Ubm Development Stock

Hello, and a warm welcome to today's earnings call of the UBM Development AG following the publication of the H1 figures of 2026. We are delighted to welcome the CEO, Thomas Winkler; and the CFO, Patric Thate, who will speak in a moment and guide us through the presentation and the results.

After the presentation, we will move on to an analyst Q&A session. As an institutional investor, we would like to invite you to contact UBM Development AG directly after the earnings call to clarify any questions you may have. And with no further ado, Mr. Winkler, please, the stage is yours.

Thank you, Marika, and welcome, everybody. Thank you for joining UBM's conference call on the first half of 2026 with, what I would say, a fair number of highlights that deserve the name highlight.

Looking at Slide 1 of our presentation, what did we achieve? Our turnaround has solidified, and we are able to report a significant earnings swing before and after tax. Second, the boom in residential sales continued and with more than 200 premium apartments, we repeated the record sales number from last year. Three, we are making good progress in affordable housing, our major strategic initiative, more details later. Four, the enabler is a strategic sales program, as announced previously, with first assets having been sold at or above book value in current market conditions, it could be called a good start. Five, our equity ratio has further improved and even lies above our target range of 30% to 35%, while our net debt decreased to just below EUR 475 million.

The outlook is all about affordable housing, affordable housing and affordable housing. I see a good chance that we can take a leading position again in this segment. More in a minute. Let us first zoom in on the half year earnings swing, looking at Slide 2. An earnings swing from a loss of EUR 6 million to a profit before tax of more than EUR 7 million cannot be overestimated in a transitional year like the year 2026. Enabled by our successful resi business on the one hand and the first asset sales on the other hand, it also shows up in revenue increase of 36%. We are not back to normal, but the direction justifies some optimism.

To have a closer look into the resi boom, please follow me to Slide #3. We have hit last year's record level spot on and projects like LeopoldQuartier C, Village im Dritten 11A or Na Plzence Phase 1 are sold out by now because you get the figures here by end of June. The boom holds. Please allow for highlighting the Prague residential market. From the launch of our sales in Na Plzence Phase 1, we were able to increase the square meter price by no less than 20%. But you are sold out, you might say. And my answer is true, but only for Phase 1.

We see the same interest in Phase 2, which is in the mirrored project on the other side of the street in Smichov and shows up in the order backlog, one of the hottest districts in Prague. The Czechs are almost obsessed, if I may say so, with owning real estate and particularly their own apartment.

We have a different trend in Vienna and the big cities in Germany. In Vienna, almost 80%, 8-0, of the apartments are for rent. This market is grossly undersupplied and our initiative in affordable housing is precisely targeting this market.

Please turn to Slide 4. What is the issue? Even though Vienna has been a shining example for reasonable cost of living compared to cities like London, Paris or Zurich, we now see an interesting phenomenon. Those who are and have been happy campers, if I may call them, do not move out of their apartments, even if they are too big when the kids have moved out. The few new apartments are facing demand by a growing number of people desperately looking to find some living space at reasonable cost.

I'm not sure if we should call this locked in or locked out phenomenon. The issue is neither unique to Vienna nor easy to fix. With the apartments coming to the market at square meter prices well above EUR 8,000 and the current interest rate environment, we see rents promising a reasonable return close to EUR 30. This, however, represents often a portion of the disposable household income well above 40% to 45%, far from affordable.

The same is true with regional differences for many of the attractive cities in Europe. This constitutes a serious political issue with people demonstrating on streets in many countries, the pictures from the news. We, this is the developers and the construction industry, are challenged to bring down the cost of housing by thinking out of the box. UBM, together with Porr Living, developed a first pilot project in Vienna to prove that affordable housing, eating up a maximum of 35%, better 30% of the net household income is doable. It is a new way of thinking rather than stripping off quality. It is moving the construction site into the factory and assembling standardized elements rather than building prototypes because nothing else is what we are doing up to now.

As can be seen from this slide, we are talking about timber frame wall facade elements with pre-installed windows and outside shading. We are talking about every apartment with a balcony photovoltaic for hot water supply and heating or cooling by heat pumps. All of this resulting in a very low monthly operating cost of EUR 1.70 to EUR 1.90 per square meter. Pre-installed central home technology piping and electricity units or plugging systems reduce the need for skilled workers. The same is true for the bathrooms or the kitchens. They come complete.

With prefab elements, we are talking scale effects and a significant reduction of construction time. This, combined with a number of highly efficient layouts is a solution. The best is that UBM is not only sitting on the land for the picture pilot project, but 6 more plots in Vienna, resulting in over 50,000 square meters of rentable area, perfectly located for the purpose of affordable living.

I shall provide you with some more information in the outlook. Before this, I would, however, like to ask Patric to share with you a bit more of the commercial considerations behind affordable housing and also update you on our financials. Patric?

Thank you, Thomas. Good morning, everybody.

Back in May, I walked you through our sample calculation for affordable housing, a net selling price of around EUR 5,000 per square meter, a monthly rent of EUR 15 per square meter, an annual return of 4% for an institutional investor and some -- as one of the key factors and the residual of the calculation, a land price of EUR 850 per square meter residential floor area.

The obvious question was, does that EUR 850 stand a reality check. This slide tries to get answers. The table on this slide offers you an overview of how much we can invest in terms of land price per square meter residential floor area across 15 cities in Germany and Austria. How do we get to our own figures? We take the rent that is achievable in each city, capitalize it at the 4% yield an institutional investor expects and derive from that the land price we can justify paying. That is the dark green bar. The light green bar does the same thing from the other direction. It starts from average net household income, applies the 33% that a household can reasonably devote to housing and derives the land price. The dash line running across the chart is the EUR 850 per square meter from our sample calculation.

Take Vienna, the third example from the left. An average market rent of roughly EUR 22.5 per square meter justifies a land price of around EUR 1,641 per square meter. Measured against household income, the figure is even about EUR 1,794. As we developed our strategy, it was clear that we would see regional differences. And that is the point of this slide. In order to achieve the yield an institutional investor expects, we don't have to achieve acquisition with EUR 850 per square meter residential floor area in every city. In nearly all of the investigated cities, the price per square meter could be higher.

In other words, our model does not depend on finding exceptionally cheap land in one particular city. It works across a broad set of markets, including the 6 cities marked with an asterisk where UBM is already developing residential projects. Land cost is highly location dependent and directly tied to achievable rents. This chart is not a shopping list, and it is not a statement that we will pay these prices in the end. Two takeaways from this slide. First, the affordable housing calculation is not a Vienna special case. The arithmetic works across our markets. Second, we are entering this segment with a clear quantified benchmark for what we are prepared to pay.

Please turn to Slide #6. At the full year presentation and again in May, we told you that we need to free up cash from our standing and nonstrategic portfolio in order to refinance the strategic shift. This slide is proving a successful start of our sales progress. The first is Ekazent Paket 6, a standing asset or rather a package of leasehold rights to various commercial properties in Vienna and the Greater Vienna area. This partial sale transaction amounted to around EUR 35 million. UBM's ownership share was 50% of that. The cash inflow to UBM is EUR 11 million, of which EUR 10 million was received in the second quarter and a further EUR 1 million will follow in the third quarter.

The second was a nonstrategic asset held 100% by UBM. The volume is EUR 10 million, and here, the full EUR 10 million comes to UBM in cash, EUR 5 million in the third quarter of 2026 and the remaining EUR 5 million in the first quarter of 2027, so not part of our cash numbers yet. Taken together, that is around EUR 21 million of cash. The most important point is both were executed at or above book value. No doubt, this will not apply to every transaction in the future, but it is an encouraging start.

Please turn to Slide #7. This slide brings me back to the 2 ratios we watch most closely, equity and leverage. Starting on the left, equity stood at EUR 374 million at the end of June and the equity ratio at 36.6%. That is above our target range of 30% to 35%, and it is the highest level in the last 3.5 years. The drivers are the positive half year result and more significantly, the EUR 25 million of Genussrechtskapital issued in the first quarter. A ratio at this level gives us flexibility at a point in the cycle where we are building a new pipeline in affordable housing, and we would rather enter that phase with capacity than have to create it.

Turning to the right-hand chart. Net debt came down to EUR 475 million from EUR 546 million a year ago. That is a reduction of EUR 71 million year-on-year and the lowest level we have reported in years. The loan-to-value ratio stands at 46.5%. Two key messages from my side. First, the equity ratio is above our target range. Second, net debt is at its lowest level in years.

With that, I would like to thank you for your attention and hand back to Thomas.

Thank you, Patric. Why do we think affordable housing is the next big thing, particularly for UBM? Well, let us have a look at the market environment as described on the right-hand side of Slide 8, by the way, our last slide of the official presentation, but there are plenty of slides in the backup that I would refer you to because they are really interesting. Austria is seeing rent rises on average of 5%. Vienna is expected to be even at 7%. This is well above inflation and is going to continue above inflation for the foreseeable future.

As mentioned before, Vienna is a traditional rent market with 77% of the population being renters. With less than 10,000 apartments expected to be completed this year and approximately only 2,250 freely financed apartments, which are also free on the market compared to an estimated 13,000 to 15,000 needed, it is easy to see a growing demand for affordable housing. The situation in Germany is no better rather the contrary. According to the Finance Minister, Lars Klingbeil, Germany is short of 1.4 million apartments today. I've seen a figure yesterday of 1.34 million apartments, doesn't make a big difference. And with an expected 185,000 units completed in '26, the shortage is growing by 200,000 per annum. A growing number of permissions, which we see in Germany, together with a growing number of cancellations, which we also see in Germany, does not change the picture.

This is underpinned by a very low number of listings in most urban markets in Germany. While the promise of EUR 23 billion of government subsidy programs gives hope, the political debate in cities like Berlin does not help. The Warsaw rent market with rent levels above EUR 20 per square meter a month is rounding up the situation. Here, we have a potential of another 50,000 square meters right next to Poleczki Park. It's actually part of Poleczki Park not being built up. This means UBM has identified a potential of more than 100,000 square meters of affordable living in its existing portfolio. Nothing is ready to be built immediately, but we have all the ingredients in-house. This perspective justifies the headline of our outlook, affordable housing is the next big thing. I'm not sure if I've already mentioned this one.

I guess there are a number of questions, and let me open the line now for them, and thank you for your attention.

[Operator Instructions] Mr. Stefan Scharff.

My first question is about the affordable housing projects to come in Germany. When will we see the first project and perhaps there is room to change some project types in Munich for affordable housing. The second question is about the bond market. You tapped the bond market almost in every of the former years in fall, September or October, November. So are there any plans to go to the bond market again? I know the equity ratio is quite high, but also we have the cash position slightly below EUR 100 million, and it was mostly between EUR 130 million or EUR 150 million.

Okay. These are your 2 questions, Stefan?

Perhaps I have 1 or 2...

Excellent. Excellent. But then let me start. Of course, as a UBM expert, you have noticed that we didn't mention Germany. The reason is we have one small plot identified that could be used for affordable housing. We are currently investigating it, and we hope that we can report on it in our Q3 call. But by and large, the properties that we own at the moment are not ideal for affordable housing for the simple reason that they are in super prime locations, and therefore, the land cost is above our limits. And that kind of answers your question with Munich. Part of the Munich project as every resi project is, of course, for subsidized living. And that's a different story, but that has nothing to do with our affordable housing.

Our affordable housing is a different way of building the properties and is clearly targeted for an institutional investor to buy it and rent it out, whereas the locations that we are talking about here are all locations for ownership preferably. I hope this answers the first question. And for the second question, I will refer to Patric.

Stefan, bond market tapping was the question, if I'm right. So what we always do, we take a closer look at the market. And meanwhile, I have the impression that not everything what Mr. Trump is doing in the U.S. is immediately doing a lot of fluctuations in the market. So if the markets are in a good condition, we are, as always, looking carefully and thinking about if we can do a bond transaction or not. In terms of cash, yes, of course, when you are in a strategic environment where you want to change the strategy and start a new asset class, affordable housing, there are some sources of cash in the company. One is the cash we are sitting on, which is a little bit lower, as you have pointed out, as we have repaid a bond with EUR 73 million in the second quarter. But you can use money from the market. And if there is a good opportunity, we will look at that and see what we can do with it.

Okay. How are the sales generally doing in Germany? I know you have the Mainz HAVN project, and there are still some apartments to sell. How is the sale progress doing there? And the other question is you also mentioned it in your half year report, you have the 5 hotels to sell. What can we expect here about transactions to come in the second half of the year? Or is it still too early and it's more a topic for '27?

Again, you are always identifying the gaps, which is fair enough. Look, we've always been picturing Germany as the upside, and I still hold this up. But as much as we love to talk about the Czech market or I should rather say the Prague market, difficult it is to talk about the German market. I mean you have seen price developments in the German market going the wrong direction from our point of view because prices have not increased anymore. And the Germans, if I may say so, as I have lived long enough in Germany, are very, very kind of pessimistic at the moment. So the overall mood in the market is not ideal for selling really good quality apartments as we have them in Mainz. Still, okay, we see a slow kind of pickup, and I keep up my hope that Germany, okay, because there is very low sales figures included in the first half year is an upside more than anything else.

Now you have asked for our hotels, and that's also a good question. And I must say I've been more upbeat about the hotel transaction market like 6 months ago than I am right now. We see that over summer, even the kind of drought situation, the lack of water in the rivers and therefore, the river tourism, the ever-changing situation with Iran and things like this has again made hospitality business plans a bit more cautious, which is not helpful for negotiation speed. We are still in talks on our hotels. We also very openly have flagged that we want to sell them. We are a developer. We are not the real estate management company. But I don't dare to give you a good timing, not even kind of -- is it still in '26 or is it in '27. My hope, of course, is that we will sign and close accordingly at least one deal in '26. But as I've described, I can't give you a guarantee on this one.

