CTP Stock

Good morning. Thank you for joining this half year of 2026 results, which are positive so far. We have been able to do a lot of leasing, 55% more than we've done in '25 over the first 6 months, which is 1.6 million square meter of deals over the past 2 quarters.

So good take-up in different countries in Romania, for example, where we have done deals with Pepco renewal, a new deal with FM Logistics, Bulgaria and Sofia, a new deal for Metro and in Ilawa, Poland, we've seen a significant take-up.

I've done a deal with Chinese e-commerce business. So far, first half this year in terms of take-up, very good. And this confirms and demonstrates that there is a high demand for CTP's ready-built factories and warehouses within the CTP business parks.

The growth drivers remain in Europe for Europe, companies need to be in Europe to serve and support their clients here. That's why they come over from Asia, other places to be here on the ground. This is one in Europe for Europe.

It's also more consumer spending. It's also Central Europe being business smart, cost effective. There's a combination of different factors. Still, 2/3 of all the business we do come from existing clients.

We're working hard, of course, to maintain a good excellent relationship with those companies, help them grow. At the same time, also we search for new companies and get new clients from different areas to come to our parks, which often actually works that existing tenants put us in touch with other companies, their suppliers. That's how we also get to new business.

Retention rate remains high at almost 90%. Rent collection is as used to be, over 99%. We collect all the rent. We charge almost all of that from our 1,700 blue-chip tenants, very nice companies and good to work for.

The integrated business model combines a CTP operator, standing income-producing developer, construction company, in-house construction company and the growth engine, as we call it. So the part of our team is looking for opportunities outside of the established markets, continuously look for opportunity often driven by client demand. We talk to clients, say, okay, "What's your next destination where you like to be? How can we support? How can we help you?"

If we go back to what we do, so back to the operator, 93% occupancy, which has been around that number for the past years, 6 years WALT. So the average lease term is 6 years, and the portfolio is now almost 15 million square meter, which is good for EUR 860 million of rental income. And for next year, we are on schedule to hit the EUR 1 billion rental income.

And in regards to the developer, in-house construction team, the builders, they've done 250,000 square meters so far of completions. Typically, we start in Q1 with construction in spring time, beginning of Q2 and deliveries will grow more during the second half this year, doing like a 10% growth this year. That's our schedule.

And we are on track with that. So far, it looks good at around 10% yield on cost. Anyway, what we built now will produce another EUR 152 million of rental income. We look forward to continued solid leasing activity, yes, in the rest of the year.

Land bank, we have a lot of land, mostly within existing business parks that helps us to or allows us to build these additional properties. The land plots have been serviced and normally come with building permits.

So it's pretty easy for us to build those properties or to develop or utilize the land. We also have local teams on the ground. We will sit in the parks and look after existing buildings, but at the same time, also within the team are responsible for building more property.

Growth engine, talk about it, making good progress in different locations, recently entered Italy. Some years ago, we entered Germany, where we now see the results of us building in Mulheim, preparing the project in Dusseldorf, which is going to be a fantastic project. At the same time, also doing projects in Krefeld and other places in Germany.

We do SBUs, small business units, so not just the big boxes, also the smaller units. We've done that for the past more than 25 years, adding larger properties in a business progress for smaller units. In Germany, especially you see strong demand for that, but also other countries.

So I can see us grow a lot in the SBU sector in the small, medium-sized companies, but also multinationals who take smaller units here and there, SBUs, 500 square meter, 1,000 square meter, 1,500 square meters, you can mix them up, make them bigger. I think it's very good for the ecosystem in the business parks, also allows start-ups and incubator, all those kind of things.

Italy, well underway, so far, building what we had agreed on time, in budget and building a pipeline for the next couple of years, making good progress with the team and also good progress on permitting. So, so far, very good. Happy with the acquisition we've done end of last year.

Vietnam, making some progress there. We previously announced that we have demand from clients. We looked at 2 different sites, preparing those now, and we see how we can further grow that market with existing clients coming over there, but also giving us better access to the Asian market, not only for our development in Vietnam, but also to meet and to connect to Chinese companies who are a lot of them in Vietnam, but those Chinese companies also have ambition to move to Europe.

And that's a side effect of us being more present in Asia and building our network and building our team, I find it very interesting. I think it's a fantastic opportunity for CTP to connect into that or to grow into that and to become a larger network and to be part of a bigger market, if you like. And that definitely helps CTP to grow and further diversify and also get more Asian clients to become our tenants. Interesting.

All kind of businesses, right, pet food, we talked about also battery business, of course, the new automotive, which is, also not bad actually for our region. We've seen a lot of electric vehicle manufacturing, of course, BMW in Debrecen, but also some Asian, Korean, they have been in the region for a while. Chinese are coming now.

And yes, we support them with their suppliers coming in to supply, for example, car interiors and seats or dashboards or whatnot. That's what we do.

We like to grow. We enjoy grow. That's what we do here. But of course, also focus on not only becoming bigger, but also a better company. We have fantastic people on board now who do process management.

We have different -- many different initiatives with different software being implemented, so we can actually do more with the same crew, be more efficient, more effective. And that's the part of becoming a better company, not just a bigger company. Anyway, more on that later. I will hand over now to Maarten on the financials, and thanks again for joining.

Turning to the financial highlights. The portfolio like-for-like rental growth came in at 4.7% in the first half, driven by indexation and continued positive rent reversion capture combined with a record leasing activity of nearly 1.6 million square meter, which was up 55% year-on-year, which demonstrates the ongoing strength of the customer demand across our markets.

Gross rental income increased by 12.6% year-on-year to EUR 430 million, and net rental income increased by 12.4% to EUR 405 million, resulting in an NRI margin of approximately 98%. The annualized rental income increased by 13% year-on-year to EUR 858 million.

And together with EUR 152 million of potential annual rent from the 2 million square meter we have currently under construction, this provides a clear visibility on our target of EUR 1 billion of annualized rental income in '27.

The growing cash flow finances our development-led growth and is the basis for our long-term shareholder returns. Our company-specific adjusted EPRA earnings increased by 11% year-on-year to EUR 241 million.

This translates into EUR 0.50 share, an increase of 9% year-on-year. Supported by strong operational performance and leasing momentum, we remain firmly on track to deliver our company-specific adjusted EPRA EPS guidance of EUR 1.01 to EUR 1.03 per share.

And now looking at the valuation results. The net valuation result in the first half was negative EUR 83 million. The standing portfolio recorded a negative revaluation of EUR 147 million.

This is partially offset by EUR 69 million of positive revaluation from our development pipeline, reflecting construction and leasing progress, while the land bank valuation was broadly stable. Valuation yields also remained stable. The gross portfolio yield was 6.5% and the reversionary yield was 6.9%.

And following the strong rental growth achieved over the recent years, we expect ERVs to be broadly stable for the remainder of '26. At the same time, the leasing demand remains supportive.

The total portfolio gross asset value now stands at EUR 18.9 billion, up 11% year-on-year. EPRA NTA per share stood at EUR 20.23, up 4.5% year-on-year. Our value creation model continues to work well, which is illustrated by our compounding track record.

Since our IPO in '21, GLA has grown by around 18% year-on-year, annualized rental income by 21%, investment property by 24% and EPRA NTA per share by 18% per year. Only a few real estate companies in Europe have delivered this level of sustained growth over such a long period.

The supportive demand drivers of our business are even becoming more relevant in the current geopolitical environment, whether that are European companies reshoring or global companies relocating manufacturing to Europe and in particularly to CE markets to effectively manage supply chain risk.

And these changes bring opportunity for CTP, and we are ready for those, not only with our 2 million square meter of space currently under construction today, but is well supported by our extensive 33 million square meter land bank where we grow with existing customers.

While in Europe, our focus is utilizing our existing land bank and turn them into income-generating assets, we also took our first step into Vietnam, securing an initial land bank of 330,000 square meters across 2 locations. We believe the Vietnamese market offers attractive long-term fundamentals, including strong FDI inflows and continued manufacturing expansion. Many of our clients, whether they are European or Asian, are already active there.

As always, our approach is disciplined. We deploy capital selectively and apply the same business model that has underpinned our successful expansion across the European markets, focusing on cash flow generation, while in Vietnam, we target higher risk-adjusted returns. And now I hand over to Richard.

The first half of the year once again demonstrated CTP's exceptional access to global debt capital markets and our disciplined approach to funding the business. We've raised and refinanced almost EUR 1.7 billion of debt, further diversified our funding base and increased the flexibility of our balance sheet.

In January, we issued a EUR 500 million green bond with a 4.5-year maturity at a spread of only 92 basis points, our first issuance below 100 basis points since 2021.

And in March, we returned to the Asian loan markets with a dual tranche 5-year syndicated facility, raising JPY 22.5 billion and USD 118 million from 15 Asian banks. This further broadened and diversified our pool of lenders.

In June, we signed a new EUR 400 million revolving credit facility with a 5-year maturity and a syndicate of 5 key relationship banks. This RCF will be regularly drawn, adding more flexibility to our balance sheet and allowing us to run a lower cash balance.

We also remain active in liability management. After tendering EUR 216 million of our February 2030 bonds with an expensive 4.75% coupon in January, we refinanced our syndicated EUR 500 million unsecured term loan facility originally signed in 2024. We decreased the margin to 135 basis points. We extended the original maturity by 2.5 years from 2029 until January 2032.

Our debt maturity profile remains conservative. After repaying our EUR 350 million bond in January, the only remaining bond maturity this year is a EUR 275 million maturity in September. Beyond that, maturities remain very manageable through 2027 and 2028 with less than EUR 1.1 billion outstanding in total over those 2 years.

Turning to our key credit metrics. Our interest coverage ratio remains stable at 2.5x, comfortably above covenant levels. The leverage ratio stood at 46.8%, slightly above our 40% to 45% target range, reflecting the strategic Italian land bank acquisition that we completed at the end of 2025, together with a modest negative portfolio revaluation in the first half of 2026.

Our standing portfolio continues to generate growing recurring cash flow, while our highly profitable development pipeline continues to create value. We expect to continue deleveraging towards our target range over time.

Every euro we invest in our pipeline increases our ICR and decreases our net debt to EBITDA, supporting a gradual return of leverage to our target range. This underpins our confidence that we can continue growing rental income at double-digit rates while strengthening the balance sheet.

The next stage of growth is built in and financed. Due to our sector-leading yield on cost of around 10%, we do not require additional equity capital to complete our 1.4 million to 1.7 million square meter pipeline in 2026.

Liquidity at the end of June stood at EUR 2.1 billion, comprising EUR 400 million of cash and a total of EUR 1.65 billion of available committed revolving credit facilities, more than sufficient to meet our cash needs for the next 12 months.

We continue to rebalance our capital structure towards unsecured funding, currently at 71% with a medium-term goal of around 80%.

Our average debt maturity is 4.6 years. 99.4% of that debt is either hedged or fixed rate. And our weighted average cost of debt is 3.4%. Following our recent refinancing activities, we do not expect a material increase in our average cost of debt during 2026.

We remain confident in the outlook for CTP. Operationally, the first half was marked by record leasing activity, while rental levels remained resilient.

We continue to see structural drivers such as nearshoring, supply chain professionalization and in Europe for Europe production, supporting occupier demand across our markets.

Our pipeline remains highly profitable and tenant-led with 2 million square meters under construction, EUR 152 million of future rental income embedded in that development pipeline and over EUR 7 billion of development profit potential in our land bank.

This provides us with significant embedded growth well beyond the current year. More broadly, we remain firmly on track towards EUR 1 billion of annualized rental income by 2027, supported by development completions and reversionary capture. Thank you for your attention. We now welcome your questions.

[Operator Instructions] Our first question comes from Bart Gysens from Morgan Stanley.

Bart Gysens from Morgan Stanley. I have 2 questions. My first question is on Romania. It looks like quite a chunky write-down there, 5% or so, significant. Can you elaborate what happened? And whether there's any other markets where we could see something similar? That's the first question.

Maarten here. Let me take the first question. So if we look to Romania, what we have seen is, in general, if we look to the volume, we see good demand. But also if you look area, signed quite a bit of leases there in the first half of the year.

But we have seen the market becoming more competitive. There have been some more players entering the market, some of the more trade developers, so to say. So people will build and then afterwards sell to fund or others.

So that has distorted the market a bit because the market with those new players entering has become a bit more competitive, and that's why you saw some pressure there on the valuations.

So that is basically what has taken place in H1. But if you look to the overall leasing that we did in Romania, actually, the first half was good in terms of volume. You see that also on the slide where we show basically the rental levels and the leasing volume we did, which is in the presentation.

So if you look, it's more of a local issue and a temporary issue rather than any structural issue. We don't see it also in other countries, and it comes back to the leasing activity that we have done.

If you look to the leasing activity, which is up 55% with a total 1.6 million square meters signed, that's a very strong underlying demand. So it's really a local issue reflecting some supply short term in the market. That also if we look to the second half of the year, we expect ERV basically to be stable there.

But can you please give us some actual numbers there? So what was the percentage write-down on that Romanian portfolio? And was that driven by higher yields, lower rents, higher vacancy? Can you just quantify that because I think that's quite important?

So indeed, ERVs came down 4.5%, to be exact. Yields were stable. So it's really driven by the ERV movement. And like I said, if you look to the overall leasing, it was good actually because the overall leasing, we signed 350,000 square meters in the first half in Romania. So it's really pressure on rent short term, driven by a bit more supply push to the market by those local trade developers.

No structural issues in terms of the park that we are having because you visited the parks from us in Romania. You know the locations. They are very strong locations.

If you look, for example, to Bucharest West, it's the largest park in Europe. And this year, we should pass the 1 million square meter there. We are developing for our key tenants, [ Lilor Mila ], LPP. So very strong underlying dynamics, but just the competition which affected the valuations in the first half.

[Indiscernible].

And what gives you the confidence that -- sure, sorry, yes, go ahead.

This is a matter of adjusting the ERV. This is Remon speaking. So we have seen that the local teams, the leasing teams, we have difficulties to hit the ERV. So we came down with the ERVs.

That's what we've done. Yes, it could be a temporary, I think so, situation that if we can hit these ERVs, we can then increase the rents again. But for now, we came down. We don't do a lot of incentives, as you know. We don't do lots of rent-free or anything like that.

So yes, and we don't plan to do that. So it's just a matter of -- we have been able to increase ERVs over the past years. And maybe we have been a bit too ambitious here and there, and that's why we corrected that to a realistic level for us or for the leasing team to do deals at.

Yes, and Maarten is correct. Of course, it's a bit more competitive. Although yes, maybe it's a temporary thing. But yes, there are other players, not only international, also local fighting for some deals here and there. So yes, there's maybe some more competition, but we don't see a lot of vacancy.

So it's more a correction of adjusting the ERV to a bit lower level and not maybe as high as we thought. Let's see our take-up is and what supply is like and then we can maybe increase slowly again the ERVs. I think that's what's happening.

Great. And then my follow-up question or my second question is on the impact on the balance sheet, right? You've been guiding to 40% to 45% LTV. That's ticked up over time, your acquisition in Italy, other ambitions.

And now, of course, you have the denominator effect of a lower V and therefore, the LTV goes up to now 47%. By when do you think you'll be back into the target range?

Yes. Thanks for the question. Yes. Look, I think you know that we are able to grow the balance sheet without acquisitions through developments at the 10% plus yield on cost. So everything that we are investing over time, the 2 million square meters that we have under construction, the rest of the developments for delivery this year at 10% plus will help us towards that.

We are happy with where we are. At the moment, understanding that the acquisition in Italy at the end of last year pushed us up, we are relaxed about valuations going in through the rest of the year.

Like Maarten said, we think about Romania as a separate case. We don't think there's a read across into any of the other markets, different competitive scenario in those. So we will move over time. I don't want to put a specific timeline on that. But over time, we will move slowly down towards the 45%.

Our next question comes from John Vuong from Kempen.

Just following up on Romania. What gives you comfort that this adjustment in ERVs is sufficient and that most downward pressure is behind us? Are the trader developers mostly done with their pipelines? Or yes, how do you see the market there?

It comes back to the rents we are able to achieve, John. So if you look -- and it's also what I said to Bart, if you look to the leasing, we've done 350,000 square meter in the first half of the year compared to 200,000 square meters in the first half of last year.

The rental levels, they stay at EUR 4.50 of the new leases signed. So we see those in line with basically the ERVs that we now have. So if we are able to lead at those levels, that gives us, of course, the comfort on the ERVs that we now have in the books.

But, Maarten, maybe more important -- maybe more important to explain, Maarten, is the cash because we are talking here about the perception or the ideas on what is value and what can we rent buildings at today, next week, next year, over next year, duh, duh, duh.

But cash doesn't change. So we collect more cash now from the Romanian portfolio than we did 12 months ago, than we did 6 months ago. Do you understand? So the cash, the rental income has grown.

That's clear. And maybe just zooming in on the Czech Republic. I noticed that in your interim statement that you're also written down on the Czech portfolio. Could you provide a bit more color on that?

So if we look to Czech, John, that's a bit -- we have spent some maintenance CapEx in the first half of the year. We keep our properties up to date, as you know.

So if you run the CapEx through the P&L, you get the adjustment on your value, and that's why you see the net revaluation result there being slightly negative. So it's the maintenance of the properties that we are able to keep up to date to the current standards. And I think you also visited some of our properties. If you look to the older parks that we are having, it's now 20 years.

If you are coming in there, you don't feel like them being 20 years. So they are very well maintained. And that's also why we can continue to drive the rental growth. And that also comes back to what Remon just said before on Romania.

