Vgp Stock

[Audio Gap] The Opel site, it's got -- before I start with all the other things which I have prepared for you. But we bought the Opel site back in 2022, I think and -- yes, in 2022, the end of 2022. It was not an easy market, and we bought the site for a reasonable price, and we negotiated with Opel that we would have exclusivity on a data center development for the whole site, whatever there is still big parts of the Opel sites which we didn't buy because they are deemed to be developed for other purposes than what we normally do. So we didn't touch up on that one. And there were also some parts which had big heritage conservation problems as we see it.

So we bought what we think is the real industrial heart of the company out. And by the way, Opel is still producing cars next to us. They just have got the Astra. They make a new Astra. And yesterday, we had -- what the Germans called the [indiscernible]. Our role building is ready, the thing is still hanging there. We had also more than 100 people here yesterday. I also had a speech here yesterday, and Opel has got a lot of plans, new developments with Leap motors, which they own in China. And I'm a very big believer in the reindustrialization of Europe. That's also why we are standing here.

Now for this building, we've done really very much our best to make it very green. We have all kinds of features built in this building. It doesn't look like it because it looks like concrete, but we have the Unidome system inside. Thanks to that, we saved 155 tonnes of concrete, more than 100 truckloads. And in total, we saved more than 1,500 tonnes of CO2 in this building, thanks also to a lot of recycled materials. And I think, okay, we are aiming for a DGNB Gold certification. We are actually aiming for a platinum, and we are fairly concerned -- we are fairly convinced that we're going to get it. But gold is -- I said gold because gold is probably the only metal you can win by using concrete.

So when we did this transaction with Opel, we are also -- you can see on the banners behind and afterwards, I'm going to show on the next thing, a little bit, a little video. We are also going to build the new engineering and design building, which is coming right in front of us here, where they're going to do really R&D things for the next future. More than 8,000 people are going to work here on this site. We have signed a 22-year lease agreement with them. We've got another company guarantee from Stellantis for EUR 300 million. We've really tried our best to make this a very institutional product, which fits very well within the VGP thing.

And the gift which came with it is these brownfield sites, and we have many of them, they come with a couple of very big advantages. You have very good schooled people, technical people. So for future production purposes, it's ideal. But you also have got very big connections to infrastructure. And the site -- this site has 112 megawatts connection today. 7 hectares of our land is now reserved for Amprion for a new division plant, which they are permitting now, which is going to come in the future from which we have reserved another 140 megawatts coming on in a couple of years' time. It will take probably longer than what they promised because it always takes longer, but we're prepared for it.

And there is a power plant on this site, which you have seen. That power plant makes now heat, but we have clear project together with KIO, the operator of that power plant to turn it over into gas turbines, and then we can almost unlimited because there is a huge gas connection, we can go and bridge our way to grid connection through the gas plants, and we can scale up our data center plants right next to it. I'm very weary to talk about data centers because nowadays, everybody feels like he is the new data center specialist. I am definitely not, but I will explain you a little bit the way forward and what we are doing.

On the agenda today, and I'm sorry, my people told me I have 2 hours to talk to you. So by the time you fall asleep, I'll probably stop, but not earlier. We have -- unlike our reporting cycle, which is what you're all looking at every half year or every quarter of the year, you're looking at which numbers have we prepared inside of VGP, we are a family company. We have a very long-term vision and a very long-term strategy. And in that very long-term strategy, we've been preparing ourselves for what we think the market is going to do. And the first thing which we did or what we are doing over the last years is I have 500 employees almost at VGP. Germany is my biggest market, and we have been trying to hire as much as possible real good engineering people. And we built all of our buildings, also this one where you are at the moment sitting in, and hopefully, it doesn't fall down, but we are building it all ourselves.

So that doesn't mean we have blue-collar people, but we have the capability to just divide -- to engineer the whole thing, to divide the whole thing up in all of its components and then to orchestrate the whole construction side of it. We've done that for Zalando, and you've seen how beloved we were in Zalando. I think you had -- we always -- you will see they have made videos with us, et cetera. We have that with all of our customers. We try really to be a one-stop shop for them and to prepare for it. And we see that our market is changing. We have, of course, a lot of standard buildings. I'm not going to say that it's the bulk -- the bulk is the standard buildings, but we see more and more automatization, robotization and we think that is going to accelerate with AI.

And there, it is a lot easier to build the building around the system. So the buildings of the future, they are becoming -- they must be really modern. They must have very modern features. And for that, we've been preparing a lot. And that is -- we think that demand is changing. At the moment, we are working on a lot of new deals, which are buildings Zalando type that you have seen today. We have a new phase of development growth. You know that we buy all of our land plots subject to having the right permit. This means we only pay for it when we have a permit, which gives us a certainty that we can construct on it. This doesn't, however, mean that we can construct immediately on the bulk of our sites, yes, but many of the sites are brownfields like this. We first need to demolish. We need to decontaminate. We need to do some other things around it, build new infrastructure.

And at this moment in time, a bit like in 2020 or 2019, when Zalando came online, when Munich came online, we were a project at that time really big, development comes in waves. And we are at the point where now we really have a very big and they call it cohort nowadays. They use the Roman titles from before. I feel like if I'm going to war, but it isn't. So we have really a lot of landmark sites, and I will show and introduce some of them to you because you cannot reproduce them. I mean you can't multiply them. A site like Rüsselsheim is very unique, so close to Frankfurt Airport with all the connection of electricity. It's something to never give away anymore if we can.

And then we have been working also over the last 5 years, and that's been with a shock. It came with a shock in '22 when the war in Ukraine started and our biggest joint venture partner, Allianz, with whom we still have a very good relationship, by the way. They said, yes, but we have a problem. We can't invest anymore in real estate because we have already too much in our balance sheet. So we started to think how should we mitigate this because it's really our system. We grow very fast, and you will -- you know the numbers. We really grow very fast. We're also -- we're going to grow fast this year also. And by recycling through joint venture transactions, we were also able -- always able to recycle that capital in the next investment phase and in the land bank, which made sense.

Now we've tried to move away a little bit from dependency on single players, and we want to become more like -- I don't want to take the worst in my mouth, but like a diversified investment thing where we sell our assets or we bring our assets inside of a vehicle, where there's multiple investments inside where online -- we're lining that up a little bit like as if it was a fund. That's where we are working at, at the moment. We have several work streams. I have told you about them in our results call, and that's ongoing. And I think that's the third thing. We need these to be able to fund all of the growth which we have in front of us. And we think that we are very close to be able to say all is organized, we can go forward. That's the new inflection point.

How do we convert growth into earnings? Well, we are in the first place a developer. The developer is -- it's not linear. So -- but we have 4.3 million square meters of just the ground floor embedded in our land bank. On top of that comes mezzanines, what you have seen today in Zalando, mezzanines, office extra, et cetera. So it's probably more like 5 million square meters. But that is the footprint of what we -- embedded in the land bank of what we can still develop on land which we already own today. On the investment side, it's our contracted rental income. And everybody always looks at us as it is weird animal, but we are actually -- we're a developer. And underneath of it, we are feeding, you could call it a REIT-like type of thing, and we like very much the recurrent income because it gives us a stable basis if things don't go as fast as we think or things go a little bit different than we think, we still can rely on our contracted rental growth, and it's scaling very quickly. It's going up very quickly.

And then we have a third leg to stand on, and that's our renewable energy. We have solar now really at scale. Over the first 6 months, we had EUR 7.6 million of gross income from the renewable energy, and it's growing very fast. And we are now investing big time in battery storage, especially here in Germany, but also in other countries. We have a lot of projects ongoing. They're very high yielding. Of course, batteries don't have a very long lifetime. So it's also -- you need to take a look at it. But as far as on paper, it looks fantastic. But you see we have now all of our projects are coming online.

And then there is the third thing I would like to take you through, and that's the data centers. Now we are not a data center developer. We're not a specialist in data centers. We just happen to have land plots we have invested in, in the past, which are extremely well fit to develop a data center on. And I wanted to find somebody we can partner with, which has all the other things, people who have experienced, people who have renowned people who have already built because many of these data center specialists when I actually started talking to them and everybody run through my door because everybody wanted to have Russell time, 95% of them never ever built a real data center. They just knew a lot about it.

But -- so we've signed an MOU with a very reputable party, and they are developing data centers on a big scale. They have customers, they have hyperscalers. They have done all the mistakes in the past and corrected them. They know what to do, what not to do, and we are going to make a 50-50 joint venture with them through which we can -- because it's a very big ticket also if we do all these things, we can dilute over time and take other investors in sight as we near completion or as it is completed so that we have a more flexible way of holding on to these assets and by not having a 50% share like we are in everything else necessarily. It's our ambition, but we will see how it goes. So that is -- we have identified our first opportunities, and now we're partnering for scale.

Now first, on the growth inflection point. So we see that demand is changing what the tenants need. I wanted to show you Zalando today because it's a very fine example of how the world is changing and how everything they try to automize and it goes a lot faster than with human hands. The output of these warehouses are incredible. I mean when Amazon puts -- is a robotics center in Frankenthal and we looked at the output which they had inside of that building packages per hour, and we looked at the same size of building, which a big German retailer had built without this automation, well, it was 10x more. So they could do 10x more packages than ours send out, both e-commerce just by doing the robotics and the thing. So we think that, that is the way forward. These investments are huge. What you have seen today in Zalando is an investment which makes it impossible for them to leave only if they go bankrupt, which I don't believe, but I think it's a very good group.

So for us, it's also important to do these very big things with absolute security and with very good companies, which we know that they are in safe hands and that they have a very solid business plan. And we see that in our location is for me always everything. It's always been everything. And we have now a couple of locations. We have many locations where we are negotiating these type of things on big investments, very nice long-term leases, all 15 or 20 or 25 years, which we are going to deploy. Then -- and those sites, I named a couple of them, but Rüsselsheim, you've seen here. Hagen is not far away. It's in the Ruhrgebiet, where we bought a paper mill, also huge amount of electrical power available. And we are now negotiating 2 very big lease agreements there.

But we have Verona coming online after 8 years. We have La Naval coming online this year. Vélizy, we have signed our first lease agreement. It's -- it's 13 kilometers away from the Eiffel Tower right next to the [indiscernible] site. We have Nürnberg, which is a beautiful site, which was a Siemens office campus. It's right next on the city ring [indiscernible] there is nothing. It's really -- it's impossible to develop something. We bought it 5, 6 years ago. We had all the time rental income from Siemens. They're now going out, and we are in very advanced negotiations for a tenant who will take the whole site. We went it into the city council because that's also something which is very difficult. When you come and want to buy Rüsselsheim, the city council, they say, yes, but we don't want only data centers there or we don't want only logistics there. We want you to commit to this and this and this and this, which we can do and which we do, which we promise and we have a very good track record in it.

So that's why we have been able to buy all these sites also where we have Reggio Emilia, we have Vila Nova de Gaia Porto, years of land assembly. And it's not like we go from 6 months to 6 months. All of that sits in our balance sheet at acquisition cost. I bought Rüsselsheim for EUR 75 million, 70 hectares, Frankfurt, just so you know that's where we were. VGP's capital platform is broadening. So I already explained that. We have EUR 3.6 billion of gross asset value that can be transacted.

Since 2022, we transacted an enormous amount of money. We recycled EUR 2.2 billion, which we reinvested mostly in our pipeline. You know how much dividend we pay. So all the rest goes in the pipeline and pay back our debt. So neither the land bank nor the capital recycling is really new. It's just the phase where we are on, that's different. We are prepared for a big leap. Hence, also, I wanted to give you an update. You're all, I assume most of you investors inside of VGP so that you know at which point we are standing.

I'm going to go through a little bit the secular tailwinds. Now you will never believe it. You saw it at Zalando, Robotics has taken over. It's going so much faster. But it's really getting into scale today where when I started back in 2002 with building the first logistic warehouses, they were -- the specifications were roughly the same, but now the load-bearing capacity of the floors has gone up tremendously. The flatness of the floor has gone up tremendously. The installations have gone up tremendously. The legislation around green and everything with it. We have solar panels on the roofs. So most of things is green roof now. But now it also needs to be able to really have these robotic systems inside.

And we have them in many, many places already, [indiscernible], our thing fell out. We have them in many, many places already. But what really surprised me is we did a little study on how much robotics we have actually in Europe. And by 10,000 manufacturing employees, Western Europe is the most robotized space in the world, more than the Chinese. Of course, the Chinese, they have 2 million robots running around. But by number of people which are working in the warehouse, we are the most robotized. But yesterday, I had a very interesting discussion with the CEO of Opel. And there are 2 people of Opel here today. They're standing there. If you have ask questions for them, you can attack them later on.

But he told me about Leap Industries, and we asked him, why do you have these dark factories in China? And he said, well, one of the big problems in China, it's actually different than we think. People are getting very quick, a lot older and the young people, they don't want to work in the factories anymore. So they have really problem in hiring people there despite the whole cohort. So they need to go more and more in automation. So everybody has its own drivers. For us, it's really -- we want to be prepared for it. And you see the countries where there is a lot of automation in Europe in most of those countries, VGP is very active today. It's raising the specification of the building. You've clearly seen that. It's a bit special.

The generic still shell is for racking and forklifts, but we do now more and more a purpose-built envelope. And that is really built-to-suit. It's true. But we see that these buildings are very versatile and they can easily be used in a traditional way, but then they can easily be transferred into another robotic system. The economics are enormous. It really dwarfed the shell, what Zalando did, also the same with Amazon in Frankenthal when we built the robotics, the intralogistics things, which are inside are a lot more expensive, a lot bigger investment than our building. And the location is so important for them because it's from here out, from here, it's so easy to transport to everywhere. It's so central in Germany. So it's really things which we should look at.

And going forward, that's where we think our new demand will come from in the first place. We see a lot of retrofits happen, but only into modern stock, the older buildings, most of them, they don't have the right height. They don't have the right floor. They don't have -- you can't put any of the MEP necessary on the roof. You've seen in Zalando, everything. There is fresh air everywhere. It's cool. It's really -- there is a lot of technique around it. You need to be able to put it somewhere. So it needs to be modern buildings. And we think that's going to drive our growth going forward.

And automation and robotics are one thing. Defence, you all know how it looks like in today's world. Defence was completely taboo a couple of years ago for us. We would never do a defence player. That has changed. That has changed quite a lot. 1.5% of the GDP, the NATO wants to invest 5% of the GDP into defence. But of those 5%, 1.5% is into infrastructure, hence, buildings. And we see a lot -- we have a lot of tenants already which are doing -- we have the Bundeswehr, the German Army twice in our buildings in Magdeburg and in Koblenz. We have -- we are building for GE, which is doing defence systems in Bucharest. We have Magna Steyr, which is making vehicles in Austria, Army vehicles in our buildings.

And then we have Isar Aerospace, which is a dual purpose. It's our answer to Elon Musk's SpaceX. We're building their new factory. Actually, we delivered it today to them in Munich. And they are backed by NATO. NATO took a big investment inside. They put through their funds a big investment inside. And there is others, which we are negotiating with. So that has become something which is also driving growth inside of our thing. Then, we have the supply chain restructuring. Everybody is questioning me about the German market, yes, and the car industry and how is that going to go. But we have in Germany, a lot of demand actually from Chinese companies who are quickly taking over if we're not careful.

And then the German spirit is not that. These people are really very inventive and they want to go ahead. They're very lean and mean if they want to. And I am a big believer in this. Actually, it's still our biggest growth motor. Despite all the other big countries where we're in, Germany is for us still the biggest growth motor. And supply chain restructuring, I mean, we have 10 groups, EUR 48 million of rent or 10% of our total contracted rental income, a little bit less with CATL for which we have built here a huge factory. Hyundai Mobis, we built in Pamplona, the new factory to produce batteries for the car industry. KraussMaffei, it's a Chinese company. They're making plastic molding machinery, huge investment. We have Fuyao. We have Lear.

Yes, we have a lot of others still in the place. So in total, in advanced manufacturing, it's 30% of our total income. And it's a very strong argument to do these because they are very long-term tenants, and we -- it seduces the local authorities because they bring employment, they bring renewal, they bring new investments inside of the town. They attract people. So we have EUR 150 million across 96 tenant groups in 13 countries, which are related to production. It's a very big growth group.

And then lately, we see e-commerce during the years where there was a pandemic, they had taken up too much space that's consumed now. And we see all of them now where we have a lot of demand from e-commerce again. And in Europe, the e-commerce and distribution represents about 19% of the total trade volume, 19.5%. We have 19% of VGP's rent. But if you look at the U.K. and the U.S., where the penetration of e-commerce is a lot higher, it also says, in my opinion, a little bit about where it's going to go through in the next years. It's going to be -- we see it growing a lot at the moment.

I have some pictures to convince you, but I think you are convinced after seeing Zalando this morning. We have KraussMaffei in Munich. It's full of robotics. We have BMW, their R&D facility. They have more than 100 KUKA robots inside. Zalando is fully automated. We are active ends, but we also have Park, Notino, Intercars, all of them have robotics inside and all of them are very much dependent on it.

So our land bank, why we can capture that demand. We're a very big land bank. So all top locations, I would say. We try to really buy the top locations. We have -- what is under construction is not so important, just that it's 76% pre-let, but we have also a lot of electrical power. And we, in Germany, have also the license to sell energy. In Germany, if you want to sell energy, you need a special license. You just can't go and sell energy. So we have a license, we can buy and sell energy, and we do that. We trade on green energy. So all of our customers, they become green energy from us, which we deliver them. We buy it in, we sell it through to them, they take. That is how it goes.

And most of it, of course, we buy in from ourselves and from our own generated energy on our rooftops. And if we can't deliver it, we are now going to store it in batteries and then release it in the grid, we can play with it. That's what we are going to do. And then what's more important than what I already said, it's our in-house capabilities. We are very much involved in permitting. We are very much involved in trying to optimize all of our constructions. Together with Opel, for example, we have many sessions about how to create these buildings so that it's really green.

We have a lot of technical design capabilities. We do ourselves and procurement. So we have a very good feel in every market for how much something can cost. And with AI, you can even play with that a little bit more. There's a lot of opportunities coming for us. And then we do ourselves the construction, and we keep long-term ownership. And I'm an absolute convinced person that we need to keep on doing that. We need to sell sometimes maybe to refresh a couple of these things inside of our portfolios. But the biggest, the iconic locations, I'm an absolute believer. You cannot just buy them back in the market. They're going to be -- if you sell them, they're lost forever and they belong to somebody else.

And there is so many properties inside of our portfolio, which are leased 10 years ago and the lease just keeps on going. And meanwhile, the lease level has gone up tremendously. There is a lot of hidden value in that also when it comes to renewal. I have some more examples. So BMW, it's really worthwhile. If you look on YouTube and you ask for the Pardorf facility, there is a lot of videos about their battery development capabilities. It's really very impressive. Amazon, we have them in 5 parks now. We are negotiating with them on a whole bunch of new lease agreements.

But the next time we do a Capital Markets Day, I will try to get you inside of Frankenthal in the robotic center because you have 3,000 robots running around on 3 different levels, screwing the cells up under pallets and then driving around with the pallets everywhere. It has really been a nightmare to do that, but it's a very, very nice investment. Inter Cars, you can see it here. All of these things are just fully automized. It's Ecotec system. It's huge. It's 60,000 square meters, and it's in Bucharest of all places. It's really very modern. Isar Aerospace, I already told you about. Hyundai, I told you about. And then we have a lot of these conveyor-driven last mile things, which is DPD and DHL, which in Lisbon, both have their headquarters on the same plot, which is very funny. The 2 biggest competitors sit on the same plot, both owned by us right next to each other. I'm curious how they do it with their employees.

Yes. So that's the demand side. Now I'm coming to the ingredient side, why we would be able to capture this demand. And in my head, it's technical competence, but in the first place, real estate is and remains everything is about location, location, location and the technical features. That's why our magazine is called location to the search. And I'm going to show you some land positions, which we have just now really mature, which we think is fantastic and on which -- on all of them, we have current ongoing lease negotiations. You are here, Russelsheim, Frankfurt, bought it from Stellantis. If -- besides what we are constructing here, which is 10 hectares, we can still develop at least 230,000 square meters, and that's without the data center. That's just what we are going to do without a data center.

