can give you very straightforward examples, and there was a huge discussion about to what extent there should be more air conditioning in care homes given the long hot summer that we had and the excess mortality that came out of it in a country like Belgium and the authorities were absolutely agreeing, yes, we need more air conditioning, but we're not willing to pay for it. So you don't expect any increases in social security spending.

And on the other hand, we don't want you to increase the day prices you're charging to your residents. That is a position that it will not work. And I think that the pressure on this type of reasoning will increase to the point that they will have to accept that if they want to guarantee a place and a high-quality place for everybody with a care need, they will have to accept more pricing flexibility for the operators. Otherwise, they will not be able to provide for it. I think that is a reality they can't afford it in the near future. But don't pin me on an exact timing.

The next question comes from Lynn Hautekeete from KBC.

I have a first question on operator health. It's a general question. It's not tied to any specific country. But yes, I mean, the current situation ahead is higher energy costs and coupled with wage inflation, which gives me a bit of flash back to 2023. And I think the biggest difference is the fact that the occupancy is higher versus '23. But just in general, do you see an uptick in requests from operators to already negotiate rents ahead of the coming headwinds?

No. No. And that I think we can be quite bold. Well we talked about some incidents that still might occur, but they're mostly always going back to the past and in some cases, I should be also saying referring to some mismanagement on the side of operators or overleveraged for the ones that still are carrying on too much leverage, but that is more referring to the past. Looking forward, we're not being approached at this point in time by operators already trying to strike some sort of deal because they're afraid of inflation that might come their way. This being said, I'm definitely not going to be naive. What we do sense is that the -- well, let's say, the experience that operators had back in 2023 with double-digit inflation has made them more allergic to inflation.

So they are aware of it. But I'm going to repeat what I said, I think, back also in '23 and '24, as long as inflation stays where it is today below 5%, I think it is more than manageable given -- and you referred to it the fact that occupancy and in most of the countries, rent covers are very decent today. And when I say decent, I mean good and strong. So it should -- they should be able to absorb it. But I agree with you that they're more nervous about it because of what they experienced back in 2023.

Okay. Yes, that makes sense. And then second question is on the offices. So I understand the strategy to sell it in one go or find a partner for an equity stake. But then again, I think you did a smaller disposal this summer of EUR 16 million in Brussels. Maybe do you have some yield details on that disposal? And secondly, could we expect some smaller divests still before hoping to close the whole portfolio at one go by the end of 2027.

Yes. I think on the disposals, we can say that the disposals that you have seen, so they are part of the normal asset rotation program. So not related to the more strategic disposals that are targeted.

Yes. And basically, the EUR 16 million, if I'm not mistaken, was entirely linked to an atypical building because it was a [indiscernible] So it was not a normal cash flow producing asset in the portfolio. So there's not a lot you can deduct from that, also not in terms of yields, specifically for the office portfolio. And then secondly, once again, as we're working on this, not going to go into too many details, the idea is to try and strike a deal for the whole of the portfolio, but we are aware that we might want to tweak the portfolio with 1 or 2 assets for which we could find a separate solution. But the idea is that today is that we're working on the whole of the portfolio.

The next question comes from Kanad Mitra from Barclays.

I have just one. Can you give some color on -- beyond the of the Belgian portfolio and offices, how do you see about a normalized business plan beyond this -- the immediate 2026 and 2027 disposals and asset routines in terms of investments?

I'm not sure that we fully understand the question. Are you asking strategy on the disposals or on the redeployment?

No. Once all the disposals are completed, how do you -- can you give us some color on -- how do you see the portfolio evolving? And what sort of investments are you looking at, the volumes and the quality in terms of geography as well? Yes.

Well, at the risk of repeating myself to a certain extent.

It's more of a medium-term question.

Yes. No, no, absolutely understood. But what we do see is that I mentioned that we're looking at more or less 3 different axes in terms of how to redeploy capital that we're recycling or deploy capital in whatever. Talking about the development pipeline, that is a market where we see a lot is happening today. So we mentioned that we are constantly refueling the development pipeline. We are aiming EUR 500 million to EUR 750 million on average at every point in time. But we could, I think, already today increase easily to higher numbers. Bearing in mind that we think, but that's not applicable right now today that we could have a pipeline of development projects of maximum 10% of the total asset portfolio of the company. So we could increase the pipeline to a much higher number, which we think might perhaps even work already today, but for lots of reasons in terms of keeping your DTA under control and managing your divestment program and link it to your investment program.

We don't want to exaggerate there. But that is a part of the market that seems to become more and more liquid. Of course, we need to find the yields on costs that make it worth investing there, but it is becoming a lot more liquid than it was over the past couple of years. Looking at standing assets, we have identified potential portfolios that might come up for sale or where we know that there is, to a certain extent, a willing seller. But once again, it's a matter of timing, not accelerating, willing to accelerate too much today and push your DTA too high. It will have to go hand-in-hand with the divestment policies. But it is also a market where we start to see a bit more liquidity. Not 100% sure that in every case, you already will have sellers willing to accept a yield level that makes a lot of sense today. But once again, we see more liquidity compared to the situation even a year, certainly 2 years ago.

And then thirdly, we refer to M&A. I also mentioned that we have targets in mind. Of course, M&A is something you don't control the timing. It happens when it happens or at least when there's a window opportunity, you have to seize the opportunity. But there are a couple of things that we're working on that we're modeling and that we think we have a good chance if we would initiate really a process. I'm not even talking about public processes, this could be very well off market, but if you would initiate a process that this could lead to a transaction, and we're talking much bigger amounts.

So I think that looking at the situation today and then trying to transform that -- transpose that to, let's say, the medium-term future, as I said, development activity in [indiscernible] the way that we are doing it today is becoming a much more liquid market even in terms of buying cash flow yielding assets, we see more liquidity starting to kick in. And in terms of M&A, we definitely do see a couple of targets that make a lot of sense to us. So if we could fire on all the 3 axes, we could be very bullish about growth. But then again, these things like DTA interest rates and the divestment policy that we need to execute upon also.

Just one small one on -- just to circle back on the standing asset acquisitions that you see potential ones. Who are the -- can you give us color on who might be the potential sellers? I'm not asking you, but just the category of sellers that you see in the market in terms of liquidity?

There are -- yes, okay -- yes, just thinking about how to answer the question without revealing too much. But there still are a couple of asset managers sitting on portfolios that we know will be selling and are willing to sell. clearly. There are some more private owned portfolios where we know because some of these people already reached out to us in the recent past that they contemplate on selling at one point in time. And we do also see basically operators turning back to growth and also turning to real estate investors to a company then, meaning that when they're taking over a holdco, they want to immediately flip the real estate to a real estate investor. Those type of deals are also back today in the market. I think you've seen Alloheim once again taking over something in Germany and flipping the portfolio to real estate investor. We have indications also from other operators that they're back out there looking for these type of growth scenarios.