If you look to those properties in Czech, well, maybe slightly older, some of the initial parks that we built, they are generating more rental income than ever. And for that, we sometimes need to invest. That's the usual property management that we are doing. That is also the service that we are delivering to our tenants and the quality that we stand for.

Okay. That's clear. And the last one, during your comments on Vietnam, you mentioned that Chinese companies active there are also looking to enter Europe. Do I read this as that they first want to cooperate with you in Vietnam before they decide on whether to partner up with you entering Europe? And just how tangible is your ambition to enter Europe?

Yes, it's both. So -- and Remon can also add on that, but we have been, of course, touring also around in Vietnam. And when we see many companies active there, both our existing clients because we already have quite a bit of Chinese, Taiwanese clients, what we have in Europe, we are also active there, Inventec and Wistron, et cetera.

Same with the Chinese clients. What we have in Europe are also active in Vietnam. But there are also, of course, Chinese active in Vietnam that are not yet in Europe. So it's both ways.

And the start of CTP Asia through our operations in Vietnam is really also to strengthen our network there. We have seen the growth of Asian clients coming to Europe. I think we have been one of the first ones to act on that.

And that's also why you have seen the increase in the Asian tenants in our portfolio. That's also why we, of course, have the team on the ground in China focused on business development. So companies will want to expand into Europe.

And we think we can leverage that even more by our operations in Vietnam because especially if you look to the northern part of Vietnam, you see many of those Chinese companies active there. Basically, it's part of the China Plus One strategy.

It's more regional production. They are growing outside of China and some of that is in Southeast Asia. Some of that will be in Europe because Europe remains the largest consumer market in the world in terms of population.

So for Chinese companies to have that growth and with the new regulation in place, they need to be in Europe and whether that's manufacturing or whether that's more e-commerce. And Remon also mentioned it in the intro, we signed, for example, with a Chinese e-commerce player in Poland.

We see more demand of those, especially with the new regulation where the small packages are no longer exempt from import tariffs, they are looking for more space in Europe.

But the same with the manufacturing, whether it is EV related, whether it's semiconductor related, the regulation basically drives them to produce in Europe for Europe, together with, of course, the growth ambitions that many of those Chinese companies have and the consumer market that Europe has to offer.

And we think that with the operations in Vietnam, we can tap in way more into the network and basically enhance that growth with Asian companies.

To finish maybe and summarize, CTP do 1.5 million square meter of new business this year, 1.5 million, right? That's around 10% of the completed portfolio. 2/3 of that, let's say, 1 million is existing clients and the remaining 1/3, say, 0.5 million square meter we look for new clients.

We think that more than 50% of that 500,000 square meter, to be exact, 300,000 square meter is our target for this year to secure that with Asian, mostly Chinese tenants.

And so far, first half of this year, we have been able to achieve that. We have done more than 150,000 square meters of new leases with Chinese companies. And that is a mix of all type of companies, honestly, logistic service providers like SF Express, companies involved in manufacturing of machines for the agriculture industry like Zoomlion in Hungary, also the new automotive, so the EV industry, [ Eyambole ] in Serbia, one example, but also a large e-commerce company, which we recently signed for Poland.

So we have a very clear identified a number of target groups and the Chinese companies are -- Asian companies, in particular, Chinese companies is one of the target groups which we approach. And we have established a China desk. So we have a team of people, Chinese people in China, but also in Europe who are actively approaching Chinese companies to see if we can help them with their property needs in Europe.

And that's not -- also Germany, by the way, it's not just Holland or Poland, it's throughout the portfolio. And with our activity in Vietnam, we're getting even closer to those Asian companies and Chinese companies also because many Chinese companies take space in Vietnam.

So this works nicely together, and it helps us to further extend our China desk or our Asia desk when it comes to securing business, not for Europe only, but also going forward for our Vietnam project.

Our next question comes from Vivien Maquet from Degroof Petercam.

Vivien Maquet, Degroof Petercam. Two for me. Maybe first, a follow-up on the increasing competition in Romania. Just wondering if there is any specificity to micro location when you see competition rising more intensively than other locations?

And to what extent you see discrepancy in terms of the rent that you can achieve in between your parks? That would be my first question.

Yes. Thank you. Well, this is more Bucharest-related. So most of our projects are in Bucharest. With respect to -- maybe more specific, with respect to the rental growth on ERVs, we adjusted, I thought we could get EUR 5.50, maybe EUR 6 for smaller units, like 1,000 or 2,000 square meter, and that doesn't seem to be the case. So we are still at around EUR 5, maybe EUR 4.75 or something like that.

Yes. So there are some local players. Maarten referred to trade developers. Yes. Is that so? I don't know. There's competition coming from different places. Maybe there is more supply than it used to be.

Maybe the market need to still get used to higher prices for the square meter. We see land prices rising, construction costs rising. So I think it's just a market which will become more mature. So yes, that's what it is. So we came down the ERV and said, guys, if you can't lease it for EUR 6, then maybe try for EUR 5. I think that's what it is really.

And in order not to have ongoing discussions with the leasing teams in order to avoid that we give a lot of incentives so that the headline still looks good, but in reality, net effective is far lower, which we don't want to do.

We never did. So that's why we said, okay, let's bring it down a little bit, see how the market reacts, see how -- it's maybe also a little bit protecting our position. Maybe we keep it low for the moment, not to motivate the others. It's a bit of what you do. So no, nothing to worry about. And as I said earlier, cash remains same, better actually than before with -- yes.

My second question will be rather on the increasing LTV. I understand that it's not the cash, but what about the credit rating? Do you see any issue with that with creeping LTV?

I mean, the debt on EBITDA to remain below 10x. But my question rather is at what point, let's say, that situation doesn't improve or stabilize in Romania, does LTV continue to go up? Do you think at one point, you will take action in order to reduce the LTV back to the target range?

We don't see any need to do anything at the moment. We are in regular contact with the rating agencies. As you know, Moody's confirmed the upgrade to BBBaa2 earlier this year. I see no reason to expect any change in the outlook or the view from the rating agencies.

We think the rating agencies understand that operationally, the company does extremely well. We create -- we generate -- we will generate in the next 12 months over EUR 850 million of cash. And that is what fundamentally underpins the credit quality of the company.

It is the strength and the diversity and the predictability and the reliability of the cash flow that we have. And the point that Remon was making about Romania.

So the valuations at a point in time are multiple of the cash flow that you're generating. They are hypothetical value. Yes. The cash flow is not hypothetical. The cash flow is real.

And that's the strongest point that we have. And that's something the rating agencies understand very well. So don't expect anything from the rating agencies, at least not on the discussions we've had with them.

Our next question comes from Suraj Goyal from Green Street.

Just a couple of questions from me. So the first one is, would you be able to provide a bit of color on the decline in the rents obtained for the first half of this year, the leasing in Germany, the 185,000 square meters as compared to prior year? I appreciate it might be nuanced, but a color there would be good.

Yes.

And then the second -- sorry, go on.

Yes, I can answer that one quite quickly. That has to do with where the rents were. So the rents in the first half of last year were in the new project that we're building in Mulheim, so state-of-the-art brand new properties and the leasing in the first half of this year was in the Deutsche Industrie portfolio.

So actually, there's a material uplift in the building for building like-for-like with that -- the leasing in the Deutsche Industrie portfolio, but it's obviously at a lower level in absolute terms than the leasing for the brand new under-development assets.

Perfect. That's very clear. And then the second one is just on, are you able to share the total development cost on average for the development in Vietnam as well as the target yield on cost? And then what kind of development run rate we target going forward? Or is it going to be more we see how the current developments go and then we'll reassess?

Yes. So if you look to Vietnam, and we are currently still in -- we have secured those 2 sites. We are now basically working on the tendering, et cetera. So it's a bit early to give all the details.

But I think if you look to the market, you see construction cost around $300 per square meter. But if you look to -- also if you look to our peers who are active there. So it's cheaper than, of course, in European markets. Labor costs are also cheaper there. Land costs are a bit more expensive. So it's ultimately the mix of that, that gets you, of course, to the yield on cost.

We target yield on cost around 12% or so. We'll see how it goes. It's really those 2 projects are our first try. One is in the north, in the Hanoi-Hai Phong corridor. The other one is in the South in Ho Chi Minh.

So real, the largest consumption areas and biggest conglomerations in terms of population in Vietnam. So we've got good locations where we think we can do successful projects with our existing clients, but also with some of the new clients over there.

And we'll try and see and learn from that. That's always how we do if we enter new markets. We have a good team on the ground now with property managers that are experienced that have done it multiple times.

So yes, it's an exciting opportunity for us. In terms of the cash flow generation, it's one of the higher cash flow generation countries, similar to what we can do in Serbia, et cetera, where we target the higher yield on costs.

And as you know, for us, it's always a balance between the cash that we can generate, which is important because what Richard refers to is essential for our credit rating, is essential for our financing of future projects because ultimately, that's the cash which gives us the self-financing opportunity that we are having.

So that's a bit where we are looking at, learning by those 2 projects and take it from there, and then we can see what the run rate will be on a yearly basis.

Our next question comes from Marios Pastou from Bernstein.

I've got 2 from my side. Just coming back on Vietnam, actually, where you mentioned a tenant led. So are these completely speculative schemes? Or are you developing these with specific tenants in mind based on the discussions you're having?

And then secondly, on leasing over the quarter, another quite significant pickup. Was there anything in there which would make that kind of non-like-for-like or something specific that drove that pace? And what level of pace could you set really for the second half based on the current discussions you're having?

I can take the first one. Thank you for your question. In regards to Vietnam, yes, we see a lot of opportunity in Asia and in Vietnam, in particular. Indeed driven by or following discussions we have had with our tenants, and that's obviously after 2 years because it's almost 2 years since we started to look at Vietnam, we now look forward to doing our first project.

We are preparing for the design and permitting. I think in Q4, we could potentially start. We could decide to start with a pre-lease. We could decide to start a bit smaller with some speculative development.

It depends also a bit on how the negotiations develop with our tenants. But the 2 sites we have identified are really strong and good locations. You can find details on our website. One is, as Maarten explained, Ho Chi Minh.

Good location, established business park, no more land. This is the last land site. So good demand already, not from existing clients only, but also local through the network, the CBREs and Savills and all of the Knight Franks who approached us to see if we can do a project for some of the clients they represent.

So they will need to see. But these 2 projects are not the last one. This is just the start. So I think there's way more opportunity there. So we are actively looking in different opportunities.

So I hope maybe on the Capital Markets Day or maybe a bit later, we will be able to give you a bigger -- a better update on that, yes. But yes, very good. Very excited about that opportunity.

And yes, maybe with regards to the leasing we've done in the details, Maarten, you want to take that? Or Richard, do you want to provide some more insight in that?

So if you look to the leasing activity, and you see it also on the slide in the presentation, Marios, it's quite broad-based. In most countries, actually, we are up in terms of the quantum of leasing that we have done. So overall demand remains solid and actually very strong in some cases. And that's really reflecting, of course, the growth drivers that we have been talking about.

Leasing is always one-offs because each and every lease, you need to do a lot of work for, except, of course, the existing tenants. That's a very continued stream of leases that we are getting.

And that's also the strength of our growth model, a consistent stream of growth with existing clients and 2/3 of our new leases being signed with those clients. So that you see across the countries.

And then, of course, you do the new leases on top. But we think that with the locations we are having, we are good positioned for the second half of the year also when we are looking to the conversations of the teams on the ground.

Yes, we need to do a lot of work for each and every building and each and every lease, but that's normal. But we have a good pipeline of negotiations, and we hope to translate that.

And that's also why we are looking if we talk about the development completions, between 1.4 million and 1.7 million square meter for this year. We are now over 50% pre-leased for the developments that we want to complete this year.

It's in line with our usual track record. We expect that to tick up like usually to 80%, 90% at completion, similar to what you saw at the first half deliveries, 245,000 square meter we delivered in the first half was 93% pre-leased.

So we expect a usual pickup in the Q3 and in the Q4, basically leveraging the ongoing negotiations that we are having with our tenants as well as the new tenants, the Asian tenants coming in.

Some new sectors that are developing. We've seen a bit more interest from the cleantech. We did, for example, a big deal in the first half of the year with Windar, the windmills in Poland. We see a really good demand from FMCG, consumer spending.

So if you look to the shift in basically where demand is coming from, we see a real strong increase of retail, wholesalers who are basically expanding into the CE market and therefore, needing more space as on the back of the growth of domestic consumption, those are expanding their networks. They are opening new stores, opening new warehouses.

So that's really the increase in the sector that we are seeing, and that's why we are confident for the second half of the year, but on track in terms of leasing for our pipeline as guided.

Yes. And I think in terms of like where we will land at the end of the year, do I think that we'd be up 55% compared to the whole of 2025? Probably not, but we'll push as hard as we can to get as close to that as we can. I think we are firmly on track to have another record year for leasing this year. And we'll do everything we can to make that as big a gap to the old record as we can.

We will now move over to our written questions. Our first question comes from Brent L. Watkins from One Consulting SRO. The question is, where is the growth? A, internal or external? B, which geography, Euro or abroad?

Yes, look, the bulk of the growth is in and around our existing parks with 2/3 of the new leases, like Remon said, with existing tenants. So the bulk of our growth is going to be internally generated organically -- organic growth and that we can self-finance the 10% plus yield on cost.

And then on top of that, we have the growth engine that adds new markets, so Italy last year, Vietnam this year, and they will come online over time and add to the ability for us to then generate organic growth next to the first buildings we built in those countries.

We have an audio question registered from Greg Simpson from BNP Paribas.

First question would be just on the Asian tenant story. It looks like 15% of leases over the last 24 months were over to Asian tenants. It was 20% a quarter ago. And it looks like GLA was quite flat quarter-on-quarter.

So I just wanted to check in, is there any change near term in terms of dynamics you're seeing with Asian occupiers still the medium-term opportunity is attractive? And then just a second quick one, was there any update on data centers? I know there was some discussion last year about Germany.

Yes. So if you look at the Asian tenants, the 20% was on a much lower quantum. So actually, demand from Asian tenants in total is increasing because if you look 15% of the record leasing that we've been delivering over the last 3 quarters is materially higher than the 20% of the smaller quantum earlier.

So actually, we continue to see very strong demand from Asian tenants. It's not a surprise that it ticks down. They make up 12% of the portfolio. So if we are doing a lot of extensions or expansions with existing tenants that you would expect that number to come down statistically.

Yes, because it really comes back to what is the percentage of Asian tenants of the new leases. And that's also what Remon said before. So if you look to the new leases that we are doing with new clients, because we have a lot of new leases with existing clients, but if you look to the percentage of Asian from new leases with new clients, that remains increasing with the demand that we are seeing.

In the first half, we did some more renewals, as you can see. So if you look to the percentage that's impacted by that.

And then you asked for an update of data centers, your second question. At this stage, we are looking at some things in Germany. We also have 1, 2 potential sites maybe in Italy as part of the acquisition that we did with VLD.

But it's too early to say. It takes time, those things. We are working on it. We have power, but of course, there needs to be the demand as well from the users. So it's securing power, securing permits.

We see it maybe a bit less than, of course, you have in some Western European markets, but it will come also here, also, of course, driven by regulation, more regulation requiring, of course, data being housed locally in the country, especially sensitive data.

So that's also a regulation coming in place. So over time, there will be opportunities also for us in the markets where we are active. But when there is an update, we'll come back to the market.

We currently have no further questions waiting online in the queue. And I'd now like to hand over to the management team for any in-venue questions.

We'd just like to thank you all for your cooperation and look forward to seeing as many of you as possible at our Capital Markets Day in Warsaw on the 22nd, 23rd of September. Thank you.

Thank you. This now concludes today's call, and I'd like to thank...

[Audio Gap]

So good morning, everyone, from Prague. It's me here with the Q1 results for '26, which is good because we have seen an all-time record high leasing take-up of more than 762,000 square meter of new deals, around 445,000 square meter of that is new build, new deals and the rest is some renewals throughout the region, mostly for existing clients, long-term tenants as historically around 2/3 of all of what we lease, we lease to our existing clients. So those are logistics service providers, DSV, Raben and many others, but also we have been able to close in Q1 a number of deals in Germany, in Krefeld, which is one of our new projects in Germany, but also some renewals in Romania, for example, Valeo and Timișoara, we have done a deal with [indiscernible] in Bucharest. So all kind of different industries. But yes, very good.

So a record high. We have never seen so much leasing as we have seen in Q1. And I think Q2 going to be a record again in terms of take-up, but let's see how far we get. This confirms a strong client base, it confirms right region. I think also confirms that with all of these events happening over the past weeks, months, decade, maybe, we've seen COVID, we've seen tariffs, we've seen wars. Often, our clients adjust their supply chain from just-in-time becomes just-in-case. They want to build inventory. They cannot rely on the Suez Canal being open all the time. So rather have a bit of extra goods on stock more in Europe for Europe is what we see, mostly Central Europe because labor cost, productivity is different here than in some of the Western European countries.

And often means that our clients are growing their business and building inventory just to make sure that they can deliver if they need to, to make sure that they can sell and continue to run their business. All of this also means flexibility. Leasing or renting property is, therefore, also very much in demand and appreciated and gives more flexibility, is not that companies build properties, which they will use for the next 30 years. It's more like they want to maybe rent something for 5 years or 10 years or even short-term leases is what we do.

And yes, short-term leases can be at a bit higher rent than long-term leases. Of course, us as well-established companies with feet on the ground here in Europe and Central Europe in particular, I think we benefit from that with the client base people on the ground with a network. We've been doing this for, well, more than 25 years. So we benefit from that. And yes, Europe cannot rely on others. We need to maybe reindustrialize as some people say, anyway, become more self-sufficient, do look after your energy business, technology, but also defense industry.