Data center is not computed inside of any of this thing. I left it on purpose out. Vélizy in Paris, we have signed our first lease agreement. It's completely demolished. It was a very big R&D site. It's really very close. Hagen Dortmund is -- we are demolishing it now. We are signing our first big lease agreement in 2 or 3 weeks. We're finalizing it. It's a very big one, and we are negotiating the second one. And these 2 lease agreements will take the whole site. It will be signed by the end of the year for both, we think. La Naval Bilbao, we are just now having had a bit of trouble in getting the final building permits. We just started with the infrastructure. Odense is coming online next year. It's in Denmark.

Also in Denmark, we have Greve North for which we also have a tenant for the whole park, which is right at the entrance of Copenhagen. The location is just stunning. It's really fantastic. We have Nürnberg, I already talked to you about. Anyway, we have so many -- these are just the examples which are for me the most iconic and now the freshest. But of course, we have a land bank of 10.4 million square meters. So there is construction ongoing on a lot of other places also. This is really, I think, where the future value of EGP sits in its land bank, which, again, I want to repeat it once more, stands in our book at its acquisition value. So we don't -- at its present value, I would say, because it's acquisition value plus what we have invested in site inside of infrastructure and permitting, et cetera, which changes a bit.

And as I said, these land plots, they are positions that will be very difficult to recreate today if you want to buy it. I mean, we've bought this one very good, and you need to be a bit lucky also when buying this. It is just this -- the market today is a bit more favorable towards people with capital. That's true because it's not so easy. But I'm so convinced about this land plot and everybody seems to be. But it's not only that, Vélizy, La Naval, and Nürnberg, I just wanted to show once it's -- I don't think it's so easy to compete on these land plots with us. If we are here, there is nobody around us here in Frankfurt, if there is a big demand, which is Frankfurt related, who can say, I can deliver it also. It's difficult. There is no vacancy in these top markets.

Yes. And that scarcity is turning -- of course, it's a very big advantage commercially. From acquisition and permitting to tenant engagement, we really have -- we can pull out of the drawer a permit and say we will adapt it for you, we can start construction. We are working on it. We have our permits in Verona. And also to give you an idea of how we work with risks inside of a land acquisition thing because many people buy land and then they have to go through -- we always -- especially with the brownfields, you need to be very careful because you need to have in the first place an agreement sort of formal with the local authority because they can just stop you wherever if they don't -- if they're not convinced about what you're going to do. So that's very important.

But Verona, I signed when we started in Italy in 2018. And the payment was conditioned to having the building permits and the infrastructure build, which is going to be the end of this year. So all these years, we've had it. All these years, the price was fixed. There is no indexation, and we are now buying it at the price of 2018, EUR 50 per square meter, including infrastructure. I think it's a very nice one. And there are a lot of examples like that. But in the tenant engagement, as we said, Vélizy, Hagen, Nürnberg and Rüsselsheim, we already signed our first lease agreements. There is a lot of demand. And then we are starting construction now here in Rüsselsheim, what you can see and La Naval infrastructure has started and we refurbished the first 2 buildings, so -- and then we are going to build the new ones.

It's moving together. It's well faced because we think we are going to be able now to do all these closings with our new, which will release a lot of capital, closings with the people of -- with our new system of East Capital, closings with our new thing with Areim. By the way, the people from East Capital are also here sitting there in the back. So if you have a nasty question for them, you can. And it has become executable at once. That's what we are really convinced about.

Our joint venture system until now was one partner takes it all in a certain region. It's very difficult to work with 2 partners take it all in a certain region because then you are getting conflicts on yes, but I want that thing, not him, that is not okay. I want that thing. So that is the discussions we have been having in the past. So going forward, we have now tried to line up 2 new platforms, one which is focused more on Eastern European things, but also with some Western European exposure to it. So it's a mix of the thing, one which is more Western European, that's some exposure. But we have 140 parks, and we have divided them up into exclusivities, which we have given to each of them. So everybody knows.

And then it's not going to be one investor, but both vehicles are going to be a multiple investor vehicle, which is expandable, and it's quite sizable what we want to do. So we want to really go from transactions to a real capital platform. If you want to -- I hate to say it, but it's a little bit we don't reinvent the warm water. It's a little bit towards what Prologis has been doing in the past. We need to do a little bit the same, I think, because our growth is so big that we are going to converge like that. By the way, what a nice transaction they did with SEGRO, I hate it because it's the Americans buying us again, and I would have loved to see David doing something else, but it's a good indication of how people think about us and about our valuations also.

I'm not so sure about this slide. The numbers say always everything. The sentiment is a bit difficult at the moment, I think. But what is true is that in the first half and more in the second quarter than the first quarter, the investment activity in direct investments in logistics and in industrial has been taken up. And it's quite a little bit -- it's quite a bit higher than it has been even before the pandemic. So during '21 and '22, of course, there was a lot. But in the first half year, EUR 18.8 billion of transactions happened in the European market, and that is huge. That's been good. So 13% year-on-year, and it's already the second year that the first half also increases, yes.

And -- so there is appetite. We will see the appetite fluctuations with how Trump goes with Epic Fury, but let's hope it just stops at some point. And what we are very convinced of is that this recycling model, which we have created back in 2016 works very well. It's -- we have done since 2022, EUR 3.5 billion of closings. We've recycled out of that EUR 2.2 billion, which we've all reinvested inside of the land bank. And that is -- I always see myself as a farmer. A farmer first needs to do the land preparation, then needs to see these crops and then the harvest comes at the end. Well, I think we are now in the middle of, it's all growing and it's getting ready to be harvested.

Until now, it was in individual things which we have now a lot of assets standing in our balance sheet, which we can transact. We also are ready for that. And the next phase is to really do, as I already said, multiple scalable investment vehicles, which we are working on in a very high tempo at the moment. It enables us to recycle faster to broaden our investor base, which is something which we've learned in 2022. It's not good to be dependent on one person. You need to think. And yes, the economics are retained. Our asset management fee grows a lot. You will see later on. Our recurrent income base grows a lot. It's our fastest growing at the moment. Yes, it's a broader ecosystem of investment vehicles, something like, as I said, I don't want to compare myself to anybody else, but it's more skewed towards what, for example, a Prologis has been doing.

Now this is where we stand. And now how do we convert growth because we're going to grow a lot into earnings. On the call, which we did, Peter made a graph about our development yields and about where we, on average, our yield on cost. And our yield on cost is including everything. It's the land development cost. It's our own team, which invested inside. It's capitalized interest. It's the whole construction costs, it's the financing cost, it's everything. And on average, we are developing at 8.7% yield. And then it goes from 6.2% the lowest to over 11% the highest. And that's depending in which jurisdiction we are and which clients we have, but we feel that we're in a very good place there. So we have a healthy margin. If we look at it, we have a 30% on average margin towards where the valuations are today.

And we have -- our recurrent earnings base is growing. And yes, it's -- the property development, that's our -- that's what we really are. We like to create new things. I like to do -- I like to think about all new things all the time. So I need to have a lot of great people around me to stop me from being too wild in my imagination, but that's what we like to do, developing new things. But that's very cyclical. We have land and suddenly, it comes all together and then it's like Munich in 2021, we had a huge profit out of our developments, but that's cyclical. And the other one, the recurrent income, that's linear. It's growing all the time underneath. And that's why it's becoming more and more important. And the recurrent income is recurring. We have EUR 134.8 million EBITDA in the first half year. And it's -- this year, it was 72% of the group EBITDA. So it's a good mattress, a good cushion to sleep on, and then the rest is extra income.

Yes, this I already said. Rent that is already contracted. We have EUR 69 million on our current projects under construction signed. So they're all coming to maturity. This building will be delivered in the -- I think we will be ready by May next year, but we will deliver it in August. So it will start generating rental income from August on next year. And all the others which are here, which we have driven through is also, by the way, generating rental income. It's a sale and leaseback to Otto, and it goes until when we start demolishing. And then the renewable energy, yes, that's committed projects, and they are already funded.

On the property development side, so on our developments, this is what I already said. We own 10.4 million land bank. It's a big land bank. We can construct probably 5 million square meters in it, 4.3 million is a footprint. And the capital expenditure -- but that's a very theoretical number because it depends very much on which type of buildings we're going to do on it. It's roughly EUR 2.7 billion for also theoretical rental value of EUR 311 million, which we can still contract on this land bank. That's with average rental prices of today. That's with average what we have in the portfolio. It's not taking into account whether we're going to go towards more Zalando buildings or to more standard buildings. And it's not taking into account one single data center, which is a total different economic. I'll come to it later. That's something completely different.

So we have so far deployed between EUR 500 million to EUR 750 million a year. How it is funded? Well, it's mostly funded through our cash recycling model. And we -- 2027, 2028 and 2029 are going to be, if all goes well, harvest years for us. That's the years when we are going to offload a lot of things in -- from our balance sheet into our joint venture and going to start up a lot of new pre-let new things on our -- mainly pre-let new things on our land bank. And yes, as I said, the EUR 311 million, it's embedded in the land bank, but that is a very theoretical number. If we take on average that what we develop a year, then we could say we have a land bank for the coming 4 to 5 years, but the land bank is something which you need to keep nurturing all the time and to keep investing in all the time because not all countries grow at the same speed, not all the regions grow at the same speed, and you need to be able to just react flexible with where you are and what you do.

The second section is our income-generating assets. Now our income-generating assets are EUR 420 million is generating cash today. So let's say, EUR 35 million a month of rental income comes in. And then EUR 37.9 million of rental income starts paying rent in the next 12 months. They have signed. It's under construction. We are going to deliver. They start paying when we deliver. And then there is a EUR 297 million potential out of the little vacancy, which we have and the pipeline to let, which then the total rental potential goes up to EUR 800 million. By the way, we've crossed the EUR 500 million line today. We -- VGP has more than EUR 0.5 billion of rental income, including its joint ventures at 100%, EUR 0.5 billion of rental income on a yearly basis.

Yes, this means that a big part is already contracted, EUR 502 million, as you can see here. And yes, it's the recurrent investment EBITDA in the annualized, it's EUR 232 million of the EUR 293 million signed, so that's pro rata for what we own is already income generating. So it's more and more -- the REIT part of our business is becoming more and more important. It's -- there is a big cushion underneath of what we do. And then the asset management, it's not very much looked at, but it's a silent grower behind. As we do more and more joint venture vehicles, we also have asset management fees.

In 2020, it represented EUR 14.7 million on an annualized basis. In 2025, it was already EUR 33.7 million. And with what we think we are going to grow, we extrapolate it to roughly EUR 80 million to EUR 100 million in 2030. That is where we want to grow to with our asset management platform as we own more and more and more assets. And so it's property and facility management fees partly that's paid by our tenants and then it's asset management fees, and that's paid by our joint ventures. Yes. And in total, we have now EUR 9.2 billion of assets, of which EUR 6.7 billion sits in the JVs, of which we own 50%. So we have EUR 5 million of lettable area, which sits in this joint venture, it's 213 buildings. In total, we have 266 buildings now, which are income generating.

Then we have our renewable energy. Renewable energy was started in the first place to be able to comply with all the new rules. But it's always -- we've always looked at it as it needs to make money. It has to be a business. And it's grown quite a lot, and we have diversified it quite. So if you look at, we have EUR 140 million invested at more than 10% gross yield in our solar panel installations for which we think the lifetime is 25 years on our roofs. We own that 100% ourselves. VGP Renewable Energy is our own company. We are 100% ownership. The joint ventures have nothing to do with it.

We have installed 193.4 megawatt peak, and we have 32 under construction. And virtually every roof now of every building which we construct on, we put solar panels on top, either we sell the energy into the grid or mostly we deliver it to our customers or otherwise, we just pull it and then sell it to our customers with the PPA agreement. So most of it is the thing. 64% of the platform is live today, but we still have a lot under construction. And then it always takes a little bit of time to connect these things. You're ready, but then somebody need to come and approve them. That's why it takes always -- there is always a lag in side.

So the EUR 140 million looks at first half year, we had EUR 7.6 million of income against that, but that is a big part of this EUR 140 million are things which are still under construction. There's at least EUR 20 million is still under construction. So not income generating yet. Yes. And it grows. It keeps on growing, and it's a nice business. It's a high-yielding thing. And then we have taken a look at batteries. Now there are a lot of companies who specialize in batteries. There was a nice article this morning in the newspaper about it, how many billions are flowing into batteries. For us, the same as with data centers, it's a byproduct because we have a land bank on which we can do it, and it's a very nice product to make a profit on it.

But it's not our -- we are not becoming a battery storage company. We are not becoming a data center company like many of my competitors have completely transferred to. We don't do that anymore. We do just data centers. We are not going to do that. But we have grid connected. We have grid connection. We have big grid connections. Sometimes here, we have a very big grid connection. We have a huge grid connection in Hagen. We have big grid connection in Vélizy. We have big grid connections in the Netherlands of all places where we have already connected.

So we already have installed 31.5 megawatts peak. We have under construction or waiting for the permit for another 140 megawatts. And I don't know if it says you something, but these are big projects that's quite sizable. It's a lot of things. And we have another EUR 80 million in the pipeline. So what we want to do is it -- when it's a warm day like this summer, we had many, then many of the solar panel things are just shut down because there is too much electricity produced. Germany has 4x the capacity, which is needed, installed in solar panels on its roof, 4x. It's a total overkill. So if -- at the moment when it's a warm day, yes, then it's reduced and you account to. So the best thing to do is -- and then the electrical energy is also minus. It's negative because they pay you to not go online. And so we store it. And then when there is a peak, when there is not enough capacity, we release it.

And for our tenants, if it is related to a tenant, smaller installations during the day, if they can't use it, we just store it in the battery so they can use it at night. And that's more projects online. That is little bit what we are doing. So it's growing fast. It's inherent now to our business model. Everybody does it in our companies throughout the whole 18 countries where we are active in, and it's become part of our daily normal business.

Yes. And then the moment of [ Supreme ] where you've all been waiting for and why you're here, I think, data centers. Now I've been very wary on talking about data centers because it creates expectations. Everybody is looking at technology today. And these things are very difficult to develop. There are many people talking about them, but then you look at the actual capacity, and we have Sarah Wilkinson standing right straight in front of me, who comes from Microsoft, working for us. If you -- already since quite some time now, if you look at the real data center market and you compare the numbers, which are really live and operational to [indiscernible] talks about, and it's a fraction, it's ridiculous how little data center capacity in Europe we have compared to the United States. It's ridiculous.

And it's just all because of congestion of power. It's all because of troubles with getting the permit. And it's also because a lot of local communities just wanted points because it consumes all the energy, it kills all the other projects. Nobody can produce anymore. There is no more work for the people. That's how they think about it. It's not necessarily true, but it's how they think about it. Many projects have been killed also in Germany just because the local authorities don't want to. That's why we only speak about where we feel very sure that we are going to be able to deliver. And we shut up about everything else where we are just taking a look at from a glance from far away.

And why do data centers fit VGP? In the first place because we have powered land, a good relationship with the local community, and we have made a deal with them that we can partly do it. We are in a lot of places where the European Tier 1 and Tier 2 markets are. I will show you right away, and we have land plots there which have power. And so -- and that's a bit why it suits very well inside of our -- another leg to stand on. And it monetizes power land for data center, of course. For us, it's not a new -- it's not -- we are not going to like a snake, change the thing in our skin and become a different animal. For us, it's an extra income source, which we want to do, again, together with a partner which is specialized in it.

We don't want to take the execution risk on ourselves alone. I've visited many of these data centers. The construction part is not what is scaring me. I think that is something which VGP can do with all of this thing. What is scaring me is the engineering part and how fast this thing is evolving. And we see the data centers, which I have been visiting, all of them are different. And depending on the age of when they've been constructed, they are all different and they all adapt to a very fast pace to the new things which are coming on these chips are ever more powerful. They consume a lot more energy. The white room, you would think it's going to be smaller, but it's actually getting bigger to -- and the heating -- the heat is a big problem. You also get legislation around it.

Anyway, we've tried to put it in the slide. So the constraint has moved from capital. That's not a constraint anymore because there is a lot of capital available for data centers today. If you want to raise money for a data center development, it doesn't feel like it is a problem. It's -- the opportunity is a problem today. There is no more land, and there is certainly no landed power available. So AI and cloud demand is increasingly constrained. AI is moving out to -- for us in Europe to the Nordics, where you have a lot of green energy, very cheap power or to Spain, where you also have cheap power. We have seen some of the things.

But we want to, in the first place, concentrate on what is the Tier 1 and the Tier 2 markets where the cloud solutions really need to be because they need to be close to the epicenter of what they are used for. And that's -- I will come right next to it. Data center economics are driven by megawatt capacity. The rental prices in megawatts. It's defined by megawatts. So the more megawatts you can offer, the higher the rental price is going to be, but also the higher the CapEx is going to be. And we think we see that there is -- it's the opportunity of having very long leases. So when you develop this thing, you have a very long rental income with a very strong covenant normally because the hyperscalers, which are around Frankfurt, all the big names, you name them, they are here, Microsoft, Google, Amazon Web Services, we've all been talking to them already. All of them have been talked to.

Everyone -- everything -- we do already all of these things today. We have powered land. We do the permitting. At the moment, we have contracted a company, which is called TTSP, a very big planning office, which works for all of the names which I just mentioned. And we are in the design phase of our first data center ourselves together, which we do together with our new partner. So we are -- it's really ongoing. We think we can apply for the building permit in the first quarter of next year, and we have been promised to have it available by the third quarter of next year. We will see whether that all matches maybe that come out some hiccups, but it's the last straight line. We can see the finish. We have a lot of brownfields.

And I think the most important thing is when we go and talk to the municipality and they say we don't want a data center, we can offer them so many things alongside of it that we -- there is always a trade-off in which we can then say, okay, let us do at least a part of it. We only want to do it where we think it's a safe investment. But yes, with 18 countries as a footprint and 140 parks, of course, there are opportunities. Of course, there is possibilities. We just need to be careful and not make a mistake. If you look a little bit about the data center growth, so the dots which are on here are, believe it or not, but these are all the VGP parts. Yes, there are many.

And the red circles is what is called the Tier 1 markets. So it's Ireland, it's London in the first place. It's the Netherlands, it's Frankfurt and it's Paris. And then you have things which are becoming more and more online. We have Spain, Madrid. We have Milan. We have Switzerland and then we have Vienna a little bit. And then we have Berlin, which has become bigger and bigger. And then the Nordics overall have been -- is more and more an investment into data centers. And if you look at it, we're not active in Poland. In France, we have a little bit more land plots already, but it matches in Continental Europe, it matches quite well where we have our land plots. So there is -- of course, there is opportunity inside of it.

The problem is in the -- what they call the FLAP-D, Frankfurt, London, Amsterdam, and Paris. There is no more -- there is a big congestion in power. So on average, you are waiting 7 to 10 years for a power connection if you already can get the promise to get it. That's why it's moving. They are looking to other locations, but some of the things you just can't move. And we are trying to build a platform. So we have selected 2 sites inside of our portfolio, which -- on which we have an agreement with the city that we can build a data center on which we have a contract and thanks to Opel, we have a nice contract here. We have a 2-time grid connection of 50 megawatts, which we can reserve -- sorry, which we can reserve for -- that's one of my employees who doesn't know at a Capital Markets Day, which we can reserve for the data center. And yes, and we are going to partner.

So what we are going to do, we have these 2. I can now talk a little bit more about it. So where we took you here because -- you see that building over there with the retrofit. I don't know if you can say it, but I can see it from my -- I think you can look -- take a look at it behind the parking house, which we are building, we are now demolishing that site. So the inside, we are taking everything which is inside already out. There's a solar panel thing on top of the roof, which Frank promised me that by the year-end will be gone. And then we will demolish the building. It will be demolished by February, March. They used to bump this thing very heavily.

So we first need to look also that there is nothing left in the ground during the World War also here, but don't be worried, it's all clean. And then we can start construction as early as we think ending of next year. You can see that we have an enormous amount of recycled material everywhere on the site, and we will have more even from there. We will use that to raise a bit also the floor because there is the river mine right next to it. And so in order to be 100% certain, it has never been a flooding, but just to be 100% certain, it can never happen. So we'll raise the floor a bit over there. We have the recycled material for that kept all of it.