Okay. I see. I see. Perhaps I have one final question. It's about the 2 offices in Mainz, the Timber Peak and also in Frankfurt, the Timber Pioneer. Here are some in Frankfurt just a little bit and Mainz a bit more, some office space available. Are here some current negotiations or, let's say, some rental contracts you can talk about?

No, nothing that we want to talk about because, I mean, it's stupid to talk about something before the ink is dry. But we see interest. And even though interest is materializing in a signed contract now in a time frame more of 9 to 12 months than 3 to 6 months, I'm optimistic for some progress in this one. The Frankfurt market is the most difficult one when it comes to buildings outside CBD and outside the towers, okay? And even there, my colleagues tell me that they do rent activities with 500 square meters to 900 square meters, which is very little per tenant.

So yes, you are right. The things are slower than expected. It comes back to the overall kind of broken spirit that I must say we are seeing in Germany. But there is interest that could materialize in contracts also for Mainz, which is actually a great situation because you can live where you work. You have the 15-minute city materialized. And it's a really beautiful icon building the highest, by the way, in Mainz, and it is in timber construction. We stand by. We keep the tension up.

We have a further risen hand by Elias New.

I guess my first question is really on the outlook for the second half of the year since you didn't issue any guidance for this financial year. I was just wondering if you could sort of share your expectations for the second half following the strong first half and whether you sort of expect the second half to be in line with what we've seen in the first half or perhaps even better, both for top line and I guess, bottom line. If you could comment on that, that would be very helpful.

Yes. Look, there's a reason why we haven't given an outlook. And I think it's justified given the volatility in the market. And I've also read the kind of, if you want, cautionary statements of my colleagues, and we are not in the range business. If I had a range business, it would be a lot easier. On the top line, you see that we have been making quite a significant increase. You know that our top line always depends where the transactions take place because if it's at equity, it doesn't show up in the top line. So we've seen the progress in Q1. We've seen the progress in the half year.

I hope that this momentum continues as much as the sales momentum in the apartments continue. And I have no doubt that the sales momentum in the apartment sales with an order backlog of almost 100% or let me be more precise of more than 90%, okay, which is eventually going to be converted to more than 90%, I probably should say 95% into contracts eventually because it's just the notary that is missing or the interior construction agreement that is still missing or something like this is looking encouraging.

When it comes to the rest, I mean, Patric, and I may repeat this, we are always very straightforward. Yes, it's encouraging that we sold assets at or above book value. But Patric explicitly said, don't expect that to happen all the time. What is our strategic challenge in this one? It is, do we prefer speed over profitability, okay? And this question, we ask ourselves every time we have an offer concrete enough on the table. And I'm saying this even though we've taken down some of the values in the course of the aftermath of the Russians invading the Ukraine. So I'm afraid I can't be more precise, not because I don't want to, but because I'm unable to do so. Rest assured that we try to do everything, okay, to optimize this kind of equilibrium that I've been talking about.

Okay. Great. No, that's very helpful. And I guess my second question is on the cost side. I mean, in the first half of the year, you reported material costs significantly down, which is due to lower construction activity. I'm just wondering sort of for the second half, should we expect material costs roughly similar? And when do you sort of expect construction activity to pick up again? I mean, 2027, at what point that kind of would be helpful. And also, I guess, on the personnel cost front, I mean also personnel costs down slightly. I mean, number of employees now at 188. What are sort of the expectations for the full year here? Is there a further reduction in the headcount expected?

Okay. Let me start with the material cost because it is obviously a question to the CFO. There is no one-to-one relationship of construction activity to that number. Why is that the case? It depends a little bit on where is the construction happening. Is that in the at-equity area or is it in the fully consolidated area? And the second thing is the number is also influenced on do we sell IAS 40 as an asset deal, and they are also going into that number. So there is no one-to-one relationship. But in terms of your -- what you phrased, you are right, construction activity is not very high at the moment in the fully consolidated area. That has to do with the project cycles we are in.

What is to be expected there? I mean there are some projects in terms of residential, which are coming up to stream soon. That is probably [ Sanfeld ] and Unterbiberg in Munich, for example, or also in the Czech Republic, the second phase of our project. So I expect that this number will pick up sooner or later, of course, because otherwise, we are not investing enough money into the market. And I hope that we will see a good thing then in '27 and '28 coming from our new asset class, which we are hoping to ramp up soon.

Absolutely. And Elias, I'm grateful for your question, even though it makes me kind of appear to be a bit thin-skinned talking about it. But over the last 3 years, we halved our employee number, okay? I mean this is one of the worst things that you go through as top management to decide that you have to address your cost base and the cost base that we can influence the biggest is the personnel cost, okay? Because very little can we do about interest rates or others. Now we are down at 188, and this is the end of the second quarter number. And I know that this number is going to drop by a single-digit number still because of people that are still included in the statistics but are going to leave us. However, we are now at the bottom of the box. We are where we want to be.

On the contrary, we are looking for new colleagues on the technical side and on the finance side in Munich, for example. And then the question is how quickly will they come on board because usually you have a long notice period. The thing that I have to point out is that other than in Austria, okay, the kind of annual salary increases, okay, come 1st of July, okay? So there's a little bit of buoyancy in this one. And I'm not deep enough in the numbers, to be honest, if that is offset by the further reduction. But I think what you can take away from what I'm saying is we have costs well under control. And while it is the worst thing, I can tell you, still in 30 years or more than 30 years of work to tell people that they better look around and see if they find a job somewhere else because we can't afford them anymore. It is that for me, okay, mentally, I'm at the end of this exercise. And I believe -- as much as I believe in affordable housing that we are also going to get our projects started, we are always depending on public authorities getting the right construction prices and what have you because nothing is less fulfilling, okay, than sitting there and racking your brain when the thing is getting better. And in this respect, our kind of headline that the turnaround solidified is perfectly appropriate.

We have another hand risen from Christian Bruns.

First of all, congratulations to this swing in half year earnings. And my question is, you mentioned, of course, the cash inflow from the disposal of [indiscernible] project. But I would be interested to know what the impact on earnings is. I think you said it's at or above book value, but could you be a little bit more precise?

Yes. Happy to do that, Christian. So we have pointed out that there were 2 deals. The one was the Paket 6 deal and the other one was the deal we call it [indiscernible] internally. So the Paket 6 deal, that was last year already the impact we had from that in terms of number that was roughly EUR 2.8 million positive because the deal started last year, it was at equity IAS 40, and therefore, we have to reflect that in the full year numbers. The deal we are talking about this year, the second one that is a EUR 5 million number roughly in terms of EBT coming from this one was a very good deal we are striking there, and that was in the first half, the impact on the EBT.

Okay. And maybe if I might add this, I would go for speed and prefer it over profitability, only my personal opinion.

Thank you, Christian. We try to balance that all the time so that everybody keeps -- is happy with us. Yes, yes. But you are right. I mean, freeing up cash for something so good-looking, prosperous as the -- this affordable housing is probably the right thing to do.

So with this, we have received no further questions. So we come to the end of today's earnings call. Thank you, everyone, for joining and your shown interest in UBM Development AG. Please feel free to contact Investor Relations with further questions. And a big thank you also to Thomas and Patric for your time. I wish you all a successful day and hand over again to Mr. Winkler for final remarks.

Thank you. Well, there is very little to say other than we are never satisfied, but we are reasonably happy with what we've achieved in the first half, okay? We are looking ahead already to the second half and the first half of next year. We've got big plans. I hope that came through nicely, but we don't only have big plans, we are good in execution, and that has been proven by these numbers. Thank you for those who bore with us up to now. I hope you found it interesting. And as mentioned, always come back to us, happy to answer any follow-up questions. And have a good day.

Welcome, ladies and gentlemen, to today's earnings call of the UBM Development AG following the publication of the Q1 figures of 2026. We are delighted to welcome the CEO, Thomas Winkler; and the CFO, Patric Thate, who will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to an analyst Q&A session.

As an institutional investor, we would like to invite you to contact UBM Development AG directly after the earnings call to clarify any questions you may have. We are looking forward to the results.

And having said this, Thomas Winkler, please, the stage is yours.

Thank you. The line is mine to this. Good introduction. Good morning, everybody. Thank you for joining today's update call on Q1. Let us take a brief look at our topics first. The turnaround, which started in Q2 of last year continues. We are proud to report a positive result before and after taxes. On top of it, our liquidity has increased to EUR 168 million, and equity ratio at the upper end of the range underlines the solidity of our balance sheet.

Strong resi sales continued into 2026, and our affordable living strategy is shaping quickly and stakeholder response is overwhelming. This creates new opportunities in the future, watch out for our news flow. With financials developing as beautifully as they did, the floor or rather the line is yours, Patric.

Thank you, Thomas. Good morning, everybody. Before turning to my first slide, I want to point out that our financial discipline and active balance sheet management, which we have upheld over the last years have once again paid off.

Please turn to Slide #2. The positive trend of last year also prevails in Q1. We have again achieved a positive result, but this time not only before tax, but also after tax. The main driver is coming from our resi sales predominantly in Austria. Thomas will come back to the number of apartments sold later in the presentation. Balance sheet ratios are well under control with an equity ratio of 33.7%. We are heading for the upper end of our equity range of 30% to 35%. Equity has not only been positively influenced by the result, but is predominantly driven by the issuance of Genussrechtskapital of EUR 25 million in the first quarter. Net debt at EUR 484 million is also well under control. This represents an LTV of 43%.

Overall, this positive result has reinforced our conviction that we are on the right track with our financial discipline, be it the tight cash control, the debt strategy or the cost control we are doing since quite a while. On the next slide, I will give you more flavor on cash management, where I also have some positive news to report.

Please turn to Slide #3. Let me walk you through our cash position and repayment profile. Both reflect our continued focus on active liquidity management and financial discipline. Starting with the cash chart on the left. You can see that our cash position has remained broadly stable throughout the last reporting periods. This is not by accident. It reflects deliberate cash and debt management and ongoing inflows from residential sales, which provide a reliable and recurring source of liquidity.

Looking at Q1, we closed full year 2025 at EUR 118 million and Q1 2026 at EUR 168 million of cash, an increase of EUR 50 million in a single quarter. This gives us a solid starting point heading into the repayment events of Q2 2026. On that note, let me turn to the repayment profile on the right. The most immediate item on the agenda is Q2 2026, where we have 2 bonds maturing coming to the step-up date, a EUR 73 million senior bond, which was already repaid last week and a EUR 56 million hybrid bond. Together, that is EUR 129 million in repayments without the interest, of course. We are well prepared for this, not only because of the present cash position. The EUR 25 million Genussrecht raised in the Q1, combined with the EUR 56 million we are planning to raise within the next 2 weeks, we will be able to replace the hybrid bond before it step up on 18th of June.

In other words, we are replacing hybrid capital with subordinated Genussrechtskapital, a clean and deliberate transition. After June, we will have done our homework also when it comes to the equity hybrid position. Beyond 2026, the picture on maturity is very manageable. There are no bond repayments between July 2027 and October 2029.

Three key messages from this slide. First, our liquidity position has been actively managed and solid for years. Second, the Q2 2026 repayments are fully planned for and covered. And third, our maturity profile beyond 2026 is well balanced.

Please turn to Slide #4. As I have already briefly mentioned, we can rely on a robust balance sheet, particularly in terms of equity and the net debt ratio LTV. Thanks to our proactive balance sheet management, we were able to increase our equity by EUR 27 million compared with the end of the previous years. Hence, our equity stood at EUR 377 million at the end of Q1. With an equity ratio of 33.7%, we finished Q1 comfortably within our equity range. Our focus remains on maintaining a strong equity base so that we can be financially flexible whilst preserving our financial resilience. This is a good starting point and a precondition for the strategic shift to affordable housing. Not only were we able to increase our equity, but we also managed to reduce our debt ratio at the same time.

As can be seen in the chart on the right, UBM has been able to not only control but steadily reduce its net debt despite a challenging market environment. Net debt has been at its lowest level since 2021. This results in positive LTV development. After peaking at 51% in Q1 2024, our loan-to-value ratio has steadily declined and now stands at 43%. Maintaining a conservative LTV profile in a challenging market is not a walk in the park, and I think this number speaks for itself.

Back to Thomas.

Thank you, Patric. Slide 5, please. We see unbroken momentum when it comes to our resi sales. With an order backlog of 86 units, I have no good reason to doubt that this trend continues into the future. What does order backlog actually mean? An order backlog includes reservations with a down payment and in many cases, only awaits public notary, KYC or bank clearing. In other words, it is only a question of time that the order backlog converts into sales. Germany is still slow, but represents an upside without any doubt.

Let us have a look at Slide 6 to explain my optimism. Building permits for new apartments have been almost collapsing between 2022 and 2025. They've been shrinking double digit year-over-year. Even looking at this year's and next year's forecast, there's very little hope for a recovery, leave alone a quick recovery. While building permits in Germany are predicted to grow over the next 2 years, the reality looks pretty dire. With 206,500 apartments completed last year, we have seen the lowest number since 2012. Our down -- it represents a downturn of 18% or a reduction of more than 45,000 apartments over 2024, which was already not a terrific year.

A recent article in the economist with a subheadline, rent controls are exacerbating housing shortages and feeding populous anger said it all. We have been warning of a growing mismatch between demand and supply over at least the last 18 months.