And also for companies outside of Europe, also they come to Europe to be part of the European economy. And we've seen that many Asian companies come to Europe. Yes, we do a lot for them. And I think it's going to continue. And they also come to Europe under the in Europe for Europe idea.

Some highlights on the operator and developer because I don't have to tell you that we collect rent because we always do that and occupancy has been around 93%, similar to what we have seen over the past 5 years since our IPO or since the listing in Amsterdam in 2021. Okay, operator. So far good, 14.7 million square meter of lettable area, which produces EUR 850 million of rental income. For next year, 2027, as you know, we target EUR 1 billion of rental income and that is still a realistic target. That's with regards to the operator.

With regard to operator, I can also say maybe that we continue to invest money in those buildings, make sure that they remain in excellent condition. We do all kind of modernization, smart metering. Of course, we equip those buildings with LED. We did and do some roof repairs, all kind of other things to make sure that these buildings remain in a good condition. Often, these buildings are obviously part of a larger business park. Yes, it's just important, we believe, to continue to invest in those parks, not only the building, but also outside infrastructure, et cetera.

For example, reminds me of a project in Brno, Moravian, south of Brno, which we started in 2001. And then we now recently built another exit from the motorway to improve the accessibility. That's what we do. We're also improving green areas and parking lot and some battery charges. So to make sure that these properties are up to date and fit for use and they've been built well back in the days. So yes, that's the operator.

Developer, the stuff we like. 2 million square meter under construction throughout the portfolio, 11 countries. Not all of that will be complete this year. Some properties take a bit more time to complete. But once fully let, it will do another EUR 150 million rental income around that keep construction costs under control. Obviously, there's a bit of here and there discussion about construction prices, try to keep that under control. I think we can do something on rental growth as well. We have a large land bank which we like to develop. So we are working on design and permitting to make sure that the land bank is prepared for future projects at the same time.

So the developer is not only building buildings, but it's also preparing for future developments, which often is, I think, probably the most demanding because you need to do a proper design and you need to get your permits. That is something which can take time. Once you're under construction, then you control that process and then you're okay to estimate your completion dates.

Target is to remain at 10% yield on costs, do that, continue to do that. Lots of existing clients also, as I said, adjusting supply chain, adjusting strategy to the new reality, flexibility also being able to react to the changing market circumstances goes for our clients, but also goes for CTP. I mean, in times of change, there is opportunity. When all is steady, then it's easy. I think you can make a difference when it's a bit bumpy and more challenging. And this is something which we enjoy, which we like to make sure that now is the time to make a difference. So it's all hands on deck. It's the time of opportunity. And yes, altogether work for a better and stronger Europe for sure.

Asia, yes, of course, we continue to look. We have teams on the ground in China. We have a team in the meantime in Vietnam to make sure that we understand the market. We talk to our existing clients on whether they would go to Vietnam with us and how that would look like. Many of our existing tenants have activities in Asia and many are in Vietnam already. We could have been part of that maybe, but we were not ready. And I think we are getting up to speed to be prepared and to see how we could extend our activities and also become active in Asia and Vietnam would be then the first market for us. I continue to go there. As you know, I'm typically involved in CTP when it's a start-up, when things start to go before we hand over to local country teams. So I do plan to continue my travels to Vietnam on a monthly basis approximately and try to spend a week in Vietnam. So, so far good.

This here, I will hand over to my colleagues, and I'm happy to and ready and prepared to answer your questions. Thank you so much.

Turning to the financial highlights. The portfolio like-for-like rental growth came in at 4.6% for Q1 '26, accelerating from 4.2% in Q1 '25, driven by indexation and continued positive rent reversion capture. As Remon highlighted, we delivered a record quarter leasing activity of 762,000 square meter, up 83% and occupancy remained stable at 93%. The annualized rental income increased by 14% year-on-year to EUR 849 million, illustrating the strong cash flow generation of our portfolio. We remain well on track to achieve our annualized rental income of EUR 1 billion by '27. This cash flow will finance our future growth.

Our company-specific adjusted EPRA earnings increased by 11% year-on-year to EUR 120 million. This translates into EUR 0.25 per share, an increase of 9% compared to Q1 '25, adjusting for capitalized interest. We remain on target to meet our full year '26 company-specific adjusted EPRA earnings per share guidance of EUR 1.01 to EUR 1.03.

Now looking at the valuation results. For the Q1 and Q3 results, only the investment properties in the development are revalued. In Q1 '26, the revaluation amounted to EUR 164 million, driven by the construction and leasing progress, allowing us to capture the development profit on our pipeline. Of the project delivered in Q1 '26, we achieved a yield on cost of 10.4%. The total portfolio gross asset value now stands at EUR 18.9 billion, up 2.2% from full year '25.

And the supportive demand drivers of our business are not just prevailing, but are becoming even more relevant given the current geopolitical environment, whether our European companies reshoring or global companies relocating manufacturing to Europe and in particular, to the Business Smart CEE region to more effectively manage our supply chain risk. And these changes bring opportunity and we are ready not only with the 2 million square meter of space under construction today, but as well with our 33 million square meter landbank. This enables us to capitalize on our high development yield on cost.

We also continue to grow with our existing customers. 73% of the new leases signed in Q1 are with existing clients expanding with us. And our tenant retention rate was high at 95%. Of the space under construction today, over 80% is in or around our existing parks, where we continue to see strong demand, especially from those existing clients.

Our EPRA NTA per share increased from EUR 8.58 at Q1 '25 to EUR 20.95 at Q1 '26, representing a strong year-on-year increase of 12.8%. We have now been 5 years listed at CTP. And in those 5 years, we have delivered an annual growth of 19% in terms of GLA and 22% in terms of the annualized rental income. But this is just the start of our self-financed development-led business, and it's supported by our standing portfolio. It's sustainable and growing income alongside market expansion opportunities.

Looking forward, structural tenant demand drivers, including our medium-term double-digit annualized growth trajectory remain unchanged, as Richard will highlight to you now.

In Q1 2026, we have again demonstrated our strong access to debt capital markets and our continued focus on diversifying sources of liquidity, raising nearly EUR 800 million of new debt during the quarter. We seized a favorable market window early in January and issued EUR 500 million of green bonds with a 4.5 years maturity ahead of the geopolitical volatility that followed. The bond was very well received with an order book almost 9x oversubscribed and provided highly attractive funding at a spread of only 92 basis points, our first issuance below 100 basis points since 2021.

Following our inaugural samurai loan from March last year, we also returned to the Asian markets with a new dual tranche 5-year syndicated loan, raising JPY 22.5 billion, equivalent to EUR 122.7 million at a margin of 115 basis points and USD 180 million and a margin of 135 basis points. With 15 Asian banks in the syndicate, we further broadened our pool of lenders and strengthened geographic diversification, both of which remain long-term strategic priorities for us.

We also continue to actively manage our debt portfolio and repurchased EUR 216 million of our February 2030 bonds with a 4.75% coupon, generating material interest savings over the coming years, supporting our integrated business model, the developer, the growth engine, the operator. We will continue to proactively manage our debt portfolio and diversify funding sources in support of long-term value creation.

Turning to the key debt metrics. Our interest coverage ratio remained stable at 2.5x, comfortably above covenant level. Our normalized net debt-to-EBITDA stood at 9.4x, broadly stable. And our loan-to-value stood at 46.4%, marginally above our 40% to 45% target range, primarily reflecting the landbank-led acquisition in Italy at the end of 2025. We believe this acquisition will be highly accretive over time.

Importantly, the next stage of growth is built in and financed. To complete our 1.4 million to 1.7 million square meter pipeline in 2026, we do not require additional equity capital due to our sector-leading yield on cost of around 10%. Every euro we invest in our pipeline increases our ICR and decreases our net debt to EBITDA as leasing income comes on stream. That underpins our confidence that we can continue growing rental income at double-digit rates while strengthening the balance sheet.

Looking through 2026 and beyond, CTP maintains a conservative debt maturity profile. We also repaid EUR 350 million of bonds maturing in January and our only remaining bond maturity in 2026 is EUR 275 million at the end of September. Looking further ahead, maturities remain limited over 2027 and 2028 with less than EUR 1.1 billion in total outstanding over those 2 years.

Liquidity at the end of March stood at EUR 1.9 billion, comprising EUR 600 million of cash and our EUR 1.3 billion RCF. More than sufficient to meet our cash needs for the next 12 months. We continue to rebalance our capital structure towards unsecured funding currently at 71% with a medium-term goal of around 80%.

Our average debt maturity is 4.8 years. 99.9% of our debt is hedged or fixed rate, and the weighted cost of our debt decreased to 3.2% in Q1, marginally below year-end 2025 due to our active liability management and refinancing activities. We do not expect a material increase in our average cost of debt in 2026. We remain confident in the outlook for CTP despite the volatile geopolitical backdrop.

Operationally, the quarter was marked by record leasing activity, while rental levels remained resilient. We continue to see structural drivers such as rising disposable incomes, supply chain professionalization and in Europe for Europe production, supporting occupier demand across our markets. Our pipeline remains highly profitable and tenant-led with 2 million square meters under construction, bringing EUR 154 million of future rental income and over EUR 7 billion of development profit potential in our landbank. This provides significant embedded growth well beyond the current year.

More broadly, we remain firmly on track towards EUR 1 billion of annualized rental income by 2027, supported by development completions and reversionary capture while continuing to progress towards our longer-term ambition of 30 million square meters of GLA.

Thank you for your attention. We now welcome your questions.

[Operator Instructions] The first question today comes from Marios Pastou from Bernstein.

I've got 2 from my side. So firstly, you mentioned you're anticipating another good second quarter of leasing volumes. But maybe can you give some color on the negotiations and the pace of leasing in the current environment, which will then feed into your volumes maybe later in the year? Has anything changed on the ground?

Marios, thanks for your question. So if we look in terms of leasing, and Remon already said it also in the video, we see a good start of the second quarter. So that remains supportive. And that's really driven by -- if you take a step back and look to the long-term drivers of what is now really underlying those leasing activities, it goes back to that the current geopolitical volatility that we are seeing is actually only supporting demand from our tenants because they want to have security in their supply chain.

So that's why also if we look to the second quarter, we see a good start, and we are positive on the outlook for the quarter, thanks to the current position where we are in, which we think is only good for Europe long term because Europe as a continent driven by those geopolitical movements has to become more self-sufficient.

And if you then look to where most of that production, which will happen in Europe for Europe will take place, that remains consistently in what we call the Business Smart Central and Eastern European region. That hasn't changed materially. That has been in place over the last 5 years and that's why you also see the consistent growth in leasing that we are able to do. And that will play out through the second quarter.

Of course, we need to deliver and we'll update you accordingly. But I think the first quarter should give you the confidence in what we are saying because we speak to our clients on a daily basis. We have people on the ground in all our parks, property managers, relationship managers who speak to the clients, who see how the clients are operating. They see that the space which the clients will need. And that is how we are so reactive and that's also why we are growing so much with our existing clients. And I think that's often a bit underestimated by the capital markets.

But if you look if we do more than 70% consistently with our existing clients expanding with us, and you know we have a very broad base of existing clients, more than 1,500 across the portfolio, that drives an enormous amount of stable and consistent growth over the years, and that we expect to play out in the second quarter. So all is set up for that, and we'll try to deliver in line with also the guidance we have given for this year.

Okay. And then just on construction costs, I think that was a reference to it in the presentation, how protected are you from price increases across both your existing developments, but also on the future impacts or potential impacts on your development returns targets? So any color there would be appreciated.

Yes, sure. Yes. Thanks for the question. In regarding construction costs for this year, yes, I wouldn't really expect any significant impact on our pipeline for this year. You can't hedge everything forever into the future. So should there be a really long-term persistent increase in energy costs driving higher construction commodity prices that's going to flow through into our business. And we won't compromise on our targets. So that means that we will look to increase rents going forward.

I think if you look at the backdrop today versus the last time you saw significant energy price increase, which was the start of 2022, the start of 2022, you had a lot of construction activity that was still ongoing, fueled by the 0 interest rate policy that have been going on for the last 15 years. You have a lot lower level of construction activity generally at the moment. So we would think construction cost inflation can remain relatively muted.

The next question comes from Frederic Renard of Kepler Cheuvreux.

A few questions on my end. Just to hear your thoughts on rental evidence. You mentioned that adjusted for the country mix, the rents are up 1% year-on-year, while admittedly, I guess, in your countries, inflation will be more closer to 2%. So can we conclude that the rental growth is slowing down? Or is it just due to the specific lease terms that were negotiated? First question.

Fred, indeed, you are correct. If you look to the leases that we signed, they were up 1%, but those are indeed not like-for-like. And that's why you also need to look at the like-for-like rental growth that we are showing. That's always the mix of those 2 figures. And the like-for-like rental growth, you see, of course, the indexation, but you also see the reversion capturing.

And as we are the leases which are coming up to expiry, we see that we are able to capture that reversion. And that's ultimately, of course, the fundamental proof of the ERVs in our portfolio and the rental growth in our portfolio. If you look to the leases we signed in a specific half, they are indeed not like-for-like, so it depends. We have signed a bit more renewals this quarter as are prolongations, while a bit less if you look to the ratio actually, new leases. So that impacts a bit that figure. But overall, what we see is, and that's also what we said, I think at the full year, we continue to expect rental growth in line with inflation.

Okay. That's clear. Can you maybe just remind on that, quantify from the 4.6% like-for-like, how much was driven by reversion and how much by indexation?

Around 2.5% by indexation and the remaining is mostly recurring.

Okay. And then last question for me. I just wanted to have your view on the new start of project for Q1. So if I compute it correctly, it's around 140,000 square meter, which could be the second slowest new construction starting since early 2022. Is this just a timing issue? Or have you decided to slow things down regarding new construction?

It's more of a timing issue. Actually, the exact number is because we delivered 116,000 square meter in Q1. Our pipeline increased by roughly 50. So in total, the new start is actually around 170 to give the exact figure. And that depends a bit when we start projects. I think if you look to the pipeline we are having, we have now a bit over 2 million square meter under construction, which allows us to deliver that 1.4 million square meter to 1.7 million square meter that we expect for this year.

So you need to look at, okay, what is the expected deliveries and what is the total pipeline. And then it's indeed timing in which quarter we start a project. And ultimately, typically, if we have a simple building, we can deliver in 9 months, 12 months. If it's a simple logistics building, if it's a more complicated building or more manufacturing or more extras, it can take longer. We also won 2 office buildings in Brno in our pipeline, which also take longer. So it's always a bit of mix of when do those projects start.

And ultimately, yes, if you look to the pre-leasing, which is ultimately where we guide upon because as management, we are looking where do we want to start on a speculative basis and where do we want to have pre-letting in place. You see that the pre-letting made a nice jump in Q1 on the back of, of course, the strong leasing evidence that we showed. We have more pre-letting, as you know, in new locations like usual because that's in line with our strategy.

While the pre-letting in our existing parks because if we have an existing park, 100,000, 200,000, 300,000 square meter with proven demand, where we, as I explained also in the call, grow mostly with those existing clients, we typically start with a bit lower pre-let because we have the proven evidence of leasing demand over there. So that remains consistent and that's what we are managing upon. So while there is the pre-let that we want to target for the locations. And there, I think you saw the good growth that we have been able to deliver. So when do the project start is more of a timing issue than anything else.

The next question comes from John Vuong of Kempen.

As you mentioned, Q1 has been a record quarter in terms of leasing. But could you comment on the split between leasing for new developments and expiring leases? And how does this split compare to previous years?

Yes, sure. And that's also what we highlighted in the press release, I think, already. If you look to the 762,000 square meter, around 320,000 square meter, 330,000 square meter is related to prolongations. So if you look to the amount of prolongations as part of the overall leasing, the percentage it's a bit higher. This year, we have a bit over 700,000 square meters of leases expiring. So with that, we are nearly at half of the expiries basically taken care of and some already for next year. Of course, it's not always exactly calendar year to calendar year.

So we have taken care of a lot of the expiries upcoming, which I think is a good sign. So tenants, let's come back to what I said before, looking for the security in their supply chain. So willing to prolong their leases to make sure that they keep the space available, which is basically essential to, of course, run that business. And then the rest is for new leasing, either for some expansion of existing clients in existing parks or for future pipeline projects, some for '26 deliveries, some for '27 deliveries.

If you want more details, I can give you a more detailed split offline. Happy to help if that is useful for your modeling. But in general, yes, a bit more prolongation this quarter than normally. And that's also what I said when answering to Fred, of course, impacting slightly that rental figure.

So on those prolongations, does that mean that the tenants have pulled forward the decision? Or is it also a bit of active management on your side?

A bit of both. Well look, we're always -- you never want to negotiate with the tenant in the last months or a couple of months of a lease. You want the certainty and the clarity as the landlord, but the tenant also needs the certainty and the clarity. That's what Maarten was saying. And if you look at what the tenants are doing with us, they're prolonging their stay with us in an existing park.

And often, they're expanding either their operations under the existing roof or sometimes also adding a small amount of space. And that's the real strength of our City Park model that we're able to offer tenants the opportunity to grow and develop their business in the same location, which is a much more efficient and effective way for them to run their business.

Okay. That's clear. And just combining your comment on strong leasing activity in Q2 and the timing for construction starts. So would it be fair to assume that development starts over the next quarter should just come in higher than the 170,000 square meters in Q1?

I would assume our pipeline to remain roughly stable in Q2. So subject to the amount of deliveries, we will also start a similar amount of new projects. But as the portfolio grows over time, also the new starts will grow.

The next question is from Nadir Rahman of UBS.

