Grand City Properties Stock

Good morning, and thank you for joining us for Grand City's results call for the first half of 2026. You can view this presentation on Grand City's website, either on the Home section or under Financial Reports of the Investor Relations section.

With me today will be Chairman and Director, Christian Windfuhr; CEO, Refael Zamir; CFO, Idan Hadad; and CMO, Michael Bar-Yosef. [Operator Instructions] The e-mail address is [email protected].

With that, I would like to hand you over to Christian to start with the presentation.

Good morning, and welcome to our H1 2026 results presentation. We are pleased to present a solid set of results for the first half of 2026, reflecting another period of strong operational performance. The economic environment continues to be shaped by ongoing geopolitical developments, including the situation in the Middle East, which create ongoing volatility in financial markets. Our portfolio locations benefit from strong fundamentals, and we do not observe a material impact on our operations. We also continue to monitor capital markets and interest rates closely.

While these have been impacted, our bond spreads have remained mostly stable and both capital and transaction markets have stayed open, giving us comfort that the current environment is not creating any significant disruption to our access to liquidity or to our business. We also continue to maintain a solid financial position, providing firepower for external growth as well as downside protection.

On the operational side, we continue to see strong and supportive fundamentals across our portfolio locations with demand for housing remaining robust and supply structurally constrained. We recorded another period of solid rental growth, reaching 3.3% like-for-like, while also externally growing the portfolio.

Looking at the financial profile following the perpetual notes transaction executed in the second quarter, we have now fully refinanced our perpetual note stack with next call dates only in 2031, providing increased clarity and limiting potential negative impacts from market volatility.

Following our robust financial position and after approval at the Annual General Meeting, we paid a dividend of EUR 0.30 per share for 2025 in July. Going forward, we have updated the dividend policy to 50% of FFO I per share, which we view as a good balance between an attractive return and positioning the company well for long-term value creation, maintaining a prudent and strong balance sheet. The strong operational performance was further reflected in the slightly positive full portfolio revaluation recorded in the first half of the year, driven by operational growth. We will provide more details later in the presentation.

On Slide 3, we present a summary of our key financial results for the first half of 2026. We saw a solid performance with net rental income up 3% and adjusted EBITDA up 3% year-over-year. This led to an FFO I of EUR 91 million, in line with our full year guidance. Our balance sheet remains strong. As of June, our LTV stood at 33% compared to 31% at the end of 2025. The LTV was impacted by acquisitions and investments in the period, partially offset by the operational results and positive property revaluations recorded in the period. The net debt-to-EBITDA and the interest cover ratio remained very strong at 8.7x and 4.7x, respectively, and we maintain a strong liquidity position.

Turning to EPRA NTA, which stood at EUR 4.6 billion or EUR 25.8 per share, driven primarily by strong operational performance and positive property valuations, partially offset by the dividend allocation, which was paid in July after the reporting date. We continued to maintain a low vacancy rate of 3.7% and achieved solid like-for-like rental growth of 3.3% as of June, supported by continued increase in in-place rents. Our portfolio as of June 2026 stands at 61,000 units, up from 60,000 units in December following the closing of several acquisitions. We will discuss these items in more depth later in the presentation.

Moving to Slide 5. We present key data on the German residential market. The German housing market continues to face a structural supply and demand imbalance. New construction remains restrained, particularly in metropolitan areas as land and construction costs stay elevated. This was reflected in the number of permits approved, which continues to sit well below the estimated number needed for demand. We are encouraged to see that policy changes are aimed at increasing the supply. The Bau-Turbo allows the municipalities to approve projects outside zoning plans. And in June, the government introduced the Aktionsplan Baukosten, a set of measures aimed at reducing construction costs, including digital permitting, faster planning and tax breaks.

That said, completions are still expected to fall significantly short of government targets in 2026, and these measures are not expected to close the very significant gap. Accordingly, available supply remained low and asking rents continued their upward trajectory. The fundamentals continue to impact our portfolio positively, reinforcing its resilience and growth potential.

On Slide 6, we address the topic that has been a recurring source of uncertainty for the German residential sector and where we have seen more clarity over the past months. For some years, the expropriation debate centered on Berlin has become a source of noise for the market. Our position on this topic has been consistent. We viewed this initiative with skepticism, saw much of the momentum as driven by electoral politics rather than by a workable housing solution and have always argued that the answer for affordability is more supply, not less private investment. Measures that simplify construction and conversion, such as the Bau-Turbo address the actual problem. Expropriation does not. And in our view, risks doing the opposite by discouraging the very investment the market needs. We can see that our view is now increasingly shared by the federal level.

In March, Berlin passed a framework law, but one deliberately built with constitutional guardrails that only takes effect in 2028, leaving room for prior review. Recently, in early July, the federal coalition agreed to introduce a law that would ban the states from using socialization legislation to transfer private rental housing into public ownership. This was taken up at the request of the construction ministers on the reasoning that the threat of socialization endangers housing construction and undermines Germany as a place to invest, very much the argument we have made ourselves. The federal law is an agreed intention rather than an elected legislation. But we believe this is a meaningful signal the federal government is actively seeking to remove this source of uncertainty and to provide legal certainty for housing investments.

Slide 7 highlights the strong fundamentals of the London residential market, whose regulatory environment also strengthens the diversification profile of our portfolio. The softer rent regulations compared to Germany allows rental prices to reflect underlying market conditions quickly, which market rents capture fast -- with market rents capture fast, sorry. London's rental market has continued to tighten in affordable and mid-income borrowers, which is the focus of our portfolio. Supply remains structurally short with delivery falling short of new homes needed and approvals continue a downward trend in recent years.

On regulations, we have seen the Renters' Rights Act come into effect, introducing reforms to the eviction process and moving leases to rolling monthly terms with annual adjustments to the market level. While this is widely described as the largest change in U.K. rental regulation in decades, none of these changes had a significant impact on our operations or our portfolio, which is maintained at high quality and where we keep a healthy and positive relationship with our tenants. The U.K. government has indicated that they already see positive impact from the reform and both the Housing Secretary as well as the Prime Minister have ruled out the need for rent controls. All in all, fundamentals in London remain strong and continue to support asking rents and portfolio values going forward.

Now please allow me to hand over to Refael.

Thank you, Christian, and welcome also from my side. Turning to Slide 8, we present an overview of our diversified portfolio. As of end of June, our investment property portfolio totaled EUR 9.2 billion, increasing from December 2025. Berlin remains our largest location, representing 23% of our portfolio, followed by London at 21%, NRW at 19% and Dresden/Leipzig/Halle at 15%, with the remainder spread across other strong metropolitan areas. Our external growth strategy remains focused on disciplined capital recycling and substantially selected acquisitions where we see clear value creation and FFO accretion, while preserving balance sheet strength.

During the first half, we completed approximately EUR 75 million of acquisitions in Germany at a rent factor of around 14x. This came in addition to the over EUR 100 million new build turnkey portfolio in London signed previously and completed in 2 stages with the first half recently completed and the second half was completed after the reporting period at an expected factor of 13x once fully rented. This newly built portfolio is expected to be fully let within a few months contributing partially to operating results in 2026 and fully from 2027.

On the disposal side, we completed EUR 31 million mostly properties in a non-core location and condominium. Regarding new potential acquisitions, we continue to be highly selective in Germany with FFO accretive as a key condition. We do expect the pipeline to improve gradually in the midterm as fund continue portfolio cleanups and assets come to market through mortgage banking system.

In London, we view the landscape as potentially more attractive as shorter finance maturities of 3 to 5 years compared to more than 10 years in Germany, are creating refinance pressure, particularly among smaller developers opening entry points into high-quality, well-located assets at compelling pricing. As always, we do not set fixed disposal or acquisition volume target, so the strategy remains opportunistic and guided by pricing, return, asset quality and reinvestment potential.

On Slide 9, we show the continued strong point of our operational performance, supported by positive market fundamentals, as we mentioned before. As of June 2026, our in-place rent increased to EUR 9.8 per square meter. On a like-for-like basis, total net rent growth was 3.3%, driven mainly by in-place rental growth, split between 2.1% from re-letting and 1.2% from indexation. Vacancy remained low at 3.7%. As always, we know that this growth comes at low CapEx and high accretion to cash flow, and it's not the product of significant modernization projects or new constructions.

Rental growth in Germany was recorded across all our key locations with the highest rental growth increase recorded in Mannheim, Kaiserslautern, Frankfurt and Mainz, as well as in Dresden and Leipzig. We also continue to see strong growth in London with over 3% rental like-for-like with vacancy there at structurally low level just above 2%. Going forward, we expect London rental growth to align more closely with our German operations.

Our annualized net rents reached to EUR 442 million compared with an estimated market rental value of EUR 530 million, indicating upside potential of 20%. We expect to unlock this mostly through revisions upon re-letting with additional upside as market rents continue to trend upwards. A supportive operating environment and this upside to market potential are expected to support like-for-like rental growth over 3% for the foreseeable future in line with our 2026 guidance.

Continuing with Slide 10, we present an update on the valuation of our portfolio. A full portfolio valuation was conducted by external independent valuers as part of our H1 2026 report. We recorded a slight positive like-for-like value change of 0.2%, net of CapEx driven mostly by continued solid operational performance, supported by sufficient transaction activity. Including CapEx, the value like-for-like amount to 0.6%, this is reflected in the stable valuation parameters compared to December 2025. As of June 2026, the portfolio average rent factor stood at 20.4x compared to 20.5x at the end of 2025, with average discount and capitalization rates broadly stable. Average value per square meter was EUR 2,353, which remained conservative and well below replacement costs.

Looking historically at the portfolio on a like-for-like basis, we have seen lower valuation volatility with moderate increase in times of growth and moderate decline in times of pressure as movement have been driven primarily by rental and operational growth rather than market-driven revaluations. Looking ahead, our base case is for yields to remain broadly stable with value development driven primarily by organic operating performance.

Slide 11 illustrates how we constantly drive our in-house platform efficiently through innovations. Over more than a decade, we have progressively built out our digital and operational capabilities from digital tenant service and centralized in-house service center through standardized digital workforce and today, to AI-supported, human-led processes deployed across our operations. Looking ahead, we will continue scaling implementation and focus on emerging innovations to drive further efficiency gains.

This is already reflected in our tenants metrics. The share of tenant requests handled through our property management app rose to over 17% in the second quarter of 2026, supported by strong app adoption. Around 95% of the handover protocols are now completed digitally, and we are seeing high rates of digital move-ins and moves-out. Constant investment in our digital and AI capabilities improves tenant experience, build up operational resilience and increase cost efficiency across the platform, keeping our operating costs low and supporting our high EBITDA margin of around 80%.

Now please let me hand over to Idan to present the financial results.

Thanks, Refael. On Slide 13, we present our P&L results for the first half of 2026. Net rental income amounted to EUR 219 million, an increase of 3%, driven primarily by strong like-for-like rental growth of 3.3%, supported by acquisitions completed during the period and partially offset by the impact of disposals in 2026 and from previous periods. Adjusted EBITDA increased by 3% to EUR 174 million, in line with the rental growth and broadly stable net operating expenses. Finance expenses rose to EUR 37 million, reflecting the full period cost of debt raised in pervious periods, which have now full effect in this period. In the first half of 2026, we conducted a full revaluation of the portfolio, recording a positive like-for-like value change of 0.2%, this uplift was driven by our continued strong operational performance rather than by yield compression. This resulted in EUR 56 million of property revaluations and capital gains.

We recorded a profit of EUR 129 million for the first half of 2026 compared to EUR 210 million in H1 2025, with a decrease primarily reflecting a lower revaluation result comparing to the previous period and higher finance expenses, partially offset by continued strong operational performance of the portfolio. Basic earnings per share for the period came in at EUR 0.49 compared to EUR 0.92 in H1 2025.