And as I already said, we have a 65-megawatt grid available, 64-megawatt grid available, which 50 megawatts we are going to allocate to the DC. And then if we need power for -- we have located to this green campus, which is going to be a huge production facility, also the necessary power at roughly the 15 which we have extra. And then we are transforming the power station, which is over there to generate power up to 200 megawatts, which we could do theoretically if we get the permit for it, but it's now already 112 megawatt big, so that we can get for sure. And we're going to use that partly to supply our industrial projects and partly to expand in the future a bridge for our data center to the new grid connection, which should be no later than 2035, as we think now it was promised for 2032, but we think it's going to be by 2035.

So that's -- it's embedded in the local plan, which is underway. We do it with Paragraph 34, which we did the same system as we did this building. So it's done by the local authority, the regional authority, not the local authority. They give the permit. It's going to go on. We have the power secured and the land, yes, it's almost really [indiscernible]. So I can -- today, I can with confidence for the first time say, yes, we are going to make a data center in Rüsselsheim. And yes, it's going to happen. And yes, it's big because 50 megawatts is really big in Frankfurt area. They all talk about hundreds of megawatts, there is nothing, but there is nonexisting. It doesn't exist. It's -- the only ones which exist of that scale are really owned directly by the hyperscalers, not by anybody else that I know of.

And then we have a similar thing in Milan. In Milan, we had a site which we bought really to develop last mile logistics on it in Paderno. We -- it's a Tier 2 market. We asked already a couple of years ago to the grid, the people who own the grid, whether they could provide us electricity. We signed an agreement with them that they are going to deliver us by the end of 2028, 120 megawatts, which is a contract, not a contract. It's with an [indiscernible]. We paid for it. And we have an agreement with the city council also that we can develop the site as a data center site. So we are now also -- we have contracted also a designer.

We are designing our first data center in Milan also, and it's going to be the second work stream, which we will start up with our new development partner. So this is the plant. It's not going to be used as if. We are going to dismantle it and build a new plant. This is one big turbine, we're going to do all scalable turbines behind each other. So if one falls out, it's always redundant. Just like the grid here, we have a so-called green and the red grid, and we are connected from both sides. So there is 2 -- there is actually 2 distribution centers from which is connected. So if one falls out, you always have the connection from the other side. Yes, this speaks for itself. I already explained everything on it. We are taking a look at it, very careful.

I want to state once more, which is important. We are not a data center developer. We want to partner with somebody who has really a track proven record and a very good name and who is building at this moment for all the big names, data centers and is very professional inside of it. Yes, potentially -- so these 2, I already told, 50 and 120 potentially -- so that's 170 megawatts, but potentially, Frankfurt could grow with another 140. We will see. That's music for the future. The 50 is a certainty. The rest is something which we need to work for. But we think we can do that. And we have the land which we have reserved here. It's 7 hectares. On the 7 hectares, we can do these megawatts more and more [ concentrate ]. That's a bit where we are.

Now many of you will want to ask us, how are you going to finance that? I don't know, is the right answer? No, that's not true. So we've been taking a look at a lot of the CapEx, which have been spent on data centers around us. And depending on who the operator is and what is the type of data center, whether it's cohabitation or it's hyperscaler, the scope is -- it goes from 8 to 16. So from 1 to 2 in the investment per megawatt, million euros. So if we take a careful -- not so careful at EUR 10 million or a little bit more per megawatt, you can see what the implied platform is.

Now we think we can leverage 50% on that on the data centers when it is a good lease agreement and a long-term lease agreement and a good name. So we need -- if we keep 50%, we need to fund 25%. Hence, for us, also, it's good that they are here today, my friends from East Capital, and we are going to see our other friends from Saga, our other thing because we need to recycle really a lot of capital, which we are going to do now. And then, yes, it's -- it's spread over a lot of years, 500 meters to 700 meters in over the next 5 to 6 years, which is for us absolutely, I would say, profitable. We can just do that. That would not be a problem.

And we do only commit the capital at the moment when the permit is in place. The only thing which we are putting capital inside today is the land we already have. So we don't need to -- we will bring it in. We will bring it in at its valued as a land for data centers. So that's one of the contributions, land, permitting, power and construction. It's what we are going to contribute to the development pipeline. It will be contributed at market value that's agreed in the MOU. So we will not at purchase price, but at the market value of land suitable for a data center development. We have 2C projects which we bring to the table, and they are very well progressing in power and permitting.

And then what we are -- the partner -- our partner is the real specialist in data center development, and he also operates them. So he also has a lot of -- he has more than 100 employees to operate these data centers. So they do that. They have a lot of investment management capability, they raised a lot of money to do so. So they are quite big. They're going to help us with the establishment of such a vehicle. And then yes, they have a lot of operating know-how. We are going to build together an operating company. We will contribute our Sarah to that and some other people. They are going to contribute also some of those people, amongst others, maybe some technical people.

We will have an asset joint venture underneath of that, which will have the ownership of the data center to which we will contribute our development pipeline at market value. We both have 50%. And we have -- our intention is to keep 50%, but we have negotiated that we can dilute if it becomes too heavy in a thing. So we can attract other capital inside. I wanted to be very careful when setting this up so that we have all the opportunities open to see what we can do.

Yes. Well, it's -- that's the end of my story of today, I think. I think there will be some questions. I talked exactly 1 hour and 10 minutes, a little bit longer than I should have, I'm sorry.

So if you have any questions, we have somebody who will run around with the microphone, and I'm happy to take them.

Thomas from Deutsche Bank. Could you give us maybe a bit more of a color on the timing and the time line for the data center scale up you have planned, especially by when do you expect the first cash flows to come effect -- become effective basically?

It's a good question, but it's a guess from my side. What we have now planned for Russelsheim is that we start construction in 2028. We think we will have -- I've taken a look at it. It depends a little bit on who the tenants will be and what the requirements will be because we have a lot of people talking to us and it might be that we need to do some changes inside of our process.

At the moment, it's done as a cohabitation data center, colocation data center. We think we need 2 years of construction period and then some fit out. So we think that by 2030, somewhere in the year, it will start generating cash flow. That's for Russelsheim. Paderno will follow 2 years later. So it's going to take still quite a while.

But of course, we will start construction. So the demolition has started now. We think we will have the permit next year, and we will start construction yes, probably already at the end of 2027 with all the preparing works. And we've looked at many models together with Sarah.

You could sell powered land, you could sell core and shell. You could sell -- you can do the whole building fit-outs with all the generators and everything, et cetera, and you can do a fully completely ready thing and then just rent space out. We've opted for the third thing, which is more capital intensive, but we did so because we found a very good negotiate a very good partner to do it with, with whom we feel very confident that the management skills of such a thing is completely under control, and it will be a higher CapEx, but also a higher income. That's what we see from it if we look at it today. It's going to be a higher-yielding project than when you just sell the land. Sorry, I didn't hear you.

By when can we expect you to announce the partner here?

When the -- so there is a memory of understanding signed, we will announce it at the moment when we have finalized our agreements with them, which should be still this year, I think. But it's an intense negotiation. Yes, I can hear you.

Suraj Goyal from Green Street. So I just wanted to clarify a little bit on the waterfall for the 225 megawatts. So the 50 megawatts in Frankfurt and 120 in Milan. So is that already secured power? And then what was the expected timing for that? And then versus the rest in the pipeline?

Yes. So the -- in Frankfurt here in Russelsheim, today, we have a 65-megawatt connection, existing grid. You've driven past the distribution -- one of the distribution points where there is 112 megawatts at the other side. I don't know if Christopher or Vincent, I don't know who was with you showed you, but it is existing.

It is Opel used it, and we bought part of that grid connection together with the landlord. So that's allocated to us, and we have it available. There is no more executive risk on the first part of it. The power plant is existing. There is an agreement with [ KMW ] in place, which is signed that they are doing a permit for transforming that power plant.

How much we are going to be able because you need an environmental permit for that is still a little bit in the air, but it has today roughly 100-megawatt capacity to produce heat, and it's the same technology to produce -- it's a little bit different, but to produce electricity. In Russel, in Paderno, we have signed a contract with the grid provider in which he under penalties has agreed to deliver us the power no later than by the end of 2028.

So he needs to do some investments for that. He has a permit, which he is asking for it, and he needs to deliver by the end of 2028, 120-megawatt connection on our land. That's in Paderno. And on the other sites, it's too early stage to confirm anything or to say there is a lot of other sites which we are looking at.

But even we are even thinking about converting existing buildings, which we have in some of our parks into a data center. That's also an opportunity because we have a lot of very well-located plots which are already fully developed, but where there is also an opportunity in the future. But that's far too early to talk about it. It's opportunities and no certainty.

Pieter Runneboom, Kempen. You said that the engineering parts scared you a bit that these data centers are evolving quickly. So what kind of yield on costs are you thinking by building a data center if you compare it to just a simple box?

Substantially higher. Yes, substantially higher. Of course, the CapEx in one building is also substantially higher. But we have seen like we've been talking to a lot of potential joint venture partners. And they come up with -- there is 2 ways how to look at it, because they come up with a proposal in which we participate the land at market value, which is different already for us in our return package than for them as our 50% partner because they paid the full price for the land.

So that's one thing. And then they -- in their assumptions, their yield on costs are well above 10%. So that's their assumptions that their things which they are doing. So that's what we go out from also. That's -- we never built one. So we need to trust them that it's well above 10%. Just what's the estimate assume...

On the financing part, do you see any changes in your dividend policy? Would you have dividend in shares and things like?

The answer -- I don't think we will do dividends in share. It's not -- there is no dogmas in our head. It's not like never. But I don't see a change in our dividend policy. As you have seen, our recurring income is growing every year, and it's growing quite exponentially.

And we've always said our free cash out of the recurrent income is going to be the base for our dividend distribution. So we try to grow it steadily every year a little bit going forward, and that's the idea that we keep it that way.

Vivien Maquet from Degroof Petercam. Maybe on the discussion with the partner on the contribution of the land, do you intend to contribute both line directly or the Milan rather in 2028 when you have, I would say, the power allocation there?

Seeing the size of these things, I think it will be 2 different project companies and both will be separately in a different company for sure. So we're not going to contribute it today. We will contribute it at the moment. Russelsheim probably at the moment when we have the building permit, then it will be contributed and Milan also at the moment when we have the building permit, then it will be contributed inside of these things. But the framework agreement will be signed this year.

Okay. And within the discussion because it's intensive discussion, can you elaborate if it's more related to the future pipeline or rather to the 2 projects that you have?

No, no, it's related to the 2 projects. We have already delegated teams from both sides, which are really running the technical discussions today with everybody. So it's a very hot process. We have weekly meetings. We are -- I'm going myself for having the discussions around. It's also around the setup of how we are going to operate these things because there is 2 entities going to operate one single company. So it's a lot about governance and things like that, which we are discussing.

Steven from ABN ODDO. Question, what's the development margin that you expect here, the broad range? And second, when do you expect the revaluations to kick in? Is it a permitting, construction pre-letting?

I think I already answered because the question there was also what are you expecting as a yield on cost. So the yield on cost, we think it's going to be above 10%.

But what's the margin or what's the exit yield?

Well, what we see in the market is there is quite a substantial margin, but I don't know what the market is going to be in 5 years' time when we are really ready when we deliver the project. But I think on our normal things, we have a 30% margin. I hope that we can do a lot more. I'm not going to say more on our data center development. And what was your second question?

Revaluation recognition.

We recognize value always like it is under IFRS. And it's a discounted cash flow model. So when you -- when we do a revaluation when we do a valuation, it's only after we really started up the building, the construction. There is a valuation which takes it into assumption when the building is starting to theoretically generate rents, so when there is a rental income.

And then you deduct from that all of your construction costs, which are still to be incurred, you deduct also you go back with a discounted cash flow model, and that is then what it goes. So your valuation starts at the moment when you start construction and then grows over the period until it really starts generating income. That's how the valuations are running. There is still a lot of food. You don't need to grill me too long and drinks.

Frederic Renard from Kepler Cheuvreux. Just 2 quick ones from me. First, you said that you bought the land EUR 75 million here. What's the value in the book today?

Well, it's a bit complicated to say it now because this is already under construction. It sits in one company. So there is a part of it is already revalued. But the rest of the land sits at the original value plus infrastructure and demolition costs where it is at. So there is no big uptick.

Okay. Clear. And the second one on the potential partner, future partner. You said that you have big experience in operating and owning data center. The question is when you -- you receive asset management fee out of your JV, but there, obviously, they will be the specialized line. Are you going to pay them any amount regarding to the management of that asset?

No, the idea is that we make together an operator. That operator will get the asset fees inside and it will be split according to the shareholding inside. So 50% of the asset management fees is for us, 50%. We're going to control that vehicle together. That's how it would work.

Pierre-Emmanuel from Jefferies. If I'm looking at, let's say, closer times than 2030 and looking at the upcoming pipeline that you put on your slide, I think you already committed EUR 1 billion to EUR 1.5 billion to the French President. If you can give us a split of the EUR 2.5 billion that you are expecting to spend over the next few years would be useful. And especially for this one, what would be the total CapEx expected for this site?

The one to the French President and to France was EUR 0.5 billion, not EUR 1.5 billion, EUR 0.5 billion, and it's spread over a very long period of time. So it's not in 1 year or in 2 years committed. It's -- and it's -- if we look at our development pipeline in France, there is at the moment, 4 land plots, which have been -- 5 land plots, which have been committed to or already been bought.

And if we count together the CapEx in those 5, that's EUR 0.5 billion together. So that's a little bit where this number came from. That's the commitment which we made. If we look forward, we have at the current period a running rate of, I think, roughly EUR 750 million a year now. So that is where we are.

We think we can recycle enough out of our joint ventures to fund also that and a bit more. There is in the pipeline, there is really -- there is -- we want to do EUR 1.5 billion roughly in our -- in one vehicle and roughly EUR 3 billion in the other vehicle. So recycling out of that is going to be a lot of capital, which is now enclosed in our existing pipeline. So I think we were going to be very well funded.

And the Russelsheim site is you need to divide it up, I think, in 3 parts. One is the grEEn-campus. And the people from Opel are here, so I can't disclose anything on my investments. They are fine to admit. [indiscernible] The other site is roughly 230,000 square meters, which we are going to develop.

And our average construction cost, including everything, but that's very average because we don't know how much office was going to be and how much -- how specialized the building is going to be. But on average, let's say, it's EUR 650 per square meter, and you know what is the CapEx going to be there. And then the data centers, I already said what we think is going to be. We have 50 megawatts. We have the land already, but the 50 megawatts, the construction cost is going to be roughly EUR 500 million, EUR 0.5 billion, of which we need to deliver 25% in equity theoretically, yes.

And maybe a quick follow-up question on your capital recycling strategy. I think some people expected some closing sooner than the one that you are expecting to do by the end of this year. If you -- would be very useful to give us more color on the process, why is it taking time? What could be the amount expected and the closings also expected for 2027?

So for Saga I, the one which is still going to close, it's just a timing issue. We have a lot of assets under construction, which are earmarked to go in there, and they're just not ready yet. So we will do a transaction, which is roughly EUR 550 million, I think, of which part is going to be transacted in this year and another part in the first quarter of next year -- end of the first quarter of next year. That's how it's looking like. And there is no issue at all. The due diligence has started. The thing is running. It's just because we needed some time to lease some things out or to finish some other buildings, and it's just a movement in time in our -- and we don't want to go little asset by little asset.

We always want to do a bigger one because otherwise, we have all these costs of doing the due diligence and everything again. So -- and it's also with the bank financing. So we want to do it by big lump sums. So I think roughly EUR 275 million, EUR 250 million is going to transact still this year. I need to look where Piet is because he knows roughly what it is.

Is that amount, yes, plus/minus and the rest in the next year. And then the other 2, they are -- they have been set up. We are starting now with all the marketing. We've been starting with the marketing. There is due diligence ongoing from investors. So it needs a little bit of time before we can really do a transaction, and we plan to have that in the next year. I'm always amazed about the question because it sounds like as if it's a very easy process, but it's really defining and agreeing everything with all these people is taking quite some time before we can actually do a transaction. But we've always delivered on it, haven't we?

Which is -- I know no guarantee for the future, but anyway.

Lynn from KBC. Just a question. You said you would start with a 50-50 joint venture. But over time, you are willing to dilute your stake. How do you look at the risk of diluting? And are there any ways to circumvent that?

Yes. The way how we look at it is until now, we always -- we also had that option with Allianz. We could also with Allianz scale down to 25%. We have that thing in our agreements. And for us, it was a safety trigger that if in any event, we could not just follow anymore because we're growing so fast in putting the capital on the table, we could say, okay, while still remaining in control and having the asset management, we could dilute to 25%.

And we are doing -- we're trying to do a little bit the same in the data center thing where we see it's very capital intensive. And at some point, we just -- the markets are closed and we can say, instead of doing a 50% contribution, we only want to do a 25% contribution and still remain as the operating partner in place.

So it's building in protection for ourselves going forward rather than seeing it as a risk. And the dilution would be one-on-one. So the economical value would remain the same. There is no punitive dilution foreseen if we can't follow. We have a right to dilute one-on-one. So somebody would put more capital inside than we do, but we have the same -- our economic part remains the same value.

Last question. I will drink a glass with you over there, so you can grill me then afterwards there.

Marios Pastou here from Bernstein. You mentioned you thought about various different models within the data center space all the way from powered land up until a fully fitted turnkey solution. You mentioned obviously the high yield on cost potential from going inside the box and doing a more capital-intensive process.

How did you also think about that from offsetting that with obsolescence and the fact that the inside the box will need to be replaced over time, depreciated, et cetera, do those returns still stack up versus doing a powered shell, for example?

Yes. That's a good question. On the data center business, -- our -- we want to maximize our profits in the beginning, and that's why we choose a partner, a partner with a very big operational knowledge about it and who really knows what data centers are about, who operates them and he also owns them through various stakeholders behind them. We are learning. We are in a learning phase. VGP is in a learning phase. VGP wants to go first to the thing where it builds up a data center together with somebody in the best possible constitution that we could find with somebody we trust.

And then we have to keep our finger on the pulse to take a look at how this market is evolving and because this technology, I mean you use probably [ cloud ] or you use other things. It's incredible how fast things go inside of it, and it's also in the infrastructure part. So your question is very right. Do we want to own this thing over a longer period of time? And then the answer is I don't know today.

Probably yes. But the option might also be, hence, also the possibility. And there is no defined point when we say we dilute inside that we sell off our part to the operator or to the people who use it or to institutional investors. But that's a thought for later. First, we want to build it and make it usable and then we will see. But I have exactly the same thoughts around it. We need to learn.

It is going to be a learning process, which we all need to do about is this then future-proof? Is this going to remain? Is it in 20 years still a fantastic asset? Location-wise, it probably will be, but the building it's a good question, and we will need to keep our eyes and our minds open and be very wise in going forward.

But what I can tell you is that this location in Russelsheim, so close to Frankfurt with a grid connection, with the people who are around it, we have had demand LOEs even sent in from every bigger player, which is around active here in the thing. And these cloud solutions, most of them are -- when they have 1 or 2 or 3, they also want the fourth and the fifth because they need redundancy, and they need them not very far away from each other.

So, and Russelsheim sits in an ideal sweet spot. So from the demand side, it's not a problem. But your question is very right to the point, what is -- how is it going to evolve? I mean at the end of the lease term, how is the building going to look like? I don't know.

Okay. I want to say wholeheartedly, a warm thank you for having taken all the effort to come here. I know it was not easy. But I hope you enjoyed it or I hope you're still going to enjoy it, the time we spent together.

And I hope to see you soon again in the future on other events, on other occasions. It's hefty times outside of there, but I'm a believer in the future. I'm a believer in the things that crises has come and go again, and we need to think long term.

As I said already in the beginning, there is a lot of things which are driven with the reporting every half year. There is a lot of things which is in our mind, which is really thinking through a cycle on where we want to be. And as I already said, I think we've armed ourselves well, very well to do nice things in the future. Thank you.

Welcome to the review of VGP's financial results over half year 2026. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Good morning, everybody, and welcome to the presentation or webcast of our performance over the first half year. I'll start with an executive summary of what has happened. So the first quarter of the year actually started very well, and the second quarter was a little bit subdued through this Operation Epic Fury, which everybody has been following with great interest. It seems now that dust is settling a little bit. The third quarter has been very well so far, and we have very nice prospects for the rest of the year, especially in newly signed lease agreements underway.