Just one from me on -- I believe it is Slide 12 of your presentation from this morning. You give some figures on the rental terms across different countries and I've noticed quite a disparity for both Germany and Poland and also Romania. And I just wanted to ask what the drivers were for the change in rental turn across these markets. I think it was negative for Germany and positive for Poland year-on-year.

Yes. That really comes back to that the leases are not like-for-like. So if you look to Germany, last year, we signed some deals for new developments. This year, we basically only signed deals for the former DIR portfolio. So that's why you saw that last year, the leasing, we signed at slightly higher rent because we had new development in there. But this year, it's more the older product in DIR. So that's why you saw in Germany a slight decrease.

Poland, you saw an increase indeed, that's driven by one tenant which had extras and which needed a big yard space. We published, I think, 2 weeks ago, it's the Windar. They produce windmills for the wind farms. So they have a larger extras and larger outdoor space. So if you then look on a per square meter basis, your rent screened higher. So it's really -- the leasing is reflective of the specific deals we are signing in the quarter. So that's why we always look at it as answered before, in combination with the like-for-like rental growth where you see it across the whole portfolio and that's why we are constructive, of course, on the back of the leasing demand that we continue to see the rental growth coming through in line with inflation.

The next question is from Steven Boumans of ABN AMRO ODDO BHF.

So I have 2. To start off, why did you remove the number of head of terms signed so that slide? And how many head of terms were signed up to March '26? That's the first one. And then the second, where was demand for leasing for new developments in Q1 coming from? So please break down the 435,000 square meters, let's say, by country, type of clients, type of assets and maybe what we can expect for the breakdown in the coming period?

Yes, sure. If I look at the demand for the new leases, we saw that pretty much across the board. And you need to be careful about looking at 1 quarter. If you look at the last 2 quarters, we've done in total over 1.5 million square meters of leasing. If we look at the slightly longer-term trend, what we see is an increase in demand from logistics companies and increased demand from wholesale and retail.

And both of those reflect the fact that we are operating in markets with significantly faster-growing disposable incomes, growing middle classes with aspirations to improve there their quality of life and their willingness to spend money, that's attracting new entrants into retail spaces and driving increased retail sales across Central Europe. And you see that then flowing through into demand from logistics and retail and wholesale.

Tenants, what we've seen less of over the last couple of years, and that comes and goes a little bit is automotive. But we've continued to see good demand from Asian tenants make up 12% of the portfolio. Now new leasing this quarter was a bit less than the 20% we've been running at in the last 2 years. That's partly to do with the high -- the good level of extensions and expansions with existing tenants that we had. So -- that's there.

And look, regarding the [ hots ], we'll always add or take away one or the other bit of information. Going forward, we are very happy and comfortable with the development of leasing activity in Q1. And as Remon said in his presentation, we're very, very happy with the start in Q2.

Do you have the number of kind of terms?

It's just under 100. So similar to what we have seen in previous years. No fundamental change because otherwise, we would not sign ultimately more leases. They are linked together. A very large number of hot translates basically into lease agreements because if you sign a hot with the tenant, they agree on all the commercials. As most of our clients are existing clients, they are not surprised by the lease terms we are putting in the contract. It's mostly just a copy paste. So if you agree on the commercials, then you see a very high flow-through into the final lease agreements being signed.

The next question comes from Bart Gysens of Morgan Stanley.

I have 2 questions. My first question is, I think you said at the start of the presentation, there's more demand for shorter leases. Can you provide a bit more color on that? What portion of leases that we signed are now shorter? What does shorter mean? And are tenants willing to pay a premium for that flexibility? That will be my first question.

Yes. The short-term leases are actually mostly seasonal. They are not in our leasing figures, by the way, Bart. Just to be clear, the leasing we communicate are all leases above 1 year. which is very important. So there are sometimes short-term leases we do because we are an active operator. So if a tenant says, okay, we need short term, 3 months, 6 months more space, and then we move into a new building. That's the flexibility we have due to our parks.

And that's also what drives, of course, the loyalty from our tenants and that those long-term relations because we are a partner for them, we help them to run that business. So we always will do some and that's seasonal and especially in those times when people are looking for that security in their supply chain, we can do some more, but those are not in our leasing figures. Those are on top. So I think it is very important.

Yes, that's clear.

If you look to the rental tone of those, yes, they are always slightly higher because ultimately, that's the flexibility we offer. That gives us a negotiation position. So for short-term leases, we also always target to sign above ERV. Those are very simple deals, no incentives, et cetera, just extra income for us and helping ultimately run the tenant that business.

No, no, that's clear. And are they in your occupancy? And what percentage of your occupancy do they represent?

They are in our occupancy. They are probably around 1%, 1.5%, but they are on a consistent basis.

Yes. Okay. Great. And then my other question, look, you've talked about this or other people have asked the question, right? We're now 4 months into the year and the start of the conflict kind of fell in the middle of that period, right? So we have 2 months pre conflict and 2 months of conflict in the Middle East. You're clearly highlighting how demand is strong and so on. But if we look across other industries, there is a delay in decision-making. Nevertheless, right, there is a fear about the impact on economic growth, maybe more in Asia than in Europe at the moment, but it's clearly in the post.

So can you provide any color on kind of leasing volume, time to sign a lease, rental tone for kind of the first 2 months of the year compared to the second 2 months period of the year? Are you seeing any change there or not at all?

Not really. Honestly, at the moment, and if I look at what we're seeing from our tenants and what's being reported across the industry at the moment, no, we're not seeing a significant change in tenant behavior. So yes, so Q1 was -- like we said, was a record for us, which we're super, super happy with. And Q2 started well so far, touch wood, nothing to -- no change to tenant behavior.

And I think that goes back a little bit to what Maarten was saying earlier. Yes, there's short-term volatility. Yes, there may be a little more short-term uncertainty created by that. But actually, this is just significantly reinforcing the mid- and long-term trends that are ongoing in terms of energy independence, military independence, manufacturing independence that every region needs in and for itself going forward.

It's very clear we're moving -- we've moved out of a globalized world into a more multipolar world and that will mean that there need to be a lot more investment in Europe for Europe across multiple parts of the economy and that will continue to drive growth in the mid- to long term, accepting that there may be one of the other episode of short-term volatility.

I think if you look at our tenants, half of our tenants are manufacturers. They are thinking on a 10-, 15-, 20-year horizon. And sometimes for some of them, volatility is a good opportunity to get a space or claim a position in a market or take a space for close to population where our workforce is around. So the volatility is not only a challenge, but it's also potentially and for those who have the financial strength and corporate balance sheets are in pretty good shape at the moment. It's also a great opportunity for them to take as well.

The next question is from Thomas Rothaeusler of Deutsche Bank.

I do have, I think, 2 questions. The first one is actually on your midterm growth plan. I mean you target the 30 million square meter GLA. But as I understand, you don't mention the concrete time line anymore. But previously, you basically said 2030, I think, as a target. Just wondering how to -- how we should interpret?

Yes, Thomas, we always said that we have the ambition to get to 30 million square meters by 2030, and we would still maintain that ambition. If we can get there by 2030, fantastic. If it takes us another year or 2 years further, we're still growing faster and further than anyone else in the time frame. So we will do our best to get there as quickly as possible. We have the capability to do that with the 33 million square meters of land that we have, 14.7 million of GLA and 2 million under construction, we can get there with what we already have secured.

We know we don't need the capital to grow. We don't need equity to grow at 10% to 15% a year, which is what we've been doing for the last 28 years. Prior to the IPO, we never had access to equity and we were able to grow every year. The IPO allowed us to grow faster, but we can do that. But it will, to some extent, depend on the health of the markets that we're in and the tenant demand that we see. If the tenant demand continues over the 5, 6, 7 years, yes, then we'll get there.

Okay. Second question is on Hungary and the regime change over there. I mean, just wondering what are your thoughts on the potential impact on your business, if you can say?

I think if you look to politics, it's overestimated in terms of impact on the operations. Hungary has been a good in terms of leasing for us in the last 3 years. We have done record leasing almost in Hungary in those years. We don't expect that to change because ultimately, it comes back to how business-friendly is the government and ultimately, where do tenants want to invest, where do they see the workforce, where is the tax situation attractive, where are their clients located. That's ultimately driving the decision-making of our clients.

And we have seen a lot of inflow from China and Hungary, for example, that will not change with the new government. That will continue. So the leasing in Hungary also, if you look to the first quarter was good. So ultimately, what will be helpful, of course, is more from a capital market perspective. Hungary might be a bit better on the map, especially if they also get, of course, more funds from Europe that will help them to bolster the balance sheet of the Hungarian state, give them subsidies to do roads and other infrastructure developments. So that's helpful for the business.

The next question is from Eleanor Frew of Barclays.

A couple of quick ones. So the pre-letting in new parks was slightly quarter-on-quarter. Is that on would be tenants changing their minds? Or is that more of an impact of greater spec development bringing that number down?

That's to do with starts during the quarter. So there's still a material amount of pre-letting in the new parks, but that's -- we wouldn't overread, over interpret that.

Great. And then has there been any change in incentives you've needed to offer to help achieve that high leasing volume? And would you say you're prioritizing price or occupancy at the moment?

We always -- there's always a balance, and it depends on where you are. Overall, not really seeing a change in the incentives. As we said earlier, a lot of the leasing is a good chunk was extensions. They are not really talking about incentives. So much for the new leasing, again, it's primarily driven by existing clients. So yes, you always -- we always want to lease for more. They always want to pay less. And the talent is always to come to a deal that works for both parties, which we've been able to do record levels in Q1.

Moving on to webinar questions. The first from Vivien Maquet of Degroof Petercam, who asks, could you comment on the Italian market and letting activity there?

Yes, sure. So we entered Italy in the end of last year, as you remember, in November of last year through a big landbank acquisition. We have been working hard in the meantime to build up the team. So we have now more than 10 people in Italy who are working on the leasing, on the development of -- that are under construction, but also on the predevelopment of some of the other land sites. So we are making good progress there.

If you look to our -- what we said in '26, we expect to deliver close to 200,000 square meter. Most of that is under construction. It's pre-let, so good underway. The Italian market in general has seen good take-up in the first quarter. So now we are working for our pipeline for next year to secure also the leasing for the '27 pipeline. But in general, we are positive on the Italian market. That's why we entered and we see that playing out.

And now also with the team being built up, we have the people on the ground working there on a daily basis. Remon and myself are frequently in Italy. Remon is always involved in the start-up of the market, like we said before. So continue to drive the business there, integrated within the CTP platform.

We also have our existing clients that we have in other markets reaching out to us from -- we also have space for us in Italy. So that's good. And that also is how we grow. We grow tenant led. So tenants asking us, can you also do something for us in market X or market Y. And that's also playing out here. So we are constructive on our Italian market entry and on track.

The next webcast question is from Wim Lewi of KBC Securities, who asks, is there any impact of the geopolitical situation on the Vietnam plant or time line?

Wim, ultimately, we are in Vietnam, like Remon said, we are making progress. We are looking to buy land. We are now looking at also the design and permitting of buildings, also speaking to clients. So we are in that stage. We hope to be able to execute on that during the course of this year. We also have now teams on the ground in Vietnam. The geopolitical movement that you are seeing are across the world with more local production. And that is the role that Vietnam plays for Southeast Asia.

So also in Vietnam, if you look to -- and each time when we drive around there, you see new plants being built, new logistics centers being created as ultimately, economic growth is strong, double digit the target in many of the areas. So a solid economic backdrop. Of course, we need to see how long the current geopolitical movement will play out and how this affects different regions.

But for now, what we see also in Vietnam is a continuation of operations and a continuation of Vietnam benefiting from nearshoring similar to what we see here in the Central and Eastern European region. But of course, we are also careful because it's a new market, especially in geopolitical times, there might be willing sellers. So it's good to have cash in the pocket, so you can act quickly when you want. We are not in a rush. We want to carefully understand the market, and that's why we are spending time there and trying to educate ourselves and building the team. So we have a full setup when we make the decision to kick off.

We have no further questions at this time. So I'd like to hand back to the management team for any final remarks.

No, we'd just like to thank everyone very much for their attention and their questions and wish you all a good day. Thank you very much.

Good morning, everyone, from CTP here in Prague, Czech Republic. Excited. And thanks for dialing in. It's good to have you on the call. We are going to talk about the 2025 results, which are good. But before we start, I'd also like to look back.

2025, you could say, has been 25 years of growth. We have completed our first building in 2000 here in the Czech Republic in Humpolec, where we did our first CTPark model. The CTPark Humpolec was the first site we acquired, initially 10 hectares, and later on we had the opportunity to grow that park. So that's where we first started with a club house where we looked for people and did establish a small team and did then develop a number of properties, and those buildings are still fully leased and many of the tenants which we initially had actually, they're still there, and they have been able to grow their business. So 25 years of continuous growth, which started with nothing, with a piece of land, and then building and second, et cetera, et cetera.

So thank you very much to all the very loyal clients, all those companies who we have been working with, the companies who gave us the opportunity to work for them outside of the Czech Republic later on. And of course, thank you very much to all people we've been working with a lot over the past 25 years. And thank you to all other partners and of course, the fantastic team here at CTP, which in the meantime is 1,000 people, more than 1,000 actually nowadays. So that has been 25 years of continuous growth, good times, bad times with all kind of different opportunities along the way.

So '25 has been a strong year, has been a good year with good results, which illustrates also the growth engine, the thing we like to do, we like to grow and the largest growth engine in the business here in Europe. So last year has been also an important year for us, because we added another country. We opened up business in Italy. In the meantime, we have more than 200,000 square meters of projects under construction in Italy, mostly pre-leased, 70%. We do that in south of Milan, close to Piacenza, Castel San Giovanni, but also in Padua, and we have other projects underway.

At the same time, we set up a team of people in Italy, and we have a land bank to build an average of, we thing, 200,000 square meters of properties over the next years, and we hope within 5 years to hit the 1 million square meter lettable area target in Italy as well. We see good opportunities in Italy. Overall, we see opportunity in Europe over the next years. So we're quite happy with the entry so far, and we're making good progress. The land bank, mostly North Italy, but also strategic sites in the region of Rome.

So there's also other places where we believe we will be successful in the development of our industrial properties, again, mostly for existing clients, so the companies who are already renting from us in other markets. For those clients, we plan to develop properties in Italy. And the amount of business we do for existing clients is approximately 70%, 7-0 percent of the total amount of business we do.

When we look at drivers for Europe, it's definitely near-shoring Asian companies coming a setup shop in Europe for Europe. I mentioned defense, but also technology, semiconductor industry, consumer goods. People have more free time, so they go out biking, running. Pets, massive industry. We do multiple facilities for pet food producers, pharmaceuticals. So there's a whole of consumer spending, means people have more money to spend than they had 25 years ago when we started here, and we see that in other markets in Serbia, in Slovakia, in Romania, where we came initially maybe for low-cost manufacturing and later turned into manufacturing for domestic market.

And nowadays, Central Europe is the engine of Europe. Here is where you go for manufacturing. And yes, it's all positive. So relatively good outlook, and we have a number of growth drivers. We are not in it for the short, we're in it for long. So we have plans for the next 25 years. And those plans are definitely to make CTP a global player and to grow with our clients and to use all the experience we have building business parks.

Last year, we signed 2.3 million square meters of new leases, 2.3 million, which is a bit more than we did the year before. In '24, we did some 10% less. Rental rates were a bit higher last year in '25 compared to '24, approximately almost 5% higher rents than same building in a year earlier, in 2024. So a bit rental growth, 10% more deals, and still around 10% yield on cost.

Target, midterm ambition, continue to grow with existing clients, which we have a lot of them. Good companies. They pay on time. 99.7% is rent collections of money which we charge to tenants, which is paid. And as I said, most of them on time, good companies. 70% of all new business we do with existing clients have 80% retention rate. And this is also important to mention, 75% of all the projects we do are being built within existing business parks.

So we don't do stand-alone boxes. We really create an address, a park, an environment, an ecosystem with sufficient infrastructure and manage these facilities for people to work, develop themselves, to create business together, to work together, to grow stronger, and to have a stable business park.

Also not overexpose to one specific industry, you want to mix it up with different industries. It's also good for labor market. We see a lot of automatization among our tenants. So they continue to invest in their facilities, in their production lines, in their technologies, which is good as well.

We break it down at CTP, as you know. We talk about 3 things. We have the operator, which is the income-producing part. So the part of the company will look after the buildings which we have built over the past 25 years, with EUR 840 million of rental income, on the way to hit EUR 1 billion rental income next year. So it's the operator with good occupancy level, always above 90%, between 93%, 95%, depends a little bit on the market and the location where you are. It depends also on how much property we actually build to enter a market and you need time for the market to absorb all those buildings, but remain at the target around 93%, 95%. That's the operator.

Then we have the developer. Those are the people at CTP who develop properties or who build business parks and properties. Quite active now also with inventing new type of properties, adjustments, constantly working on making these buildings better, both the existing refurbishment upgrades, but also new properties. And better means flexibility. So we have generic designed buildings for multiple generations, energy consumption, maintenance, those things are important when you design a property. That's what these guys are busy with. Some highlights as well what we've done in terms of completions last year, 1.3 million square meter, 180,000 square meter in Bucharest; 65,000 square meter in the CTPark Budapest in Hungary, but also, of course, in Brno, Czech Republic, yes, the home of CTP, where we have built millions of square meters. Last year, we did a deal with FedEx, for example, just to mention one. Part of our 30-30 plan, right, to grow to 30 million square meters. 2 million square meters under construction this year, which is good for EUR 150 million of rental income.

