Aroundtown SA (AT1) Earnings Call Transcript & Summary

Good afternoon, everybody. Thank you for joining us for Aroundtown's Full Year 2025 Results Call. You can view this presentation on Aroundtown's website, either on the Home section or under Financial Reports of the Investor Relations section. Guiding you through the presentation today will be CEO, Barak Bar-Hen, CFO, Jonas Tintelnot, Executive Director, Frank Roseen; Chief Capital Markets Officer, Timothy Wright; Chief Sustainability Officer, Limor Bermann; Deputy CFO, Kamaldeep Manaktala; and representatives from Grand City Properties are also present. [Operator Instructions] With that, I would like to hand over to Barak and the rest of the team, who will guide you through the presentation of our results.

Good afternoon, and thank you for joining us for our call for year 2025 results presentation. As you have noticed, we have launched a share-to-share voluntary tender offer for GCP shares and therefore, came out earlier with the results. We published our results in parallel with GCP, so both companies' most updated numbers are the base for the transaction. We also announced our decision to recommend to distribute a dividend for 2025, after 3 years without a dividend payout. We will start with the FY 2025 presentation. And after that, we will continue with the offer presentation. After both presentations, we will start the Q&A session. 2025 was a year of progress for the group. We benefited from more supportive economic backdrop with further rate cuts by the ECB, improving inflation dynamics and improving sentiment across Europe. In Germany, the government's sizable stimulus package and long-term investment plans have created a more constructive environment, which is starting to show its positive impact on the macroeconomic numbers, and this was further reflected in higher transaction activity and steadier financing markets. Against this backdrop, our portfolio delivered solid performance supported by strong fundamentals in residential and hotel, stable contributions from offices and continued progress on targeted conversions where new regulation provides additional flexibility and faster execution. Alongside our operational delivery, we advanced our capital recycling strategy, redirecting capital from lower-yielding assets into accretive high-quality opportunities under a disciplined return-focused approach. We also continue to strengthen our financial profile, executing a range of capital market transactions that extended our maturity profile and enhanced our funding diversification. This development, together with the stable performance of our portfolio, placed us in a strong position as we look ahead to 2026. We note that the market is again in uncertainties due to the war in Iran, which could escalate into original war. We are equipped with high liquidity to deal also with additional market volatility and have the cash required for our near-term maturities. On Slide 4, we present the key financial highlights for 2025. Net rental income amounted to EUR 1.2 billion, stable compared to 2024, primarily supported by solid like-for-like rental growth of 3%, offsetting the impact of net disposals. Adjusted EBITDA amounted to nearly EUR 1 billion, lower by 1% compared to '24. FFO I amounted to EUR 288 million, in line with our guidance, down from EUR 316 million in '24, mainly due to higher finance expenses. These negative impacts were mostly offset by operational growth. As part of 2025 annual report, the complete portfolio was revalued by external independent appraisers, resulting in a positive like-for-like value growth of 3.1%, including CapEx and 1.6% net of CapEx. The results were mainly driven by operational developments. EPRA NTA per share amounted to EUR 7.8, higher by 5% compared to December '24. We are making ongoing progress toward obtaining Green Certificates for our assets with 70% of our commercial portfolio now Green Certified, including 79% of offices and 65% of hotel assets. Liquidity is high and increased to EUR 4 billion plus EUR 900 million unused credit lines, maintaining wide covenant headroom. The EPRA LTV was reduced by 2% to 58% and our BBB rating was affirmed by S&P in December '25. Given the further improvement in the environment in '25, supported by continued good volume of disposals and our proven access to capital, the company proposes to resume a dividend payment for '25. The proposed dividend per share for '25 is EUR 0.08 based on payout ratio of around 30% of FFO I and subject to approval at the AGM. Including the ongoing EUR 250 million share buyback program for '26, the total shareholder return is expected to be more than EUR 330 million this year. Furthermore, the company has also updated its dividend policy. And from 2026 onwards, the payout ratio is set at 50% of FFO I per share. Slide 5 sets out how we are positioned for growth in 2026. We have strong liquidity and that can support our internal and external growth together with keeping our financial healthy. On the operational side, we continue on focusing on delivering both internal and external growth, starting with a significant potential that is embedded with our existing portfolio. We continue to extract this throughout targeted operational improvements and by advancing accretive office conversion projects where the economics are compelling. We already started extracting more of this potential in recent periods