We report a net profit before tax of EUR 141 million, EUR 140.9 million. That's EUR 120 million net profit after tax, earnings per share of EUR 4.26. We also report an EBITDA of EUR 186.4 million, and you will be probably pleased to hear that EUR 130.5 million from that is recurring investment segment, so recurrent income. We had EUR 128.2 million of net rental and renewable income at share, which is a growth of 17.9% year-on-year on a proportional basis.

And our -- at the 30th of June, our committed annualized rent income stood at nearly EUR 0.5 billion at EUR 489 million. That has grown to EUR 496 million meanwhile. And it's 11% year-on-year growth, and we will soon break the EUR 0.5 billion barrier, which we've been always looking for. And I hope it will happen in September. I'm sure it will happen in September. We have EUR 260 million of cash-generative leases at the moment at share, which means handed over generating lease income already.

We initiated 314,000 square meters of new developments and delivered 236,000 square meters in the first half, which were 86% let. We have -- our proportional LTV dropped from 50% at the year-end to 49.3%. We have a consolidated gearing of 35.5%, and we still have a BBB- with a stable outlook, both from Fitch and Standard & Poor's. Our shareholders' equity was up 10.5% year-to-date after EUR 247 million net equity raise.

And -- at the moment, we have EUR 9.2 billion assets under management. If you look at our investment property at share, then that is EUR 6.1 billion. And in December, we had EUR 8.7 billion assets under management. We have multiple joint venture closings upcoming. As you know, our SAGA, our latest joint venture is momentarily 60% deployed. We foresee to do a large transaction both in the end of this year, beginning of next year and then to start a second Saga vehicle and our East Capital fund is in preparation for 2027.

And then I also have some news, which I will talk a little bit about, but mostly on our Capital Markets Day, about our data center deployment. We've always been very careful in communicating about it because we wanted to be sure before we say something that we also can deliver. So I think the time has come to veil little bit, to reveal a little bit what we plan to do in the next 2 to 3 years on the data center side. I'm going to hand over the word to Piet first now for the financial performance.

Thank you, Jan. As always, I've prepared you a set of slides to walk you through the main changes over the period, albeit this time, it's in a bit of a new jacket. But as Jan mentioned, we are happy to report a profit of EUR 120 million or EUR 140 million before taxes with a strong contribution from all of our business segments, resulting also in a EUR 186 million of EBITDA.

If we compare a bit year-over-year, then you will see that the EBITDA by the segments has grown from EUR 118 million to EUR 131 million in the Investment segment. That is mainly as a result of the recurring earnings and the rental and renewable -- the net rental income that has grown significantly, both in our own portfolio as in the joint ventures. I will share a bit more details on that on the next slide.

In the development, we have a decrease of EUR 118 million to EUR 52 million. It's not that there is anything outspokenly negative happening in H1. It's just that H1 '25 benefited from some additional revaluations gains as well as transactions with joint ventures, which resulted in a significant realized gain, and we haven't done any joint venture transactions to date. On the other hand, the renewable energy EBITDA doubled from EUR 2.1 million to EUR 4.3 million as a result of a higher output of our solar installations and also the battery systems that are coming online.

So if we break it down a bit and focus on the different contributing factors, the first and foremost is our recurring earnings, which have grown significantly organically also, which is at share up with 18% to EUR 128 million. So that's EUR 51.7 million or 26% up in our own portfolio, EUR 76 million in our share in the joint venture rental income, that's up 13%. So I think it's a testament to the quality of our rent roll.

And as Jan mentioned, we have EUR 489 million of contracted annualized rental income in the entire group at 100%. Out of that, proportionally EUR 327 million is the contracted income, of which EUR 260 million is already cash generative. The rest is being handed over, of which a majority part will be in the next 12 months delivered. Solar, as I mentioned, is up 10%. It's mainly a production increase from 71 to 78 gigawatts and also a capacity increase that is exactly linked to it. Basically, it's 9%, and we have now 170 megawatts under construction.

We also had a good indexation on the portfolio in the first half of this year, and we were also able to relet vacant space with an average 6% increase in the rental price that is compared to the latest rental price that was active in that building and that we now replace. And it's not just 1 contract, it's quite spread over the group. So all in all, the recurring income in the rental and renewable energy performed very well.

The valuation gains, they are EUR 65.9 million on our own P&L. And on the joint ventures, there is a EUR 25 million revaluation at share. So the total revaluations at share is EUR 91 million. As you can see, the valuation gains, they are primarily driven by the constructions that have been initiated in the first half of '26. And just to give you a bit of color on that, how the development gains are coming to be. I've made the box-and-whisker graph on the left, which shows with the title development gap, which shows on the left side, the yield on cost of the developments and on the right side, the weighted average yield by the appraisers of these developments.

But you should always know that these developments that have been initiated, they are at the beginning of their construction period. There might still be some vacancy in. So up until the moment you stabilize the asset and the asset becomes completed and fully rented, the weighted average yield, provided there are no real fluctuations in other movements in valuation assumptions, it will come down. But as you can see, the yield on cost, we are very enthusiastic about it.

And the lowest asset that we have is at 7.2%. The highest we have is at 11.5%. And on the average, we are around 8.7% yield on cost, fully loaded, of course, with capitalized interest and development fees, et cetera, whereas you see the weighted average yield, of course, should be lower, that triggers the margin is between 5.4% and 9.6%, where the average is at the moment, 6.5%. So that looks very promising also for the future because we expect this to ramp up further by continuing to develop these assets that have initiated.

You can also see this in the average yield of our portfolio on our own balance sheet. That's around 7%. And in joint ventures portfolio, it's very stable, 5.22% to 5.25%. Also the revaluation in the joint venture, we have a EUR 25 million contribution at share, but towards the size of the joint ventures, which you can see on the right side, that is quite a stable revaluation.

And as Jan was mentioning, we have EUR 9.2 billion assets under management. The inner circle shows it at 100%. So the EUR 2.8 billion is on our own balance sheet. The rest is in the JVs. The outer circle shows actually in the gray bars, which are in the joint venture, which is our share. So we own EUR 3.3 billion inside of the joint ventures' IP and EUR 3.1 billion is, of course, economically owned and legally owned by our joint venture partners. So together, EUR 6.1 billion. And 74% of the assets of the EUR 9.2 billion, they are also located in Western Europe.

I think I mentioned already probably most what has happened in our joint ventures. So strong increase in the net rental income with 13%, valuation gains I've just described. But I'm also very happy to show once the EPRA metrics of our joint ventures because we always consider our joint ventures sort of a REIT. They are fully stabilized portfolios, and we try to run them as efficiently as possible. We try to distribute all of the excess cash during the year and different formats.

But this result that our EPRA earnings of the joint ventures have increased to its 16.4%. Cost ratios are well in check. The valuation yields, they are very stable. The vacancy rate has come down from 2% to 1.2%, very happy to see that. And then the LTV has also come down from 32% to 31.5%. There was also an excellent performance in our Rheingold joint venture, which has a track record in its 10-year existence now of above 12%.

This triggered a promote of EUR 18.4 million. This was also already provisioned at year-end, has also been paid out, but the cash was received on 1st of July. So you will see that popping up in our cash flow in the second half of this year. Finally, Rheingold also needed to refinance as the term of the JV came to its maturity, such that its debt that was EUR 844 million, we have completely been able to refinance that quite easily even in the volatile market environment, and it's now replaced with a bullet facility with a small top-up of EUR 886 million, which also allowed for the payment of the promote to VGP.

On the balance sheet, I think it's a pretty straightforward story. Our total assets and equity and liabilities have increased from EUR 5.2 billion to EUR 5.8 billion. The shareholders' equity is up to EUR 2.9 billion. So the investment property increased from EUR 2.4 billion to EUR 2.8 billion. It's the equation of EUR 378 million of CapEx and then the revaluation effects and our share in the joint ventures, as I showed the performance on the previous slide, that equates an equity participation in value of EUR 1.5 billion.

Our consolidated gearing is stable with 35.5% and our proportional LTV at share came down to 49.4%. We have a very solid cash position with EUR 599 million and untapped RCFs of EUR 500 million. So we have a liquidity position of above EUR 1 billion. Maybe to zoom in once on our debt because we have been quite active in the last 18 months on the debt markets. Last year, we raised a bond of EUR 576 million. Beginning of January, we raised one of EUR 600 million, which was then used to repay a bond in March of EUR 190 million.

And also, we bought back EUR 100 million on the January '27 bond outstanding. As you can see in the graph on the left, that bond is now EUR 220 million. It was 1.5 years ago, EUR 500 million, but we have been proactively extending the maturity on this bond and been repaying them and very happy that we did so. So the refinancing that we are looking at now until 2029 is very limited with only one bond remaining in '27 of EUR 220 million. Of course, in the current interest environment, I don't think it will come as a surprise that our interest has come up from 2.7% to 3%. But again, we are looking quite bright to the future as we don't have to do any major refinance in the next years to come.

Revenue is vanity, EBITDA is sanity, but the cash is the reality. So it's always good to also look once at the cash flow and see where the money has flown through. You can see that the net cash from the operating activities went from EUR 28 million to EUR 4 million. It's not that our operating cash flow went down. On the contrary, it's mainly the movement on the working capital that has played this part. It's a bit of an unfortunate that the promote was only received on 1st of July. Otherwise, this picture would have looked already different, but it's mainly buildup in some short-term receivables, but nothing out of the ordinary, but that is a good contribution.

The net cash used in the investing activities is EUR 331 million. It's up versus last year. It's mainly driven by a higher CapEx spend of EUR 376 million. We also sold 1 of our parks in Latvia, which was VGP Park Tiraines. Last year, we sold VGP Park Riga in the second half of the year that provided some cash in of EUR 26 million. We had distributions of joint ventures in the first half, up versus last year. It was EUR 19.2 million. I think we can expect a minimum EUR 80 million for the year, but the JV distributions, they usually come in the second half of the year. Some of them pay it regularly. Others, we do it in one go. So -- but we expect about EUR 80 million at least.

And then in the financing activities, also a big swing versus the previous year. So we raised a bond of EUR 600 million, which raised EUR 593 million net of proceeds. We repaid EUR 190 million bond in January and EUR 100 million proactively. So that's EUR 190 million net. We raised an equity of EUR 250 million, net EUR 247 million. We paid out the dividend. We paid out the interest on our bonds. The interest that you will see in the P&L is lower than the interest paid. That is because most of our bonds have been raised in the first half of the year, and then it's when we also pay the interest. So that's actually less to be expected in the second half cash flow-wise.

And I think that will conclude my slides, and I'll give it back to Jan. Thank you very much.

Yes. I will continue with the operational performance. The park you are seeing on the picture in the presentation is our VGP Park in East Midlands. And we have already leased the first building under construction now to Games Workshop. It was just signed. It will start generating income at the end of this year, and we are in active negotiations for the second building. On the leasing activity, I will start with the leasing activity. We just put in this slide on. This is our park in Vélizy, not very far away from Versailles.

And as you can see, you can see also the Eiffel Tower, which is here in the back. It's really 13 kilometers away from the Eiffel Tower. We're very proud on the location. We think it's absolutely stunning. That's our VGP Park in Vélizy. Completely demolished meanwhile now. It used to be an R&D facility for Stellantis. And we have -- we're signing our first lease agreement on the building right in the corner on top in the coming week.

We have a record committed rental income at the 30th of June of EUR 489 million, including the joint ventures at 100%. And our committed annualized rental income has gone up by 7.6x over the last 10 years. So we've grown considerably. It's -- we have 482 tenants, but 693 tenancy contracts, which also shows that we have a lot of repetition clients, a lot of clients who put their faith in us and come again and also over multiple countries. And if somebody talks about a real European platform, I mean, we have assets in 16 different countries. I think we are a real European player also from a shareholding perspective.

The bridge of the committed annualized rental income, if you look at it. So we started with EUR 468.3 million of leases at the year-end. We signed EUR 24 million of new leases. Meanwhile, that's gone up to EUR 31 million. We have some indexations, EUR 7.6 million. We have amendments to existing lease agreements, people who want something extra, and we have amendments, EUR 2.2 million. We had EUR 11.3 million of terminations, and we sold one building, which is EUR 1.8 million, and that makes the bridge to EUR 489 million. Meanwhile, that's gone up to EUR 496 million.

We signed EUR 52.7 million in total of rental income signed and renewed during the first half of 2026, roughly in line with our record year of last year. And as I already said, as Piet already said, the relettings of the vacant space achieved a 6% on average increase in the rental price, and that's over total our portfolio, and it's a lot of lease agreements. And we have an 84% retention rate at the moment of those leases, which come to an end and we need them to relet. 84% of the tenants stay.

The new tenant demand is shifting back towards e-commerce. E-commerce has been very off the market over the -- since 2022 to until last year, we had virtually no e-commerce deals. Now we see them coming back and really coming back big time. At the moment, as we speak, we have a number of really very large new e-commerce players, which are going to sign up with us. So we are in final lease negotiations.

And I'm very happy that I'm going to be able to show you the Zalando building on our Capital Markets Day because I think it's a reflection of what is going to happen also with robotization and automatization. You will see the building is incredible. It's fully automated, and it's really impressive. I'm very glad to be able to show you that. Logistics is the largest part. You can see in the new lease agreements by segment, it's 51% of what we have signed, but e-commerce is growing again. It will grow a lot bigger in the second half because these contracts with the e-commerce providers are really very big.

We expect to sign some very large new leases. Light industrial is -- has been 21.6%. And, for example, GE is as an example here, we also see quite some demand out of the defense sector, which is really picking up. And yes, the occupancy of our standing portfolio, it's 98%. It's compared to the market where we think the average vacancy is around 5% to 6%. We are performing quite a bit better. We have now EUR 419 million of cash-generative leases.

We have a land bank, as you know, I will come to the land bank later on, which is fully permitted, where we have all the permits in place, which we can develop. And we think some of them are now coming to maturity because we are demolishing inside and there are some sale and leasebacks and they are going to come to the end. And so if we develop all of that, we have a potential to grow our income-generating assets to roughly EUR 800 million per year.

And Piet likes to make bridges as always. So we have -- we started the year with EUR 389.3 million of cash-generative leases. We activated EUR 30.6 million of new leases. So we handed over to the customer and it started to pay rent. So the cash-generative leases EUR 419.9 million, EUR 420 million as at the end of June 2026. We have EUR 69 million of signed leases, which are under construction, which will be delivered in the next 12 to 18 months.

And then the vacancy and the pipeline ERV, so what we can still construct and what is not yet leased together, it's another EUR 310.6 million. That's future music, which we can develop and that would bring the total rental potential to roughly EUR 800 million. We have added in the first half of 2026, 8% of cash-generative rent, and we have 17% from cash generative to committed annualized rent uptake. And so the growth potential is still 67%.

I'll go to the next slide. On the delivery side, the building you are seeing is in Split, and it's leased fully let to Studenac and Atlantic Grupa. Both are very active. It's in Croatia. And we delivered 12 buildings, 236,000 square meters, gross lettable area, which was completed in the first half of 2026. On the right top, you see our park in Alicante, Spain. And then underneath of it, you see once more our park in Split, Croatia. It's EUR 17.1 million of annualized rental income, which is spread over through 35 new contracts. It's 86% let at delivery. There are some smaller units, which are, remain to be leased out. And the sustainability credentials, which Martijn will talk about a little bit later, all of them are 100% BREEAM Excellent or better and 39% of the deliveries, which we did in the first half year, are even BREEAM Outstanding.

The deliveries were mostly logistic activities. So we have some examples of customers, which you can see there. ID Logistics, Spain, we have a little bit everywhere around the group. And 76% of what we delivered was logistics and e-commerce is growing. I think it's going to become really a big driver again in the next years to come. You can also see in the bottom, the 2 pictures of 1 of our VGP Park in Vejle, Denmark and then of our new VGP Park Sibiu in Romania, where we are leasing out our last units. All the first half year deliveries are certified sustainable and of which 39% are BREEAM Outstanding. And then you can see for the rest of the portfolio, virtually everything is now certified. And you can see the split down BREEAM Outstanding and BREEAM Excellent together, it's almost 70% of our portfolio.

Characteristics a little bit of our standing portfolio. So the average building age, we've been growing a lot, as we've shown you that we have done our leasing income 7.6x over the last 10 years. So we've built a lot over the last 10 years also. So the average building age is 5.1 years. 74% of our buildings is younger than 10 years. And it's younger than 2 years is even 20%. So it's a very young portfolio, very up to date, very well certified. 24,000 square meters is our average building size. And we have a lot of large facilities, and we think that large facilities are going to remain very much coming on, especially with automatization and robotization, we still think that it's going to be large facilities.

And then we have inside the EUR 800 million, if we develop them all, then we will have a completed portfolio of 12 million square meters roughly, of which now the standing assets are 6.6 million square meters. We have 1.1 million under construction, and we have a land bank on which we can still develop quite a lot of square meters, quite still 4.3 million square meters roughly on our standing land bank, which is constantly evolving as we are looking at new opportunities.

On the development side, the park you are seeing on this picture is our VGP Park in Nijmegen, where last year, we virtually let out everything. The building you're seeing down here is immediately adjacent to the highway. It's the last building in the park that's leased to Protempo. In the back, we are building a very big also with a very automated thing for a clothing retailer. I can't disclose the name, unfortunately.

It's a very big park also. We have 160,000 square meters, which is, of which is now 120,000 square meters under construction, plus the already existing building. So the park is quite substantial in Nijmegen. We're very happy with it. It's performing very well. It did a nice contribution to our profit. We have 44 buildings under construction, which represents EUR 90.6 million of annual rental income once fully let and built.

And I have already told you a lot of times that I'm a very big believer in that we should really try and help the reindustrialization of Europe. On the right top side, you see a very nice example of the building D in our VGP Park in Munich, where we have Isar Aerospace, our European answer to SpaceX, I hope, upcoming. They really did a lot of capital rounds and are now very much supported, and we're very proud to have them. And we are going to deliver that building now in September to them. It's virtually ready. So they are making rockets inside.

And then underneath, you see the building of the very big clothing retailer, which we are constructing in Nijmegen. It's 74% pre-let, our development pipeline. We're going to remain very careful over the second half year also with our pre-let levels, not too much speculative buildings. We will remain at the same levels or a bit better. And it's very well spread across our geographical footprint. At the moment, in every country where we are active, we have constructions ongoing. So almost ongoing.

There is only 2 countries where we are going to start up normally in the second half of the year. All the rest in 14 countries, we have constructions ongoing. And the largest park under construction are Nijmegen, our Rüsselsheim area, Rouen and Mulhouse. Rouen is meanwhile also fully let. It's complete. We are constructing the last 2 buildings.

On our land bank, the picture you are seeing is 1 of our most iconical parks. It's in Nuremberg. Nuremberg was an office site which we bought from Siemens. They are going out later this year. And we are finalizing a very large lease agreement, which we hope to sign October, November this year with a very big e-commerce retailer. It's right adjacent to the Ring Road. It can't be a better location. And we went with them to the mayor of Nuremberg and the mayor of Nuremberg and the political side already approved, which is always an advantage if you have a backup, for which we're very grateful from the politicians, to implement this thing at our site in Nuremberg, and it's going to be a very long lease agreement. So that will be a very nice thing to develop.

The land bank is now 10.4 million square meter owned and committed. We started the year with 7.1 million square meters. We acquired 1.2 million square meters. We deployed 600,000, we sold nothing. So we own at the end of June, 7.7 million square meters. And then we have committed. As you know, we always buy our land subject to receiving the permits through which we can use it for its intended purpose. So once we will obtain these permits, we will also buy the 2.7 million of committed square meters, which brings it to 10.4 million square meters of land, which we own or have a commitment on, which is binding. And then we are under option. At the moment, we are looking at another 1.4 million square meters. We are very careful in trying to locate really the top quality assets in the market at reasonable prices.

Our land bank is very well spread across the countries. As I said, we are a truly pan-European group. We've been building very carefully at this. You can see the biggest country is also the biggest land bank. Of course, in square meters, the land banks can be varying. For example, Serbia has a very big land bank. But in euros, it's small because we only paid a very small price compared to the land bank and the values of land in other countries, but we are constantly looking at expanding it. And CEE is 44% of the land bank today. Western Europe is 56% of the land bank, but that varies every time again when you look at it.