Another highlight, maybe if you talk about those 2 million, we do a lot in Poland, the largest economy, largest country in Central Europe, very dynamic. Can do, a lot of support from the government, very good locations, I think we have secured a good team on the ground. So there we invest a significant amount of money now building properties, mostly leased, in and around Warsaw, but also Upper Silesia, Katowice, Zabrze, as well as along the German border on the west side of Poland. So we see there good opportunity, as well as in Gdansk, by the way.

Another highlight, I would -- yes, Bucharest, Romania has been good, is still strong. Serbia is strong. Germany this year is important to get things going in Mülheim. Some of you have been on the Capital Markets Day event last year, we looked at Mülheim Energy Park with E.ON, Siemens and more to come. So that's happening, making good progress in Düsseldorf as well as in Wuppertal. So overall, quite positive about Germany as well. I think, yes, well established and good position.

Last but not least, the growth engine, the third activity, we look globally at opportunities in different countries. And how does this work? Well, it comes from clients. Clients tell us, okay, we are going to that market, because we see growth. We need properties. Are you there? Sometimes we are, sometimes we are not. If we are not, then we have a closer look at such a market. We think shall we go there? Does it make sense now? And we constantly do that. Sometimes we do not enter. Sometimes we have a closer look.

Now we always have the desire, as you know, to also become active outside of Europe, because we see other opportunities in other markets. And we found good opportunities in Vietnam and strong demand from existing clients. So we continue to have a closer look. We announced it last September. And so far, we've been making some good progress, having a closer look at the market and the opportunity. We have a few people in the meantime on board. So we have a CTP Vietnam, and we have there a small team of experienced industrial property people.

Vietnam, obviously strategically located, 100 million people, very productive workforce, but also quite young people, around 30 years of age. So in the future also, you will see consumer spending. Well connected to the rest of the world. And that will also give an opportunity to get us feet on the ground in Asia and also closer to other Asian companies who look at coming to Europe. And then we'll keep you up to date on developments we are making.

Yes, it's not only about getting bigger, we need to also get a better company. So we are obviously constantly working on getting a better company with maybe doing more buildings with less people, more efficient, more effective, different processes and procedures. We automatize. For example, when it comes to property management, when it comes to energy consumption, we know exactly how much energy tenants consume in their buildings. We can help them again with energy management with clear understanding of the condition of the building, and when there are issues, property management related, then we can fix that. We have a clear system for that in place in the meantime to monitor all the maintenance and repairs, which potentially are needed. So both energy consumption as well as maintenance and repairs to make sure buildings are in good condition and remain in a good condition. That's one example.

And there's many other things we've done, whereby we've introduced new processes, better, and software and automatize, standardize, digitalize the company, and that makes us think better and quicker and more efficient to continue to grow our business.

Yes. So we're looking forward very much to the next 25 years. Thank you for your attention. I will hand over to Rob. Some of you know Rob. He's not really new to CTP, but as IR, we are happy to have him on board and look forward to answering your questions.

Turning to the financial highlights. Net rental income increased by an impressive 14.1% to EUR 738 million, driven by record leasing of 2.1 million square meters, excluding Italy. Like-for-like rental growth came in at 4.5% in FY '25, accelerating from the 4% we delivered in FY '24, and this was driven by indexation and positive rent reversion capture.

We also delivered record development completions of over 1.3 million square meters with occupancy at the year-end still remaining stable at 93%. Annualized rental income increased by 13% to EUR 840 million, illustrating the strong cash flow generation of our portfolio and locked-in growth profile of our business for 2026. Company-specific adjusted EPRA earnings increased double digit by 11.3% year-on-year to EUR 405 million. CTP's company-specific adjusted earnings per share amounted to EUR 0.85, an increase of 6.3% year-on-year, as we also made positive progress on our debt refinancing during the period. This EPS figure was just EUR 0.01 variance to guidance, driven by the timing of development completions in Q4 '25 with some moving to Q1 '26. As we look forward, the important message here is that our medium-term double-digit annualized growth trajectory is unchanged, as Richard will highlight shortly.

Now looking at the valuation results. The revaluation of the portfolio for 2025 came to over EUR 1.1 billion, a key contributor to our leading total accounting return for the period. Of this positive portfolio performance, EUR 422 million was driven by the construction and leasing progress on our developments, while EUR 649 million came from the revaluation of our standing portfolio with the balance from our land bank. As at the year-end, the total portfolio gross asset value now stands at EUR 18.5 billion, up 15.6% from FY '24. CTP's reversionary yield stood at a conservative 6.9% at full year '25. For '26, we expect further selective yield compression and positive ERV growth in line with inflation. This is also illustrated by the new leases that we signed in '25, where rents were a solid 4% higher than 2024, adjusting for country mix.

The supportive demand drivers of our business remain present, whether that be near-shoring, manufacturing in Europe for Europe, businesses upgrading their supply chains or reacting to the changing global landscape alongside increasing deglobalization of political agendas. Our core CEE markets, where industrial and logistics space per capita is half of that of many of other Western European markets, continues to benefit from these supportive trends alongside our own Western European markets and our opportunities being assessed outside of Europe.

We are not short of opportunity, nor are we short of capital, with that opportunity driven primarily by the embedded value to be unlocked from CTP's existing land bank of more than 33 million square meters with the majority next to our existing CTParks. This land bank that we have on our balance sheet allows us to facilitate our tenants growth as a solution provider for their real estate needs. We remain active in the market for the acquisition of land, especially in Poland and Germany, and we replenish and, in a number of cases, grow the land bank in existing markets where returns are the most attractive.

Now as Remon mentioned, we also continue to look to enter markets such as Vietnam, following on from our successful CTP Italy market entry at the back end of last year. Our EPRA NTA per share increased from EUR 18.08 at year-end '24, up to EUR 20.39 FY '25, and this represents a strong increase of 12.8% during the period. With this NTA growth, in conjunction with our dividend distributions, we delivered a total accounting return to our shareholders of 16.1% over the past 12 months, highlighting our superior total return profile, which is underappreciated by the equity market within the real estate sector.

I now hand over to Richard.

2025 was another year of solid growth for CTP as we continue on our journey to 30 million square meters of GLA, a doubling of the current portfolio. The company's interconnected business units, the operator, the developer and the growth engine are all supported by our strong access to debt capital markets, diversified funding structure and multiple sources of liquidity provided from across the globe.

2025 saw us receive an investment-grade credit rating upgrade to BBB flat from Standard & Poor's. Moody's also have a positive outlook on our credit rating, confirming the growth trajectory of our business. This January, we again evidenced the high institutional demand for our debt, issuing a 4.5-year bond at a spread of only 92 basis points with a peak order book of over EUR 4 billion. Looking forward, we will continue to diversify our sources of debt funding as well as managing our liquidity to ensure we do not hold material excess cash. We also target growing our share of unsecured debt towards 80% of total outstanding debt.

Turning to the key credit metrics. Our interest coverage ratio was unchanged quarter-on-quarter at 2.5x, and we expect this level to be the bottom. Our normalized net debt-to-EBITDA remained broadly stable at 9.3x and our loan-to-value stood at 46.1%. This LTV is marginally higher than our 40% to 45% target due to us seizing the acquisition opportunity in Italy at the end of 2025. In Italy, we will deliver 200,000 square meters of GLA in 2026, more than 10% of our annual target. And with a land bank of over 8 million square meters, we have a long runway for growth in Italy, a country with a significant undersupply of modern A-class industrial and logistics space. As our development pipeline is completed and over 10% yield on cost and revaluation gains are fully booked, we expect loan-to-value to move back towards our target range.

To complete our development pipeline of 1.4 million to 1.7 million square meters in 2026, we do not need additional equity capital due to our sector-leading yield on cost around 10% from projects to be delivered in 2026. Every euro we invest in our pipeline increases our ICR and decreases our net debt-to-EBITDA as our leasing income comes on stream. This allows us to grow group rental income at double-digit rates while simultaneously improving the most important credit metrics.

In 2025, we signed EUR 1.7 billion of unsecured debt to fund our development business, debt refinancing and our growth engine. We continue to demonstrate our ongoing strong market access whilst actively managing our funding costs. During the year, we renegotiated or repaid EUR 1.6 billion of our most expensive bank loans. Looking through 2026 and beyond, CTP maintains a conservative debt maturity profile. We repaid EUR 350 million of bonds maturing in January, and our only remaining bond maturity in 2026 is EUR 275 million maturing at the end of September.

Looking further ahead, maturities remain limited over 2027 and 2028 with less than EUR 1 billion in total outstanding. Our liquidity at the end of 2025 stood at EUR 2 billion, comprised of EUR 700 million of cash and our EUR 1.3 billion RCF, more than sufficient to meet our cash needs for the next 12 months. The average debt maturity stands at 4.8 years, and the weighted average cost of debt was 3.3%, which represents only a marginal increase compared to year-end 2024. We do not expect a material increase in our average cost of debt as our marginal cost of funding is currently below 3.5% for the 5-year midterm period.

Regarding the midterm outlook, a key message here is that the medium-term growth outlook for CTP remains unaltered. At our 2025 Capital Markets Day, we introduced our ambition to double the size of our portfolio to 30 million square meters. We expect to grow top line income around 15% per annum, driven by rental growth in our operator business alongside double-digit organic GLA growth from our developer business as we build on our unrivaled land bank at 10% yield on cost, supported by our growth engine as it seeks attractive global investment and growth opportunities.

Digging deeper into those attractive return drivers. Firstly, we have the operator, over 1,500 supportive tenants who pay on time, stay with us and grow with us. Secondly, we have our development business, led by the strategic land bank of more than 33 million square meters, either on balance sheet or under option, located mainly around our existing parks. This is the key component of our portfolio growth ambition. And thirdly, we have the growth engine, the global identifier of shareholder value-accretive land-led acquisition opportunities to continue to deliver high returns well above our cost of capital.

We also continue to see above inflationary rental growth across our markets, supported by income reversion capture, positive near-shoring trend, production in Europe for Europe, and ongoing e-commerce growth driven by rising disposable incomes across our strong Central Eastern European region and our Western European markets.

Previously, unlike the rest of the sector, we did not capitalize interest on development activities, which made comparability between companies for investors more difficult and made CTP appear more expensive on a simple earnings multiple basis. Going forward, we now capitalize interest to provide reporting harmonization with all other European real estate companies. Following this change, we now set our company-specific adjusted EPRA earnings per share guidance for 2026 at EUR 1.01 to EUR 1.03. This implies year-on-year growth of 9% at the lower end of the range, rising to 11% at the top end of the range when compared to the 2025 result.

In summary, CTP delivers leading shareholder returns as a growth business with income and cash flow growth, development profit growth and the growth engine lever through expanding our global exposure.

Thank you for your attention. We now welcome your questions.

[Operator Instructions] With that, we'll take our first question from Marios Pastou from Bernstein.

I've got 2 questions from my side, one on the development pace and then one on capitalized interest. Just firstly, on development. So you had some delays in 2025. You also then added Italy. I'm just questioning why there isn't any upgrade really to the guidance range for the development targets for 2026, and whether there's any kind of room to beat on this going forward?

And then secondly, on capitalizing interest, I suppose another question really on why you've decided to implement this change now. Not all companies do this, and whether you'll continue to headline both numbers going forward?

Yes. Thanks, Marios. I'll take the interest capitalization question first. look, as we've been on the market now for 5 years, if someone wants to look at the real estate sector, they fire up their Bloomberg and they sought companies by earnings multiples, if everyone else is capitalizing interest and we are not, we screen expensive compared to the market. So basically, what we're doing is we're just aligning ourselves with the standard market practice of all the logistics players. And the timing, we think that -- we've increasingly heard from investors that when they look at us first, they think you screen expensive. And then when we dig in, we understand better why that first look isn't always helpful. We understand investors are time poor. So we want to try and make it easy for them to have a simpler comparison going forward. And on that basis, we will publish the EPS targets and results, including the capitalization, not excluding it.

Regarding the development pace, maybe I start and then Remon maybe comes in. Regarding the guidance for 2026, we're coming out with something that we are very confident that we can deliver. We think the 1.4 million to 1.7 million is something that is very achievable with us. The lower end of that range would be a new record for deliveries for us, but we're confident that we can reach that. We know we missed on the EPS guidance for last year, and we don't want to disappoint the market in any way going forward.

Our next question comes from John Vuong from Kempen.

Just on the pre-let for 2026, could you elaborate a bit more on the mix of developments in existing and new locations and how that compares to last year? And have you started relatively more developments in existing locations essentially? Or did leasing start a bit slower than last year's pipeline given the 30% pre-let rate?

Yes. Thanks for the question, John. Yes, regarding the overall pre-let, we stand at 30% at the start of the year, which is in line with our 30% to 35% range that we've been doing over the last years. In terms of the existing parks, the pre-let is 23%; in new parks, the pre-let is 62%. So consistent with what we've been doing over the last years and what we've been reporting in parks, where we know the demand, where we understand the tenant requirements coming up, we are willing to start with a lower pre-let ratio. And finally, I would also highlight that we have another 175,000 square meters of pre-let projects that we have not started yet. So you don't see those in the pre-let ratio.

John, this is Rob Jones. The other thing to add is, we're still very comfortable on our 80% to 90% target for pre-letting at delivery for '26. We obviously delivered 88% in 2025, so very much towards the top end of that range, and are happy to guide for that 80% to 90% again for 2026. So yes, we're pretty comfortable there.

Our next question comes from Jonathan Kownator from Goldman Sachs.

Just coming back to the guidance, please. So 2 questions really. The first one, I think your guidance previously excluded Italy. Now it does include Italy for EUR 200,000. So overall, the entire amount has not changed, meaning that it's probably a bit lower for the rest of the business. Is it just risk management; ultimately, that's the amount of space you're comfortable having to let or deliver as a package? Or are there differences that you've noticed in terms of appetite for different countries? That's the first question.

The second question, please. The growth implied by your guidance from the top line seems to be a bit stronger than the growth at the bottom line, and yet you highlighted that your marginal cost of debt is pretty close to the in-place. So is there something that we're missing here? Or are you expecting some additional costs that we need to be aware of?

Jonathan, I can touch on both of those, and I'll pass over to Richard for part of the second half, the second question. So on the guidance for deliveries for '26, you're absolutely right, 1.4 million to 1.7 million square meters. We initially announced that '26 guidance, obviously, towards the second half of last year prior to the Italy transaction. But it's important to understand that we obviously had a high degree of probability internally that we were going to complete on that Italy transaction. So when we gave that raised guidance, and as Richard touched on earlier, even at the bottom end of the range, it's still a record in terms of what we've delivered in previous years. That included our expectations for the Italy deliveries of 200,000 square meters, which, of course, is already substantially pre-let for '26.

And when you think about Italy going forward in your model, we are guiding to 250,000 to 300,000 square meters of deliveries from 2027 looking forward, so an increase thereafter. So I guess the takeaway from that is, do we think that there's further upside in the 1.4 million to 1.7 million? No, very comfortable with the range and it includes Italy.

Just on the top line growth versus bottom line, so you're right in your assessment. But I think one important point to make is, yes, our weighted average cost of debt today, which is about 3.3%, is very similar to our marginal. We did debt issuance at the start of the year where we issued 4.5-year money at 3.375%. So very, very close to our weighted average cost of debt. But don't forget, we do have a debt instrument bond that matures in September this year. I think, remember, the coupon on that is 0.625%. If we refinance that with, say, 5-year money today, that would probably cost 3.4%, 3.5% all in. So it's important to be aware of that. But obviously, then looking thereafter, from '27 onwards, we're then in a position where we've got no refinancing upcoming that has a notably different coupon to our marginal cost of debt.

Richard, I don't know if you want to add anything to that?

No. I mean, unfortunately, we never see the top line flowing one-to-one through to the bottom line. Of course, we would love to see that. I think one of the things to please bear in mind in this year is, also we'll be building up a team in Italy and there's some costs associated with that. And although we have the pre-let deliveries to come, they're coming in Q4. So there's not going to be a lot of income to offset the ramp-up in the costs. Secondly, we've continued to investigate the opportunities in the Vietnamese market and are looking to build up a team there over time as well.

And of course, as you -- sorry, go ahead. I was going to say, as you say, despite those points that Richard makes, we're still in a position where at the midpoint of our earnings guidance for '26, it still represents double-digit EPRA EPS growth year-on-year despite that investment we're making in the business.

And maybe to add also for you, Jonathan, it's also -- for the cost of debt is also the annualized impact from '25. So you cannot only look at '26, because, yes, as Rob explained, we had, of course, the bonds in January and then in September, but it's also the annualized impact of '25, which is, of course, reflected already in the average cost of debt, but still has an impact on our '26 EPS. So if you do the math, and you can do it relatively easily, also if you look to the refinancings we have done in '25, you see that the impact is still a few cents on the overall EPS.

Okay. So if I understand correctly, cost of debt and admin cost you're building as opposed to being a bit less confident on the top line, right?

Correct.

Yes, absolutely correct.

If you want, I can add something on the supply, because it keeps coming back, this question. So first of all, we look after the income-producing part of the portfolio. We make sure that we are happy with the occupancy rate. And then we will continue to build if we can lease. So we are going to not build buildings if we are not confident we can lease those buildings. So we balance between supply and demand. And while doing that, we do gain market share. So if there's an opportunity to develop and to lease properties, we do. And that's what Rob explained in his presentation, as we've been doing over the past years, we do gain market share. So we build as soon as we believe we can lease.

Our next question comes from Frederic Renard from Kepler Cheuvreux.

First of all, let me flag that your line is not really great. So I'm not so sure it's just me. So just flagging.

Then I would like to comment on 2 elements. First, on the long-term guidance of 30 million square meters. Even with Italy today, the pace of growth is important, but far from the level which would bring you to a portfolio of 30 million square meters by 2030. So it seems basically that your existing market is not absorbing what you are delivering at the moment from an external point of view. Can you comment on that first?