and expect further acceleration of accretive projects in the coming years, all will support our EBITDA growth going forward. Capital recycling will also remain a key driver. By selling assets at lower yields and reinvesting in opportunities with higher returns without compromising on quality, we can generate accretive growth. The current market environment is helping this approach as the recovery across sectors is uneven and creates attractive entry points for selective acquisitions. On the per share profitability side, we are also reinvesting a portion of the disposal proceeds back into the portfolio as part of the ongoing share buyback program, which supports value creation on a per share basis. We see the share buyback as a relatively attractive alternative use of disposal proceeds at around book value and buying our shares at significant discount. The ECB's rate cuts and increased stability in financial markets created a more favorable environment by improving refinancing conditions, supporting yields and encouraging more activity in the transaction market. On the financing front, we plan to continue strengthening our financial profile further. The main focus here is further extending the average debt maturity profile and continuing to proactively manage financing costs. Furthermore, as we have seen issuance spreads decrease throughout 2025, we have been able to mitigate part of the higher finance costs, including of perpetual notes by buying back relatively higher coupon instruments. We have already refinanced the perpetual note with a first call date in 2026. Only GCP's 1.5% perpetual note remains outstanding, which has its first call date in June '26. Together, these actions form a disciplined framework for operational execution and capital allocation, positioning us well for 2026. Kamaldeep, please continue on the next slide.

Thank you, Barak. Turning to Slide 7. The portfolio demonstrates a well-balanced allocation across asset classes. We updated the presentation of the breakdown to present the development and invest portfolio separately. hotels account for 20%; residential, 33%; Office, 34%; logistics and retail, 6%; and the development and invest portfolio, 7%. We provide a further breakdown of the development and invest portfolio to their current use and envisioned use later in the presentation. Geographically, the portfolio remains concentrated in key metropolitan markets. Germany, the Netherlands and London together represent 89% of the portfolio. Berlin constitutes the largest single city exposure at 23%, followed by London at 9%, Munich at 7% and Frankfurt at 6%. These markets are characterized by strong underlying fundamentals and provide meaningful long-term value potential. Slide 8 presents the continued strength of our operational performance, reflected in solid like-for-like rental growth across the portfolio. The results demonstrate the resilience of our diversified asset base. Residential assets representing 33% of the portfolio delivered like-for-like rental growth of 3.6%, driven by strong market fundamentals, record low vacancy levels and further uplift supported by our capital recycling activities. Hotels, which account for 20% of the portfolio, achieved like-for-like rental growth of 3.5%. This performance is driven by targeted investment into the portfolio at attractive contractual agreed rent step-ups, further supported by a stable operating environment that enables tenants to maintain healthy operations. Together, these two asset classes comprise 53% of the portfolio and continue to provide a strong foundation for rental growth. In offices, which make up 34% of the portfolio, we achieved like-for-like rental growth of 1.8% despite broader market headwinds, resulting in pressure on occupancy. This is supported by our gap to market rents, which give us a competitive advantage to retain and attract new tenants. Our office portfolio is well positioned to benefit from an increasing activity once the German stimulus package will be translated to stronger office demand. We are also advancing selected conversion initiatives, particularly into service departments and data centers, which demonstrates the portfolio's adaptability. The Bau-Turbo regulation provides further momentum by enabling faster office-to-residential conversions, increasing flexibility and unlocking additional FFO and value potential. Development rights and invest portfolio account for 7% of the total portfolio. We are successfully completing office to serviced apartment conversions and several additional repositioning and conversion projects are currently underway and are expected to generate rent over the next years. On Slide 9, we provide an update on the main portfolio KPIs. As of December 2025, the portfolio value stands at EUR 25 billion and generates EUR 1.15 billion in annualized recurring rental income, resulting in a rental yield of 5%. We note that the yields are based on current contractual rents and do not include future agreed rent ramp-ups. This is mostly relevant in the hotel sector, where significant contractual rent increases for the recent hotel reopenings are yet to be included. Including the stabilized rents, the hotel portfolio yield is 5.5%. The WALT remains solid at 7.2 years, supported by a balanced maturity schedule that adds further downside protection. EPRA vacancy stands at 7.6%, up 0.1% in comparison to 7.5% in December 2024, and