So we will start now with the written questions. So the first question that was sent to us, it's regarding the leverage. So what is the medium-term leverage target for the combined group? Should we think of 42% LTV as the new normal? Or is there an ambition to move back below 40%?

So I think there, indeed, the fact that we currently have a DTA of 42.7%, it is influenced by the payment of the dividend, but also the fact that following the integration of Cofinimmo, which had a slightly higher leverage of Aedifica, the combined entity has a somewhat higher leverage. I think 42%, 43% is indeed the level that we see currently in the business plan. It's in line with the strategy that we had in the past to say that we want to be in the low 40s. So there is not so much an ambition today to move it below the 40%. Of course, this is something that can evolve over time as there will be important divestments happening in the coming months and years. That can also be a point depending on the evolution of the interest rate environment where we might decide to lower a little bit the leverage of the company. What we can say is that there is no intention to further increase the leverage of the company. So the 42%, 43% is where we want to be. And temporarily, we do not allow ourselves to be above the 45%.

The next question is also on the financing. How are you thinking about the EUR 2.2 billion refinancing requirement coming up in '27, 2028?

So it's something on which we are actively working. For the first 6 months of '26, we have been refinancing almost EUR 1 billion. So it's something that we continue to work on. I already mentioned the bond. The bond will only be a part of the refinancing strategy. So it's something that will be continued also in '27 and '28. Especially in '28, we also have some GBP financing that is coming up to maturity. So there, we intend to access a little bit debt capital markets like we have been doing in the past, and we intend to do going forward. A combination of bond market and for GBP financing, we might also consider going back to the private placement market and all that also combined with bank financing, still have very good access to bank financing and intend to continue that as a source of debt funding in the future as well.

There's a question once again about the somewhat lower rent cover ratios in Belgium, asking, is there a higher risk in Belgium and Germany to see negative reversion in the coming years?

Apart from incidents, we talked about that. But looking at the whole of the Belgian market, you always have to bear in mind that this is, to a certain extent, the market comparable to the French market where the authorities are controlling the licenses, meaning literally the number of beds that can be operated in the country. And they're controlling also and regulating the income of operators because it's either depending on social security money, as I mentioned, or it is what operators can charge to the residents, but also there, you will have a quite strict regulatory framework in place.

So if you wonder about the somewhat lower rent covers, I already explained in one of the previous questions that to me, it is more a political issue coming from authorities not willing to allow operators to have a bit more flexibility in terms of increasing their prices. But the debt is a position that they will not be able to hold because they won't increase social security financing themselves. I'm not saying it never will happen, but it will not be the solution. The only solution will be for the Belgian market to evolve a bit more towards what today you see, for instance, in Spain, in Ireland and in the U.K., U.K. being perhaps the other extreme where you have a total pricing flexibility, knowing that the country when you look at the people in the country, they have the needs.

So Belgium is a relatively rich country, not as a country because too much public debt. But when you look at the people living in the country, I look at all international statistics in terms of what is the average wealth, but also the median wealth in Belgium, it is one of the highest in Europe and I think even in the world. So it's more a political position that is keeping the rent cover relatively low today, but the authorities are facing the fact that they will need to make sure there will be more supply, that the supply will be of high quality and that they will need to finance it one way or another. And the only way forward I see is allowing a bit more flexibility in terms of pricing. And once that kicks in, this rent cover should move to levels comparable to other countries. I'm not going to refer to the U.K., but countries like what you see in the portfolio, Ireland is doing. There's no reason why not something similar should not be happening in Belgium.

Sorry, looking at the questions. How do you explain the low OCR level for Spain?

OCR [indiscernible] occupancy rate. Okay.

Low OCR level for Spain.

I think it can mainly be explained by the fact that Spain is really new developed portfolio. So there is also more ramping up. And even the assets because we only disclose figures, include figures that are related to more mature assets, but then they are just coming out of the development stage, I would say. For the rest, we see no reasons why in Spain, there would be a lower occupancy.

And I think even to that point, I was quickly checking because we're giving a 96% occupancy rate for Spain. So I'm not sure we were actually answering the question. But what we also see in Spain is that with some exceptions that the ramping up of newly built assets being delivered is actually growing relatively fast compared to what saw recently in Western European countries where it could easily take up to 24 and more months to get to a decent occupancy level.

Going to another written question. Okay. This is about the Belgian market, given that you need to sell EUR 300 million nursing homes, have you reached a maximum level of market concentration in this country?

No, definitely not, meaning that the reason why we -- why the Belgian competition authorities asked us to sell a portfolio of EUR 300 million, which basically also could be done in 2 different tranches. That's not the question. It's not about -- they're not trying to limit our market exposure to the Belgian market. They only want to make sure that there is sufficient competition available from the point of view of an operator who wants to do something with the real estate that they own. So we -- what they want us to do by selling such an amount is making sure that other investors have a stake in the Belgian market and will be available in the future as competitors to Aedifica for the operators doing business in Belgium. There is absolutely nothing in what the market authorities asked us or required from us that is limiting us in doing new business in Belgium.

On the contrary, they want us to remain active in Belgium because they want to see more competition. So if we would have to stop doing business in Belgium, then it would even not help them if we sell EUR 300 million. So basically, we are totally free to keep growing in Belgium.

I think that we answered the question, yes. It's quite a long one, agreed. For the offices, Aedifica had the plan to set up an institutional JV and to sell part of it. Is that still a possibility?

I think that is already a reality because that structure is in place, yes.

Okay. I think that we're out of questions. So I thank you all very much for attending this webcast. If you would have any further questions, please feel free to reach out to the people that you know within the company. And hopefully, we will be in touch in the near future or at the Capital Market Day in November in London. Thank you very much.

Thanks for participating to the call. You may now disconnect.

Good morning, everybody. Welcome to the annual results presentation of Aedifica. We will start the session right now. We have more or less 1 hour available, and I do apologize because we really have back-to-back meetings today. So we don't have much time to really go beyond the 1 hour that we've scheduled. As usual, the results will be presented by Ingrid, CFO, and myself. And we will walk you, first of all, through the slide deck, a couple of selected slides from somewhat bigger deck that you will find available on the website and then afterwards, take your questions.

So not to lose any more time, starting the presentation. And as a quick introduction before Ingrid will take over and walk you through the numbers, a quick view on what really happened in 2025 and how we perceived 2025. And I think the best way of explaining it is by having a quick look at this slide, looking at what we were planning to do and what we really did. I think one of the first things that, in our view, are quite important is that the investment market and the project development market in healthcare real estate is back up and running. We see clearly a more dynamic market. We'll go into that and the reasons why, but we also see it in our own numbers and what we have been doing. So we have been refueling development pipelines, acquiring standing assets more than we expected, so for close to EUR 300 million. And we do see clearly, compared to 2024, that this number is going upwards.