And maybe just a small word on some of our most iconical parks because they have now, they are now coming, some of them are now coming really to maturity. So some of them have been a sale and leaseback like the Rüsselsheim facility or the Nuremberg facility. In Rüsselsheim, we have the, we have the grEEn-campus under construction with Opel. It's a very large construction site. And the Opel facility has, it was a production site of cars since 1864. They have grown over the time, and they have a very big electrical connection. We, being a partner of Opel and making for them also the grEEn-campus, we have been able to secure quite a substantial amount of electric capacity directly from the grid and have a nice view on more capacity coming on later in a couple of years.

Hence, that's also why we want to develop our first more modest data center development in Rüsselsheim, but I will disclose the details of that only on our Capital Markets Day, you have to come. Otherwise, you won't know.

And then Vélizy has now been completely demolished and decontaminated, and we are starting construction activity in October this year, and it will be, the first building will be completely pre-let. We are working on our last, on the last pages of negotiation on the lease agreement. The same goes for Vila Nova de Gaia in Porto, where we also, we are in final negotiations with a very big industrial group to sign the first building. We have our park in Hagen, which is also, the same story, it's a very big paper mill. It used to be a lot of electric capacity. So we have already ordered a very large battery storage thing to be placed there.

And we are in negotiations again with 2 very large tenants for the whole site. So we hope to be able to bring you at the year-end, the 2 names of the people who are going to lease out both retailers in this park in Hagen. Hagen is right next to Dortmund in the Ruhrgebiet, a really nice location. Nuremberg, I already explained. And in Reggio Emilia Gavassa, we already signed a lease agreement with Savino Del Bene and the big building at the right side, which you are looking at, that is also under lease negotiation at the moment with a very large retailer. So fingers crossed, touch wood, but we have really a lot of activity in the pipeline.

I will give, I will hand over the renewable energy topics to Martijn, our specialist in that case. Martijn, go ahead.

Thank you, Jan, and good morning, everybody. On the renewable energy, the story starts to stand more and more on two legs now. We've always presented the photovoltaic leg as obviously being the most important constituent. And in terms of revenues, that is still the case. Battery starts to become more of an important growth prospect every reporting period.

Starting with the photovoltaic there, we've really been able to catch up on the rollout of our existing portfolio. You see that we now have 284 projects on the, in total on the platform. If you compare that to the number of buildings that we have, which is 319, you see that we've really been able to catch up mostly on the rollout of our existing portfolio. So also in terms of growth, this will start to become more and more aligned with the growth of our overall portfolio as obviously, we will continue to build photovoltaic on our new construction projects, but there is less of a catch-up to do.

If you look at the gross renewable income, Piet already touched on it. If you look at the performance of the portfolio and compare it to the portfolio of photovoltaic that was operational at the beginning of the year, which was around EUR 105 million worth of investments, the yield is very similar as what it was in 2025 and in 2024. And if you annualize that, that gets to around EUR 13.5 million for the full year because the second half is always a little bit less productive in terms of sunny hours. But yes, we will also work on adding additional platform through the second half.

Then on the battery projects, we've been able to connect the first projects in the first half. These need to be approved by the local grid operators, et cetera. So it takes some time before they start generating revenues, but we anticipate that these will start in the second half to start meaningfully contribute. And if you look at the total investments, then the total CapEx that is either spent or committed is on the middle of the bullet point is EUR 170 million now. Of that, there is already over EUR 30 million that is related to BESS projects.

So it is, as I said, it really starts to become a meaningful contributor to the investments, and we will expect to see that in the top and bottom line in the coming periods as well. We'll talk a little bit more about the BESS rollout at the Capital Markets Day. But with that, I think I'll hand it over to Jan for the joint ventures.

Yes. The building you are seeing on this slide is a small business unit in Ceské Budejovice, which is completely let. Also Vélizy is more of a small business units, an SBU now, which is a new business line also, we achieve higher rents, and it's a bit more volatile in the occupancy, but it's a very nice segment in the market, and it's the growth flagship. We are also trying to do more and more of them where we are very urban. So it's part of our business line now.

Here is an update on the joint venture. So we have a running joint venture, which is SAGA 1, which is now already 60% deployed. It will be in 2027, it will be deployed more than 90% with what we have foreseen to transact, which is 2 years earlier than expected. And that's why we have been negotiating on a second joint venture. The memorandum of understanding is signed. The launch is foreseen in 2027. The joint venture structure is virtually a copy of the one which we had with Areim acting as manager for the other 50% stake.

The focus is on Western Europe. And that's very complementary to our East Capital fund Central and Eastern European mandate, which is also running at the moment. And it targets, the new one targets at least EUR 600 million of equity. So that is at least, it's going to take us to at least EUR 1.5 billion, but we hope to do a lot more in the second SAGA joint venture. It is EUR 600 million is the minimum equity ticket, which we are focusing on.

And the capital recycling because we have now so much income-generating assets on our own balance sheet, which are coming to maturity, especially in the beginning of next year and then throughout 2027, '28 and '29, we expect it to pick up in the second half of this year, but then accelerate really a lot into 2027 and the years coming.

Yes. For a summary and outlook, just once more, what you see in front of you is our grEEn-campus. You will see it's the building on your left side, which is an office building, high-end office building, completely passive. It's 10 minutes away from, you will, when you come to the Capital Markets Day, you will notice it's only 10 minutes away from Frankfurt Airport. It's really very close to Frankfurt. And this is our cooperation with Opel, which is going very well.

Opel is very committed to the site. Also Stellantis is very committed to the site to remain there. Big parts of the other sites around it are going to be sold separately, but that's to other users than we do. It's retail or and/or housing, which VGP doesn't want to do. We focus on the industrial part, which we have bought out. And we have an exclusivity for the whole Opel site on data center development, which we negotiated with Opel when we bought the site of ours.

So the outlook, we want to develop further on towards our 12 million square meter target without putting a fixed date on it when we want to achieve it, but because we want to maintain a very disciplined approach to the development, we prioritize pre-let levels. I don't want to construct millions of square meters of vacancy that brings nothing and certainly not when money is getting a bit more expensive. We are focusing very much on our development margin. As you have seen from what Piet showed you that we have very nice development margins.

The average yield on total cost is now 8.7%. So that's including also our iconic developments in Germany, in France, in the more mature markets. So we're feeling very confident that we have a nice margin. And we are very confident, and that's the message that I wanted to give mostly that we are securing very nice pre-lets on our new brownfield locations, which are now going to initiate development.

The recurring income is for us very important. Its income base is expected to continue to expand, and it's accelerated by further growth in renewable energy. It looks that the battery projects which we have are very profitable, and we have some really very nice big several battery energy storage systems. And then we are going to, of course, grow the joint ventures, and that will also lead to increased recurring joint venture management fees besides our share in the rental income, which we get every year.

Yes. And so the 12 million square meter equates to EUR 800 million of total rental income per year, which we want to grow to now. And then we're very focused on capital recycling. As I already said, it's expected to accelerate in 2027 with the launch of new JV initiatives and then as well as the start-up of the development platform for data centers for which we also have signed a memorandum of understanding with a very reputable company.

We acknowledge that it's not easy to develop a data center, and we acknowledge that you need, we want to avoid having to go a long way to build up reputational skills and a good name in the market. And that's why we have chosen to sign a memorandum of understanding with somebody who has a very good standing reputation in the market and a very nice track record and who will bring its technical expertise and know-how to our JV. And we will do the same from our side.

We will bring in our land plots, which are now already feasible, which is virtually 2, Paderno and Rüsselsheim, which we have now in the last straight line, I would call it, in order to be able to start a data center development, which is slower than you would expect. So I will tell a lot more about it, which leads to another EUR 3 billion of gross asset value, not taking into account the data center rollout of transactions, which we have at the moment under an MOU.

This is the slide made by AI as it should be. When Europe needs more cloud, we keep it grounded. It's cold. It's a very heartly invitation to our Capital Markets Day. I will be there, and I will join you on September 3, 2026. Just a small word on it. The idea is that we first go to take a visit to our Giessen site, which is roughly 70 kilometer north of Frankfurt. We will foresee all the necessary transportation. We will get a guided tour through the Zalando facility by the management, by the people who manage the Zalando operations.

It's a very fine example of a building in which there is an incredible amount of automatization. Actually, Zalando made a lot bigger investment inside of the building than we in the building itself. I think it's worthwhile seeing it because the future. It's how things should go. It's so much more efficient in operations than the other buildings, which were before for the same purpose.

And then afterwards, we will take you to the Rüsselsheim site. It's our largest brownfield to date, which we bought in the heart of Frankfurt. It's 10 minutes away from Frankfurt Airport. We will show you the grEEn-campus, which we are developing for Opel, and we will explain you also because the grEEn-campus is only 10 hectares out of 71 hectares, what we are going to do with all the other potential, which is there, how it is phased, what is the plans, and I will lift a little bit more the veil on what we have been hiding so far because we wanted to be absolutely sure that we can deliver.

So if you want to know more about it, please come to the Capital Markets Day. Don't ask me any questions today. I won't answer them. I want to keep it for that day. Thank you very much for listening to us, and we'll be happy to answer any questions which we can answer on.

Thank you, Jan. Operator, we can open the line for questions.

[Operator Instructions] The next question comes from Vivien Maquet from Degroof Petercam.

I will limit myself to one as requested. It will be on the reversion capture on the reletting. If I compare the 6% that you captured in H1 to the 14% in 2025 and even the 18.5% over the first 4 months of 2026 [indiscernible]. Did you manage to capture the entire reversion? Or did you accept some concession in the course of Q2 to secure the letting? And addition to that, can you provide the number of the reversion potential that you have on the standing portfolio?

Yes, Vivien, thank you for your question. It's a difficult 1 to answer because we have, our contracts are all, they all have renewable clauses inside through which our tenants can opt to just prolong the lease agreement. And so we can only take the uptake of a new lease agreement at the moment when a lease agreement really ends and we need to re-lease it in the market. Otherwise, we have no, except for the U.K., where this is totally standard that you have clauses inside where there is a market revision, we have no possibility only when there is a reversion moment, which is when a lease agreement stops.

And the, I don't think you need to look so much at the 6.6% because it's depending very much on the mix of the buildings which we have to re-lease again. And in some of the markets, in some of the lease agreements, it's a bit more difficult to achieve a higher rent than in some of the others, older lease agreements where we have very low leases compared to the actual market lease, so it's a mix of maybe 20, no, it was, I think, yes, 20 different lease agreements which we have been reletting. And sometimes it will be more, sometimes it will be less.

But we still think, and I can't quantify it today. We still think that we have a huge potential of uptake in our buildings. If you look at the average price per square meter of our buildings, it's EUR 1,250 per square meter roughly of the value, the total value. And that's compared to what we see around us, that's still very low. So it means also that the underlying rent has a potential to grow a lot. But I can't, at the spot here, quantify it. I don't know if Piet can quantify it, but I think it's difficult also because all of these leases have different running times.

And you know we are on average still 7.7-year leased. And 84% is retained. So the people just, until today, so the people just prolong. So there is limited uptake when they just prolong. It's only at the moment when it is replaced. So I'm afraid it's a question which is very difficult to answer upon, except for what I just said.

Yes. I think you said everything.

The next question comes from Marios Pastou from Bernstein.

I know that's on data centers, but I'll save it for the Capital Markets Day. Could you just provide a bit of color on project deliveries and the quantum of development? So, kind of, based on the time line you're currently looking at, what completions should we be tracking to 2026?

And if you then manage to get some of the various MOU-driven leases agreed over the second half, should we then expect a bit of a ramp-up in the level of development starts over the second half compared to what you reported today?

I will answer on the developments which we start. As I said, we're going to be very careful, and there is a lot of big projects in the pipeline. The, most of them, some of them are going to be started in this year and some of them are going to be started in the first half of next year because they still need some fine-tuning and some permit adaptations. So I'm not quite sure what we are going to start up in the second half year. It will depend very much on the market environment, but it will be somewhere in the line or more than what we did in the first half year, I think. We've foreseen a lot more, but I'm going to be prudent. So I'm also prudent in what I'm answering.

And it will depend a little bit on how fast we are able now to secure these lease agreements, which are under negotiation, which we have, our lease negotiations, we have them lined up in 4 different categories, of which the last two categories are we call it DOI 3 and DOI 4. DOI 4 is lease agreements which we have currently under negotiation, where we have exchanged the lease with the people and DOI 3 is where we have virtually an accepted heads of terms or commercial conditions, and we are still fine-tuning the technical specification of the building.

These two together, they are, they represent more than EUR 50 million of rental income, and we are convinced or we are very confident that we can sign quite a lot of them in the next 2 to 3 months. So by the next trading update, we should be able to tell you a little bit more on that. And then on the delivery side, we have 1.1 million under construction. And Piet, you know how much we are going to.

Yes, I think it will be the same or higher than it was in the first half of this year. I think between 300,000 and 400,000 square meters would be a good estimate. It depends a bit on the leasing activity and the finalizations of the building. So a bit more than in the first half. That would be my best estimate on this.

The next question comes from Suraj Goyal from Green Street.

Just 1 question, as you mentioned. So full year '25, you were talking first closing with East Capital, I think, in 2026 or that's what suggested. And today, it looks like it may be pushed to 2027. I just wanted to understand if there's potentially a shift in terms of investor appetite for the return requirements potentially linked to some softening in operating fundamentals in Central and Eastern Europe? Or is it purely timing?

It's purely timing. We have started this process in April, March, April this year. So it's normal that people need a bit of time to set up their things. It's a regulated fund business, so we can't really answer on where they are with it because that's forbidden to do that. But the sounds we are hearing is that it goes, that they have very positive feedback and that they are very confident to do something with us. I think it just, we are in August now. We need to do a due diligence. We need to, they need to do due diligence. We need to do afterwards, we need to agree on the first seed portfolio. We need to do it. So it's very unlikely that for the Eastern European part, we will be able to still close the transaction before the year-end. It will be more first half of next year.

But in the SAGA 1, we are aiming for a transaction still in this year with the second 1, second part of it also in the first half of 2027, for which we have identified the buildings, for which we have identified the scope for which we roughly know what is going to be transacted and how much it will exactly be in the first, in the second half of this year and the first half of next year is depending a little bit on our tempo of completions and our, the number of lettings which we need to do on some of the buildings still.

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

So on leasing metrics, they seem a bit weak in H1, but what about H2? Where would you expect, for example, pre-letting levels, rent uplifts from lettings and committed annualized rental income to land by year-end? So could we, for example, see uplift of those metrics in H2, something like, I don't know, over 8% pre-lettings delivery and committed annualized rental income growth up by 15% a year? Is that realistic?

Steven, I don't have a crystal ball. I can't tell you. It also depends on what the market is going to do. But I think throughout the whole presentation, we have given quite some indications about the level of demand, which we are seeing. Already in the third quarter, it has been picking up. Normally, it's very quiet in the month of July and August. Everybody is on holidays. Nevertheless, we managed to sign EUR 7.2 million of new rental agreements, which have been finished. And so it's already at EUR 496 million now at the moment.

And we have quite some heads of terms, which have been signed off where the people have said we agree on your commercial terms and where we're now in exchange of a lease agreement, which should be signed in the second half of the year.

So, and as I said, there are these very large transactions, which we are trying to finalize now both on, especially in Germany, where we have quite some, but also in France and in Spain, we have some really very nice new ones. So we are confident that we are going to have a strong letting in the second half of 2026. But how much it's going to be, I never want to stick to a number where you afterwards are going to say, it's a lot more, it's a lot less. That's something which I also need to, it's also going to depend on what Trump is going to do and which bombs are going to fall, I think.

So we are doing our best to land all of this, and we are very confident that we will, but I can't glue a number on it. And maybe I can already tell a little bit more at the Capital Markets Day because it's still in 2 weeks from now, and we are really in very advanced negotiations on some of it. But that is, at the moment, the most I can tell you.

The next question comes from Thomas Rothaeusler from Deutsche Bank.

Just a quick 1 on the second SAGA JV. Could you indicate by when should we expect the first closings there?

Thomas, I think second half of next year, I think, or maybe Q3, but rather maybe second half of next year. I think we will deploy the final due diligence by the first half of next year and then launch in the second half. But we will first complete, we will also complete first the SAGA joint venture 1.

It makes more sense to first complete that one before we start with another one. And there is a portfolio is inside to do that, and that will be over multiple closings in this year and next year. And then I think immediately after, we will start with the SAGA 2 one.

And just to make it complete, the SAGA 1 deployment, which we still need to do is roughly, is more than EUR 0.5 billion. So it's still quite sizable with the transactions which we need to do in the SAGA 1 portfolio.

The next question comes from Pieter Runneboom from Van Lanschot Kempen.

I got a question on the market dynamics. Which markets are you currently most enthusiastic about and which one the least?

Pieter, and welcome back. I'm truly European, so I'm quite enthusiastic about all the markets where we are active in. We see everywhere opportunities. But if I have to pick out 2 or 3 which we are currently seeing a lot of activity ongoing, they're actually all performing quite well. But Germany is, at the moment, very active. And it's funny enough, it's not directly the German companies, which are very active there. It's from other continents, which are people running around everywhere and really leasing out quite some square meters besides, of course, also some German activities. And then we're very positive about the demand, which we still see in Spain. Spain is doing still very well.

But also now Italy. Italy has been taking up. Maybe it was because we didn't have the right land plots before. But now that we have Verona coming online and that we have Reggio Emilia online, we just started the 40,000 square meter development in Mancasale in Reggio Emilia for a tenant, for GAER, which is a 10-year lease agreement. So the big economies are doing really very well. Also, Eastern Europe is doing very well. In Eastern Europe, we had to reshuffle a bit our team in Romania, which was a bit of a hassle up, but we are now fully back on track. And we expect, we have a lot of demand at the moment. So we're very positive also about our Romania, which is our biggest Eastern European market at the moment that, that is going to perform very well in the second half year.

I would say difficult markets, the market where it is most difficult at the moment is by far Austria. It's very silent in Austria. So, but we don't have a very big exposure to that. We just agreed on one transaction there, a lease transaction. And then we see a lot of activity also in the U.K. So we're confident on the U.K. We want to grow a bit everywhere. France is also, we signed quite some leases over the past year. And then more of my concern is that it's sometimes very difficult to keep the growth in some of the countries because of lack of land positions at the moment.

The Netherlands are very difficult, although we're very successful there, but it's not so easy to buy new land in the Netherlands, especially with this nitrogen thing, which needs to get solved at some point. I mean, I always hear the politicians say that we need to reduce rules, but I have the feeling that we always have more and more rules. That's a little bit the biggest brake on our development, I would say, it's the complexity. It's also the advantage which we have is the complexity of the permitting.

I hope that answered your question. If not, we see each other maybe on our Capital Markets Day. Thank you, thank you. Looking forward to it. Thank you, everybody.

This ends the Q&A session. So I hand the conference back to the speakers for any closing comments.

I just wanted to thank you all for being on the call. I hope we gave the right color so that you understand where we are. We're really doing our best in this market to grow, to keep on growing, to deliver what we have promised. And I'm looking forward to see you on the Capital Markets Day. I'm looking to really be able in person to exchange with you directly about our future plans and about all the exciting things which are ongoing inside of VGP.

Thank you very much. Thank you.

Bye-bye.

Welcome to the review of VGP's financial results over full year 2025. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Good morning, everybody, and welcome to the presentation of our full year 2025 financial results. My name is Jan Van Geet, and I'm the CEO of VGP, as most of you know, I think. I'll first start with a little executive summary and the highlights of 2025.

We recorded a pre-tax profit of EUR 338 million, an increase of EUR 19 million or 6% higher than the full year of 2024. Our net asset value grew 8.3% up to EUR 2.6 billion, and that's -- the EPRA NTA is up 9%. We have an EBITDA growth of 28% to EUR 454.7 million, 13.5% increase. And what makes me happy is the historic record of EUR 106.7 million of new and renewed leases, which I will go to more detail later on. The annualized committed leases at the year-end stand now at EUR 468.3 million.

We have 1,052,000 square meters under construction and our development pipeline is 75% pre-let. I can add to that, that we have signed a lot of LOIs, which are in final negotiation. We think that by the end of the first quarter, most of them will translate into new lease agreements. And if they do, and we expect they do because we are finalizing the lease agreements with them, we will have a new record of more than EUR 80 million of signed lease agreements to be started up in the new year. So we are having a solid pipeline to be started up already, which is fully pre-let.