in-place rent has increased to EUR 11.7 per square meter from EUR 11.2 per square meter in 2024. We note that EPRA vacancy definition and applicable market standard does not include properties under major refurbishment or development. The development rights and investment portfolio accounts for 7% of the total portfolio and includes around 700,000 square meters of existing space at circa 90% vacancy. The intrinsic potential of these developments and future rental income growth of the company will be extracted over the coming years. We present further breakdowns in the development portfolio slide. On Slide 10, we look at the strength and resilience of our tenant base. Our portfolio remains highly diversified with over 3,000 commercial tenants alongside a very granular residential segment, thereby significantly reducing concentration risk. Our top 10 tenants together contribute less than 20% of total rental income, ensuring that no single tenant has a material impact on portfolio performance. The commercial lease expiry profile is well-distributed, giving us flexibility in uncertain market environments and helping us manage renewals and re-lettings proactively. The portfolio has a reversionary potential of around 25%, including the impact of vacancy reduction and reaching market rents across both commercial and residential assets. On Slide 11, we outlined the progress made on disposals in 2025 and how these proceeds support our broader capital allocation strategy. During the year, we signed EUR 575 million of disposals and closed EUR 790 million, 1% below book value and at an average rental multiple of 20x. These transactions were mainly comprised of office and residential assets with additional sales of development, retail and hotel properties. Geographically, the disposals were concentrated in NRW, Berlin, Frankfurt, Bremen and non-core locations. Altogether, disposals were executed at 19% premium over total cost, resulting in EUR 128 million of disposal gains and EUR 415 million of FFO II. In addition to completed transactions, the company currently holds EUR 650 million of investment property classified as held for sale. In addition to the acquisitions, a portion of the proceeds is being directed towards highly accretive share buybacks. In February 2026, we launched a EUR 250 million share buyback program at a significant discount to NAV, enabling us to convert disposal gains at book value, directly into per share value by reinvesting into our own portfolio. If fully executed at prevailing prices, the buyback is expected to increase FFO I per share by around 7% and NAV per share by approximately 5%. Our decision to launch the buyback comes on the back of successful de-leveraging efforts over the previous years and was primarily driven by the high accretion on a per share basis, following our proven ability to refinance our debt maturities at attractive rates and after considering our current leverage. On Slide 12, we show the achievements we have made with disposals over the past several years. Since 2020, we have executed more than EUR 10 billion of disposals to third parties across all major asset types and locations, which have been executed at 2% above book value on average. This includes office, residential, hotels, retail, logistics and development rights spread across more than 800 properties, carried out also during challenging periods, validating our ability to sell successfully. When measured against total costs, including CapEx, these disposals were executed at an average profit margin of around 28%, reflecting the value created by the company and our ability to subsequently crystallize this value. The large volume of disposals also demonstrates our ability to transact under a wide range of market conditions and provides validation for the strength of the portfolio. Part of the disposal proceeds were reinvested into acquisitions. As part of the EUR 10 billion disposal volume, the group provided EUR 0.8 billion of vendor loans in relation to a disposal volume of EUR 1.4 billion. To date, we have collected over EUR 1.1 billion for these transactions, EUR 0.3 billion were converted to properties at a discount to book value and less than EUR 30 million remain to be collected in 2026. The model of selling with vendor loans in a period when banks were reluctant to finance deals proved itself very successful. On Slide 13, in 2025, we have EUR 500 million of property additions to the portfolio of mainly residential, office and hotel assets, primarily located in Germany and London with an average vacancy of 13%, of which EUR 0.3 billion were converted from vendor loans. 40% of the acquisitions are residential properties, 30% offices, 5% retail and the remaining development properties. To date, in 2026, we have signed acquisitions of EUR 175 million of residential properties in London and Germany. EUR 350 million of acquisitions were completed through the TAC fund. As a reminder, the rationale to build the TAC fund is to raise new external equity for acquisitions without the need to issue new shares, which will be dilutive due to the big discount of our share price to NAV. We note that the TAC fund does not and cannot acquire existing properties from the group, including GCP, and it cannot sell assets back to the group during the fund's term. We provide more details on TAC, including key terms in the appendix. Frank, please continue on the next slide.