Have a look at Slide 7 to see the effects on pricing. Across Europe, residential prices are back above pre-pandemic levels and rising again despite rising interest rate expectations and an unhealthy percentage of net income devoted to housing. Every other industry would actually wreck its brain how to reduce the cost of the product. European governments think of rent control and more regulation with perverse consequences, as shown before. UBM's answer is different.

Have a look at the next slide. We have informed you of and are busy executing a 2-product strategy, affordable housing and premium living. While affordable could be called home cooking, if you want, premium is the gourmet product. The one is driving volume, the other one is driving the margins. The one is targeting middle-income, younger families who are prepared to rent at this stage of their lives. Affordable housing is designed for institutional investors. The other one is addressing the upper income part of the population and individual buyers.

Affordable needs to be technology agnostic. What do I mean? The building system is suggested and provided by the construction company as long as the price per square meter of living space above ground is at or below EUR 2,000. Offers from several providers are available on the market now. At the same time, we continue our timber hybrid commitment in premium. Standardization, simplification and modularization are the key drivers for both. The construction site has to move into the factory. I'm not getting tired to say this over and over again.

Industrial production brings down cost, eliminates the number of deficiencies and addresses the shortage of construction workers. We continue to pursue our strategy of focusing on A cities like Vienna, Munich or Prague premium. We follow the market demand and go wherever the administrative bottleneck is acknowledged and permits are granted in shorter periods than we see today. Housing is the top public concern according to polls across Europe. There can be no doubt, affordable housing is the next big thing in all of UBM's markets. How affordable is affordable? Let Patric guide you through our master calculation. Patric, please.

Let me now walk you through our development calculation for affordable housing, which demonstrates that our new asset class can and should develop into a source of future profits. As you can see, in Austria, we are targeting net selling prices of around EUR 5,000 per square meter residential floor area. At this price and with a monthly rent of EUR 15 per square meter of residential floor area as well as EUR 150 per parking space, institutional investors can expect an annual return of around 4% for their investment in affordable housing.

As mentioned before, this product is designed rather for institutional than individual investors. To achieve those net selling prices or yields, one of the main key factor is to reduce the above-ground construction cost to less than EUR 2,000 per square meter residential floor area. This can be achieved in particular using prefabrication element modular systems. Additional construction costs amount to around EUR 500 each for underground construction and residential costs. Although we expect a reduction in residential costs over time as the learning curve will kick in, this is not yet apparent in underground construction. In contrast to underground construction, we will be able to achieve cost savings in financing. These cost savings derive from the shorter construction phase, whereas the total period to be financed from the purchase of the land of construction to the completion of the construction will be around 3.5 years.

We assume a debt-to-equity ratio of 50-50 in the land acquisition phase and 25-75 split between debt and equity in the construction phase. This could be further improved by customer, institutional investors, prepayments in line with the BT 4G and the like, which are not part of the calculation. On top of that, land acquisition is calculated at EUR 850 per square meter, and I want to flag this clearly. Land cost is highly location dependent and directly tied to achievable rents. This is one of the key levers in our selection process for land. After deducting all these costs, the calculated developer margin comes to around 18% to 19% in our master calculation.

As we view this product a key volume driver, we believe that a margin slightly below the target of 20% is more than justifiable. Given these promising figures, our affordable housing scheme is set to be the next big thing in all UBM markets, and we are looking forward to implementing it as soon as possible.

With that, I would like to thank you all for your attention and hand back to Thomas.

Okay. So where do we stand 5 months into 2026? And what is the outlook? We are fully focused on continuing the turnaround as we rebalance our portfolio. This means a ticking the execution box for our existing premium residential pipeline of around 2,000 apartments. We are also keeping the ESG focus as nobody will be interested in buying an asset which is stranded within less than 10 years. Whoever is not learning the lesson now that the dependence on fossil fuels is unsustainable, will not get it in the future and eventually faces the same fate as the dinosaurs.

We have brought our 2-product strategy underway, and I promise nothing, nothing will stop us from implementing it. We still owe you evidence of success in being able to free up cash from our standing and nonstrategic project portfolio. Bear with us for a little longer, and we shall deliver as we did in the past. And then watch us build a dedicated affordable housing pipeline. We have been overwhelmed by the first market reactions, including first offers for suitable properties. We see less competition for these properties already today, and we shall see even less in the future when we benefit from being in the right segment and facing growing demand.

Before getting too carried away, let me end the formal presentation at this stage and open the line for your questions. Thank you for your attention.

Thank you, Thomas and Patric. [Operator Instructions] To we are starting with Stefan Scharff.

I have a couple of questions. The first question is about the portfolio rebalancing. It will need some time, 2 or 3 years, maybe a little bit more and also capital. So how far or how is the progress with selling nonstrategic assets or nonstrategic projects or to sell also hotels or other investment properties?

Okay. So we answer the questions question by question because usually you have more, Stefan. Well, the 2 to 3 years are right to complete the portfolio rebalancing. But the portfolio rebalancing has already started, okay? So it will be a transitional process, and it will go step by step as much as we didn't stop developing hotels overnight, particularly as we had the hotels that were already under construction to be completed.

So the 2 to 3 years is the right guess to say that is then the ultimate EUR 2.2 billion pipeline, but we are building this pipeline as we speak. The other question, of course, is the right one. How do you want to finance it? And yes, we've been very open in saying we are financing it. through a sales list, which you can find in our presentation on Slide #19, okay? So if you want to circle back to Slide #19, you will see what we have put up for sale officially, readable for everyone. The Immobilien Magazine has excessively reported on it. You've mentioned hotels and appropriately, you've mentioned hotels because the hotel transaction market is actually the first market that has reopened fully again with office being somewhat behind, which is the second column. And the resi is actually a question of the next 6 months.

So we will have sold off all the resi that almost all of the resi that you see in column #3 within the next 6 months. So I'm pretty confident that, that goes hand-in-hand with our acquisition process regarding new pieces of land. And you know that we have one project already in the permitting process where we own the land already.

Okay. Okay. I see. So if we have a -- so do we get some news here, some positive news here, let's say, in the second or in the third quarter that you can deliver some first sales transactions?

Yes. I'm confident. But until the ink is right, it's a bit premature to talk about it. But we are in several conversations regarding the sale of such assets.

Okay. I see. I see. So if you look at the resi sales, you were strong last year in Austria and also in the Czech Republic. And there was not too much or just a middle picture in Germany regarding the resi sales. You have Mainz, [indiscernible] and you also have Berlin, Thulestrasse. Can you say a bit more here what do you expect? Or how is the picture at the moment in Germany for Mainz and Berlin?

Yes. Very good question. And don't forget about Munich. And you have this chart that I presented when I presented the sales numbers on Slide #5, where it gives you all the apartments for sale. And you can see that Munich is showing up to 366 apartments in 2 projects. We have one Timber living that is not even officially in the marketing process because we had to settle, which we have done meanwhile, a dispute with the neighbors. But even without being officially on the market, we have a double-digit reservation number in Munich.

So that's good news. And I've been very optimistic when it comes to Germany catching up because, look, there are 200,000 apartments that are completed every year, and there is 400,000 apartments which are needed. So unless you believe that we are building or rather developing these apartments in completely the wrong areas of Germany, which we don't because we are only in the A cities, you should kind of understand our optimism. And bear with us, you will see more sales than you've seen last year from Germany.

Okay. Okay. I see. So there's also some movement on your debt side. You did the repayment of the sustainability bond last week, I think. And there's also this hybrid bond to come in June, EUR 56 million. So that depends a little bit on the new participation capital. You did the first step by raising EUR 25 million. And there will be another EUR 50 million or EUR 60 million to come in the next weeks. Can you say a bit more here about the coupon? I would suggest or I would think about 8.5% to, let's say, 9.5% or what's your cash position after all these transactions? And what does it mean also for your financing expenses to come in the second half of the year and in next year?

Okay. So that is more than one question, to be honest. But anyhow, let's make it step by step. So in terms of interest rates, you are right. We publicly already hammered that out. Note 7 says 9%. That is the ballpark. So you are right between 8.5% and 9.5%. You are also right with the step-up date that is in June for the hybrid. We repaid the bond, as you pointed out in your question as well with the EUR 73 million plus the interest on the EUR 73 million last week. So that has been already paid.

The step-up with the EUR 56.4 million, that is the amount outstanding. And on top of that, there is an interest rate, so it's close to EUR 60 million that will be done in June, and we are in negotiations in order to have an inflow, which is an equal amount to the EUR 56 million soon. So that we have -- if you want an inflow and an outflow and it doesn't have any effect on the cash position then. And the EUR 73 million or EUR 75 million had a cash effect on the cash position. So you have to deduct that from the EUR 168 million, which we presented.

On top of that, the inflows are coming from residential for sure, over time, that is the LeopoldQuartier D, where we are selling and where we will be soon out of the bank financing debt and then it's going into our pockets. It's the rest of the LeopoldQuartier C. And it's also in Germany when we started selling more in mines that goes also into our pocket. So the cash inflows will come from this one. In addition, it is what Thomas said in terms of the refinancing. So we will see the one or the other project we will sell. Cash inflows coming also from this position, I don't have a clear number which I can communicate where the cash is going to. But anyhow, you know our policy.

We are trying to have always a proper cash position so that we can pay back. I mean the good news is after the second quarter, we have paid back what we have in this year in terms of bonds and hybrids to be done. So the second quarter can be probably also the cash position can be used for our strategic rebalancing, which is needed. And most probably, you won't see cash positions, which are in the range of the first quarter. So the EUR 168 million was tied up in order to be able to show the market that the repayments can be done easily.

Okay. Okay. My assumption is that you could be for half year close to the last year December where it was at almost EUR 120 million, and you could be close to that if no further sales or disposals kicking in, bringing this number even higher. But EUR 120 million from December could be approach that you are close to this number also in end of June. But okay. Another question is about Poland. The output in Poland quadrupled to EUR 38 million. And in the quarterly report, I could read about Poland that you sold a stake in the Poleczki Business Park. Perhaps you can say a little bit more about Poland and this sale.

Yes, of course. I mean you pointed it out correctly. The number has been influenced predominantly from the 25% stake, 24% stake we were selling in the Poleczki Business Park. So we are now at 51%, 49% instead of 76%, 24%. Poland is a topic where we look into, is there affordable housing or it's called their PRS. Is that something we could go into? We see that the market is moving. We still have their land in the region of the Poleczki Park, which can be used for this one. We look at that from the angle, should we do it ourselves or should we sell it.

So Poland will be probably, over time, a small source of cash in terms of helping us in the strategic shift. But I don't see that we do things like we have done in the first quarter. We won't see many things in Poleczki because that is a kickoff for us with the selling of the 24%. And remember that Poleczki is also quite a nice source of rent income.

Okay. Okay. Yes, it's a good cash machine, yes. So as this is the last day of Christoph, all the best from my side for Christoph. And it was always a pleasure and have a good time or good time for your next step.

And we will move on to Christian Bruns with the next question.

I think already answered questions. There's one remaining. And I would like to know where do you stand with your ambitions for the affordable housing sector? And could you provide us with an update on the pilot project?

Sure, sure. It's quite funny because with all the Christophs and Christians, I think Christoph, but it's Christian. So let's make it easy. Chris, where do we stand? Let me start with the second question. Second question is on our pilot project, and it's in Victor-Kaplan-Strasse here in Vienna, it's 92 apartments, okay? It's an 8-story building. It's almost an ideal plot of land, okay? We have still to the knowledge what's built there. And we are making good progress, and it will be built by the general contractor [ PORR ] with the poor living proposition. And that gives us then also a showcase that we can, similar to the LeopoldQuartier is the first urban timber hybrid one show around to everyone.

But we're making good progress. And as I said, it's a nice project, 90-plus apartments, 8 stories. It will kind of be almost a showcase in every respect, including balcony, photovoltaic pipe power stations and what have you. I've seen the mock apartment built up, and it's quite amazing. It's a different thinking. And this is why we are talking about the shift in paradigms that is currently taking place when it comes to housing.

The other question was how advanced are we with the execution of our strategy. Well, it was pretty quickly adopted by everyone because the market is waiting for it. We are solving a problem that our society has. I'm not sure if everyone is aware, but I keep on pointing out this economist article across Europe, okay, we see strengthening of extreme political powers abusing this topic. And it's not only migration, it's predominantly people from the countryside that move to cities in order to get work opportunities. And we have shortages throughout Europe, and the answer can only be let's propose a product that is constructed or I should rather say, put together differently than it was the case in the past. And by this, reduce production costs significantly without offering something that is dissatisfying.

The contrary is the case. I really love the apartment. I think that standard bathrooms are just perfect or this idea of an Xbox is kind of -- you ask yourself, why hasn't this been invented earlier? And the reason for it definitely is because there was not enough pressure on this topic. But now it's spoiling damned hot and once we start with it, the beauty is it's very scalable because there is interest from all stakeholders, be it financing banks, be it investors, be it interested people who want to rent. I mean, we even got calls or messages asking where can I rent something of this kind, so that I'm pretty optimistic that this is going to fly quicker and higher than everybody at the moment imagines because there was a lot of talk about it in the past, okay? But nobody was coming up with a proof.

Now we have several construction companies offering the magic EUR 2,000 per square meter livable area above ground. And we are not even counting on scale effects, which are definitely going to kick in if you order, I don't know, instead of 500 slim walls, 50,000 slim walls. And I'm not kind of sci-fi talk. This is a reality, and this is going to be a reality soon.