Looking at deliveries coming out of our development pipeline, we were more or less on target with 1 or 2 of these projects that have been delivered just after the new year, but we are actually more or less on target. Now compared to 2024, this is a lower number in nominal value, but it basically reflects the market. In the past couple of years, we haven't been refueling the pipeline as we were used to, but we're now back in a phase where we are refueling the pipeline and these project completions in the future will become more contributing to the growth of the portfolio and the top line. And then asset rotation, there, we did what we wanted to do. The must-have to us was divest the Swedish portfolio because as we explained, it was not contributing in a similar way as other geographies to the EPS of the company. So this was a matter of capital recycling.

But towards the summer of 2025, we stopped really pushing hard on divesting because we were live in the market with the Cofinimmo transaction, and that comes in the very near future with a quite ambitious divestment and asset rotation program. So this for 2025 was no longer one of our top priorities. But I think the main thing that comes out of this slide is that we clearly see the changes in the healthcare real estate market that we wanted to see a more dynamic and liquid market, which is basically quite promising for the future.

Now this being said, over to Ingrid, so she can present the financials.

Okay. Good morning. So we will have a look on the income statement. First of all, the EPRA earnings, they are up by 4%, driven by an increase of 8% in the operating result, mainly coming following an increase of the net rental income. We also worked on a further improvement of the EBIT margin, so we can show a strong EBIT margin at 87%. The financial charges went up compared to previous year, although we can still have a very low cost of average cost of debt at 2.1%. The increase is mainly related to the fact that there was a slightly higher average amount of debt outstanding in the course of 2025. The low average cost of debt is related to the hedging that the company has in place. At the end of 2025, the hedge ratio still stands at 88%.

Then you have the corporate taxes. That's the line where you see most of the variance. So it's mainly related to the change of the fiscal system in the Netherlands, the ending of the FDE regime. In 2024, there was still a one-off refund from previous years of EUR 4.2 million. And this year, we recognized in the account accruals for corporate income taxes in the Dutch entities for EUR 4.84 million, explaining the difference in corporate taxes that you see between the 2 reporting years. So this leads then to the EPRA earnings of EUR 244 million or EUR 5.15 per share.

Then we move over to the net result. So the changes that are included from going from the EPRA earnings towards the net result are noncash elements, mainly related to the changes in fair value. So this year, we can show changes in fair value for the investment properties of EUR 75 million. This is the most pronounced in countries like the Netherlands, U.K. and Ireland, where we saw strong increases in the valuation of the investment properties. In the Netherlands, mainly driven by the indexation, U.K. and Ireland supported by a strong tenant cover.

Then we have the gains and losses on disposals. So this is not a new element. You have been seeing this in our income statement since the end of Q1. It's related to the disposal of the portfolio in Sweden, which was sold with a small discount of 3.9% compared to the latest fair value, but the amount also includes the recycling of the historical currency translation from equity into the income statement.

We will now dive a little bit more into detail on the rental income. So globally, for the portfolio, rental income is up with 7%. When we look on a like-for-like basis, we see an increase of 2.7%. This can be split in between 2.6% coming out of the rent indexation. Then we have positive rent reversion of 0.4%, mainly supported by some contingent rents in the U.K. And then there is a slightly negative impact from the currency translation in the like-for-like of minus 0.3%. When we look at the individual countries, you can see that in most countries, the like-for-like is very close to the indexation that we see in each of those countries.

What is standing out is the U.K. related to the contingent rents. This year, we also had a historical catch-up of contingent rents, representing GBP 3.2 million. This is not included in the like-for-like. So in the like-for-like, this figure of 4.7%, it's only contingent rents that are related to the previous 12 months that are included. The second country that is standing out is the Netherlands, where we still had strong indexation and we're also able to increase the rental income on some assets related to the fact that we changed the lease agreement more to a B2C model.

Moving over to the debt-to-asset ratio. So at the end of 2025, we can report a debt-to-asset ratio of 40.8%. It was slightly below our expectations related to the fact that there is an increase in the fair value of the investment properties. Our financial policy remains unchanged. So that means that we target a debt-to-asset ratio in the low 40s, and we consider 45% as a maximum. The debt outstanding at the end of the year represents EUR 2.5 billion. We still have a good balance between financial resources, debt resources coming from bank facilities and the debt capital markets. In 2025, we have mainly been focusing on refinancing with the banks and adding new financing to the debt portfolio as well for a total amount of EUR 585 million. The tenors on those maturities are between 3 and 7 years, and the average credit spread is around 110 basis points. We have also been working on extensions. So often credit facilities, they have extension options at the discretion of the lender, and we were able to extend those and keep the same conditions in place.

And lastly, as a third point, I would like to add that we increased our treasury note program. So there was an additional EUR 100 million that was added to the program, and that was also fully used by year-end. So this allows us to have strong KPIs regarding the debt. So currently, we have a BBB rating with S&P. There is a positive credit watch related to the transaction that has been announced between Aedifica and Cofinimmo that if the transaction can be executed following expectations, there is a probability that the credit rating would improve towards BBB+. Our interest coverage ratio is strong at 6.2x. The covenant stands at 2x. We have a net debt-to-EBITDA of 7.8x, very few encumbered assets. Most of the financing is still done on an unsecured basis. And 53% of our financing is related to sustainable financing. Most of the cases is sustainability linked KPIs that are integrated in the credit facilities.

When we have a look on the debt maturity profile. So there, you can see that there's not a lot of refinancing that needs to be handled for 2026. There are some debt maturities starting to kick in, in 2027 and 2028. The timing of the refinancing of those can have an impact on the average cost of debt for 2026. But we still have a lot of headroom on the committed credit facilities, so more than EUR 740 million. This allows us to be able to be in a position where we can say that the financing needs for the company are covered until May 2027 and with a weighted average debt maturity of 3.4 years. Hedge ratio, as I just mentioned, still high at 88%. It will stay at that level until the end of 2027. Then you see it gradually declining in 2028 and 2029. So what we will do is the same policy as we have been following in the past, where we will add additional swaps to the hedging portfolio based on opportunities that we see in the market.

Handing over to Stefaan.

I'm going to walk you quickly through the portfolio slides, but focusing on what I think is probably the most interesting thing, and that is about the operator performance. But starting with the portfolio itself, a quick helicopter view on a couple of things. No surprises here. This is totally in line with everything you've seen in the past. Focus of Aedifica's� portfolio is clearly on seniors housing, so elderly care, senior housing. Numbers haven't really changed compared to previous year. The geographical footprint of the group, there has been some change, namely that we divested Sweden in the first quarter of 2025. As I mentioned already, that was a matter of capital recycling.

And that now for the first time, I think Spain is popping up with a very small 1%, but we have been delivering a couple of projects in Spain in 2025. And looking at the future, we are focusing a lot on being more active in the Spanish market. Otherwise, absolutely similar image to previous years, the 4 somewhat bigger countries, each around 20%; Belgium, Germany, the U.K. and Finland. And then the Netherlands coming in at 11% and Ireland, where we started investing in 2021, now standing at 7%.

