Aroundtown SA Stock

Good morning, everybody. Thank you for joining us for Aroundtown's H1 2026 Results Call. You can view this presentation on Aroundtown's website, either on the Home section or under Financial Reports of the Investor Relations section. With me today are CEO, Barak Bar-Hen; CFO, Jonas Tintelnot; Executive Director, Frank Roseen; Chief Capital Markets Officer, Timothy Wright; Chief Sustainability Officer, Limor Bermann; Deputy CEO, Kamaldeep Manaktala; and representatives from Grand City Properties are also present. [Operator Instructions] With that, I would like to hand over to Barak and the rest of the team, who will guide you through the presentation of our results.

Good morning, and thank you for joining us for our H1 2026 results presentation. The macro and geopolitical backdrop has remained mixed throughout the first half and the volatility has persisted over the past month. We did not experience any material impact on our operations from these external factors and come with good H1 2026 results, well on track to meet our 2026 guidance. Against that backdrop, our diversified portfolio continues to deliver. Residential and hotel, which together are 53% of the portfolio, keep benefiting from strong market tailwinds paired with our ability to identify and extract upside potential, while the office segment remains relatively stable despite the lagging economic activity.

Over the first half of the year, we executed several measures that continue to drive growth. We concluded the share-to-share exchange offer for GCP, and we continue to increase our exposure to the residential segment. We continue to execute our share buyback program launched in January, taking advantage of the market volatility and repurchasing our own shares at a significant discount to NAV. We closed disposals around book values, recycling that capital into accretive uses such as the share buyback. And having strengthened our balance sheet sufficiently, we resumed our dividend payment for 2025 after 3 years. Taken together, these actions support our earnings both on an absolute and on per share basis and position Aroundtown well.

These efforts have resulted in a substantial and attractive EUR 340 million shareholder return so far in 2026. Despite the ongoing volatility, capital markets have remained open throughout. And after the reporting period, we continue to be active, issuing across multiple currencies and instruments and further extending our maturity profile and in parallel have bought back shorter debt. This is a direct result of our proactive approach, refinancing our upcoming maturities early and maintaining a sufficient liquidity position, which together mean that market volatility is currently not impacting us immediately with sufficient liquidity to cover our maturities this year and next.

We continue to monitor development closely, and will keep taking advantage of windows of opportunity to further optimize our debt profile. With a strong operational base confirmed guidance and a solid liquidity position, we remain on track for the remainder of 2026. On Slide 4, we present the financial highlights for the first half of 2026. Net rental income amounted to EUR 591 million, stable compared to H1 '25 despite the net disposal carried out over the last period, driven by solid like-for-like rental growth of 2.7%. Adjusted EBITDA amounted to EUR 500 million compared to EUR 501 million in H1 '25, similar to the rent development and reflecting a stable cost base.

FFO I amounted to EUR 144 million, 4% lower compared to EUR 150 million in H1 '25 and in line with our guidance and mainly as a result of higher financing expenses. In H1 '26, the full portfolio was externally revalued, resulting in stable valuation compared to December '25. EPRA NTA per share came in at EUR 8, increasing 3% compared to EUR 7.8 of December '25, supported by the share buyback, which was executed at a deep discount to NAV. We continue to make progress on obtaining green certificates and now 76% of our commercial portfolio is green certified with 81% of offices and 72% of our hotel assets holding green certificates.

We have also obtained our first BREEAM Outstanding score, the highest BREEAM score. Liquidity remains high at EUR 3.9 billion in addition to over EUR 1 billion of unused credit lines while maintaining wide headroom to covenants. We will discuss these items in more detail later in the presentation.

Tim, please continue on the next slide.

Thank you, Barak. On Slide 5, we present some of the main drivers supporting our FFO I generation, which -- and which are expected to offset increasing finance expenses over the coming years. We expect to continue extracting solid top line growth in our portfolio, mostly from reletting as well as indexation. Over the coming 3 to 4 years, we expect around EUR 100 million of additional rental income based on a like-for-like growth of around 2% to 3%. Furthermore, the investments in our portfolio through conversions, redevelopment and repositioning is expected to increase our rental income in an amount of EUR 55 million until 2030 from current projects, including ramp-ups from completed projects from previous periods.

More details of this, we will show you in the next slides. We further increased our FFO following the increase in our stake in GCP. We increased our stake in an attractive 10% FFO yield, which will result in EUR 10 million additional FFO from '27 onwards. Our higher contribution to the residential market in Germany and London has increased a market which benefits from strong and structural fundamentals and from very defensive cash flows, which will strengthen our FFO generation going forward. Additionally, the share buyback is highly accretive on an FFO per share basis. We continue to execute the program initiated in January, utilizing disposal proceeds realized at around book values to buy our own shares at a significant discount to NAV.

This delivers FFO I per share accretion with the impact only partially realized this year and fully captured in 2027. These measures, once fully completed over the next few years are expected to offset the increased interest expenses in the coming years under the assumption that refinancing rates stay unchanged. Moving to Slide 6. Here, we outlined the progress achieved on accretive capital allocation and capital recycling in the first half of the year. We closed in H1 disposals of EUR 350 million and signed around EUR 390 million year-to-date, executed around book values and at a rental multiple of 17x. The disposals were led by hotels alongside disposals of mainly development rights, offices and condominiums. From a geographic perspective, disposals activity was mainly concentrated in non core and other locations, Leipzig, Berlin, Wiesbaden and Paris. In addition, we have EUR 400 million of investment properties classified as held for sale as of the reporting date.

The proceeds are being recycled into accretive uses such as for the previously mentioned share buyback program. We also acquired high-quality residential assets at an average yield of over 7%, and we continue to execute accretive CapEx measures in our portfolio with office conversions into servic$6 apartments at a yield of around 14% and hotel repositionings at a yield of around 13% -- going forward, we expect to continue selling assets and reinvesting into opportunities at high yields, creating meaningful accretion while returning capital to shareholders.

Frank, please continue.

Thank you, Tim. Slide 8 shows our balanced portfolio across various asset classes. Hotels make up 20%, residential 33% office, 34%; logistics and retail, 6%; and finally, development and invest properties, 7%. Through various measures that we present on the following slides, we have been actively reducing our office exposure in favor of asset classes with more stable long-term fundamentals. Our properties are concentrated in top European locations with Germany, the Netherlands and London representing 89% of the portfolio Berlin is our largest city at 23%, followed by London at 9%, Munich at 7% and Frankfurt finally at 6%.

These markets offer strong long-term fundamentals and meaningful upside potential. For more details, please see the appendix. Continuing on Slide 9, we provide an update on the main portfolio KPIs. As of June 2026, the portfolio value stands at EUR 25.2 billion and generates EUR 1.16 billion in annualized rental income, resulting in a rental yield of 5%. We note that the yields are based on current contractual rents and do not include future agreed rent wrap-ups. This is mostly relevant in the hotel sector, where significant contractual rent increases for the recent hotel reopenings are yet to be included. Including these stabilized rents, the hotel portfolio yield is 5.7%. The office yield of 5% reflects the vacancy of the respective assets.

The WALT remains solid at 7.3 years, supported by a balanced lease maturity profile that adds further downside protection. EPRA vacancy stands at 7.6%, stable compared to 7.6% in December 2025. In-place rent increased to EUR 11.8 per square meter. We note that the EPRA vacancy definition and applicable market standard does not include properties under major refurbishment or development. The development rights and invest properties accounts for 7% of our portfolio and includes around 700,000 square meters of existing square meters with about 90% vacancy. The embedded potential from these developments on the future rental income growth of the company will be extracted over the coming years, and we present further details of the development portfolio in the appendix.

Slide 10 shows our operational performance reflected in continued solid like-for-like rental growth across the portfolio, which once again demonstrates the benefits of our diversified portfolio. Total like-for-like rental growth was 2.7%, with a stronger contribution coming from Berlin, Rotterdam, [ Utrecht ]. Residential assets representing 33% of the portfolio delivered a like-for-like rental growth of 3.5%, driven by construction supply-demand imbalances across our portfolio locations, low vacancy levels and the reversion upside we continue to capture. Hotels, which account for 20% of the portfolio, achieved a like-for-like rental growth of 4.4%, driven by indexation and contractually agreed rent step-ups, new hotel openings and the repositioning measures completed in recent periods.

These 2 asset classes make up 53% of the portfolio and continue to provide a strong foundation for rental growth in future. In offices, which make up 34% of the portfolio, we achieved a like-for-like rental growth of 0.9% despite the muted market activity, driven primarily by indexation and rent reversion and offsetting a slight increase in vacancy. This has supported our gap to market rents, would give us a competitive advantage to retain and attract new tenants. Over the last 12 months, we renewed 160,000 square meters of leases at an average WALT of 5.1 years and signed new leases for 130,000 square meters at an average WALT of 7.8 years.

For the full year, we expect total portfolio like-for-like rental income growth in the range of 2% to 3% -- on top of this organic growth, we have significant embedded upside to extract through development and conversions from the development and invest portfolio, which amounts to 7% of the portfolio as well as targeted investment within the operating portfolio. These assets will drive strong organic growth and increase the overall portfolio asset quality. We are also progressing well with office conversion into service apartments, and we have recently delivered another project this time in Dortmund and have started the construction phase for a project in Berlin.

We have also obtained the permit for a project next to Frankfurt Central Station. The Bau-Turbo regulation provides further momentum by streamlining change of use processes and shortening approval periods, and we have received good feedback from municipalities for around 120,000 square meters of offices. Our data center conversions in Berlin, Munich and London are also progressing with power and permit approvals expected this year. We are also intensifying and adding new space within existing properties, such as our property in Kassel, where we are building another pre-let logistics hall for an existing -- one of our existing tenants on site.

Kamaldeep, please continue on the next slide.

Thank you, Frank. Slide 11 provides an overview of our rental upside from our main conversion and repositioning projects, which are in execution and which we expect to complete gradually over the next 3 years. The expected rental upside for these projects is EUR 55 million by 2030, which includes the step-up rent following the ramp-up phase of already completed projects. Starting with the office to serviced apartment conversions.

These projects generally fall within the same zoning framework and require only a standard building permit, which is usually be obtained within 6 to 12 months. We have several projects running in Berlin, Dortmund, Frankfurt and Hanover. The rent achieved are similar or even higher compared to office rents with longer lease terms of 15 to 20 years, which reduces vacancy, supports rental growth and creates stable income streams. We are in discussions with several different operators who are looking to expand and are interested in our portfolio. In the hotel portfolio, we are refurbishing the hotel in Hanover City Center, opposite the historic new town hall, which is expected to reopen in a few months.

We have started works on the former InterContinental Hotel in Frankfurt and are renovating an additional 260 rooms at Cardo Hotel in Rome. In the Hotel Bristol in Berlin, we are nearly completed with the full modernization of the rooms and common areas. And in Paris, we are working on a phased modernization of the rooms. We also completed the comprehensive renovation of our hotel in Baden-Baden after several years and handed it over to the tenant who opened the doors in July. In addition, we are also working on several further hotels, executing smaller targeted modernization and refurbishment projects agreed with new and existing tenants. These projects have a remaining investment budget of around EUR 225 million, which is to be invested gradually over the next years.

The CapEx is mainly included in our expansion CapEx and is executed at an expected yield of around 12% on the total CapEx budgeted, resulting in an expected yield uplift of around EUR 55 million, including from ramp-ups of completed projects. As other projects have been completed in recent years, we do not plan a significant increase in the CapEx per year, although we do note that the investments can fluctuate from period to period depending on project progress. On Slide 12, we walk through 4 properties that show our repositioning and conversion strategy in practice, where we have delivered very strong results, increasing significantly both the quality and the income generated from the properties. In Rotterdam, we took a single-tenant office building that was facing a soft office market and repositioned the 28,000 square meters into a mixed-use asset combining service apartments, offices and leisure.

We have signed a 15-year lease with a tenant operating the serviced apartments, which were delivered earlier this year. The refurbishment of the remaining spaces is progressing well, and the full asset is now 82% pre-let. Based on the current letting status and considering the full investment, the project is already yielding 16%, and we expect a yield of 19% on CapEx invested once the property is fully let. In Rome, we took over the former Sheraton Roma, which is the largest hotel in Rome's prime EUR business district and carried out a comprehensive repositioning, upgrading the rooms to a modern standard, adding new food and beverage and improving the wellness offers. The property was launched under Marriott's Autograph Collection. It is now let on an 18-year lease at a stabilized yield on total CapEx of 11%.

As shown on the previous slide, we are executing further works in this hotel, bringing additional rooms to be opened by 2027. In Dortmund, an underutilized office building next to the main station was converted into 52 serviced apartments. The serviced apartments are let on a 15-year lease at a yield of 10% on CapEx. On the prime location of Kurfürstendamm in Berlin, we modernized the Hotel Bristol that had become outdated when we bought it, refurbishing all rooms and suites, both ballrooms, the restaurant and 14 meeting rooms and relaunched it as a luxury lifestyle hotel. It is now the first German hotel in IHG's Vignette Collection, BREEAM certified and let on a lease with 21 years remaining, with the investment executed at a yield of 19% on CapEx on a stabilized level.

Across these 4 assets, attractive returns on the CapEx invested and long-term leases give us strong visibility on the income these properties will generate going forward. These examples demonstrate the process of our value-add strategy and how we can combine our in-house expertise across asset types with the quality of our locations to unlock embedded value and secure long-term stable income streams. On Slide 13, we present our hotel tenant base updated for the disposal activity and the new leases signed. The group has been operating in European hotel business for over 2 decades. Keeping and building up relationships is an integral part of our business culture. And over this period, we have developed good business relationships with a broad range of hotel operators. In recent periods, we signed several new leases, resulting in a further strengthening of the tenant mix.

The broader operating environment remains supportive. Demand across Europe continues to be underpinned by a mix of business travel, public sector activity, events, culture and leisure, which enables our tenants to maintain healthy operations. Our priority is always to have long-term leases with experienced operators in addition to our in-house capability to operate hotels on an interim basis. This ability to replace tenants with limited impact on the hotel operations and a long-term value is a key competitive advantage and reduces dependency. More information on our hotel tenants and their background is available on our website.

Turning to Slide 14. We set out how the expropriation debate in Germany has developed and why we see the most recent steps as a positive for our residential portfolio. The starting point was the referendum initiative in September 2021, where the Deutsche Wohnen & Co. enteignen campaign secured support for socializing portfolios held by landlords with more than 3,000 units. Our assessment regarding the expropriation topic has always been consistent. Germany has a structural gap between housing supply and demand and moving existing apartments from one owner to another does not close it. What closes the gap is building and converting more housing, which is why we regard regulations such as the Bau-Turbo, which we discussed earlier, as a measure that addresses the problem, while socialization risks are lowering exactly the investment the market needs.

The more recent development came in July following the conference of construction ministers, the federal coalition committed to introducing nationwide legislation that would prevent individual states from using socialization laws to transfer privately owned rental housing into public ownership. The reasoning put forward by the construction ministers was that the threat of socialization itself holds back housing construction and weakens Germany as a place to invest, which is in line with our view. We note this is a coalition commitment and not enacted legislation, and we will follow the legislative process closely, but we welcome the aim to safeguard housing investment and establish clearer legal certainty, which also significantly lowers the perceived expropriation risk attached to Berlin residential and investment risk in German residential real estate as a whole. Limor, please continue on the next slide.

Turning to Slide 15. We present a practical example of how we integrate sustainability investments into our refurbishment strategy, combining improved environmental performance with tangible financial value creation at a residential asset in core Leipzig location. We combined the energy upgrade of the building with a planned major refurbishment. This allowed us to implement the sustainability measures in a high cost-efficient way -- the works included full reinstallation of the facade and the roof, new windows, floor heating and air tightness improvements alongside balcony extensions and the additional of a barrier free lift. The total investment amounted to EUR 3.8 million net of subsidies, supported by a EUR 2 million KfW subsidy and brought the building to a KfW 40 energy efficiency standard. The project delivered strong results on both sides.

The EPC improved from F to A, final energy demand declined by more than 75% and the primary energy demand by more than 85%. At the same time, we created tangible value at the asset level, adding 26 residential units and over 2,100 square meters of lettable area. The improved quality and the positioning of the property also supported reletting at significantly higher rents. This is a clear example of our approach using integrated CapEx to reduce energy consumption and operational costs, while at the same time, improving the asset quality, increasing lettable area and unlocking rental and long-term value upside.

On Slide 16, we outlined our BREEAM strategy and highlight some further milestones achieved in our green certification program. We use the BREEAM methodology as a framework to create clear pathway for improvement of the sustainability of our portfolio. It allows us to implement targeted measures to improve the overall score of each property. The methodology is very transparent. This allows us to use together with existing and prospective tenants to set clear targets, driving tenant satisfaction and retention. Our current goal is to fully certify our commercial portfolio, and we have made good progress so far. Currently, 76% is certified. We expect to certify the remaining assets over the coming few years. In the meantime, we have started recertifying some of the properties that received their initial certifications 3 years ago.

Here, we are aiming to gradually improve the score and reach at least very good in the long term. One -- on this slide, we also show the progress made in this regard. We see strong improvements in score for the vast majority of properties that have undergone recertification. We also highlighted some recent recertification achievements. Our Astropark office property in Frankfurt achieved the highest BREEAM score, Outstanding. This is the first building in our portfolio to reach this level and only fourth building in all Germany to do so. It is also our first recertification in Germany ever to achieve this rating. In addition, we received BREEAM Excellence score for our office property in Berlin close to Checkpoint Charlie, building further on the first excellent certification in our portfolio in Neu-Isenburg, which we achieved earlier this year.

In Leipzig, we achieved the BREEAM Very Good rating, reaching our minimum targeted level already in 1 cycle and increasing significantly from a past score received on the initial certification of this property in 2023.

Jonas, please continue on the next slide.

Thanks, Limor. Moving on to Slide 18. We present our financial results for the first half of 2026. Net rental income amounted to EUR 591 million, stable compared to the first half of '25, with like-for-like rental growth of 2.7%, offsetting the reduction in rent from net disposals over the past periods. Finance expenses amounted to EUR 142 million, higher compared to the first half of '25, primarily reflecting the refinancing measures carried out during '25 and the first half of '26. As part of the H1 '26 report, we conducted a full revaluation of the portfolio for the certified independent third-party evaluators, recording stable valuations compared to the end of '25 with slightly positive revaluations across the main segments, office, residential and hotel.

Overall, profit for the period amounted to EUR 218 million compared to EUR 578 million in the first half of '25. On a per share basis, net profit amounted to EUR 0.08. Moving on to Slide 19. Adjusted EBITDA amounted to EUR 500 million in the first half of '26 compared to EUR 501 million in the first half of '25. The result was underpinned by solid operational performance, offsetting the impact from net disposals over the period. FFO I amounted to EUR 144 million, 4% lower compared to EUR 150 million in the first half of '25. The decline was primarily a result of higher financing expenses, partially offset by reduced contribution to minorities, reflecting our increased holding in GCP as well as lower perpetual note attribution following the perpetual refinancing from last year.

On a per share basis, FFO I amounted to EUR 0.13 compared to EUR 0.14 in the first half of '25, supported by the share buyback executed in the period. The benefit from the lower minority contribution following the GCP transaction was offset by the higher effective number of shares outstanding on settlement, leaving the transaction broadly neutral on a per share basis. FFO II, which includes the disposal gain over total costs amounted to EUR 268 million, higher compared to EUR 200 million in the first half of '25, reflecting the higher disposal margin in the current period. During the first half of '26, we closed EUR 350 million of disposals, generating a gain of EUR 125 million over total costs. On Slide 21, we highlight our EPRA NAV metrics. Our EPRA NAV KPIs were supported by the net profit recorded in the period and by the increase in equity attributable to owners arising from the higher holding rate in GCP.

These effects were partially offset by the share buyback program and by the recognition of the dividend, both of which reduced equity attributable to the owners. On a per share basis, the metrics benefited further from the accretive impact of the buyback, executed at a significant discount to NAV, offset by the shares delivered in connection with the increased GCP stake. EPRA NRV amounted to EUR 9.6 per share as of June '26, higher by 2% compared to EUR 9.4 per share at the end of '25. EPRA NTA amounted to EUR 8 per share compared to EUR 7.8 per share as of December '25, reflecting a 3% increase. EPRA NDV amounted to EUR 6.9 per share, higher by 5% compared to EUR 6.6 per share at the end of '25.

On Slide 22, we highlight the breadth of our capital markets activities across currencies and instruments. Within the period, we issued CHF 160 million 7-year bond and 2 Australian dollar transactions of AUD 300 million each over 5 and 10 years, all in January and hedged back to euro. On the perpetual side, we issued EUR 750 million at AT level in January and EUR 600 million at GCP level in April, refinancing the full perpetual note stack and using the proceeds to buy back notes with the '26 call dates as well as high coupon instruments. Due to the timing impacts, part of this refinancing was completed in July after reporting period. Furthermore, after the reporting period, we issued approximately EUR 1 billion of secured senior notes -- sorry, apologies of senior unsecured notes. Our first euro benchmark of '26, EUR 850 million 5-year bond at 3.625% coupon alongside CHF 180 million 7-year bond, our third Swiss franc issuance in less than a year.

The euro benchmark was placed with a concurrent tender offer under which we bought back around EUR 0.7 billion of bonds across years 28, 39 and 40. In addition, approximately EUR 1.1 billion of Series 38 and GCP Series G were redeemed at maturity. Together, these measures reduced gross debt year-to-date and further extended our average debt maturity schedule. On Slide 23, we present our pro forma debt maturity profile, which incorporates the recent issuances, buybacks and redemptions across our debt stack. Following these measures, our maturity profile has been extended and our near-term maturities effectively. Our average debt maturity now stands at 3.9 years, extending to 4.7 years when accounting for our liquidity position. We continue to maintain strong financial flexibility supported by broad access to financing across capital markets, a solid BBB rating from S&P, a high level of unencumbered assets across diversified asset types and geographies as well as established mortgage banking relationships.

In addition, we have EUR 1 billion of undrawn revolving credit facilities. Our hedging ratio remains high at 95%, and our cost of debt stood at 2.4% as of 30th of June. Following the refinancing of the reporting period, the cost of debt stood at 2.6%. We continue to maintain significant headroom to all our bond covenant thresholds. We present on this slide the coupon of the debt maturing each year. While current financing rates are higher than the debt which matures over the next year, from 2029, the cost of debt is similar to the current refinancing rates. We generally take a proactive measure to refinance ahead of time, which front loads the impact of the higher financing expenses, but smoothens the impact of refinancing at higher rates over several periods.