Thank you for your question, Mr. Bruns. And as no further questions are coming in by now, I will hold the room another moment. We come to the end of today's earnings call. Thank you, everyone, for joining and you've shown interest in UBM Development AG. Please feel free to contact Investor Relations with further questions. A big thank you also to you, Mr. Winkler and Mr. Thate for your time and all the best to you, Mr. Rainer. I wish you all a successful day, and I'm handing back over again to Mr. Winkler for some final remarks.

Thank you. Thank you very much. Well, it's a beautiful summer day here in Vienna, and I guess it's a beautiful summer day almost throughout Europe. I understand that everybody is already dreaming of the holidays and vacations. We will not have too much of a holiday. And I ask you to at least keep an eye on the news channel and our social media where we will report over the course of summer what progress that we have been making in terms of sales. With this, thank you very much for your attention and a very efficient and smooth conference call, and have a good day.

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of the UBM Development AG following the publication of the full year figures of 2025. We are delighted to welcome the CEO, Thomas Winkler; and the CFO, Patric Thate, who will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to an analyst Q&A session. As an institutional investor, we would like to invite you to contact UBM Development AG directly after the earnings call to clarify any questions you may have. We are looking forward to the results.

And having said this, Mr. Winkler, please, the stage is yours.

Thank you, [ Ingmar ] and good morning, everybody. Thank you for joining today's full year conference call just before the start of the Semana Santa, the Holy Week and Easter. We have a couple of good news and a promising shift in our strategy to present. Looking at the highlights of Slide 1, we have 5 major achievements or news and the outlook. First, we have promised you a profit in the second half of 2025 and are overdelivering with a profit for the full year. Two, we promised to sell 450 apartments, and we achieved 452. With EUR 118 million at year-end, cash stood higher than expected. By the end of March, we are able to state that already existing cash inflows will provide for the bond repayment on the 21st of May. And more important, we are able to announce already at this stage that we shall repay the hybrid upon the step-up date as also I spoke yesterday evening.

Fifth, mentioned at the beginning of the call, we are going to adjust our strategy given the extreme demand for affordable housing and a clear business case, which we have developed and which didn't exist up to now. Finally, we expect to benefit not only from this move in strategy, but also from a new balance in the market after a radical shakeout and despite the macro uncertainties. So let me get a bit more specific by turning to Slide 2. After 2 loss-making years, we are returning to profitability.

As can be seen in the Zoom, EUR 7.7 million in the fourth quarter overcompensated the first quarter loss, which kind of spilled over from 2024. Pretax earnings of EUR 4 million is higher than anticipated for the full year and clearly underlines the turnaround of our operational business. A more than 30% higher revenue, a EUR 18 million reduction in net debt and a staff reduction to almost 200 are rounding up the picture at year-end. By the way, we've reduced headcount by more than 40% over the last 4 years, and I expect the number to be closer to 150 than 200 by end of this year. In other words, we are acting out of a position of strength again, admittedly something we at UBM are proud of after 4 extremely challenging years for the industry.

Please turn to Slide #3 for the major driver in 2025. We have hit an all-time high in individual apartment sales with 452 or 12% more apartments sold than in the strong year 2024. Remember, there has been no business case for institutional investors at the current price level and interest rate. The vast majority of sales occurred in Vienna and Prague, where we expect the market dynamics to continue based on what we are seeing in January, February and part of March. You may look at Germany as somewhat disappointing. For me, Germany represents an upside opportunity in the future. There's one thing for sure in all of our markets, prices in the premium living segment only know one direction, and this is up. Rather than starting to talk about premium and affordable, I turn the micro to Patrick, who will first provide you with detailed insights into our financials. Patric, please.

Thank you, Thomas. A warm welcome also from my side. Please turn to Slide #4. Let me walk you through our cash development and capital structure, both of which clearly reflect our successful focus on financial discipline and active balance sheet management. Starting with liquidity. Over the past periods, our cash position has remained fairly comfortable despite a number of significant repayments. This stability is the result of proactive cash management and timely access to the capital markets in recent years. In 2025, we successfully raised a total of more than EUR 160 million on the capital markets, making it the second strongest year in the last 10 years. This was also key in securing financial flexibility and optimizing our maturity profile. I will come back to our bonds in more detail on the next slide. At the same time, we executed targeted deleveraging measures in 2025. In particular, we repaid EUR 75 million through a bond redemption in November and an additional EUR 40 million in promissory notes in December 2025.

In total, this amounts to EUR 89 million of repayments within less than 1 quarter. These repayments were achieved without overly stretching our liquidity position. As a result, we closed the year with a cash balance of EUR 118 million, above our guidance of around EUR 100 million. Please bear in mind that we were able to do so without any emergency sales and full preservation of our asset base waiting for more stable market conditions.

Turning to our equity position on the right side. We see a very stable development over time with the highest equity ratio by year-end in the last 3 years. Our equity ratio currently stands at 32.1%, lying comfortably within our target range of 30% to 35%. This is a result of a clearly defined capital structure strategy. We have actively managed our equity base, including the use of hybrid capital. This is also why we have prioritized addressing the hybrid in the first half of 2025 before turning to the senior bond market in the fourth quarter. In parallel, our loan-to-value ratio remains below 50% in the current environment. We consider this to be a signal of strength. Overall, let me highlight 3 key messages. First, we are executing in a disciplined and forward-looking manner. Second, we maintain a robust and well-balanced equity position within our defined target range. And third, our capital structure remains fully aligned with our strategic priorities. This is essential as we move forward with our current strategic initiative, the portfolio rebalancing. Please turn to Slide #5.

Let me start with the key message upfront. We have a EUR 56 million hybrid bond, which reaches a step-up date on June 18 this year. We intend to repay this instrument upon step-up amounting to a total of EUR 59.5 million, including accrued interest. As announced via our talk release yesterday evening, we are currently in advanced negotiations for subordinated Genussrechtskapital of up to EUR 90 million. Our intention is to replace the hybrid bond with this equity-like instrument. The main source of the Genussrechtskapital is expected to come from 2 parties for whom we are an important customer in the field of private building construction, which is currently going through rough times. It is IGO Industry and Porr. Porr has already granted Genussrechtskapital to UBM back in the year 2014, and we have repaid it fully over the following years. For completeness sake, the EUR 73 million sustainability-linked bond will be repaid on May 21, of course.

Looking beyond 2026, the maturity profile looks very manageable. Next bond repayment of EUR 50 million is due in July 2027, and there are no further bond maturities until October 2029. This creates broad refinancing windows and high visibility. It allows us to act opportunistically and align future capital market transactions with favorable market conditions.

Before I hand back to Thomas, I would like to thank you for all your trust and for the constructive dialogue throughout 2025. Back to Thomas.

Thank you, Patric. Slide 6, please. The next big thing in Europe, particularly in UBM's markets, is undoubtedly affordable housing. While there is no specific terminology behind the English word, there is a certain confusion around the term Bezahlbares Wohnen in German. While Bezahlbares Wohnen often means very low maximum household incomes as a limit, generous public subsidies and maximum regulated rent levels, Bezahlbares Wohnen is targeting price levels which, a, provide a business case for institutional investors; b, a business model for developers and most importantly, c, the cost of housing not exceeding 30% to 35% of net disposable household income, which is, by the way, also in line with the definition of [indiscernible] and OECD.

Admittedly, there has been quite a hype around affordable housing already for a while, but nobody could make the ends meet. Conventional construction costs have been soaring up. Supply has been steadily going down and building permission times increased significantly since COVID as did equity requirements by the banks or even regulators. The construction industry has reacted to this as they are the only ones to have the resources and execution competency. Porr under the brand of Porr Living, STRABAG under the brand of Moleno or Tetrix or [indiscernible] under the B-Solutions brand are today offering construction prices at or even below EUR 2,000 per square meter of lettable area above ground. That's important as opposed to gross floor area. We and the remaining developers are now following by opening ourselves to these technologies, irrespective of the various systems of assembly or the building materials and elements used.

The same is true for geography. It is driven by demand and public framework conditions rather than by parameters like A city or size. As a result, UBM is going to pursue a 2-product strategy in the future, affordable housing on the one hand and premium living on the other hand. While affordable housing is primarily focused on price or the S in ESG, premium living continues to address the E in ESG, i.e., timber hybrid construction as well as renewable energy sources. Two product strategies have proven highly successful in other sectors in the past. Just think of Apple with its Pro Series and standard series or for the more fashion savvy listeners, think of H&M and COS. UBM has proven a track record of executing its shifts in strategy in the past. Just think of us moving from #1 hotel developer to one of the leading timber construction developers in Europe.

We aim for an early mover advantage again when it comes to affordable housing. The still unanswered question is, how do we want to finance this shift in the light of the tight financial boundaries set by the industry environment? Well, have a look at Slide #7. We are going to rebalance our EUR 1.9 billion pipeline from Q3 of last year. EUR 0.73 billion of resi projects will continue as streaming living, unchanged from what we described and hopefully as successful as it was. A selected number of office and light industrial assets with a total volume of EUR 370 million have also made it to the cut and details are given in our backup. We have completed a number of projects since last September. Best examples are the office buildings LeopoldQuartier Office, Village im Dritten 9A or Timber Peak. Together with 6 projects, which we now have classified as nonstrategic, they are adding up to a book value of EUR 740 million.

Selling them all creates a cash potential of EUR 360 million after redemption of bank debt and under the assumption, we are able to sell them at book value. The EUR 360 million of freed up cash are planned to be reinvested primarily in affordable housing, potentially creating a project volume of up to EUR 1.1 billion, assuming a leverage of 66%, which is far from aggressive for the rather low-risk affordable housing. The lower end of the range or EUR 0.8 billion would represent a leverage of only 55% or you could also take it as a rather cautious look at the shorter-term achievable sales volume. In total, the new pipeline will have a volume of up to EUR 2.2 billion or EUR 300 million higher than before. We realize that this portfolio rebalancing might require a more in-depth session than today's full year conference call, particularly for the analysts on the line. This is why we are offering a half-day session after the Easter break on Thursday, April 16. In preparation of this session, you find a full section on the portfolio rebalancing at the end of the backup of today's presentation.

Given the time, let me rather proceed to our outlook at this point, which can be found on Slide #8. 2026 will be under the headline portfolio rebalancing in order to reshuffle resources to affordable housing, which is going to be the asset class on the highest demand and focus irrespective of the overall economic situation. The required cash will primarily come from the disposal of stainings as we want to remain a pure-play developer. This also requires an adjustment of our workforce in the newly cut portfolio and will benefit additionally our cost base. 2027 is seeing 3 major features with a positive impact on profitability. One is less competition; two is a widening supply-demand gap; and three, almost no repayments, as already mentioned, and this up to Q3 of 2029. We have delivered what we promised in 2025 despite all the uncertainties in the real estate market and the overall economy. We are determined to deliver also in 2026 on the basis of the presented clear road map and our track record.

With this, I would like to conclude the formal part of our presentation. Thank you for your interest and open the line for your questions.

[Operator Instructions]

And we have Mr. Stefan Scharff. Scharff, you Should be able to speak now and place your question.

I have a couple of questions. The first question is, can you give us a split for the 452 residential apartments, which you sold last year and perhaps also say something about the 10-year swap rates were up the last 3 weeks about 40 basis points and the financing conditions deteriorating in the last weeks, making financing for residential apartments more expensive, at least in Germany. What is your view here for sales of apartments in Germany and your general view on the economic situation?

Great questions, Stefan. Let me take the first one. It's definitely the easier one, which is the breakdown of our apartment sales. I give you the rough numbers, but 220 are coming from Austria, predominantly from Vienna. 200 are coming from Czech Republic, Prague only and around 30 from Germany and Poland. This is why I said you might look at Germany as somewhat disappointing. But I think it creates an upside for us in 2026 because there is definitely no press release I'm aware of that there is a higher supply coming to the market, and there is reports of up to 1.2 million apartments missing. So I look at it positively.

Shall I answer the overall economic question? Well, everybody knows that we cannot say anything about it because it all depends on the duration of the conflict, the war in Iran. Everybody has thought that it will take much shorter than it already takes. And we are well aware of the impact and have not been ignorant to them and still get some optimism out of it because there are things that need to be done. In our case, it's this shift to affordable housing. But I think overall and knowing where you are sitting, which is right in the heart of Germany, there's no way around than fixing the infrastructure in Germany. And always complaining and asking yourself, what's going to happen next and what could get wrong on top of it is kind of not a good way of tackling the future.

I hand the question for the 10-year swap rate to Patrick.

I mean, predominantly, you answered that, Thomas, because we are not more clever than the market. We see that the market is nervous. You can see that on the swap rates. You can see that on the 10-year bond. You can see that everywhere. I mean that is one part of the equation of somebody. And just to be reminded, we are selling the apartments to individuals currently. We are not selling them to bonds because they are anyhow out of the window that they can make heads or tails on their investment calculation. So an increasing interest rates on this side is not helping at all for these bond investors, but investors who are not there can't be going out of the market because they are anyhow not there.

So the question is what are the individuals are doing? Does that have a big impact on their plans to buy an apartment? And secondly, what are the banks doing in terms of are they providing liquidity in terms of debt? Or are they just sneaking away from the market? I can't answer this question yet. As Thomas was pointing out, it's an unsecured timing currently. We are all hoping for a quick end of that Iranian conflict so that we come back to what we have seen a positive trend in selling apartments.