Our tenants. Now this slide, once again, is not really showing you anything new compared to previous years. So it still shows a very strong mix of the somewhat bigger European players like Clariane and Colisee in our portfolio with a lot of local heroes. If I'm not mistaken, the top 10 is exactly the same as it was in 2024. We have a big focus, as you know, for historical reasons on the profit sector in Europe. This sector has been growing and consolidating in the last 10 to 15 years. But we have exposure to not for profit and public operators up to 10%, out of which the Finnish municipalities, 4%, they're popping up on this slide are within the top 10 of our operators today.

And then I think what I was referring to earlier on, and in my view, the more interesting slide. So what is happening with the operators in Europe. First, look, occupancy, underlying occupancy, resident occupancy, we have been showing these numbers now for, well, I think, 1 or 2 years. What we do see now end of 2025 is a very strong occupancy throughout the whole portfolio. Looking at the average for the mature care homes in our portfolio, we're above 90% now at 91%. Maybe explaining a couple of things. Mature care homes, we are applying a very simple and straightforward definition. A mature care home is a care home that is trading for more than 2 years. And if that is the case, it enters into these numbers.

Secondly, we have been working very hard on improving the coverage, and you will see the numbers at the bottom of the slide in the 5 countries for which we are now showing occupancy numbers, we are reaching almost 100% coverage. So this is not a selected part of the portfolio to show you the best possible occupancy. It is really giving a true image of what is happening in the portfolio. Finland is still not on this slide, but even in Finland now, we made a breakthrough in 2025. We're now starting to collect numbers from a couple of operators. As soon as we reach -- well, statistically relevant coverage, we will start also showing you numbers for Finland. But the numbers that we have for Finland are absolutely in line with what we see for the rest of Europe today.

Maybe when looking at the countries themselves, as I said, strong performance throughout the portfolio. But one thing which to us, well, it came as a quite positive surprise even though we had the signs already before is Germany. Germany now at 90% in the portfolio. You know that we have been doing a lot of development activity in Germany pre-2022 with deliveries coming in also after 2022. We now see that the ramping up is really coming to maturity and that the German portfolio also in terms of occupancy is absolutely in line with the rest of Europe. So that's quite strong and positive news also looking at the future.

But then something that we now added for the first time is a bit more information about rent covers in our portfolio. You know that we, in the past, already mentioned the U.K. numbers, but now we're adding 3 other countries. Once again, before we dive into these numbers on the back of a quite high coverage. So this is not a selected number of a couple of care homes to show you the best possible situation. It really is reflecting what we see happening in the portfolio. Maybe singling out, first of all, the U.K., you have comparable numbers in the past for the Aedifica� portfolio. It remains a historically high, absolutely very strong rent cover of 2.4. These are numbers on 30 September, but LTM for the last 12 months. It's even a bit higher than it was in the number that we mentioned at the end of '24, 2.3. So the U.K. operated market keeps showing an incredibly strong performance.

Then looking at the other countries, Ireland, for the people that attended our Capital Market Days in Dublin, I think, in early 2025, we already mentioned there that we see rent covers in Ireland around 1.7. We're now at 1.8. Once again, a very strong rent cover knowing that we started doing business in Ireland back in '21 by acquiring a couple of standing assets, but soon after we start building the portfolio more to development, in this case, more forward purchasing deals. So this is a fairly young portfolio with mature assets, but fairly young. But what we do see in the portfolio in Ireland is that ramping up is going at quite remarkable speed, meaning that for most of these Irish care homes, 12 months after delivery of the asset, we already see occupancy rates going above 80%, in some cases, even reaching 90%, whereas in the rest of Europe, you probably would start to see these numbers after 2 years.

So even when we consider them to be mature, we do see that they come in at somewhat lower numbers and keep growing afterwards. Ireland is really doing much better than the rest of Europe. And on top of that, showing a very strong rent cover. And then you have Belgium and Germany, the 2 countries where we have been explaining in the recent past that we do see operators bottoming out. We're now in Continental Europe, should not expect to see a 2.4 rent cover in the near future because these are countries where there's a lot more public money going into the financing of the operators. But as we mentioned, these countries were clearly bottoming out.

What we do see nowadays, and once again, it comes in as a quite strong message is that on the back of the increased occupancy and lots of other signs that we had in the German market, we now also see a very good rent cover in Germany of 1.6. To put things into perspective, you probably know that over the past 10 years, when asked about rent covers and underwriting criteria, we each time said that what we use as a rule of thumb is that when we are underwriting new contracts, we would like to see a rent cover of at least 1.5. Now Germany is back above the 1.5, at 1.6 and Belgium is actually very close to the 1.5. So you do see, I think, on average, quite strong -- very strong to good rent covers throughout the portfolio in Europe.

Once again, Finland, because we don't have the data coverage comparable to what we see in the rest of Europe. So I'm not going in too many details, but the limited numbers that we see are definitely not deviating from what you see on the slide. So I think it is really becoming a European trend, occupancy back at almost pre-COVID levels and rent covers growing back to normal territory, even strong territory with differences between some of the countries where in some countries, it goes a bit slower than in other countries. But I think that we do see an operator performance in Europe, which is totally recovering, and it is starting to show in operator activity in Europe. To add or to mention one example recently in Germany, where we have seen Domidep taking over Vitanas. So we do see a lot of signs of an absolutely improved operating climate in Europe.

Then going forward to -- well, in this case, lease maturity, I'm not going to spend too much time on this. You know that we have a quite long WAULT and that today is standing at 18 years with a 100% occupancy rate. We really only have a couple of buildings which are vacant today. It's I think also a result of a quite active and proactive asset management that we have been applying certainly in the '22, '23, '24 years. We're transferring buildings to other operators if and when needed, but it results in a very strong occupancy rate. And -- but also maybe pointing out that we are basically activating our asset management in countries like Finland, where on average, the WAULT is a bit lower. It has to do with initial duration of lease contracts that are more around 15 years. But we're making a lot of efforts to make sure that we keep the WAULT also in these countries at a quite high level, resulting in the fact that only 1% of our total portfolio will -- at least 1% of the leases for the total portfolio will come to an end in the next 5 years. So basically, I think that we've managed the portfolio quite well in that respect.

And then valuation. Pretty much the same message as in the past. What we do see now is that when you look at the average fair value yield for the whole of the portfolio, we're now at 6%. So we're actually stabilizing around this 6%. If you look at what happened in 2025, you will see that we've seen like-for-like value increases around 1.3%. If you just look at the last quarter, it's plus 0.4% to 0.5% with a couple of countries outperforming. The Netherlands coming in with 4.9% has also to do with the fact that inflation was much higher in the Netherlands compared to, for instance, Finland, where inflation was actually quite low in 2025. But also the U.K., and I think that is still reflecting the exceptionally high operator performance in the U.K. market.