Thank you, Kamaldeep. Slide 14 provides an overview of the performance of our hotel -- our office portfolio. Offices represent 34% of the total portfolio and are focused on strong central locations in leading European cities. Berlin, Frankfurt, Munich and Amsterdam together account for 58% of the portfolio, reflecting our concentration of strong economic centers. As of December 2025, the office segment delivered a like-for-like rental growth of 1.8%, mainly driven by indexation. Our tenant base remains robust and well diversified with around 75% of rental income generated for public sector organizations, multinational companies and large domestic operations. Our office vacancy rate stands at 30%, up slightly from 12.7% in 2024. This limited increase demonstrates the resilience of our office portfolio even in times of softer demand. Sustainability continues to be a key priority. Currently, 79% of our Office portfolio is Green Certified. The first reclassifications within the Dutch portfolio have already achieved higher scores, reflecting ongoing improvement measures. From a market perspective, office take-up in Germany increased by 1.4% year-on-year. Although overall office vacancy has risen, it remains close to long-term historical ranges. Looking ahead, we see several positive tailwinds. The German government stimulus program is expected to support economic growth, which historically correlates strongly with office demand. The first positive impacts are now starting to appear in economic data. In addition, the new Bau-Turbo regulation creates a meaningful opportunity for conversion projects. We have already identified approximately 120,000 square meters of space for visibility assessments and the initial feedback from municipality has been encouraging. To support this, we have also established a dedicated team, focused on conversions, to ensure effective utilization of government programs. This team centralizes the company's resources and expertise required for these projects, enabling efficient execution. Overall, the combination of strong locations, a high-quality tenant base, improving sustainability credentials and supportive regulatory conditions position our portfolio well for the coming years. Further data is available in the appendix, including details of our top office tenants, the government stimulus package, the Bau-Turbo regulation and expected subsidy programs. Slide 15 highlights the strength of our tenant diversification. We have no dependency on single tenants or industries. More than 70% of our office tenants are from the public sector, multinational companies and large domestic operations. The public sector alone accounts for more than 30%. Our top tenant -- office tenants -- our top 20 office tenants represent 40% of the total office rental income, reflecting a well-balanced and diversified income profile. Slide 16 focuses on our short stay and service apartment activities. This segment is operated primarily through long-term leases, currently contributing EUR 40 million of rental income or approximately 1.2% of the total group rent. In addition, some properties operate under management agreements where our tenants are the hundreds of individuals staying at the property. Service apartments align well with today's hospitality trends. They offer efficient operations, long-stay ecosystem positioning, capturing multiple demand drivers. They also integrate well into mixed-use buildings and play an important role in our broader repositioning strategy. Conversions represent a strong internal growth driver. Demand for flexible long-stay accommodation continues to increase and our centrally located assets are well positioned to capture this trend. In addition to the operating properties as mentioned before, our current pipeline includes 8 assets in Berlin, Frankfurt, Dortmund and Hannover, representing around 1,100 rooms. Some of those are already under conversion, while others are under the permitting phase. These projects are expected to be completed between 2026 and 2028. We have completed our project in Rotterdam and recently added a new project to the pipeline following the signing of the lease for the partial conversion of vacant space in our Frankfurt office tower. These attractive conversion opportunities reduce vacancy, support rental growth and create stable income streams through long-term leases. Once stabilized, we expect these assets to generate an additional EUR 50 million of net rent. We continue to review some assets for conversion to unlock additional embedded upside within the portfolio, and we'll expand the pipeline as leases are secured. Slide 17 highlights our Rotterdam project as an example of how we execute our conversion strategy in practice. The property is a centrally located 20,000 square meters office building with excellent connectivity and a strong mixed-use environment. Here, we carried out a partial conversion while fully refurbishing the existing structure. Floors 4 to 9 have been converted to service apartments and now leased to an operator called Numa. The full project is expected to be completed in 2026. A portion of the leases have already been signed and advanced negotiations are going with additional prospective tenants. Sustainability has been a key element of this project. The renovation is designed to meet Paris Proof 2050 requirements, and upon completion, the building will be WELL Platinum and ready and eligible for BREEAM Excellence certification. This supports long-term operational efficiency and further strengthens our ESG credentials. Overall, this project demonstrates how selective conversion and sustainable repositioning enable us to unlock value within well-located assets. Turning to Slide 18. Our residential portfolio represents 