And then maybe on the second question, if I compute your vacancy in terms of square meters, it looks like your portfolio is at 1 million square meters of vacancy, which is quite sizable. What is structural here in the mix? And finally, on the pre-letting, you mentioned 88%. But actually, if you compute the pre-letting in Q4, it came close or slightly below 80%. So can we conclude that there is some kind of a softer demand in the market at the moment versus what you had in mind 1 year ago?

Yes. So in terms of our midterm ambition, I mean, we said 30 million we would like to achieve target. It's an ambition, we want to get to 30 million square meters by 2030. If you compound our portfolio by 12.5% per year for the next 5 years, you're going to get to somewhere around 26 million, 26.5 million square meters. And there's a small gap there, but we think that there may be opportunities or there will be opportunities to find one or the other attractive acquisition over the next 5 years. We talk about a relatively midterm perspective there, Fred. So I think we're comfortable with that level of ambition and our ability to realize that. If we can do 15% a year, which would be the top of our organic growth rate, then we get almost to the 30 million square meters. But it's our ambition and we're comfortable with that at the moment.

In terms of the vacancy, as Remon just said, we're always balancing supply and demand in our parks and in and around our parks. Our business model is to run a vacancy of -- we target around 95% occupancy going forward. And as the portfolio grows, that means the absolute square meters of vacancy increases. So yes, at some stage, that gets to 1 million square meters, that's simple math. That's part of our business model that we live with, we accept that vacancy rate, because we feel that gives us a competitive advantage when tenants are looking for space in the short term, because not everyone is planning years in advance. Sometimes people need space quickly, and then the ability to act quickly and grab a tenant and meet their demand puts you in a better position to retain and grow with them then also going forward.

And regarding the pre-let for Q4, look, across the year, we delivered 88% towards the top end of our 80% to 90% guidance. We try not to get too hung up on the volatility of any one quarter. Short-term trend is not our target. As Remon said in his presentation, we're in it for the long term. That's why we have the land bank that we have mostly in existing parks or with the potential to build a new park of more than 100,000 square meters for each park. That's the real value driver for us and...

[Technical Difficulty]

It seems we have lost audio with our speakers. Please stand by whilst we're getting them reconnected.

Yes. Let me continue. I think Richard dropped out.

Okay. Hold on. I'll just transfer you back over, because I've moved you out of the main room. I'll transfer you back over now.

Okay. I'm still here as well.

We'll now continue.

Sorry for the connection drop. I think Richard dropped out, but let me continue on where he stopped. So if you look to the pre-letting as always, so I think last year, when you look to the Q3 of '24, we were at 95%. At the end of the year, we came also within the range. So there is always a bit quarter-by-quarter movements and that comes indeed back to our business where we are mostly developing in our existing business parks.

If you also look to the quantum of leasing that we are doing, yes, 1 million of vacancy might seem a lot, but we sign 2.3 million square meters of leases each year. So if you look to the overall amount of leasing that we are doing, 1 million square meters is less than half a year for us. So yes, of course, with the scale of the portfolio, that becomes a larger number. But in our overall leasing capacity, that's ultimately important for us, because it all comes back to tenant demand. That is ultimately the key thing when we are looking for, are we starting the next development, where are we starting the next development, and where do we see growth.

We'll now take our next question from Vivien Maquet from Degroof Petercam.

I think your line dropped again, but I hope you will hear me. A couple of follow-up questions from me. Maybe when it comes to the deliveries, can you quantify the volume of deliveries that was moved to Q1 2026? And if possible, what kind of level of pre-let do you have on this project? And maybe I ask my other question afterwards, if you can hear me?

Yes, sure. So if you look to the deliveries, we came out on the lower end, of course, of the 1.3 million to 1.6 million that we guided for. We were planning to be more in the middle or the higher end of the range, but that's business. So if you look to what has shifted, that's basically, say, 150,000 square meter or so to the next year. So that's also -- it's reflected in the overall pre-letting, of course, for this year, the 30%. But like Richard mentioned, actually, the 30% might look a bit low compared to previous years. But on top, we have the 175,000 square meter of projects leased that haven't started yet. Some of that also will be delivered in '26. So it's always a mix of those elements. So that is basically the impact on the shift of deliveries, and that will help a bit in '26, and that's why we are so comfortable with the 1.4 million to 1.7 million for this year.

And let me add to that, maybe an important one, is structural vacancy. There is nothing like that. There is not buildings which are empty for years and years and years, okay? So it's just adding supply to the market and then you need the market, you need some time for the market to absorb all that space, and that's what we are doing. So when it comes to buildings which have been vacant for a longer term, then I can think of properties in Germany.

As you remember, we entered the German market through an acquisition of buying Deutsche Industrie, which is a mix of some fantastic locations, redevelopment opportunity, but all the buildings, so there is some vacancies, and we need time to refurbish those buildings, which have started, but that takes a bit of time. It's all part of the budget and it makes a lot of commercial sense. But then you have buildings which will not produce income for a while because you're doing some refurbishments now.

And there's some vacancy in the German portfolio, you can see, but our core portfolio, all of the stuff we built, there's no structural vacancies. There are some vacancies here and there because of the supply. But again, this goes down to CTP's business model. So I suggest you have a good look and listen to all the nice videos we have done to understand the way we run it. It took us more time to get to 15 million square meters. It took us 25 years to get to 15 million square meters. It's going to not take us 25 years to add another 15 million square meters, to grow to 30 million, because we know the game of how to develop and with whom, and with all of the clients we have, that gives us great opportunities to continue to do what we do. But yes, 5% from 30 million is 1.5 million square meters.

Our next question comes from Eleanor Frew from Barclays.

One question, please, on the reconciliation between your company-specific EPRA EPS and EPRA EPS. The adjustment this year was a lot larger than last year. Can you talk us through the reasons for that? And also, what should we expect on that adjustment moving forward? Is this the new run rate?

There were some one-offs in that adjustment. And I think we already discussed that in the H1 and Q3. I think on the tax side, you saw a positive, especially in the first half of the year. So the tax adjustment for '26 will be lower. That's one. There are also some in the other expenses where there were some one-off adjustments, for example, related to some transaction that in the end did not take place, which is booked in the other expenses and therefore, adjusted, of course, in the recurring elements. So there are some of the one-offs in '25, which are slightly higher than I would expect on a run rate basis. So that should be less in '26.

Our next question comes from Steven Boumans from ABN AMRO - ODDO BHF.

Some technical questions for me. What's the assumptions on the capitalized interest? So what's the interest rate that you use and what loan on cost do you assume? Second, what's the impact on the average yield on cost for the change there due to the capitalized interest? Can I assume that will increase the cost of development? And last one, do you assume a similar number of shares year-end '26 as in '25?

Yes, Steven. So in terms of -- go on. Marios, do you want to go -- we had a problem with our line. Yes. So apologies for that. And I hope that you can hear us properly, because Fred was saying that he couldn't hear us and then we dropped. So apologies for that technical lapse. In terms of the capitalized interest, what level do we use? We use the actual cost in the balance sheet, so the average cost of debt. So for this year, it's 3.3%. In terms of the yield on cost impact, that would be somewhere around 30 basis points. And there was a third question as well, but I lost the connection on that one. I'm sorry, Steven.

So the last one, the number of shares you assume in your full year '26 outlook, is that the same as in '25?

Yes, we're not -- yes, it's slightly higher because it incorporates the dividends that we're paying. As you know, we proposed a final dividend of EUR 0.32 for the full year. We'll also have an interim dividend later in the year. Based on past behavior of the shareholders and expected behavior, we would expect the majority of that to be taken up in scrip. So there will be an increase in the number of shares as a consequence of the scrip dividend. But otherwise, we're not planning on an increase in the share capital. As I said in the presentation, we don't need to raise equity to fund the development pipeline, the 1.4 million to 1.7 million that we're very confident to deliver.

Our next question comes from Suraj Goyal from Green Street.

Hope you can hear me. The rent levels for new leases in '25 were around 4% higher compared to 2024, but I noticed it was lower in Bulgaria, Serbia, Hungary and also flat in Romania. I wanted to find out what the reason for this is, and if this is reflective of some of the softness or normalization in operating fundamentals across Eastern Europe. And then are you able to give any color on the market split of the 3.8% ERV growth that you quote?

Yes. So maybe I'll deal with the technical part, maybe Remon will pick up on the overall tenant demand and how we see rents going overall. Yes, I mean, it depends a little bit country by country as to where we're leasing within that country. So certain parks have higher rent levels than others. So if you're very close in town -- in the capital, you're going to get a higher rent than if you're leasing in one of the regional cities. So the mix there across the countries is generally to do with where we're doing the leasing in that specific quarter or in that year.

So generally speaking, if we look at our ERVs, the ERVs across the portfolio are increasing. So location for location, like-for-like, we're seeing across the portfolio, a general increase in the rent levels. But we don't expect that to -- that's different location for location, depends on the supply, on the demand in the individual location at the time. Overall, you will see rents continuing, we think, to grow inflation plus over time. There will be markets where it's going quicker, at a point in time markets where it's going slower. But overall, we're very happy with the rent level development that we're seeing across the whole region.

Our next question comes from Vivien Maquet from Degroof Petercam.

Sorry, I had 2 other questions that was skipped. First is on the retention rate. Just trying to understand the decline to roughly 81%, if I recall. And how do you see a normalized retention rate going forward?

Yes. Look, I think our retention rate historically has been 80% to 85%. There have been times where it's been a bit higher. There have been times where it's been a bit lower. We would think that generally, if we look, 70% to 75% of our new leasing, last year was 71%, is done with existing tenants. So we would think that 80% to 85% is a reasonable rate to expect in terms of tenant retention. So you're retaining the vast majority of your tenants, but you won't never keep everyone.

All right. And then one last question on the goodwill impairment. Can you comment on that one?

Yes, sure. That goes to our German acquisition back in 2022. And what we see -- last year we saw a nice uptick in the valuations of our portfolio in Germany. And as the valuations increase, then the goodwill that we recognized at the time of the acquisition decreases.

Our next question comes from Bart Gysens from Morgan Stanley.

Quick question on the dividend payout ratio. So you're saying that for '26, the dividend payout ratio remains unchanged. But of course, the accounting policy of starting to capitalize interest increases your reported EPS by 10%. So will you now start paying a higher percentage of this previously more cash EPS? Or will you gravitate towards the lower end of that range to reflect this accounting policy change?

Yes. Bart, good question. Yes, I think that we'll end up gravitating towards more 70%, 72%, 73% rather than historically, we've been 75%, 76%, 77%, something like that.

But that would still mean a higher percentage payout, right, on the previous...

No, you end up -- if you're 70%, you're almost the same. There shouldn't be a material increase in cash out as a consequence of the capitalization of the interest.

We'll now take some questions from the webcast. Our next question comes from Laurent Saint Aubin from Sofidy. Can you please comment on the decline in your client retention rate to 81%?

So we already answered that question. So yes, look, like I said, we're targeting generally expecting to be between 80% and 85% in our tenant retention. In '24, we were 84%; in '25, we're 81%. So very comfortable with that.

And then our next question is from Wim Lewi from KBC Securities. What is expected impact of the capitalization of interest costs on your yield on cost expectation?

Yes. Again, that's another question I answered earlier. It's around 30 basis points.

And then our next question from Crispin Royle-Davies from Nuveen. Are you going to keep the same payout ratio against the new definition of earnings, or adjust this downwards to keep cash payout ratio the same?

Yes. So payout ratio will stay within -- or move towards the bottom end of the 70% to 80% payout range. Cash outflow for the business remaining relatively unchanged given the majority of our divi is taking scrip.

With that, we have no further questions in the queue at this time. So I'll hand back over to the management team for some closing comments.

Yes. So thank you very much, everyone, for your questions and your interest. I'd just like to underline that we continue to see really attractive midterm growth potential, primarily in and around our existing CTParks, but also with the addition of Italy and hopefully an addition in Vietnam, we think that we have everything in place for the next leg of growth. And we wish you all a good day. Thank you very much for your attention.

And you're invited for the Capital Markets Day in September, right, in Warsaw.

Yes, of course. Sorry. Thanks very much.

Thank you very much, everybody.

Thank you all for joining. That concludes today's call. You may now disconnect your lines.

And good morning, and thanks for joining on this Q3 call, talk about the results and the things we have been busy with over the past couple of months and maybe start with talking about CTP, a growth company. We enjoy growth. We like growth, and we see growth opportunities to continue to develop, build for our clients and secure new business.

So, growth comes from supply chain professionalization, if you like. So, we have seen obviously many events over the past decade and you could maybe conclude or say that this whole supply chain becomes more professional. So, companies adapt or adjust to different market circumstances or different events, which we have seen over the past years. We benefit from that in different ways. That's one, supply chain.

Second is Nearshoring. We continue to see manufacturing coming to Central Europe for the region, for Western European countries as well. But we also see growth in the markets of Central Europe. So, the consumer spending, maybe when I came here first in '95, 30 years ago, Central Europe was about low-cost manufacturing. In the meantime, of course, with all the GDP growth, which we have seen over the past decades, the local population have money to spend and they do spend. And obviously, that results in demand for property warehouse, for example, e-commerce, et cetera.

We see also growth coming from defense industry. There's a lot of talk about it. But in the meantime, we've also seen some concrete demands in our German portfolio. For instance, there is multiple companies who are involved in the defense industry, and they ask for more space. So, that's good.

So, we continue to see mostly from existing clients, strong demand from a diverse tenant base, it's including retailers, pet food manufacturers, semiconductor business, but also demand from automotive-related industry, maybe moving from West Europe to Central Europe to Eastern Europe or Asian companies coming in and set up business in Europe for the European market.

In numbers, we signed 1.6 million square meter over the past 9 months in '25. This is 6% up compared to what it was in 2024, 6% plus. And we have done that at 6% more rent. So, our rent average per square meter per month has grown with 6%. Again, we look also forward to continue this trend. And typically, we close a lot during the last part of the fourth quarter of the year as we've done last year and the years before. So, we're on schedule to close more leases by the end of the year.

Stable, consistent growth, 2/3 of our business comes from existing clients, our partners, long-term clients, loyal clients. It's also them who help us grow in new markets. We get 99.8% of all the rent which we charge is being paid, retention rate, 85% and 80% of all the new construction happens in existing business parks.

Our integrated business model combines the operator. So, I'll talk about how we break down our different business lines. The operator is the income-producing part of the business. Those are all the properties which we have built over the past years is good for EUR 780 million of rental income around that number.

The second activity, the developer with 2 million square meters of properties under construction with a land bank of 26 million square meter. Those are the people who are busy with building property, constantly improving the quality of the property, come up with different property concepts and innovations, make the properties consume less energy, less maintenance cost. You want generic design buildings because the building will last beyond the lease term of the first tenant, et cetera, especially nowadays with so many changes going on, it's very important that you get the property right, the location right, and to make sure that you have amenity services, utilities, electricity on site in those business parks to make sure that your clients grow.

And that's what happens. The last, if you break it down and say, okay, we have this operator income-producing developer construction. The last bit, maybe most exciting part is the growth engine. We have been growing beyond the markets where we are active. Remember, the IPO we did also to raise capital to get access to capital, affordable, cheap capital to grow our business beyond, and that's what we continue to do.

This year, we delivered 500,000 square meters, a bit more 0.5 million square meter. Mostly pre-leased. We do 10.3% yield on cost. And who are those tenants? It's LPP for Bucharest, Hitachi for Brno, Japanese client, long-term client, but also Zoomlion in Tatabánya in Hungary. This is one of our Chinese clients. Thank you very much to the clients for the continuous support, commitment and loyalty and thanks for working with us. We've been able to complete these projects on time and in budget.

Again, end of the year normally is a lot of projects come to the market. We have 2 million square meters under construction, 2 million. Not all of that will be complete by year-end, but many will and the rest will go to 2026.

When all of the stuff which we build and complete this year comes to the market and is leased, and we are another EUR 165 million of rental income at 10% yield on cost, we are well underway to hit the EUR 1 billion of annual rent by 2027. That is our target, and we are on schedule to hit that target.

A couple of highlights maybe on different markets. What we see good is Czech, stable. We've been here for a long time. It's our home market, good occupancy, good returns.

Poland, relatively new for us, largest economy, of course, in Central Europe, quite important to be there. We've done well, more than we planned. So, quite happy with that.

Germany, as well, we see more demand over the past couple of months also turn into deals. We signed the lease contracts, which is good and also makes us positive for the future. Some of you had the opportunity to visit us at our Capital Markets Day in Wuppertal in September. So, you have also seen our projects in Mülheim, Aachen and of course, a couple of other places.

So, it looks like over the past years, we have been able to put a team together. We have secured land and permits that we now can go ahead and build those properties and lease them, which we look forward to doing. Yes. So, we actually think it's just the beginning of CTP. I think it's more complicated probably to come from 0 to build 10 million or 15 million square meter portfolio than it is to double from 15 million to 30 million square meter.

Let's see, we have systems in place. We have a fantastic team of people, great relationships with clients, but also with the local authority. So actually, we look forward to hit that 30 million square meter one day. We target for 2030. Let's see how far we get. So far, it looks good.

Maybe a couple of things about the new markets. I wanted to talk about Italy, which is another European market, Northern Italy, where we have many clients coming from that part of Italy. We now have an opportunity to get started with some projects, which we look forward to doing, and we hope some of them will already be complete next year in 2026. So that will happen. We think it's a next logical step in the region. We obviously already active in Germany and Austria and yes, in Italy, Northern Italy, we see some good opportunities to introduce our full-service business park concept.