Turning to Slide 14, our FFO I and II results. FFO I came in at EUR 91 million in the first half of 2026, down from EUR 95 million in the same period last year. The main drivers of the decline were higher perpetual notes attribution and higher finance expenses, along with higher contribution to minorities. Together, this more than offset the growth we saw in the adjusted EBITDA. FFO I per share stood at EUR 0.52 compared to EUR 0.54 in H1 2025. The higher perpetual note attribution comes from the refinancing we completed in May when we have issued EUR 600 million of new perpetual notes at a coupon of 5.25% and at the same time, redeemed EUR 603 million of notes that carried a coupon of 1.5%.

FFO II amounted to EUR 99 million, lower compared to EUR 146 million a year ago as a result of a much lower level of disposal in H1 2026 than in H1 2025, along with a lower FFO I. Over the period, we disposed of EUR 31 million of assets against around EUR 131 million a year earlier. The sales during the period were completed well above book value at a premium of 13% and at a margin of 34% over total cost, including CapEx.

On Slide 15, we present an update on our maintenance and CapEx activities. Our focus remains on enhancing the overall asset quality of the portfolio and supporting rental income growth. In H1 2026, total investment amounted to EUR 13.3 per square meter, stable compared to H1 last year despite inflation of around 3% over the period. Of this, EUR 10.3 per square meter relates to repositioning CapEx and EUR 3 per square meter to maintenance. Additionally, we invested EUR 15 million in pre-letting modification, which includes the creation of new rental space and other measures supporting additional rental income in upcoming periods. We also invested a targeted EUR 2 million in modernization projects. These are aimed at upgrades such as balconies, elevators and technical infrastructure to support higher rental levels.

Investments in energy efficiency and CO2 reduction, such as window replacements and heating system upgrades are allocated based on the specific nature and scope of each project. AFFO for H1 2026 was EUR 52 million compared to EUR 54 million in H1 2025, lower mainly due to the lower FFO I.

On Slide 16, we present a case study that shows how our sustainability CapEx is translating into measurable improvements in asset quality. This is a building in Berlin, where we replaced a gas-fired heating system with a hybrid air-source heat pump supported by a buffer tank and the gas backup for peak demand. The works were carried as part of a larger investment program and quality enhancement. And therefore, it made sense here to also increase the energy efficiency. The impact of this single measure was significant. The asset's energy performance certificate improved from an E rating to a C with the final energy demand reduced by around 45%, moving the buildings from below to above the German stock average. The renewable share now sits at over 65%, and the system is in line with the new GModG requirements.

We are already working to improve the assets with the lowest energy scores irrespective of the regulatory time line. The European framework, the EPBD has now been transported into German law through the GModG and imposed no renovation obligation on residential assets. We see energy efficiency investments as a driver of asset quality, lower running costs for our tenants and reduce regulatory and CO2-related risk over the longer term. As the chart on the right shows, this continued work keeps our portfolio well ahead of the German average, both for multifamily and total residential stock.

On Slide 17, we present the update on our EPRA NAV metrics. EPRA NRV per share increased by 1% to EUR 29.2. EPRA NTA per share increased by 1% to EUR 25.8. EPRA NDV per share increased by 1% to EUR 23.6. The increase across our NAV metrics was driven mainly by the strong operational performance and positive property revaluation recorded in the period and partially offset by the provision made for the dividend paid in Q3.

On Slide 19, we turn to our professional -- financial profile. Our LTV ratio stood at 33% as of June 2026, up from 31% at year-end 2025. The increase was mainly the result of acquisitions and investments carried out during the period, partially offset by the positive revaluations and operational cash flows generated over the half year. The EPRA LTV ratio, which treats perpetual notes as debt stood at 45%. We remain committed to maintaining a conservative financial profile, which is a core pillar of our strategy and a key driver of long-term success. Our leverage remains low, giving us the flexibility to capture external growth, which we expect to continue unlocking primarily through accretive capital recycling.

The interest coverage ratio stands at 4.7x. And in addition, EUR 6.6 billion or 71% of the portfolio remains unencumbered, ensuring strong access to bank financing. As of June 2026, cash and liquid assets totaled EUR 1.4 billion. Our cost of debt remained low at 2.1% with an average debt maturity of 3.8 years or 5.2 years, adjusting for debt already covered by our strong liquidity position.

On Slide 20, we bring together the steps we have taken to solidify our financial position. Through proactive management and full refinancing of our perpetual notes, we are in a strong and conservative position that has allowed us to resume our dividend. On the perpetual notes, we have now refinanced the entire stack. In the second quarter, we issued EUR 600 million of new notes at a coupon of 5.25%, following the transaction we executed in the fourth quarter of last year and completed the tender offer on the notes with the first call date this year, which have been now bought back or redeemed. Our perpetual notes have equity content under S&P methodology. With this, the next call date across the stack is only in 2031, giving us greater clarity on this part of our capital structure and limiting our exposure to market volatility.

Following approval at our Annual General Meeting on the 24th of June, we paid a dividend of EUR 0.30 per share for the 2025 financial year in July. Going forward, we have updated our dividend policy to 50% of FFO I per share, which we view as the balance between an attractive return for shareholders and returning the headroom to fund accretive growth while keeping our balance sheet conservative.

And with this, allow me to hand over to Christian to conclude the presentation.

Thank you, Idan. Allow me to point out that in the appendix, you will find more detail on our strategy, portfolio distribution, ESG, financial policy, analyst coverage and more.

On Slide 22, I would like to confirm our FFO guidance for 2026. Our results for the first half were in line with our expectations and put us in a good position to confirm our guidance. For the third quarter -- from the third quarter onwards, we will have the full impact of the new perpetual notes, which will have an offsetting effect on the FFO I growth. Accordingly, we continue to expect FFO I in the range of EUR 175 million to EUR 185 million, while internal and external growth is expected to support increasing EBITDA more than offsetting the impact of last year's disposals, FFO I is expected to be slightly lower in 2026 than in 2025.

For 2026, our guidance is like-for-like rental growth of around 3.5%. FFO I in the range of EUR 175 million to EUR 185 million, translating to FFO I per share of EUR 0.99 to EUR 1.05, the dividend in the range of EUR 0.50 to EUR 0.53 following our updated dividend policy. And as always, we aim to maintain our strong balance sheet and keep LTV below our 45% internal limit.

Thank you for your attention, and allow me now to move to Q&A.

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

What is your view on the geopolitical situation and its impact on GCP?

The geopolitical developments continue to create volatility in the markets. But overall, we see the potential impact of Grand City Properties as manageable. Our portfolio locations benefit from strong fundamentals, and we do not observe a material impact on our operations. We continue to monitor capital markets and interest rates closely. However, we are in a solid financial position as a result of the measures we have taken in recent years. We hold EUR 1.4 billion in cash and liquid assets alongside low leverage and a large share of unencumbered assets.

In addition, following the refinancing completed in the second quarter, our perpetual notes stack is now fully refinanced with the next call date only in 2031, giving us further protection against market volatility. Despite the increased uncertainty, our bond spreads have remained mostly stable and both capital and transaction markets have stayed open with strong investor demand. This gives us comfort that the current environment is not creating any significant disruption to our access to liquidity or to our business.

Like-for-like rental growth stood at 3.3% in the first half. What is driving it? And how do you see your performance developing going forward?

The like-for-like rental growth is in line with the level we have seen in the recent period and in line with our guidance of approximately 3.5%. Small fluctuations from period to period are normal and it's impacted by several factors such as timing of the rent increases as well as minor fluctuations in occupancy, which are a normal part of our business.

For the first half of 2026, we recorded total like-for-like rental growth of 3.3% with re-letting contributing 2.1% and indexation, 1.2%. Re-letting is a bigger driver as it allows us to capture the revisionary potential of the portfolio faster. We are seeing references rents continue to move in our favor with the 2026 Berlin Mietspiegel period set nearly 7% above the prior schedule, which increased the potential we captured on re-letting.

In London, rental growth has coverage throughout our German level at just over 3%, consistent with what we guided as vacancy there settled at structural just above 2%. Going forward, we expect to continue unlocking the revisionary potential gradually through steady indexation and stronger re-letting supported by those fundamentals keeping us well positioned to deliver on our full year guidance.

How do you assess the valuation results for the period? And what is your outlook for the coming periods? How do you view the transaction market?

As part of our H1 report, we conducted a full external revaluation of the portfolio by independent valuers and the result was 0.2% positive like-for-like, net of CapEx and 0.6%, including CapEx. This was supported by the continued strong operational performance of the portfolio, and there were no large movements in yields. Accordingly, our valuation parameters remained broadly stable compared to December with the portfolio yield stable at 4.9% and the discount and capitalization rates broadly unchanged. We continue to hold the view that yields will remain broadly stable with gradual movement, and this is supported by market.

Looking ahead, our base case is for organic value growth to be correlated with the operational performance of the portfolio with yields remaining broadly stable. And in case of yield expansion, we expect this to be more than offset by operational growth. At the same time, we do not rule out selective yield compression over the longer term, especially in the scenario where financing rates come down, supported by strong demand, low supply and high replacement costs. But with the recent moves in the capital markets, we see this more as a longer-term prospect than a driver for the coming period.

The transaction market has slowed down in the past few months following the volatility in the market. However, transactions have not been fully muted, and we see transactions in the European market being closed, including several larger deals. We do note that the summer months are usually quiet, and we will hopefully see the transaction volumes increase after the summer and towards Q4, hopefully also supported by positive development on the geopolitical front.

How do you view your leverage position? And do you expect it to move materially?

Our leverage remains conservative with an LTV at 33% as of June, higher compared to December as a result of investments, which we see long-term supportive. EPRA LTV, which treats perpetual notes as debt remained stable at 45%. Our strong financial position allowed us to resume the distribution of dividend. We have best-in-class ICR and net to debt -- and net debt-to-EBITDA ratios, which is also a reflection of our conservative financial approach. Preserving a conservative financial profile remains a core pillar of our strategy. While our metrics give us ample headroom to support growth, we expect to fund that growth through capital recycling and our current liquidity. So we anticipate leverage staying low and below our Board limit.

How do you evaluate your strategy on acquisitions and disposals in the current market environment? Where is the deal pipeline more active?

Regarding acquisition and disposal, our approach is unchanged, and we stick to disciplined capital recycling and highly selective acquisitions with FFO accretion as the main principle. We do not set fixed volume target for the simple reason that we do not want to find ourselves transacting just for the sake of meeting the target and not for creating value. As presented in the first half of 2026, we completed around EUR 75 million of acquisition in Germany alongside the partial takeover of EUR 100 million in London, new build portfolio at attractive factor, while completing around EUR 30 million of disposal. The remainder of the London acquisition was closed recently after reporting period, and we expect the full impact from the new acquisition to be reflected from 2027 onwards.

Have you seen changes in your financing conditions in recent months?

On financing conditions, access to capital markets remains strong despite market volatility, with spreads on our bonds broadly stable at low levels, similar to where they were at the beginning of the year. Given our capital market access, combined with our large pool of unencumbered assets and established bank relationships, we view ourselves in a solid position to access funds at attractive pricing.

We have no near-term refinancing pressure. Our liquidity comfortably covers bond maturities up until the end of 2027. We expect to come to the market opportunistically, for instance, as part of the liability management exercise if conditions support it.

How much are your perpetual coupon expenses this and next year?

Having fully refinanced the perpetual note stack in the second quarter, the perpetual notes attribution will be around EUR 53 million for 2026, in line with our guidance expectation, and then normalize to a full year attribution of EUR 60 million from 2027 onwards. We have been proactive in managing our perpetual notes, with the next call date only in 2031. We have now increased clarity regarding this component of our capital structure.

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

[Operator Instructions] The first question comes from Kai Klose from Berenberg.