We delivered almost 500,000 square meters last year, 99% let. And the last unit has just been agreed upon. It's a small unit in Koblenz with somebody from the defense industry. We have 1.4 million square meters of land acquired and our total secured land bank stands at 10.3 million square meter, which represents a development potential of at least 4.3 million square meters. We did a net cash recycling of EUR 389 million through a transaction with our joint venture partner in the Saga joint venture, and that led to an additional EUR 60.5 million realized profits in 2025.

And we target another material closing with the Saga, as we already announced it in August last year. We announced that we were going to do EUR 1 billion. I think we'll do a bit more in the second half of 2026, for which we have already all of the assets aligned. It will be a material closing. We'll go more in detail also later on that.

And then finally, VGP and East Capital have agreed to set up at least EUR 1.5 billion of gross asset value of pan-European fund with an emphasis on Central and Eastern Europe. We know East Capital already for 15 years. They are a very reputable boutique fund manager from out of Sweden, which have quite some track record in Eastern European assets and they manage the fund, management thereof. The Board of Directors proposes an ordinary dividend of EUR 92.8 million, which is 3% higher than the ordinary dividend of 2024, or EUR 3.4 per share.

If we look at the summary of the financial results, and you see that the steady growth of the total portfolio value goes up from -- for the full year at 100%, including the joint ventures portfolio at 100% with EUR 900 million almost from EUR 7.8 billion to EUR 8.7 billion. We have a continued strong growth in committed annualized rental income. It grew 13.5% year-on-year. So we're getting bigger every year. It's more and more difficult to beat that, but we're going to do our best this year. I think we're going to be able to set another nice year. We have a lot of demand in the pipeline. And the full year of 2024, we had EUR 412.6 million at the end of the year committed annualized rental income, and at the end of 2025, we had EUR 468.3 million.

The EBITDA increased 28% -- Piet will go more in detail later on -- which followed actually a very solid performance in all of our business segments. It went up from EUR 354.4 million in 2024 to EUR 454.7 million in 2025. And then I already told you about the dividend, which will grow with 3% to -- we're proposing, anyway, to EUR 3.4 per share.

I'll first go a little bit on the market and the market update. These are not our slides. These are slides which we got from Jones Lang LaSalle. And I will compare our own performance a little bit to that. If you look at demand and occupier segments, then you see the take-up share by sector, and then you see that the third-party logistics are still the biggest one. We have very little third-party logistics inside of our own portfolio. We have most end users and also longer-term lease agreements. And we see a very big comeback from e-commerce. It is bigger than what we have in here. And what we have in the pipeline now, what we are working on, is also very e-commerce determined.

So we see them coming back, and we see that there is more and more and more demand from out of that sector. It's not only Chinese companies. Also, they are here. But it's mostly Western European and American people who are coming back to the market. We also see a lot more demand now from the defense sector. We have been able to secure some of them, and we are also currently negotiating with some of them for some new manufacturing things in the pipeline.

The vacancy rate has come up a lot over the past quarters. It actually doubled from 3% to 6.2%. But that compares in our own portfolio to -- we are a little bit more than 98% let at the moment. And we see healthy demand. And we also see that there is a lot less speculative construction in the market. So the vacancy levels, we expect them to go down in the future. If you compare to all the markets which you see right next them, there where we are in Budapest, we have 0 vacancy; Madrid, we have 0 vacancy. If you look at Bratislava, we have 0 vacancy at the moment. In Milan, we have 0 vacancy. In Prague, we have 0 vacancy. Of course, some of these are also speculative buildings which have been started up over the last quarters.

On the supply, you can see that the build-to-suit over the last 3 years is quite flat. The 2023, '24 and '25 levels have remained stable. But you see that the speculative development is coming down quite a lot, which gives us a good view on that there will be soon not so much available anymore in the market because there is quite some take-up over the last year also. We have 16.2 million square meter space under construction, which is the lowest level in the past 5 years now.

Capital markets, I don't know if we can say something intelligent on it. Last year started very well, and we did a very large transaction, EUR 509 million, in the second half year. So that also contributes to it. But we saw that the -- overall, over the whole year, the transactions went up both in volume and in size. And -- but mostly in the smaller markets on the major markets, only U.K., the Netherlands and Poland posted a year-on-year growth.

The yields have been relatively flat. You can see that very well. We've had a devaluation on some of our German assets because our valuator takes the view that vacancy levels in Germany should go up -- no, not should go up, but the reletting should take a longer period. He has made that from 12 months to 18 months. Pete will go in detail to it. But we have seen that in Germany what has come available over the year, we have been able to relet on average in 2 days, not more, and we have a 21% uptake on the rental income of what we have relet. So we can't really concur to that view, but it is what it is in the market. That's what our valuator thinks of it. But it's not visible in our own portfolio.

I will go through the operational performance for the full year. Maybe I'll just go back. This is our park in Arad, which we've just started. And the building which you see on the right side is a building which we constructed for VAT. VAT is a vacuum valve producer for the semiconductor industry, a very specialized product production. It's got 12,000 square meters of clean rooms inside at a very high level. And we have achieved with that building, BREEAM outstanding score of 96.2%, which is the highest of any industrial building in the world last year -- no, over all the years in BREEAM outstanding.

And this is our park in Valsamoggia, which is also fully let and which we've transacted last year through our joint venture with Saga, with our friends from Areim. As I already said, we had a record year in committed rental income, including the JVs at 100%. The group has 465 tenants, but that's divided over more than 650 lease agreements, as you can see. So we have a lot of tenants which come multi times back into our buildings. The committed annualized leases as of 31st of December stand at EUR 468.3 million; occupancy rate, 98%; and it's filling up really very well. At the moment, we really have quite some demand in our portfolio. And if we make the bridge, then you see that the committed annualized rental income started with -- and I think it's 13 -- yes, EUR 412 million and a bit.

We signed new leases, almost EUR 57 million. We had EUR 6.5 million of indexations. We had some amendments in leases, people who wanted some other space or differentiate their space. And that EUR 8.9 million of terminations. And we sold one building in Riga to its user, to Jysk, which declined also EUR 2.4 million of rental income. And that brought us to the EUR 468 million, which we had at the year-end. But meanwhile, we've signed quite some leases already, and we're looking forward to be able to report to you after the first quarter, because, as I said, we have quite some nice LOIs in the pipeline.

The majority of the new contracts which we signed were within the Logistics segment. I have some examples. Logistics was 67.9%. But as I said, we have very little third-party logistics. You don't see many third-party logistics also in the names here. We signed with Studenac, which is one of the largest retailers in the Balkan, a very nice cooled warehouse, which is delivered this week. We signed with Aldi a very nice new warehouse, which we're going to start construction in a couple of weeks in Frankenthal. That's a big one, 60,000 square meters. We signed a very nice lease with Movianto, healthcare dedicated logistics. That's a third-party logistics. But you see Heineken, Eureka, Duomed, Ursus, Farmol, Studenac, they are all end users and they use their own facilities and sometimes use somebody to operate it.

This is something which changes all the time. But e-commerce was last year 16.5%, and I expect it to be quite a bit higher this year. Light industrial, 14%, but that's just a move in time because we also had quite some demand from light industrial over the past year.

Our portfolio is leased to a very diversified and blue-chip tenant base. The weighted average lease term is already here stable. It's 7.8 years. As we keep on growing and most of the leases are relatively long term signed, we have -- the top 10 tenants represent 29.7% of committed leases. But also there, we have -- these represent 28 different lease agreements in many different jurisdictions. So it's well spread, the risk of it.

And yes, if you look in here -- but this is a little bit longer term. The logistics represent 47% in our total portfolio, light industrial, 34% and e-commerce, 17%. And we have some others. We have some -- it's mainly Siemens, yes, where Siemens is in Nuremberg. It's a site where we have offices and which we are going to start rebuilding this year completely. This year, we have some quite iconical projects which are upcoming and about which I will tell a little bit more afterwards in the outlook, because we are going to really have some land plots coming online which are -- from which we expect really a very nice contribution in the coming 12 to 24 months.

If you look at VGP at a glance and you look -- we are always looking forward in how can we grow and where can we grow, in which segments can we grow. And of course, the main part -- the main raw material to be able to grow is the land bank because we always grow organically, we develop everything ourselves. We don't buy any standing assets. And if you look at the December '24 net cash generative rental income, so things which were delivered and really generated cash, it was EUR 350 million or EUR 240 million at share. During 2025, we activated EUR 39 million of new leases. So it went up with 11% to EUR 389 million or EUR 236 million at share, so including 50% of the joint ventures, if you look at it.

The signed leases, which are still under construction and which will be added on in the next 12 to 18 months, is another EUR 79 million. And so that's another 18%, and that takes us to EUR 468 million of income-generating activities or EUR 310 million at share of income-generating lease agreements, of which EUR 321.7 million sits in the joint ventures. But if you look at our land bank which we have today and the ERV of the vacancy and the development pipeline which we have, that's another roughly EUR 300 million, which takes us -- the potential up to EUR 766 million, or, at this moment, EUR 602 million at share. And we are trying to accelerate our development pace as much as we can now.

The development activity, talking about acceleration, drives our second strongest EBITDA in our history. And if you look, there is a couple of notes which I need to say to this. You see very well the division between East and West. In 2021 and in 2020, we had big start-ups in Western Europe because we had these big leases in Giessen and in Munich, which started up at that time. You see also that in 2022, we delivered and then we started up a lot less because of the big inflation. I told you that I was standing very much on the brake at that point because I was afraid about having too much vacancy with buildings for which we paid far too much.

Now we have our costs very well under control. Our margins are going up relatively quickly. We have very sound margins again, which you can also see in the revaluation result, because the revaluation result in this year, I think it's EUR 183 million, is pure and only revaluations from new activities from things which we have started up. And whereas, in 2021, it was a little bit a distorted image because there was also a big uptick in valuations, of course, in the standing portfolio as yields were going down with very steep declining interest rates.

Out of the EUR 634 million record EBITDA in 2021, only EUR 81 million was cash -- was really cash income, recurrent income. Out of the EUR 455 million EBITDA in 2025, it's EUR 249 million, which says a little bit also about the resilience of our result going forward. It's more and more regenerative income.

The net rental and renewable energy income at share has grown a lot year-on-year with 18% in 2025. If you look at it, we are now at EUR 223.384 million in 2025, which we expect a continuous growth in 2026. In the renewable energy, about which Martijn will tell you a lot more later on, we have now a lot diversified also into battery projects, battery projects which have a very high yielding on their investment, and of which we have foreseen to construct quite a lot in 2026 as now we have the permits coming into place to -- in order to be able to do that.

We also thanks to the brownfields which we have been buying over the past years -- most of them have been big factories with enormous electrical connections. For example, we bought Hagen. Hagen has 90-megawatt connection of energy, which not only allows us, if we can, to deliver back very nice battery projects, big in size, but it also opens the potential. And it's very congested today to be able to do a more data center exercise.

So we are trying to take a look at it, whether we could implement a data center also in Hagen, whether the location is the right one. And at the moment, we have 2 identified together with Sarah, our new employee who came from Microsoft. One is in Russelsheim and one is in Bodenheim. And on both, we are very well advanced on our permitting. On the permitting side, we are advancing very well. It will take a little bit more time. These are complex exercises also, but we are on a good way to be able to realize them soon. And it's our ambition to have something by the year-end to be able to say something more concrete about our data center developments going forward.

The portfolio is virtually let on a long-term basis, and you can see there is very little variance. Combined occupancy of the portfolio stood at 98%, WALT at 7.8 years, with the first brick at 7.4 years. Top 10 customers, as I said, that's 28 lease agreements, and the biggest one is still Krauss Maffei. But when we first contracted them, they were 21%. And now thanks to all this growth, it's only 6% left of the total portfolio which is now Krauss Maffei. And Opel is 5.1%, which is a short-term lease, but it will be replaced. And we are going to redevelop, of course, Russelsheim, and we expect to be able to do quite a significant uptake in the leases going forward. Our own weighted average lease term on our own portfolio is 9.6 years at the moment.

On the delivery side. And here, you see our park in Vejle under construction in Denmark. We delivered 21 buildings, which represented almost 500,000 square meters in gross lettable area. That was EUR 32.9 million rental income, 39 new contracts, and they were 99% let. And as I said, we've now have -- we have a tentative agreement with somebody from the defense sector to take the last unit in these buildings, and it will be 100% leased. 100% will be rated BREEAM actually excellent, of which 31% is BREEAM outstanding over the last year, which I think in Europe, at least we believe we have done the best performance with the rating of BREEAM outstanding. You see 2 of our buildings, the VGP Park Parma in Italy, which last year, we delivered to Mutti, the tomato producer, and our Park in

Keckemet, where, amongst others, we also have Mercedes as a customer.

The deliveries in 2025 trending towards logistics, but you see immediately that there is also some quite big productions inside. Hyundai Mobis was a very nice one. We delivered a 50,000 square meter facility in Pamplona. And we delivered to VAT, as I already said, this building for this vacuum valve producer. On the 2 pictures which you see in the -- you see VGP Park Cordoba, which is a production, by the way. And then you see our VGP Park in Montijo, which we delivered last year and which for the biggest part is a cooled and deep cooled warehouse for Logifrio.

The portfolio at share has grown organically and completely organically because we only develop everything ourselves and then we place it in our joint ventures. But it has grown at an annual compounded growth rate of 21.9% and it's gone up from EUR 5 billion to EUR 5.6 billion. We offloaded since 2022 EUR 3.4 billion of gross asset value into the joint ventures. And we aim this model works very well. We aim to continue to do that.

Yes, it's -- if you look at it, Germany is still the strongest market, although the others are now growing maybe a little bit faster relatively. The Czech Republic is now almost EUR 1 billion in assets. Spain is growing quite well. And in the Netherlands, this year will be a huge uptick because we already leased out 60,000 square meters, which is under construction. But we are working on a very big new lease agreement in the Netherlands, which will take out our entire park in Nijmegen.

The investment portfolio on 100% view has grown to EUR 8.7 million, which is up 11% year-on-year. And Western Europe represents 74% of the total portfolio value as of December 2025. You can see the completed is EUR 7 million. Development land is EUR 770 million or 9% of our total investments. And under construction, we have almost EUR 1.930 billion, which is also 11%.

On the development side, the portfolio under construction represents EUR 85.3 million of new leases. And as per today, 43 buildings are under construction, which represents 1 million -- just 1 million of square meters. It's 75% pre-let, including pre-lets on development land. When we finalize these LOIs which we have in the pipeline, it will be well over 80%. So I think it's on a very healthy basis at the moment. We have started last year 761,000 square meter of new buildings in 2025, and we aim -- we have to already start up 450,000 square meters if this materializes, which is already pre-let, which is the highest which we ever had at the beginning of the year, pre-let, to be started up in a given year. So that's a very nice forward-looking thing to have.

You can see again on the right side, you see our park in Rouen, which is now virtually fully let. We only have one last unit left. And then -- and a small one, 4,500 square meters out of the total more than 100,000 square meters -- total more than 150,000 square meters, which we are constructing there. And then you see our VGP Park in Veijle, Denmark, where we also have one last unit left, also 4,500 square meters.

Yes. Again, it's well spread across our geographical footprint. You saw what is the income-generating assets or the assets overall, which are already that Germany in the income is more than 50%. In the -- what is under development, it's only 36%. You will see that the other countries are relatively growing a little bit faster now. They also are becoming more and more mature. France is a big market. Spain is a big market. The United Kingdom, I'm sure, will come up to speed soon. So we think that we will be able to do some very nice developments all over Europe. 2025 was also the first year where we had buildings under construction in literally every country where we're active in. That's never happened before. So that is now -- we have everywhere now buildings under construction.

On the landbank, the picture you see is our beautiful park in Nijmegen, where we have Ahold Delhaize and Bol.com in one of these buildings which you see. And the land bank in front, that's only a very small part of it because we still have more than 20 hectares available, where we now have started groundworks already and we are already under construction for one client which we signed at the end of last year, Pragma Trading. And then we are negotiating -- we have signed an LOI for the rest of the land bank.

The land bank, of course, it's something I am very much dedicated to because it is our -- it is the source of our future growth as we develop everything ourselves. And the land bank -- Piet likes to make bridges, so we have also this in a nice bridge. We owned in 2024 when we started or beginning of 2025, 7.4 million square meters, which is fully permitted, by the way. We acquired 1.37 million of square meters, which we always acquire subject to having the permit in place. So that's also fully permitted. We deployed 1.6 million square meters last year. We sold a little bit, a couple of square meters, but that's nothing.

And then -- so we owned at the end of 2025 7.09 million square meters. But we committed, and in December, we had 3.15 million square meter of committed. So that's land which we have binding agreements on and which we then buy at the moment when we have the permit in order to be able to use it for its intended purpose. So that brings the owned and committed in December 2025 to 10.25 million. And we have another under option and PV contract of 1.51 million square meters. And this means that roughly -- because the 4.3 million is just the ground floor space, you need to calculate mezzanines and offices to it, but at least 4.5 million can be developed on this total land bank versus the 7 and a bit million of buildings which we currently have either finished or under construction.

I also try to take a look -- a very pragmatic look at the land bank. And everywhere, we need to have a nice margin, which, of course, makes it -- in Germany, the yields are a bit lower than the exit yields than they are, for example, in Romania. But we try to target everywhere the same margin. So we -- and we have been able to target lands in all of our countries and the land bank is geographically well diversified. We have some specific countries we really need to take a look at going forward, but we were able to secure quite some really nice land plots, and I will talk a little about it also in the outlook later on.

This is the first part of our operational results. I'll come later back to the JVs. But I'm now going to first give the word to Martijn to talk a little bit about our renewable energy company and its income.

Thank you, Jan. First, giving a short overview of how our renewable energy business has now actually developed 2 segments. Jan already mentioned it at the beginning. Photovoltaic has continued to grow, and we added a good 50% to the revenues for the photovoltaic business. But something that is still a bit nascent, but for which we see good prospects is on the battery projects. You see there's in total 258 projects on the photovoltaic side. There's a few less on the battery side. But actually, it's -- in terms of investments, we see a good opportunity both to deploy capital. There's around EUR 4 million invested now, but yes, we see that grow substantially over the coming 2 years.

And certainly, if you see the megawatt hour deployment that becomes -- with 173, that's a good 30% of the total in renewable energy. So -- and as Jan mentioned also, the profitability of this business is typically much better than for the photovoltaic. So this will start to add to the EBITDA line for renewable energy in 2026, but even more so in 2027 and onwards.

The big constituent of renewable energy remains the photovoltaic business. Certainly, in 2025, we've seen a good growth. As I mentioned, the revenue came from EUR 8.3 million, and we've added another EUR 4 million to the total revenue, which was driven by additional production that was now over 130 gigawatt hours. Energy price at which we've been able to sell has remained broadly constant.

If you look at the outlook, we've added another 13% in operational photovoltaic this year. So you will start to see that also in the production figures for 2026. And then there's another 35-megawatt peak that is under construction, which we expect to become operational in the course of this year. And I think the last thing to add is that the overall yield for photovoltaic has now popped over 10%. So the overall investment of the projects that are operational is EUR 110 million. And as said, gross revenues was EUR 12 million. So the gross yield has actually for the first time now popped over 10%.

Then maybe also briefly on the corporate responsibility. There is one thing here highlighted on the left-hand side, which was something that was recognized at the end of last year by Time Magazine in cooperation with Statista. They've done sort of a science-based and quantitative assessment of all the listed companies across the globe. And based both on our financial revenue growth as well as the sustainability metrics that we have been able to accomplish in 2025, they've highlighted us as one of the top 100 companies globally in terms of realizing sustainable growth.

I think one of the big contributing factors to that is the EU taxonomy, which you see on the third on the left in the smaller boxes. We've now achieved 68% of the total portfolio. But certainly, if you look at the new productions or new construction, we've actually been able to verify EU taxonomy for 95% of the buildings that we are currently constructing. That's all under the EU taxonomy new construction regime. So that's quite a strict regime, which we've set ourselves. And yes, with the 95% you hear, that really has become our internal market practice to adhere to across the group.

A couple of other metrics that we've highlighted here that I'll leave to you to read at your leisure. I think we can move on to the joint venture update. Jan, back to you.