The rent increase measures, which we outlined earlier in the presentation, will catch up by the end of '28 and will fully support earnings growth. On Slide 24, we present an overview of our debt metrics and a solid financial profile. Our loan-to-value stood at 43% compared to 41% at the end of '25 and remains within our Board of Directors' guidance of 45%. The increase was mainly a result of the share buyback as well as some investments, partially offset by the proceeds from disposals. We continue to maintain a substantial pool of unencumbered investment properties amounting to EUR 17 billion or 69% of rental income, which supports our strong access to bank financing. Our ICR stood at 3.3x, impacted by the higher financing expenses and net debt to EBITDA at 11.3x, impacted by the share buyback.

Together with the financing structure that remains well diversified across straight bonds, equity, perpetual notes and bank debt, these metrics underline the conservative approach we continue to apply to our capital structure. On Slide 25, we present the resumption of our dividend distribution. The dividend approved during the period and paid on 6th of July 26 marked the resumption of dividend payments following the decision of the Board of Directors to suspend distributions from 2022 financial year in order to strengthen the company's financial position. As the company has successfully taken measures to strengthen its position, the decision was made to once again to recommend a payment of a dividend to the AGM. Together with the EUR 250 million share buyback program, this implies a EUR 340 million allocation to shareholders in 2026.

Going forward, our dividend payout policy is set at 50% of FFO I per share. This is designed to balance an attractive shareholder return with conservative financial structure. On Slide 27, we present our guidance for '26. We guide for FFO I in the range of EUR 275 million to EUR 305 million, translating into EUR 0.24 to EUR 0.27 per share and a dividend per share of between EUR 0.120 and EUR 0.135 based on our payout policy and subject to AGM approval. The guidance is supported by the conservative rent increase assumptions, the contribution from acquisitions and a lower minority contribution following our increased stake in GCP. It further benefits from cost efficiency measures, the net positive impact of the perpetual note transactions on our total coupon and the share buyback. These are offset by the full year impact of disposals closed in '25. The effect of disposals closed year-to-date in '26 and expected from held-for-sale portfolio as well as the impact of the proactive refinancing executed in the recent months.

This concludes our presentation. As always, you can find further material in our appendix. With that, we would like to start the Q&A. Before we invite your direct telephone questions, we would like to answer questions that we have received by e-mail prior to this call. For simplicity reasons, the team has taken liberty to group similar questions in order to answer as many questions as possible. Allow me now to read out these questions.

Could you update us on your external growth strategy and where you currently see the most attractive opportunities?

Our approach remains centered on capital recycling and on extracting growth from our existing portfolio. In H1, we continued to sell assets around book values and redeployed the proceeds into several accretive opportunities while keeping leverage stable. We assess the deployment of that capital holistically across acquisitions, accretive investments in our own portfolio and other measures such as the share buyback. On external growth, we continue to scan the market actively. The recovery remains asymmetric with smaller and more leveraged players continuing to face refinancing pressure.

We believe this creates opportunities to acquire quality assets at high yields. Strategically, we intend to continue to increase our weighting towards the living segment, meaning residential, hospitality and mixed-use while gradually reducing office exposure through disposals and conversions. We note that external growth remains opportunistic and disciplined, and we will transact on the back of low-yield disposals and where deals meet our acquisition criteria. balancing between acquisitions and other opportunities such as high-yield CapEx investments, share buybacks and debt repayments, supporting our balance sheet, FFO per share and interest coverage metrics.

Thank you, Kamaldeep. Regarding office, how do you assess current leasing conditions and valuations? What is your outlook going forward?

Letting conditions remain broadly consistent with recent periods. Demand still needs to recover, largely reflecting the subdued economic activity in Germany. As mentioned, we let and prolonged 290,000 square meters in the last 12 months at EUR 14.8 per square meter, which is similar to comparable periods. The current market situation puts pressure on occupancy level, however, limited. We see vacancy ratios increasing slowly in a pace of about 1% this year, which is very limited. As long as the current market environment remains, we expect this pressure to continue. We do record positive rental income like-for-like from offices as the in-place rent increase more than offsets the occupancy pressure.

Our activities to reduce office vacancy include reletting, conversion to residential via Bau-Turbo, conversion to hospitality units, conversion to data centers and disposals. We believe that these measures will keep occupancy levels stable around the current levels while increasing our rental income. As to the office property valuations in 2026, we continue to expect value to broadly remain on current levels as rental growth continues to offset the negative macroeconomic volatility. With the reduction in the macroeconomic volatility, we expect to see more positive impact of the rent growth fueling value growth.

Thank you, Barak. With your shares still trading at a significant discount to NAV and the current program close to completion, would you consider increasing the size of your share buyback?

We are very pleased with how the program has been executed. Since launching it in January, we have repurchased shares at an average discount of around 67% to EPRA NTA per share as of December '25. This has delivered meaningful accretion on both FFO I and NAV per share. And together with the resumed dividend reflects around EUR 350 million returned to shareholders in '26. We believe this program was particularly accretive as we utilize proceeds from disposals executed around book value to buy back shares at a deep discount to intrinsic value. We continue to view share buybacks as one of the instruments within the broader framework of capital allocation and capital recycling.

And we assess these options with the objective of deploying capital accretively while maintaining a strong and conservative balance sheet and interest coverage ratio. Therefore, share buybacks similar to acquisitions will be on the back of disposals, keeping our leverage and balance sheet in a strong position.

Thank you, Jonas. Following successful completion of the share exchange offer, do you intend to continue building your stake in GCP?

After the completion of the offer, we have selectively increased our holding to around 84% currently, up from 81.5% at the completion of the exchange offer. This increase was carried out through open market transactions on an opportunistic basis. We retain the option to continue increasing our stake opportunistically through open market transactions, but do not have a specific ownership target we wish to achieve at any price. In our view, GCP's FFO yield remains highly attractive and increasing our exposure to the German and London residential market strengthens our earnings profile. As with other measures, we evaluate the metrics of each option on an ongoing basis to ensure capital is deployed where it creates the highest value.

Thank you, Timothy. Where can we expect to start to see FFO I per share growth?

We put a lot of focus on FFO per share performance, and we are well positioned to meet the 2026 guidance. The FFO I per share result comes after 3 years of declining FFO, where we refinanced large positions of our debt, refinance and reduce the perpetual notes balance while executing disposals of mainly low-yield and development properties, increasing our share in GCP and executing a highly accretive share buyback program, which will have a full year impact next year. For 2027 and 2028, we expect the pressure on FFO I to continue given we have a number of cheaper legacy debt maturing in those 2 years, which we will balance between repaying from our cash balance and refinancing at comparably higher rates, which we usually do proactively ahead of time.

That mechanically will increase our gross finance expenses in 2027 and 2028. While we are executing many measures to increase rents, which we expect will offset those increases in the midterm, the short-term impact of the increased finance expenses could result in a soft temporary decline in FFO. This impact will also be softened in the FFO I per share due to our share buyback program, which will have a full year impact next year. We will provide the guidance for 2027 with the full year 2026 results as usual. However, in the midterm, our measures expect to contribute FFO growth drivers in the coming years as we outlined in the presentation.

On the perpetual side, we have already refinanced all outstanding notes, but could do a similar recouponing exercise as we did previously to reduce the ongoing cost of market volatility subsidized. We expect 2029 to be the inflection point. From that year, the cost of debt maturing is in line with our marginal cost of debt. So the refinancing headwind will reduce massively, assuming rates do not change. At that point, EBITDA growth flows through to FFO rather than being absorbed by rising interest costs. And the EBITDA growth is, therefore, throughout like-for-like rent growth of 2% to 3% per year, additional rent from repositioning and conversions and accretive capital recycling where we redeploy disposal proceeds into value-accretive opportunities.

Those drivers are offsetting the '27 to '28 finance expenses over time. And from '29, they translate directly into FFO per share growth and more than that if rates can come down.

Those were the questions that we received prior to this call. We can now start the open session for your questions. We would appreciate it if you could answer them one by one.

And the first question comes from Ellis Acklin from First Berlin.

Chance to ask a couple of questions. You covered most of my topics already. Two smaller questions that I do have open. First one, looking at the LTV now, which has crept up to about 43%. My question is how much of the current balance sheet capacity do you realistically think you can deploy here? And should we expect future acquisitions to be funded mainly through just strictly through disposals and [TAC] as well? Or maybe will leverage be involved?

And then second question, more on the housekeeping side. If you could maybe just give us a current expectation for your financing expenses for 2026 and 2027 given the recent portfolio -- debt portfolio optimizations.

Thank you very much for your questions. Yes, so the LTV increased slightly. You're right. Obviously, the share buyback that we've done acquisitions, investments and so on. Now as we outlined several times, we see the disposal proceeds as the recycling measure to fund growth opportunities, which are acquisitions, but also conversion projects and so on. So the selling of lower-yielding investments into higher-yielding investments, that's where we see a leverage-light measure to increase our earnings going forward? Jonas, do you want to take that?

In terms of the question on the financing expenses, yes, have increased. Now if you look at the quarter-quarter actually in H1 about EUR 72 million in Q2, it was compared to EUR 70 million in the first quarter. So it have modestly increased quarter-by-quarter. Now going forward, you see that we did the EUR 850 million already to basically take away a lot of the refinancing pressure that we would otherwise have in the coming periods. And this on a pro forma basis, increasing our cost of debt to 2.6%. Now at which kind of -- when we will see additional financings coming through, clearly also depending on what happens with rates. We see a lot of volatility, but we'll continue to update you over the period.

The next question comes from Jonathan Kownator from GS.

Just a follow-up actually on the capital allocation. Should we understand essentially that you expect to be net neutral in terms of acquisitions versus disposals and that you're happy with current level of leverage?

Jonathan, look, we have our internal guidance, so we have headroom there. Clearly, we will utilize that headroom also and it doesn't mean that necessarily we will go up. A lot of factors are playing into it. But we feel comfortable in the leverage that we are and utilizing those headrooms for the opportunities that are coming. But again, the opportunities depends on revaluations going forward, disposals, acquisition opportunities, which come first and so on. And we always try to keep some headroom. So up to 45% is there, but we clearly are also working on decreasing it.

And the next question comes from Stefan Scharff from SRC Research.

Stefan here from SRC Research. The first question is about your interest cover ratio. It was 4.2x last year in June and is now down a bit to 3.3x in the first half of '26. What do you expect here for the year-end?

The second question is about your expectation for about EUR 100 million additional income coming from like-for-like rental growth and indexations in the next 3 or 4 years. Can you give us here a split in, say, resi, office and hotels?

My next question is about the EUR 55 million annual rent extra coming from conversion projects. I think this is mainly vacant offices in Germany as, say, in Frankfurt, [Stuttgart or Brussels]. Perhaps you can give us here a bit more insight about the locations and from which cities, from which locations this EUR 55 million come from?

And my last question is about how is your general view on the German hotel investment market? Are there signs of an improving picture, improving sentiment to continue in the second half of the year? And how is the progress of refurbishment and concept for the former Frankfurt InterConti hotel?

Stefan, thank you very much for the comprehensive questions. I hope I covered everything. Look, the question on the interest cover ratio, we expect to be over 3x for the year-end. The question on your like-for-like expectation going forward and the breakdown by asset class. We believe the majority will come from the residential and hotel portfolio, I mean, similar as we've achieved in the recent periods. We do not factor in any potential economic improvement, which could clearly also be further supported by the government stimulus, which would then have a positive impact on the operational growth of our office portfolio. That's why we kept it on the 2% to 3% level that you have seen or that we achieved in the last years.

Regarding the EUR 55 million and the development and conversions. Now we have a slide where we present those. I don't know if you've seen it. We'll present the properties and the projects, which are the current projects. Clearly, we're working on more projects and these projects that we're working on once they will start and we have visibility on them, we will present them as well. But so far, the ones we have in execution, we present here on that slide. And it's a mix of conversions from office to service apartments as well as repositioning and refurbishment of hotels. And the hotels actually make up the majority of those current projects and have the highest upside also.

We're working on further projects, as I said, and those will then increase also the rental income in the coming periods. Once we're starting executing those -- and regarding the general view on the hotel investment market, yes, we see the German hospitality market doing really well due to solid travel demand. Clearly, several years ago, it looked very different, and then there was a long recovery phase, but we see that now as very solid. The investment market in general remains impacted by the volatile market -- macro market environment, which impacts also this type of asset class.

But at the end, if you have strong demand factors, strong fundamentals that's always supportive and, let's say, the interest of this type of asset class. And yes, look, we had also several relettings, reopenings. We outlined that in our previous presentations. Also here, also what's future to come, all these result in strong like-for-like performance going forward.

Then the next question comes from Bart Gysens from Morgan Stanley.

I have 2 questions, please. On the revaluation Aroundtown, so a good revaluation on residential, but it looks like it was offset by a negative revaluation in -- it looks like from Slide 18 in developments. Did that revaluation relate to any specific assets? And if so, could you provide color on that? And then I have a second question as well that I will ask afterwards, please.

Thanks for your question. You're correct. We've seen very stable valuation outcomes for most of our segments, especially in the development rights and investments part, we see devaluations, which the overall result of 0.9% if we also include CapEx. In terms of within development part, I think it is really affecting several of the assets in the whole category, I think continues to see cost inflation, which does impact the valuations here in this segment, particularly.

Note that the valuations are impacted by construction costs, which are very strongly tied to interest rates as well as future cash flows, right? It's different for standing assets, which are generating and yielding already. The second question?

And then you really helpfully guided on FFO trajectory, right? You said, okay, falling for '27, '29 and then inflection in '29, that's really helpful. But can you also provide a similar comment on interest cover? I mean we've seen a material slide in your interest cover. When and at what level do you think that could stabilize? And if there -- are we potentially going to see a level of interest cover that is getting more challenging from a credit rating perspective?

Thanks also for the second question, Bart. So yes, of course, we see the ICR also now is at 3.3x level. I think what's really important to highlight is that we come from a starting point with exceptional high headroom to our bond covenants. -- bond covenants were 1.8. So even at 3.3, we still have very good headroom, which gives us comfort. I think the other thing, which clearly -- which you're seeing in terms of our actions as well that we very proactively refinance our debt, not just when they come due, but way ahead of time. That means in a sense, we are front-loading interest expenses, but thereby really reducing our exposure we have to refinancing at any point in time.

So yes, that means that we do see coming down. But I think, again, very important to keep in mind that come from a very, very high starting point, got a headroom and now we still have very good headroom. And we also see that in the coming periods that we expect, of course, subject to changes in interest rates and when we actually decide to refinance also to keep good headroom going forward.

And the next question comes from Kai Klose from Berenberg.

I've got 3 quick questions. The first one is why have the property operating expenses gone up by around 5% when rents were just pretty stable?

Second question is on the increase in the other financial result, if there's anything else than financial hedges?

And third one is on the increase in the cash expenses in the FFO calculation, whereas the cash EBT was rather flat or even slightly lower.

Can you repeat the questions? It was unfortunately a bit too quick for me to follow, please.

The first question, why have property operating expenses increased whereas rents were just flat?

Second question is on what was the -- what are the components of the other financial result, if not financial hedges?

And second question, why we have higher cash tax expenses despite rather flat or slightly lower cash EBT?

Okay. That's very helpful, Kai, and really appreciate you doing this in slow motion. Very helpful. Thank you. So look, in terms of your first question, yes, slightly higher in the operating expenses on the income side, I think really due to inflation. On the other financial results, you're right, the biggest component here. There's also some other items clearly here in terms of bank fees as well as impact in this case, from a positive point of view on the buyback of the debt, which we bought back at a discount. And sorry, the last question here in terms of tax expenses, it's not always linear and I expect this basically to line up over the rest of the year.

And the next question comes from Adam Shapton from Green Street.

Three quick ones from me. Can you disclose the average yield on the disposals signed so far this year? I don't see that in the disclosure.

Secondly, what would you estimate the reversion to be in the office portfolio? You talked about a gap to market rents. You specify that for resi, but I wonder if you could put a number on that for office.

And then a more general question. Could you provide some commentary on regulatory developments in the service apartment and short-let space in Germany, how that affects your business, whether positively or negatively? Those are the 3, please.

Thanks for the questions. In terms of the disposals, this is I think in terms of 17x multiplier. In terms of the question on the potential of reversion potential in the office segment, I think we see 30%. I think very clearly that we still see the market environment in offices as difficult given the environment. So clearly it will take time to get that. And in terms of your third question, in terms of regulatory environment, I think overall.

Maybe I jump in. Look, it's a pretty easy process for us to convert from the commercial asset into another commercial asset, which service apartment is. That's our way to actually capture the demand for residential, which is basically the same user, right? Now if the German government is in any way supportive of also putting hurdles in the way in terms of serviced apartments and furnish and stuff like this, note it's a different concept. It's a hospitality concept. So currently, there's nothing on the radar here. But let's say, if there would, at the end, we can just transform it further into an actual residential, which would actually be the long-term goal anyway with these type of asset classes. But again, it's capturing the same demand. From a regulatory perspective, we're all fine.

And the next question comes from Pranava Boyidapu from Barclays.

If you could give us a little bit more clarity in terms of your part on the cost of debt and the ICR. I think you mentioned that on a pro forma basis, the cost of debt has already gone up to 2.6%. How do you see that evolving over, say, the next 2 years, same for ICR? And also, are you using any sort of forward hedges? I think some of your competitors have been trying to manage the ICRs using some hedges. Is that a strategy that you have considered?

Thank you very much for the question. Yes, look, exactly the cost of debt increased after the reporting period. Obviously, we issued another bond, we also repaid. Again, I think we outlined this before, and it's very clear to our market participants here that we are very proactive in the market. We don't necessarily go when we need to, we go when we see the market as favorable. Unfortunately, another war broke out just a few months ago. Luckily, right before that, we were -- we issued -- what I want to say generally is like it's very difficult, obviously, to assess where interest rates will go.

It's clear that we will refinance debt with lower rates with comparably higher rates. The average coupon of the issuance we did this year was around 3%. I don't know if the 3% will continue going. Obviously, mid-swaps increase now, where will mid-swaps go again afterwards is very hard to assess. But yes, we definitely see an increasing impact here. But look, I think it's also very important, again, also in the question on ICR. We have a lot of cash on hand and also the disposal activities that we're doing, we said the cash on hand as well as disposal activities will also be utilized for debt repayments. It's not one-to-one that we will need to refinance here. meaning we will really have flexibility on timing, on when we execute and also what type of measures we do in parallel.

For example, when we target certain tenders -- when we do certain tenders in parallel, where we target certain either short-term or expensive or, let's say, relatively more expensive coupons. So we can really utilize the timing that we have and the optionality we have to offset that impact on the ICR. Very important to know is we have a lot of EBITDA growth factors coming in. Yes, they will take time. They're not from one day to another. Some of the measures we've taken already in previous years, which are still -- we're still benefiting from the ramp-up phases of the hotels, which we repositioned, reopened. Just a few weeks ago, we reopened another hotel, for example.

So all these will flow into strong EBITDA growth over the period and will offset, and I think very clearly, we outlined in the presentation, will offset the increase in the finance -- at the end, it's a whole question of when we're going to refinance and at what rates. But we have huge headroom. Again, I think that's very important. We have huge headroom to our covenants. We see clearly the ICR still going down further. That's part of it. That's the whole industry what is going through. But with that headroom that we have and the flexibility we have, we will be able to manage it going forward.

In terms of your second question in terms of the pre-hedges, yes, our treasury team does prehedging and have done so over recent periods as well. So we basically try to prehedge the interest rate risk from the issuances that we have to refinance in the coming periods. Clearly, with hindsight, we see that you didn't do enough or you did too much. It's difficult to gauge. But yes, clearly, we do engage in pre-hedging. In terms of -- I think the other factor here to consider is that for existing debt stack, we have a very high ratio of basically fixed or hedged coupons, which means that for existing debt stack, we have a very good hedge ratio already. Thank you for the question.

Okay. It seems that this was it. With that, we'd like to thank you all that participated in the call and your valuable questions you raised before, but also during the call. All the best. Goodbye, and see you soon in the upcoming conferences. September is a very busy month. So we'll see most of you again.

Ladies and gentlemen, the conference is now over. Thank you for joining, and have a pleasant day. Goodbye.

Good morning, everybody. Thank you for joining us for Aroundtown's Q1 2026 Results Call. You can view this presentation on Aroundtown's website, either on the Home section or under Financial Reports of the Investor Relations section.

With me today are CEO, Barak Bar-Hen; CFO, Jonas Tintelnot; Executive Director, Frank Roseen; Chief Capital Markets Officer, Timothy Wright; Chief Sustainability Officer, Limor Bermann; Deputy CEO, Kamaldeep Manaktala; and representatives from Grand City Properties are also present. [Operator Instructions].

With that, I would like to hand over to Barak, and the rest of the team, who will guide you through the presentation of our results.

Good morning, and thank you for joining us for our Q1 2026 results presentation. We started the year strong and have proactively pursued highly accretive transactions, which have strong impact on our earnings metrics on an absolute as well as per share basis.

Among others, these include a successful increase of our holding rate in Grand City in April and the EUR 250 million share buyback program launched in January, which is nearly completed and further signing disposals to fuel future capital recycling.

From an operational perspective, performance across the portfolio remains solid, supported by resilient fundamentals. Our living portfolio, including residential and hotels, which now account together for 53% of the portfolio is continuing to perform very well, and we're capping the strong internal growth potential.

With offices, the demand is slowly picking up, but has not reached yet to former year's levels. The macroeconomic and geopolitical environment remains mixed. This is creating volatility and a certain level of uncertainty, especially given the conflict in the Middle East. Against this environment, we remain confident in our ability to navigate ongoing volatility as we have done so successfully in the past years since the outbreak of the COVID pandemic.

Our decision in Q4 of last year and the beginning of 2026 to proactively refinance our upcoming maturities has proven to be prudent. And as a result, this macro uncertainty is currently not impacting us immediately with sufficient liquidity to cover maturities this and next year. That being said, we will continue to monitor the market for opportunities to further optimize our debt portfolio proactively.

Overall, with strong operational base, improving financial guidance and sufficient liquidity, we believe the group is well positioned as we move through 2026.