I've got two questions. The first one, could you indicate what is the annualized rent of this year's acquisitions? You mentioned a couple of -- some assets in London might come into the portfolio in installments or in stages. Could you indicate what is the, let's say, total annualized rents of these acquisitions in London and Germany? And secondly, what is currently the exposure in Germany into nonresidential, like [ towns ]?

So we acquired EUR 130 million assets in the first half of this year. We also have another EUR 50 million coming in Q3, so we completed that as well after the reporting period. So it's a total of EUR 180 million. We acquired around the multiple of 13, 14 multiple blended on the EUR 180 million. So once they fully contribute, we'll do EUR 180 million divided by 14. I think that's around EUR 12 million or so, but I'll have to calculate that afterwards, but 14 multiples what we had.

And yes, it will take a bit of time for the London acquisitions. As you know, we bought properties that are turnkey development, but we have to relet them in full. And we hope to see already in the next few months, full operation there, and it will be implemented in our P&L and results. Thank you, next question.

No, sorry. What was it, nonresi?

Okay. So we're not looking to increase exposure to nonresi, so no change here. We focus on nonresidential as we've done before. And hopefully, we continue acquiring assets with similar characteristics that we've done so far.

The next question comes from Ellis Acklin from First Berlin.

I have a question regarding the disposal economics, which seemed to take a material uptick in Q2 versus the first quarter. It looks like you booked a 13% premium and a much higher margin. Maybe you could give some color on what that's attributed to, if it's based on the particular assets you sold? Or is there some change in buyer appetite or achievable pricing? Just some further color on that would be appreciated.

Yes. Thank you, Ellis, for the question. Yes, we sold just over EUR 30 million in the second half of 2026. It came at above book value at 13%, 1-3. But these were mainly condos and noncore, but mainly condos. So I wouldn't say it's not reflected the full portfolio, but we do see still selling book value and above, similar as we did in the past 2 years. So we see that the momentum stay as is.

The next question comes from Neeraj Kumar from Barclays.

Two questions from my side. Firstly, with regards to Aroundtown stake in your company. I was under the impression that it was 81.5% in April, and now it seems to be at 83%. So just trying to understand if Aroundtown bought more shares of your company in the secondary market or there was something else driving this change?

And second question is with regards to your plans to access the bond market. I mean, I see you have EUR 1.4 billion of cash and liquid assets, but that is more or less in line with your debt maturities until February 2027. So just trying to understand if you plan to run with a bigger cash balance going forward as well? Or do you plan to repay the debt?

Thank you, Neeraj, for your questions. First on Aroundtown stake in Grand City. Yes, Aroundtown has increased their stake from 81.5% to 83%. I believe they bought in the market. I mean, if you have questions on that, you maybe should refer to Aroundtown, but Aroundtown has indicated when they did the exchange to reach 89%. They had good acceptance reading 81.5%. And since then, they probably bought in the market to reach 83%.

As to your second question on maturities and cash balances, so we have EUR 1.4 billion of cash as we stand end of June. Already, we did a big repayment of debt on the 3rd of August. We repaid over EUR 400 million of bonds. We have EUR 100 million -- more than EUR 100 million coming in September, and we have also around EUR 500 million coming in Q1.

From that, given all equal, we have still around EUR 300 million for the maturities of 2028. But we won't wait for 2028 to refinance it. We're also looking at the 2029s and the 2030s that are coming at a higher coupon, higher than the marginal cost that we have now. So it would make sense if the conditions in the market allow it to go and do a liability management ahead of time. But we have time. We have 1.5 years to prepare for this. And hopefully, we see the condition's right and we go ahead.

The next question comes from Manuel Martin from ODDO BHF.

Two questions from my side, please. The first one is maybe you could give us some more background information on the higher LTV? It increased a bit. In other words, where did the money go to cause the increasing LTV? That would be the first question.

Second question, a bit on the market. It seems that in Germany, resi prices and resi rents are losing a bit momentum. Still increasing, but decelerating apparently. Maybe you can give us your view on that or maybe you can prove me wrong? These are the two questions, please.

Thank you, Manuel. First on the LTV. So LTV went up slightly due to investments and acquisitions resulted in increasing our LTV to 33%, still at a very low level.

As to the trends we see in the market, look, we see rent growth being very strong. We showed the dynamics we see in Germany as well as London. We presented at the presentation, we see very good demand, very limited supply, and we don't expect that to change. If anything, we expect to continue seeing the demand getting stronger and supply getting lesser.

As to prices, look, I mean, our valuations are in line with our expectations for H1. We'll see where it goes forward, but we believe rental like-for-like growth will more than offset what we see in the macro now. So we see yields remain stable. If we continue and see volatility on the macro level, could be offset more, offset less if we see now, stability. And hopefully, on the geopolitical level, we could start seeing also further -- more of the like-for-like rental growth driving valuation growth.

Thank you very much. Those were the questions for today. Thank you very much for your participation and for your questions, and we look forward to meeting you in person in any one of the future events that take place. And we wish you a very good day. And hopefully, you have a chance to see the eclipse tonight. Bye-bye.

Good afternoon, and thank you for joining us for Grand City's results call of the year of 2025. You can view this presentation on Grand City's website, either on the Home section or under Financial Reports of the Investor Relations section.

With me today will be Chairman and Director, Christian Windfuhr; CEO, Refael Zamir; CFO, Idan Hadad; and Chief of Capital Markets Officer, Michael Bar-Yosef. [Operator Instructions] But please feel free to send us your questions via e-mail, also during the presentation. The e-mail address is [email protected]. With that, I would like to hand you over to Christian to start with the presentation.

Thank you very much, and welcome to our full year 2025 results presentation. We have come out a few days earlier with our results on the back of Aroundtown's offer to GCP shareholders. We believe that the offer is enabling GCP shareholders to take part in a larger and more dynamic company with very good growth prospects, enabling the participation in the long-term value creation of a larger and more diversified real estate platform.

With that, let me turn to our results. 2025 was a year shaped by geopolitical uncertainty, but the European economy demonstrated notable resilience. Interest rates continue to decline and have now stabilized, contributing to a more constructive backdrop for real estate markets. In Germany, the economic outlook improved as a result of the government's stimulus package.

We could also see that transactions activity began to pick up further over the course of the year. We still note, however, that the recovery remains asymmetric. While well-capitalized players benefit from improved conditions, many smaller participants continue to face financial pressure. This environment aligned well with our strategy, enabling us to recycle capital efficiently and capture opportunities that arose from ongoing market dislocations.

Operationally, 2025 was another strong year for GCP. We reached our full year guidance, recording like-for-like rental growth of 3.5% and reducing vacancy to a historic low of 3.6%. The portfolio continued to demonstrate its resilience, supported by a robust demand and supply -- a robust demand and structurally low supply.

We recorded a positive like-for-like revaluation of 3.2%, reinforcing the upward trend in values that began in the second half of 2024. This supported further the decrease in our leverage with LTV down 2 percentage points compared to the end of 2024.

We continued with our proactive approach towards managing our fiscal profile, while we active -- we were active in capital markets in December, tapping both our Series H senior bonds and executing a perpetual note transaction through which we were able to take initial steps towards refinancing the perpetual notes with first call date in 2026, while also mitigating part of the expected increase in perpetual note coupons. These actions reflect our ongoing commitment to prudent financial management and long-term value creation. More details of these topics will be presented in the following slides.

And with this, I would like to hand over to Refael.

Thank you, Christian, and welcome also from my side. On Slide 3, we present a summary of our key financial results for the full year 2025. We continue to record strong operational performance with net rental income and adjusted EBITDA both increasing by 1% year-over-year. FFO I remained stable as operational growth offset the impact of higher financing costs. Our balance sheet became stronger further in 2025 with the LTV decreasing to 31% compared to 33% in December 2024, supported by disciplined capital allocation and continued deleveraging effort as well as positive valuation recorded in the period.

Our interest coverage ratio reached to 5.2x and net debt to EBITDA to 8.2x, remaining strong and reflecting our solid operational performance. EPRA NTA increased in 2025, driven mainly by property revaluation and continued operational growth. We will provide more details on valuation in the dedicated slides later in the presentation. Throughout the year, we remained proactive in our financing activities. We issued EUR 250 million in new bonds and repaid EUR 260 million of existing bonds, allowing us to further extend our debt maturity profile. In addition, we successfully refinanced EUR 600 million of perpetual notes. We will expand on those developments in the following slides.

Slide 4 highlights the continued strength of our operational performance in 2025. We recorded a sustainable solid like-for-like rental growth of 3.5% as of December 2025, supported by a 3.3% increase in in-place rent and an additional 0.2% increase in occupancy. Accordingly, vacancy decreased further and reached to a new historic low of 3.6%, reflecting sustained demand across our location and the effectiveness of our asset management initiatives. Our reversionary potential remained high at 21%, supported by strong demand and supply fundamentals in the key metropolitan area of our portfolio.

Those dynamics position us to gradually unlock additional rental upside in the coming periods. Adjusted EBITDA continued to grow as an increase in rental income offset impact of net disposals. In the coming period, we expect positive impact from acquisitions executed primarily through disciplined capital recycling to support both rental and EBITDA growth. Those operational trends reinforce the strength of our platforms and provide a solid base for continued internal and external growth.

On Slide 5, we highlighted that continued positive momentum across our portfolio reflected in both operational and valuation metrics. Annualized net rent increased to EUR 429 million as of December 2025 compared to EUR 413 million as of year-end 2024, driven mainly by strong like-for-like rental growth of 3.5%. Rental growth was driven by a strong increase in in-place rent and a further reduction in vacancy, which declined to 3.6%, marking another historical low for our portfolio. Our portfolio value increased to EUR 8.9 billion, up from EUR 8.6 billion last year.

We recorded a like-for-like revaluation gain of 3.2% for the year, excluding CapEx. This reflects the resilience of our assets and the contribution from the strong operational performance. We will go into more details on the valuation parameters on Slide 16. Rental yield remained stable at 4.9%, while average value per square meter increased to EUR 2,335 compared to EUR 2,203 at the end of the year 2024. In 2025, we continue executing our capital recycling strategy, which we will discuss in more detail in the next slide. Overall, our actions throughout the year reflect our ability to generate sustainable value across the portfolio.

Slide 6 highlights our continued success in executing our capital recycling strategy throughout 2025. We completed approximately EUR 340 million of disposals during the year at a rent factor of around 20, equivalent to a yield of 5.1%. Those transactions were spread across several locations, primarily in Germany and carried out at around book value, resulting in a mere 1% capital loss in the year-end and generating strong return over total cost resulting to FFO II of EUR 350 million in 2025 and compared to EUR 205 million in 2024.

On the acquisition side, we deployed around EUR 300 million at an attractive rent factor of around 13x or 7.7% yield. Those acquisitions were mainly in London and focused on high-quality assets, including recently built or converted properties. Over EUR 100 million of those acquisitions are expected to close in the coming periods, and our broad and established deal-sourcing network continue to give us access to off-market opportunities at attractive pricing, allowing us to reinvest disposal proceeds into high-yielding assets with strong fundamentals.

We continue sourcing attractive deals also in 2026 and acquired approximately EUR 75 million, which are expected to be completed in the next month. Overall, the disciplined execution of disposal, reinvestment throughout the year demonstrate the effectiveness of our strategy, maintaining leverage stable while continuously upgrading the portfolio and enhance long-term cash flow generation.

In line with this, Slide 7 highlights again how GCP strategy has continued to adapt to market conditions while consistently creating value. In 2025, we have continued to successfully execute our strategy, reducing leverage as reflecting in our LTV of 31% while at the same time, increasing our annualized rent to EUR 429 million.