Okay. I see. If we have a look at your new strategy, that makes sense. The affordable housing segment is booming for sure, in the next years. I have 2 questions. The first is how much can you save through standardization and modularization to make it cheaper, the square meter prices? And the second question, perhaps more important is on Slide 7, you introduced your plans to sell about, let's say, EUR 700 million or EUR 750 million and put this money, this capital into the new affordable housing business. Can you please give us a schedule here? Or is there a schedule to say this year, we can sell EUR 250 million or EUR 300 million and another EUR 300 million next year? And if yes, or this schedule, which properties like, say, hotels or which office projects like, say, Dusseldorf could fit most to be sold quite soon?

Tricky questions, but I still try to give you a satisfactory answer. Your first question was what is our calculation. I should rather refer you to the construction companies. Now I know that they haven't been all too detailed because all the construction companies like to talk about civil engineering and public contracts. But they all have slides in their decks. And what is most important is they all promise us EUR 2,000 per square meter of lettable area, okay, above ground. That's also important because there was a lot of confusion, and there was a lot of talking about EUR 2,000 per square meter, but if it's per gross floor area and if it's not including the areas that are still required like underground parking, it's no good. So from that point of view, they offer it. And what we had to kind of make peace with ourselves is that if it's in elements that do not consist of timber, it's fine. It still fits into our adjusted strategy because it's the S in the ESG.

It's the social part because otherwise, there will be no living room provided for the people who are currently seeking apartments on the market. I think -- I personally think you will see 2 developments. The one is that elements are assembled, and these elements are purchased according to availability and price. And we have put in the backup on the very last slide, an illustration, of course, of our sister company because we are most familiar with what they are doing and all the interesting kind of "innovations" that they have, the plug-in cable connections, the pre-wall units, the timber frame external walls. And you're absolutely right. It's all about the standardization. And we even hope, but this is what we need the public authorities to is a kind of -- and I need to say it in German, typification as we see in cars.

It makes no sense once you have a proven system out there to wait for individual permits because they take endlessly, and we need the public to play along with us. And this is also, by the way, and you haven't asked for it, but I answered it, why we are also completely agnostic to locations. We go now also to B and C cities. We go to wherever we are welcome because we want to achieve faster permissions and less bureaucracy. And if this is promised, it will be decisive for us deciding for a location. We want the Hamburg model simplifications throughout Germany and also Austria. They are then probably called Vienna model, but there should be no other difference.

And finally, we also hope that there will be reasonably priced communal land reserves that will be made available for the market. Now that was the one. The other one is the schedule that -- and as I said, there is plenty of information in the backup, and we will spend half a day with you on the 16th of April, including our CTO, which should be helpful. Now on the schedule of the sales, it is a difficult one because the transaction market still is a very, very kind of unreliable source, which is maybe a bit of a harsh word. I think what is fair to say is that the hotel transaction market has opened. And I'm not only talking about the transactions that are led by [indiscernible], which I think is great news because [indiscernible] is an institutional established investor. It's not an exotic investor of any kind.

They have bought the Andaz in Vienna. They've bought Motel One and 25hours hours in Cologne. And they are not the only ones, and that is basically what my transaction people came back with from [indiscernible] income. Everybody is interested in hotels. So my educated guess would be looking at Slide 32, where you see the standing assets that the first category is not by coincidence the hotel category. And we have the Voco in Den Hague, the Kempinski in Jochberg, which are also up for sale. Now the -- the other potential is the nonstrategic projects because we have projects that are even in the process of gaining building permission, but they are now outside what we think we should do, and they are also listed on this slide.

And last but not least, again, not asked but answered, with the office, we are least optimistic, but we have bought time for the office sales by having refinanced them. We bought time to rent them out, which proves to be more difficult than we thought. And we've bought time to bring them to the market at reasonable multiples because there is one thing for sure. There is no new supply coming to the market, but there is demand for new office space. I hope this answers your questions.

That seems to be the case. Thank you very much for the questions, Mr. Scharff. And we move on to the next participant dialed in by phone. Elias New, you should be able to speak now.

I hope you can hear me.

Yes, we can.

My first question would be on participation capital. So just wondering what the reasoning was for deciding to issue participation capital rather than a new hybrid bond. So the question is really why equity rather than debt? And what was the rationale for the EUR 90 million in size relative to the hybrid bond repayment of around EUR 65 million. And any additional details you could share in terms of the rights associated with this participation capital would be very helpful as well.

Of course, Elias, let me tackle this question. So first of all, the hybrid is also accounted as equity. So we are talking about 2 instruments, which are both in the area of equity when it comes to IFRS accounting. The difference between the 2 is not too big in terms of Genussrechtskapital and hybrid. It's both deeply subordinated. The construction, which we have in the Genussrechtskapital, which we are planning to sign is close to the hybrid we had. One big difference is there is no step-up in Genussrechtskapital. So you have a fixed interest rate, which in theory, at least, can be used forever. And the termination like also in the hybrid because that is the way why we count it as equity is up to us in the end. It's not up to the one giving the capital to us.

So your question was also why EUR 90 million and not just replacing it. I mean, we have the chance to get to a little bit more equity without having capital issuance. We think we should tackle that because a solid equity structure is giving us also the opportunity in order to rebuild a little bit the company, as Thomas was pointing out, because you need 2 things maybe you need, for sure, capital to do so and equity can help you as well if you are planning to reshape your company. That is the reason why we did it, and that is also the reason why we decided to do it up to EUR 90 million.

Does that answer your question?

Yes, that's great. That's very helpful. And I think you mentioned that there will be 2 tranches. Has the first one being concluded? Just in terms of the time line there, that would be helpful.

I didn't say it's 2 tranches. What I said in my speaker notes is that we have probably 2 major sources, which is IGO and Porr who are up to signing, and it's like a bilateral you're doing. The first one we will see very quickly. The second one will be seen before the repayment. That is why we are so keen of saying we will repay the capital when it's up for the step-up. So we will see that early Q2, maybe Q1 even.

Okay. Great. That's very helpful. And my second question would just be on your early expectations for 2026. I mean I appreciate you already touched upon office and hotels remaining somewhat uncertain. But any commentary on your sales expectations in residential would be very helpful also in terms of apartment numbers, et cetera. Any sort of early thoughts on that would be greatly appreciated.

Yes. Hopefully, not repeating myself, but we have a sales process running at the moment for the Andaz in Prague and for the Jochberg hotel in Jochberg, the Tirol. And we will very soon after the Easter break open a sales process also for the Voco the Hague. So we have 3 sales process ongoing. When it comes to apartments, there was a lot of skepticism when we kind of were very upbeat on the development of 2025 back in 2024 because we sold already 400 apartments and everybody said, well, that's going to be a stretch to beat this one. Well, we've beaten it by 12%. We see the usual seasonality, if you want. January is a weak one and part of February is also kind of weak, but then we compare it on a seasonal basis. Here in Austria, we are selling apartments very well.

And in all of our developments, remember, we are currently completing 750 apartments. Half of them have been sold a bit more than half of them that have been sold. The other half is going to get off the shelf. Now even better is Prague, where we are basically sold out with Na Plzence 1. And we wait for the building permit because otherwise, we cannot kind of draw up the contracts. We wait for the permission for Na Plzence 2, which is opposite and is kind of the mirror Na Plzence 1, and we were even able to increase the prices. So we have another 150 or so apartments on the other side of the street.

And then we come to our German projects. The one I'm most optimistic about is the Thulestrase project in Berlin because everybody is aware of the Thulestrase -- sorry, of the Berlin apartment situation. And it hasn't gone any better. And we also get a KfW 40 subsidy for this. So it's even interesting for kind of private investors, if you want. So I expect the pace of sale to continue pretty much in line with what we've seen in 2025. And there's no reason or no indication from our experience in the first 3 months that would let me be pessimistic about it.

And we get to the next participant. Christian Bruns, you should be able to speak now and raise your question.

Well, seems to be a bit tricky. Mr. Bruns, you should be able to unmute yourself and place your question. Okay. So then there are no more questions on the line, and we, therefore, would come to the end of today's earnings call. Thank you, everyone, for joining and your shown interest in UBM Development. Should further questions arise at a later time, please feel free to contact Investor Relations. A big thank you to Mr. Winkler and Mr. Thate for your presentation and the time you took to answer the questions. I wish you all a lovely and successful day. Stay safe. And with this, I hand over again to Mr. Winkler for some final remarks.

Christian Bruns, I'm sorry if you didn't come through with your questions, but place them with us, and I might even get on the phone bilaterally with you. And I hope to see you on the 16th of April back here. I also, in the name of everybody around this table here in Vienna, would like to wish you a very happy Easter time. Let's keep our fingers crossed that the situation in the Middle East is kind of getting a bit more under control. I think this is what we all do. And let's focus on what we can influence. There's one thing for sure. Nobody here in Vienna neither around the table nor anywhere else is able to influence the conflict in Iran, but we are able to do something about the living situation of so many, and this is what we want to tackle.

With this, thank you very much for your attention, and have a good day.

Thank you. Sorry for having technical problems.

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of the UBM Development AG following the publication of the Q3 figures of 2025. We are delighted to welcome the CEO, Thomas Winkler; and the CFO, Patric Thate, who will speak in a moment and guide us through the presentation and the results.

After the presentation, we will move on to an analyst Q&A session. As an institutional investor, we would like to invite you to contact UBM Development AG directly after the earnings call to clarify any questions you may have.

We are looking forward to the results. And having said this, Mr. Winkler, please, the stage is yours.

Thank you, Ingmar, and good morning, everybody. Thank you for joining our quarterly management presentation and your interest in UBM Development. If we move to Chart 1, the headline of this chart could also be promised and delivered.

This might sound boring, particularly for the analysts because they like to report about something new. But for us, it's exciting. One, we promised that the resi asset class is out of the crisis. Q3 delivered another proof with resi sales having increased by 25% over the first 3 quarters 2024. Our pipeline of 2,800 apartments should give you comfort for the future.

Two, we promised a profitable Q3, and we delivered it, together with a strong balance sheet and an equity ratio of 30%. We have also successfully issued another green bond and have raised a total of EUR 166.5 million from the capital markets this year alone.

Four, we promised a business model improvement and it's underway.

Five, we have promised to stay the sustainability industry leader in the DACH region and delivered it by the reaffirmation of our rating. And finally, six, we have promised a significantly better 2025 than 2024, and we confirm this outlook today at the end of November.

Please follow me to Chart #2. In the third quarter, we continued to see very strong momentum in residential sales with 355 units sold year-to-date, we are clearly on track to reach around 450 units for the full year, i.e., by year-end.

That would represent more than a 10% growth compared to last year, even though 2024 included a one-off global sale of 124 apartments in Munich, which makes the performance this year, at least to my reading, even more impressive.

At Leopold Quartier in Vienna, presales are now above 70% and the first buyers will soon be handed over their apartments.

Na Plzence, Prague is above 65% presales off plan, even though completion will only be in 2027. And Village im Dritten in Vienna is above 60% on average across all 4 resi projects.

These high presale levels give us a solid forward visibility and underline the resilience of demand in our core markets. Vienna and Prague remain the key drivers of this strong momentum. Please follow me to Chart 3. Let us have a closer look on Vienna, Prague as well as on our core geographies in Germany and why the demand-supply imbalance can only continue and will support our prices.

Let's start on the left with Vienna. Here, you can see a very clear trend. Residential completions are falling dramatically by more than 46% from '23 to '26. This decline affects all segments, ownership, free market rent and subsidized housing.

At the same time, Vienna's population is growing with 22,000 new residents in the last 12 months. And more and more project developers drop out of the market, and we see this development to continue also in the future. The result is clear, less supply, more demand to come.

This explains why average prices in the inner districts, so not only in the first district, all within the [indiscernible] are now close to EUR 9,500 per square meter. If you look at the center chart, we see a very similar picture in Prague. Prague has one of the longest-lasting housing under supplies in Europe. Prices increased again in Q3.

Remember, it was 17% in a year-on-year comparison in the half year by up -- so the prices went up 1.3% compared with Q2 and now stand at around impressive EUR 7,111, of course, in Czech koruna per square meter.

The typical apartment size is 63.8 square meters. UBM is perfectly positioned in Smichov, one of the most attractive residential micro locations in the city.

On the right, you see the heat map for Germany, visualizing the imbalance between demand and supply. Our cities, if I may say so, Munich, Frankfurt and Berlin, remain deep in the red, meaning demand significantly exceeds supply.

With 76% or more than 300,000 square meters in timber-hybrid projects, we are well on our way to becoming one of the leading developers of timber-hybrid buildings in Europe. This has only been possible because even throughout the challenging past 4 years, we continue to invest consistently in our pipeline, more than EUR 108 million this year alone. You can find the details in the backup.

Today, we are benefiting from projects that are nearing completion and can be brought to the market.

In other words, UBM is fully participating in the residential rebound. Now to Patric.

Thank you, Thomas, and good morning, everybody. Please turn to Slide #5. In the third quarter, we continued the positive momentum from earlier this year.

After returning to a black zero in the second quarter, we were able to build on that foundation and increased our earnings before tax to EUR 1.9 million in Q3. This marks our second consecutive profitable quarter. Once again, the key driver was a strong performance in individual apartment sales coming out of POC.

Revenue for the first 9 months has now reached EUR 97 million, reflecting this continued sales momentum. At the same time, we maintained strict financial discipline. Net debt stands at EUR 583 million. Our balance sheet remains stable at EUR 1.164 billion. Overall, the trend is very clear.

Revenues are growing, earnings improving and the balance sheet remaining in good shape. With the profitability Q3 behind us, we are on track for a profitable second half of the year, delivering what we promised.

Let us now take a closer look at the key performance indicators. At the end of the third quarter, our equity ratio stood at 30%, within our target range of 30% to 35%. Equity amounted to EUR 349 million. In recent years, we have successfully strengthened our balance sheet structure, most recently through the issuance of a green hybrid bond in May, which further improved our equity base and capital structure.