On Slide 4, we present the key financial highlights for Q1 2026. Net rental income amounted to EUR 297 million, higher compared to Q1 2025, primarily driven by solid like-for-like rental growth of 3%, which more than offset the impact of net disposals. Adjusted EBITDA amounted to EUR 250 million, stable compared to EUR 251 million recorded in Q1 2025.

FFO I amounted to EUR 70 million, lower by 8% compared to EUR 76 million, mainly due to higher finance expenses and in line with our guidance. The negative impact was mostly offset by operational growth and lower perpetual notes coupons from our successful transactions in Q4 last year.

As a result of the accretive transaction to increase our stake in GCP, we increased our FFO I by EUR 35 million on an annual basis with EUR 25 million impacting this year's FFO, and we, therefore, increased our absolute guidance for 2026 with FFO I to a range of EUR 275 million to EUR 305 million.

On a per share basis, the guidance remained in the range of EUR 0.24 to EUR 0.27. EPRA NTA per share amounted to EUR 8, increasing 3% compared to EUR 7.8 per share as of December 2025, mainly as a result of the share buyback. The share of green certified assets steadily increases with 72% of our commercial portfolio now certified, including 80% of offices and 67% of the hotel assets. Liquidity is high and increased to EUR 4.1 billion plus EUR 1 billion undrawn credit lines, maintaining the wide covenant headroom.

Tim, please continue.

Thanks, Barak. Slide 5 outlines the main impact from our increased share in GCP after the share transaction, which we concluded in April. We're happy to announce the high acceptance achieved, which enabled us to increase our share in GCP from 62.5% prior to the offer to 81.5% after settlement.

The transaction was FFO per share neutral on day 1 with the transaction executed at an attractive 10% FFO yield. In other words, we have increased our position in one of the most attractive real estate asset types without diluting the FFO per share.

Following the increased stake, we have a simplified corporate structure and balance sheet with reduced contribution to minorities, resulting in lower leakage and further supporting our EPRA LTV ratio. We've increased our exposure to the residential markets in Germany and London, which benefits from strong and structural fundamentals and will strengthen our FFO generation going forward.

Overall, we see the results of the exchange offer as very beneficial. Slide 6 sets out our strong achievements year-to-date and how we are positioned for growth in 2026. We continue to extract growth potential across the portfolio. The swift and efficient execution to increase our stake in GCP was FFO accretive and thus provided strong absolute FFO growth from day 1.

Furthermore, we began ramping up investments in our portfolio in recent periods, which we will continue in the coming periods as we have more untapped potential to lift. Through targeted refurbishments, conversions and expansion projects, we are unlocking embedded value and driving additional like-for-like rental growth.

At the same time, we continue to actively pursue capital recycling. This strategy allows us to dispose of assets at lower yields and reinvest into opportunities at higher yields, creating meaningful accretion. As we continue to successfully sell assets while acquisition opportunities fitting our criteria remain selective, we channeled some of our disposal proceeds into a share buyback program, effectively selling assets around book value and repurchased our shares at a significant discount to NAV. We executed 60% of the program already in Q1.

And as of today, the program is almost fully completed. As a result, the positive impact on the FFO I per share has been faster than initially expected, but the full impact of the share buyback program is to be seen in the next periods.

Regarding acquisitions, we are selectively targeting high-quality assets at attractive yields with clear upside potential without compromising on location or quality, focusing primarily on residential and hotel properties. On the financing side, we have continued to strengthen our financial profile.

Our priorities remain in extending the average debt maturity profile and proactively managing financing costs. We have already fully refinanced the perpetual notes with the first call date in 2026, and our debt issuances in Q4 of last year and the beginning of this year leave us with no more near-term refinancing needs, providing flexibility over the timing of future financing.

Taken together, these initiatives form a disciplined framework for operational execution and capital allocation, positioning us well for 2026.

Frank, please continue.

Thank you, Tim. Turning to Slide 8. The portfolio continues to demonstrate a well-balanced allocation across asset classes. Hotels account for 20%, residential 33%, office 34%, logistics and retail comprise 6%, while development investment properties make up 7%.

Geographically, the portfolio remains concentrated in key metropolitan markets. Germany, the Netherlands and London together represent 89% of the total portfolio. Berlin constitutes the largest single city exposure at 23%, followed by London at 9%, Munich at 7% and Frankfurt at 6%. These markets are characterized by strong underlying fundamentals and provide meaningful long-term value potential.

Slide 9 highlights the continued strength of our operational performance, reflected in solid like-for-like rental growth across the portfolio and demonstrating the resilience of our diversified asset base. Our total like-for-like rental growth was 3% across the portfolio, with strong contributions mainly from Berlin, London, Utrecht and Frankfurt.

Residential assets, which represent 33% of the portfolio delivered a like-for-like rental growth of 3.7%, supported by strong market fundamentals and structurally low vacancy levels. In addition to the like-for-like results, the residential portfolio benefits from operational growth driven by our capital recycle activities. Hotels accounting for 20% of the portfolio achieved a like-for-like rental growth of 4%, driven by targeted investments with attractive contractual rent step-ups and stable operating environment that supports healthy tenant performance.

New signed leases further support the diversification of our strong tenant mix. Together, our living, residential and hotel portfolio segments comprise more than half of the overall portfolio and continue to provide a strong foundation for rental growth. In offices, which makes up 34% of the portfolio, we achieved a like-for-like rental growth of 1.5% despite ongoing muted market activity.

Growth was mainly driven by indexation and rent reversion offsetting slightly higher vacancy. This performance is supported by our gap to market rents, which underpins tenant retention and leasing activity.

During the last 12 months, we renewed 200,000 square meters of leases at an average WALT of 5 years at trends slightly above previous levels. We also signed 140,000 square meters of new leases at an average WALT of 7 years and rent level around 11% above prior rates. The portfolio is well positioned to benefit from increased demand once we see the economic situation improve, which will translate into higher office activity.

Please be aware that we publish on our website on a continuous basis the information on new signing of rent agreements. In parallel, we are progressing with our conversion initiatives, particularly the transformation of assets into service apartments, data centers and residential properties. The bulk turbo regulation further supports these efforts by enabling faster office to residential conversions, increasing flexibility, reducing regulatory uncertainty and hurdles and unlocking additional FFO and value potential.

Development rights and the invest portfolio account for 7% of the portfolio. Office to service apartment conversions are progressing well and additional repositioning and conversion projects are underway with rental contribution expected to come through over the coming years. We have started the refurbishment of our hotel in Frankfurt, the former Intercontinental.

We expect to complete the renovation within 2 years and reopen the hotel, which has been closed since 2021. We also expect to complete the refurbishment and reopen our hotel in the city center of Hanover at the end of this year. We will also complete this year the refurbishment of additional 260 rooms of Avani hotel in Rome, which will contribute next year to our rental income. We are working on many more hotel upgrades will continue driving rental growth. We expect overall like-for-like rental income growth in the range of 2% to 3% in 2026.

Kamaldeep, please continue.

Thank you, Frank. On Slide 10, we provide an update of the key portfolio KPIs. As of March 2026, the portfolio is valued at EUR 25.1 billion and generates EUR 1.15 billion of annualized recurring rental income corresponding to a rental yield of 5%. These yields are based on current contractual rents and do not reflect future agreed rent step-ups from the hotel properties. Assuming full contractual rent, including the agreed rent step-ups for the newly opened hotels, the hotel portfolio yield increases to 5.8%.

Also note, the office portfolio yield of 5.1% reflects the vacancy of the respective assets. Considering the properties at 100% occupancy, the yield would be 6.1%. The WALT remains solid at 7.3 years, supported by a well-balanced maturity profile. EPRA vacancy stands at 7.5% compared to 7.6% in December 2025, while in-place rent remained stable at EUR 11.7 per square meter. It is important to note that EPRA vacancy in line with market standards excludes properties under major refurbishment or development.

Development rights and the investment portfolio account for 7% of the total portfolio and include approximately 700,000 square meters of existing space with around 90% vacancy. The embedded value and rental growth potential of these assets will be realized progressively over the coming years with further details provided on the development portfolio slide in the appendix.

On Slide 11, we summarize our conversion strategy, which will drive revenue growth through targeted investments to convert part of the portfolio, mainly offices into asset classes, which generally generate higher rents and partially also longer leases. Most of these additional rents come on top of the like-for-like rental growth.

Starting with service apartments, there is a structural demand for flexible living solutions in central urban locations. By converting assets into fully serviced apartments or mixed-use formats, we are able to respond to local demand dynamics while extracting higher rental income through long-term leases of up to 20 years.

We have a good track record in executing these projects in recent years and a good pipeline of projects coming up. Moving to residential conversions.

We are leveraging Fast-Track regulations to accelerate the transformation of commercial properties into high-quality residential assets. These conversions allow us to shift capital into one of the highest demand asset classes, improving long-term cash flow stability.

Early and ongoing discussions with municipalities have been constructive with encouraging feedback supporting approximately 120,000 square meters of office space suitable for conversion, with an additional pipeline currently under review.

Finally, data centers represent a third highly attractive conversion pathway. A large part of our portfolio is positioned in locations with strong demand for data centers, particularly in Germany. The data center conversions have a high growth potential with stronger revenue potential driven by location and grid access. Overall, conversions demonstrate once more how we are actively reallocating capital, leveraging our portfolio and in-house expertise to optimize asset allocation and extracting additional value across the portfolio.

On Slide 12, we outlined the progress achieved on disposals so far this year. Year-to-date, we have signed disposals totaling circa EUR 300 million and closed in Q1 EUR 27 million. The closed disposals were executed at 1% above book value. The disposals were predominantly comprised of non-core properties, mainly office and residential assets alongside selected sales of development and retail properties. From a geographic perspective, activity was mainly concentrated in non-core locations, NRW, Leipzig, Berlin and London.

In aggregate, disposals were completed at a 15% premium to total cost, resulting in disposal gains of circa EUR 0.3 million and contributing EUR 3 million to FFO II. In addition to the completed disposals, we have circa EUR 635 million of investment properties classified as held for sale as of the reporting date. After the reporting period, we completed additional disposals amounting to EUR 270 million around book values, further supporting our capital recycling strategy.

The majority of the signed and completed disposals were Penta branded hotels comprising 11 properties in Germany, Belgium and France. These hotel properties were excluded from the December 2025 portfolio and classified as held for sale. Hence, the disposal has no impact on the portfolio's annualized rental income and our 2026 guidance. On the acquisition side, as of Q1 2026, we signed acquisitions totaling EUR 175 million, of which EUR 100 million was signed in Q4 of last year.

Of the signed acquisitions, EUR 75 million relates to residential assets in Germany that were completed after the reporting period. The remaining EUR 100 million consists of assets located in London with around half completed in May and the balance expected to close in the third quarter of 2026. In parallel to acquisitions, a portion of disposal proceeds are being allocated to our share buyback program, which is highly accretive.

As of last week, 93% of the program has been executed at an average price of [indiscernible] per share, representing a discount of 67% to NAV and delivering strong FFO per share accretion. On Slide 13, we provide an updated overview of our hotel tenant base, reflecting the disposal activity and new leases signed. With over 2 decades of activity in the European hotel market, the group has built and maintained long-term relationships as a key in its business culture, which has allowed us to develop strong partnerships with a broad range of hotel operators.

Center Parcs is the largest individual tenant and represents approximately 7% of total group rental income. In recent months, we have signed several new leases, resulting in further strengthening of the tenant mix. In addition, following the disposal of our remaining Penta hotels, Penta is currently no longer a tenant. We view our in-house capability to operate hotels on an interim basis as a key advantage.

While our strategy is focused on securing long-term leases with strong tenants, this capability allows us to replace operators with limited disruption to hotel operations and long-term value, thereby reducing dependency risk. Further details of our hotel tenants and their backgrounds are provided later in this presentation and on our website.

On Slide 14, we provide an overview of the ongoing progress and growth of ATworld, which contributes to expand rapidly and has now over 850 locations across 25 countries. highlighting the strong demand for flexible workspace solutions and scalability of the business model. While ATworld started in our portfolio, we have developed it into a proptech solution with revenue-generating potential with the platform scaling through additional of third-party spaces, which now make up the majority of spaces available on the platform.

ATworld is strongly aligned with modern working trends, providing a wide range of working environments tailored to different needs from premium office setting to informal or meeting spaces. The flexibility, combined with the variety and large number of locations makes ATworld an ideal solution for business travelers as well as freelancers, start-ups and remote workers.

On this slide, we also highlight two examples of ATworld network locations. The first is within our asset Hilton Berlin. The hotel has a large and underused lobby space. While part of the lobby was already utilized as a ATworld space, the data we gathered made it clear that a more premium offering would further enhance value.

We, therefore, converted part of the space into a premium co-working offering operated by Mindspace Germany, one of the company's joint ventures. The offering benefits not only from its central location, but combines additional services and amenities provided by the hotel into the offering, such as larger meeting and conference rooms as well as access to the fitness space and swing pool.

Limor, please continue on the next slide.

Turning to Slide 15. We provide an update on our green certification strategy and the strong progress across the portfolio. We continue to expand certification coverage across our commercial assets. Using the BREEAM framework, we are driving higher standards, better building performance and stronger tenant engagement.

Today, certification coverage has expanded to 72% of the portfolio. We are progressively improving the scoring level to at least a very good rating. We are also proud to share an important milestone. This year, we achieved the first excellent BREEAM score in our portfolio. This achievement reflects targeted measures to improve sustainability of our building in key areas such as energy optimization as well as measures implemented as part of the letting processes, including measures that improve the well-being of our tenants' employees.

On Slide 16, we present an overview of our ESG rating and awards. We are very proud to be included once again in the S&P Sustainability Yearbook. This marks our second consecutive year, while GCP has also been included this year for the first time.

Out of more than 9,200 companies assessed across over 50 industries, fewer than 900 companies were selected for inclusion based on the S&P Global's Corporate Sustainability Assessment. This recognition places both companies among the industry top performers and supports our inclusion in the Dow Jones Best-in-class Europe Index. Here, we are included for the fourth consecutive year.

In addition, Morningstar, Sustainanalytics recognized us as an ESG leader with top scores for both globally and within the real estate sector. These achievements demonstrate that our ESG strategy is creating measurable impact and positioning us among the leading performers in the industry.

Jonas, please continue on the next slide.

Thanks, Limor. Moving on to Slide 18. We present our financial results for the first quarter of '26. Net rental income reached EUR 297 million, slightly above the EUR 295 million recorded in Q1 '25. This increase was driven by like-for-like rental growth, partially offset by the impact of net disposals.

Operating and other income, which primarily comprises recoverable expense from tenants remained stable year-over-year. As we did not revalue our portfolio during Q1, the impact from property revaluation and capital gains was significantly lower compared to last year, where we recorded a positive result of EUR 204 million.

We will revalue the portfolio as part of the semi-annual report. The current period result was driven mainly by a capital gain as a result of small volume disposals executed a 1% premium to book value and a 15% gain over total cost. We will revalue our portfolio as part of the H1 results. Finance expenses amounted to EUR 70 million in Q1 '26, in line with the EUR 70 million in the fourth quarter of '25.

The increase compared to last year was mainly the result of refinancing measures executed in '25, which have a full period impact in Q1 '26. Overall, profit for the period amounted to EUR 119 million compared to a profit of EUR 319 million in the first 3 months of '25, with the change mainly explained by the absence of revaluations in Q1 '26. On a per share basis, net profit amounted to EUR 0.05.

Turning to Slide 19. We present our adjusted EBITDA and FFO results. Adjusted EBITDA for the first 3 months of '26 totaled EUR 250 million, stable compared to the equivalent period of '25, mainly as a result of disposal impacts offsetting internal growth. FFO I amounted to EUR 70 million, in line with our guidance. The lower perpetual notes attribution resulting from the perpetual note transactions conducted in recent period were offset by higher financing expenses.

On a per share basis, FFO I amounted to EUR 0.07, stable compared to EUR 0.07 in the equivalent period of '25. The positive contribution from the share buyback will support the per share FFO I in the coming periods. FFO II, which incorporates disposal gains over total costs was EUR 74 million, decreasing year-over-year mainly as a result of lower disposal activity in the reporting period.

On Slide 21, we highlight our EPRA NAV metrics. EPRA NRV totaled EUR 9.7 per share, increasing by 3% compared to December '25. EPRA NTA totaled EUR 8 per share, increasing by 3% as well. All EPRA NAV metrics are positively impacted by operational profits. On a per share basis, the NAV metrics are further supported by the share buyback, which is being executed at a steep discount to NAV.

Turning on to Slide 22. We present our maturity profile. Our average debt maturity stood at 3.6 years at quarter end, extending to 4.4 years when taking into account the liquidity position. We continue to maintain strong financial flexibility supported by broad access to multiple sources of financing.

This is underpinned by a solid BBB credit rating from S&P, a high level of unencumbered assets across diversified asset types and geographies, strong mortgage banking relationships as well as additional undrawn revolving credit facilities amounting to EUR 1 billion with an average maturity in the first half of '29.

Our high hedging ratio of 95% further limits potential negative impact from market volatility and our cost of debt is stable at 2.3%. The maturity profile shown on the slide shows a further breakdown of the debt maturities, providing a clearer picture of what part of maturities are attributable to GCP.

On Slide 23, we provide an overview of our key debt metrics and our solid financial profile. Our loan-to-value stood at 42%, slightly up compared to 41% at the end of '25. Our ICR stood at 3.4x and net debt to EBITDA stood at 11x in Q1 '26, both negatively impacted by the higher financing expenses. Additionally, we continue to maintain a substantial pool of unencumbered investment properties amounting to EUR 17 billion, representing approximately 69% of rental income.

On Slide 24, we present key details on the recent perpetual note transactions. Following GCP's perpetual note issuance and tender offer conducted after Q1 '26, in addition to Aroundtown's perpetual notes issuance in January of this year, all perpetual note refinancing needs have been fully addressed.

As a result, the next first perpetual note call date for Aroundtown in '29 and for GCP in 2031. As a result of the transactions conducted this year and at the end of last year, perpetual notes coupon payments have stabilized and will be below 2025 levels.

To conclude, on Slide 26, we present our adjusted guidance for 2026. We now guide for FFO I in the range of EUR 275 million to EUR 305 million and FFO I per share in the range of EUR 0.24 to EUR 0.27. Following the increased holding GCP as the share buyback, which adds to the existing positive drivers such as expected gradual rental growth and the positive impact from perpetual note transactions, we are unlocking FFO supportive growth measures, both in absolute and per share level.

On the other hand, we also expect more volatile environment, which could result in higher refinancing costs, which have a potential offsetting impact on the positive drivers.

This concludes our presentation. As always, you can find further material in our appendix. With that, we would like to start the Q&A. Before we invite your direct telephone questions, we would like to answer questions that we have received by e-mail prior to this call. For simplicity reasons, the team have taken liberty to group similar questions in order to answer as many questions as possible.

Allow me now to read out these questions. Could you provide an update on your disposal progress after the reporting period?

Year-to-date, including after the reporting date, we have signed disposals amounting to circa EUR 300 million, representing around half of our properties held for sale. After the reporting period, we completed disposals in the amount of circa EUR 270 million, primarily consisting of the company's Pentabranded hotels, which includes 11 hotels in Germany, Belgium and France. These hotel properties were previously classified as held for sale and were excluded from FFO I guidance. Therefore, there is no negative impact here.

Thank you, Kamaldeep. How complex are office to residential and service apartment conversions in terms of permitting? And how much space are you currently converting with what kind of rent upside?

Office to service apartment conversions typically follow a relatively straightforward execution path. In most cases, these projects remain within the existing zoning framework and can be implemented with a standard building permit, which is usually obtained within a few months and up to a year. We currently have several projects under execution alongside additional projects in the planning phase.

To date, we have completed several conversion projects across the portfolio, including the recently completed project in Rotterdam. These conversion investments are yielding very well, diversify the demand structure of the property, and we don't have any operational efforts as these are led to an external operator with a long -- on a long-term basis of up to 20 years.

As we will continue identifying more projects, the share of our living portfolio, which already makes up the majority of our portfolio will increase while the share of our office portfolio will reduce. Demand for apartments, including service apartment, remains very strong, and we are working with a broad range of hospitality and living operators as shown in our presentation.

These projects typically achieve higher rents than traditional office use, supported by longer lease terms of 15 to 20 years, which enhances income visibility and stability as office leases are generally shorter.

We are in active discussions with multiple operators who are looking to expand and value Aroundtown as a long-term partner with a large and diversified portfolio, and we will provide further updates as new projects are added to the pipeline.

All planned projects currently presented in the appendix of our presentation are expected to generate additional EUR 15 million of annual rental income, corresponding to an attractive yield of around 15% on invested capital. We see these conversions as a compelling way to unlock value from our existing office portfolio while responding to structural demand in the living and hospitality segments.

Do you have an update regarding the impact of the Bau-Turbo regulation on your office conversion strategy?

Bau-Turbo regulation is a positive development of our conversion strategy as it streamlines change-of-use processes and significantly shorten approval time lines. This makes conversions from commercial to residential users more practical and broadens the range of economically viable projects.

We have already initiated discussions with municipalities across several locations in Germany and have received encouraging feedback for around 120,000 square meters of office space.

Based on this feedback, we're currently working through the detailed business cases to assess the economic ability of individual projects as the new subsidy program for such conversions have been published. Beyond our own portfolio, we also expect the Bau-Turbo framework to have a broader market impact by structurally reducing office supply through conversion to residential, hospitality or other alternative uses, which should be supportive for the overall office market.

Thank you, Barak. How are you approaching your development portfolio? And what role does it play in future value creation?

Development projects account for approximately 7% of our portfolio and represent an important source of future rental growth and value creation. These projects capture embedded development potential across both land plots and mainly existing building.

We view these assets as growth opportunity that can be unlocked through disposals, refurbishments, conversions and in selective cases, new construction. Each development asset is assessed individually, and we actively explore the most attractive and capital-efficient way to unlock its potential.

Depending on the project, this may involve preparing planning concept, securing permits and subsequently disposing of the asset with approved rights or fully executing the CapEx program, typically supported by a pre-let agreement.

The key focus area is conversions into residential, benefiting from the Bau-Turbo framework as well as commercial living and hospitality concepts. The development portfolio comprises around 700,000 square meters of existing space, of which approximately 90% is currently vacant.