Yes. Our joint venture model is a little bit the cornerstone of our growth model going forward. And so far -- I'll go to the next slide -- we have -- you can see it's been growing consistently. We have done a new transaction last year with Saga, which is our fifth, sixth, whatever you call it, joint venture. And it's now more than 60% invested. And when we are going to do the next transaction, which is planned for the second half of this year, we will be virtually for a big part already fully invested. There will remain some parts of it, but we foresee a very material transaction in the second half year. And we have very positive and constructive talks ongoing also with Saga to continue with the next stage, next vehicle, which we would like to start up in the course of 2027, then going forward after Saga is fully invested.

If you look at Saga -- well, as I said, it's 60% deployed. There remains roughly EUR 600 million of gross asset value. And as some of the parks which we have transferred have some little spaces left, which -- where tenants have expansion option, et cetera, we think that we will do a transaction which will exceed EUR 500 million in the end of the year, where actually everything is already identified. And we have been able to go a lot faster than originally foreseen, also thanks to the fact that we have enhanced the scope of countries in which we do our investments.

In the beginning, what you see, the original scope, the dark green, it was Germany, France, Czech Republic, Slovakia and Hungary. And we have added to that Denmark, Austria, Italy and the Peninsula, Spain and Portugal. And so we now have a lot of assets which we can do. We have 989,000 square meters or 39 assets already spread over all these countries which are in site, and that's 60% of the total gross asset value which we have foreseen to deploy over the first 5-year period, which will become a 3-year period, I think, because by the end of this year, we should normally be fully invested.

We also announced today for the first time that we are working with East Capital, a company which we know already for a very long time. Very nice people out of Sweden. I don't know if they are looking, but hello. VGP and East Capital is to set up a partnership to launch a Luxembourg-based real estate investment fund focused on European industrial logistics real estate with an emphasis on Central and Eastern European countries, not only but mostly. The targeted gross asset value we have agreed upon is at least EUR 1.5 billion. We hope to be able to do a first closing and we trust to be able to do a first closing in 2026 in the second half of the year.

VGP intends to keep up to 50% and the remaining equity should come from third-party investors. The management will be shared between parties. There is no difference between the asset management and property management profile, which we had with the former joint ventures. It will become -- it will be the same. It will be East Capital's responsibility to do the fundraising and to do a little bit of investment advisory. And the portfolio will consist of -- what we are going to buy will be income-generating assets, all ESG aligned in the countries which you see. So it will come a little bit from everywhere, but with an emphasis on Central and Eastern European countries.

That's it a bit on the JVs, and I will give the word now to my brother, Piet, for -- to explain the financial performance. And by the way, what you see on the picture is our park in Serbia, where the building on the right side is Ahold Delhaize, which we have built brand new, which has taken into operation. And the second building, the main tenant there is the Metro Group. And both buildings have been also delivered and both buildings also are BREEAM excellent awarded.

You stole my intro Jan.

Sorry.

As always, I have prepared for you a usual slide deck with P&L, balance sheet, cash flow movements and some further details. And I'm happy to walk you through and also happy to report an increase in our profitability from pre-tax EUR 319 million to EUR 338 million. And as always, there is really a lot playing through our P&L given the fact that we have a hybrid model between own developments and a JV. So I think the best thing is, as also in former formats, to walk you through it in more line by line. We had an issue with some sound, so...

So first and foremost, you see that our net rental and renewable energy income, it has increased with 31% to EUR 88.7 million, basically exists out of the gross rental income or the rental income and the renewable income. The gross rental income on our own balance sheet increased 32.7%, which is EUR 86.7 million --- to EUR 86.7 million. But if you look at it on a proportional basis, meaning this EUR 86.7 million and our share in the joint ventures' gross rental income, this effectively grew from EUR 203 million to EUR 235.5 million of gross rental income.

Maybe just to make a quick recap to what has Jan been presenting before, is we have in the group on an annualized basis EUR 468 million of contracted rental income. From that EUR 468 million, EUR 146.6 million is on our own balance sheet, of which EUR 78 million is active. That EUR 78 million could compare to this EUR 86.7 million, but it is, in fact, more. That is because, of course, we had done a transaction with Saga at year-end, and that still delivered us EUR 15 million of rental income that portfolio before we transferred it into the JV. And on an annualized basis, that transfer was actually EUR 29 million of rental income. So that's it about the rental income, a good positive increase, all built up organically.

In terms of the renewable income, we also see a strong increase, 43% to EUR 11.9 million, coming from EUR 8.3 million on gross renewable income. As Martijn has presented, this was an effective increase in production from 90 gigawatts to 132 gigawatts or a 47% increase. So that brings it down on the net rental and renewable energy income, an increase from EUR 67.7 million to EUR 88.7 million, but also at share from EUR 189 million to EUR 223 million or up 18% in comparison to 2024.

The next line in our P&L is the joint venture management fee or the joint venture fee income. It's EUR 32.7 million last year. That grew with 59% to EUR 52 million. Here, there are also some -- quite some particularities. The joint venture fee income basically exists now out of 3 components. One is our property facility or asset management fee, which on a recurring basis grew with EUR 4 million, and then there is also a provision for EUR 18.4 million on a promote.

Just as a quick reminder, we have multiple joint ventures. The first joint venture, Rheingold, comes up to maturity in May 2026. It has already been extended for 10 years. But after the 10-year -- or the lapse of the 10-year period, VGP is entitled to a promote based on the net IRR performance of that joint venture. Now the net IRR performance, and we are particularly proud of it, has been very good, and we have a 12.4%. This is really net IRR really on a cash level basis after all asset management fees, taxes and whatsoever. And since we have surpassed the hurdle, we have now at 31st of December booked a provision of EUR 18.4 million. This provision, of course, will be updated in the first half at 31st of May based on the valuation of the portfolio as of then, plus its operational performance. So it is our best estimate based on the track record until 31st of December.

And then finally, the remaining part is the development management income. We perform works on behalf of the joint venture. This decreased with EUR 3.2 million to EUR 2.5 million. But overall -- so the joint venture management fee significantly increased to EUR 52 million. And on a recurring basis, we do expect it to increase further in 2026 because we have done a transaction, for instance, in December, where we also have an asset management fee on, which will be accounted for in 2026. Plus then, of course, all of the transactions that we foresee to do, one with Saga and also with the new East Capital fund, which will also lead into increases of our fee income with the JVs.

The next line, that's always a strong influencer on our P&L, that's the net valuation gains that we record on the investment properties. These increased from EUR 187.1 million to EUR 243.6 million, and they are actually composed out of 2. Jan has already hinted to it also that we have an unrealized gain of EUR 183 million, which is an increase of EUR 89 million, which is mainly related to our development activities. That's the profit on our developments.

Whereas there's also a second component, which is the realized gains. That means that we have sold assets towards the JVs or, for instance, also the disposal of VGP Park Riga at a higher level than it had been recorded for in our books, versus the fair value in our books. This led to a EUR 6.5 million additional profit. And our own portfolio has a weighted average yield of 7.48% versus 7.22%. Of course, the number, sometimes we get a question, is a bit higher than in our JVs. But in JVs, it's 5.22%. That is because it's more skewed to Western European countries in the JVs and fully stabilized assets, whereas here, we are still having assets under construction and also quite some Central and Eastern European assets, which have a higher yield, on which, of course, we have also now the nice opportunity with East Capital.

The next line on our P&L is the administration expenses. They are quite, you could say, broadly in line with last year from EUR 61 million to EUR 63 million. In average, the remuneration went up with EUR 1.6 million. But we also had a depreciation increase of EUR 2.2 million. That is mainly related to our renewable energy installations, which are recognized in a cost model, so at acquisition cost and depreciated. We have a general -- I need to move this -- EUR 5 million increase in general admin. Part of that was also the marketing campaign that we launched in 2025. And then since we have more assets under construction in comparison to previous years, we have also higher capitalized expenses on our assets or investment property, which offsets the extra cost of the above with EUR 6.7 million. And at year-end, we have 434 FTE.

Next line is the share in the net profit. And there, we actually see a decline from EUR 92.7 million to EUR 41.3 million. But I can actually explain, I think, what has happened there in the bridge versus last year. First and foremost, the -- and I don't know if you see it also what I'm seeing, but there is a line missing. There is a -- but anyway, the net rental income increased from EUR 121 million to EUR 134.7 million. That's an increase of 10.7%. But the big driver or change in the JVs is the net valuation gains, where it was a positive of EUR 54 million, it actually reduced with EUR 65 million to minus EUR 10 million.

This was driven by a number of facts. One is we have done a few settlements with the JVs where the JV had to pay us a top-up on previous closings, which was a negative impact on the valuation in the JVs. But the second element was mainly that there was -- and there is a strong German portfolio inside of the JVs, which was negatively impacted by a valuation change. So the average yield went from 5.05% to 5.22% in the JVs and the German part was a devaluation of approximately 2%. The appraiser effectively reviewed its prime yields for the country, and as Jan was referring to before, also had -- updated also his discounted cash flow model, foreseeing rather an 18-month vacancy period than a 12-month vacancy period when contracts would come to an end.

Now as we mentioned before, we do not see that trend at all in our German portfolio. In fact, everything what we released last year was at 21% prices, averagely higher, as well as the average term to release something was 2 days. So we didn't really see this. But nonetheless, it did impact a bit our German portfolio and within the joint ventures.

Then the other expenses that you see there, it's actually the promote at share. All of these -- what we see on the bottom table is at share. So it's EUR 18.4 million for us. But it's a cost to the JV. And at share, since we own 50% of the JV, it's EUR 9.2 million. Admin expenses were broadly in line. And I think if we disregard once the valuation movements, then we are actually seeing a very strong set of EPRA results on the joint venture, which is a testament to the very strong operational performance of the joint venture because the EPRA earnings are up 25%, but also our cost ratios are down. So in general, we are actually very satisfied with the performance of the joint ventures. Hence, also, for instance, the above 12% net IRR that we could achieve on the Rheingold joint venture.

Next point in our P&L is the net financial result, which went from an income to a cost of EUR 24 million. This is -- of course, we raised the EUR 576 million of debt last year at a coupon of 4.25%, which gives already a delta in a higher interest cost. On the other hand, also in 2024, we profited quite a lot, also in 2025, but the interest came down on interest on cash on hand. We usually put quite some money on term loans and try to optimize it maximally as possible. But last year, this was an income for us of EUR 12 million. Now it was EUR 5 million. So it's a decrease of EUR 7 million.

We have some higher capitalized interests of EUR 3 million. That is because we -- just like the capitalization on the admin expenses, we have higher amount of volume of assets under construction. So this leads to a high capitalized interest of EUR 3 million. And we have a decrease in our interest income from the JVs. I would say the shareholder loans in the JVs, they effectively increased. But of course, there have been distributions through repayments of shareholders during the year. And only at the end of the year, we created a new shareholder loan with the Saga joint venture because the transaction only materialized in the second half of December. And also, we partly capitalized part of the noncurrent receivables or the shareholder loans on the Deka JV, which also decreased a bit the interest income.

And then finally, as you may recall, we raised EUR 576 million of bonds. But we also bought back in 2025 EUR 200 million worth of bonds, for which we paid EUR 195 million. So we made a profit on that of EUR 5 million.

Going to the next slide. He doesn't want to go to the next slide.

Yes, he did.

Okay. Where Jan also already referred to, and it's a particularly good performance over EBITDA. So the EBITDA is up EUR 100 million versus 2024. So up to EUR 455 million or an increase of 28%. And the increase is to be noted in all of our segments. So in the Investment segment, where we show the EBITDA of our completed portfolio, excluding any valuation gains, you see an EBITDA going from EUR 204 million to EUR 249 million. This represents, actually, if you look at into our balance sheet, EUR 2.9 billion of our total assets.

In terms of Development, as I explained before, net valuation gains of EUR 243 million, composed of the good development profit traction that we have -- something is happening here on the -- with the -- yes, I'm back here. The good traction that we have on the development profits and realized gains. So our EBITDA also increased from EUR 145 million to EUR 199 million. And then the gross renewable energy also has a nice EBITDA increase given also the 47% extra production that we managed to produce in '25 or a 43% increase in its gross renewable energy income.

In terms of the balance sheet, we see a strong increase of our total assets and total liabilities from EUR 4.6 billion to EUR 5.2 billion. The investment property is now EUR 2.4 billion, which, of course, composed of a completed portfolio of EUR 915 million, under construction EUR 777 million versus EUR 579 million. So you see here also the increase versus '24. And then development land, as we did buy quite some very attractive land plots, also increased from EUR 645 million to EUR 728 million.

We did about a total CapEx of EUR 660 million, which is composed of about EUR 490 million on assets and EUR 150 million roughly on land acquisitions. And I mentioned already the weighted average yield of our investment property, 7.48%. The property, plant and equipment, the EUR 141 million, it's an increase of EUR 18 million versus last year. This is mainly related to our renewable energy installations, where we had a EUR 19 million CapEx. And the completed installations, where also then the EUR 11.9 million of gross renewable energy income is coming from, is generated from a complete installation of EUR 109 million, and what is still under construction is EUR 18.6 million.

And our investments in joint ventures increased quite significantly with EUR 109 million. Now we have done quite some transactions with the JVs, not only the Saga closing, but as I mentioned also before, there were some settlements on previous closings which were to the benefit of us, which increased the equity contribution into our joint ventures altogether with roughly EUR 100 million or EUR 98 million.

Then we, of course, have -- since it's reported under equity methods, the allocation of our result or our share in the result of the JVs, which is EUR 41 million. And then we received equity repayments from the JVs, so dividends of EUR 30 million. I will come back on the distributions of the joint ventures in the cash flow statement.

I already mentioned the other noncurrent receivables. So they increased with EUR 63 million following the transactions with Saga, but we also got EUR 32 million of joint venture loan repayments. These were the 2 main movements, I would say, on the noncurrent receivables. And then we ended the year with a cash position of EUR 523 million, got EUR 31 million more than we had last year. And on the disposal group held for sale, the EUR 27 million, that is the VGP Park Tiraines, which is going to be sold in H1 '26. That is under a call option of its tenant. It's located in Latvia, and the transaction is about to be materialized. Everything is more or less done.

The shareholders' equity increased, as already mentioned before, from EUR 2.4 billion to EUR 2.6 billion, very easy movement, EUR 290 million profit, EUR 90 million dividend going out. So that makes the movement there. And then in terms of our financial liabilities, that increased from EUR 2 billion to EUR 2.360 million (sic) [ billion ]. This follows a EUR 576 million bond that we raised in H1. It was actually EUR 500 million with a top-up of EUR 76 million. Then from out of that, we did a tender on our outstanding bonds of January '27 and '29 of EUR 200 million. And '27 was reduced with EUR 179.9 million. The one of '29 was reduced with EUR 20.1 million. But we effectively paid EUR 195 million on that.

And then there was also a bond that came to maturity in March of EUR 80 million, which was also repaid. And then we moved to current financial debt at year-end, now the EUR 190 million bond, which is due in March. I'll come back on the debt also in one of the next slides. But our average cost of debt is now at 2.7% as at 31st of December '25.

And as you may recall, we have also revolving credit facilities, which are untapped. They amount to EUR 500 million. We increased them during the year, and we also prolonged to them. There are more -- there's more info to that in our press release on what and to what extent it has been prolonged. But in the end, it comes up to a consolidated gearing ratio of 35% or a proportional LTV of 50%. We also have a Fitch, and also since 2025, an S&P Global rating. Both investment grade with BBB- and a stable outlook.

I already made a reference to this I think in -- on the previous slide. So our average cost of debt increased to 2.7%. We have a significant liquidity position. And the bond maturities, I've updated it here already, given the January '26 -- in January '26, a few weeks ago, in fact, or 1 month ago, we raised EUR 600 million bond. And from that bond, we also repaid EUR 100 million on the outstanding January '27 bond, which was originally EUR 500 million. We reduced it with EUR 180 million in '25, and we reduced it again in January with EUR 100 million. So it's now still EUR 220 million. And then the remaining bonds to be paid are listed there. But you can see the one in 2025 has a maturity, the EUR 576 million, in '31, and the new one, which was raised in January, has a maturity in 2032.

Speaking of the cash flow statement, we started the year with EUR 492 million. The net cash generated from operating activities is EUR 51 million. Just as a side note, we did an update to our cash flow this year, where interest paid, as you can see now in financing activities, has been moved from operating to financing activities. We felt it's more correct there. It has also been restated in '24. So we go from EUR 33 million to EUR 51 million.

I have a bridge on the left. But in essence, we have spent EUR 171 million in investing activities. The proceeds from disposal, the EUR 389 million, is related to the Saga JV and the disposal of Riga, plus some settlements with the joint ventures. From the EUR 660 million of CapEx that we see on investment property, an effective EUR 642 million has been spent. The remaining will move through our working capital on CapEx payables. Loans to JVs is a loan to one of our development joint ventures.

And then distributions by joint venture, what I referred to before, EUR 82.7 million, broadly in line with last year. The EUR 82.7 million is a combination of interest payments of EUR 20 million, shareholder repayments of EUR 32 million and equity distributions of EUR 30 million. It depends a bit joint venture-by-joint venture, how we take out the excess cash that is inside. That's why I also group it here for simplification purposes. But we all consider this as distributions. There were no investments in joint ventures. That's mainly then related to development joint ventures.

And then in our financing activities, so we paid an interest of EUR 48 million. We paid out a dividend in May of EUR 90 million, which we now propose to increase from EUR 3.3 to EUR 3.4 in '26. So that will go to EUR 93 million as cash out in '26. Then we had proceeds from loans, which is the bond raise of EUR 576 million. After costs and deductions, it's EUR 565 million net cash in. And then the loan repayments, it was a bond that we paid back of EUR 80 million. And then the EUR 200 million that we paid back for EUR 195 million. So EUR 195 million plus EUR 80 million is EUR 275 million that we actually repaid. So that means that we end the year with EUR 523 million of cash.

I think I maybe explained all of this already, but maybe there's one more nice thing to note that is that we raised the bond in April of EUR 576 million at a coupon of 4.25%. We did one in January at 4%. But underlying, there is quite a big difference, because the EUR 600 million bond that we raised in January was at our historic lowest spread ever, 150 basis points. Of course, it was a bit upset and offset with the increase of interest versus the previous bond. But nonetheless, it was still at a cheaper and it was a very successful transaction that we've done. And now the maturity profile of our bonds are as follows.

I believe this was, I think, my last slide. So I hand it over back to Jan.

Yes. Thank you all for listening until now. A summary and the outlook. I am personally very happy that our result is even more and more cash generative and that the profitability of our new developments going forward is going up again. With all that we are going to start up this year, and we are quite bullish on it, we think that we are having a good year in front of us in 2026.

On the relettings, as we have seen, our portfolio is -- we've never had to transact something to the joint ventures with a loss. And if you look at our relettings, they were during 2025, 14% higher than the rental price which they were let at before. And as Piet already said, on average, it took us 2 days to relet in Germany, where our reletting was 21% higher than the one before. And we have heard through the former reporting periods a lot of concerns about the German market, where we have a big exposure to. But we feel very confident in site, and we also see a lot of activity. We have a lot of new things going on. So we feel really very confident on that.

The margins on our new developments, they are EUR 103 million. But there is really a lot in the pipeline, and I already talked about it. There are a couple of LOIs on which we are now finalizing. So cost reimbursement agreements is a better term for it, where we have agreed with tenants mainly out of the e-commerce sector that we're already going to line up everything so we can negotiate the relatively complex lease agreements because they are also relatively complex buildings. But we are on track to close them all before the end of the first quarter, some of them even in this month. So we're really in final negotiations. We already signed one with [ PE ] Capital last week in Bucharest.

And if we look at it, we see that e-commerce is back on track and starting to look really again -- what they had over rented in 2021 and '22 has now been consumed, and they are back on track with growth, which is I think a very positive for us. So if these things materialize, we will at least start 450,000 square meters now in 2026, EUR 80 million which we need to start of rental income, which is already contracted, which is the best position I think we've ever had in our history. So looking forward.

And that's very much supported also by the unlocking of some of the historical iconical parks which we have bought and which are mainly brownfields. And brownfields always take a little bit of a longer time to develop. But if I look at it, we're going to start construction this year on La Naval in Bilbao.

We are going to start demolishing Nuremberg, for which we have a lot of demand. It's a super location, and we're going to start construction. We also are talking to some people out of the defense industry. We have already paid a visit to Hagen, which we bought just after the year-end with a very big tenant and which has been welcomed. Hagen is Dortmund, right next to Dortmund. It's a very nice site, which disposes of a 90-megawatt peak capacity of electricity, which is active. And so which opens a lot of opportunities for us.