Our cash position remains stable and in line with our internal planning. We closed Q3 with EUR 142 million cash, which once again demonstrates our strong and reliable cash management over the years.

At the same time, our access to financing remains open when it comes to project financing and the capital market. In the fourth quarter, we will further improve our balance sheet and corresponding balance sheet ratios by repaying the remaining 2019 bond and promissory notes approximately EUR 90 million in total.

Let us now take a closer look at our bond maturity profile and the successful issuance of EUR 75 million green bond last month.

Please turn to Chart #7. We have built a strong and reliable track record in the capital market. And at the end of October, we successfully issued our fourth green bond, further underscoring our commitment to sustainable financing.

This year alone, we raised EUR 140 million in bond financing and another EUR 26 million promissory notes. We are one of the few developers who are able to tap the capital market. We have flattened the redemption profile for the years ahead, which gives us more predictability and stability in our financial structure.

With the full transition of our bond financing to green instruments, we are exactly where we want to be strategically, focused, consistent and aligned with our long-term positioning.

Before we move on, I want to take a moment to thank all our investors for their trust, especially those joining us on today's call.

Your continued support is something we truly appreciate. Let us now turn to UBM's business model or more precisely to our adapted business model. As a project developer, we operate along a clearly structured value chain that takes us from the initial idea to the completed property.

It begins with the concept phase where vision and objectives are defined. In the planning phase, these are translated into concrete steps and form a reliable basis for implementation. A key element of our adapted business model is prefabrication.

It shortened construction times and therefore, interest expenses, reduces cost risks, improves planning reliability and enables economies of scale and consistent quality through industrial production.

That we have successfully put this approach into practice is demonstrated by our first timber-hybrid project, Timber Pioneer in Frankfurt, where we achieved a prefabrication rate of 23%. This project marked the starting point of our journey into serial and modular construction and already showed the benefits of prefabrication.

In the following project, the LeopoldQuartier -- LeopoldQuartier office in Vienna, we increased the share to 43%. The direct comparison illustrates how consistently we have evolved our business model within a short period and how we continue to learn from each project to further enhance efficiency and quality.

As you know, we have discussed operational improvements in detail in several previous conference calls, so I will keep it very brief here. All underlying assumptions come from real UBM projects and the full breakdown is provided in the backup.

On the residential side, our tomorrow view shows clearly rising margins driven by lower construction and incidental costs, while sales prices go up. Margin per square meter more than doubles, which underlines the potential of standardization and consistent execution.

In office and light industrial, construction costs are moving in our favor as well. If we achieve our targeted cost levels and sell at around 5% yield or 20x annual rent, the asset class becomes profitable again and not only breakeven. The detailed calculation is also included in the appendix. The core message is simple. Our measures are working, and we can restore profitability in both asset classes. Back to Thomas.

Thank you, Patric. Slide 9, please. As I mentioned before, the carbon pricing of buildings is without an alternative. Buildings produce 37% of all carbon emissions worldwide. If you want to soften the cost of climate change, you need to price the CO2 emissions, be it through carbon taxes, be it through emissions trading certificates.

This puts timber at an advantage or will increase the price of steel and cement as building materials going forward. Where do we stand with UBM's carbon balance sheet?

More than half comes from our development activities, which is no surprise. More than 70% -- 75% of our future projects are in timber construction and will benefit the carbon balance sheet. Remember, 1 cubic meter of timber stores 1 tonne of CO2, 1 cubic meter of concrete emits between 600 and 800 kilograms of carbon in its production.

Roughly 1/5 of our carbon footprint is generated by our standing assets. Our offices and carb emissions from mobility is less than 10% and therefore, of minor importance. We have developed a clear transition plan with defined targets and most importantly, all our employees are fully bought in.

Wait for the carbon footprint to come back to the agenda. It might happen rather sooner than later. Let me come to the close of our formal presentation by turning to the outlook on Slide 10.

As can be seen from the first 9 months numbers, 2025 will be significantly, significantly better than 2024. This is what we predicted, and this is what we shall deliver. The flights to real assets has started, and I expect hotels to be the next asset class to get out of the crisis, good for us as we still have "5 hotels on the shelf."

The demand supply gap is widening in residential. The answer how to provide sufficient housing will influence, if not even decide the next elections throughout Europe. The big open question, of course, is when is office going to come back?

The honest answer is we all do not know. So we better have a plan B as it will be executed for Timber Pioneer. We are parking this asset for up to 3 years by financing it as a standing asset, which should free up a double-digit million liquidity effect for us.

However, liquidity management remains in our focus and will occupy our minds also most of next year. At the same time, the foundation for future profits will also be started to be laid next year. With this prediction, I thank you for your attention and would like to open the line for your questions.

Yes. Thank you very much for the presentation, and we will now move on to the analyst Q&A session. We kindly request that analysts ask questions during Q&A. All other participants are invited to contact the Investor Relations team following the call.

Thanks for your understanding. [Operator Instructions]

We start with Mr. Bruns.

Congratulations for the second quarter consecutive quarter with a positive EBT. I have several questions on the gross profit margin in Q3 seems to be quite high, above 50%.

Could you give us a little bit background on this figure? And can we expect a similar strong performance in Q4? And maybe in addition, can you give me an update how many completed apartments in which cities have not yet been sold? And of course, I'm also very interested in the situation in the hotel sector, so under standing assets. There you report that the real estate office market remains difficult, but I would also like to know your assessment on the hotel sector.

Maybe I start, Christian, on the profit margin, good question. So predominantly, our profit currently is coming out of the already sold apartments because we are showing that from the POC point of view and most of the apartments, which are under construction are in the erection phase, meaning they come to an end. So predominantly, this is coming.

On the future trend, this will prolong for a certain time. And as we give the apartments in the next step to the buyers and hopefully, we are also selling the ones which are not sold yet, which was another question you had. So it comes from the apartments.

Let me jump in here. You've asked for the completed apartment projects, which we have only 3, okay? One is Timber Praha, and we have approximately a dozen of apartments, 12 apartments left.

It might also be 10 by now. So a small number out of 64 apartments, if I remember correctly. And in Mainz, we have approximately 35 completed apartments not sold. And in Vienna, only Village im Dritten #11, so field #11 is completed, and there are 3 apartments left that have not been sold yet.

So you see we are -- I could say, on a basis of completed apartments, we are almost sold out. Then your other -- does this answer your question?

Yes, it does.

Perfect. Then your other question was on hotels. Well, I've mentioned it in the call already. And my kind of light at the end of the tunnel stems from the Expo Real, right? [indiscernible] That was at the beginning of October. And I'm still waiting for news to be officially publicized.

But there was talk about serious institutional investors. I'm not saying that others are not serious, but I'm talking about the big names, okay, are coming back and buying hotels, for example, here in Vienna.

If this is happening, this might be kind of the signal for everyone else that they might be too late and they will come back to the market because what we've seen in the last 3 years were not the big institutional buyers, but either family offices for smaller hotels, i.e., below 150 keys or like more exotic buyers that wanted to own a hotel in a city they haven't been.

So for us, this means as we have, as I said, 5 hotels on the shelf, that could be a positive one. I don't expect that prices will immediately recover to where they should be.

But as the price for newly built hotels is above the existing ones simply because of the construction price development, I expect that these will be cleared before the rest.

And we all know that we have several cities where you don't find a bed neither in the hotel segment nor in the Airbnb segment now before Christmas. Does this answer your question?

Yes. Thank you very much. But this will not be the case. There will be no divestment in the current year, I think.

No, I don't expect one this year. And then you need to see that the lead time for such negotiations is a minimum of 4 months, but the average is 6 months. And I've also seen negotiations taking 9 months.

So you need to consider the lead time, and this is why I'm not disappointed or kind of hesitant about the rumors that I picked up at Expo Real because that is 2 months ago.

Thank you very much for your questions, Mr. Bruns. And we move on to the next participant, Mr. Scharff, you should be able to speak now.

Stefan here from SRC Research. I have a couple of questions. It's about your projects. Let's talk about Timber Peak in Mainz, which is to be completed until the end of the year. That means in the next weeks.

So perhaps could you give us an update here? And also about the B section of LeopoldQuartier in Vienna. This could rather be a hotel perhaps or also be a serviced apartment property. So what are your plans here? And yes, for Mainz, of course, how is the letting at the moment? And how are the negotiations for more space to rent?

Thank you, Stefan, for your questions. Well, in Mainz, we have one office project and the office projects are the only ones that we need to find tenants, okay?

Because for the resi projects, we find buyers. Now we have Dexcom as the main tenant in Timber Peak, and it occupies 23%. The build-out is happening as we talk. And for those who are on LinkedIn or other social media, they almost get live pictures because there is a very regular reporting on the progress that they are making and the views are amazing, even though it's like mobile phone pictures.

So that's where we stand. We hope of course, for more tenants in the near future, but too early to report. The interest is there, okay? And your second question was on Leopold B. That's a completely different story because we haven't even started with Leopold B. Leopold B is divided in 2 parts. There's Leopold B1 and sorry for being a bit technical and not very sexy names.

That is facing the street and that needs to be commercial living, i.e., it could be a hotel. It could be long-stay apartments or something of this kind. Leopold B2, okay, facing to the backyard, which is not the backyard view, but like more noise protected is a forward resi apartment project, which depends a bit on B1, okay? And I think this is kind of answering your questions, but maybe you repeat the one that I might have missed.

No, no. That's it because a hotel might work because it's so close to the first quarter in Vienna and to the city center of Vienna, so a hotel might properly work there.

It will definitely work. I mean the question is if it works for us commercially. I mean, without wanting to sound arrogant, but I think location-wise, it's very difficult to point out a new build project in Vienna that has a better location than the LeopoldQuartier because as you pointed out and you are familiar with Vienna, it's adjacent, okay, there's a little canal, the Donaukanal, separating the first district from this project in the second district.

And what also is worth mentioning, it's not even 10 minutes walking distance from Augarten. Now if anybody who hasn't been to Vienna knows Augarten, it might be from the [ Poland ] but it's a big recreational park. So it's like green city. It has enough parking for offices. And location-wise, it's difficult to be beaten.

Yes, yes, I did the property tour and you sold already almost all apartments. That was great. Yes. And another topic is the timber works in Munich. It's like Timber Peak in Mainz, also about 10,000 square meters. And here, completion is planned in about 2 years in the mid of 2027.

Perhaps what are your plans here? Or do you also have some negotiations here with tenants as this is a good leading commercial project in Munich?

You perfectly framed it, first step first. So we first have to find a tenant. And only if we find a tenant or enough tenants above 25% occupancy, we would start the project. And this is not where we are as yet. I mean everybody is aware of the current economic situation, which makes decisions very, very slow. But I'm confident because it's opposite to Olympiazentrum underground station. From the location, it's also one of the best locations for at least certain purposes that I can think of in Munich.

And then there we have in Munich, the big Timber Living project with more than 200 apartments to be completed in '28. So perhaps you will start during the next year or end of next year with some construction work?

And how is the status here of the building permits? Did you receive all or what you still expect to come in next year? And is there a split now of the social supported flats and free market flats? What can you say here a bit more?

Yes, sure. Look, dangerous question because I could now start about the kind of discrepancy between the demand for apartments, which is significant in Munich, okay?

And the difficulties, which -- to a certain extent, I understand because we are in a democratic legal system. But every neighbor can kind of impose and if it's only to get some money out of us an injunction.

Injunction is the wrong English word because it has no [indiscernible], but as a stock-listed responsible developer, you need to get it out of the way before you start.

So always remember, we give you to the best of our ability, an expected completion date because this is what you justifiably ask for. But we cannot do anything about neighbors trying to slow down the project for whatever reason.

Now having said this, this is the case with Timber Living. We don't take the risk that we get an injunction, which would stop our construction work. And so we need to get this out of the way. And just to be clear, we get good support by the public authorities. So it's not, in this case, the public authorities, it is that every neighbor can kind of hold you up and aggravate the situation in this respect.

Yes. It's welcome in Germany. It's a mess sometimes here in Germany, in particular, in the big German hubs to build new residential units, not easy.

I can tell you it's not only Germany. It's all over. So thank you for your questions. Good questions.

Thank you very much. And we move on to the next participant, Mr. Stippig.

First one, and I follow on with some projects or one particular project I saw this morning that you sold part of the Timber Marina Tower. And here, I would be interested some insights into the context of the sale, reasons for the sale, potentially some share development financing and also in regard to the transaction value given the purchase price you paid in 2023.

And if I assume closing of the transaction in Q4, so how will this transaction actually impact your P&L? And I wonder, should that not turn your result positive for the full year then?

And one more question in regard to outlook. Is there a potential quantitative guidance for 2026? Or could you at least provide some larger items such as transactions or specific transactions you're targeting for next year that would materially impact your expectations for 2026?

Well, let me start with the first question. Yes, we have events after the cutoff date. And we have a number of these events this time. [indiscernible] the share buyback program, and we've issued the bond on the 24th of October. And yes, we have sold 50% of Timber Marina Tower.

The reason is we are making pretty good progress with the execution and construction companies try to pin down their contract with us by taking a participation in such a project. Again, okay, to kind of cool a little bit the expectation, what you need is a tenant. Okay? So the tenant is the decisive factor.

But as I said, we made very good progress regarding construction prices. And that is an optimal point in time to take a partner then on board. It also helps on the construction price side because he's benefiting from the sale of the project if he is, like in this case, a 50% partner. Now your question was how is it impacting Q4? Maybe I pass on to Patric.