Geographically and by use, the portfolio is well diversified. Our efforts are primarily concentrated on the living segment, including residential, hospitality and mixed-use schemes, where we see the strong structural demand and long-term fundamentals.

Value creation is realized through a combination of targeted disposals where development rights are crystallized and selective execution where we reposition assets through upgrades and disciplined CapEx deployment. This approach allows us to optimize returns while maintaining a clear focus on capital efficiency across the wider portfolio.

Our experienced in-house development team is continuously refining the optimal business plan for each asset, working closely with the local authorities, construction partners and where relevant, assessing available subsidy schemes. An overview of a selected development project is included in the appendix of our presentation with additional assets available on our website.

Thank you, Barak. Given the continued discount to NAV, do you intend to increase the size of the share buyback program?

The share buyback is an integral part of our capital recycling strategy, allowing us to deploy disposal proceeds in a highly accretive manner. To date, we have completed approximately 93% of the program at an average price of EUR 2.55 per share, which represents a discount of around 67% to NAV and delivers meaningful FFO and NAV per share accretion. We expect the current program to be fully completed shortly.

We view share buybacks as part of our capital recycling and holistically review all our options on an ongoing basis. At this stage, we believe that the buyback program, together with the proposed dividend is a good balance between capital returns, balance sheet strength and financial flexibility. We're monitoring the current macro environment, which will influence our decision if and when to extend it.

Thank you, Jonas. How do you view your new stake in GCP? Do you plan to increase your stake further?

When we launched the share exchange offer, we set a limit of ownership of up to 89.5% of the total of GCP shares. However, please note that we do not have set an ownership goal. We are very happy with the high acceptance of the offer and the results of the exchange.

We continue to have the option to acquire additional GCP shares in the market, which we will use on an opportunistic basis as GCP's FFO yield is highly attractive and is one of the possible growth drivers in [indiscernible] evaluating the benefits of each option on an ongoing basis to ensure an accretive deployment of our capital.

Thank you Tim. Could you provide some details on your updated guidance? What are the main drivers of the increase?

The main driver of our increased absolute guidance was the increased stake in GCP from 62% to 82%, which was an accretive transaction and is expected to add around EUR 35 million of annualized FFO I. As a result, we have raised our 2026 FFO I guidance to EUR 275 million to EUR 305 million, reflecting the periodic impact where the per share guidance remains unchanged at EUR 0.24 to EUR 0.27 as the transaction is FFO I neutral from day 1.

While the increased stake in GCP supported the FFO growth on an absolute basis, the share buyback supports growth on a per share basis.

Thank you, Jonas. Those were the questions that we received prior to this call. We can now start the open session for your questions. [Operator Instructions]. The first question comes from the line of Ellis Acklin from First Berlin.

I've got a question, I believe, best directed at [indiscernible] pertaining to AT World. It looks like that is rapidly moving from pilot phase into a broader rollout. And I was wondering if you could maybe give us a sense of the economics that is now emerging from those platforms at this time, maybe in terms of like revenue per location, membership growth or tenant retention? Just any sort of KPIs that sort of give us an indication of what's emerging from that standpoint.

Thank you very much for the question. Now it's progressing really well. I mean you see that the platform is growing and there's third-party spaces onboarding and clearly we keep up that base also. We're still in the start-up phase, meaning we're really building up the platform and clearly the value of the platform itself. And with that, the next step is clearly driving more membership.

So we have a few hundreds of memberships, but nothing too material to brag about it yet. So we're moving really from the start-up phase into the scale-up phase and working hard. And we see the potential there. We definitely get also the feedback of the value that the membership is seeing when they're using it. So we believe there's a potential and we want to tap it. So let's hope in the next few quarters.

[Technical Difficulty] Ladies and Gentlemen, please hold the line. The connection with the speakers has been lost. The conference will continue shortly. The next question comes from the line of Marios Pastou from Bernstein.

I have a question related to acquisitions. I see most of the recent deals that have been signed have been in the residential space. So I just wanted to check an update on the pipeline of potential deals you're currently tracking maybe by location, but also the asset types you're seeing as most attractive to your portfolio and also whether you're seeing more opportunities coming to the market in the current environment?

Thanks, Marios, for the question. Now it's promising to see that we see some acquisition opportunities, but clearly, they remain selective, but more selective because we are very strict in our criteria what we want to buy. So the acquisitions were resis. Clearly, GCP, when they announced, they gave some more input on those. But very good resi assets standing as well as developments in Germany as well as in London.

So it really fits the capital recycling strategy of selling lower yielding and buying high yielding. But again, the opportunities remain selective in terms of what we would like to buy. We're looking mainly at residential and hotel. And we are very active in general. We're looking at a lot of deals. It doesn't necessarily mean we want to take those deals. So we have an active pipeline, but I would not call it advance or anything like this.

Obviously, you saw that we launched a share buyback program, and that's exactly the reason why we launched it because the acquisition opportunities were not as favorable as the share buyback program. So that's why we basically refrained from this opportunity and took the share buyback instead. Now going forward, we still believe there will be more opportunities coming up.

There's opportunities hopefully from a mismanaged situation, distressed financial situation. And we're ready. We're here. We launched the TAC fund, which gives us a leverage-light opportunity to grow. But currently, we believe that we will probably pull the disposal proceeds into other accretive growth measures, for example, the conversions, as we also mentioned, which are yielding very well currently.

And maybe just to add to that, I mean, overall, we're looking to balance between the share buyback as well as accretive acquisition opportunities we see while at the same time, of course, making sure that our leverage is conservative.

Next question comes from the line of Stefan Scharff from SRC Research.

I have a very general question about the still sluggish German office market. What's your view here, what could be for the second quarter and also for the second half of the year in terms of investment activities of possible investors also from abroad and also in terms of tenant demand for office space. The economy in Germany is still sluggish and has more or less a zero growth.

Stefan, thank you for the question. Yes, we agree with you. The market is not there. It didn't recover full. But in general, we start to see signs of positive dynamics. They're coming from a pickup in demand and also on the back of low supply in the market. We also clearly see and we're one of the players in the market doing the same, taking office space out of the market.

So low construction, reducing office space, and we believe that we will see hopefully better performance. But right now, it's okay. It's kind of stable. You see we have positive like-for-like performance, which is not as strong as the other asset types, but we're happy with the results, and we're working hard for it.

We now have a question from the line of Stephanie Dossmann from Jefferies.

Actually, I would have three questions, please. The first one is regarding your EPRA LTV, which is still up. And I was wondering if you could give a kind of detailed figure about the difference impact to reconcile the increase. I mean, even after the share increase in Grand City, which has a lower LTV.

So I -- just would like to reconcile a bit the different impact in the increase of the EPRA LTV to 59%. And the second question would be about your JVs and the impact on the FFO I. Could you give the detailed figures of Globalworth's contribution in Q1 '26 compared to Q1 '25?

And the last one regarding, again, the investment market, the market is currently challenging in the current context on and we start to see yield expansion actually in market data. So I was wondering what was your expectation in terms of like-for-like value change for '26 in your segments, so in offices, hotel and resi, please?

Stephanie, thank you for your questions. First, talking about the FTV. Yes, correct. The transaction with Grand City, there is a positive impact. On the other hand, clearly aware of the share buyback we launched earlier this year of EUR 250 million, EUR 150 million of that was already spent had a negative impact. Those I think the main factors in terms of EPRA ATV, how we got to the 59%.

Please also note that we didn't have any revaluations in Q1 did value the portfolio. So you'll see that for H1. Regarding the FFO I and the JVs, so yes, Globalworth, the impact decreased a little bit because Globalworth is paying lower dividend. Happy to go through more details later offline, Stephanie.

Regarding the investment market value changes. So yes, look, we are -- we continue to sell. We're selling well, and we're selling on book value. Yes, we're selling a mix of asset types. We sold mostly this year hotels and developments, but you saw last year, the majority or not, but a big chunk, really big chunk was offices. We also still see in basically all asset classes we see demand. Our size and our diversity clearly plays in hand to find suitable buyers match with our assets.

Value change in general, we'll have to see. We will come out again in H1 with our valuations. We see that valuations continue performing as before. meaning operational growth is supporting valuation growth.

Now clearly, the recent volatility in the market will probably have an impact. It will all depend clearly if it's a short-term impact or a long-term impact. But we -- let's say, we see less of a growth materializing into the value. But again, valuations performing in the same direction as they did before.

And maybe just to follow up on your second question in terms of contribution to JVs and FFO. The contribution here was about EUR 10 million. In previous comparable period was EUR 12 million, so slightly lower.

And I think also if you're looking at this whole year in terms of expectation, I think we're looking at this EUR 10 million per quarter, I think assumption also for the rest of the year and the run rate.

Also I wanted to add on the LTV question before. Clearly, the disposals -- disposals which were closed in Q1 was a relatively low amount compared to actually the big amount that we closed in Q2. So clearly, if you factor this in, there will be another around 1% decrease only from that disposal impact.

Okay. It seems that there are no further questions. Thanks very much, every time for joining and a valuable questions. Always happy for that, and we'll see each other very soon clearly for a lot of more upcoming conferences prior to the summer break, but you can, as always, reach us through e-mail -- thank you.

Good afternoon, everybody. Thank you for joining us for Aroundtown's Full Year 2025 Results Call. You can view this presentation on Aroundtown's website, either on the Home section or under Financial Reports of the Investor Relations section.

Guiding you through the presentation today will be CEO, Barak Bar-Hen, CFO, Jonas Tintelnot, Executive Director, Frank Roseen; Chief Capital Markets Officer, Timothy Wright; Chief Sustainability Officer, Limor Bermann; Deputy CFO, Kamaldeep Manaktala; and representatives from Grand City Properties are also present. [Operator Instructions]

With that, I would like to hand over to Barak and the rest of the team, who will guide you through the presentation of our results.

Good afternoon, and thank you for joining us for our call for year 2025 results presentation. As you have noticed, we have launched a share-to-share voluntary tender offer for GCP shares and therefore, came out earlier with the results. We published our results in parallel with GCP, so both companies' most updated numbers are the base for the transaction. We also announced our decision to recommend to distribute a dividend for 2025, after 3 years without a dividend payout.

We will start with the FY 2025 presentation. And after that, we will continue with the offer presentation. After both presentations, we will start the Q&A session.

2025 was a year of progress for the group. We benefited from more supportive economic backdrop with further rate cuts by the ECB, improving inflation dynamics and improving sentiment across Europe. In Germany, the government's sizable stimulus package and long-term investment plans have created a more constructive environment, which is starting to show its positive impact on the macroeconomic numbers, and this was further reflected in higher transaction activity and steadier financing markets.

Against this backdrop, our portfolio delivered solid performance supported by strong fundamentals in residential and hotel, stable contributions from offices and continued progress on targeted conversions where new regulation provides additional flexibility and faster execution.

Alongside our operational delivery, we advanced our capital recycling strategy, redirecting capital from lower-yielding assets into accretive high-quality opportunities under a disciplined return-focused approach.

We also continue to strengthen our financial profile, executing a range of capital market transactions that extended our maturity profile and enhanced our funding diversification. This development, together with the stable performance of our portfolio, placed us in a strong position as we look ahead to 2026. We note that the market is again in uncertainties due to the war in Iran, which could escalate into original war. We are equipped with high liquidity to deal also with additional market volatility and have the cash required for our near-term maturities.

On Slide 4, we present the key financial highlights for 2025. Net rental income amounted to EUR 1.2 billion, stable compared to 2024, primarily supported by solid like-for-like rental growth of 3%, offsetting the impact of net disposals. Adjusted EBITDA amounted to nearly EUR 1 billion, lower by 1% compared to '24. FFO I amounted to EUR 288 million, in line with our guidance, down from EUR 316 million in '24, mainly due to higher finance expenses. These negative impacts were mostly offset by operational growth. As part of 2025 annual report, the complete portfolio was revalued by external independent appraisers, resulting in a positive like-for-like value growth of 3.1%, including CapEx and 1.6% net of CapEx. The results were mainly driven by operational developments.

EPRA NTA per share amounted to EUR 7.8, higher by 5% compared to December '24. We are making ongoing progress toward obtaining Green Certificates for our assets with 70% of our commercial portfolio now Green Certified, including 79% of offices and 65% of hotel assets. Liquidity is high and increased to EUR 4 billion plus EUR 900 million unused credit lines, maintaining wide covenant headroom. The EPRA LTV was reduced by 2% to 58% and our BBB rating was affirmed by S&P in December '25.

Given the further improvement in the environment in '25, supported by continued good volume of disposals and our proven access to capital, the company proposes to resume a dividend payment for '25. The proposed dividend per share for '25 is EUR 0.08 based on payout ratio of around 30% of FFO I and subject to approval at the AGM.

Including the ongoing EUR 250 million share buyback program for '26, the total shareholder return is expected to be more than EUR 330 million this year. Furthermore, the company has also updated its dividend policy. And from 2026 onwards, the payout ratio is set at 50% of FFO I per share.

Slide 5 sets out how we are positioned for growth in 2026. We have strong liquidity and that can support our internal and external growth together with keeping our financial healthy. On the operational side, we continue on focusing on delivering both internal and external growth, starting with a significant potential that is embedded with our existing portfolio. We continue to extract this throughout targeted operational improvements and by advancing accretive office conversion projects where the economics are compelling. We already started extracting more of this potential in recent periods and expect further acceleration of accretive projects in the coming years, all will support our EBITDA growth going forward.

Capital recycling will also remain a key driver. By selling assets at lower yields and reinvesting in opportunities with higher returns without compromising on quality, we can generate accretive growth. The current market environment is helping this approach as the recovery across sectors is uneven and creates attractive entry points for selective acquisitions.

On the per share profitability side, we are also reinvesting a portion of the disposal proceeds back into the portfolio as part of the ongoing share buyback program, which supports value creation on a per share basis. We see the share buyback as a relatively attractive alternative use of disposal proceeds at around book value and buying our shares at significant discount. The ECB's rate cuts and increased stability in financial markets created a more favorable environment by improving refinancing conditions, supporting yields and encouraging more activity in the transaction market.

On the financing front, we plan to continue strengthening our financial profile further. The main focus here is further extending the average debt maturity profile and continuing to proactively manage financing costs. Furthermore, as we have seen issuance spreads decrease throughout 2025, we have been able to mitigate part of the higher finance costs, including of perpetual notes by buying back relatively higher coupon instruments. We have already refinanced the perpetual note with a first call date in 2026. Only GCP's 1.5% perpetual note remains outstanding, which has its first call date in June '26. Together, these actions form a disciplined framework for operational execution and capital allocation, positioning us well for 2026.

Kamaldeep, please continue on the next slide.

Thank you, Barak. Turning to Slide 7. The portfolio demonstrates a well-balanced allocation across asset classes. We updated the presentation of the breakdown to present the development and invest portfolio separately. hotels account for 20%; residential, 33%; Office, 34%; logistics and retail, 6%; and the development and invest portfolio, 7%. We provide a further breakdown of the development and invest portfolio to their current use and envisioned use later in the presentation.

Geographically, the portfolio remains concentrated in key metropolitan markets. Germany, the Netherlands and London together represent 89% of the portfolio. Berlin constitutes the largest single city exposure at 23%, followed by London at 9%, Munich at 7% and Frankfurt at 6%. These markets are characterized by strong underlying fundamentals and provide meaningful long-term value potential.

Slide 8 presents the continued strength of our operational performance, reflected in solid like-for-like rental growth across the portfolio. The results demonstrate the resilience of our diversified asset base. Residential assets representing 33% of the portfolio delivered like-for-like rental growth of 3.6%, driven by strong market fundamentals, record low vacancy levels and further uplift supported by our capital recycling activities.

Hotels, which account for 20% of the portfolio, achieved like-for-like rental growth of 3.5%. This performance is driven by targeted investment into the portfolio at attractive contractual agreed rent step-ups, further supported by a stable operating environment that enables tenants to maintain healthy operations. Together, these two asset classes comprise 53% of the portfolio and continue to provide a strong foundation for rental growth.

In offices, which make up 34% of the portfolio, we achieved like-for-like rental growth of 1.8% despite broader market headwinds, resulting in pressure on occupancy. This is supported by our gap to market rents, which give us a competitive advantage to retain and attract new tenants. Our office portfolio is well positioned to benefit from an increasing activity once the German stimulus package will be translated to stronger office demand. We are also advancing selected conversion initiatives, particularly into service departments and data centers, which demonstrates the portfolio's adaptability. The Bau-Turbo regulation provides further momentum by enabling faster office-to-residential conversions, increasing flexibility and unlocking additional FFO and value potential.

Development rights and invest portfolio account for 7% of the total portfolio. We are successfully completing office to serviced apartment conversions and several additional repositioning and conversion projects are currently underway and are expected to generate rent over the next years.

On Slide 9, we provide an update on the main portfolio KPIs. As of December 2025, the portfolio value stands at EUR 25 billion and generates EUR 1.15 billion in annualized recurring rental income, resulting in a rental yield of 5%. We note that the yields are based on current contractual rents and do not include future agreed rent ramp-ups. This is mostly relevant in the hotel sector, where significant contractual rent increases for the recent hotel reopenings are yet to be included. Including the stabilized rents, the hotel portfolio yield is 5.5%.

The WALT remains solid at 7.2 years, supported by a balanced maturity schedule that adds further downside protection. EPRA vacancy stands at 7.6%, up 0.1% in comparison to 7.5% in December 2024, and in-place rent has increased to EUR 11.7 per square meter from EUR 11.2 per square meter in 2024. We note that EPRA vacancy definition and applicable market standard does not include properties under major refurbishment or development.

The development rights and investment portfolio accounts for 7% of the total portfolio and includes around 700,000 square meters of existing space at circa 90% vacancy. The intrinsic potential of these developments and future rental income growth of the company will be extracted over the coming years. We present further breakdowns in the development portfolio slide.

On Slide 10, we look at the strength and resilience of our tenant base. Our portfolio remains highly diversified with over 3,000 commercial tenants alongside a very granular residential segment, thereby significantly reducing concentration risk. Our top 10 tenants together contribute less than 20% of total rental income, ensuring that no single tenant has a material impact on portfolio performance. The commercial lease expiry profile is well-distributed, giving us flexibility in uncertain market environments and helping us manage renewals and re-lettings proactively. The portfolio has a reversionary potential of around 25%, including the impact of vacancy reduction and reaching market rents across both commercial and residential assets.

On Slide 11, we outlined the progress made on disposals in 2025 and how these proceeds support our broader capital allocation strategy. During the year, we signed EUR 575 million of disposals and closed EUR 790 million, 1% below book value and at an average rental multiple of 20x. These transactions were mainly comprised of office and residential assets with additional sales of development, retail and hotel properties. Geographically, the disposals were concentrated in NRW, Berlin, Frankfurt, Bremen and non-core locations. Altogether, disposals were executed at 19% premium over total cost, resulting in EUR 128 million of disposal gains and EUR 415 million of FFO II.

In addition to completed transactions, the company currently holds EUR 650 million of investment property classified as held for sale. In addition to the acquisitions, a portion of the proceeds is being directed towards highly accretive share buybacks. In February 2026, we launched a EUR 250 million share buyback program at a significant discount to NAV, enabling us to convert disposal gains at book value, directly into per share value by reinvesting into our own portfolio. If fully executed at prevailing prices, the buyback is expected to increase FFO I per share by around 7% and NAV per share by approximately 5%. Our decision to launch the buyback comes on the back of successful de-leveraging efforts over the previous years and was primarily driven by the high accretion on a per share basis, following our proven ability to refinance our debt maturities at attractive rates and after considering our current leverage.

On Slide 12, we show the achievements we have made with disposals over the past several years. Since 2020, we have executed more than EUR 10 billion of disposals to third parties across all major asset types and locations, which have been executed at 2% above book value on average. This includes office, residential, hotels, retail, logistics and development rights spread across more than 800 properties, carried out also during challenging periods, validating our ability to sell successfully. When measured against total costs, including CapEx, these disposals were executed at an average profit margin of around 28%, reflecting the value created by the company and our ability to subsequently crystallize this value. The large volume of disposals also demonstrates our ability to transact under a wide range of market conditions and provides validation for the strength of the portfolio. Part of the disposal proceeds were reinvested into acquisitions.

As part of the EUR 10 billion disposal volume, the group provided EUR 0.8 billion of vendor loans in relation to a disposal volume of EUR 1.4 billion. To date, we have collected over EUR 1.1 billion for these transactions, EUR 0.3 billion were converted to properties at a discount to book value and less than EUR 30 million remain to be collected in 2026. The model of selling with vendor loans in a period when banks were reluctant to finance deals proved itself very successful.

On Slide 13, in 2025, we have EUR 500 million of property additions to the portfolio of mainly residential, office and hotel assets, primarily located in Germany and London with an average vacancy of 13%, of which EUR 0.3 billion were converted from vendor loans. 40% of the acquisitions are residential properties, 30% offices, 5% retail and the remaining development properties. To date, in 2026, we have signed acquisitions of EUR 175 million of residential properties in London and Germany. EUR 350 million of acquisitions were completed through the TAC fund. As a reminder, the rationale to build the TAC fund is to raise new external equity for acquisitions without the need to issue new shares, which will be dilutive due to the big discount of our share price to NAV. We note that the TAC fund does not and cannot acquire existing properties from the group, including GCP, and it cannot sell assets back to the group during the fund's term. We provide more details on TAC, including key terms in the appendix.

Frank, please continue on the next slide.

Thank you, Kamaldeep. Slide 14 provides an overview of the performance of our hotel -- our office portfolio. Offices represent 34% of the total portfolio and are focused on strong central locations in leading European cities. Berlin, Frankfurt, Munich and Amsterdam together account for 58% of the portfolio, reflecting our concentration of strong economic centers. As of December 2025, the office segment delivered a like-for-like rental growth of 1.8%, mainly driven by indexation.

Our tenant base remains robust and well diversified with around 75% of rental income generated for public sector organizations, multinational companies and large domestic operations. Our office vacancy rate stands at 30%, up slightly from 12.7% in 2024. This limited increase demonstrates the resilience of our office portfolio even in times of softer demand. Sustainability continues to be a key priority. Currently, 79% of our Office portfolio is Green Certified. The first reclassifications within the Dutch portfolio have already achieved higher scores, reflecting ongoing improvement measures.