But what we do see in all of the countries are clear signs of a market that has bottomed out and is basically already starting to turn to growth again also in terms of value. Some of the countries, we do see pluses and minuses. But on average, a lot of signs that the market is back on its feet. And adding to that, that this is also being underpinned more and more by market evidence because we do see a more active investment market. So it's not just valuers making up their minds. I think we start to see more and more evidence in the market.

And then a slide that also is very important to us because this should reflect what we think will happen in the market. It is becoming a more active investment market with lots of potential because operators are back, rent payment capacity is improving. And as we announced at the beginning of 2025, to us, that means that we want to rebuild our development pipeline, and it's actually what we're doing. If I'm not mistaken, end of 2024, we were around EUR 160 million, EUR 170 million. We're now back at EUR 276 million. You do see that we have been quite active in Ireland. I just mentioned that ramping up is going so fast. So there's a clear demand for new capacity in Ireland, and it shows in the numbers.

Our pipeline in Finland, where, as you know, we are full developers is growing again. So after a couple of years where we were slowing down, we're building up the pipeline again, and we're doing it on the back of the criteria that we want to see happening. So that means yield on cost of 6.5% and development margins around 15%. And based on those criteria, we're building up the pipeline in Finland today. We remain active in the U.K. given the strong operator performance, but I flagged before, we remain cautious in the U.K. because we want to avoid building the portfolio on the top of the market when prices are relatively high, which is, I think, to a certain extent, the case in the U.K. today.

And maybe adding, which is not reflecting in this slide yet, but as I mentioned, that we do see a lot of interesting things happening in the German market that just after the year's end, we signed a first new project in Germany. So you do see a lot of potential to build up the portfolio. And then going to the right side of the slide, it's not just about volume, it's also about getting interesting yields. So we are now at a 6.5% initial yield on cost for the whole of this pipeline, whereas I think end of '24, we were around 6%. And if you go back a bit further in time, it was more around 5.5%. So you do see the market becoming more active, more dynamic, and you do see yields and value potential, which we clearly can achieve in this market already today.

So basically, looking back at 2025, actually quite happy with the year, not just in terms of our own results, but more specifically in terms of operators' performance, clearly improving in Europe and becoming -- we're reaching promising territory. And also when we look at investment and development activity, we see a lot more potential in this market. Now then looking forward to the future before handing over to Ingrid, I think it's quite clear that what will be probably catching all the attention in 2026 will be the result of our exchange offer on the Cofinimmo shares. I'm not going to walk you through these slides. You know it. I think that the only -- and the main thing right now is to flag that we are in the middle of the initial acceptance period.

Talking to a lot of people and well, coming across a lot of support in the market. So our feeling is that things are going absolutely well at this point in time. You know why we are doing it. So we explained the whole rationale behind this operation. I can only confirm and repeat what, by the way, also is in the prospectus today. But add to that, that we do really believe that this operation comes at the right point in time because we do see the European healthcare market opening up again, and we do see European operators improving their performance. So I think it is absolutely the right point in time to create this platform that is operationally and financially stronger than the 2 companies in a stand-alone situation. But that then is my bridge to Ingrid so that she can explain what are potential scenarios for the future for Aedifica, either stand-alone or combined with Cofinimmo.

Okay. So this year, it was a little bit particular situation, I would say, to give guidance to the market on our financial outlook for 2026. So how did we approach this? So first of all, we had a look on the business plan and Aedifica�based on the current portfolio. On that basis, we can say that we have a stand-alone budget, excluding any impact of transaction costs related to the project, the exchange offer. Based on the assumptions that we have in that model, we come to a rental income of EUR 370 million. This is an increase of 2.5% compared to 2025.

I think that I need to add as well that in our pipeline, as you might have seen, we are expecting deliveries for 2026 of EUR 160 million, but they will be delivered in the course of the year. So during the first 3 quarters, we are expecting approximately EUR 35 million to be delivered. And then in the fourth quarter, it will be EUR 50 million. So the increase in rental income coming out of the deliveries will be spread out over the year. Then we have a new investment target, EUR 300 million, in line with what we have been announcing this year. But also in this investment target, an important part of it will probably be related to new projects. So for the announcements that we made in 2025, 75% were projects that are added to the pipeline and hence, only later onwards start to contribute to the rental income.

So for this budget, we made the assumption that part of it will kick in around the summertime, part of it will rather only contribute for 3 months to the rental income for the part that is related to the acquisitions. And we also included an assumption on asset rotation. So it's a little bit a standard amount, I would say, EUR 100 million. If you take into account the portfolio of EUR 6 billion, that will be spread over the year in the form of disposals. Then other assumptions that we included and an important one is the average cost of debt. We see it still standing at 2.1% in 2026. This is based on the credit facilities that we currently have in place.

Depending on what we will be doing for refinancing, there might be some impact on the average cost of debt. I'm hinting on the fact if we would go to the bond market, something that we had on the planning, taking into account the average debt maturity that is standing around 3.4 years. So going to the bond market, that would have an impact on the average cost of debt because we are doing the refinancing earlier than that currently is foreseen in our budget, and that is also needed from a liquidity perspective.

Then we have the assumptions on the exchange ratio. So there, you can see that we are cautious on sterling. So in the past, usually, we had sterling standing at EUR 1.15. So currently, in the budget is EUR 1.13. If we would assume that current sterling would be trading at EUR 1.15 where it currently stands, this would lead to EUR 0.03 additional earnings if you have a full year impact.

Then the debt-to-asset ratio, we do not include in our budget any assumptions on changes in fair value. So that means if the valuation of the existing portfolio remains flat, our debt-to-asset ratio probably will be around 42% by year-end. Taking into account all of these assumptions, we are expecting that the EPRA earnings will be above EUR 247 million and the EPS will be above EUR 520 per share.

Having said that, I must add to this that probably this stand-alone budget is more like a theoretical exercise because most likely, we will be in the second scenario, where we will take control of Cofinimmo at the end of Q1. So what will be our priorities under that scenario? So first of all, we will have the first consolidation that will start at the end of Q1. So normally, the capital increase is expected to take place on the 30th of March. So there will be, for 2 weeks, contribution to the income statement coming out of the consolidation. We will work on the integration. So the scoping, planning and the execution; we are targeting to do most of the work in 2026. And it will also allow us to start working on the synergies where we do expect that the full run rate impact will occur in the course of 2027.

We will also focus on the disposal of the healthcare asset disposals, the EUR 300 million that are related to the approval of the competition authorities. So that will also be one of the priorities in 2026. And then we have the intention to work on a legal merger in the second year half of 2026. So this legal merger will allow us to take 100% control of Cofinimmo and to delist Cofinimmo. So taking into account all of these elements, we do not know the exact holding percentage that we will have during the first consolidation exercise, makes it difficult for us to give EPS guidance for 2026 for the combined entity.