33% of the total portfolio and continues to deliver sustained operational results, supported by strong market fundamentals in the portfolio locations. Vacancy rates remained at historical lows, currently at 3.2%. As of December 2025, the residential portfolio delivered 3.6% like-for-like rental growth, driven by higher in-place rent and a continued supply-demand imbalance. Market conditions in Germany and London remain robust, supporting rental growth and positioning us for continued growth in rental income. The portfolio is further diversified through senior homes and HMO tenants, which provide stable income streams and a haste diversification within the residential segment. As outlined earlier today, we have initiated a share offer for GCP shares with a goal to increase our holding GCP. Slide 19 highlights the continued strength of our hotel portfolio, which represents 20% of the total portfolio and remain well diversified across major European tourism and business destinations. We own more than 150 hotels with over 25,000 rooms operated under long-term fixed leases with inflation linked or step-up rent structures. As of December 2025, we recorded 3.5% like-for-like rental growth. We expect further upside in the coming years as recently repositioned hotels, fully stabilize over the next 2 to 3 years and the full contractual rent becomes effective. In addition, several additional operating hotels were under go upgrades as part of our repositioning program. These upgrades are agreed with tenants and include various upgrade elements such as rooms and public space improvements, installation of air conditioning, MEPs upgrades and more. We expect returns of at least 10% of the CapEx invested reflected in the rent increase following completion of the works. The broader hotel market environment remains supportive. Demand across Europe continues to be driven by business travel, public sector activity, events, cultures and leisure. At the same time, operators are implementing digital and smart technologies to enhance efficiency and reduce operational costs. We expect to complete the refurbishment of our 330-room hotel in Central Hannover towards the year-end 2026. The property is currently within the development portfolio and will be moved to the Hotel portfolio upon reopening. We have also commenced the renovation of our City Center hotel in Frankfurt, the former Intercontinental Hotel. The completion of this hotel is expected in approximately 2 years. For obvious reasons, this asset also remains within the development portfolio until reopening. Our diversified tenant base, long average lease terms and the continued recovery in European travel reinforce the resilience of this segment. Combined with embedded rent growth, the hotel portfolio remains a stable and meaningful contributor to the overall group performance. We continue to strengthen the segment through innovation. PropTech solutions improve energy performance, digital operations and guest experience. ATworld activates underutilized areas, providing flexible workspaces that add value for guests and local communities. These initiatives support tenant performance and operational health, enabling us to benefit from more stable and growing rental income. ATworld currently leases around 1,000 square meters of the portfolio and primarily operates in previously unlettable spaces such as hotel lobbies or on a pay-per-use basis alongside other co-working operators. On Slide 20, we present our hotel tenant base. The group has been operating in Germany and the European hotel business for over 2 decades. Keeping and building up relationship is an integral part of our business culture, and in this period, we have developed good business relationships with many hotel operators. In fact, prior to becoming a public company, the group operated hotels internally. In that period, we accumulated knowledge and expertise, which allowed us in a later stage to know how to acquire hotels on one hand and how to monitor our tenants' operations on the other. We choose our tenants based on several factors such as profitability, for which we check whether the tenant achieves gross operating profits, GOP in excess of the rent, what is called rent cover. Aroundtown's hotel tenants have gross operating profits rent cover ratios of 1.1 to 1.5x, which is common market practice. The Center Parcs, which account for 30% of our hotel rental income, have an exceptional high rent cover of close to 2x. Other factors include the financial security package, reliability, reputation and diversification. Our tenant base is very diverse and granular and consists of more than 30 third-party tenants with Center Parcs being the largest tenant, which represents 7% of the group rental income. We are proud of our in-house capability to operate hotels on an interim basis. Although our focus is always to have long-term leases with strong tenants, our ability to replace tenants with limited impact on the hotel operations and long-term value is a key competitive advantage and reduces dependency. Prior to the end of a lease agreement or if a tenant has difficulties to pay the rent, our teams are ready to find a replacement tenant while we still have the tenant deposit and other securities in place. In such cases, our teams will first try to find the replacement within our existing 30 hotel tenants. It is always better to work with companies who have good track record and that fit the criteria we mentioned before. In parallel, we will offer the relevant property to new potential tenants who consider appropriate to be, as of our tenant lease. More details about hotel tenants lease and background is presented further in this presentation and on our web page. Tim, please continue on the next slide.