From a market perspective, office take-up in Germany increased by 1.4% year-on-year. Although overall office vacancy has risen, it remains close to long-term historical ranges. Looking ahead, we see several positive tailwinds. The German government stimulus program is expected to support economic growth, which historically correlates strongly with office demand. The first positive impacts are now starting to appear in economic data.

In addition, the new Bau-Turbo regulation creates a meaningful opportunity for conversion projects. We have already identified approximately 120,000 square meters of space for visibility assessments and the initial feedback from municipality has been encouraging. To support this, we have also established a dedicated team, focused on conversions, to ensure effective utilization of government programs. This team centralizes the company's resources and expertise required for these projects, enabling efficient execution.

Overall, the combination of strong locations, a high-quality tenant base, improving sustainability credentials and supportive regulatory conditions position our portfolio well for the coming years. Further data is available in the appendix, including details of our top office tenants, the government stimulus package, the Bau-Turbo regulation and expected subsidy programs.

Slide 15 highlights the strength of our tenant diversification. We have no dependency on single tenants or industries. More than 70% of our office tenants are from the public sector, multinational companies and large domestic operations. The public sector alone accounts for more than 30%. Our top tenant -- office tenants -- our top 20 office tenants represent 40% of the total office rental income, reflecting a well-balanced and diversified income profile.

Slide 16 focuses on our short stay and service apartment activities. This segment is operated primarily through long-term leases, currently contributing EUR 40 million of rental income or approximately 1.2% of the total group rent. In addition, some properties operate under management agreements where our tenants are the hundreds of individuals staying at the property. Service apartments align well with today's hospitality trends. They offer efficient operations, long-stay ecosystem positioning, capturing multiple demand drivers. They also integrate well into mixed-use buildings and play an important role in our broader repositioning strategy.

Conversions represent a strong internal growth driver. Demand for flexible long-stay accommodation continues to increase and our centrally located assets are well positioned to capture this trend. In addition to the operating properties as mentioned before, our current pipeline includes 8 assets in Berlin, Frankfurt, Dortmund and Hannover, representing around 1,100 rooms. Some of those are already under conversion, while others are under the permitting phase. These projects are expected to be completed between 2026 and 2028.

We have completed our project in Rotterdam and recently added a new project to the pipeline following the signing of the lease for the partial conversion of vacant space in our Frankfurt office tower. These attractive conversion opportunities reduce vacancy, support rental growth and create stable income streams through long-term leases. Once stabilized, we expect these assets to generate an additional EUR 50 million of net rent. We continue to review some assets for conversion to unlock additional embedded upside within the portfolio, and we'll expand the pipeline as leases are secured.

Slide 17 highlights our Rotterdam project as an example of how we execute our conversion strategy in practice. The property is a centrally located 20,000 square meters office building with excellent connectivity and a strong mixed-use environment. Here, we carried out a partial conversion while fully refurbishing the existing structure. Floors 4 to 9 have been converted to service apartments and now leased to an operator called Numa. The full project is expected to be completed in 2026. A portion of the leases have already been signed and advanced negotiations are going with additional prospective tenants.

Sustainability has been a key element of this project. The renovation is designed to meet Paris Proof 2050 requirements, and upon completion, the building will be WELL Platinum and ready and eligible for BREEAM Excellence certification. This supports long-term operational efficiency and further strengthens our ESG credentials. Overall, this project demonstrates how selective conversion and sustainable repositioning enable us to unlock value within well-located assets.

Turning to Slide 18. Our residential portfolio represents 33% of the total portfolio and continues to deliver sustained operational results, supported by strong market fundamentals in the portfolio locations. Vacancy rates remained at historical lows, currently at 3.2%. As of December 2025, the residential portfolio delivered 3.6% like-for-like rental growth, driven by higher in-place rent and a continued supply-demand imbalance. Market conditions in Germany and London remain robust, supporting rental growth and positioning us for continued growth in rental income. The portfolio is further diversified through senior homes and HMO tenants, which provide stable income streams and a haste diversification within the residential segment. As outlined earlier today, we have initiated a share offer for GCP shares with a goal to increase our holding GCP.

Slide 19 highlights the continued strength of our hotel portfolio, which represents 20% of the total portfolio and remain well diversified across major European tourism and business destinations. We own more than 150 hotels with over 25,000 rooms operated under long-term fixed leases with inflation linked or step-up rent structures. As of December 2025, we recorded 3.5% like-for-like rental growth. We expect further upside in the coming years as recently repositioned hotels, fully stabilize over the next 2 to 3 years and the full contractual rent becomes effective.

In addition, several additional operating hotels were under go upgrades as part of our repositioning program. These upgrades are agreed with tenants and include various upgrade elements such as rooms and public space improvements, installation of air conditioning, MEPs upgrades and more. We expect returns of at least 10% of the CapEx invested reflected in the rent increase following completion of the works.

The broader hotel market environment remains supportive. Demand across Europe continues to be driven by business travel, public sector activity, events, cultures and leisure. At the same time, operators are implementing digital and smart technologies to enhance efficiency and reduce operational costs. We expect to complete the refurbishment of our 330-room hotel in Central Hannover towards the year-end 2026. The property is currently within the development portfolio and will be moved to the Hotel portfolio upon reopening.

We have also commenced the renovation of our City Center hotel in Frankfurt, the former Intercontinental Hotel. The completion of this hotel is expected in approximately 2 years. For obvious reasons, this asset also remains within the development portfolio until reopening.

Our diversified tenant base, long average lease terms and the continued recovery in European travel reinforce the resilience of this segment. Combined with embedded rent growth, the hotel portfolio remains a stable and meaningful contributor to the overall group performance.

We continue to strengthen the segment through innovation. PropTech solutions improve energy performance, digital operations and guest experience. ATworld activates underutilized areas, providing flexible workspaces that add value for guests and local communities. These initiatives support tenant performance and operational health, enabling us to benefit from more stable and growing rental income. ATworld currently leases around 1,000 square meters of the portfolio and primarily operates in previously unlettable spaces such as hotel lobbies or on a pay-per-use basis alongside other co-working operators.

On Slide 20, we present our hotel tenant base. The group has been operating in Germany and the European hotel business for over 2 decades. Keeping and building up relationship is an integral part of our business culture, and in this period, we have developed good business relationships with many hotel operators. In fact, prior to becoming a public company, the group operated hotels internally. In that period, we accumulated knowledge and expertise, which allowed us in a later stage to know how to acquire hotels on one hand and how to monitor our tenants' operations on the other.

We choose our tenants based on several factors such as profitability, for which we check whether the tenant achieves gross operating profits, GOP in excess of the rent, what is called rent cover. Aroundtown's hotel tenants have gross operating profits rent cover ratios of 1.1 to 1.5x, which is common market practice. The Center Parcs, which account for 30% of our hotel rental income, have an exceptional high rent cover of close to 2x. Other factors include the financial security package, reliability, reputation and diversification. Our tenant base is very diverse and granular and consists of more than 30 third-party tenants with Center Parcs being the largest tenant, which represents 7% of the group rental income.

We are proud of our in-house capability to operate hotels on an interim basis. Although our focus is always to have long-term leases with strong tenants, our ability to replace tenants with limited impact on the hotel operations and long-term value is a key competitive advantage and reduces dependency. Prior to the end of a lease agreement or if a tenant has difficulties to pay the rent, our teams are ready to find a replacement tenant while we still have the tenant deposit and other securities in place. In such cases, our teams will first try to find the replacement within our existing 30 hotel tenants. It is always better to work with companies who have good track record and that fit the criteria we mentioned before.

In parallel, we will offer the relevant property to new potential tenants who consider appropriate to be, as of our tenant lease. More details about hotel tenants lease and background is presented further in this presentation and on our web page.

Tim, please continue on the next slide.

Thanks, Frank. On Slide 21, we provide an overview of our development and invest portfolio, which represents around 7% of our portfolio and serves as a meaningful source of future rental income and value creation. This portfolio captures embedded development potential across both land but mainly existing buildings, and since 2020, it has contributed approximately EUR 1 billion of disposals through selective asset sales.

The development portfolio includes around 700,000 square meters of existing space, of which around 90% is currently vacant. The hotels which are currently under refurbishment, together with the conversion of properties to service apartments and other uses described in this presentation compound to about 135,000 square meters out of the development portfolio.

The portfolio is well distributed across geographies and intended use. Our efforts primarily focus on the living segment, so residential and hospitality concepts as well as mixed use where we see the greatest potential and long-term demand. This significant repositioning and development potential is reflected by an average value of EUR 2,500 per square meter. The majority of existing assets and land accounts for approximately 16% of the development and invest portfolio by value, providing additional long-term optionality.

Part of the development rights are crystallized through targeted disposals, while further upside is extracted on a targeted basis through repositioning, selective upgrades and disciplined execution. These opportunities help optimize returns across the wider portfolio while maintaining a clear focus on capital efficiency. Our professional team is continuously working on building the correct business plan for each property and are in touch with the local authorities and local constructors. We also focus on subsidies that might be available for each use. A detailed overview of selected properties is available in the appendix of this presentation and more properties under this category are available on our website.

On Slide 22, we highlight the opportunity in data centers. Over half of our commercial portfolio is located in Germany's top 5 data center markets, giving us strong optionality to work with hyperscalers and co-location operators. Leveraging our existing offices and development assets in these locations positions us to tap into one of the fastest-growing and most resilient real estate segments. We are progressing in several of our portfolio locations, namely in Berlin, Munich and London, of which some have sufficient power available and others we have received indicative incremental allocation. We aim to do partial conversions as we receive incremental grid approvals, gradually securing high energy capacity and full permitting for potential large-scale deployments. We will continue submitting power allocation requests for additional sites and run technical validation tests to prepare for future phases.

Our strategy is focused on extracting value through different pathways. In the near term, we're looking at hybrid opportunities in City Center locations where portions of existing commercial assets can be converted into edge or co-location data centers, making use of existing grid connections and infrastructure. Longer term, there's a potential for larger-scale developments for hyperscalers or wholesale co-location use provided that we can secure higher power capacity and relevant permitting. We are also in negotiation to secure land for potential hyperscaler level data center nearby our joint venture power plant in Larissa, near Athens. We will share more information once the details will be agreed. We are also exploring partnership models that allow us to capture value along the full value chain while leveraging external expertise where needed.

Moving on to Slide 23. We present an update on CapEx for this year. In 2025, CapEx investments totaled EUR 421 million, representing 1.7% of the average investment property. Tenant improvements made up 22% of total CapEx and largely reflect property enhancements negotiated as part of lease extensions and new lettings. Other CapEx represented 31% of total CapEx. This category mainly includes repositioning CapEx for the Residential portfolio, along with various projects aimed at maintaining the high quality of the assets and supporting selective improvements and CO2 reduction initiatives, such as roof and facade installation, LED lighting, energy-efficient heating and green installations. Expansion CapEx accounted for the majority of CapEx in the year, compromising 47% of the total. These investments focus on generating additional income and value primarily through major refurbishment projects, selective conversions and new developments.

The year-on-year increase in CapEx is mostly the result of these activities as once the markets reopen in 2024 and we have regained the access to the capital markets, we have started to ramp up the investment into our portfolio, which is allowing us to accelerate the extraction of our internal growth potential.

Limor, can you please continue the next slide?

Thank you, Tim. On Slide 24, we outline how innovation is becoming a core driver of performance across real estate industry and how we are positioning ourselves for this shift. The market is entering a phase where operational excellence, AI, automation and data-driven decision-making will increasingly determine outcomes. For us, this transformation is already underway as we are looking to evolve from traditional real estate model into real estate -- with AI technology designed to structurally improve NOI, reduce risk and enhance capital efficiency.

Our approach is built on three value pillars. The first focuses on revenue and tenant platforms, including AI-enabled workspace tools and digital tenant journey that support flexible services, monetize underused areas and strengthens tenant retention. An example of this is ATworld.

The second pillar is operational intelligence and automation. Digital robotic and smart building solutions are already helping lower operation costs and improve service quality through automated workflows and predicted maintenance. Furthermore, AI applications support in faster and improved letting processes.

The third pillar is sustainability and energy intelligence, where partners such as PassiveLogic, VARM and Enter support energy optimization, decarbonization and long-term ESG compliance at the asset level. The capabilities are being embedded across the organization. Automation and AI initiatives are scaling with early efficiency gains already visible and broader financial benefits expected to increase over time.

In our hotel portfolio, we are supporting operators with digitalization and revenue optimization tools, while in offices, the shift towards experience-driven workplaces create opportunities to reposition assets with flexible layout and integrated digital infrastructure. Technology also strength our ability to reposition assets with operational inefficiency by leveraging our scale, centralized platforms and unified data foundations.

This we see as a key competitive advantage, allowing us to scale the platform more easily, providing enhanced economics for acquisition as well as for M&A opportunities. Overall, we see a clear industry road map. Scale, technology and operational excellence will define the next generation of real estate companies. Aroundtown is positioning itself accordingly with its disciplined execution and forward-looking approach to how buildings operate and how value is created.

On Slide 25, we are very proud to show that we have already achieved a 41% reduction in emissions compared to 2019, meaning we have reached our 2030 targets sooner than initially planned. This milestone underlines the strength of our strategy and the quality of our portfolio, combining portfolio-wide efficiency improvements, a shift to lower carbon energy sourcing and supportive grid decarbonization. At the same time, we continue to invest to push this further, for example, through the rollout of more than 900 EV charging sockets across over 100 assets, the installation of 13 megawatt peak on-site PV and ongoing upgrades to high-efficiency energy systems. Here, we are looking to scale up our heat pump program, which we successfully piloted in '25. We will continue our efforts to reduce emissions further and are currently reviewing new targets. The current progress positions the company well to face emerging regulatory changes such as the EPBD, the Energy Performance of the Building Directive.

On Slide 26, we present a detailed update on our Green Certification strategy and the role it plays in improving asset quality and supporting long-term growth. In general, our strategy focuses on upgrading existing buildings rather than pursuing new construction, which align well with BREEAM's emphasis on circularity and significantly reduces embodied emissions. Through ongoing BREEAM in-use upgrades, we work systematically to raise certification level across the commercial portfolio using framework to set clear improvement targets and support constructive discussions with tenants.

Certification coverages have already increased from 9% in '22 to 70% today. And our next objective after obtaining full certification is to bring the full portfolio to at least very good level with recertification already underway in the Netherlands. This will take some time as we look to increase scoring progressively as properties are recertified.

At the same time, we are shifting from compliance-focused mindset to more strategic use of BREEAM. Higher certification level help attract tenants with strong sustainability requirements, support alignment with the EU taxonomy standards and strengthen asset resilience in markets where regulatory expectations continue to increase.

Furthermore, by using the framework in tenant negotiation, we can set clear and transparent targets with strong fit to tenant needs in a direct and attractive return on investment for us. By integrating smart tech solutions to capture better scoring and utilizing of automation into the certification process, we can maintain consistently quality, reduce administrative efforts and continue improving rating over time. Overall, this strategy positions us well for long-term competitiveness, ensuring that our buildings remain attractive, complete and future-ready while generating value with limited capital outlay.

Slide 27 highlighted our continued improvements across our ESG ratings, reflecting both strong execution and greater recognition from the external frameworks. Our S&P Global score increases from 64 to 68, placing us in the top 6% of global real estate sector, and we are also a member of the S&P Sustainability Yearbook. In addition, our Sustainalytics score improved to 8.7, ranking us at the top 2% globally with negligible ESG risk. We continue to hold an AA rating with MSCI. We were upgraded to C+ and Prime Status by ISS ESG and achieved EPRA Gold for both BPR and sBPR for the ninth and eighth consecutive year. These results underline the quality, consistency and transparency of our ESG performance.

Jonas, please continue on the next slide.

Thank you, Limor. Moving to Slide 29. We present our financial results for 2025. Net rental income totaled EUR 1.18 billion, stable compared to '24. The growth was primarily driven by strong operational performance, partially offset by the impact of net disposals. Operating and Other income, which is mainly composed of recoverable expenses from tenants, decreased slightly to EUR 360 million and property operating expenses also decreased slightly to EUR 549 million.

Finance expenses amounted to EUR 243 million, up 3% from EUR 235 million in '24. The increase was mainly due to refinancing leading to new debt being raised above the company's existing cost of debt. Finance expenses were further affected by lower interest income on the liquidity position. We reported deferred tax income of EUR 459 million compared to an expense of EUR 13 million in '24, mainly due to the onetime impact of the change in the German corporate tax rate effective from 2028, whereby the rate gradually changes from currently 15% to 10% by 2032, more than offsetting deferred tax expenses arising from positive property revaluations.

Accordingly, we recorded an impairment of goodwill amounting to EUR 239 million as the goodwill is mainly attributed to GCPs and TLG's deferred taxes, which reduced due to the positive impact related to changes in the income tax mentioned earlier. As EPRA NVA KPIs exclude goodwill, any change in the goodwill balance has no impact on these KPIs. The full portfolio was revalued as part of the 2025 annual report by external independent appraisers, following a revaluation, also conducted as part of the semiannual reporting. In 2025, we recorded a positive like-for-like valuation increase of 3.1%, including CapEx or 1.6% net of CapEx.

On this slide, we also show the breakdown of the like-for-like value growth per asset type. The hotel portfolio was impacted by repositioning efforts, resulting in negative like-for-like revaluation of 0.2% for 2025 or positive 0.6%, including CapEx and positioning portfolio more strongly for future growth. Profit for the year amounted to EUR 1.13 billion compared to a profit of EUR 309 million in '24. On a per share level, net profit amounts to EUR 0.61.

On Slide 30, we present our adjusted EBITDA and FFO results. Adjusted EBITDA for '25 amounted to EUR 999 million, decreasing 1% compared to '24. This is mainly due to the impact of net disposals in the year and lower contributions from JVs. This was partially offset by strong operational growth and improved operational efficiencies. Adjusted EBITDA before JVs remained stable at EUR 946 million. FFO I amounted to EUR 288 million, decreasing by 9% compared to EUR 316 million in the comparable period of 2024. The lower FFO I was mainly a result of higher finance expense and lower contribution from JVs, partially offset by operational growth. The FFO I was additionally impacted by slightly higher perpetual note attribution compared to '24. Due to the company's proactive measures for '24 and '25, the increase in '25 remained limited and expected to be lower in '26. Per share FFO I amounted to EUR 0.26 compared to EUR 0.29 per share in '24. FFO II, which includes the disposal gain over total costs amounted to EUR 415 million, increasing by 6% due to higher results from disposals.

Turning to Slide 32. We highlight our EPRA NAV metrics. EPRA NRV amounted to EUR 10.3 billion, increasing by 3% compared to December '24. EPRA NTA amounted to EUR 8.5 billion or EUR 7.8 per share as of December '25, higher by 5% on per share level compared to December '24. These increases in EPRA NAV metrics were mainly driven by the positive property revaluations recorded in operational profits. However, EPRA NRV and EPRA NTA, the positive impact from the onetime deferred tax income was offset by the associated adjustments in deferred tax liabilities.

On Slide 33, we present our updated maturity profile. As of December, our average debt maturity stood at 3.7 years, which extended 4.6 years when factoring in our liquidity position. We continue to maintain strong financial flexibility, supported by our diversified access financing across the capital markets, a solid BBB credit rating from S&P and a substantial pool of unencumbered assets across various asset types and geographies. In addition, we have EUR 0.9 billion of undrawn RCF with an average maturity in the second half of '28 and well-established mortgage banking relationships. Our hedging ratio remains high at 97%, and our cost of debt stands at 2.3%, with only a slight increase due to recent refinancing effects. The cost of debt is expected to increase modestly in the next years as we repay lower cost of debt in parallel to further rent increases, which will keep at FFO levels relatively stable.

On Slide 34, we highlight our ongoing strong access to the capital markets. In '25, we executed several large capital market transactions, extending the debt maturity profile. Part of the funds raised have been used in concurrent tender offers, while the remaining proceeds will be used to repay upcoming maturities. We issued eurobonds across different maturities and importantly, at meaningfully lower coupons compared to the July '24 benchmark. In July '24, we issued a 5-year bond with a coupon of 4.8%. On May '25, we issued a 5-year bond and a coupon of 3.5%. In September '25, the 5.25-year bond at a coupon of 3.25%, demonstrating a clear reduction in coupon for comparable tenors.

We also expanded and diversified our funding base with non-euro transactions, issuing CHF and GBP bonds in late '25, including our first CHF issuance since 2019. The positive momentum continued to early '26 with successful CHF and Aussie dollar issuances that were met with strong investor demand. These transactions were issued in maturities ranging from 5 to 7 and 10 years, further extending our maturity profile and allowed us to secure competitive coupons across currencies, reinforcing the depth of our investor base and our proven market access.

In total, we raised in 2025, EUR 3.3 billion new debt and repaid EUR 2.6 billion of debt. Taken together, these issuances clearly demonstrate our ability to raise capital at improving terms while maintaining broad access across markets and currencies.

On Slide 35, we highlight the perpetual note issuances executed through 2025 and January '26. The 2025 EUR 1.3 billion issuances were used to reduce the perpetual balance by EUR 0.5 billion and the remaining for refinancing at a lower coupon rate. In January '26, we raised EUR 750 million new perpetual notes at a lower coupon and 40 basis points tighter spread compared to the October '25 issuance, supported by strong demand with a peak order book nearly 4x oversubscribed. The proceeds from this issuance were utilized to repay EUR 268 million of perpetual notes with first call date in '26 with the concurrent tender offer and GBP 153 million of perpetual notes carrying an effective 6.95% coupon through a combination of tender and redemption. The remaining balance of the 2026 perpetual notes are expected to be called in Q2 '26.

As a result of all these transactions combined, the annual coupon in '26 are expected to remain below '25 levels, supported by the positive impact of perpetual transactions executed in Q4 '25. In total, in '25, we raised EUR 1.3 billion new perpetuals and repaid EUR 1.8 billion of perpetuals.

On Slide 36, we present an overview of our strong financial profile and debt metrics. LTV decreased to 41%, mainly as a result of both net disposals and positive property revaluations in the period. In addition, we continue to maintain a large balance of unencumbered properties, which amount to EUR 17 billion or 17% of rental income. Our ICR was 3.9x compared to 4x in '24 and net debt-to-EBITDA 10.9x in '25 compared to 10.7x in '24.

Barak, please continue on the next slide.