So there, we will come back to more detailed guidance for the combined entity at the publication of the half year results, which will happen in the beginning of September. But what we can say is that the dividend policy of Aedifica� remains unchanged. So that means that we will continue to distribute 80% of the recurring consolidated EPRA earnings towards the shareholder in the form of a dividend.

Stefaan?

Yes. Okay. I think that we are now coming to the end of the presentation part of this session. Maybe to allow you to have a bit more time to ask questions, I'm not going to make a long speech about the conclusion. I think it was quite clear. We do see a much improved healthcare real estate market. We are quite confident about the future potential, both of the combined entity, Aedifica, Cofinimmo and the market itself.

But this being said, let's switch to the Q&A. [Operator Instructions] So if you have questions, now it's time to start raising your hands.

Steven Boumans.

I have a question there. You are very constructive on the investment market. Do you also imply that the EUR 300 million stand-alone gross investment target that is a bottom? And second, to what extent could we see some yield compression for the portfolio in '26?

Okay. The EUR 300 million that was mentioned in the stand-alone is, in my view, indeed more a minimum than maximum. So I do believe that there is more to be done in the market, both in terms of asset deals, rebuilding the development pipeline and perhaps even M&A. So yes, I do think that if -- well, we could do probably more. That's one thing. Secondly, yield compression. Yes, always difficult to predict that. This being said, I think that we more or less are now at yields that I think makes sense and will be there for a bit longer time. It might depend from one market to another that there might be some first signs of yield compression kicking in. Sometimes wondering whether that is not happening today in Spain, for instance. But given our expectations in terms of long-term interest rates, I do not see a lot of yield compression kicking in, in the near future. But as I said, the market is really shifting into a much more dynamic mode. So we'll have to see what really happens.

Aakanksha from Citi.

So three questions from my side. The first one, mainly on the acquisition opportunities in the market. So I guess you mentioned that there is an increasing number that you're seeing. Markets are more dynamic now. I just wanted to understand what are the main drivers for the increasing number of deals that are coming to the market now? Is it just because operators want to offload into the property companies, so propcos? Or is it increasing distress in the market? Or is it just the fact that operators are -- the profitability of operators is improving, and that's making it more attractive for more players to enter into the market? So that's first part of the question.

And the second part would be on the acquisitions. What are the top 3 geographies where you are most keen on acquisitions? That's the first question, and I'll take the other two as we go along.

Okay. First of all, so the drivers of this increased activity in the market, to me, are definitely more positive drivers and not negative drivers. So it's not distressed. It's much more the fact that operator performance is improving. And some countries definitely are trying to do something about the lack of capacity. Now for instance, the indication I gave about the Irish market, the fact that ramping up is going so incredibly fast is a clear indication that there is need for more capacity. And this, combined with operator performance that is improving, it means that operators are turning back themselves to growth. They want to build more capacity because they can do it right now and they can turn it into a profitable business model. So it is really a quite, I think, positive trend that we see returning to the market.

On top of that, we do see increased -- well, first signs of an increased M&A activity in the operator world. We have already been approached by some operators asking us if we would be ready to accompany them in those type of operations, if there is some real estate that they want to take out of the balance sheet when acquiring competitors. So these are things that basically we didn't see in '22, '23 and '24 and that are now more and more popping up again. So it's definitely not distressed situations. It's much more -- well, the market shifting to really growth again.

And then the top 3 countries, that's always a tricky question. But today, top of mind, I would clearly say Ireland, Spain and then U.K. and/or Finland, maybe a slight preference still for the U.K. Why do I say Finland? Finland is because we're full-blown developers. And we do see that development activity potential is increasing and allowing us also to make -- well, operator -- sorry, development margins, healthy development margins again in Finland, which in the end is creating equity, allowing us to leverage on that. So I think that these are basically the countries that we do believe are very interesting today.

I should add that I'm actually becoming more and more positive for Germany, but it's more the cycle that it starts to go upwards in Germany again. So that's, I think, also a lot driven by timing, not waiting too long before you start building up positions in a country and you have to do it at the right point in time. So Germany might be at the right point in time if what we see happening confirms in 2026.

Okay. That's very clear. The second question will be just on the yield on cost on the pipeline. So it has definitely improved to by about 40 bps compared to last year. So what are the main drivers here? Is it just the tenant profitability improving and you're being able to charge higher rents?

I think in the end, that's probably the most straightforward answer. I have been explaining in the recent past that when we look at the market, basically, what we've seen in Europe is a total disbalance between our cost of capital, cost of construction that went up a lot and then rent payment capacity that was in most of the countries under pressure. And what we do see now is in lots of countries that rent payment capacity is very healthy again and increasing. So -- okay, I think also the cost of capital is slightly improving. So given the fact that buildings have become more expensive, we have a certain cost of capital urging us to go for certain yields. So yes, the third factor being rent payment capacity, and that has clearly improved. So I think that, that is the main driver today in terms of new developments.

Perfect. And the third one, I think Ingrid mentioned lease agreements changed to B2C. I think that was for Netherlands. Could you just put some more color around that? Is it something more country-specific or something we can see more of an increase?

Why I mentioned it is because it did have an impact on the like-for-like. So those are 2 independent living assets where we went to a model that is B2C, that is related and creating additional rental income for the company because we are invoicing directly to the tenant, but it also involves some increase in the maintenance charges that will come to the company. But it is a model that we are exploring a little bit. So something that could be part of our business model, but it will remain marginal in the portfolio as a whole, I would say.

Yes. I think, Aakanksha, at this point in time, it's very country specific. So it's clearly something that we see a lot happening in the Netherlands where also other domestic investors are stepping more into B2C models, but always teaming up with an operator. So there is a third party involved, which is the operator, which is providing care, but this is more independent living where the investor landlord really signs a lease with the resident.

What we did in the Netherlands is because we -- these are actually buildings that we acquired a couple of years ago, where we had a master lease with an operator, not for-profit operator. But they, for reasons of their own, they wanted to get out of the master lease, but keep focusing on providing care in these buildings, whereas we -- well, clearly, if we could take over their position, that would immediately for us result into higher rental income with also more operational costs. But in the end, it seems to be a very profitable operation. And it is actually totally in line with lots of investments that we see being done by domestic investors in the Netherlands. So it is a bit of an experiment, promising experiment, but at this point in time, very typical of the Dutch market here.

Frederic Renard from Kepler Cheuvreux.

Maybe a question on the underlying occupancy rate within your nursing homes. Can you help me reconcile a bit the high occupancy rate that you disclosed in Belgium with the relatively low rent cover of 1.4x. That's maybe -- and linked to that, I would like -- well, you know that Colisee changed its shareholder recently. I'd like to see a bit if you had been able to discuss with Blackstone among other recently.