Over the years, we have shifted from scaling through disciplined acquisitions to optimization the portfolio and strengthen the balance sheet. Looking ahead, we are well positioned to capture both internal and external growth. Internally, significant value remain embedded in the portfolio through a reversionary potential of 21% and continued operational improvements.

Externally, our strong sourcing network support both strategic disposals and target acquisitions with accretive deals executed in 2025 and 2026, supporting future growth. Overall, our strategy remains defined by disciplined growth, balancing opportunity with conservative financial approach and creating value across market cycles.

On Slide 8, we present an overview of the successful execution of our perpetual note transaction, which further improved our capital structure and reduced market risk. In last December, we issued EUR 600 million of new perpetual notes at a coupon of 4.75%, while simultaneously buying back the same amount. Around EUR 500 million of those were notes with materially higher coupon levels, resulting in an annual coupon saving of around EUR 7 million.

In addition to the EUR 500 million, we repurchased EUR 100 million of the 1.5% perpetual notes that have their first call date in 2026, proactively targeting the refinancing of the notes and reducing potential negative impact from the market volatility.

Following those actions, the overall perpetual notes balance remained at EUR 1.2 billion, while the average coupon decreased from 3.4% to 3.1%, with the reduction allowing us to partially offset the expected increase from the full refinancing of 2026 perpetual notes in the coming months. Furthermore, this transaction demonstrates the strong investor demand, our proactive approach to financing management and our commitment to maintain a conservative financial profile.

The refinancing measures strengthen our balance sheet resilience and were supportive of our S&P credit metrics. We will continue to manage our capital structure with the same discipline as market conditions progress.

On Slide 9, we provide an update on our vendor loan activities, which have proven to be an effective and value-accretive component of our disposal strategy. Since 2020, we have disposed of approximately EUR 2.2 billion of assets and provided around EUR 145 million of vendor loans, which were linked to around EUR 245 million of disposal transaction.

At that time of disposal, we received the sale proceeds in cash in the amount of around EUR 100 million, while for the remaining portion, we gave a short-term loan fully secured directly against the asset. As of December 2025, the loan were corrected in full and the entire vendor loan balance has now been repaid. Vendor loans have not only supported the successful execution of disposal, especially in period of remit buyer liquidity and longer financing process, but have done so in a very -- in a way that benefit GCP.

Overall, our vendor loans have been proven to be a reliable and accretive tool, supporting disposal activity, safeguarding values and enhancing the flexibility of our capital recycling strategy. The vendor loan structure reflects on the strong reputation of the company as a deal maker, facilitating transactions successfully also when the market is challenging.

On Slide 10, we present an overview of our ESG rating across several leading agencies. Both S&P and Sustainalytics upgraded our assessment, placing us with the top 9 and top 4 of our respective real estate peer group. ISS also improved our rating, confirming prime status and positioning us within the top 10% of the sector. We are also proud to announce that EPRA once again award us Gold for our financial and sustainability reporting for the ninth consecutive year. Those awards reflect our continued progress in supporting our ESG performance, the robustness and the transparency of our reporting and the effectiveness of our sustainability framework.

Moving to Slide 12 and 13, we provide some short highlights into the German and London residential market, where fundamentals remain very strong. In Germany, new construction activity continues to be quiet, particularly in metropolitan areas.

Permitting volumes have remained low and continue to be well below historical levels, signaling continued supply constraints. At the same time, demand remained robust, putting upward pressure on rental levels as it can be seen in the positive result of the operation, mainly in the biggest city in Germany.

As a result, supply shortages are expected to persist and market vacancy levels should remain low over the medium term. Those dynamics continue to support rental growth and reinforce the resilience of our portfolio, where we recorded a new historical vacancy low.

On Slide 13, we can see that the fundamental in the London residential market also remained robust. Rental growth continued to be strong, supported by a more flexible regulatory environment that allows quicker alignment of the rents with market revenue. Supply conditions in London remain tight. Planning application and approval have declined materially and construction activity is running well below the level required to meet structural demand. As a result, we expect continued supply constraint in the medium to long term.

Those developments reinforce the strength of our London portfolio, and we expect that solid fundamentals will continue supporting rental growth and the strong operational momentum going forward. Within London itself, we have seen variance in trends with the trends in central and higher price growth being weak, whereas the more affordable boroughs has been strong growth, where the vast majority of our portfolio is located.

Turning to Slide 14, we provide an overview of our portfolio. As of the end of December, our investment property portfolio totaled EUR 8.9 billion. Berlin remained our largest location at 23% of the portfolio, followed by London at 21%, NRW at 19% and Dresden/Leipzig/Halle at 14%, with the remainder spread across other strong metropolitan areas.

Slide 15 highlights the solid operational dynamic of the portfolio, supported by both in-house property management and market fundamentals. In-place rent continued to grow and reached EUR 9.7 per square meter in December 2025. This corresponds to a compounded annual growth rate of 4.6% since 2021 and a 5% increase compared with December 2024. Total like-for-like rental growth was 3.5% -- 3.6% in Germany and over 3% in London. The portfolio has an annualized net rent of EUR 429 million compared with an estimate market rental value of EUR 519 million. The 21% gap indicates on one hand, the remaining upside that can be captured through re-letting and operational improvement and on the other hand, the limited downside of the portfolio. Those trends reflect steady progress in aligning existing rent with the market condition while maintaining consistently high occupancy rates.

On Slide 16, we provide an update on the valuation of our portfolio. The year-end valuation was carried out by independent qualified internationally recognized valuers, who performed a full revaluation of all our portfolio. For 2025, we recorded a positive like-for-like value revaluation of 3.2% with valuation driven by rental growth, while yield as well as discounts and cap rates remained stable compared to 2024. As of December 2025, the average rent factor was 20.5x, corresponding to a yield of 4.9%, same as the end of 2024. The average value per square meter increased to EUR 2,335, which remains conservative and well below the estimated replacement cost. When reviewing the portfolio on a like-for-like basis and adjusting for the impact of transaction over the years, the current yields are at the same level as in 2018, which was 8 years ago. This stability reflects the conservative nature of our valuation. Historically, valuation movements have been relatively modest with increase driven primarily by rental and operational performance rather than by market-driven revaluation.

Slide 17 provides an overview of our diversification within the broader residential segment. We operate in a senior homes and short stay or serviced apartment, which offered different lifestyle and living concept, which supports additional income stability, exposure to different demand drivers while capturing higher rents. Senior homes offered diversification and stable income supported by strong market fundamentals.

With Berlin being our largest location within this asset class, Senior homes account for 6.1% of the total rental income. Those properties are operated by experienced third-party operators under fixed long-term rental contract. Short stay and serviced apartment generate additional value through long-term fixed lease and management agreement with established operators. This category contributes 1.8% of the GCP total rental income.

Together, those 2 segments illustrate how the company extends its income base within the leading sector, balancing the business with complementary concepts that have higher return and exposure to different customer groups. Slide 18 presents our high-quality London portfolio, which accounts for 21% of the total portfolio. The asset benefit from strong locations, excellent transport connectivity and high demand.

This is reflected in a strong operational performance with occupancy at 97% as of December 2025. London low regulation environment also support faster revisions to increasing market rental levels and the market continued to show solid fundamentals that enhance both income growth and diversification. A component of the portfolio is the social tenant and HMO segment, which provide additional cash flow stability.

Those units are leased to a local operator with extensive experience in the sector and strong relationship with over 60 local authorities, charities and housing associations with rents generally linked to inflation. So social tenants represent 9% of the total rental income. Overall, the London portfolio combines strong market fundamentals, resilient occupancy and diversified income streams, making it an important contributor to the group performance.

Slide 19 gives an overview of how GCP drives innovation across the organization by both investing and adopting real estate technologies at scale. Our approach combines access to venture-backed solution with the ability to adopt new tools directly into our operation, helping us to streamline processes, improve efficiencies and support our ESG objectives.

Two of such success stories are Enter and VARM. Enter support us with data-driven energy efficiency services, including audits, contractor sourcing and renovation planning. Their work has enabled targeting improvement measures across the portfolio and contributed to increasing the share of regulatory-ready assets from 78% to 84%. VARM provides tech-enabled insulation solution designed to reduce time to installation and improved energy performance.

By using their cloud-based installation model, we benefit from faster execution, higher insulation impact and more efficient sourcing and delivery processes. Together, those partnerships illustrated how tech solution can result in more efficient enhancement and our operational performance and support long-term value creation. Continuing from the innovation example on the previous slide, Slide #20 shows how those initiatives are already translating into measurable improvement in the quality of our portfolio. The work supported by Enter and VARM, together with our broader energy efficiency program has helped us increase the share of regulation-ready assets from 78% in 2024 to 84% in 2025. This represents a 6% year-on-year improvement.

Our portfolio is now positioned well ahead of the German average, both multifamily and for a total residential stock. This stronger EPC profile directly lower regulatory risk and provide greater resilience as energy efficiency rules continue to tighten. We have also made significant progress in CO2 emissions reduction, and this positions us well to reach our emission reduction target well before 2030, decreasing potential risk related to CO2 tax.

The progress achieved in 2025 reflects both ongoing improvement measures and the benefit of early technology-driven intervention. With this foundation, we expect to continue evolving the quality of the portfolio in the coming years. Thank you. And now I will hand over to Idan.

Thanks very much, Refael. On Slide 22, we present our P&L results for 2025. Net rental income amounted to EUR 429 million, primarily driven by strong like-for-like rental growth and acquisitions completed during the period, partially offset by the impact of net disposals. Adjusted EBITDA increased by 1% to EUR 340 million. The company recorded a one-off deferred tax income in 2025.

This was the result of the positive impact related to changes in the income tax in Germany, effective from January 2028, where the rate is gradually reduced from currently 15% to 10% by 2032. As a result of which the deferred tax impact of tax positive revaluations has reduced, resulting in a one-off deferred tax income in the current period. This positive impact was partially offset by the deferred tax expenses connected to the positive revaluation result in the year.

We recorded a profit of EUR 588 million in 2025 compared to a profit of EUR 242 million in 2024. This was primarily due to the strong operational results as well as positive portfolio revaluation recorded in 2025 and the one-off deferred tax income, partially offset by higher finance expenses and other financial results. Basic earnings per share for the period came in at EUR 2.67.

Turning to Slide 23, our FFO I and II results. In 2025, FFO I amounted to EUR 188 million, remaining stable, primarily as a result of higher adjusted EBITDA and slightly lower perpetual notes attribution, which were offset by higher finance expenses. FFO I per share was EUR 1.06, slightly lower compared to EUR 1.08 in 2024 due to slightly higher average number of shares outstanding. FFO II came in at EUR 351 million, higher than EUR 205 million in 2024, driven by higher profit margins on disposed properties combined with a larger volume of disposals.

On Slide 24, we present an update on our maintenance and CapEx activities. Our focus remains on enhancing the overall asset quality of the portfolio. Total investments amounted to EUR 26.8 per square meter compared with EUR 25.8 per square meter in 2024. We have seen a slight 4% increase in the investment per square meter, which is the result of a slight cost inflation as well as a large investment program.

Of this amount, EUR 20.9 per square meter relates to repositioning CapEx and EUR 5.9 per square meter to maintenance. We invested EUR 27 million in pre-letting modifications. These investments include the creation of new rental space and other measures that fall outside repositioning CapEx and are intend to support additional rental income in upcoming periods.

In 2025, we also invested EUR 3.6 million in modernization projects. These targeted upgrades are designed to improve the quality and appeal of our properties, helping to support higher rental levels. Examples include adding balconies, installing elevators and upgrading technical infrastructure to ensure reliable power, water and heating supply.

Investments aimed to improving energy efficiency and reducing CO2 emissions, such as window replacements and heating system upgrades are allocated based on the specific nature and scope of each project. Adjusted FFO for the period was EUR 105 million, broadly unchanged from the EUR 105 million recorded in 2024.