We'll start with some smaller projects maybe, but there's also an opportunity to accelerate and to come up with a different entry strategy similar to what we have done in other countries, Germany and Poland over the past years.

And then Asia, we definitely like to have a closer look at the opportunities in Asia as we think our company and our clients don't stop in Europe. They go beyond. They are often global players, and they have asked us whether we would be willing to support them in Asia and Vietnam to be exact, and we have been spending the past 12 months looking at opportunities. And we became more positive and enthusiastic about the idea of doing a project in Vietnam. So, we expect more to come from that. Don't expect huge things.

We will start with one project and maybe do a second. We learn by doing with existing clients, with pre-leases, but definitely it's an opportunity, it's 100 million population, early 30s average age, so young, very productive with huge FDIs, not only from the consumer electronics industry, but also LEGO and Volkswagen Skoda have just opened up a plant or building a plant. So, many opportunities we see there, which we want to have a close look at.

Happy to answer any questions. I think, I'll hand over to Maarten for now with some more details on the financials, and then I'm here later. Thank you very much for your attention.

Moving on to the financial highlights. The like-for-like rental growth came to 4.5% in Q3 '25, while occupancy remained stable at 93%. The net rental income increased 15.4% to EUR 549 million as we continue to reduce our service charge leakage. The NRI to GRI ratio, therefore, improved to 97.7%, while we also continue to improve our EBITDA margin.

Annualized rental income increased to EUR 778 million, illustrating the strong cash flow generation of our portfolio. The company-specific adjusted EPRA earnings increased by 13.1% year-on-year to EUR 305.2 million. While the group's EPS amounted to EUR 0.64, an increase of 7.2%.

Thanks to the deliveries and net development income being backloaded to the fourth quarter, the group is on track to reach it's guidance for the year.

Now looking at the valuation results. For the Q1 and Q3 results, only the investment properties under development are revalued. Valuation results in the first 9 months of the year came to EUR 802 million. Of this, EUR 385 million was driven by the construction and leasing progress on our developments, but EUR 373 million came from the revaluation of outstanding portfolio and EUR 43 million from our land bank.

The total gross assets value now stands at EUR 17.7 billion, up 10.6% from full year '24 and 16% year-on-year. CTP's reversionary yield stands at a conservative 7% and we expect further yield compression and positive ERV growth in line with inflation or slightly ahead of inflation for the rest of '25.

This is also illustrated by the new leases signed in the first 9 months of '25, where rents are 6% higher than the new leases signed in the first 9 months of '24, which is supported by the undersupplied nature of the CE markets and industrial and logistics space per capita is only half compared to the U.K. or other Western European markets.

The transaction markets continue to recover across Europe as there's more clarity around funding costs. We expect an increase of transactions into next year, especially on the private equity side, where funds are coming to maturity. We expect to see more turnover. This will offer opportunities for us. We also remain active in the market for land acquisitions, plenishing the land bank in our existing markets, growing the land bank in countries that we entered recently like Poland, which we plan to enter like Italy and Vietnam, while maintaining our disciplined capital allocation.

Our EPRA net tangible asset per share increased from EUR 18.08 at year-end '24 to EUR 19.98 at the third quarter, representing an increase of 10.5% since the beginning of the year. Year-on-year, the increase was 14%. With this NTA growth and our dividend, we delivered a total accounting return to our shareholders of 70% in the last 12 months, highlighting our superior return profile, which is unique to the real estate sector.

And now I hand over to Richard.

Our funding strategy remains centered on maintaining a stable investment-grade rating. And we are very happy that our improving credit metrics were recognized by Standard & Poor's with their upgrade in September. We focus on ensuring access to multiple sources of liquidity, meaning attractive funding is available at all times. We have a geographically diversified investor base, now further strengthened by Asian investors added in 2025 and a growing share of unsecured debt towards our target of 80%.

Thanks to our highly accretive developments and proactive debt management, our interest coverage ratio increased to 2.5x. Our normalized net debt-to-EBITDA remained stable at 9.2x, and our loan-to-value stood at 45.2%. We expect loan-to-value to return to our 40% to 45% target as our development pipeline is completed and revaluation gains are fully booked.

As presented during our Capital Markets Day, with our market-leading development yield on cost of over 10%, every euro we invest in our pipeline increases our ICR and decreases our net debt-to-EBITDA, allowing us to grow at our 10% to 15% annually while improving our overall cash flow credit metrics. This was also highlighted by Standard & Poor's on their upgrade of our credit rating to BBB flat with a stable outlook in September.

Moody's have a positive outlook on our credit rating, confirming the positive trajectory of our ratings. In the first 9 months of 2025, we signed EUR 1.7 billion of unsecured debt to fund our organic growth. This included EUR 1 billion in dual-tranche bonds issued in March, an inaugural JPY 30 billion Samurai loan equivalent of EUR 185 million and a EUR 500 million syndicated term loan facility signed in June, which had commitments of over EUR 1.2 billion.

Together with the 6.5-year, EUR 600 million bond we issued in October, this continues to demonstrate our ongoing strong market access. We continue to actively manage our funding costs. And over the past 12 months, we have renegotiated or repaid EUR 1.6 billion of our most expensive bank loans, including the prepayment in June of EUR 441 million of expensive unsecured debt.

CTP maintains a conservative debt profile. The EUR 272 million of bonds maturing in June and the EUR 185 million maturing in October were both repaid from available cash. Looking ahead, maturities remain limited over the next 3 years with a EUR 350 million bond due in January '26 and a EUR 275 million bond in September '26.

Our cash position stands at EUR 1.1 billion, including our EUR 1.3 billion RCF, our liquidity totals EUR 2.4 billion, more than sufficient to meet our cash needs for the next 12 months. The average debt maturity stands at 4.8 years and the average cost of debt at 3.2%. This represents only a minimal increase compared to year-end 2025 as our current marginal cost of funding remains below 3.5% for 5-year money.

We remain confident in the outlook for CTP. We have a strong tenant lead list. In addition to what we have already pre-let within our development pipeline, we have 151,000 square meters pre-let for future projects for which construction has not yet started. We continue to see rental growth across all of our markets, supported by the nearshoring trend and ongoing e-commerce growth, particularly in the CEE region.

Our tenant-led development pipeline remains highly profitable. With our industry-leading yield on cost of over 10%, we are able to deliver sustainable and profitable organic growth, while maintaining a robust financial position.

We confirm our EPS guidance of EUR 0.86 to EUR 0.88 for 2025, which due to an intended acquisition in Romania not proceeding, is now expected to come in towards the lower end of that range.

Thank you for your attention. We now welcome your questions.

[Operator Instructions] Our first question comes from Marios Pastou from Bernstein.

I have two questions from my side. So, I see leasing is up over the first 9 months. It's marginally down in Q3. I think you mentioned that you want to have a good final quarter, but I also see that last year, that final quarter was also very strong. So, do you expect to be up in terms of leasing volumes for the year as a whole?

And then secondly, can you just remind us why the intended acquisition in Romania didn't proceed as planned?

I will take the last question on the Romanian acquisition first, and then I'll let Remon comment further on leasing.

So, it comes back to antimonopoly reasons where there were two restrictive conditions for us. So, we decided not to go ahead with it. We see enough opportunities in terms of acquisitions across Europe. We continue to buy land. So, we always do also relative capital allocation where it doesn't make most sense for us. In the end, with the restrictions here, it didn't make sense. So, we decide to prefer to invest in other opportunities.

Our next question comes from John...

We didn't answer the second part of the question with regards to leasing. If you like...

Apologies. Continue.

No, I can give some color on that. Anyway, with reference to what Maarten just said, well, even if we wanted to buy, we can't buy, because that is very complicated with the competition and antimonopoly whatever, which actually is not bad because there is other places where we can invest money. That's why I think, we waste a lot of time on that P3 acquisition, which didn't happen. But as I said, at the end, maybe it's even better without.

With regards to the leasing, yes, as stated, we continue to see demand and that will turn into deals over the rest of the year. And yes, which is good. So that is often the case that fourth quarter is more takeup than first or second. I don't know exactly why that is, but it has been historically like that, and we think that trend will continue for '25.

Yes. So, we did sign some leases just now in Poland, which is good. And in Romania as well, in Germany. So yes, overall, relatively positive, I would say, I think, and we are on schedule to hit the occupancy target for end of '25.

Our next question comes from John Vuong from Kempen.

On Vietnam, you said that you -- well, that we shouldn't expect huge things with only one or two developments. So just trying to understand here, over what time line do you expect to start these developments? And if you're really excited about the opportunities in the country, why only start with one or two and not with like a park strategy like you are in Europe?

Good question. Well, it's definitely going to be a park concept. So, we think of using or doing the identical thing or similar thing to what we do in Europe. So, park concept and business park, full-service business park with different property types. But -- so that is definitely the case. But you need to also get ready in terms of setting up a team. And so, we are now in the middle of recruiting people for our Vietnam office or Vietnam team. And that will take a bit of time.

So, that's why I think, honestly, the recruitment process has started. We have met people. People came over to visit us in Europe in order to make themselves familiar with what we do, how we do it to get to know other people in the organization. So, it's also part of the recruitment process. And yes, it takes time until these people will actually join, which some of them will join in Q1, beginning of next year, Q1 of '26.

And simultaneously, we have agreed an option on four land sites, and that would give us the opportunity to develop around 300,000 square meter. It will be very nice. And I think some of that we can start next year in '26, but those buildings will come to the market in 2027. And so, that is what I think now.

So, that means 300,000 square meter, EUR 150 million. I think construction cost will be a bit lower in Vietnam, what you see at the moment it's going to EUR 500, it's more going to be like towards EUR 400 per square meter. And we think of, of course, doing that at 10% plus yield on cost, so above 10% yield on cost. But that is the base plan.

And maybe we see opportunities to accelerate and to grow more through some acquisitions as we have done before when we entered a new market, that we do our organic growth, buy land and develop or maybe here and then buy something which would help us get a bit more volume. But yes, so that is how we see it now.

So, we will need time to get familiar with the market, to put up a team, to get started. And we want to do that carefully. And -- but once we get going, so from '27 onwards, maybe there's an opportunity to do 200,000, 300,000 square meters per year, maybe. The market is big enough by 100 million people, there is hardly any stock.

There are, of course, a couple of players, that's GLP or SLP, they have been -- they are Frasers, Mapletree. It's not -- so there is, of course, a significant amount of developers. But if you look at the stock compared to the amount of inhabitants, 100 million people. And if you look at all the opportunity, then the market is very -- yes, it's at the beginning. And as I explained, demand coming from our clients, we think it's a good opportunity to proceed with. But that's how I can -- I will continue, of course, to update you on how far, how quick we can get. But that's for now how I see it or how we see it.

Okay. And just on the 10% yield on cost, is that net of land leases, given that you cannot own land in Vietnam?

Correct, it's 50-year leasehold or concession. So, what if we calculate as very primitive and as very simple. So, we add the concession cost for 50 years. Then on top, we add cost for everything related out of pocket to develop the property, so infrastructure, construction costs and all of that. So yes, that is included. And we think yield on cost in Vietnam is more towards what we do in Serbia. So, well above the 10% yield on cost.

Okay. Great. So right.

It's included.

But John, so in Serbia -- in Vietnam, like Remon says you're looking at kind of like Serbian type of relationship where you're developing at trying to get to 12% and revaluing 8.5%.

Our next question comes from Suraj Goyal from Green Street.

Just a quick one. It's on leases again. So the new leases signed at rent levels 6% higher than last year. But it seems lower in Serbia, Hungary, Romania and Bulgaria. I appreciate there may be some nuances here, but would you be able to just share some color as to why this may be the case.

That's always what we say. Some years will be up, some years will be down. It depends a lot on which leases you are signing, especially for the smaller markets, it depends a lot on which projects are coming online and when they are exactly coming online, in which quarter you are signing the leases.

To be honest, you always see volatility. Last year, for example, we did less leases in Czech. This year, Czech in terms of absolute amount of leases is doing very well. Same with what we had in Hungary. Hungary, we did last year, a bit more leases, this year, a bit less. That's the normal business cycle.

You can lease the space only once. You try to lease at the highest rental levels possible to what we think our clients which add value for us long term in our park model. So, it really depends on what is the opportunity building set you have for leasing. So, there is no -- if you look across the markets, there is no structural trends in either one of them that is really for us a point of concern. Some markets are better than worse. That's year-on-year.

Overall, what you see is, we do more leases, we do them at higher rents, and that comes really back to the demand drivers, which are long term, and they won't change from one day or another. The demand drivers that were in place last year are still in place, and it comes back to the nearshoring, that comes back to the growth in domestic consumption, et cetera. But it depends a lot on which quarter you sign with specific deal. That's always been the case also if you look back historically.

So overall, that's what Remon also said, we are confident in our occupancy targets to hit by year-end. And the leasing is progressing well towards that. Also, that's why we confirmed basically the guidance for our deliveries between 1.3 million and 1.6 million square meters for the year. So, we are very well on track. And with the amount of hope that we are doing and the conversations that the team on the ground has, we have confidence in getting there. And some markets will contribute a bit more than others, but that's normal.

Our next question comes from Steven Boumans from ABN AMRO, ODDO.

I have two. So the first one, a follow-up on the expected leasing numbers. Do you think that the average rent per square meter will rise above the EUR 6 per square meter per month for Q4? And what about '26? Maybe that's the first one. I do another.

It would be good if they are above EUR 6. In some markets, they will be. I don't know, maybe Maarten has the average number.

Where do we see rental growth? We see a lot of rental growth in the German Deutsche Industry portfolio. Remember the old buildings we bought or older buildings we bought. Of course. Why is that? Because we bought relatively cheaper. When we bought, the rents were quite low, EUR 3.5, so let's say, EUR 42 per year. And that we see that going up to, yes, EUR 70, EUR 60, EUR 70. That's true. We have to also invest in those big properties. But just yesterday, we did a deal at that kind of number. So it's around EUR 6 per square meter for the Deutsche Industry.

I think we see rental growth throughout -- also Romania because the other question was that, we do less in Romania. I don't think so. We have seen a lot of rental growth in Czech. So yes, Czech, I would think it's EUR 6. Maybe, Maarten, you can add some on that, whether it's EUR 72 or EUR 70 per year on average, maybe throughout the portfolio. I mean, big box logistics in Bucharest, you will not get to EUR 6 for sure, but something smaller in Czech, you will definitely get to EUR 6.

Poland, you will not get. Although the -- by the way, the small stuff we do in Warsaw, so we have SBU, small business units. Obviously, that is higher than EUR 6, but those are small units of 1,000, 2,000 square meter units. So, lower than 5,000 square meter units. The square meter price will be significantly higher than a large 10,000, 20,000, 30,000 square meter warehouse building. So, I think there is also the difference in the rent per square meter per month.

But that is going quite well, the smaller units, which also, yes, we like because there is good demand for it as part of the -- what's going on in the region of Central Europe, and of course, you have small and medium-sized companies, that segment is growing. But there's also big multinationals taking smaller units here and there. Yes, so then they pay more rent.

Maarten, do you have some more details on the average?

Yes. You can see that also in the presentation. If you look on -- Steven, if you look on Slide 10, you see exactly the rents that we are making per country. Whether we in the Q4 will be above EUR 6, like Remon said, it depends a lot on which market we are signing.

If we are signing more in Czech, yes, we will be above EUR 6. If we sign more in other markets, it will be a bit harder. But that's normal. So what we are looking is what is the real underlying rental growth country-by-country. And that's ultimately -- that comes back to the 6% that we are showing.

And smaller countries, as I said before, it depends sometimes a bit on location, because whether you're leasing the capital city, whether you lease indeed, like Remon said, smaller units or bigger units. So in Poland, we have, for example, seen the increase there. So, the leases which we did this year were on average at EUR 5.50. But that includes some smaller stuff, includes, in some cases, some extras that we do for tenants. But on average, Poland, we see some rental growth coming through.

Romania as well, if you look an underlying, while if you look maybe to the absolute figures, they look flat, but that because there is a big unit again in this year's numbers. So big units typically pull it slightly down. But if you look -- and I know it's harder for you than for us, because we look at it on a unit-by-unit basis when we are doing the deal, when the leasing team sits down to speak to the tenant, we look, okay, what is the ERV of the unit. We continue to track towards that. And then, when we -- we look on that detailed level, we continue to see the rents creeping up in countries like Romania, in countries like Poland, in countries like Serbia, et cetera.

Okay. To ask a bit differently. So -- and to fully understand. So, like-for-like growth per country is, let's say, inflation like, maybe a bit more, but let's say, inflation. And then the mix you don't want to commit that, that will change materially as of today. So, the mix should be broadly similar. It could be a bit better or a bit worse. Is that correct?

Yes. That's correct. Look, what we see is -- what we said is we expect market rental growth indeed to grow in line with inflation. The mix depends indeed where we sign leases. That's hard for us to commit.

If you look on a year or 2-year basis, yes, we can give a rough split, but not on a quarter-by-quarter. That doesn't make sense. That's not also how we run our operations. So, that's harder to determine. But the underlying rental growth remains there, and that's also the confidence we have, and that's also -- you see reflected in the like-for-like rental growth coming through in the P&L. So, it's not only the market rent. It's also if you look to the like-for-like when we are really capturing the reversion of leases coming up for expiry.

Yes. Steven, I think that the big picture is, we see increasing demand, and we see that increasing demand at higher rent levels pretty much across the markets in which we operate. If you look at the more granular data, you will find something that looks a little bit worse. But the overall trend is the one that we would try and highlight, which is continuing strong growing demand and that at higher rent levels.