Yes. Okay. No specific -- Belgium, in the end, the rent cover is not only depending on occupancy. It's actually also depending on the revenue that the operators are getting out of it and cost management. So what you see in Belgium today is the market bottoming out at a rent cover, which is not excellent, but definitely not poor or bad either. But where there is room for improvement and improvement, and this is answering your question, I see it coming mostly from managing staffing costs. So what we do see in Belgium in some assets happening today is something that in the past, you've also seen in Germany and even if you go back a bit further in time in the U.K. is that they have to turn too much to agency workers, which come in at a much higher cost compared to employees and for which they are not really being refinanced, knowing that in Belgium, wages of care takers are actually being refinanced through the social security system. So that is something that the Germans were able to address, the U.K. also, where there is room for improvement in Belgium at this point in time will automatically lead to an improved rent cover.

And then secondly, but it is more of a political thing, I think that also my opinion, but once again, which could lead to a lot of improvement in terms of rent covers also in Belgium has to do with the pricing flexibility. I think that in certain parts of the country at this point in time, the prices are overregulated and basically slowing down operators in trying to adjust their revenue to the real cost they are experiencing. So in a nutshell, this is why even at the higher occupancy, you see somewhat lower rent covers in Belgium. But there is a clear path forward to improve these rent covers in Belgium.

And then your second question, sorry, you have to remind me quickly.

On Colisee specifically.

Colisee. You mentioned Blackstone, but we haven't entered into a dialogue with Blackstone at this point in time. But what I can say about Colisee is that we had a dialogue with the local management of Armonea in Belgium, which was a very, let's say, constructive dialogue. So as far as I can tell today, but it's not -- at this point in time, nothing more I can disclose because I do not want to, well, intervene in perhaps ongoing conversations at another level. But we had -- let me repeat what I just said. We had a very constructive dialogue with the local management team in Belgium. So I think that we did what we needed to do and that we stabilized the situation.

Okay. But I guess you know that at some point, they will try to force you to lower [indiscernible], but we'll see later on.

As I just said, we had the dialogue with them. I'm smiling at this point in time, so you don't see a lot of problem I face here.

Valerie Jacob from Bernstein.

I've got three, if I may. The first one is on your 2026 stand-alone guidance. You're guiding for 2.2% like-for-like growth, stable cost of debt and some net investment. So I just wanted to understand why your guidance is so conservative, if there is something I am missing here.

Okay. Well, I'll take the first part. I think conservative, it's coming from the fact that we have been very conservative in budgeting the portfolio growth. So as I keep repeating, we do see a more active and dynamic market. But we know from experience in the past that you can, at the end of the year, show a very high number in terms of new deals that you have been announcing throughout the year. But it is more the point in time that they become cash flow generating, which is important in terms of your guidance. So yes, I expect that we will be very active in terms of investment and refueling the pipeline, already indicated that the EUR 300 million that we mentioned is perhaps also even or even so conservative. But the real impact of that is something that you will see once all of these new deals start generating cash flow in the portfolio. And that's not on the 1st of January. That will be spread throughout the year.

And then secondly, maybe adding to that is that we come out of a period where the pipeline hasn't been refueled a lot. So we have to get back to cruising speed. And to me, cruising speed means that you have a constant flow of deliveries coming out of your pipeline at interesting yields. This is what we're now building up again. And on top of that, you have your ongoing investment activity throughout the year. So once you reach that cruising speed, you will see more impact on the top line. So I think it's more of a timing issue as far as I am concerned. But Ingrid?

Yes. What I would also like to add is, like I said in the beginning, this is a little bit of a theoretical budget because if you would have put in on a stand-alone basis, a much higher assumption on the investments. Because in reality, we think we will invest much more, but we also think that we will take control of Cofinimmo and there will be capital recycling, allowing to finance and to redeploy that capital and to finance the new acquisitions. If you just put it into a model, much more investments, then your DTA goes up or you have to add in as well a capital increase. So you have to think about the stand-alone budget as a theoretical exercise with the EUR 300 million, which is in line with what we did in the previous year and what we are very confident that we can realize in 2026 as well.

But for us, the most plausible scenario is the second one, where we will take control of Cofinimmo, where we will be working on the divestments that we have been announcing to the market, and we will redeploy that capital. And then it mainly comes to the timing issue element that Stefaan just has mentioned earlier.

Okay. My second question is about your investment strategies. I mean you are doing a lot of very small development of just like EUR 10 million, EUR 20 million. And I just wanted to understand how you think about this type of deal versus scaling the platform with some large portfolio deal. I mean, you're trading close to NAV now, so you could even raise equity. So I just wanted to understand how you balance the size and the profitability of all your sort of potential investments.

Okay. It's actually a very straightforward answer here. We know from experience that the existing platform with our decentralized model with country teams is giving us access to a lot of local deals and very often also to very interesting deals, meaning relatively higher yielding or when talking about development offering, development margins, which basically are creating equity and allowing us to leverage on that. It's something that has been a strength of Aedifica�in the past, and we want to keep that strength, absolutely. So we're going to keep doing this using the network that we have throughout Europe.

But I do agree with you, also looking at the challenges that we will have if this Aedifica�, Cofinimmo combination comes through and the quite ambitious divestment program, including the noncore of Cofinimmo that we also will have to scale up in terms of somewhat more sizable M&A type of deals. So looking at the future, it will be a combination of both.

Vivien Maquet from the Degroof Petercam.

Two questions on my end. Maybe first, I did not get it right, but you mentioned that you want to avoid building the portfolio in the U.K. at the top of the market, but you also mentioned that it is your third perfect geography. So I just wanted to get a bit of clarity here. And does it mean that you also see risk of price correction? Because if you think it's the top of the market, then you will assume maybe a risk of price correction.

Yes. Maybe taking that one, first of all, maybe underlining, I'm still a firm believer of the U.K. market. So I was not sending out any negative messages about the U.K. But it's just -- actually, it's always all in the timing. We have acquired a U.K. portfolio back in 2018, 2019 from an investor that wanted to step out of the market because they were afraid of Brexit. Okay, that was a bit of a mixed portfolio, but we managed it and brought it to a higher level of quality. And then we started adding a lot of new buildings and mostly through development of forward deals. And that has been very profitable.

What we do see now is that the U.K. market and certainly the operator performance is at a very high level, but it remains at a very high level. I do not see at this point in time any indication of a price correction in the very near future. I would actually say that if you look at how active certain U.S. healthcare REITs have become in the U.K. that you could even make a case that prices might go up or at least performance and activity in the U.K. market might even go up, et cetera.

But we're long-term thinkers. And what we want to do is when we look at the metrics of our portfolio, we also look at what is the average cost per room, the average cost per square meter, the average rent per unit, things like that is we keep an eye on that also. So we want to avoid doing too many deals that maybe today from a strictly financial perspective seems interesting, but when you look at all of these other metrics, come out as quite expensive deals, where you know that if the market would correct at a certain point in time, those are the deals where probably you will feel the pain afterwards. So that is what we're trying to manage carefully.