On Slide 25, we present an update on our EPRA NAV metrics. EPRA NRV per share increased by 4% to EUR 28.9. EPRA NTA per share increased by 5% to EUR 25.6. EPRA NAV per share increased by 9% to EUR 23.3. The increase in EPRA NAV metrics was mainly driven by strong operational performance and a positive property revaluation recording during the year. The EPRA NAV also benefited from the one-off deferred tax income resulting from the change in Germany's tax regime. This effect was not material for the other NAV metrics as these already add back most of the deferred tax liabilities.

Slide 27, we turn to our financial profile. Following the deleveraging measures implemented during the year, our LTV ratio decreased to 31% from 33% at year-end 2024. The EPRA LTV ratio, which treats perpetual notes as debt also improved, falling to 44% from 46% at the end of 2024. The interest coverage ratio stands at 5.2x. In addition, EUR 6.4 billion or 71% of the portfolio remains unencumbered, ensuring strong access to bank financing.

As of December 2025, cash and liquid assets totaled EUR 1.6 billion. And as a result, we do not have a refinancing pressure for the upcoming future. Our cost of debt remained low at 2.1% with an average debt maturity of 4.3 years. During the year, we repaid the remaining balances of the Series U and Series E bonds using existing liquidity. We also tapped the Series H bond maturing in 2032 by additional EUR 250 million. And with this, allow me to hand over to Christian to conclude the presentation.

Thank you, Idan. And as always, in the appendix of our presentation, you will find more detail on our strategy, our portfolio distribution and some more data on the German and London housing market in general, ESG, financial policy, analyst coverage and so on.

On Slide 29, I would like to conclude with our guidance for 2026. For 2026, we expect continued strong like-for-like growth as well as positive impacts from acquisitions, which should translate into a long single-digit increase in adjusted EBITDA.

We note that around EUR 100 million of the acquisitions signed in 2025 will be taken over later in 2026 and include newly developed units in London, which are expected to be let out in the periods after. And therefore, the impact on the P&L will be seen starting from 2027.

Net finance expenses are anticipated to rise mainly due to lower interest income on the cash balance, partly offset by expected debt repayments. Perpetual note coupons expenses are also expected to be higher due to the expected refinancing of the EUR 600 million perpetual note with a first call date in 2026, although this will be partly mitigated by the positive impact of the proactive perpetual note transaction completed in 2025.

Accordingly, we guide for like-for-like rental growth around 3.5%, FFO in the range of EUR 175 million to EUR 185 million, translating to an FFO I per share in the range of EUR 0.99 to EUR 1.05. And as always, we aim to maintain our strong balance sheet and will keep our LTV below 45%, which is our internal limit.

Thank you for your attention, and allow me now to move to our Q&A.

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

Allow me now to read these out. What is your latest assessment of the macroeconomic environment? And how do you see transaction activity for German residential assets?

We continue to observe a supportive environment underpinned by solid and structural supply and demand fundamentals in our portfolio. Demand for housing across our key location remains high, supported by several long-term drivers.

Although we have seen an uptick in recent months on the number of permits in Germany supported by the Bau-Turbo regulations, supply remains constrained for the foreseeable future. These dynamics, in addition to the significant reversionary potential of our portfolio support the gradual unlocking of internal rental growth.

We have also seen positive developments in the transaction markets with our successful disposals in 2025, which have accelerated towards the end of the year and in the market in general, which has become more liquid in recent periods, supporting us in executing accretive capital recycling measures, which will further support rental growth in the coming years.

Can you please comment on the potential implication of the war in the Middle East on GCP and its business?

We are following the news and the events in the Middle East closely, which could potentially have ripple effect that could have several implications for Grand City Properties and its business. It is too early to estimate the impact, but in general, geopolitical instability in the region increases market volatility, affects investor sentiment and potentially disrupt global supply chains.

We highlight our very strong balance sheet, little refinancing needs in the upcoming periods and high cash balances, which provide GCP with extra protection in case of a significant market downturn.

With the Bau-Turbo's framework advancing towards practical implementation and the government drafting the new tenant law, how do you assess the impact of these regulatory developments on your operations?

We see both developments as broadly supportive for our long-term operating environment. On Bau-Turbo, the direction remains positive. The framework aims to streamline planning and approval processes, reduce bureaucracy and enable faster conversions or densification. While the ultimate impact will depend on how effectively municipalities implement it, we view the initiative is helpful for improving the social pressure over time and thus supportive for our business.

Regarding the tenant law change, it is still within drafting, and it's too early to estimate the implications, but currently, we expect the impact on our business to be immaterial. The proposed cap on indexed rents is immaterial given the immaterial portion of indexed leases in our portfolio and our rental growth within the Mietspiegel framework remains unchanged.

The new rules for short-stay furnished units also do not meaningfully affect us. Less than 2% of our rental income comes from short-stay and serviced apartment tenants, of which around half are located in London. We use short-term lease selectively to provide the right product where needed. And as a fallback position, we can always change the concept into a long-term contract. Overall, the regulatory changes do not alter the fundamentals of our operations or our rental growth outlook.

Can you please elaborate on the like-for-like rental growth in which regions you see growth? How do you see the market development? And what is your expectations for the performance going forward?

For 2025, we recorded like-for-like rental growth of 3.5%. This was driven mainly by in-place rental growth, which accounted for 3.3% as well as occupancy growth contributing 0.2% to the like-for-like rental growth. Indexation accounted for 1.5% in the period. Vacancy in our portfolio remained very low at a rate of 3.6%.

As always, we are proud that this rental growth came at a high accretive to cash flow, and it is not the product of significant modernization project or new construction. We recorded like-for-like rental growth across all our regions with total like-for-like rental growth reaching 3.6% in Germany, reflecting the positive long-term fundamentals across all our portfolio locations. The highest increase were recorded in Berlin, [indiscernible] Manheim, Frankfurt as well as Dresden, Leipzig, and Halle.

Rental growth in the London portfolio remained robust at 3.1%, stabilizing at a good level after a period of high growth. Vacancy in the London portfolio remained very low at 2.7%. We expect to continue unlocking gradually the significant reversionary potential in the portfolio through reletting in the coming years.

The operating environment remains supportive, positioning us well to continue growing. We anticipate like-for-like rental growth for the total portfolio of above 3% for the foreseeable future. In our London portfolio, vacancies has reached structurally low level of just above 2% and the substantial rental increase captured in recent periods are gradually reflected in the in-place rents. As a result, we expect rental growth to align more closely with our German operations.

Could you update how you're approaching acquisitions and disposals in the current market environment?

Our external growth strategy remains focused on disciplined capital recycling and selectivity capturing opportunities where we see high value creation potential. Overall, the backdrop continued to improve, although not uniformly across markets. Transaction activity is gradually picking up, and we expect market tailwinds to increase as financing conditions stabilize and investment volumes increase. In the German market, unique opportunity remain relatively limited, and we, therefore, continue to see fewer accretive opportunities.

We do expect more activity once [ certain fund vehicle ] approach the end of their life cycle. But at present, the environment remains more constrained relative to other regions. In London, by contrast, we continue to see convincing opportunities. Smaller players, particularly developers remain under pressure due to shorter financing cycle and higher refinancing needs. And this is creating a window for us to acquire high-quality, well-located assets at attractive pricing.

Furthermore, we see closed-ended funds coming into the market pressure to sell. Our strong reputation and preferred buyer status help us to secure deals at discount to comparable market transactions. And the acquisition we have already signed will begin contributing in 2026. Capital recycling remains a strong strategic driver for us and continues to support both operational performance and returns.

We view capital recycling as the most equity accretive strategy in the current market, where the recovery in the market is not symmetric and accordingly, we have competitive advantage both when we're buying and when we sell. In reporting period, we execute around EUR 340 million of disposals, mainly in NRW, Bremen, Frankfurt and other noncore locations at an attractive average factor of around 20x over net rent.

Over the same period, we acquired around EUR 300 million of high-quality residential asset in London at attractive yields with an average acquisition factor of 13x over the net rent, including new build turnkey properties in London, which we expect to take over in tranches in 2026 as the properties near completion.

This disciplined recycling of capital enable us to shift from lower-yielding assets into high-quality assets with higher yield and stronger upside potential. In addition, after the reporting period, we signed additional acquisition amounting to around EUR 75 million in Germany. We also note that we do not set disposal volume targets. Our acquisition and disposal strategy remain opportunistic and guided by asset quality, value creation potential and FFO accretion.

We will continue to dispose our assets if pricing remain attractive and if we can recycle proceeds into high-quality acquisitions at better yields. As the assets we are acquiring come in with strong operating margin and attractive yields, we expect acquisition to become a net contributor on an EBITDA basis over the coming period, mostly from 2027 onwards.

Overall, the direction of the market is constructive, but our focus remains on disciplined acquisition, maintaining balance sheet strength and pursuing high-quality accretive external growth where conditions are favorable.

Could you provide some further details on your revaluation results for FY 2025?

We completed a full external valuation at the end of the year, and the results continue to reflect the strong operational momentum in the portfolio. For 2025, we recorded a like-for-like value growth of 3.2%, excluding CapEx, driven mainly by the strong operational performance of the portfolio.

Accordingly, yield and discount capitalization rates have remained stable year-over-year. Our yield remained conservative at 4.9% and so it is discount rate at 5.4% and capitalization rate at 4.2%. This operational performance has more than offset the remaining market uncertainty and yields have remained broadly stable, which also supporting the positive outcome.

Looking ahead, we expect organic value growth to continue in line with the fundamental of the business. The underlying drivers remain intact, low vacancy, consistent rent reversionary and stable yield environment. At the same time, we are seeing a continuous improvement in transaction activity, and we expect this to accelerate further in 2026 as the market recovery becomes more pronounced and investment volume pick up.

On a like-for-like basis, our current rental yield similar to the rental end of 2018, reflecting our conservative valuation approach and that the portfolio is geared for growth.

How do you view your current leverage position? Do you expect significant changes?

We have improved our leverage further in 2025, with the LTV reaching a conservative ratio of 31% as of December 2025, lower compared to 33% in December '24. The EPRA LTV ratio also reduced to 44%, down from 46% in December '24. The reduction in leverage was supported by net disposals and positive revaluation.

While our leverage metrics put us in a strong position to capture external growth, we expect to continue unlocking external growth mainly through capital recycling in the coming periods. As always, preserving a conservative financial profile remains a core pillar of our strategy, which we view as a key element in the company's success.

Have you seen changes in your financing conditions in recent months?

We continue to maintain a strong access to capital markets, and we continue to see low spreads on our bonds, which are currently below the margins offered on secured bank financing. In general, the capital markets closed very strongly in 2025 with many large issuance at attractive pricing and 2026 has so far continuing this trend.

That being said, in 2025, we utilized both capital markets as well as our secured banking sources with EUR 250 million tapped of our Series H bond maturing in 2032 and raising around EUR 100 million in bank financing with a similar amount of bonds and bank loans repaid during the year.

Looking ahead, we are under no term -- near-term need to raise new debt given our strong liquidity position, which is more than sufficient to cover our 2026 bond maturities. That said, we may consider issuing debt in the context of a liability management exercise provided market conditions remain supportive.

Could you give an update on your 2026 perpetual note call date? And what is your expectation here?

We conducted a successful perpetual note transaction in December in which we issued EUR 600 million at a coupon of 4.75%. We came back to the perpetual market with the new plain vanilla issuance for the first time in 5 years, and we're very happy with the results and with the demand we have seen.

The proceeds of the issuance were used to replace notes with higher coupons as well as proactively tackling part of the refinancing of the perpetual notes with the next upcoming call date, which is in mid-2026. Accordingly, we have reduced the outstanding amount by around EUR 100 million, now remaining around EUR 600 million outstanding.