We're well proceeding on our Russelsheim development, and we're also very well proceeding on our permitting there because we needed to do a new B plan in Russelsheim, in which we also incorporated our data center and development which we aim to do. And I was puzzled by the presentation which Sarah gave to me about data centers coming from Microsoft. If you look at the actual installed capacities in the big conurbations of Europe where it is -- where everybody talks about, it's actually not that much as you would think. London is 1.7 gigawatts, Frankfurt also. And if you think about us in Russelsheim probably being able to do quite a bit more than 100 megawatts, that gives a total different perspective about the possibilities of our land plots. And we also have a very nice opportunity in Italy, and we're looking at other land plots in Germany. We think that, that would be nice.

We also are going to have Verona coming online this year, our new land plot in Velizy, Paris, which is now -- for which we have also received the building permit and for which we're going to sign our first lease in the next couple of weeks. So all-in-all, we think that we have a very sunny future in front of us, as you can see on this picture, which is our park in Montijo, which is in Portugal.

And then, of course, we are looking very much forward to the further diversification of our joint venture model. We are in continuous talks with our friends from Areim to do the follow-up of our Saga transaction. And also now we have announced it now publicly and we're very much looking forward to our cooperation with East Capital. And we have 2 legs to stand on them going forward and we hope it's going to be a big success.

That's a bit, I think, the summary and the outlook for the next year. And I think that we can now move to questions from your side.

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

I've got a question mainly around the new partnership with East Capital. I think on the slide, you mentioned the potential for at least EUR 1.5 billion of gross asset value in scope. So I'm just thinking maybe part of the agreement, if you could give some more details on kind of what that total investment volume could scale to, if you've agreed a time frame or a target to reach that fully invested level? And whether the structure is broadly similar to what you've agreed in your prior partnership?

Yes. Shall I take it? We can develop on our total -- on the total land bank at the moment, roughly something between EUR 6.5 billion to EUR 7 billion of new assets, which we are -- including what we have already -- which we still have on our balance sheet. So that is all possible to transfer into new joint ventures going forward. And we have already envisaged and we've already defined quite a large portfolio, which we could transact because it's already income generating and delivered in this year. So we have said we want to do at least EUR 1.5 billion. I think we're targeting more, something like EUR 2 billion. But that is a momentarily view at the moment. When we start, it can also grow bigger. We're very confident on the fact that we are going to be able to deliver -- well, VGP is delivering all the time new assets and all the time starts up new assets. So it will keep on growing in the future.

I think in general, it's indeed more or less a copy of our current joint venture model with an investment period, 3, 4, 5 years. And what we develop, we will offer. And it's broadly similar. We will retain the asset management services on the -- as it is in the current joint venture basically.

Yes. Structurally, it's actually the same. What is different is that we are not targeting one single partner per JV, that we are targeting multiple partners at the other side. More something like a fund structure than just a single JV with one single investor at the other side.

The next question comes from Vivien Maquet from Degroof Petercam.

I hope you can hear me. I had a follow-up question also on the JV. Just to understand from the fundraising perspective, what kind of precommitment do you have on the third-party investor because I just wanted to see because you mentioned a closing in the course of the year. But do you have the -- I would say, the equity already being raised within the fund? Or what [ commitments ] you have on that fund? And also on the structure. Is it closed-ended or open-ended fund?

It's foreseen to be a closed-end fund. And the raising of the funds is an ongoing exercise, which East Capital is predominantly occupied with, knowing that, of course, East Capital has a solid investor base inside of their existing funds. And this is an addition, more of a unique product that they can offer. But it is an addition to what they have in their current fund business. And the exercise is currently ongoing. We are targeting a closing by the end of the year. I think that's about it what we can say today.

Yes. It's a regulated business, Vivien, raising capital. So we can't really say what's been committed already. It's prescribed quite precisely what can and cannot be set in such exercises.

Okay. And then just on the shares management agreement. I understand that deviate a bit from the previous joint venture. What does it mean for you in terms of recurring income you're going to drive from that joint venture?

We expect a similar income model that we have with our current joint ventures also. There is indeed a sharing of services with East Capital, but it's somewhat similar, for instance, with what an Areim or an Allianz also does with their investors behind who are invested into our joint ventures. So East Capital will mainly look into gathering the funds and also doing the investor relations with the investors that they have been able to target. But other than that, our services remain the same. And we expect broadly the same revenues to be incurred from all of the disposals into the JVs.

The next question comes from Wim Lewi from KBCS.

I've got 2 questions. One is a small one on East Capital, if I can bother you with, is does the new fund also allow for countries that were not eligible for the other joint ventures to be transferred? I'm thinking, for instance, on Serbia or maybe other countries that you can now offload more into the future?

The East Capital fund is a Pan-European fund. So every country where we are active in is, in fact, targeted. But it will be skewed more to the Central and Eastern European countries. But in essence, everything -- all countries are on the target list of the fund.

Okay. And then a follow-up, if I may. It's really on these valuators increasing yield in Germany and then especially in the JVs to 5.22%, which you explained that it's based on vacancy. Now you obviously have good leasing activity, which you explained many times. But could there be like a timing difference, because they do that at the end of the year, whereas you have done the re-leasing over the year. Can you give an indication of the amount of re-leasing you have to do in '26 and what you expect from that?

We have very little re-leasing to be done in 2026. And so far, what we see is that, again, also for the things in 2026, which are coming available, we already know on beforehand and mostly months on beforehand that we are going to have a follow-up tenant. So what the valuators have taken as an assumption from a 12-month vacancy period, which we never had in Germany, to an 18-month vacancy period, we find it -- and we've tried to argue about it, but they take a view of the market. We find -- we can't say that we see that reflected in our own portfolio. I don't know what it is about. Maybe it's about older buildings or maybe it's about the total market view. But in our own portfolio, Wim, we are very confident and very -- that we have solid demand for everything. So we don't see, neither expect any deterioration of that in the months going forward. On the contrary, we have a lot of new lease negotiations ongoing also for new buildings.

Maybe if I may, because what we see or what we hear from WDP and Montea is that they can't find anything to buy above 5%. So could there be deals maybe in the near future that could review their case, that if we see that yields come down in deals. Is that something that you expect?

Well, we hope so. We certainly hope so. Also the promote calculation which we have done is based on our risk valuation at the year-end. So it's just our current valuation, where okay --when we are going to have the valuation in May that's going to be based on the capital markets valuation, where the valuator really looks at the transactions as if we were to really sell -- and that's probably going to be a little bit different. We don't know north or south. But we think it's going to be different than what is our risk valuation. Until now, every transaction which we have done with our joint venture partners when we had a real discussion about the valuation, we always had a better exit yield or we always achieved a better exit yield than what we had it in our books for. So we're trying, of course -- we want to be a fair partner, but we are trying, of course, to defend our position also. That is more than normal, I think, in business. And I don't...

[Operator Instructions] The next question comes from John Vuong from Van Lanschot Kempen.

At the end of last year, you had 780,000 square meters under construction. Deliveries came to just short of 500,000 square meters. Were there some delays in the deliveries? And if so, what has been the reason for these delays? And looking at your pipeline going forward, it's currently sitting at a pre-let ratio of 75%, and you're saying that you're seeing quite some strong demand. So how do you think about the size of the pipeline under construction? And what are your thoughts about more speculative developments over the next 12 months?

Yes. Yes, when you report, you always have a cutoff, which is at the 31st of December, and you need to take a look at it. Whereas in development, it's not always really linear. You have sometimes customers which have demands for changes in the building, which entail relatively complicated situations and which makes the delivery going over the reporting period. That's one of the things where we are. So I think you need to look over a period of -- a longer period of time to see really the tendency and not just in the cutoff of 1, 6 months period. That's the thing. We -- I want it to be -- although we have a big incentive to construct more because we now have our costs really back under control as inflation has come down tremendously.

And in the construction industry, in every country at the moment, we can achieve attractive pricing. At the same time, we're also trying to manage our portfolio, so not to create too many vacancy or too many speculative buildings. So we look at on a country-by-country basis, but we try to limit really our speculative buildings to an acceptable level, which for us is -- it should be -- we should be pre-let above 70%. And ideally, by 8 months under construction, we should be above 80% -- above -- after 6 months under construction, above 80%, which we currently also are.

So that's the parameters in which we make the decision internally, do we do speculative developments, yes or no. And it's also depending on the demand which we see in the locations, because not all countries run at the same pace at the moment. So we are also a bit careful in starting up too much square meters where we don't see the demand for it. And on the contrary, where we see a lot of demand, we start up a little bit more. But as I already said, and I hope I was -- it came across enough, at the moment, we really have a very strong pipeline in demand. We divide up our demand, we categorize it in a first contact, a second where we already have commercial negotiations, a third where we have virtually an LOI agreed, and a fourth where we started the negotiations on the lease agreement.

And if I take the 2 last things, we have roughly EUR 50 million of negotiations ongoing, which I don't say we're going to sign all of it, but it's a very healthy indication that there is really demand which wants to contract at some point, because people don't engage with teams and with lawyers and with things if they have no intention to close the lease agreement.

So from that point of view, we, at VGP, with our current portfolio and our land bank and the quality of what we offer, we feel comfortable to start a bit more construction over the year. But I can't tell you a number. As I already said, we have roughly 450,000 which we need to start up anyway because it's already pre-let if these LOIs also materialize. And then, of course, we'll do a bit more because it will bring our vacancy levels -- our pre-let levels up. And then we have a bit more room to also start a bit of speculative buildings in those jurisdictions where we feel demand is strong and supply is very low.

The next question comes from Francesca Ferragina from ING.

I have 2 questions. The first one is about guidance. I understand that you never disclose the guidance. But can you just give at least some qualitative type of comments on 2026? Consensus is pretty dispersed and it doesn't help. And then the second question is on data centers. You managed to hire a dedicated person. Can you provide an update about the opportunities you see here?

We -- indeed, it's a bit difficult for us to give a guidance because we are not a REIT. Our VGP is a multiline model, where we have the development portfolio, where we have the rental income and we have -- it's different than a REIT. If you would only look at a REIT, it would be a little bit more easy to say what it's going to do. And going forward, we can also maybe make a projection of the rental income, what we expect for the year, because there we -- but also there, because we always transact between our own balance sheet and the JVs, it's not so easy to give you a reasonable view because we -- there is always movements from rental income, which is either on our own balance sheet and then it goes into the JVs and then it only accounts for 50%. So we'd rather not say something which we then cannot fulfill. We always give guidance on things where we think that they are achievable and where we feel ourselves also comfortable that we can achieve. And so far, I think, we've never promised something which we haven't delivered. That's something which we are proud of.

On the data center things, so we are not actively buying land plots with the aim of developing really a data center. I see too many accidents in the market. Just last week, there was a big announcement in the press in Germany where a EUR 2.7 billion investment in [indiscernible] was stopped by the local authorities. People had paid a tremendous land price for it and done all the efforts and then it was stopped. So it is really a very risky business because we have a huge congestion in electric energy. And starting to build a land plot and then going for it, it is a very difficult business going forward.

But VGP has a very big land bank, in the very big land bank, has some brownfields. Those brownfields come with a very big historical electric connection, which is there and available. And that's already a very big part of the transaction. And by coincidence, we are also 10 minutes away from Frankfurt Airport in Russelsheim. We've signed an agreement with Stellantis. That's the only one who can develop a data center on that land plot. They also still have a big reserve. But we have an exclusivity on data centers. And we have an agreement with the city on where the data center will come. And that it is going to be incorporated. It's currently part of the new B plan. And Sarah is working on that one and another one in Milan, where we also have a similar constitution, and where we think that -- and where we also have very intensive negotiations ongoing with most of the hyperscalers and some of the colocation investors, and where she is trying to manage that.

And we are trying to take a look at where in the value scale of from just selling the land to core and shell to power shell to completely finished, build-to-suit, and then to completely finished and operational, what we are going to offer and whether we should do that alone or whether we should do that with a partner who has already all the accreditee to -- because he already has done it, something. And as you can hear from me, we are in a very intense process of aligning ourselves in order to be able to bring the best result.

But this is a work which is not just -- it's not like developing a logistic warehouse. There are so many parts running around that it really -- it doesn't go so quick. So also the energy connection, it's not from today and tomorrow. Yes, in our case, it is. And then there is also the connectivity, the grid, et cetera, which you need to do for. And then we still have also to demolish in Russelsheim because now there is building standing on it. So it is not for tomorrow. But we're well on track. And that's everything which I can describe about it and disclose about it. Paul?

A couple of questions from me. Just wanted to check. Coming back on the pre-letting point, because I think that's been declining since 2022. I think you had a high of 89%. Now you're down at 69%. Just wonder what level are you comfortable going to in terms of pre-letting level? And what gives you the comfort in starting more and more speculative schemes as you have been over the last few years? And second question is, linked to that, is just looking at the yield on cost on completed developments. Did you have to give any rent concessions to lease these up? I think in the past you talked to tenant incentives or rent-free periods. Just to get a sense on that. And if you could quantify those, it would be great. And then I do have a very quick third question, but let's see if you let me ask that one.

Paul, on the first one, I think I already answered quite a lot of it. So yes, we've done a bit more speculative construction last year because our construction price came so much down. And we are currently -- after 6 months period, if you look at it, we are 80% pre-let. And we also have a lot of things in the pipeline where we feel very comfortable that we're going to sign it, which will take our pre-lets even more up. So we feel comfortable with today's level of pre-lets of speculative buildings under construction because we also see good activity and good demand on that pipeline going forward. So -- and we've built it for a very good price.

On the activity for the -- from the tenants, we are always -- because we did not buy land at excessive prices and because -- at the time when the land was so expensive, I told you all, I don't find this thing sustainable. In 2022, we really stopped. We didn't buy anything, if you look at it going backwards. We only bought Russelsheim, which we bought for a very good price. But the rest, we couldn't make working. So today, we are in a very good position because we can be aggressive on the rental price but still make a very beautiful margin. Our margin is actually going up instead of going down because we have so good control of our construction cost.

So we don't see anywhere where we need to give excessive rental incentives more than what we have been doing over the last 5 years. It's still the same. So we are -- it's a healthy market, I would say. Also the vacancy level which we see today in the market, 6%, it's not like we haven't had before, a lot more even than that. And I find it still very healthy that people finally have something they can look at, take a look at. And it's an advantage for us as a developer offering new things, where we can be aggressive on the price, that we can grow in a healthy way going forward. And yes, we can be maybe more aggressive than somebody else on some of our land plots because also we act as a general contractor in every country nowadays. And I think we have our -- I wanted to use the word shit, but it's our things very well under control. So it's really going well. Did you have another question?

Rent incentive wise?

That's what I said, just answered, [ Tom ]. So no special rent incentives, yes. And you had a third question, Paul. No.

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

So I have some questions on what to expect for signing new leases. So on the LOIs that you mentioned, could you please remind me how much in annualized rental income you expect to sign in Q1? And second, to respond to John's earlier question, how does the EUR 50 million in lease discussions you talked about compare to 6 months ago?

As we said, we don't give guidance. So you've asked me to give a guidance on the first quarter. Well, we have really, let's say, EUR 25 million of lease agreements in final negotiations at the moment ongoing. Whether it will all be signed in the first quarter? I do think so that there is quite some nice things which are in final negotiations. And that's about the guidance which I can give. And if I look at going backwards, I think that the market today, it's -- last year, we signed a lot of lease agreements, really a tremendous amount of lease agreements, but they were all relatively small to the years before when we always had these 1 or 2 big ones standing out, which were really very big lease agreements. Last year, it was a lot more spread over many, many little -- or not little, but smaller lease agreements. On average, before, we signed 22,000 square meters. I think last year, on average, it was below 20,000 square meters. So that was a bit different in demand than it is maybe today, because today, again, we are looking at some very big leases which we are negotiating on.

Yes, the one in the Netherlands is huge. There are a couple of very huge ones in Germany ongoing. There is a very big one in Spain ongoing at the moment in final negotiations, I would say. So that's about what we can say about it.

The next question comes from Thomas Rothaeusler from Deutsche Bank.

Just one question on data centers. I understand you plan to provide concrete plans by the year-end, yes. But maybe you could provide a rough idea about the capacity for Milan and Hagen already. And any indications if it will be powered cell or fully fitted? I mean, considering the high-profile recruitment you have announced, I assume it won't be gas powered land.

You're asking me difficult questions to answer, Thomas. Yes, we hired a high-profile person, and she's a very lovely lady if you meet her with a lot of ambitions. And that's good because that's why we hired her for. We can do quite big -- I don't want to say anything about numbers because I'm going to say something and then it's going to be different, because we actually don't really know yet. But we have -- at the moment, we have a 50-megawatt connection available in Russelsheim from the grid. There is a power plant on our land plot, which is another 100-megawatt available. The question is, can we use it, yes or no, because it's a gas-powered power plant, and we are looking into it. We can expand that power plant quite significantly with gas turbines, and the gas can come from several ways. And that's an exercise which is ongoing.

So it's quite complex to give an answer to your question, as you understand yourself because we are still looking and puzzling the pieces together. And we need to take a look also at what is acceptable for a hyperscaler, which risk he wants to go because he needs to have absolute reliability and the Tier 2 at least supply of energy, which we don't have our things all aligned yet because it's really complex.

And the same is ongoing for our land plot in Milan, where, yes, we do have an agreement on the power supply. We know, plus/minus, when the power supply also will be available. But it's -- we are dependent on a third party. And yes, it's a very big capacity which we have been awarded. And the land plot is perfectly suited for it because it lies really on the super location for it.

But as I said, there is a bit of work to be done on it. And we are going to disclose in the right time when it's ready to disclose where we are and what we do. And I don't want to overpromise. I just wanted to give you an update on where we stand today. And that's in all honesty what I can tell you today. Frederic.

The next question comes from Frederic Renard from Kepler.

A lot of questions already been answered, too, on it. Maybe to have a view on Allianz and the intention from here? And anything new with regard to potentially new JV? And then maybe another question. If I look at the sequential increase in H2 from new construction activity, and you mentioned already a good LOI of demand, so should we expect H1 2026 to actually be sequentially even more bigger than H2 '25?

I will answer first on your last question, whether it's going to be more in H2...

Which one?

In H1 versus H2 last year is -- I don't have immediately in my mind. But we are going to start up roughly -- we have to start up quite some buildings in the first half year of 2026 because they are pre-let and we need to deliver within a certain time frame. So we need to start up. But I would need to calculate how much that is that is going to be for sure in the first half of 2026.

On general, I expect somewhere between the same amount as last year and a bit more to be started up during the year. I think we feel confident that we are going to start up a bit more than last year. So that's the answer on your last question.

And then on the first question regarding the JVs, I think we disclosed -- because it's a regulated business, so we've disclosed on the new JVs where we could. We can't say anything more than what it is. In the current JVs running, actually, everything is running well. There are no divestment plans immediately there. And all partners seem to be very happy with the performance of the things. As Piet said also, the EPRA results of the JVs are outstanding. The relationship -- the day-to-day relationship with Allianz but also with Deka and all the others is going very well.

And the only real discussion which is ongoing at the moment is about our promote, where we have now tentatively agreed on the metrics of how we are going to do it. Because originally, it was, of course, foreseen that there would be after 10 years a liquidation of the JV. But that is not going to happen. So now it's an exercise on which we need to agree. And that will crystallize by -- in the next few weeks. But I'm sure we will find an agreement with Allianz about what it is about.

And for the rest, operational-wise, everything is running well. We are going to -- we have also a refinancing upcoming in the Rheingold joint venture. That's all agreed. We have the term sheet signed. So there is no -- everything is aligned. So there is no clause on the horizon as far as I can see. Everything is good. I think I answered on your questions.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. I want to thank you all first in the first place for being here, both my colleagues and analysts and investors. Thank you very much for listening to what we had to say. I'm looking forward to speaking to you again on our Annual Shareholder Meeting maybe or then in August with the update of our half year results and then we have this year or maybe before on some conference. I hope that I can see all of you soon.

As you could have heard from our side, it was a very busy year because we've done so many things and going forward, and it's grown all the time. But all-in-all, I have a good confidence in our sector that it has still a lot of growth capacity and growth possibilities and that VGP can play a significant role in that. And I hope all the others too, there is room enough on the market. Thank you for listening, and goodbye.

Goodbye. Thank you.

Thank you.

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