The effect of the whole transaction is, obviously, we have not got a gain. So we never touched the project, but we developed the project further and the costs we have put into the project over the time that has been paid by the partner, who acquired the 50%.

So there will not be a positive effect in terms of P&L. There won't be a negative effect in terms of P&L. So it's a book value transaction predominantly. So from this perspective, it won't help us and it won't harm us in the fourth quarter when it comes to our EBT and so on. Yes, basically, that was your question, I think.

Yes. Now on the expectation, I think I've been pretty outspoken on '25. In '25, we expect Q4 to be a logical continuation of Q3. We are now at the end of November, but year-end is always a dangerous point in time because a lot of people take influence on what you have. I mean we are all clear.

Interest rates haven't moved in any direction. So from expert opinions point of view, I don't see any issues. You never can outrule a transaction that happens in the last minute in a neighboring comparable project that might influence the price. But by and large, 2025 can be kicked off okay?

And you know that we've made a loss in Q1, and we don't go any further than saying we believe that Q4 is also a positive one. And so you end up plus/minus 0.

On 2026, okay, there are a couple of observations. It's going to be another tough year.

No doubt about it because a lot of effects come with delay, okay? And you see this awareness rising on what's happening on the market because there is a significantly lower number of developers on the market already, okay?

But it will take a time to actually settle in the people, in the buyers, in the investors' mind. Now I could even give you a SWOT analysis on what I think is 2026, but I think it doesn't take us very far because it's based on a myriad of assumptions.

As I said, I'm cautiously underlined 2 times optimistic that the hotel segment because it's not the full asset class, could attract interest from the regular investors more than we have seen between 2020 and 2025.

And that is an advantage for us who have hotels on the shelf. What the prices are going to do needs -- remains to be seen. I mean the good news is we can run these hotels and we can wait, but it's not our intention, okay, clearly. Did I answer your questions? Or did you have a more specific one on 2026?

Of course, I would like to know what will be the EBT number for next year. So now you answered it. I'm happy with what you said. Just still maybe 2 quick follow-ups. One is you said you concluded the share buyback in Q3.

I think you initially announced up to EUR 3 million. So I think now you're at EUR 1.9 million, you bought back a bit more. So will you -- did I understand it right that you concluded it, so you -- that's the volume you will allocate towards returning capital to shareholders? And then the second question would be in regard to what you said in the hotel sector.

Do you have an update on the sales process with [indiscernible] of course, I heard you when you say lead times are very long up to 9 months, maybe even longer, over 6 months, at least 4 months, but maybe there's some additional ongoing development you can speak about.

Yes. Look, Jochberg is on the market. We have a partner there. He's decided also to sell it. And we've got to see how much interest it attracts. And I wouldn't expect any event happening in the first quarter.

I'm even hesitant to say in the second quarter, there is a potential, but a deal is only signed once the money is on the escrow account. Now on the share buyback, we had the permission for this share buyback until the 18th of November.

And we've closed it slightly before and not using the full amount of money, which kind of tells you that it's been running quite smoothly. To be honest, the idea at the end was to close it on a day when we are at 7,350,000 shares so that I can remember it even when I wake up at 3:00 in the morning.

I think it was doing good to us. But as I said, the permission that was granted ended on the 18th of November, so it's done.

And we have one participant. Mr. Hettich.

First one would be on your current team that you're carrying. So your development pipeline should likely go down because office projects, they're finalized, residential projects, they're also soon to be handed over to the buyers.

So I was just wondering if you see any necessary adjustments in the team size going forward as the developed pipeline is shrinking or if you want to or plan to ramp it up?

Then maybe the second one is, yes, on the residential segment, basically on the slide that you had in your deck, you mentioned that profits could double in the residential segment as prices increased and costs on the other side are going down.

So I was just wondering how far is that actually out, do you think? And will this already affect profitability in the residential segment over the nearer term, so speaking, 2026, 2027? That would be it from my side.

Look, first question, always a very sensitive one. Let's look back a little bit. We were coming in the year 2023 from 335 employees. And we are standing end of Q3 at 211. That is, if I get my math right in my head, 40% reduction, okay, which I would call significant.

Almost the same, by the way, is true on the personnel costs, which is even more amazing. I mean it's closer to 30% minus [indiscernible] than 40% minus. But that's even more impressive, if you want, because we had increases in terms of inflation, okay?

So we have offset this as well. I think reviewing your cost base in general, okay, is one of the top duties of management in a situation as we are all in, okay, which is an economically depressed situation.

And you have to strike the balance between are we set up for a rebound on the one hand. And on the other hand, are we not kind of burdening our platform with more costs than it can digest.

I guess you have an understanding that I leave it there with your question. But rest assured, and you can see that from our track record in the past that not only personnel costs, but costs in general are also closely monitored as is liquidity.

Coming to your resi margin question. So on the Slide 8, where I -- where you are pointing it, what you can see from this slide is that in the former times, a margin of 10% in the resi sector was kind of okay. Why was that the case?

Because resi is always with less equity to be developed as you get more tailwinds from the banks. And if people buying it, individual buyers are buying it, you are in certain countries, for example, Austria, you have a law that they are placing piece-by-piece payments into it.

Yes, we are able to double that, and we can see that already in most of our projects, predominantly when it comes to the Czech Republic, a margin of 20% is a doable thing. But we also see margin improvements in our Austrian projects. So we see coming that through. In Austria, Village im Dritten, is one of these projects where we have some of the tailwind also on construction costs. But nevertheless, we see that the margins are coming through, and that was the reason why I answered the question from Christian right in the beginning with the gross margin that this is coming from POC and the residential sector.

So over time, we will see it, I'm quite sure. and that will help us in the future with the profitability in this sector for sure.

Thank you very much, Mr. Hettich. And in the meantime, we have received no further questions. And with this, we come to the end of today's earnings call. Thank you very much for joining and your shown interest in UBM Development.

Should further questions arise at a later time, please feel free to contact Investor Relations. A big thank you also to you, Mr. Winkler and Mr. Thate for your presentation and the time you took to answer the questions. From my side, I wish you all a lovely and successful day. Stay safe. And with this, I hand over again to Mr. Winkler for some final remarks.

Well, Ingmar, you haven't left too much for me to say. Thank you for suffering with us for 50 minutes. I hope it was interesting and worth it. We are looking forward to kind of inform you about the full year and about the visibility that we have then. With this, I wish you a happy festive season. Most of you, I'm probably not going to talk to some peace over Christmas. I think we all can need it. Goodbye. Bye.

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of the UBM Development AG following the publication of the first half year figures of 2025.

We are delighted to welcome the CEO, Thomas Winkler and the CFO, Patric Thate, who will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to an analyst session. As an institutional investor, we would like to invite you to contact UBM Development AG directly after the earnings call to clarify any questions you may have. We are looking forward to the results. And having said this, Mr. Winkler, please, the stage is yours.

Thank you. And after such a pleasant introduction by Judith, I also wish you a very good and warm welcome and morning. The headline of today's conference call could be it's going up again. Well, let me not be misunderstood. I'm not telling you, but I can illustrate what I mean by running you through the summary on Slide 1. We have achieved a black zero schwarze Null in Q1, and all signs point into the direction of returning back to profitability in the course of the second half of this year.

Two, once more, residential sales have proven to be a solid foundation. We have doubled our sales again in the first half. Maybe even more important, we have a pipeline of 2,800 apartments over the next 4 years in this asset class. Three, we are well prepared to meet this year's and next year's financial obligations, both in terms of liquidity and refinancing. Four, and this is very important for me to mention, ESG is going to remain relevant. This is not only my prediction, but has recently been confirmed by PwC's state of decarbonization 2025, Morgan Stanley's Sustainable Signals and EY's [indiscernible] only for Germany. Five, I have already mentioned our financial outlook. What we also see in times like this is that flight to real assets and you've looked in software there. So far, with one exception, real estate. Our expectation is that real estate is going to follow. At this point, let us give Patric the opportunity to inform you about the financial highlights of Q2.

Thank you, Thomas. Good morning, everybody. Please turn to Slide #2. We have improved our earnings before tax by 47% in the first half. This was made possible by a black zero in Q2, which has been mentioned by Thomas, but cannot be stressed strongly enough. Besides, our equity ratio is again back above 30%. And with this, also lies within our target range of 30% to 35%. The successful issuance of a green hybrid has helped to bring our equity above EUR 350 million again. Net debt is slightly below EUR 550 million and well under control. Altogether, we are on track for our return to profitability in the second half, while at the same time, having improved our balance sheet on which to build in the future. Back to Thomas.

Yes, please turn to Slide #3. Once again, our operational highlight is in residential. We have increased the number of apartments sold to 208 compared with 97 in the first half of last year. Within 2 years, we have quadrupled our sales. We expect the trends to continue. In other words, this means that we are confident to keep our run rate of well above 100 apartments per quarter, also in the third quarter, resulting in more than 300 apartments sold by end of September despite the rather slow summer months.

What makes us confident for the future are, as already mentioned, the 2,800 apartments in our pipeline. They ensure a solid [Foreign Language] a solid basic utilization with a steady income stream. There's another reason fueling our self-confidence, seed on Slide #4. I guess, particularly the German participants of this call appreciate that any commercial topic hitting Bild [indiscernible] headline's is of utmost importance for the entire public, including politics. This is even more true if Bild is referring to a [Foreign Language] study. However, since Q4 2022, the number of newly started resi construction projects has decreased by 85%. This leads forecast to drop expectations below 200,000 new apartments in 2025, below 200,000.

At the same time, Q2 prices have been rising the highest in the last 30 months in Germany. They have been rising by 3.8%. But this is no exception. In Austria, the price increase was 4%. And in the Czech Republic, we have seen resi prices go up by 17%. For further details and the sources of information I would like to direct you to the appendix of our presentation. Shortage of supply intensifies and the still ongoing shakeout in the real estate market further aggravates the situation. Back to Patric for more financial information.

Please turn to Slide #5 and our repayment profile. With the liquidity of EUR 168 million at the end of June and repayment obligations of EUR 102 million, we are in a comfortable position in 2025. We have successfully refinanced our exchange -- or exchanged a fair share of our repayments already. And there are several capital market windows ahead of us to further shrink the EUR 117 million of repayments in 2026. Just have a look to the past. In only 6 months, we have raised almost EUR 160 million, not even including our latest refinancing of the Schuldscheindarlehen or Inhaberschuldverschreibung.

Throughout the real estate downturn, we were able to access the capital market and there is no reason why this should change and things are going up again. Key for successfully getting through the storm, or should I rather say hurricane, is our ability to manage our cash. Just have a look at Slide #6. Our cash position increased by more than 17% from Q1 to Q2. We are a responsible and reliable issuer. Recently, this has been proven by paying hybrid interest in Q2 despite no dividend payments in 2025. Liquidity permitting, we are also repaying bank debt to improve our financial results as has been the case in Q1 of this year.

The first e-mail I open every day is our daily liquidity report. While this might be not a surprise for a CFO, and I guess this is also true from our Board colleagues and the Managing Directors of our country organizations, full focus on cash back to Thomas.

Yes. As mentioned in the summary, Europe cannot afford to leave the ESG path. Please turn to Slide 7. ESG remains relevant. This is not only my conviction, but coincides with the studies that I've mentioned by Morgan Stanley, PwC and Ernst & Young. All relevant links to these publications can be found in the most recent linked impost that I've made, by the way. The reasons are economic. There are commercial reasons and not ultristic reasons. Europe cannot afford hundreds of billions of fossil energy imports every year.

Most nations are post-peak fossil fuel use. So it is no surprise that the top 6 Wall Street banks reduced financing for fossil fuels by 25%. Morgan Stanley led the pack with a 54% fall in financing. Damage of climate exchange must be mitigated. Just look at Spain with the strongest forest fires ever. Wait for the flooding season in autumn. Insurance companies are strongly more and more carrying the cars and the general Republic is also not able to do so. There is no way around carbon pricing, I'm convinced. Building construction and operations is playing the most significant role in it with 37% of total carbon emissions.

Ultimately, ESG is a major driver of future growth in Europe. And this is why we are also fighting to stay at the top of our industry regarding sustainability. Just have a look at Slide 8. We have been an industry leader in the DACH region for the last 4 consecutive years. We enjoy top 1% platinum status with EcoVadis and released our second UBM green bond allocation report, which has been audited by PwC. Let me come to the outlook and the end of our formal presentation as I expect a number of questions, and let me ask you to turn to Slide #9.

There are really 3 reasons to make our outlook sound more optimistic than before. One, we shall return to profitability underlined by our black zero in the second quarter. Two, look at the gold price, share prices or even price of Bitcoins, we can clearly and not surprisingly see a flight to real assets. There is no good reason why concrete gold should not follow. Real estate is the asset class which survived wars, and most other crisis best in the past. Needless to add that the political debate of a net-price and capping indexation is accelerating the shortage of rental apartments, and is accelerating thereby the flight into ownership. And three, the demand and supply imbalance is further aggravated by the most massive market share out in the last 40 years.

With demand often driven by pure need, it is difficult to see how projects which are carried through will not benefit in the end. Call me a converted optimist, if you want, but with all potential backdrops, it is difficult to see how the future is not going to brighten up. With this, ladies and gentlemen, I would like to conclude our presentation. Thank you for your attention and open the lines for your questions.

Thank you very much for your presentation. We will now move on to the analyst Q&A session.

[Operator Instructions]

And with this, I open the line to Stefan Scharff. You should be able to speak now.