We aim to refinance the 2026 perpetual notes at or before the upcoming call date. Through the transaction in December and redemption options completed earlier this year, we were able to mitigate part of the higher coupon expenses, which we expect from the refinancing of the 2026 perpetual notes.

You have published your 2026 guidance. Can you provide some more details on the drivers?

We guide for 2026 an FFO I of EUR 175 million to EUR 185 million in total or EUR 0.99 to EUR 1.05 on a per share basis, reflecting nearly 10% yield over the midpoint on the current share price. The slight decrease in 2026 guidance compared to the 2025 results was expected mainly due to the refinancing of the EUR 600 million perpetual notes, which are currently bearing a very low coupon of 1.5%, which we have partially offset with the recouponing exercise in December.

Operationally, we expect momentum to maintain strong next year with like-for-like rental growth of around 3.5%. This positive contribution will be partially offset by the timing impact of capital recycling. 2026, we have the full period effect of 2025 disposals, while the full year impact of acquisitions will be only from 2027 onwards as around EUR 100 million of the acquisitions are signed and will be taken over in mid-2026.

As most of the acquisitions were carried through tuck, their contribution to minorities will increase in 2026 compared to 2025. We expect the EBITDA margin to remain broadly stable as operational efficiencies remain high. As a result, we forecast a low single-digit increase in adjusted EBITDA. On the financing side, we expect higher finance expenses compared to 2025, mainly due to the refinancing effects in 2025 and lower interest income.

For the perpetual notes, as mentioned, we expect a higher coupon expense linked to the refinancing of the notes reaching the first call date in 2026, which is already partially mitigated by the perpetual note transaction we executed in December '25.

Overall, the underlying operations remain very strong. The year-on-year change in FFO I is largely driven by the timing of disposals, acquisitions and financing flows rather than by changes in the operating performance of the portfolio.

Can you please shed more light on postponing the dividend decision? Would GCP change its dividend policy?

GCP has not decided yet on the dividend payout for the year 2025 and will present its decision prior to the AGM invitation. The policy currently remains unchanged.

Can you please comment on your view on the offer of Aroundtown? Do you support the offer?

The offer is enabling Grand City Properties shareholders to move into a more dynamic company with stronger internal and external growth engines. The offer provides the participation in the long-term value creation of a larger and more diversified real estate platform. The total premium is 7% over Grand City Properties' yesterday's share price or 13% over the 6 months average and is additionally accretive 20% in terms of NTA as AT share is currently trading at a larger discount to NTA, offering GCP shareholders more EPRA NTA in AT than in GCP, increasing the upside potential.

To support our decision, we received an external fairness opinion testing the exchange ratio on several matrix and parameters, which has validated that the offer is fair. The offer allows GCP shareholders to exchange their shares for Aroundtown shares, which are significantly more liquid and are currently part of major indices such as MDAX and have the potential to be included in larger indices. Therefore, GCP's Board of Directors and management welcomes the offer and subject to their review of the offer document, intends to recommend that shareholders accept the exchange offer.

How should minority shareholders think about the future positioning of GCP if Aroundtown's ownership increases to around 90%, particularly in terms of liquidity, governance and the long-term listing status?

We expect the current governance and structure to be maintained as is. The offer did not suggest a change in governance. Liquidity is expected to be lower, which could result from exclusion from indices. If that is the case, we could consider downlisting if it doesn't serve a purpose to be listed at Prime Standard.

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

The first question comes from the line of Kai Klose from Berenberg.

I've got 4 questions, if I may. The first one is, could you indicate or give more a split of last year's disposal volumes? You mentioned this also included condo sales. Maybe you could indicate what was the contribution to total disposals and what was the average gain on selling a single set -- single condo? Second question would be on the ICR in '26. We saw a 50 bps decline in the last year, given the fact there's only a marginal increase in the EBITDA.

What is your expectation by how much the ICR will fall in this year? And when do you expect that to trough at which levels in which year and at which levels? Third question would be on the contribution from rents from commercial properties. Could you remind us how much that was 11% of the asset base and how much was in rents from commercial properties? And the last one is on the balance sheet. We saw a EUR 10 million increase in provisions. Could you indicate what was the reason for that, because of ancillary cost reconciliation or other reasons?

Kai, thank you for your questions. First, on the split on the disposals. Yes, we did have some condo sales, but I would say it's a relatively insignificant amount. So the vast majority is from regular disposals of assets and multifamily houses.

As to your second question, as the ICR, it's a bit hard to forecast where ICR is going. EBITDA, as we mentioned, is increasing, but interest expenses also are expected to increase slightly given the issuances we did towards the end of '25 and also on the back of a bit lower interest income. So we do expect to see a small decline in ICR. We know now we're at a high level of over 5%.

We have to see if we remain over 5%, but we expect to remain at a similar level. We believe that potentially, we could reach already trough in '26 or '27. It depends a bit on timing of financing, but we see EBITDA growing. And as you know, we have big cash balances, no need for refinancing in the near future. So we expect EBITDA at some point to outpace interest expense growth.

On the commercial, in terms of rent, there's no big difference. So we're around 10%, 11% rent contribution from the commercial portfolio. Regarding your last question, I think we'll take that offline. I'll check the numbers and get back to you.

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

Two questions from my side, please. The first question is on the fairness opinion, would you be willing to share with us the name of the institution, which gave the fairness opinion on the voluntary tender offer Aroundtown? And the second question, the CapEx of Grand City, I think, has remained more or less unchanged year-on-year. Do you expect that to continue? Or do you think CapEx might increase at the time?

Manuel, thank you for your question. So yes, the fairness opinion was received by big -- one of the big 4 institutions. As to the CapEx, your second question, CapEx has remained stable on a per square meter, we saw a slight increase of 3%, 4%. We expect to see similar levels going forward. So we don't expect to see a big change in CapEx.

Okay. There seems to be no further questions. So I would like to thank you very much for your participation in this call and the questions that you raised during and before the call. We, from our side, wish you well and hopefully meet in one of the future conferences or other occasions. Thank you very much and all the best. Bye-bye.

Good morning, and thank you for joining us for Grand City's results call for the first 9 months of 2025. You can view this presentation on Grand City's website, either on the Home section or under Financial Reports of the Investor Relations section.

With me today will be Chairman and Director, Christian Windfuhr; CEO, Refael Zamir; CFO, Idan Hadad; and Chief Capital Markets Officer, Michael Bar-Yosef. [Operator Instructions] The e-mail address is [email protected].

With that, I would like to hand you over to Christian to start the presentation.

Thank you, and welcome to our Q3 2025 results presentation. We are pleased to present our 9 months financial results, which reflect another quarter of strong operational performance. The key trends we currently see are that Germany's transaction market is showing signs of recovery following the recent turndown. Meanwhile, the interest rate environment has started to stabilize, which is positively impacting capital markets. These dynamics are creating a more supportive financial climate.

At the same time, we have seen a sharp decline in construction activity, which has intensified the supply shortage driving rents upwards. As a result of these market conditions, we continue to see growth in rental income and strong operational performance. Our like-for-like rental growth remains solid at 3.7% and vacancy has dropped further to 3.6%, a historic low for GCP.

While the overall residential market is improving, the recovery remains uneven. Many smaller players are under financial pressure. We see this as an opportunity to capture opportunities and recycle capital on the back of our robust balance sheet, low leverage, high liquidity and wide deal sourcing network.

Our strategy continues to be focused on capitalizing on these market [ dislocations ]. We are actively recycling capital, disposing of mature assets at lower yields and reinvesting into higher quality and higher-yielding assets. This approach reflects our commitment to driving operational growth, balancing asset sales with opportunistic acquisitions, while maintaining a healthy balance sheet.

We will now move on to the details of our results in the following slides. On Slide 3, we present a summary of our key financial results for the first 9 months of 2025. We continue to deliver solid performance with net rental income increasing by 1% and adjusted EBITDA up 1% year-over-year. This contributed to an FFO I of EUR 141 million, remaining stable compared to last year, in line with our full year guidance. We did not revalue the portfolio in Q3 as a full revaluation was conducted at half year, we will revalue the portfolio again for our full year results.

As of September, our LTV stood at 33%, stable from 33% in December 2024 and 4 percentage points lower than in December 2023. Net debt-to-EBITDA improved to 8.6x and our interest cover ratio remains strong at 5.3x for the period.

These figures reflect our disciplined financial management and the resilience of our capital structure. They also provide a strong foundation from which we can resume external growth.

EPRA NTA increased to EUR 4.4 billion or EUR 25.1 per share, driven primarily by positive property valuations and strong operational performance. Our portfolio continues to show strength with a low vacancy rate of 3.6% and in-place rent of EUR 9.4 per square meter as of September, up from 9.2% at the end of 2024. Like-for-like rental growth reached 3.7%, supported by increases in in-place rents. We will explore these KPIs in more detail later in the presentation.

And with that, I'd like to hand you over to Refael.

Thank you, Christian, and welcome also from my side.

On Slide 4, we present some key trends and highlights. We recorded a like-for-like rental growth of 3.7% year-over-year, mainly driven by strong in-place rental growth, while vacancy was at historically low rate of 3.6%, down from 3.8% in December '24. This operational momentum has also contributed to a positive revaluation result of 1.6% in the first half of the year, underscoring the strength of our portfolio, and we expect valuation to trend broadly in the same direction of the operational growth in the coming periods.

We continue to see revisionary rent potential of 22%, fueled by rising market rents and winding supply-demand imbalance in key metropolitan areas. These dynamics support our long-term growth outlook.

From a financial standpoint, we maintain a conservative profile with a loan-to-value ratio of 33%, a high proportion of unencumbered assets of EUR 6.2 billion and solid coverage metrics. Our liquidity position remains strong, amounting to EUR 1.4 billion and further supported by EUR 200 million of RCFs with no material near-term maturities, and we continue to maintain strong access to capital markets.

Looking ahead, our strong balance sheet and extensive transaction network position us well to capture external growth opportunities. At the same time, we continue to invest in internal growth, capitalizing on high reversionary potential and unlocking value through strategic disposals and capital recycling. In summary, our market condition and operational remains strong, and we are well positioned for further growth.

Moving to Slide 6. This slide highlights the persistent and structural imbalance in the German housing market. Germany residential market continued to face structural challenges. New constructions remained subdued, especially in urban areas, while demand is keeping grinding. With permitting activity still low and completion declining, supply sources are likely to persist, keeping vacancy rate low.

At the same time, rental prices continue to trend upwards, particularly in Germany, main metropolitan areas. Those fundamentals reinforce the resilience of the residential market and highlights the long-term opportunity in well-positioned urban assets.

Slide 7 highlights the strong fundamental of the London residential market. London continued to offer a compelling environment for rental growth. The regulatory landscape allowed us to respond quickly to market shift, capturing rising rents more effectively than in other regions. Our focus on affordable and mid-income growth has positioned us well to benefit from this momentum.

While some of London's rarest areas such as Westminster, Kensington and Chelsea have been price corrections, demand in more affordable locations remain strong. Combined with persistent undersupply of new homes, those fundamentals support a healthy outlook and give us room to unlock further values.

Slide 8 highlights the continued strength of our operations, supported by solid rental growth and historically low vacancy rate of 3.6%. Like-for-like rental growth reached to 3.7% with particularly strong performance in Germany at 3.4% and 5% in London.

As of September 2025, our portfolio in-place rent stands at EUR 9.4 per square meter, reflecting a compounded annual growth rate of 4% since December 2021. Annualized net rent increased to EUR 425 million, and we have seen further growth in the market rental value of the portfolio, which brings our annualized market potential to rent of EUR 518 million as of September. This indicates an upside potential of 22%. We expect to unlock this potential primarily through revisions upon reletting, supported by continued upward momentum in the market rents and additional value-enhancing measures we plan to execute.