On Slide 38, we present our guidance for 2026. In 2026, we guide for an FFO I in the range of EUR 250 million to EUR 280 million, translating into per share of EUR 0.24 to EUR 0.27 per share. This does not include the targeted share-to-share transaction with GCP, which is neutral on a per share basis, but will increase the total FFO. We revised the dividend policy to 50% of FFO I to balance between attractive shareholder distributions while also retaining capital for debt repayment and to pursue accretive growth opportunities.

The guidance is impacted by full year impact of disposal from 2025 as well as expected disposals in 2026. As we exclude the contribution from assets held-for-sale from the FFO I, the reclassification for the properties under advanced negotiation to held for sale has no further impact. On a run rate level, this amounts to EUR 23 million. In addition, FFO I will be impacted by refinancing above current cost of debt and the full year impact of 2025 refinancing.

These negative drivers will be partially offset by the impact of conservative rent increase assumptions, impact from acquisition closed and signed, cost efficiency measures as well as the net positive impact of perpetual note transactions, including the expected refinancing of remaining 2026 perpetual notes. On a per share basis, we expect the share buyback will positively impact our guidance with the exact impact depending on the price development of the share.

This concludes our presentation. As always, you can find further materials in our appendix. [Operator Instructions]

Could you provide an updated assessment of your growth strategy? Do you expect changes now that you launched a share buyback?

The recovering market environment, combined with increased transaction volumes has allowed us to focus on capital recycling. This strategy enabled us to sell properties at a low yield and acquire new ones at higher yield, thereby creating strong accretion. A successful share-to-share transaction with GCP will also support FFO growth, reducing significantly the FFO contribution to minorities. Effectively, since the share discount of the two entities is broadly similar, the transaction enable us to further buy into residential properties at very attractive FFO yield of 9% without harming our leverage since we are using 100% equity and not using cash.

On a per share basis, the transaction will be neutral, which is good. In the midterm, we expect this transaction to contribute to a per share growth with very strong and defensive cash flows from the residential portfolio.

We continue extracting our internal growth potential. We have started to ramp up investments in our own portfolio already in 2024 and expect this to continue in the coming periods as we extract the embedded potential through targeted refurbishments and conversion projects.

That being said, we're still scanning the market for external market opportunities. We also continue to observe an asymmetric market recovery with smaller players facing financial pressure while larger participants benefiting from stronger access to capital and generally improved financing conditions.

We're looking to acquire quality assets at high yields with meaningful upside potential, allowing us to capture the accretive spread between disposal and acquisition multiples. This is achievable without compromising on location or quality as we're looking for sellers which are under financial distress. There are no huge quantities which fit this criteria and so far, we are reviewing an acquisition pipeline of several hundred million euros, primarily in residential and hotel property.

Additionally, at the end of January, we initiated a EUR 250 million share buyback program, which allows us to repurchase our shares at a significant discount and utilizing disposal proceeds from selling properties at around book values. We anticipate buying back nearly 10% of our shares, which will, in turn, enable us to grow the FFO per share by close to 10%. Taking into account our leverage levels, our current focus is on per share growth, which will be partially realized in 2026 and fully captured in 2027 as the current program is expected to run throughout this year.

Can you update us on your like-for-like rental growth across regions and asset types as well as your outlook?

As per December 2025, we recorded like-for-like rental growth of 3% across the portfolio with the strongest contributions coming from Berlin, Leipzig and London. Positive like-for-like rental growth was recorded across all asset types. Strong structural supply-demand fundamentals continue to benefit the residential portfolio, which recorded rental growth of 3.6%. The hotel portfolio achieved rental growth of 3.5%, supported by the repositioning measures implemented in the recent periods. Office assets recorded rental growth of 1.8%, supported by indexation.

We expect the positive momentum to continue going forward, particularly within the residential, hotel segments, supported by favorable market fundamentals and increased investment. In the office segment, we anticipate a slightly positive rental growth in the near term, supported by indexation and reversion of reletting, but partially offset by some continued vacancy pressures. We do, however, see meaningful upside potential as broader economic conditions have started to improve in recent months, supported by the fiscal stimulus in Germany.

We expect to continue unlocking value through targeted repositioning and selected conversions across our portfolio, and we expect overall like-for-like rental income growth in the range of 2% to 3% for 2026.

Can you provide a brief update on hotel portfolio performance and your outlook for the coming period?

Our hotel portfolio continues to perform well, supported by the broader recovery in European hospitality and by the strategic repositioning work we have carried out across the segment. In 2025, we saw steadily improving momentum, which translated into like-for-like rental growth of 3.5%. This reflects both healthier market conditions and the targeted upgrades and the concept shifts we have implemented in selected assets.

Hospitality remains a strategically important part of our diversified European platform. Demand in major cities such as Berlin, Brussels, Paris and Rome continues to be underpinned by a broad mix of business travel, public sector activity, events, culture and leisure. The fundamentals in the sector continue to look strong. International arrivals have surpassed pre-pandemic levels and global hotel investment volumes have increased significantly from the 2023 trough. We also see sustained momentum behind modern hospitality concepts, particularly service departments, which combine longer stays with efficient operations and fit naturally into our mixed-use strategy. These formats help activate buildings, support office to mixed-use conversions and provide resilient cash flows even in more volatile market environments.

We started the refurbishment of our hotel in Frankfurt, the former Intercontinental. We expect to complete the renovation within 2 years and reopen the hotel, which was closed in 2021. We also expect to complete the refurbishment and reopen our hotel in the City Center of Hannover this year. Both properties, which are currently part of the development asset portfolio will not contribute income this year, but in the following periods.

We will also complete this year the refurbishment of an additional 260 rooms of our Cardo Hotel in Rome. We have plans for more upgrades of hotels this year. The CapEx costs are part of our 1.5% CapEx for investment property.

At the same time, we remain mindful of risks. Geopolitical uncertainty can influence travel flows. We address this through diversification of locations, tenants and hotel products. Looking ahead, growth will be driven by our repositioning strategy, contractual rent step-ups and indexation and our continued collaboration with strong brands.

Why do you have hotels under held-for-sale? And where are those located?

As we are in advanced negotiations with a potential buyer for 11 hotels located in Germany, Belgium and France, we decided to place these hotels for sale.

Are you exposed to the self-administration process of the Revo Group?

Revo Group is a tenant of 2 of our hotels, making up 0.8% of total rent, as you can see in our presentation. Due to their strong location in Davos and on Alexanderplatz in Berlin, these hotels are performing very well. In case the Revo Group will not succeed to get there through the self-administration process, we have lined up potential alternative tenants.

What is the connection to the GCH Group?

GCH Hotel Group is a third-party management company, managing 37 small hotels around 4,400 hotel rooms of our operating tenants, which are composed of less than 2% of our total rent. Before Aroundtown was a public company, Aroundtown had business connections to GCH over a decade ago in 2014, prior to Aroundtown being a public company, Aroundtown sold its stake. The two companies are not related for the past 12 years. You can see Page 41 of our presentation.

What trends are you seeing in office leasing and occupancy? And do you anticipate pursuing further office conversions? When do you expect vacancy levels to go down?

The office segment performance remained broadly consistent with the levels seen in the recent years. Overall, demand is still somewhat muted, which largely reflects the softer macro environment in Germany, which is the main driver of office take-up.

That said, we are beginning to see improvements in business sentiment and the fiscal stimulus package enabled by the German government is starting to support economic growth, which in turn is expected to translate into gradually increasing office demand. At the same time, new supply remains limited with construction activity subdued and an increasing share of assets being converted to alternative uses, supporting a more balanced long-term supply/demand dynamic.

Those, it is difficult to assess where the vacancy rates will develop as could be at an inflation point. Note that since 2020, our office vacancy rates have increased by only 1.4% to 13%, which shows that even in hard times, the office sector performs well. Although the letting market is challenging, we are able to deliver solid results with a positive rental like-for-like performances of 1.8% in 2025, driven by in-place rental growth offsetting the impact of increased vacancy during the year.

During the period, we renewed 160,000 square meters of leases at an average WALT of 5.1 years, achieving rents 3% above previous levels. We also signed new leases for 140,000 square meters with an average WALT of 10 years at rents around 8% above prior rents, reflecting the continued attractiveness of our assets. Conversions continue to be an important value driver within our office portfolio. We are actively identifying assets that are suitable for conversion to alternative uses, such as service apartments, regular residential supported by the new Bau-Turbo framework, which simplifies change-of-use procedures. In parallel, we are assessing data centers use cases in selected locations as other avenue to unlock value wherever appropriate.

There have been several news recently on AI making, a lot of white-collar jobs redundant and the impact on demand for offices. What is your assessment on the future of office utilization?

It is much too early to provide any qualified input on this topic. Although the news are talking about a much faster impact compared to previous SEC revolutions, note that we have long leases and thus, the impact will be gradual over the years. Due to the strong locations of our properties, we continue to have the option to convert many of our properties into other asset classes, such as living, hospitality and data centers.

Could you provide some more details on your current valuations and expectations for valuation results for the coming year?

The year-end revaluation confirms a stable and positive trend we have seen throughout the year, with values broadly tracking the solid operational performance. Accordingly, we recorded positive 1.6% like-for-like revaluation, excluding CapEx and 3.1%, including CapEx. In the residential portfolio, we saw 3.6% like-for-like value growth, 0.8% in the office portfolio and negative 0.2% and positive 0.6% excluding CapEx in the hotel assets. The hotel assets were impacted by the ongoing repositioning efforts in the portfolio, resulting in higher CapEx investments and new tenant leases, which support operational value growth in future periods. The drivers behind the valuations for operational improvements in our repositioning investments.

The overall result reflects solid fundamentals and increased cash flows, which remain the key drivers of valuation momentum. Portfolio yields have remained largely unchanged compared to the levels recorded at the end of '24. While we do not anticipate meaningful yield compression in the near term, we continue to see room for yield improvement over the medium term, mainly for residential hotels as market conditions strengthen further. Any such movement would add to the organic value growth already generated through operations. Referring to the hotel yields, it is worth mentioning that the rental income presented in the run rate refers to current contractual rent and does not include contractual ramp-up rents for the hotels we reopened late last year.

Can you please comment on the article about your Frankfurt portfolio published in the WiWo?

The article conveys an incorrect information about our Frankfurt portfolio with many inaccuracies. The information is fully and accurately disclosed in our website and presentations. And we have issued an extensive answer to this in the home section of our website.

Can you please comment on the long recommendation published by Viceroy? They are known on as short sellers.

It is evident that Viceroy has dedicated substantial effort and time to the analysis of our company based on public information. As they wrote in their report, they initially looked at us as a short case. Based on what Viceroy wrote, they have not identified material negative aspects of the company's business or governance. On the contrary, Viceroy has found the company to be conservative, transparent and undervalued. We understand that this is a report to take a long position of Viceroy, which are usually well known for the short positions, which we believe speaks for itself.

We are constantly answering a large amount of investor questions and meetings at conferences and through e-mails. We have a very large analyst coverage who each do their own modeling and assessment. Regarding our portfolio valuation, we do reiterate that our portfolio valuations are externally assessed by internationally recognized valuators and any weakness of the office segment is already priced in, in our valuations and as a result, in our NTA per share of EUR 7.80. Our valuations in NTA are further validated by our massive number of disposals on average by 2% above book value across different asset types and locations over many years already with a total of EUR 10 billion, which you can see on Page 12 of our presentation.

On the basis of the extremely discounted share price, we have also issued a share buyback program, which will further increase our NTA per share. We also see the value uplift potential in our portfolio, which is embedded in the reversionary potential of our rental income together with periodical realization of value of properties under the development and invest portfolio.

How are permitting and conversion challenges of office to commercial residential projects? How much office space are you currently converting? And what is the rent upside?

Office to service apartment conversions broadly follow a straightforward execution path. These projects generally fall within the same zoning framework and can proceed with a standard building permit, typically obtained within 6 to 12 months. We recently completed the first project in Rotterdam and have several projects ongoing, including a newly signed project in Frankfurt City Center.

There is strong demand for service apartments, and we are working with many different tenants for this hospitality living concept, as you can see in our presentation. The rents are higher compared to office rents with longer lease terms of 15 to 20 years. We are in discussions with many different operators who are looking to expand and are interested in a strong partner as us with a wide portfolio. Including the recently finalized project in Rotterdam, we are converting 44,000 square meters, which is 2% of the office portfolio. All the presented projects in Page 18 will generate over EUR 15 million rental income, which represents a yield of 15% of the CapEx.

What is your assessment of the new Bau-Turbo regulation to support your conversion plans?

The newly introduced Bau-Turbo regulation streamlines the change of use processes and shortens approval periods, making conversions from commercial to residential more practical and expanding the range of the viable projects, including when appropriate, full conversion to traditional residential. We have already entered into discussion with municipalities across several of our locations in Germany and have received good feedback for about 120,000 square meters of offices.

Following this feedback, we're currently working on the business model to confirm the economical aspect. We understood that the German government's plan to offer certain subsidies for such projects, which is expected to be disclosed this summer. We will provide further updates with the progress we are making, but generally see strong upside potential from this new regulation. This regulation will also have a general market effect by reducing office supply due to conversion from office to residential, hotels or data centers.

What are your plans with your development projects?

We identified this project as growth opportunity either through refurbishment conversions or with a few exceptions, new construction. As each asset is unique, we're exploring several different alternatives, how to lift an asset's potential and what is the relevant most profitable business plan. So far, in a few cases, we decided that the best strategy to lift the upside is through preparing the plans, receiving the permits and then sell the property with the permits. And in some cases, the best way is to execute CapEx works, mainly following a pre-let contract. This includes conversions into residential on the back of Bau-Turbo or conversion into commercial living.

Two of these projects include the former Intercontinental in Frankfurt, where the renovation works began a few weeks ago, and Maritim Hotel in Hannover, which is expected to be opened at the end of this year. You can find in our presentation and our website a list of assets with the project details as we see it now. Note that although a future value driver, it makes up only 7% of our portfolio.

What is your business rationale for investing in the PropTech ventures?

The main idea is to explore innovative ideas and real-time test these for our business. If they are only in a start-up phase, they can run through our accelerator program, but we also target scale-ups. The main strategy is to find innovative ideas to improve our business and implement these early on and have a first-mover advantage. We, therefore, expect to leverage technology as a value driver with our real estate assets as a base.

We see three main pillars to extract this potential. The first is in revenue generation, the second in increasing operational efficiency, mainly through automation and digitalization, where AI utilization can lever the most. And the third is in sustainability and energy. We believe that a big part of the way to net zero emissions should result from innovation in technology and not just cash investments and therefore, putting significant efforts in exploring the new technologies and implementing those we think are most promising. As we are already testing several strong ideas and will increase our access significantly more over time, each solution will be in a different implementation stage.

Does the nomination of Yakir Gabay to the Executive Board of Peace have any implications for your business?

The group is not involved in any form and not connected or related to this activity. Mr. Gabay has no executive role in Aroundtown for many years. It is a personal nomination for Mr. Gabay, and we wish him and the Board of Peace success in their peace activities.

Why did you decide to recommend a dividend distribution in 2026? And why did you change the payout ratio?

We have taken a wide number of measures to strengthen our position in the last years. This has allowed us to navigate successfully the difficult market conditions, and now we are seeing a continued market recovery with positive valuations recorded, increased transaction volume, improved financing conditions and an overall improved outlook. The bond and the perpetual markets were totally open for us since last year, and we have raised successfully billions of euros. This gave us the confidence to initiate the dividend distributions.

Since we also initiated the share buyback of EUR 250 million, we have decided to recommend to the AGM a partial dividend payment of EUR 0.08 per share, reflecting around 30% of our FFO I per share. Including the ongoing share buyback, the results in a strong shareholder return of more than EUR 350 million after a few years of our dividend holiday. Going forward, we decided to amend the payout ratio from 50% of FFO I per share from 75% previously.

Do you plan to increase the share buyback program?

The buyback amounts to a capital recycling measure to utilize the disposal proceeds accretively. The current program is limited to buy back only a certain amount of shares today. It will take probably until year-end to execute the complete program. We feel that the current program, together with the suggested dividend is balanced.

Could you comment on your guidance for 2026? Do you expect any impact from the share buyback program?

For the year 2026, we guide for an FFO I per share in the range of EUR 0.25 to EUR 0.27, which midpoint is the same as the 2025 FFO I per share. As we have executed several successful debt issuance in the end of '25, finance expenses will increase in '26. The impact of debt refinancing will be mitigated by the strong operational progress with the like-for-like rental growth in the range of 2% to 3% and the full year contribution of assets repositioned or re-leased during '25. These operational tailwinds will partially offset the net impact of disposals executed last year.

On the financing side, we've executed several measures successfully to partially mitigate the impact. Our issuance spreads have decreased significantly since our '24 issuance. We refinanced debt with perpetual notes at lower coupons and repaid a significant amount of expensive perpetual notes. The FFO I per share guidance is including the share buyback program, which is very accretive. The share buyback program will take most of the year to execute. It will have only a partial effect in '26. And therefore, we will see only in '27 the full year impact and further per share growth compared to '26. It is very important to note that although FFO I is declined due to disposals and increased finance expenses, the FFO I per share is expected to remain stable as a result of rent increase and the share buyback program.

What do AT1 intend to do with the cash at Grand City Properties?

The expected holding increase in GCP does not change our approach to GCP's cash. We do consolidate the cash already now, but the cash is for GCP's use to cover its debt and for its own corporate uses.

Can you provide a consolidated NAV LTV and NTA post ideal indication for shareholder assessment? Note, it is on the assumption deal completes.

First, on the FFO I, which is accretive through reduction of minorities and will increase our FFO by close to EUR 50 million. The fact that we are buying into GCP at an FFO I yield of over 9% is very supportive, especially on the back of GCP's strong portfolio. On a per share basis, FFO I will be neutral on day 1 and expect it to be accretive in the midterm.

NTA per share will go slightly down as we offer a premium to GCP's NTA in the short term. but we see an upside potential in GCP's portfolio, which will drive valuation creation. On the debt side, EPRA LTV will improve slightly as we will have a larger portion in GCP's low leverage and as no cash payment will be carried out in this transaction since we will use our treasury shares.

Those were the questions that we received prior to this call. We can now start the open session for your questions. We would appreciate if you ask one all your questions at once, and we will answer them one by one.

[Operator Instructions] And the first question comes from Jonathan Kownator from Goldman Sachs.

First question on the guidance, please. Have you included additional disposals that have not been signed just yet for 2026? And if so, can we have an order of magnitude perhaps this hotel portfolio that you're talking about? And also related to the guidance, do you assume or do you have already information about new properties that will be effectively put into your refurbishment program or your reconversion program? That would be my number one question.

Second question, on the buyback, I think you're talking about doing 10% of shares over time. So is the current buyback for this year and this new buyback would be for subsequent years once you do disposals?

And the last question, please, on Grand City. Are you still planning to expand to new country beyond Germany and London, be it the United States or Middle East? If you can give us more clarity on that, that would be helpful.

Jonathan, first of all, good to have you on the call. Thanks for joining. In terms of your questions in terms of what is included in the guidance, it's basically the held-for-sale, which we closed and that's basically a number there that's already impact already taken and considered in the guidance.

Then asking about any acquisitions and also outside of other locations. So acquisitions that we executed and signed, mainly on the GCP level are included in the guidance going forward. Clearly, we'll have to see more on an opportunistic basis. The largest accretive growth opportunity that we took now here was the share buyback. As we said, the share buyback, we assume will take most of the year because we're limited to buy a certain amount of shares per day. So we're not going to take an assessment here in the following years. But clearly, as we stipulated several times already, we are selling assets and pulling these proceeds into recycling into higher accretive growth opportunities, which was right now, the share buy was the most accretive one.

And in terms of locations, look, we're always happy to look into other locations. We have a focus, which is Germany, Netherlands and London. And with the hotels, we have been more open to expand into other locations, mainly because they're relatively easy to manage and operate because they are completely leased out to tenants, and they manage everything by themselves. So yes, if there's a good opportunity and it has to be on a deal-by-deal basis, we will also look into other locations as we've always been open for.

The next question comes from Kai Klose from Berenberg.

I've got four questions, if I may. The first one is on Page 8 of the presentation, where you say that you have successfully completed office to service conversion, service apartments conversion. What was the total amount spent? What was the yield on cost? And what is the new rent compared to the loss in rent from the former commercial properties?

Second question, what was the office lease retention rate?

Third question is, could you explain why we had a small drop in values for hotels, excluding CapEx? Was this a function of the insolvent or one of the insolvent -- the potential insolvent hotel operator?

And last question would be on Page 250 of the annual report. Could you indicate the increase in equity accounted investees. I just only saw a footnote that this was for investment for a power plant increase. How much can we expect here to be invested going forward?

In terms of your first question, in terms of the successful conversion, this is a property which we in our company presentation. Here, we invested about EUR 43 million in terms of CapEx, in terms of yield, somewhere around 15% on the CapEx.

In terms of -- the third question in terms of hotel cap -- and valuations. So you're right, devaluation is about 0.2%. If you consider the CapEx spend as well, it's positive 0.6%. As you can tell, we invested heavily in hotel repositioning over the time. This CapEx also is not all reflected in the valuations currently, especially we expect this to help us boost rental income in the coming period. Not all of this is already reflected in valuations, and I think clearly means there's potential upside there in the valuation increases going forward.

Then on the re-leasing spreads on the office. So for the prolongations, we had around 3% higher than previous rents and on the new lettings, over 8%.

And regarding the increase in the equity account investees, as you point out yourself, that's mainly the power plant that we're looking to in Greece. So we decided to become a player in the data center business. Obviously, we pointed out several times now. So we understood that the keyword is power. So if you have access to power, you can actually build data centers much easier and not rely on regulatory or energy constraints.

So we also understood that having just one data center doesn't give you just access to big hyperscalers, so you need more and especially bigger sizes. So we found an opportunity to develop a gas-based power plant in Greece without any material initiation costs. And we partnered with a national Greek energy company as a main partner as well as other investors to build and operate this project. So we currently hold a minority stake in the project with an expected CapEx commitment of less than EUR 50 million over the project lifetime.

And the power plant is expected to generate 870 megawatts in combination with a potential large-scale data center in the close proximity. So the construction of the power plant is scheduled to start in probably this year with completion target for 2030. And we are already in advanced negotiations to secure the lease for the data center land in the close proximity.

And maybe just to add a bit as well in terms of this increase here, in the [indiscernible] in addition is not cash investment. Actually maximum was more, also have revaluations that feed into this number.

Next question comes from Marios Pastou from Bernstein.