Thanks, Frank. On Slide 21, we provide an overview of our development and invest portfolio, which represents around 7% of our portfolio and serves as a meaningful source of future rental income and value creation. This portfolio captures embedded development potential across both land but mainly existing buildings, and since 2020, it has contributed approximately EUR 1 billion of disposals through selective asset sales. The development portfolio includes around 700,000 square meters of existing space, of which around 90% is currently vacant. The hotels which are currently under refurbishment, together with the conversion of properties to service apartments and other uses described in this presentation compound to about 135,000 square meters out of the development portfolio. The portfolio is well distributed across geographies and intended use. Our efforts primarily focus on the living segment, so residential and hospitality concepts as well as mixed use where we see the greatest potential and long-term demand. This significant repositioning and development potential is reflected by an average value of EUR 2,500 per square meter. The majority of existing assets and land accounts for approximately 16% of the development and invest portfolio by value, providing additional long-term optionality. Part of the development rights are crystallized through targeted disposals, while further upside is extracted on a targeted basis through repositioning, selective upgrades and disciplined execution. These opportunities help optimize returns across the wider portfolio while maintaining a clear focus on capital efficiency. Our professional team is continuously working on building the correct business plan for each property and are in touch with the local authorities and local constructors. We also focus on subsidies that might be available for each use. A detailed overview of selected properties is available in the appendix of this presentation and more properties under this category are available on our website. On Slide 22, we highlight the opportunity in data centers. Over half of our commercial portfolio is located in Germany's top 5 data center markets, giving us strong optionality to work with hyperscalers and co-location operators. Leveraging our existing offices and development assets in these locations positions us to tap into one of the fastest-growing and most resilient real estate segments. We are progressing in several of our portfolio locations, namely in Berlin, Munich and London, of which some have sufficient power available and others we have received indicative incremental allocation. We aim to do partial conversions as we receive incremental grid approvals, gradually securing high energy capacity and full permitting for potential large-scale deployments. We will continue submitting power allocation requests for additional sites and run technical validation tests to prepare for future phases. Our strategy is focused on extracting value through different pathways. In the near term, we're looking at hybrid opportunities in City Center locations where portions of existing commercial assets can be converted into edge or co-location data centers, making use of existing grid connections and infrastructure. Longer term, there's a potential for larger-scale developments for hyperscalers or wholesale co-location use provided that we can secure higher power capacity and relevant permitting. We are also in negotiation to secure land for potential hyperscaler level data center nearby our joint venture power plant in Larissa, near Athens. We will share more information once the details will be agreed. We are also exploring partnership models that allow us to capture value along the full value chain while leveraging external expertise where needed. Moving on to Slide 23. We present an update on CapEx for this year. In 2025, CapEx investments totaled EUR 421 million, representing 1.7% of the average investment property. Tenant improvements made up 22% of total CapEx and largely reflect property enhancements negotiated as part of lease extensions and new lettings. Other CapEx represented 31% of total CapEx. This category mainly includes repositioning CapEx for the Residential portfolio, along with various projects aimed at maintaining the high quality of the assets and supporting selective improvements and CO2 reduction initiatives, such as roof and facade installation, LED lighting, energy-efficient heating and green installations. Expansion CapEx accounted for the majority of CapEx in the year, compromising 47% of the total. These investments focus on generating additional income and value primarily through major refurbishment projects, selective conversions and new developments. The year-on-year increase in CapEx is mostly the result of these activities as once the markets reopen in 2024 and we have regained the access to the capital markets, we have started to ramp up the investment into our portfolio, which is allowing us to accelerate the extraction of our internal growth potential. Limor, can you please continue the next slide?