Yes. I have a couple of questions. Perhaps we do it one by one. The first question is about Mainz. You stated in your half year report that you already sold half of the 44 flats, that was the same number or the same percentage like in the first quarter report. How is the sales process working in Mainz and perhaps you can say a bit more here about perhaps new notary dates coming in, in July and August? And yes, for the buyers, the financing is still not easy given the interest level at the moment.

Well, Stefan, sometimes you remind a bit of my wife. It might be because we have a long track record. You always put the finger in the wound. So we have only sold apartments in Q2, which doesn't make a difference for the 50% quote. And yes, we have reservations. But as you've pointed out, we must see if they fall through or if they go through with the bank financing.

For me, the interesting one on the apartment sales side, which is the positive one, is that in Germany, the Germans live up to their reputation. And it seems to me as if it is a little bit a game of chicken, who brings first? Is it buyers who then buy at the current prices? And I pointed out that price increases have been 3.8%. Or is it the seller who's reducing the price to get things going more smoothly.

Let's hope that the interest level goes down a bit or there are some public health programs to come in the second half of the year or for '26. So my second question is about the Timber Pioneer in Frankfurt. If I'm right, there are still about 4,000 square meters to rent. How is the letting process here in a Frankfurt?

Yes. You're absolutely right with the 4,000 square meters. Well, it's no secret that we had the summer break. And in the summer months, particularly with institutional tenants, things are going slow. However, for me, it seems as if things are moving again in Germany after a pretty long [Foreign Language] whatever this is in English, I think price fell or something like this. So expect a positive news flow as early as next month, early as September because we are now end of August.

I can't say no more because as we know, it's only through when the signature is under the contract. But I'm pretty confident that we make some progress both in Timber Pioneer in Frankfurt, and in Timber Peak in Mainz.

I see. The next question is about your hotel segment. You had an output here of EUR 43 million after EUR 62 million in the year before. But in the year before, there was a special item by selling a share in the Andes in Prague perhaps can I have the number for '24 without the Andes? Because the 43 million was at least more than the EUR 37 million in '23. So it might be a good development in the hotel segment.

Good question. So the Andes inside of that number, and we are talking about the total output in the 2 numbers with the EUR 43 million and EUR 62 million is roughly EUR 18 million. So we are on the same level like the last year, but with a very different mix when you look into the countries especially Poland is much better than last year. Germany, on the other side as there was not the, I would say, extraordinary effects we have seen in 2024, like, for example, the football championship or some concerts around in the cities where we are that has come a little bit down. So overall, we are on the same level with a different mix.

Okay. I see. Perhaps once again Mainz, if I see your pipeline, there is the Mollenkopf and the Timber View. That means almost 300 apartments to come with the completion date in '29. That's 2.5 years. So construction for the next 300 apartments has to start next year if I take it right, and if all is according to plan.

Absolutely correct. If this was a question. It's going to start then. We could probably start even a bit earlier. But as I said, it's at the moment, the question who blinks first. And so later you bring apartments to the market from today's point of view, the smoother probably the sale is, and that is behind at all. Well, when it comes to Mollenkopf in curve, there is still the architectural competition that needs to be held, but it's all on track timing-wise.

Okay. I see. So another resi project, a big resi project of you is the [indiscernible] area in [indiscernible] in the eastern part of Munich, perhaps you can give us here an update also about the permits and the situation.

Well, we do have a [indiscernible] , but there is [indiscernible] . That is not to us but to the City of Munich, we have had the opportunity to look into it. And we believe that the reason behind it is rather weak. So we shall see what the city of Munich is going to do with this [Foreign Language] , with this objection by the labor. And so there is a slight potential delay as the authority, the public authority, the city of Munich has to deal with it.

But I expect with the pressure that is on new apartments everywhere, and the Ministry of Construction putting a lot of pressure for good reasons and having identified this issue, we believe that the public authorities are going to deal with it smoothly. And it is a perfect example, unfortunately, that as we are a start, a perfect legal system, you can be held up, but you will not be able to structure this.

Okay. I see. But the decision might be realistic until the end of the year?

Yes. I expect it definitely to happen in this time frame.

And we will move on to Simon Stippig with the phone #6009. Mr. Stippig you should be and with yourself now.

Yes. I have a couple of questions also. And the first one would be on the last call, you said the result despite the revaluation of the Amras in Innsbruck was in line with your expectations. Is Q2 also in line with your expectations? Or would you say it was a bit better than anticipated? And also, does it change your view on H2 '25 and the full year?

Yes. Well, Simon, very good question. I, personally, but then I'm the CEO, so I might be maybe a bit more ignorant. I expect it to be still slightly in the negative, okay? So the black zero is definitely coming a bit earlier than we thought. It's not changing anything of what we said about H2, which is we are returning to profitability. And we haven't given a more concrete kind of number guidance on this one for good reasons because with all the uncertainties around we don't want to break our kind of track record in when we guide we achieve exactly what we are guiding for, and that's behind it.

So it was slightly better than I have personally expected it. And it doesn't change anything on the positive outlook for H2 in terms of pinning ourselves down more concretely.

Okay. Great. And maybe one follow-up. Is it possible to carefully look into the next year already?

Well, even more difficult. There's a guy who changes tariffs according to his mood. And that leads to a lot of uncertainty. You've seen the nervous reaction regarding the bad decision. So I don't dare to kind of make a more concrete statement than things looking as if it's going up again and the worst is behind us.

Great. Clear. And then next one would be in regard to your leasing sales and overall projects in the residential sales, could you say what projects drove your strong results? And also, which projects you expect to contribute in the second half and beyond?

Sure. So if we look into the total output, and that is a bit of a flavor where it's coming from. 40% of what we have achieved came from the residential sector. And inside of the residential sector, that was predominantly coming from 3 sources. I mean Haven has been already discussed with my thing that this was only a bit, but it came from Leopold Quartier in Austria. It came from the village in Dutton, also Austria, and it came from the Czech Republic predominantly.

So what do we expect for the second half? We expect that we go on with the Leopold Quartier, which is currently in the erection phase and is quite good in picking up sales. Village im Dritten also contribute to the overall output. And in the Czech Republic, we have started a project called Na Plzence which is running super well in terms of presales. So when we come into the erection phase, we will also see from this one quite a good impact on the numbers. So these are basically the sources where we think the good numbers should come from. And we also expect that we get into a slightly better position in Germany.

Look, sorry for jumping in there. I mean there is a consensus throughout any of the statistical authorities that by '28, we are lacking 800,000 apartments. Come on, I mean how long do you want a way, particularly if you know that the prices of the apartments have risen already. And a perfectly good indication for me is a market in which we are not active, which is the single family house okay? They have increased in prices even by more than 6% according to my recollection.

So it's going to happen. The question is does when, and I don't buy into the financing is so difficult. I am more see people to change very slowly and adapt very slowly.

Mr. Stippig, does that answer your questions?

Yes. That absolutely answered my question. I have one follow-up in that regard because, I mean, if we see that supply-demand imbalance and a huge gap, would it also be -- or do you consider to replan projects from office or light industrial towards residential? Would that be an idea? Or is it just that margins are still too attractive going forward in the office and light industrial segment?

Look, we are considering this. And of course, that breakdown, which currently 60% in resi and 40% in light industrial and office is strongly driven by -- if we say hypothetically, would find a single tenant an office or like industrial building, then we would go full steam into it because -- that is the key question. How do we make our office projects generate a cash flow. The moment we see this, this is fine. But you're absolutely right.

We are still thinking is it making sense to maybe even apply for a rezoning in the one or other project because usually, the zoning is the issue and usually, or so far zoning has seen a cumbersome fairly long process. And I hope as we see these exceptions that the Ministry of Construction has announced that, that might be a good option, still thinking of how to keep a balanced portfolio so that we don't rely too much only on one source of income.

Great. That answered my question. And then maybe a quick one in regard to your hotel potential sales of your Kempinski Jochberg hotel. Is it -- do you have any update there? And is that also already included in your H2 '25 guidance?

Yes. I have a quick answer on this one. We've granted exclusivity to one party. So we've narrowed down the sales process. But I don't expect anything before year-end, and that's already optimistic to a certain extent, because we don't want to negotiate under pressure. And a contract is only signed and in this case, as it is a project that is already up and running, also closed when the signatures are dry under the contract.

And one last one in regard to your project. The Timber Pioneer, you changed that into your segment of standing assets. But as I recall correctly in one of the last conference calls, you also mentioned that you would like to refinance this project? And potentially, maybe you get some equity out of the project or at least cash. Is it -- can you -- any -- can you just give an update there? Did you progress with this financing? Or have you at different plans?

No different plans. We progressed quite well with the financing. We expect that to come in the third quarter. When we have the ink right under it, maybe in the next call, we have together in the third quarter, I can give more flavor on this one because I recall what we have said when it comes to the office part, that in the phase where sales might not picking up to an extent we expect and the values which are offered are not living up to our expectations. It might be a good bridging. I recall this one. And the Timber Pioneer, hopefully can present that next time as the solution. And yes, you are right, what we are trying to achieve is to get a part of our equity out of it.

And last one, apologies for so many questions. But last one is in regard to your hotel leasing business, I saw in the notes that you sold 49% of it. Could you add some information to the disposal?

Yes. Well, as an interest statement, we love your question because it shows that there is enough interest on us. And particularly you, Simon, prove it with your resources. So there are not too many questions here, maybe too little questions. When it comes to the 49% sale, yes, our former partner, [indiscernible] wanted to exit. And we found a new partner, and I think there is nothing more to add it. We won't change anything with the operations.

And we have one more hand up from Philip Hettich.

Thanks a lot. I hope you can hear me.

Loud and clear.

And first question would be I just came out of the CA Immo conference call, and they were talking about that lead times have extended significantly in the signing of office leases. Is that something that you have also experienced? And what do you think is reason behind it? So they are talking that lead times went up from around 4 months. So from the first discussion until to the signing of the final lease agreement to around 8 months now.

Well, basically, that's the story that I've been telling when I've answered Stefan's question. I even think that the number of months could be more like 9, 10 months. What is the reason behind it? You have one competitor, which is very difficult to beat in times of uncertainty, which is your current landlord. And so even though there is no way around renting new offices, if you want to convince your people to return to your office for more than 1 or 2 days a week. There is always the situation that the current landlord knows that if his tenant is leaving, he's probably got a vacancy rate that is shooting through the roof. And so he's almost prepared to do everything. I mean everything, to keep his tenant. And it needs quite as much effort than it used to need to kind of outline the advantages that you have to offer.

And this is even true if some have doubled, okay, the [indiscernible], the operating costs than what we are offering because in most cases that we are offering, our [indiscernible] our operating contribution is less than EUR 5 a square meter. And we've come across more than EUR 10 per square meter quite often. And the current landlords are prepared to take and swallow this disadvantage.

For me, the question is how long can they afford to do so. But full agreement as usual, I'm pretty much aligned with CA Immo and Keegan on this one, and we can confirm that. And this is why you keep on asking have you made progress. And this is why we apologetically always have to say, well, we've made progress, but nothing to write home about.

Understand. I had a slight disconnection. So sorry if I ask a question that might have been asked already. I mean there's another office development on [indiscernible] . Do you have information how that is going to similar difficulties to lease out? Or is the situation different there? Do you know that?

You're referring to [indiscernible] . We have no clear information because, as you know, this had a change in ownership and that disconnected us a little bit. But I suppose it's the same for everyone. And the reason behind it is the kind of pretty soft economy that we are seeing. And so I mean, you put yourself into the shoes of a Supervisory Board member who's approached of changing offices with all this "soft factors". I need to bring my people back. I need to be able to compete with work from home. I need to offer a different zoning. I need to really seduce, probably the wrong word, my people to come back. I don't want to force them back to the office.

But I can't tell them that returning to the same old single-room office is not the right thing and everything. What is the Supervisory Board members saying, "Hey, aren't you reading any newspapers? I mean, economy is going lousy, stay where you are try to push the current landlord to reduce your rent, which he often does and come back to me in half a year". And that is the situation that we see in Austria. That is the situation that we see in Germany, and it would be very surprising for me if the [indiscernible] owners would be any better off. But as I said, I have no information on it.

Okay. I understand. And then one question on the cost side. So first cost, how do available, how do you expect it to develop for the remainder of the year? I think the run rate, if we use H1 would be around EUR 26 million for the full year. But do you think this will come down in the second half and support your results?

I mean on the personnel cost side, we see 2 things kicking in. One is if you compare it to the last year, you will see that it increased a bit that had to do with accruals. This year, you are quite okayish when you are saying and just taking the first half and make my math to the second half. What I expect a bit is that we see more and more kicking in that we reduced the number of persons in our group. And that might be giving us a little bit tailwind when it comes to the second half.

So if you are very conservative, I would say, you doubled it, if you give us the advantage of that we have done our homework also in terms of numbers of people we have on board. Unfortunately, I have to do -- I have to say, did our work, then we might see a little bit of a better thing in the second half than the first half.

Thank you, Mr. Hettich. And with this, we come to the end of today's earnings call. Thank you, everyone, for joining and your strong interest in UBM Development AG. Should further questions arise at a later time, please feel free to contact Investor Relations. And a big thank you also to you, Mr. Winkler and Mr. Thate for your presentation and the time you took to answer all the questions. I wish you all a lot and successful day and stay safe. With this, I hand over again to Mr. Winkler for some final remarks.

Well, Judith, you make it very difficult for me to add anything. So nothing to add. But have a lovely late summer. And let's get things going. I think there are good indications why they could be moving the right direction, which is up and only up. Thank you, and goodbye.