Turning to Slide 9, we provide an overview of our portfolio. As of the end of September, our investment properties portfolio amounted to EUR 8.8 billion, with the overall distribution remaining stable. Berlin continued to be our largest location, representing 23% of the portfolio, following by NRW at 21%, London at 20% and Dresden/Leipzig/Halle at 14%. The rest is spread across other strong metropolitan areas.

Over the first 9 months of 2025, we completed disposals amounted to approximately EUR 140 million, including deals signed in the previous years. Those transactions were executed at a slight premium of 0.3% with assets sold at rent factor of 19x. The properties sold were primarily located in Bremen, Frankfurt and noncore regions, along with selected condominium units, mainly in London. Those disposals reflect our ongoing strategy to streamline the portfolio and recycling capital into higher quality and higher yielding opportunities.

Now I hand over to Idan to present the financial results.

Thanks, Refael. On Slide 10, we present our results for the 9 months of 2025. Net rental income amounted to EUR 320 million, primarily driven by strong like-for-like rental growth and acquisitions completing during the period, partially offset by the impact of disposals between the period.

Adjusted EBITDA increased by 1% to EUR 253 million, reflecting continued improvements in operating margins. The company recorded a one-off deferred tax income in the 9 months of 2025. This was the result of the positive impact related to changes in the corporate income tax in Germany effective from January 2028, where the rate is gradually reduced from currently 15% to 10% by 2032.

As a result of which the deferred tax impact of past positive revaluation has reduced, resulting in a one-off deferred tax income in the current period. This positive impact was partially offset by deferred tax expenses connected to the positive revaluation result in the current period.

We recorded a profit of EUR 410 million for the 9 months of 2025 compared to a loss of EUR 17 million in the same period in 2024. This was primarily due to the strong operational results as well as positive portfolio revaluation recorded in the first half of 2025, and the one-off deferred tax income. Profit was further supported by improved operational performance, partially offset by higher finance expenses and other financial results. Basic earnings per share for the period came in at EUR 1.84.

Turning to Slide 11, our FFO performance. FFO I amounted to EUR 141 million, remaining stable, primarily as a result of higher adjusted EBITDA and slightly lower perpetual notes attribution resulting from the exchange and tender offer executed in 2024, which were offset by higher finance expenses. FFO I per share was EUR 0.8, slightly lower compared to EUR 0.82 in the comparable period of 2024 due to the sale of treasury shares in December 2024, which increased the number of shares outstanding. FFO II came in at EUR 195 million, up from EUR 142 million in the comparable period of 2024, driven by stronger disposal margins.

On Slide 12, we provide an update on our maintenance and CapEx activities. Our focus continues to be enhancing the asset quality of our portfolio. Over the 9-month period, we invested EUR 19.5 per square meter in repositioning CapEx and maintenance compared to EUR 18.5 per square meter in the same period last year. Additionally, we invested EUR 17 million in pre-letting modifications. These projects include the creation of new rental space and other initiatives beyond the scope of repositioning CapEx aimed at generating additional rental income in the upcoming period.

We also invested EUR 3 million in modernization projects during the first 9 months of the year. These targeted investments are designed to improve the quality and appeal of our portfolio, supporting higher rental rates. These investments include initiatives such as adding balcony, installing elevators and upgrading technical infrastructure to ensure optimal power, water and heat supply.

Investments focusing on improving energy efficiency and reducing CO2 emissions, such as replacing windows and upgrading heating systems are categorized based on the nature and scope of each project. Adjusted FFO for the period was EUR 81 million, lower compared to EUR 83 million in the same period of 2024 as a result of higher repositioning CapEx.

On Slide 13, we present an update on our EPRA NAV metrics. EPRA NRV per share increased by 2% to EUR 28.4. EPRA NTA per share increased by 3% to EUR 25.1. EPRA NAV per share increased by 6% to EUR 22.7. The increase in EPRA NAV metrics was primarily driven by strong operational performance and positive property revaluation in the first half of the year. EPRA NDV was additionally supported by the one-off deferred tax income related to the change in Germany tax regime, which didn't have a material impact on the other metrics as the add back most of the deferred tax liabilities already.

On Slide 14, we turn to our financial profile. Our LTV ratio remained stable at 33%, same as of December 2024. The LTV increased slightly compared to June, mainly as a result of currency fluctuations on the London portfolio, which reduced the euro value of the value side, while the debt remained unchanged as well as from the impact of acquisitions completing during the quarter. The EPRA LTV ratio, which fits perpetual note with debt declined to 45% from 46% at the end of 2024.

Our hedging ratio remained stable at 95% as of September 2025, helping us maintain a low cost of debt and protecting the company from market volatility. The interest coverage ratio stands at 4.3x and additionally, EUR 6.2 billion or 69% of our portfolio remains unencumbered, supporting strong access to bank financing.

As of September 2025, our cash and liquid asset position was at EUR 1.4 billion. Our cost of debt remained low at 2%, increasing slightly due to the repayment of lower-than-average debt and EUR 32 million of bank debt taken in the third quarter. The average debt maturity is 4.4 years. And lastly, during the reporting period, we repaid the remaining balance of our Series U and Series E bonds using existing liquidity.

And with this, allow me to hand over to Christian to conclude the presentation.

Thank you very much, Idan. Allow me to point out that in the appendix of our presentation, you will find more detail on our strategy, our portfolio distribution and some more data on the German and London housing market in general, ESG, financial policy, analyst coverage, et cetera.

Finally, on Slide 16, I would like to conclude with our guidance for 2025. We confirm our guidance 2025 at FFO I between EUR 185 million to EUR 195 million, FFO I per share between EUR 1.05 to EUR 1.11 and total net rent like-for-like growth around 3.5%, with an FFO of EUR 141 million or EUR 0.80 per share, we are well positioned to meet our guidance in the final quarter of 2025.

Thank you for your attention, and allow me now to move on to our Q&A.

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

What are your views on the current macroeconomic environment? How do you see this impacting on transaction volumes for German residential?

We have continued to observe positive market development supported by solid long-term supply and demand fundamentals. We continue to see a downward trend in new building permits in Germany, which in turn points to a decrease in the number of completions in upcoming years. Meanwhile, housing demand remains high across our portfolio locations, driven by urban population growth. We expect these positive drivers to continue supporting strong internal growth going forward.

We also continue to see an overall improvement in the transaction market. With the stabilization of interest rates and the macroeconomic situation observed in past periods, we see a positive impact on the total cost of debt with capital markets open and debt spreads tightening. This improvement added to the strong positive trend in rental growth, position the rental yields with a good spread over the cost of debt, especially when including the revisionary rents, which are substantially higher than the current rents.

Accordingly, this is reflected in the increasing number of transactions recorded across the market, and we are seeing an uptick also in activity for larger ticket transaction. We expect these positive developments to continue going forward with rental growth supporting the value growth.

Thank you, Christian. Will GCP benefit from the new construction law, the so-called Bau-Turbo and the intention of the German government to boost construction?

The aim of the Bau-Turbo, which is a German government initiative launched in 2025 is to accelerate the construction of housing in response to a deepening housing shortage. And the main way this is envisioned is by reducing bureaucratic hurdles such as by introducing fast-track building approvals, reduce complexity, improve affordability and cut construction time lines.

The law not only applies to new construction projects, but also deliberately includes alterations and changes of use. The latter options of simplified change of use offers potential, particularly for the conversion of commercial space into residential space or for densification.

Looking ahead, the effectiveness of Bau-Turbo will be measured by how much it will actually increase housing supply in the next 2 to 5 years. The law is initially to be introduced as a so-called experimental clause until the end of 2030.

We view this as a positive development as increased supply could reduce some of the social pressure and improve liquidity in the letting market, which may also increase our tenant turnover and allow us to capture rent upsides faster. In addition, it could result in increased attractiveness of our development rights and make densification within our portfolio more economical.

That being said, we expect to continue to focus on creating value through extracting building rights and permits and sell them. We do note that the final implementation will be done on the municipal level, and municipalities may not have enough capacity or willingness to implement changes in such a way that it would result in a significant improvement.

Thank you, Christian. Can you please elaborate on the like-for-like rental growth? In which regions do you see growth? How do you see the market development? And what is your expectation for your performance going forward?

As we mentioned, we continue to record strong operational growth across all our locations, supported by a strong macro dynamics. For the last 12 months ended in September 2025, like-for-like rental growth reached to 3.7%. This was mainly the result of an in-place rental growth with 1.4% driven by indexation, 2.1% driven by re-letting and 0.2% from occupancy growth.

Vacancy remained at record low rates, decreasing further to 3.6%. We note again that this rental growth come at low CapEx and high accretion to cash flow, and it is not the product of significant modernization projects or new construction. Positive long-term fundamentals in our portfolio locations continue to support rental growth.

In Germany, strong rent increase were recorded across all our key regions with total like-for-like rental growth reaching 3.4%. The highest increase were recorded in Berlin, Mannheim, Frankfurt and Nuremberg, Fürth. We also recorded strong rental growth in London with like-for-like growth amounting to 5%, with softer rent regulations that allowed us to unlock faster the revisionary potential of our portfolio, with occupancy growth supporting internal growth.

Vacancy in London portfolio stands at 2.3%, reaching a new low and down from 3.1% a year ago. Going forward, we expect to continue unlocking gradually the revisionary potential through re-letting with a supportive environment and solid operational performance, positioning us well to keep growing.

We expect like-for-like rental growth of over 3% for the foreseeable future. In the London portfolio, as vacancy reached to structural low level just above 2% and the significant increases captured in past periods are reflected, we expect to have similar rental growth as in our German portfolio, stabilizing at a level of 3% to 4% rental growth.

Thank you, Refael. Could you provide an update on your external growth strategy? Do you expect to be a net buyer or net seller?

While we see overall improvement in conditions in the past periods, we also observed an asymmetric recovery among market players with smaller players facing increased financial pressure. We see this trend stronger in the London area, which generally has a shorter financial cycle compared to Germany and owners are coming under more pressure. We see this more with developers as they have less financial headroom. This has the potential to open us opportunities to acquire high-quality properties at attractive pricing.

In this context, GCP benefits from preferred buyer status and a solid reputation, which added to our extensive deal sourcing network provide us with good opportunities to execute accretive acquisitions. We currently have an increased acquisition pipeline of over EUR 150 million in London alone. We still do not see such accretive opportunities in our main German locations as not much development took place in recent years. We still expect that once funds will reach their lifetime and will be obliged to sell, we could find accretive transactions also in Germany.

As such, we intend to continue disposing of mature assets at lower yield, mainly in Germany to opportunistically recycling the capital into high-quality opportunities such as in London. Long-term, we expect our German footprint to remain over 2/3 of our portfolio with the remaining in London and other locations.

In addition to our acquisition pipeline in London and Germany, we continue to explore other major international cities, evaluating the opportunities to create excess value. Capital recycling remains a strong driver for external growth, creating stronger operational performance and higher returns.

In the reporting period, we executed approximately EUR 140 million in disposals, mainly in Bremen, Frankfurt and noncore locations as well as condominiums, which were executed at attractive average sales factor of around 19x, while we acquired EUR 85 million of high-quality residential assets mainly in London at attractive yields with an average acquisition factor of 13x.

The acquisitions are mostly newly developed in strong location in close proximity to public transportation and embedded further upside potential. We note that we do not have disposal volume target, and our acquisition strategy is opportunistic and guided by asset quality and the potential for value creation and strong FFO accretion.

However, we would consider disposing further properties if we can continue and achieve good pricing for disposals and recycling the proceeds into quality assets at attractive pricing. We maintain a significant pipeline of attractive opportunities and currently see a good window for potential deals mostly in London.

We do expect this year to remain a net seller in terms of value. But as we are acquiring quality assets at very attractive yields and strong operating margin, we expect that on the EBITDA basis, we will start to see acquisitions become a net contributor over the coming periods.