Thank you, Tim. On Slide 24, we outline how innovation is becoming a core driver of performance across real estate industry and how we are positioning ourselves for this shift. The market is entering a phase where operational excellence, AI, automation and data-driven decision-making will increasingly determine outcomes. For us, this transformation is already underway as we are looking to evolve from traditional real estate model into real estate -- with AI technology designed to structurally improve NOI, reduce risk and enhance capital efficiency. Our approach is built on three value pillars. The first focuses on revenue and tenant platforms, including AI-enabled workspace tools and digital tenant journey that support flexible services, monetize underused areas and strengthens tenant retention. An example of this is ATworld. The second pillar is operational intelligence and automation. Digital robotic and smart building solutions are already helping lower operation costs and improve service quality through automated workflows and predicted maintenance. Furthermore, AI applications support in faster and improved letting processes. The third pillar is sustainability and energy intelligence, where partners such as PassiveLogic, VARM and Enter support energy optimization, decarbonization and long-term ESG compliance at the asset level. The capabilities are being embedded across the organization. Automation and AI initiatives are scaling with early efficiency gains already visible and broader financial benefits expected to increase over time. In our hotel portfolio, we are supporting operators with digitalization and revenue optimization tools, while in offices, the shift towards experience-driven workplaces create opportunities to reposition assets with flexible layout and integrated digital infrastructure. Technology also strength our ability to reposition assets with operational inefficiency by leveraging our scale, centralized platforms and unified data foundations. This we see as a key competitive advantage, allowing us to scale the platform more easily, providing enhanced economics for acquisition as well as for M&A opportunities. Overall, we see a clear industry road map. Scale, technology and operational excellence will define the next generation of real estate companies. Aroundtown is positioning itself accordingly with its disciplined execution and forward-looking approach to how buildings operate and how value is created. On Slide 25, we are very proud to show that we have already achieved a 41% reduction in emissions compared to 2019, meaning we have reached our 2030 targets sooner than initially planned. This milestone underlines the strength of our strategy and the quality of our portfolio, combining portfolio-wide efficiency improvements, a shift to lower carbon energy sourcing and supportive grid decarbonization. At the same time, we continue to invest to push this further, for example, through the rollout of more than 900 EV charging sockets across over 100 assets, the installation of 13 megawatt peak on-site PV and ongoing upgrades to high-efficiency energy systems. Here, we are looking to scale up our heat pump program, which we successfully piloted in '25. We will continue our efforts to reduce emissions further and are currently reviewing new targets. The current progress positions the company well to face emerging regulatory changes such as the EPBD, the Energy Performance of the Building Directive. On Slide 26, we present a detailed update on our Green Certification strategy and the role it plays in improving asset quality and supporting long-term growth. In general, our strategy focuses on upgrading existing buildings rather than pursuing new construction, which align well with BREEAM's emphasis on circularity and significantly reduces embodied emissions. Through ongoing BREEAM in-use upgrades, we work systematically to raise certification level across the commercial portfolio using framework to set clear improvement targets and support constructive discussions with tenants. Certification coverages have already increased from 9% in '22 to 70% today. And our next objective after obtaining full certification is to bring the full portfolio to at least very good level with recertification already underway in the Netherlands. This will take some time as we look to increase scoring progressively as properties are recertified. At the same time, we are shifting from compliance-focused mindset to more strategic use of BREEAM. Higher certification level help attract tenants with strong sustainability requirements, support alignment with the EU taxonomy standards and strengthen asset resilience in markets where regulatory expectations continue to increase. Furthermore, by using the framework in tenant negotiation, we can set clear and transparent targets with strong fit to tenant needs in a direct and attractive return on investment for us. By integrating smart tech solutions to capture better scoring and utilizing of automation into the certification process, we can maintain consistently quality, reduce administrative efforts and continue improving rating over time. Overall, this strategy positions us well for long-term competitiveness, ensuring that our buildings remain attractive, complete and future-ready while generating value with limited capital outlay. Slide 27 highlighted our continued improvements across our ESG ratings, reflecting both strong execution and greater recognition from the external frameworks. Our S&P Global score increases from 64 to 68, placing us in the top 6% of global real estate sector, and we are also a member of the S&P Sustainability Yearbook. In addition, our Sustainalytics score improved to 8.7, ranking us at the top 2% globally with negligible ESG risk. We continue to hold an AA rating with MSCI. We were upgraded to C+ and Prime Status by ISS ESG and achieved EPRA Gold for both BPR and sBPR for the ninth and eighth consecutive year. These results underline the quality, consistency and transparency of our ESG performance. Jonas, please continue on the next slide.