I've got two remaining questions from my side. Firstly, can I just clarify with all the acquisitions you're looking at, will they all be via the TAC fund or you're also considering whole acquisitions on your own books?

And then secondly, I appreciate the additional slides on the increased ownership plans for Grand City. I appreciate this has also been a recurring question for some time. I suppose really the question is, why is now the right time to take this larger stake? This has been a question for a few years.

Thanks, Marios, for the question. So look, the TAC fund was launched as a leverage-light opportunity for us to buy. And remember, this was also in times when interest rates were much higher, still had an impact on -- a negative impact on the valuation. So for us, it was a good opportunity to take equity and buy properties. So we built up the TAC fund with clear rules. And some of the clear rules are that any certain asset types and locations have to be bought through TAC, unless TAC declines. So it could be that they decline because of IRR expectation, again, location, asset type, whatever, then around or GCP could instead decide to buy. But again, don't look at it necessarily something separate, yes. It's basically -- our equity is also inside, right? So it's institutional equity, our equity, so we're buying it together and we're managing it.

I also want to point out, it's very important clearly that there's no cross-buying and selling between TAC and Aroundtown or Grand City. So it's very -- again, one of the very clear rules that we have.

And in terms of your other question relating to the share offer, which we announced this morning. As you know, and I think as we illustrated also in the presentations and elaborate narrative of today, Grand City is a strategic holding for us. And I think over the last couple of years, we put a lot of efforts in terms of managing our balance sheet, brought leverage down and as also communicated in more recent times, we're also open again looking at acquisitions on a accretive basis. And having already a strategic stake in Grand City and thereby very comfortable with its assets, we consider acquisitions, an obvious choice there clearly is also Grand City.

But a very attractive FFO yield in which we're potentially able to acquire shares, this from our point of view, also in comparison to the other opportunities we see out there is from our point of view, I would say, a no-brainer in terms of considerations, and that's why we're also considering this at this point.

Look, it's a unique opportunity, obviously, yes. It's -- the share price is trading right now and the FFO yield, you don't get this in the market. Obviously, through our control situation already, we are in the sweet spot to take this opportunity. So the question of like why not before, why not now, like question should be like -- or the answer should be like, finally, we do it.

So look, it's an opportunity we're taking here. Let's see, it's a voluntary offer. Let's see what the market sees and how the shareholders accept it. But from an FFO perspective, as we explained before, very accretive because our FFO deducts all the minority in GCP. And on a per share basis, because the offer, the way it's structured is relatively neutral. So on an FFO per share basis, neutral. So the share buyback really helps in that aspect on the per share base to support. And on an overall FFO potential here, let's see how the transaction goes and how much acceptance there will be. But that will definitely support our FFO growth again going forward.

The last question comes from Manuel Martin from ODDO BHF.

Two questions from my side. First question is on the property valuation result for the full year. I'm not sure, but I guess you might have done a full portfolio revaluation process at the end of the year? If yes, maybe you can give us some color why there was almost no valuation gain. That would be the first question, in the second half of the year.

The second question regarding your intended offer for Grand City shares. Changing a bit the perspective, what could incentivize Grand City shareholders to tender their shares into Aroundtown shares while having already an exposure to German residential at maybe a good price. So these are the two questions, please.

Manuel, thanks for joining the call. Thanks for your questions. First of all, let me talk about the valuations. So first of all, you're right, we've valued the entire portfolio again for the full year. And overall, getting to this 1.6% increase, including CapEx, 3.1%. Clearly, the point of valuations is relative to consider the values and to reaffirm them from our point of view, the 1.6% is a very strong result. Looking at also in comparison to the previous year, we've had still a valuation [indiscernible] 1.6% here. I think the which we have in our books is a good result from our point of view.

And your second question on the share, why you think Grand City shareholders would accept it. Again, I think we outlined really well in the presentation, but happy to repeat the point basically.

So we see the transaction beneficial for both shareholders, and that was important for us when we constructed the transaction that really -- both shareholders really benefit here from a combined stronger company perspective. And from a GCP pure perspective, again, look at it, your -- the free float is relatively low. It's already building a certain hurdle. With our increasing stake, that hurdle will just become bigger and will make more difficult for institutional investors basically to flow in. So accepting the offer gives you actually a bigger company, bigger market cap, bigger liquidity entering indices.

Aroundtown, as you know, we just announced the dividend. So all the GCP shareholders who accepted will become eligible for the dividend. On top, we have the share buyback program running. And it's also a diversification in terms of demand drivers. So first, they still have a strong access to a residential portfolio which is like around 1/3 of the portfolio, but also very strong upside drivers, clearly, depending on where the cycle is. But we see where the hotel cycle currently is.

Let's ignore the situation that happened this week. But the hospitality industry has been recovering really, really well after the COVID pandemic. And our upside potential is not done because we have obviously much more internal potential, which we can lift through our refurbishment and repositioning measures. converting a lot of assets into hospitality and residential, so the living concept. So potentially increasing also our share to residential. So there's a stronger overlap from the commercial to the residential.

So we see it also as a, let's say, beneficial offer besides the clearly the premium over yesterday's share price, also the premium over the -- whatever you look at it 3 months or 6 months, VWAP. So you get a short upside, but also long-term upside in this company.

Okay. So since we don't have any further questions. With that, I'd like to thank you all that participated in this call and the questions you raised before and during the call. As you know, you can always reach us by e-mail and by call. We're going to meet you, obviously, in upcoming conferences. And all the best, and goodbye and stay safe.

Good morning, everybody. Thank you for joining us for Aroundtown's 9 months 2025 Results Call. You can view this presentation on Aroundtown's website, either on the Home section or on the financial reports of the Investor Relations section.

Guiding you through the proposition today, will be CEO, Barak Bar-Hen; CFO, Jonas Tintelnot; Executive Director, Frank Roseen; Chief Capital Markets Officer, Timothy Wright; Chief Sustainability Officer, Limor Bermann; Deputy CEO, Kamaldeep Manaktala and representatives from GuardDuty properties are also present. [Operator Instructions].

With that, I would like to hand over to Barak and the rest of the team, who will guide you through the presentation of our result.

Good morning, and thank you for joining us for our 9 months 2025 results presentation. Our portfolio continues to perform well, with the majority of the portfolio at 56% of residential and hotels achieving strong operational results, benefiting from strong market tailwinds further with our ability to identify and extract upside potential.

The office portfolio at 38% remained stable, although the economy continues to lag. Nevertheless, we see the outlook is improving, and we continue extracting positive rent like-for-like performances. In addition, our conversion potential is increasing as we continue to identify more opportunities with the new regulation in Germany especially the Bau-Turbo, further supporting conversion to residential, thus providing us more optionality to extract upside potential.

We see the general sentiment continuing to improve and the economy is expected to move to a more positive territory next year as expected by the German government supported by the large stimulus package. Government similar programs are expected to drive investment in critical infrastructure and renewed private sector activity is beginning to show in the macro data. Meanwhile, the stabilizing interest rate environment is positively impacting capital markets, creating a more supportive financial climate, we see these as encouraging signs.

Germany's transaction market is also showing signs of recovery, and we are seeing an uptick in transaction activity, including some larger deals. However, this recovery remains uneven as smaller and less liquid players continue to face refinancing challenges, which may create growth opportunities for us. Year-to-date, we have also executed several capital market transactions, which includes senior bond issuances, together with tender offers as well as the recent successful perpetual note transaction executed a few weeks ago.

In the perpetual transaction, we refinanced high coupon perpetual with a cheaper one and on top, reduced our perpetual balance, thereby reducing coupon payments and supporting FFO. This deal attracted strong investor demand and positive feedback, reinforcing our strong access to the capital market. We continue to focus on attracting our internal growth potential and together with our recent proactive activities in the capital markets, positioning us strongly for the opportunities ahead.

On Slide 4, we present the key financial highlights for the first 9 months of 2025. Net rental income amounted to EUR 886 million, increasing slightly compared to 9 months 2024, supported by solid like-for-like rental growth of 3.1% and more than offsetting the impact of net disposals. Adjusted EBITDA amounted to EUR 750 million, slightly lower by 1% compared to 9 months 2024.

FFO I amounted to EUR 221 million, down from EUR 236 million in the comparable period, mainly due to higher perpetual note attribution and a lower contribution from JVs which offset operational growth. In H1 2025, the portfolio was externally revalued showing a positive like-for-like value change of 1.4% compared to December '24, mainly driven by strong operational performance. The portfolio will be fully revalued again as part of the year-end report.

EPRA NTA per share amounted to EUR 7.8 higher by 5% compared to December '24. We are making ongoing progress towards obtaining green certificates for our assets with 62% of our commercial portfolio now green certified, including 73% of offices and 60% of hotel assets. Liquidity remained solid at EUR 2.7 billion despite significant debt repayments during the period with gross debt reducing by EUR 1.1 billion during the 9 months period. LTV stands at 41%, well below our internal Board of Directors guidance of 45% and maintaining wide covenant headroom. Jonas, please continue on the next slide.

Slide 5 highlights our reason perpetual notes issuance and buybacks. This transaction involves issuing EUR 700 million in new perpetual notes at 5.25% coupon, including a EUR 200 million tap while buying back EUR 1.2 billion of perpetual notes with an average coupon of through the concurrent tender as well as redemption calls following the transaction. The rationale behind the transaction was to reduce coupon payments. We achieved this by replacing higher group of perpetual notes with new lower coupon notes, thereby reducing our analyzed coupon payments.

In addition, we were able to reduce the total balance of the outstanding perpetual notes due to the transaction by EUR 510 million. As a result, annualized coupons will decrease by approximately EUR 50 million, supporting FFO while significantly lowering our interest expenses under S&P's methodology. Overall, this accretive transaction strengthens our credit metrics, improves our financial position and assist in keeping our FFO level going forward.

On Slide 6, we present a summary of the outcome of perpetual notes transaction on a line-by-line basis, highlighting here the reduction in the balance by EUR 510 million and the decrease in average coupon specific notes from 7% before the exercise to 5.6% after. In the appendix, we provide an update on list of all our outstanding actual notes post transaction.

Moving to Slide 7, where we give a summary of our bond issuances since July '24, highlighting the strong progress we've made in reducing the margin cost of debt over this period. In July '24, our Series 40 senior bond was issued a coupon of 4.8%, where DCP issued EUR 500 million series bonds at a coupon of 4.375%.

At that time, these are our first issuances after several years, marking our return to the capital markets. By May '25, we were able to issue Series 41 bond at a much lower coupon of 3.5%. And in September '25, the coupons for the Series 42 decreased further to 3.25%. In November, we also issued a new CHF bonds to proactively refinance the upcoming maturity of our Series X CHF1 in Q1 next year. The Series X was issued in 2019, so before the pandemic and period of higher interest rates and carried the coupon of 1.72%, where the new Series 43 CHF1 was issued at an even lower rate of 1.5%. Tim, please continue the next slide.

Thank you, Jonas. On Slide 8, we show our internal growth, reflected in continued robust like-for-like rental growth across the portfolio, showcasing the benefits of our diversified portfolio. We continue to see strong growth in the majority of our portfolio. Hotels which make up 22% of the portfolio, leading the growth with 4.2%, supported by repositioning projects completed in previous periods, which are now driving internal growth.

The residential assets, which make up 34% of the portfolio continued to deliver strong rental growth with a like-for-like growth of 3.9%, supported by record low vacancy. These 2 asset assets make up 56% of the portfolio. In offices, which comprise 38%, we continue to capture rental growth despite market headwinds by leveraging our gap to market rents as we can offer competitive rents. We continue to enhance our letting activities through selective conversion opportunities primarily service apartments. Here, the Bau-Turbo regulation provides a strong opportunity to accelerate office to residential conversions, enabling more flexible changes and unlocking further value.

Moving to Slide 9. You can see here our internal excellent growth drivers. We continue to drive growth through internal drivers, including targeted investments in operational efficiencies. With a rent reversion potential of around 26%, including potential to increase occupancy, benefits from indexation and the regulated rent increase in our German residential portfolio, we're well positioned to capture rental upside. Targeted CapEx measures in past periods will deliver contractually agreed rent increases from hotel repositioning.

Furthermore, we have rental upside in the upcoming periods from conversions of office to service apartments. Also here, we have the uptake contractually agreed with long-term leases signed and a further opportunities under review. Looking at external growth, new capital recycling is a key growth driver by selling lower-yielding assets and utilizing the proceeds to fund high-quality and higher-yield acquisitions, we are able to drive EBITDA growth while maintaining a conservative balance sheet. Now let's discuss our operations. Frank, please continue.

Thank you, Tim. Slide 11 illustrates our well-balanced portfolio across asset types. Hotels account for 22%; residential, 34%; offices, 38%; and logistics and retail 6%. Our properties are concentrated in top locations with Germany, the Netherlands and London, representing 88% of the total portfolio. Berlin remains our largest city at 24%, followed by London 8%, Munich at 7% and Frankfurt at 6%. These core markets offer strong long-term fundamentals and continued upside potential. For more details and aerial views of our main cities, please see the appendix.

On Slide 12, we highlight how our diversified asset base remains the foundation of our resilience and growth potential with broad exposure across residential office and hotel segments, we are able to unlock synergies, manage risk and adapt confidently to changing market conditions. Our in-house expertise allow us to intensify the best use of each asset, whether through repositioning, conversion or operational improvements.

As market conditions change, the best use of a specific property may shift over time and with our expertise across asset classes, we are able to unlock further potential and capture new opportunities. For example, we have converted selected office spaces into service apartments where returns are more attractive. Furthermore, innovation and processes developed in one segment can also be applied across others, enhancing efficiency and supporting stable cash flows.

This diversification also offers downsized protection due to lower sensitivity to industry or asset class specific impacts, such as we saw during the COVID pandemic. Residential assets provide resilience and protection during economic downturns, while office and hotel segments offer greater upside when markets are growing. This balance ensures that our portfolio remains well positioned through our different cycles with manageable sensitivity to market headwinds. Our flexible capital allocation strategy enables to enable us to direct resources to the most promising sectors, helping us to take advantage of market opportunities and pursue higher returns.

On Slide 13, we provide an update on the main portfolio KPIs along with an overview of our tea composition. As of September 2025, the total portfolio value stands at EUR 24 billion, generating EUR 1.16 billion of annualized recurring rental income, reflect a rental yield of 5%. The WALT remained solid at 7.4 years. The maturity schedule is well balanced, which provides additional downside protection. Vacancy has improved slightly at 7.4% compared to the end of 2024 and in place rent has increased to EUR 11.4 per square meter. Our tenant base is well diversified, including around 3,000 commercial tenants alongside a highly granular residential segment. The top 10 tenants contribute less than 20% of total rental income, limiting exposure to any single tenant.

Slide 14 provides an update on our disposal progress. In the first 9 months of 2025, we completed approximately EUR 460 million of disposals around book values at an average rental multiple or 20x. Most of these transactions involve office and residential properties with the remainder in hotels, building rights and retail. The disposals were primarily located in Berlin, North Rhine-Westphalia, Bremen, Frankfurt and Oker and other locations.

Year-to-date 2025, we have signed over EUR 350 million of disposals, which provide us additional capital to support our balance sheet and fund growth opportunity through capital cycle. Approximately EUR 155 million of disposals assigned but not yet closed as of September 2025. Looking ahead, we plan to continue with selective disposals of lower-yielding assets and development properties to support our acquisition strategy. Timothy, please continue on the next slide.

Thank you, Frank. Good morning. Slide 15 offers a detailed view of our office portfolio's performance and positioning. Most of our office assets continue to be concentrated in Berlin, Frankfurt, Munich and Amsterdam, which together account for nearly 60% of the total portfolio. In September 2025, the office portfolio achieved like-for-like rental growth of 1.5%, mainly driven by rent indexation and reversion.

Our vacancy increased slightly and stands at 12.9%/our tenant base is well diversified with about 75% of rental income coming from public sector entities, multinational corporations and large domestic firms. Currently, 73% of our office portfolio holds green certifications, and we are making steady progress towards certifying the remainder.

Market vacancies have increased slightly over the past years but remain around historical levels as they come from very low levels, supported by low and decreasing new supply. We expect improvements in the office sector once the German government stimulus package flows through the market. At the same time, we see additional opportunities created by the Bau-Turbo regulation, which allows for more flexible conversion of office space into residential, which helps address Germany's housing shortage.

On Slide 16, we highlight the improved economic outlook in Germany, driven by the government stimulus package and recent reforms supporting conversions. For the office market, signs of this positive outlook start to be visible with office take-up in the big 7 cities up 5% year-on-year and investment volumes rising by 23% year-on-year.

Overall, these developments position our portfolio to benefit from improving market conditions and increased demand. We believe the structural and cyclical improvements will support a gradual recovery in office demand particularly in core urban markets where we maintain a strong position. While we believe that the Bau-Turbo would make additional potential conversion projects economical. The Bau-Turbo is a significant step in the right direction of German government support to increase housing supply.

Recent years, supply did not catch up with the government's targets and actually moved even further away. We believe the Bau-Turbo will have its biggest impact in conversion projects compared to new builds as construction costs remain high. In addition, currently 360 million of subsidies are being discussed, which would be allocated from the infrastructure fund. These subsidies are targeted specifically for conversion of commercial to residential the government might also introduce further measures.

Slide 17 provides an overview of our selected office properties that are being converted into centrally located service departments and long-steel accommodations. These projects are designed to meet growing demand in key urban markets and unlock value from underutilized assets. We have secured lease agreements for 8 properties in Berlin, Frankfurt, Dortmund, Hanover and Rotterdam, totaling around 1,200 rooms.

Development is progressing well with conversions underway in Rotterdam and one Dortmund asset and planning or permitting ongoing for the others. We expect incremental rent of approximately EUR 17 million once they are operational, starting gradually from 2026. We note that all these projects are pre-let and have secured long-term leases. We are also reviewing additional projects with strong potential and are in the process of securing more leases.

Turning to Slide 18. Our residential portfolio continues to deliver outstanding operational results, supported by strong market fundamentals in portfolio locations. Vacancy rates remain at historical lows, standing at 3.3%. We delivered 3.9% like-for-like rental growth as of September '25, supported by higher in-place rents and a sustained supply-demand imbalance. Market conditions in Germany and London remain robust, supporting increasing market rents and positioning us for continued growth in rental income.

Slide 19 highlights the continued strength of our hotel portfolio, which includes over 150 hotels across key European tourists and business hubs. These assets are leased under fixed long-term agreements with inflation-linked or step-up rents. We recorded 4.2% like-for-like rental growth in September 2025 supported by our repositioning efforts with tailwinds from RevPAR growth, continuing to support operations of our tenants.

Across Europe, international travel and overnight stays are continuing to grow steadily. We continue to view our hotel properties as a core growth segment. In this area, we are comfortable expanding beyond our primary markets as these assets are leased to experienced external tenants who operate the hotels while our teams provide active asset management and closely monitor tenant performance. Limor, over to you.

Thank you, Timothy. On Slide 20, we provide an update on ATechX, our OpEx accelerator. Since launching in late 2024 ATechX continues to build momentum. We opened the application process for the third cohort and ATechX hosted its first ever pitch night a few weeks ago. our second cohort comprised of 5 companies specializing in the areas of fitness, fintech, tenant satisfaction, decarbonization, deep tech and material science. Some of these startups move into commercial deployment, and we continue to engage with some of them beyond the program.

On the right of the slide, the spotlight an example of one of the companies in our second cohort, Temperate. Temperate produces an innovative cooling device that delivers up to 95% reduction in energy consumption compared to a traditional heating ventilation and air conditioning systems. It operates without cooling fluids, relies on biodegradable materials and despite heat into space, helping avoid heat island effects. This approach offers significant potential for energy and heat cost savings as well as decarbonization across AT's portfolio. Barak, please continue.

Moving to Slide 21, we present a breakdown of our development and invest portfolio, which represents approximately 5% of total assets. Our strategy involves value creation at low risk, whereby development potential is identified and permitted for. Such new development rights are sold as gains or developed with the pre-let contracts.

We have properties comprising around 700,000 square meters in the development and invest portfolio currently, and our teams have built a plan that suits the size, location and type of each property. Unfortunately, receiving permits is a long process, and therefore, these properties are not included in the run rate figures. We only actively undertake developments ourselves that are low risk and offer large returns on invested CapEx.

Using this strategy, we have created a substantial value and saw development in the amount of approximately EUR 900 million since 2021. We A more detailed list of selective development and conversion projects representing approximately 70% of total value of the development and invest portfolio is presented in the appendix of this presentation.

Moving to Slide 22 and the data center opportunity. Our portfolio has strong overlap with Germany's main data center markets, mainly Frankfurt, Berlin, NRW and Munich. By entering this rapidly growing asset class, we're aiming to unlock substantial value from our portfolio and participate in one of the fastest-growing asset class of the real estate market.

On Slide 23, we outlined our strategy and the progress we have made so far. Our approach is twofold. In the short term, our hybrid network strategy focuses on partial conversions of commercial assets usage into edge or colocation data centers. Such edge and colocations will benefit from low latency and do not require high amount of power as hyperscalers. We expect the first operating data center in this segment to start operation within approximately 3 years.

For the long run, we look to secure the higher energy capacity and full permits for the bigger properties, and as it takes several years to obtain full grid approval for large-scale deployments which would unlock the development potential for such large-scale developments. We are also exploring partnership, which gives us access to additional know-how and which may provide an opportunity to capture the full upside potential along with value chain to raise specific capital in a vehicle that funds the development. In recent periods, we continue to work on the data center strategy, and on this slide outlines the progress we made so far.

Our initial analysis resulted in approximately 100 properties that could be suitable for conversion into data centers. From these, we have selected over 10 assets as initial project sites based on strategic and technical criteria and demand. Permits and initial power applications have been submitted for these sites and 6 locations in Berlin have already secured initial power locations, of which 4 are centrally located. Our next steps are to submit new and additional power applications for existing and future selected projects secure additional power and for permitting. Jonas, please continue on the next slide.

Moving to Slide 25, we present our financial results for the first 9 months of 2025. Net rental income totaled EUR 886 million, slightly higher compared to EUR 883 million in 9 months '24. The growth was a result of like-for-like rental growth, partially offset by the impact of net disposals in the period. Operating and other income, which is mainly composed of recoverable expenses and tenants decreased by 6% year-over-year, where property operating expenses decreased by 4%. Both items were mainly impacted by disposals carried out between the periods.