Our next question comes from Vivien Maquet from B Degroof Petercam.

I hope you can hear me. I have two. Maybe on the first one, it's a follow-up on Vietnam. Just wanted to understand a bit what will be your target in terms of tenants? I would assume that you will mostly look for existing tenants that you already have in CEE for the first project. And secondly, what level of pre-let will you feel comfortable before launching such a project?

Thank you. Yes, we hear you loud and clear. Good questions. Indeed, so what we want to do in Vietnam is very similar to what we do in Europe, full service business parks, whereby we offer a variety of different property types.

In Vietnam, they use the word ready-built factory and they use a ready-built warehouse, and they refer to build-to-lease. And we call it a little different. We say CT box, CT Flex, CT Space, but it's similar.

So let's see -- let's test the market. We want to go out with a pilot. Yes, around 50% pre-lease. I think that is the kind of thing. But as I explained, the four of the locations which we have secured, you could do 300,000 square meters of total lettable, say, assume that you can start construction mid of next year, second half next year. You may start initially with 100,000, 50,000, let's see, in one location. And locations, I referred to maybe also a bit more to explain.

And we are -- we do a paper. I think we have a paper, Vietnam paper, which we can share with you. It's going to be online. So, also to get a bit more background on what is the economy like, FDI, what is the market like and why do we see opportunities and where do we see opportunities. But to explain a little bit, we could talk about one location close to Hanoi in the north of Vietnam, which historically, it's a concentration. There's a lot of people living there. As I mentioned, total 100 million people in Vietnam. So in that part, in the northern part, a couple of dozen million people, so it's quite large.

But more importantly, there is many of our clients with different activities. So, if you refer to the Vietnamese semiconductor industry, companies like Wistron or Foxconn, who are our clients, they have facilities in that part of Vietnam already.

Historically, because they have a China Plus One policy, many of those, which means that not all of the manufacturing facilities are in Vietnam or in China, some in China for Chinese market, some outside of China for South Asian market. And that is -- those are Taiwanese clients who we have been working with for more than 20 years, especially in the Czech Republic.

Anyway, those are there, and they have suppliers and subcontractors and all of that ecosystem. And that's one of the target groups, which we would, which we talk to and say, okay, yes, we will build properties in and around Wistron, Foxconn facilities in the region of Hanoi.

But in Hanoi, obviously, you can imagine there's also consumer spending. So there's also FMCG, there is a need for warehouses. There is e-commerce. There is all kind of that. So, our clients who are involved in 3PL logistics -- involved in 3PL logistics or supply -- so that's the kind of ecosystem of the clients we have, which we will plan to work for in Vietnam.

So yes, indeed, mostly existing clients, but could, of course, also be new clients. But there's many of our existing clients who have facilities in Vietnam or who are considering opening up facilities in Vietnam.

Thanks very clear and looking forward for the Vietnamese paper. Then second question is on, I think that you commented that you expect very strong ERV growth for H2. As I remember, we don't value the standing assets in Q3. So just to understand in which country you expect the biggest ERV growth? And how is it based to your recently signed lease? I think that we comment a bit on the rent level left and right, but just wanted to get from a valuation perspective, when do you see the biggest discrepancy between what you -- at what level you are leasing and what the valuers is assuming as ERVs?

Yes, sure. So, what we said is that, we expect to grow it in line with inflation or slightly ahead of inflation, the ERVs. And that comes back to where we are signing the rents as we are continuing. As I said earlier, to sign the rents 6% higher. We also have indexation coming in. So, we see market rents growing in line with inflation or slightly ahead.

If you look on a country level, there will be less ERV growth in Czech. In Czech, the opportunity for us, we have commented on that before, is more to capture the reversion because in Czech, we have one of the largest reversionary embedded potential as the market rent there already has grown quite a bit. And of course, with our leases, when they are 10 years or 15 years, it can take some time a while before you can capture that. So, you need to go through the world.

And we expect more ERV growth in countries like Romania, for example. So, the more upcoming markets. We'll also see some ERV growth in Poland. In Poland, there will be really a divergence between the new and the old. There has been different build quality. As you know, we are a long-term owner. We commit to locations. We build buildings that will last because we have the commitment to own them long term, both vis-a-vis our tenants, but also vis-a-vis our municipalities.

While in the past, the Polish market was more dominated by trader developers. So, what you see there is more a divergence where you might have given more incentives on really older product or lower quality product. While if you look to new product that is coming to the Polish market, you can lease at good rates, and that's what you also see reflected in the rental growth that we are doing. So, there will also be some ERV growth. But in general, also across some other markets like Serbia, we expect some ERV growth to come, Bulgaria.

Hungary, I don't think so. Hungary is a bit more vacancy at the moment, especially around Budapest, but there is also a split between the region and Budapest and the other areas of Hungary see a bit stronger rental growth than Budapest at the moment. So, there's always those local factors. But on average, we expect to grow in line with inflation or slightly ahead of inflation.

And if I may squeeze a very quick third question. You could deliver up to 1 million square meter in Q4. Just wanted to understand how much of new projects you expect to launch in Q4? Keeping, I would say, the 2 million square meter of development pipeline, I would say, unchanged? Or could it be split a bit more into the beginning of 2026?

It will be relatively unchanged. I don't expect our pipeline to materially change. It comes also back to next year because for next year, as you know, we guide to 1.4 to 1.7 million. So we also need to start those projects. Simple projects will take us 9 to 12 months. If you have a simple logistics building. In some cases, you can even do it a bit quicker. But there are more complicated projects if you do some extras for tenants, et cetera. So, we will always run a pipeline, which is slightly ahead of next year's deliveries, taking into account the time to complete.

Our next question comes from Frederic Renard from KC.

Just two questions on my side. The first one is on the reversion, which has come down 120 bps Q-on-Q since Q2. Can you comment maybe on that?

And then second question is on occupancy rate. You are still at 93% versus the target of 95%. I see that client retention is at 82%. It's a good level, but it's for me the lowest figures you had over the last 2 years. So, is there more downside risk on occupancy rate than upside risk? And then have you any specific concern on some countries?

So regarding the reversion, that's partly driven by the fact that we don't reset ERVs in the third quarter. In the third quarter, as you know, we don't revalue our portfolio, only the developments.

So, if you don't reset your ERVs and we are capturing reversion as leases are coming up for maturity, naturally, the reversionary potential comes down in those quarters. It's more a mathematical effect than anything else. Then your question regarding occupancy, yes, we remain stable around 93%. And that's also what we explained during the Capital Markets Day.

The two main markets which are below are the two market entries, Germany and Poland. Poland, we expect end of this year to be more around 90%. And then into next year, we will keep up to the 95% target. Same with Germany. So that's part of the market entry strategy. We target to be around 95%, especially for our mature markets. In some markets, you even would want to be a bit above.

And why do we target around the 95%, maybe also good to remind you, that's really to have the growth opportunity with existing clients. We want to have always some space available to grow with existing clients in our existing parks, because that gives us -- if a tenant comes to us and say, I want to expand in an existing park, that gives us much more negotiation power than when you have to build a new unit. So, that's why we always target around 95%, and that's why our pipeline deliveries, we target to be 80% to 90% to always have that space available to grow with existing clients.

If you also put it in perspective, on a yearly basis, we will sign more than 2 million square meter. If you look to the occupancy, if you take it from our portfolio, if you take 5% of a portfolio of 30 million square meter, that's 700,000. We leased 3x as much in a year. So actually, yes, we have a bit of occupancy, but that gives us an enormous amount of flexibility. And given the amount of leasing that we are doing, that's not a concern for us. It's just an opportunity to have those long-standing client relation and to leverage that to drive rents higher.

Then on your last question or last part of your question, which was the retention rate. Retention rate was indeed slightly lower this year, correct. No fundamental issues, but there are, of course, sometimes you can have individual tenants who decide to leave. For example, if 3PL has a client and they want to consolidate or they want to move to a different location, they might terminate. It's not a reflection of your business, but it's more a reflection of sometimes the change in supply chains.

Of course, we try to keep all our tenants. Sometimes actually, also, for example, we see in Germany, it's sometimes better to replace tenants if we really want to capture that upside potential, for example, in the Deutsche Industry portfolio. So, there we are sometimes actually happy when people move out and we can replace them for a higher paying tenant. So it's always a case-by-case analysis, of course, that we are doing. The absolute figure is slightly lower, but there is no fundamental underlying driver, which would mean that the rent retention rate will be lower going forward. It depends on the leases we signed in the quarter.

Yes, I can confirm that. So, I can just confirm Maarten said some of the leases we had to terminate in Germany, because we -- yes, the relationship was not great, and we felt that we would be better off with a new tenant in that building, doing some refurbishment and get more rent out of the property. So that happened in Germany and is still happening while we speak, which is part of cleaning up the portfolio in Germany.

And also with regards to vacancy, yes, we have been at around 93%, 95%. Sometimes also, you don't need to be in a rush to lease it immediately. Sometimes certain areas need some time for the market to absorb some space. And then I'd rather have 6 months of vacancy cost and then do a better deal as pushing down on the rents. And so, we also need to balance and understand the market.

And if there's no demand, there's no need to push, then you'd rather wait until there is demand or until the market has been able to absorb the space, which was available. But I think overall, also, we see from a supply side that yes, here and there, some of our peers and colleagues stopped or slowed down or there is no land or things like that, which is good. So long term, you -- we believe that these properties, which we have built are good quality properties, and they will continue to generate and produce income, which values may go up and down, it depends on the interest rates and so on and so on.

But the income from the property so far has always grown, and we continue to see that. And that is more important to build the cash flow and to make sure that we create this income in time at the correct level. So yes, you play with the supply and demand and balance around the 93%, 95%. But yes, not huge. And overall, good, we are gaining market share, which is good, which also later on give us more opportunity to grow rents. It's good.

And maybe just last one on my end. Can you remind us the size of the acquisition in Romania that you didn't do? What was again...

The quantum of investment was around EUR 250 million.

Our next question comes from Eleanor Frew from Barclays.

A few questions go one by one. So just to confirm, was the Romania acquisition explicitly baked into your guidance? And is the acquisition not happening going to impact your GLA target for the year of 15 million square meters? And moving forward, do you have any annual acquisition assumption guidance we could use?

In terms of GLA, that's mostly driven by our development. So, we confirmed our guidance on terms of development between 1.3 million and 1.6 million square meters, which means indeed, like Remon already mentioned, we will deliver nearly 1 million square meters in the fourth quarter, which will bring us probably rounded towards 15 million, whether it's exactly 15.0 million or whether it's 14.9 million or 14.8 million, we'll see. It depends more on where we end in that range of the deliveries. That's ultimately the key one. So, that's with respect to the GLA target.

If you look to acquisitions, no, we don't guide for a specific amount of acquisitions, because it's really opportunity driven. If we talk land, yes, we will do each year around 200 million, 250 million, in some years, maybe 300 million of land. Because that's a lot of individual plots and that as I said, it's part of replenishing the land bank in some of the existing markets, but also growing the land bank in markets which we entered recently or plan to enter. So, that is a more stable acquisition pipeline on the land bank side.

On the standing assets, it's really opportunity driven because, yes, we like to do acquisitions, but they need to make sense in capital allocation. So, that's why we don't guide for a specific target. We will be there opportunistically. We are not the ones who want to pay a full price. We want to do things which make strategically sense for us. We can do things off market. That's much more our sweet spot in terms of M&A rather than committing and then forcing ourselves to buy 600 million of standing property per year, that will not drive shareholder returns for us. We need to be focused on what makes sense, where is pricing realistic and where can we add value. Because we are not an investor in buying simple core product, there needs to be value-add opportunities.

Yes. And I think, Eleanor, you asked if the Romanian acquisition was part of our EPS guidance for this year. Yes. And that's also why we say that as a consequence of the Romanian transaction, not happening, we now expect to be at the lower end of our guidance range.

Great. Then on the reasoning for that portfolio falling through, does that impact your growth plans otherwise in Romania, i.e., is that region now saturated for you? And is there a risk on future permits maybe? And then on top of that, are there any other markets where you have a position that could prevent you from acquiring in scale?

No, I don't -- it won't affect our ability to continue to grow organically in and around our existing parks by land to start new parks. So, that we don't see that as an impediment to continuing to grow our business in Romania through 10% plus yield on cost developments. And we don't have any other market where we would think that we would have a problem.

[Operator Instructions] Our next question comes from Wim Lewi from KBC Securities. His question is, on Italy, can you give more details on tenants targets, greenfield versus brownfield? What is your SQM GLA targets for the next couple of years? Will you consider buying a standard asset portfolio?

Yes, thanks for the question with regards to Italy. I don't know how you see it, Maarten, but I think it's a bit too early. We don't go -- we don't disclose too much details there. What we can say is that, we have been looking at Italy for the past years. And we -- as we communicated back in 2021, when we did our IPO, we said, okay, we would like to go to Western European markets, which we said initially, we're going to look at the Netherlands and Germany. Germany worked out well. Poland, less. Happy with the ALC property in Amsterdam, which is -- there's been some good take-up, and that's okay. But besides that, we have done very little in the Netherlands. No, it's not the place where we see opportunity. So, we put -- we slow down.

But we always communicated we wanted to do more in Western Europe. And Italy has been on our wish list. We now see a good opportunity to enter. I think we are ready for it in terms of -- we have the money, we have the capacity, we have the team. But more importantly, we have also identified the opportunity. So, what we have done in the meantime, we have established a small team of people.

We currently work on securing land. And yes, and it's not in any of our pipeline projects. So, it's the base plan, the 26 million or 20-something million square meter land bank. There's nothing in Italy. It doesn't include Italy, so it's on top. But I think we will keep the good news for later.

That's what I think, Maarten, let me maybe add or comment on anything you want to share at this moment.

Yes. So, we'll announce the transaction when it's there. We always announce it when we have -- when we close something. But in general, we are looking at broader opportunities. Where we add most of the value is through land, whether that's greenfield or brownfield, we can do both. It comes back to what is the location. That's a key thing. Whether it's greenfield or brownfield is not a massive factor in that. It's just a bit different in terms of, do you have to take in account demolition costs, et cetera.

We are looking for the right locations in Italy, which can give us a kick start. And we are looking for sizable opportunities where we can develop our park model, which is important for us. So, not only small land plots, but more sizable ones in line with our strategy.

What we see in opportunities in Italy is a couple of things. There's a very strong manufacturing base. And if you look to our portfolio, we do a lot in manufacturing. Roughly 50% of our portfolio is manufacturing. So, we see opportunities there as many of our peers here in Italy are more focused on logistics. So, that's an opportunity for us. We see some opportunities in more some smaller business units closer to town.

Italy has quite a lively SME environment. So -- and then, you know what we have done, for example, in Brno. So, you can think of doing certain of those projects here in Italy. So that's the opportunities that we see and that is the land plots we are looking for. And as part of each market entry, we are looking at, of course, a broad set of opportunities. And hopefully, we can update you later this year more specifically.

Our next question is from Alvaro Mata from Santander AM. Their question is, the 93% occupancy looks a bit lower than others. I wonder if there is a specific reason for that. Any explanation would help. Your LTV at 45.2% continues to be a bit higher than your target of 40% to 45%. When shall we expect a decline and to what level? How important is this for you? ICR at 2.5x is in the low side. Do you expect an improvement in 2026?

No, the LTV is not of our concern. And the vacancy is around 93%, 95%. We talked about it before. We're not going to repeat. Also historically, has been around the same number. We wait for a good moment to do good deals at higher rents. And for the rest of the questions, I refer to what has been previously discussed. Thank you.

Yes. Regarding the ICR, I think we reported earlier that we already took most of the repricing from the higher interest rate environment that we have today compared to the environment 2019, 2020, 2021. We see our ICR bottoming out at 2.5x. That's also what the rating agencies are saying, and we've consistently highlighted that everything that we invest in developing a 10% plus yield on cost is incremental to our ICR. That's also one of the reasons that the rating agencies are comfortable with where we are. And despite that ICR of 2.4x at the time, Standard & Poor's gave us a rating upgrade. So no, we don't see any problem with those ratios, and we expect that to improve over time.

Our next question is from Jesse Norcross from ING. The question is, how big is the defense spending opportunity in Europe and Germany for the logistics sector and for the CTP in particular? What kind of timeline? And on Moody's, how confident are you of getting ratings upgrade there? Or is this not a priority at this point in time?

So rating upgrade is always a priority. I think -- and we are happy with the upgrades we got from S&P to BBB flat, which I think reflects our ambition. We want to be a solid BBB flat company. We think that reflects the underlying of our business with the stable cash flow that we are each year able to generate, where Remon also referred to. We target to have a rental income of EUR 1 billion by 2027, which gives us an enormous amount of stability for the group, and a very good coverage basically of our ICR and net debt-to-EBITDA.

So clearly, it's a priority for us to also work on Moody's. I cannot speak about the time line. We plan to deliver on the plan like we always do. Moody's has given us a positive outlook, but it's ultimately up to them, of course, to take the action. We work as hard as possible to get there.

And then, I'll let Remon comment on the defense opportunity.

I don't know.

Our next question is from [indiscernible] from ESP. Do you maintain the target level of deliveries for FY '26 within the 1.4 to 1.7 mn SQM range?

Yes, we do. We have confirmed the guidance we have given at the Capital Markets Day. No change. We are on track for this year. So, we are also -- with the leasing we are doing on track for next year.

Thank you. We currently have no further questions. So, I'll hand back to the CTP management team for closing remarks.

Thank you all for attending. If there are any follow-up questions, don't hesitate to reach out to us. We are also doing quite some of the conferences and roadshow in the coming days. So, we're always happy to continue the dialogue with our investors. So thank you for now.