And this being said, repeating again, still very positive about the U.K. market. But if rent covers in the U.K. would come down to 1.8, that still is a very, very strong rent cover. But if you're buying a lot of assets that really are depending on the rent cover of 2.4, even at 1.8, you will feel the pain. So that is what we're trying to avoid.

Okay, clear. Then a question on the disposals, the EUR 100 million, I assume it does not include any Belgian assets. And maybe can you provide an update on the identification of the EUR 300 million portfolio? Are you working mostly on your, I would say, stand-alone portfolio or any update there would be great.

Yes, maybe the EUR 100 million you were referring to in the stand-alone scenario, as Ingrid said, that's a quite theoretical approach. And basically, what we do see as normal asset rotation for Aedifica�stand-alone is that we -- 1% to 1.5% of the total portfolio every year should rotate and then you get to these type of amounts. In real life, we think that the base case is much more the one where we do combine Aedifica�and Cofinimmo, and then you have this, what you were referring to commitment towards the Belgian competition authorities of having to dispose EUR 300 million of Belgian assets.

Do we have -- there's not a lot I can tell you at this point in time for lots of reasons, also keeping in mind that we are in the middle of an acceptance period. And I should clearly avoid telling you anything which is not already publicly known and in the prospectus. But this being said, I confirm what I've been telling the market before. When we were talking to the competition authorities about this, we did some market sound ourselves, of course, very limited to just talking to a couple of parties we know. And we got positive signs that there is interest for these type of portfolios. So that was confirming -- sorry, reassuring for us.

And then secondly, yes, we have built a case where Aedifica�stand-alone has identified a portfolio, which we can use to accelerate things if need be and if the opportunity would arise. But after taking control of Cofinimmo and certainly after the legal merger with Cofinimmo, legal merger that we see happening in the second half of 2026, we can, of course, look at the whole of the portfolio. And in any case, think that the divestment will not take place before the summer of 2026 and might take place towards the end of 2026, and that will be after the legal merger.

Okay. Then two quick questions on the guidance. First, on the 42% debt to assets, you assume as of 2025, that does not include any revaluation.

No, it doesn't.

okay. And then it does not include any potential agreement you will get with Armonea either, right?

I think it does, to be quite honest.

Very difficult to answer that question for us. But let's say that I'm not expecting additional impact coming out of such a kind of agreement.

So if you have an agreement, that will be already [indiscernible] and therefore, should not [indiscernible] negative on your guidance, right?

Yes.

But as I said to Frederic earlier on, we had a quite constructive dialogue. So I think we know where we will land, and we know it already today. So it's, yes.

Indeed, just to know if it's already in the guidance or not.

Stephanie Dossmann from Jefferies.

Maybe just a follow-up on the disposal side because just to clarify something, are you able to dispose of assets in the Cofinimmo portfolio ahead of the merger if you agree legally, I would say, with Cofinimmo's management?

Yes, of course. Not today, after taking control and then we have to agree between the 2 companies because basically, in the period between us taking control, which will be mid-March, if everything goes according to plan, of course, and the legal merger that we see happening somewhere in the second half of 2026. In that intermediate period, you still will have 2 companies with their own governance, but with a controlling shareholder, it will be like a group, parent company being Aedifica�, subsidiary being Cofinimmo. Yes, we can agree within the group to team up together to do this. That's possible yes.

All right. So I don't know if you can give some color on the disposal of the offices. Do you have advanced discussions on those?

Yes. The offices -- sorry. yes. The only thing I can tell you today is that we -- and when I say we, I am really talking Aedifica�at this point in time. We did get a lot of inbound from parties in the market that were making clear that they could have some sort of interest in the portfolio, being it part of the portfolio or the whole of the portfolio, which basically was also a very pleasant surprise to us. But we did not engage at this point in time into any really material discussions. I think it's -- we need to wait until we are in this group situation. But we clearly do have some ideas of what could be possible. That's absolutely the case.

And will it be piece by piece or as a portfolio?

The only thing I can tell you is that we've got interest -- well, as I said, inbound, just people telling us that when you start acting, please talk to us. And that really goes from the whole portfolio to parts of the portfolio and I guess, also for asset per asset.

All right. Fair enough. On the rest of the disposals targeted, I mean, the EUR 300 million committed. Will it be more on peripheral assets or to lower exposure to specific operators, such as, of course, the big one you have in your portfolio? Colisee, [indiscernible], Korian?

Once again, very -- I think what you should expect to see is that, that will be a portfolio that reflects the reality of the Belgian Aedifica�portfolio today. So I think more or less answering your question, yes.

Yes. And maybe on the coming merger or the offer actually, what indicators do you watch to anticipate the tender level, I mean -- and the outcome of the initial period? Do you have feedbacks? I mean, what key indicators do you look at, proxies and so on?

Yes, indeed, we have proxy advisers who give us some informal indications. So...

Can you say something more?

We are communicating a lot at this point in time also towards retail and towards institutional shareholders. As I mentioned, I think, at the beginning of the session, the feedback that we get is straightforward positive. So that's one thing. We will have to see whether people then tender or not. We keep an eye also on the stock price, of course. And I think the stock price also has a clear indication that the market is a true believer of this combination. So I should turn it in the other way. We do not get any negative feedback or pushback in any way at this point in time.

Okay. Maybe just the last one, very quick. If I'm correct, there was a slight expansion in the yields in Belgium. What is related to?

Yes. No, no, that could be the case. I think it is really, as you said, a slide. So it could be just a rounding. But this being said, what we do -- basically, what we have seen in the latest quarters is that, well, inflation increasing rents are driving valuation at this point in time because what we do see is that there's not a lot of yield decompression going on either. So yields are more stabilizing. But when you dive into one specific part of the portfolio, it could just very well be a mix -- what we do see in lots of countries with perhaps the exception of the U.K. and the Netherlands where it clearly is a very strong positive. Lots of other countries, it's a combination of pluses and minuses. There might be corrections for certain assets, but there also are upward corrections for other assets So it could be just the impact of these pluses and minuses at a certain point in time.

But we do not see anything specific happening with the yields in Belgium. I could say on the contrary, there was for the Belgian market, a quite big deal being done a couple of weeks ago by a listed REIT acquiring from the biggest profit tenant in Belgium at a yield of 5.75. So that is really underpinning the valuation.

I think there are still people willing to ask questions, but we are basically out of time. Can you -- I do apologize for this, but as I said, we are a little bit in a situation of having back-to-back meetings today. But if we couldn't address your question, please feel free to reach out to Delphine. We will come back to you ASAP. And once again, my apologies that we can't make more time available at this point in time. I thank you very much for your attendance, and we're pretty sure that we will be in touch in the very near future. Okay. Thank you all. Bye-bye.