Finance expenses totaled EUR 173 million in 9 months '25, lower by 3% compared to EUR 179 million in the same period of 2024. The decline was a result of our proactive measures such as gross debt repayments and hedging activities, further supported by the downward trend in market interest rate between the periods. This positive impact was partially offset by lower interest earned on our cash position as well as the refinancing impact from higher average rates on the new bonds issued.

We reported deferred tax income of EUR 230 million compared to EUR 52 million in the comparable period in '24, mainly due to the onetime impact from the change in the German corporate tax rate effective from 2028, whereby the rate gradually changes from the currently 15% to 10% by 2032. Accordingly, we recorded an impairment of goodwills amounting to EUR 157 million in the period.

As the goodwill is mainly attributed to GCPs and TRG deferred access, which were due to positive impact related to changes in the income tax, as mentioned earlier. As EPRA NAV KPIs exclude goodwill, any change in the goodwill balance has no impact on these KPIs. Altogether, profit for the period amounted to EUR 882 million, compared to a loss of EUR 154 million in the first 9 months of 24%. On a per share level, net profit amounted to EUR 0.49.

On Slide 26, we present our adjusted EBITDA and FFO results. Adjusted EBITDA in 9 months 25 amounts to EUR 750 million, slightly lower compared to the same period in '24. This was mainly due to the impact from net disposals in the period and lower contribution from JVs, partially offset by strong operational growth and improved operational efficiencies.

Adjusted EBITDA before JVs increased slightly to EUR 711 million. FFO I amounted to EUR 221 million, decreasing by 6% compared to EUR 236 million in the comparable period of '24. Here, the higher perpetual notes of divisions, which are mitigated going forward as a result of the perpetual note refinancing and buyback conducted in Q4 '25, and lower JV contributions had a negative impact. Per share FFO 1 amount to EUR 0.20 compared to EUR 0.22 per share in the same period of '24. FFO II Which includes the disposal gain of our total costs amount to EUR 271 million, higher year-on-year due to higher results from disposals, partially offset by the lower FFO on Slide 28.

Turning to Slide 28, we highlight our EPRA NAV metrics. EPRA NAV amounted to EUR 10.4 billion, increasing by 4% compared to December '24. EPRA NTA amounts to EUR 8.5 billion or EUR 7.8 per share as of September '25, increasing by 5% compared to December '24. This increase in EPRA NAV metrics were mainly driven by the positive property valuations recorded in operational profits However, for EPRA NAV and EPRA NTA, the positive impact from the onetime deferred tax income was offset by the associated reduction in deferred tax liabilities adjustment.

On Slide 29, we present our maturity profile, which was extended as a result of recent issuances and buybacks. Our average debt maturities were 3.6 years as of September which extends to 4.5 years if we account for our liquidity position and recent capital market activities. We continue to maintain facial flexibility as we have strong access to different sources of financing from capital markets support our strong credit rating of BBB S&P, a high amount of unencumbered assets with diverse asset types and locations and strong mortgage banking relationships as well as ongoing RCF in the amount of EUR 0.9 billion, with an average maturity in the second half of '28. We will retain a high hedging ratio of 97% and kept the cost of debt low at 2.2% albeit increasing slightly as a result of recent refinancing impacts.

In Q3 '25, we tapped our Series 41 bond before EUR 150 million. Additionally, after the period, we issued approximately EUR 1.2 billion of bonds across 3 different instruments of which a majority constituted the new Series 42 with a low group rate of 3.25%. Slow coupon marks a material improvement from 4.8% in the issuance a year earlier. Additionally, we issued a new EUR 150 million CHF bond at a coupon of 1.5%, improving from the 1.72% coupon CHF1 issued in 2019. The significant reduction in the margin cost of debt is a combined result of our improved financial position, acknowledge our strong investor base as well as improved base rates.

On Slide 30, we present an overview of our strong financial profile and debt metrics, all of which have improved in December '24. LTV decreased to 41%, mainly as a result of both net disposals and positive proper LTV valuations in the period. LTV increased slightly compared to June mainly due to the FX impact related to our U.K. portfolio and investments during the period. In addition, we continue to maintain a large balance of unencumbered investment property, which amounts to EUR 17.1 billion or 70% of rental income. Our ICR was 4.1x, improving from 4x in 9 months 24 and net debt to EBITDA, 10.7x in '25, improving from 11x in 9 months '24.

Lastly, on Slide 32, we reiterate our full year guidance for 25. We continue to guide for FFO I in the range of EUR 280 million to EUR 310 million, which translates to EUR 0.26 to EUR 0.28 per share. We expect positive impact from continued rental growth, hotel repositionings and improved operational efficiencies.

On the other hand, we expect some offsetting effects from the full year impact from disposals closed in '24 and '25, higher coupons on potential notes compared to '24 as well as reduced interest income on our cash balances and refinancing of current cost of debt. It should be noted that as a result of the recent perpetual notes transaction, perpetual coupon payments are expected to reduce only slightly quarter-on-quarter in Q4 '25 and reduced materially by approximately EUR 50 million on an annualized basis going forward. This impact is partially offset by a slightly higher fund expense result of senior conditions in Q4 '25. As usual, we will provide an update on our 2016 guidance as part of our full year '25 results in March.

This concludes our presentation. As always, you can find further material in our appendix. With that, we would like to start the Q&A.

Before we invite your direct telephone questions, we would like to answer questions that we have received by e-mail prior to this call. For simplicity reasons, the team has taken liberty to group similar questions in order to answer as many questions as possible. Allow me now to read out this question.

Could you provide an update on your views regarding external growth? What do you expect the impact to be on your leverage?

Thanks. We continue to view our position in the current market as positive to capitalize on accretive growth opportunities. Currently, we see capital recycling as a very accretive source to fund growth. Therefore, we expect to continue disposing properties who are looking into acquire a below market value -- sorry, we expect to continue disposing properties. We're looking to acquire below market value with high upside potential in order to capture the accretive spread between the disposal and acquisition price.

We see an asymmetric market recovery with smaller players facing financial difficulties where large players are recovering and are benefiting from increasing and strong access to capital. In this context, we view ourselves as well positioned to capture attractive opportunities due to our established deal sourcing network, our solid reputation as a preferred market buyer and our liquidity. We have EUR 600 million of assets held for sale, of which a quarter is already signed. We are currently reviewing an acquisition pipeline of several hundred million euros comparing comprising preliminary of residential and hotel properties.

Looking at the impact on leverage as we mainly look to acquire our true capital recycling, it should not have a significant impact on leverage. That being said, timing of transaction could impact the leverage metrics between periods. On the other hand, the uplift in EBITDA from buying properties at high yields would be supportive for FFO and ICR.

Thank you, Barak. Could you provide more details on your rent like-for-like performance?

Sure. We achieved like-for-like rental growth of 3.1% across the portfolio with the strongest performance in Berlin, Stuttgart, Hamburg, London and Leipzig. The majority of our portfolio with around 60% of residential and hotel properties are performing very well. Our residential portfolio continued to benefit from the expanding supply-demand imbalance in key metropolitan areas, delivering solid growth of 3.9%.

The wholesale portfolio recorded a strong growth of 4.2%, supported by the repositioning measures completed in recent periods, which are supporting rental growth as well as in the next periods. Offices recorded 1.5% growth, primarily driven by the indexation. Looking ahead, we expect this positive trend to continue, particularly in the whole term residential segment underpinned by favorable market fundamentals.

Office rental growth should remain slightly positive in the near term, driven by indexation impacted by slight headwinds on vacancy. However, we do see further upside as economic conditions improve on the back of the German physical stimulus. Overall, for the portfolio, we will continue to unlock value through positioning and selected conversions and anticipate overall like-for-like rental growth of 2% to 3% in 2025.

Thank you, Timothy. Could you provide an update on the recent performance of your hotel portfolio? What is your outlook for this asset class over the upcoming period?

Our hotel portfolio continues to demonstrate strong performance, driven by a favorable market environment and targeted repositioning of selected assets. This is reflected in the 4.2% like-for-like rental growth as of September 2025. The European hospitality sector entered 2025 with solid momentum with robust and fundamentally stable demand. Looking ahead, we expect demand to remain robust, supporting the operations of our tenants.

Our strategy of repositioning combined with contractual rent step-ups and indexation position us well for continued tenant growth. Given the resilience and attractiveness of this segment, hotels remain a core strategic focus for us, and we aim to further expand this asset class internally and externally.

Thank you, Frank. How do you view the current leasing activity and occupancy levels within your office portfolio? Are you considering further conversions of office properties?

Leasing activity during the first 9 months of 2025 was in line with recent years' average. Demand continues to be soft, primarily due to Germany's economy, which is the key driver of office demand. However, we are seeing encouraging signs with economic sentiment improving and government stimulus measures supporting a potential recovery.

The significant stimulus package announced by the German government will support economic growth in the coming years. As the economy strengthens, we expect office demand to follow suit. Meanwhile, new office supplies remain constrained due to low construction activity and conversions to alternative users, creating a favorable long-term supply-demand dynamic.

On a like-for-like basis, in-place rent increases, driven mainly by indexation have supported positive rental growth of 1.5%. In the first 9 months of 2025, we extended 110,000 square meter of leases with an average WALT of 4.5 years and an in-place rent of EUR 15 per square meter, representing 2% above previous rents. We also signed new leases for 100,000 square meter with a WALT of 8 years and an in-place rent of EUR 14.2 per square meter, 3% above the previous levels.

As to conversions, we continue to identify office assets suitable for conversion to commercial residential. We are also analyzing conversion potential supported by the new Bau-Turbo regulation, which is simplifying change of use processes. Our diverse operational expertise enables us to optimize portfolio use and we evaluate the best and most value-accretive use. Several office to service apartment conversions have been signed and are expected to generate rent starting in 2026 and additional properties under review and analysis. Additionally, we actively evaluate data center opportunities and select locations to unlock additional value.

Thank you, Timothy. How do you assess your current liquidity position? How do you intend to deploy your cash?

We have a strong liquidity position, which has been further supported by recent capital market transactions. In past periods, our strong cash position was an important factor in navigating market volatility successfully. However, the ongoing improvement in market conditions point to lower needed levels of excess cash.

The repayment of debt through the scheduled maturity for as part of liability management exercises continues to be our main focus, and we may also deploy cash to pursue accretive acquisitions if we see the opportunity. This is reflected in the first 9 months where we deployed cash to reduce gross debt by EUR 1.1 billion. The strong investment demand, both in our bonds and perpetual notes issuances further underscore the company's ability to obtain funds at competitive rates also reflected in the increasing spreads for our instruments in the market.

As always, we will seek to maintain our conservative financial position while capitalizing external growth as part of the capital recycling. Our lower leverage metrics and headroom to credits and covenant ratios provide us the ability to execute our disciplined acquisition strategy from a strong position.

Thank you, Jonas. Could you provide an update on your disposal progress? What is your disposal strategy going forward?

Across the first 9 months of '25, we signed approximately EUR 350 million of disposals. During the same period, we closed approximately EUR 460 million of disposals, consisting of 44% offices, 32% residential, 10% hotels and 14% across development and remaining asset class types. Disposal locations, including Berlin, Hanover, Frankfurt, Bremen as well as noncore and other locations.

Close disposal were conducted at book values and multiple of 20 times. Going forward, our strategy is to continue pushing targeted disposals that enable capital recycling, whereby lower-yielding disposals are used to fund acquisitions of attractive higher-yielding opportunities while maintaining a conservative balance sheet. Specifically, we plan on focusing on disposing the remaining held for sale portfolio and select noncore properties and development rights. Consistent with our approach in previous years, external growth will remain opportunistic. We will engage in transactions that meet our strict acquisition criteria and create accretive growth.

Thank you, Barak. Could you provide some more details on your current valuations and expectations for valuation results for the upcoming periods?

We conducted a full external valuation of our portfolio as part of our H1 report, and we will carry out another revaluation as part of our annual report. The positive revaluation results in H1 '25 were primarily driven by strong operational growth, supported by recovering transaction market and lower financing costs.

Looking ahead, we expect organic value growth to continue, reflecting the underlying operational performance of the portfolio. While we do not anticipate significant yield compression in the near term, this could become an additional value driver of long-term operational growth over the medium term potentially towards 2027. This will come on the back of increasing transaction volumes, low supply in the market and improved financing conditions.

Thank you, Jonas. For your data center plans, will you convert existing commercial space to acquire new assets. What progress have you made so far? How do permitting and conversion challenges compared to office to residential project?

We are currently reviewing the potential of conversion into data centers within our existing portfolio which could create significant upside. And the fact that we have strong overlapping portfolio with data center markets gives us an advantage and higher upside compared to other players. The main challenge is securing sufficient energy capacity, particularly in markets where grid of ability is limited.

To address this, we are following a dual-track approach, obtaining parcel capacity for edge or colocation data centers in the near term while working towards full permitting and higher energy allocations over the medium to long term, a process expected to take 3 to 7 years. To date, we have selected over 10 assets at initial project sites and have made progress with permit applications and initial power requests.

Our next step focused on securing additional capacity and completing the permitting process while continuing to review the pipeline. We are discussing also to partner up with leading market players with a proven track record in developing data centers to support the potential execution. This could save us time, reduce CapEx requirements and enable us to build scale.

By comparison, office to service apartment conversions are significantly less complex. This project typically fall under the same zoning category and acquire only a standard building permit, which can usually be obtained within 6 to 12 months. The recently introduced value regulation further simplifies change-of-use processes and shorten time lines, enabling more time-efficient transformation and potentially allowing for more conversion opportunities, including full change of use to regular residential. We review the potential of each asset on a case-by-case basis, selecting the most fitting and value supportive use. This is the advantage of having a diversified portfolio and keep knowledge of all major asset sides.

Thank you, Barak. Do you expect to distribute dividends in 2026 will you change your payout ratio? And would you consider a share buyback instead of cash dividend?

In 2025 and over past periods, we have undertaken a compressive range of measures to strengthen our financial position. At the same time, we have continued to see market recovery, stabilization evaluations, increased transaction volumes and better economic outlook. In light of these developments, we feel confident about resuming paying dividends next year. Prior to the AGM next year, we will assess payment payout ratio, which is 75% of FFO 1 per share and the method of distribution, whether in form of cash or buyback or a combination of both.

Thank you, Frank. Could you comment on your latest guidance for 2025? Do you expect any changes after your perpetual notes transaction? What are your expectations for 2026?

We reaffirm our guidance issued in March, protecting F1 in the range of EUR 280 million to EUR 310 million, equivalent to EUR 0.26 to EUR 0.28 per share. Our strong results for the 9 months '25 period was fully aligned with expectations and guidance.

FFO I is expected to benefit from solid operational results, including like-for-like rental growth of 2% to 3%, supported by continued strength in the eventual portfolio and gains from hotel reopenings and repositioning. These positives will be partly offset by the full year impact of '24 disposals and additional disposals conducted and planned in '25.

Our current guidance does not assume any material acquisitions. Interest expenses are expected to increase slightly in Q4 due to the liability management exercise we executed. But perpetual note coupons will reduce slightly in Q4 '25 as a result of perpetual notes buyback. We will publish guidance for 2026 and March next year, together with our full year '25 results.

The main drivers of the '26 guidance will be continued EBITDA growth, mainly driven by further internal growth. We expect finance expense to increase as a result of refinancing of upcoming debt maturities, which will be partially mitigated by additional revenue from like-for-like at the hotels that rents and conversion projects.

Regarding perpetual notes, our recent transaction is highly supportive, and we expect the positive impact of the lower coupons transaction to offset the impact from higher coupons related to the notes with the first call date in '26. We expect to get more clarity on these moving pieces over the next months and we'll give the detailed update with the full year results.

Thank you, Jonas. Could you please confirm, the lower contribution from JVs in the EBITDA is related to a timing difference?

The contribution from JVs declined as the payouts with certain investments are not linear. Some of our positions reduced the dividends compared to last year, which were higher than usual. This year's level is in the same range as in 2023 period and we conservatively expect this amount to remain around this level going forward.

Thank you, Tim. Those were the questions that we received prior to this call. We can now start the open session for your questions. [Operator Instructions].

The first question comes from the line of Neeraj Kumar from Barclays.

I have 3 questions with regards to hybrids. I'll go on even. So firstly, is it fair to say that on a stand-alone basis, the hybrid LME exercise leads to higher PLD as the bonds were redeemed at premium on average the new hybrid issue at discount?

My second question is, can you help us understand your intentions for the refinancing of non-core '26 hybrids given the improvement in capital markets? Do you still see exchange as a potential? Or do you think the pain coal and replacement of the hybrid is a base case scenario if the current market environment prevails in 2026.

And lastly, you're currently at around 15% limit from S&P after the reduction from the recent LME. Do you intend to reduce the hybrid cap stack even further under the 10% S&P limit as the recent transaction was excluded from those rules?

First of all, thank you very much for your questions. It's great to have you on the call. In terms of your question, we expect an immaterial negative impact on EPRA LTV from this transaction on a stand-alone basis. In terms of your second question, on the strategy of this transaction, I think, as we also explained, is really to manage the coupons related to our perpetual notes. That's why we targeted certain instruments. And the '26, as you know, have resets -- I think Q2 next year.

So still some time to go. So predominantly, the focus here on the recouponing on managing the coupon expenses. And that's why we press targeted the other notes. In terms of your last questions on the 15%, I think this reduction of EUR 500 million is a very good reduction in hybrid stack, really helps us to manage our hybrid expenses going forward. Overall, we're looking here from a steel impact but a reduction was EUR 5 million, which would offset potentially the additional expenses related to 2x. So from that point of view, I think we're happy with the reduction we've made so far.

The next question comes from the line of Manuel Martin from ODDO BHF.

Three questions from my side, please. First question is on the property valuations. Could you give us a bit more detailed outlook on what you might expect in the second half of the year? Would it be something maybe similar to the first half of the year in terms of valuation result? Maybe you could give us some hints there. This would be the first question.

Second question, it's on the FFO guidance of 10 to 25. Given that Q3 seems to be a bit slow in terms of FFO 1 also due to joint venture contributions. Do you have an idea where you will come out in the range of your guidance rather at the lower end or midpoint, do you expect JVs to contribute significantly in the fourth quarter? Maybe you could elaborate a bit on that, please?

And my third question is on the office portfolio. The vacancy rates went slightly up to 12.9%. Maybe you can give us some color on which part of the portfolio, which kind of assets were the cause of this? And do you expect this trend to continue in because I mean the office market seems not to be very easy for the time being. These are my 3 questions, please.

Manuel, thanks for your questions. Your first question on the valuation. So we don't have -- we're in the process. We don't have the numbers clearly yet. We already get some indication that valuations as we see in H1, moving along the operational performance. So some of that operational performance has translated into valuation growth. we see clearly when we publish our full year financials more details on that.

On the FFO guidance, yes, I mean, if you look at the projection, how it's going, you see that we are around to mid-level of the guidance around the mid level. So we see that as a realistic level that we can land in for the full year. The office vacancy, there was a slight uptick, correct, looked at normal part here, we have the maturity schedule of the leases, you see that. So some part of the of the leases are maturing every year.

The majority were able to pull on for the tenants who are leaving, we're also able to find new tenants but not always necessarily. So this was not any specific location or property. This is just generally across the board. Next question and briefly, before I move on to the next question, let me as just following up what you asked you before time for the '26 is. I think our base case is a new hybrid and replacement.

We now have a question from the line of Jonathan Kownator from Goldman Sachs.

So a few, if I may. Just to come back to this JV point. The contribution in 2023 was about EUR 43.2 million was EUR 49.9 million in 2024. So is the EUR 43 million -- EUR 43.2 million, a good basis to think about going forward? That's the first question, please. Second question, on the vacancy that you're showing or the occupancy as you prefer, just trying to understand if your reconversion project and your development projects are excluded from the vacancy or included in the vacancy at this stage. And yes, that will be it.

Jonathan, thanks for your questions. Yes, your projection for the JV is -- look, again, it's not linear, but the EUR 40 million is realistic to see. So yes, last year was a little bit of an outlay, but the 2023 numbers that you're referring to you are more going forward, we will see more realistic. The vacancy, so some of the vacancy are in the development and other assets which are vacant, which we also plan to develop our -- in the portfolio line clearly.

The next question comes from the line of Paul May from Barclays.

Are you able to provide the multiple yield on leased offices that you sold to if you saw any manner you can remove those, just to get a sense of where the office yields are and another one question -- a question.

Sorry, Paul, can you please repeat them? It was unfortunately quite difficult to understand. If we appreciate you speak slightly. Thank you.

Sure. So first one is, if you're able to provide the multiple or yield on leased offices that you sold, so excluding any vacant offices, just to get a sense of where offices are being disposed at on either a multiple year basis? And then I've got a follow-up question on your answer.

Thanks. Thanks for being on the call. I'm good to have you here. And I think in terms of the disposals of offices, yes, big part of the disposal we did in the first 9 months was in relation 2 offices. However, into that portfolio, clearly, there's a big utilization factor where this office are located, a big impact on the yield. So difficult to give you an average number here.

Okay. I'm sorry, you gave -- you give an average for all disposals -- sorry, why it's not possible to do it for the ops in isolation. But that's fine. In terms of then the valuation of your offices, I think we're at 5.2% gross rental yield, which on an NOI basis is in the low 4s actually.

Just wondering what gives you confidence that, that is the right valuation of those offices given vacancy rates continue to increase the best assets or theoretically the best assets in Germany are valued at higher yields than your yields according to CBRE. So I just wondered what gives you confidence that your portfolio with a high vacancy rate is worth more on a yield basis than the market the best assets in the market. If you go to that, that would be great.

Thanks, Paul. We'll come back to your first question. Again, I think it's difficult to give an average value because, again, it's a very diverse amount of disposals to give you a number, we're looking here in the multiple around 21 times.

And about our valuations, again, we reiterate this message. All our assets are externally evaluated by professional bid-outs and why they see this clearly is because our assets are in strong locations with the right fundamentals where market rents are higher, where vacancy rates are low.

Clearly, right now, the sluggish economy has an impact on our letting activities, but these assets should be performing according to the local market. And that's why also valued in similar ranges like the local markets where our assets are located. And just now also when we sell the assets also, so on book value, that's again, I think, a validation of the values of our ...

With that, I would like to thank all of you that participated in this call and the questions you raised before and during the call, all the best, and goodbye.