Thank you, Refael. You have not conducted a portfolio valuation in Q3. However, what are your perspectives on the valuation in the full year? Do you expect to see yield compression in the following period?

This is correct. We have not conducted a portfolio revaluation as part of our Q3 report. We have conducted a full external revaluation of our portfolio as part of our H1 report, and we will carry out another full revaluations as part of our annual audited report. As noted, we continue to observe positive development in the market with increased liquidity and a higher number of transactions, particularly of larger portfolios, supporting valuations.

In addition, stabilization of interest rates, especially in capital markets, has resulted in an attractive spread over in-place rent compared to historical levels, while the additional embedded upside stemming from Germany regulatory environment provide a stable rental growth path in coming years, making the current value rates more attractive.

Looking ahead for the following period, we expect organic value growth to continue reflecting the operational growth of the portfolio with yields remaining stable. While we also see the potential for yield expansion in coming periods, we continue to view the possibility over a long-term.

Thank you, Refael. Do you expect to pay dividends next year? Are you considering a share buyback?

In the past periods, we have seen a sustained improvement in market conditions, which added to our proactive actions have resulted in a notable improvement in our position. As such, we are confident about resuming dividend payments next year if the current market conditions continue. The decision will be taken next year ahead of our AGM.

Regarding a share buyback, we view it as a relevant option in the event that we will continue to dispose properties at attractive prices and don't find attractive transactions to recycle the capital.

Thank you, Christian. How do you view your current leverage position? Do you expect significant changes?

We have maintained our leverage in 2025 with a conservative LTV ratio of 33% as of September 2025. EPRA LTV has been reduced to 45% as of September, down from 46% in December. While our leverage metrics provide comfortable headroom to support external growth, we expect leverage to remain low, achieving growth through capital recycling in the coming periods, where there can be fluctuation as a result of timing impacts of transactions. As always, we remain committed to maintaining a conservative financial profile, which we view as a key element in the success of the company. We expect our leverage position to remain at low levels, enabling flexibility going forward.

Thank you, Idan. Have you seen changes in your financing conditions from your last report?

Our access to capital markets remains strong and continued positive bond performance has further improved our refinancing outlook. Notably, the spread on our bonds has even tightened to levels below the margin on secured bank financing, reflecting the favorable market sentiment. We have seen a very strong bond market in the past month, with many of our peer's raising debt at attractive pricing and benefiting from very strong demand, significantly better than the conditions a year ago.

Looking ahead, we are in a no near-term need to raise fresh debt as our liquidity balance is very strong. However, we may explore issuing debt as part of an LME if the conditions are right.

Thank you, Idan. Could you give an update on your 2026 perpetual note call date? And what is your expectation here?

We see the capital markets improving, including bonds and perpetual notes, namely, Aroundtown executed a successful perpetual note transaction and got positive market response. We view the transaction very positively and are encouraged by the good results, which is a reflection of the improved sentiment we have seen over the last period.

Our next upcoming call date is in mid-2026, and our base case scenario continues to be the issuance of a new perpetual note and either tendering or calling the existing one, thereby replacing the perpetual note. We believe that this option will be possible for us at a reasonable price, significantly better than the conditions we have seen in the last time we were facing a first call date for one of our perpetual notes. This is the case as long as market conditions remain as is and do not reverse significantly.

Thank you, Michael. Could you provide your latest guidance for 2025? Do you expect any changes? What can we expect for 2026?

We confirm the guidance published in March, and we guide for [indiscernible] to be in the range of EUR 185 million to EUR 195 million, with FFO I per share of EUR 1.05 to EUR 1.11, reflecting around 10% yield on the current share price. With an FFO I of EUR 141 million in the first 9 months of 2025, we are well positioned to meet the guidance.

Our solid operational performance in the reporting period was in line with expectations in our provided guidance. We expect the strong operational momentum to continue with a like-for-like rental growth of around 3.5%. We expect to continue unlocking internal growth gradually through the high reversionary potential of our portfolio as well as capitalizing on accretive external growth opportunities if they fit to our acquisition criteria, although this impact is most expected in the coming periods and will not have a significant impact on 2025 results.

Regarding financing expenses, our expectations remain unchanged, and we expect them to increase slightly compared to 2024 due to the impact of the bonds issued in July '24 and the lower income earned on cash holdings, net of repayments of debt. As to 2026, we will present the guidance for the next year as part of the 2025 full year results. In general, we expect to continue seeing increasing EBITDA driven by the internal and external growth, while interest income will be reduced, and the perpetual note attribution will increase with the first call date coming up mid next year.

Thank you, Michael. Before we invite your direct telephone questions, we would like to answer questions -- sorry, apologies. Those were the questions that we received prior to this call. We can now start the open session for your questions. We would appreciate if you can ask all your questions at once, and we will answer them one by one.

[Operator Instructions] The first question comes from the line of Jonathan Kownator from Goldman Sachs.

Interesting to see that you clearly have more opportunities in London perhaps at this stage versus Germany. Any willingness to grow your net exposure to London over 20% in doing that? Or would you keep recycling and finding disposals opportunity to maintain ultimately your exposure to 20% if you're finding more acquisition opportunities in London?

Jonathan, thank you for your question. Yes, look, in the past, we've been up to 25% in London. We gradually went down with disposals over the past 2 years. So we were comfortable being at 25% around that level. Yes, we could continue seeing disposals. We see good transaction market in Germany. We see also a good transaction market also in London. So we might have also disposals in London. But most of the pipeline we see now is in London. So we could expect a certain increase in London in the next period. However, at a limited level, right? So we're not going to see a very big change, maybe towards the 25% I mentioned earlier.

We want to mention again that we will keep the German portfolio at the around of 2/3 of the total.

We now have a question from the line of Manuel Martin from ODDO.

Two from my side, please. Just to update a bit. Can you give us some news or an update on your plan with the fund or if you're going to do joint ventures when it comes to acquisitions? That would be the first question.

Second question, maybe you can elaborate a bit on how have your plans regarding a possible expansion to the U.S., how has that evolved? Is this something that you're going to follow, which is or is it something that you put it aside for the time being? These are the 2 questions, please.

Manuel, thanks for your questions. First, regarding the fund, yes, there's not a significant update here. The fund still up to $400 million. The acquisition we did in Q3 was not through the fund, but we clearly could use the funds also for acquisitions we see in residential.

As to your second question, look about U.S. or other markets. As mentioned, we see Germany holding very well. Transactions levels are good and picking up. This is great for the business. It's good for valuations. It's good for disposals as well, but we don't see many opportunities in Germany. As mentioned, London is pretty similar. We see a bit more opportunities. We're entering the sweet spot where we see a good transaction market there, but also, we see some smaller portfolios come to developers, which gives us the opportunity to buy at very attractive prices, high-quality assets in good locations.

But that being said, we are also looking to grow further. We want to have the option to grow further similar like we did with London 7 years ago or so when we saw Germany being expensive, we were disposing, and we wanted to recycle that capital to a new location where we see good fundamentals and we enter attractive pricing.

So we are looking a bit outside the traditional locations. We're still looking -- U.S. is one of the locations, but currently, we're still exploring this option. But just yes, as Refael just mentioned, I mean, Germany will continue to be our main focus with 2/3 of the portfolio. And outside of London and Germany, we're seeing up to 10% in this -- in a potential new location. But naturally, this will be a gradual increase once we find the place and we start to build scale.

Next question please.

The next question comes from the line of Marios Pastou from Bernstein.

Of course, you've reiterated your guidance today for this year. Based on where you're trending, are you able to point at which end of the guidance range you expect to be for 2025?

We expect to be around mid-guidance. That's how we see it now. I mean we still have time and some moving parts, but we feel that around mid-guidance is where we expect to be by the end of the year. The acquisitions we did and the acquisitions we may carry in this year and potential some Q4 won't have a big impact this year. So we don't expect to see a big change to where we are. So around mid-guidance is where we expect to be.

We have the next question from the line of Paul May from Barclays.

Three quick ones for me. You disposed 1,300 units year-to-date and acquired 300. I think the number of units in your portfolio has actually increased by 220. I assume it's just a timing thing in terms of the disposals coming through maybe in Q4.

Second one, you sold at 5.3 and acquired at 7.7. Just wondering, do you have any proof you mentioned the transaction market is supporting your valuations. Just wonder if you can point to specific transactions that support your 4.9, obviously being much tighter than the yields you're selling at and the yields you're acquiring at.

And then the final one, just in Q4, do we expect a big pickup in repositioning CapEx in Q4 similar to last year? Just noting, obviously, the run rate year-to-date is trending below where probably you would expect it to be. So I just wonder if that's going to all come in Q4.

Thanks, Paul, for your questions. First question on the unit number. So the disposals and acquisitions reported all happened and they are in the balance, but we don't include the held-for-sale portfolio that we sold and the EUR 140 million we sold was out of the held-for-sale portfolio and therefore, not presented in the units and the acquisitions we did are inside. And as we pointed out, they are there.

Look, as to valuations, I mean, the proof for the transactions is what we see. So we're selling -- selling at book value even at a slight premium. Also negotiations we see, we are seeing around book value is also higher in some instances. So we're comfortable. And as we mentioned, we're acquiring very specific kind of assets from very specific sellers. These sellers are under financial distress. They have their considerations.

As I mentioned, mainly they are developers. So these developers don't have the access to capital we have. They've been rolling debt for quite a while. Rates specifically in the U.K. and London have still been elevated and they wish to make a fast transaction, and this is where we come in.

As to repositioning CapEx. So we slightly increased from last year, actually. So the trend is a bit going up. We see a bit of cost inflation there, and we are also feeling more comfortable to spend a bit more, but we are around this level, right? So we are at EUR 15 per square meter for the 9 months and we expect to be EUR 20 per square meter also for the year. And also, I think that's a good run rate, maybe with a small uptick upwards going forward, but nothing significant.

Next question, please.

We now have a question from the line of Andrew McCreath from Green Street.

Just coming back to the dividend, firstly, I appreciate that you're confident about resuming the payments. But are you able to share some color on what the payout ratio will look like? Are you going to stick with 75% or revised lower in line with your peers? That is the first question.

Second question on your cash position. How are you thinking about this? I mean you're sitting on a substantial cash pile and have been for some time now. Is that driven by credit agency requirements? Or is it more of a strategic decision?

And then following on from that, you have a fair amount of debt maturing over the next 3 years. And while debt markets are open for refinancing, as you say, that will likely be a high 3% coupon for you. Would you therefore consider repaying some of that debt instead or exploring a convertible?

Thank you, Andrew, for the questions. I'll go one by one. As to the dividend, our policy stands where it is. It's at 75% of FFO I per share. We may evaluate closer to the AGM, and that will be depending on opportunities we have on acquisitions on the one side and also if we see more disposals on the other. So 75% is currently where we are, but that's subject to maybe a bit of rethinking from our side.

In terms of debt, I think actually the second and third question go together. Look, we have a substantial amount of cash on hand. It covers up to the next 3 years. So 2.5 years, so we have no real need for refinancing at this stage. We tried to buy back our debt in the past, but the pricing wasn't right, which maybe is a positive thing. It depends how you look at it. So currently, we're benefiting from income on this cash balance, and we pencil most of it to repayments. It also will be some firepower for acquisitions. But also, as I mentioned, we expect to see some capital recycling.

So in general, most of that cash we have now will be were paying, and we don't expect to need to have more cash for refinancing in the next period. So unless we'll do a liability management, also, we don't expect to go to the market and do a new bond. Thank you. Yes.

Okay. This seems to be the last question that we had. And therefore, I would like to thank all of you that participated in this call and the questions that you raised before and during the call. I wish you all the best and say goodbye from the team here in [ Velen ].