Thank you, Limor. Moving to Slide 29. We present our financial results for 2025. Net rental income totaled EUR 1.18 billion, stable compared to '24. The growth was primarily driven by strong operational performance, partially offset by the impact of net disposals. Operating and Other income, which is mainly composed of recoverable expenses from tenants, decreased slightly to EUR 360 million and property operating expenses also decreased slightly to EUR 549 million. Finance expenses amounted to EUR 243 million, up 3% from EUR 235 million in '24. The increase was mainly due to refinancing leading to new debt being raised above the company's existing cost of debt. Finance expenses were further affected by lower interest income on the liquidity position. We reported deferred tax income of EUR 459 million compared to an expense of EUR 13 million in '24, mainly due to the onetime impact of the change in the German corporate tax rate effective from 2028, whereby the rate gradually changes from currently 15% to 10% by 2032, more than offsetting deferred tax expenses arising from positive property revaluations. Accordingly, we recorded an impairment of goodwill amounting to EUR 239 million as the goodwill is mainly attributed to GCPs and TLG's deferred taxes, which reduced due to the positive impact related to changes in the income tax mentioned earlier. As EPRA NVA KPIs exclude goodwill, any change in the goodwill balance has no impact on these KPIs. The full portfolio was revalued as part of the 2025 annual report by external independent appraisers, following a revaluation, also conducted as part of the semiannual reporting. In 2025, we recorded a positive like-for-like valuation increase of 3.1%, including CapEx or 1.6% net of CapEx. On this slide, we also show the breakdown of the like-for-like value growth per asset type. The hotel portfolio was impacted by repositioning efforts, resulting in negative like-for-like revaluation of 0.2% for 2025 or positive 0.6%, including CapEx and positioning portfolio more strongly for future growth. Profit for the year amounted to EUR 1.13 billion compared to a profit of EUR 309 million in '24. On a per share level, net profit amounts to EUR 0.61. On Slide 30, we present our adjusted EBITDA and FFO results. Adjusted EBITDA for '25 amounted to EUR 999 million, decreasing 1% compared to '24. This is mainly due to the impact of net disposals in the year and lower contributions from JVs. This was partially offset by strong operational growth and improved operational efficiencies. Adjusted EBITDA before JVs remained stable at EUR 946 million. FFO I amounted to EUR 288 million, decreasing by 9% compared to EUR 316 million in the comparable period of 2024. The lower FFO I was mainly a result of higher finance expense and lower contribution from JVs, partially offset by operational growth. The FFO I was additionally impacted by slightly higher perpetual note attribution compared to '24. Due to the company's proactive measures for '24 and '25, the increase in '25 remained limited and expected to be lower in '26. Per share FFO I amounted to EUR 0.26 compared to EUR 0.29 per share in '24. FFO II, which includes the disposal gain over total costs amounted to EUR 415 million, increasing by 6% due to higher results from disposals. Turning to Slide 32. We highlight our EPRA NAV metrics. EPRA NRV amounted to EUR 10.3 billion, increasing by 3% compared to December '24. EPRA NTA amounted to EUR 8.5 billion or EUR 7.8 per share as of December '25, higher by 5% on per share level compared to December '24. These increases in EPRA NAV metrics were mainly driven by the positive property revaluations recorded in operational profits. However, EPRA NRV and EPRA NTA, the positive impact from the onetime deferred tax income was offset by the associated adjustments in deferred tax liabilities. On Slide 33, we present our updated maturity profile. As of December, our average debt maturity stood at 3.7 years, which extended 4.6 years when factoring in our liquidity position. We continue to maintain strong financial flexibility, supported by our diversified access financing across the capital markets, a solid BBB credit rating from S&P and a substantial pool of unencumbered assets across various asset types and geographies. In addition, we have EUR 0.9 billion of undrawn RCF with an average maturity in the second half of '28 and well-established mortgage banking relationships. Our hedging ratio remains high at 97%, and our cost of debt stands at 2.3%, with only a slight increase due to recent refinancing effects. The cost of debt is expected to increase modestly in the next years as we repay lower cost of debt in parallel to further rent increases, which will keep at FFO levels relatively stable. On Slide 34, we highlight our ongoing strong access to the capital markets. In '25, we executed several large capital market transactions, extending the debt maturity profile. Part of the funds raised have been used in concurrent tender offers, while the remaining proceeds will be used to repay upcoming maturities. We issued eurobonds across different maturities and importantly, at meaningfully lower coupons compared to the July '24 benchmark. In July '24, we issued a 5-year bond with a coupon of 4.8%. On May '25, we issued a 5-year bond and a coupon of 3.5%. In September '25, the 5.25-year bond at a coupon of 3.25%, demonstrating a clear reduction in coupon for comparable tenors. We also expanded and diversified our funding base with non-euro transactions, issuing CHF and GBP bonds in late '25, including our first CHF issuance since 2019. The positive momentum continued to early '26 with successful CHF and Aussie dollar issuances that were met with strong investor demand. These transactions were issued in maturities ranging from 5 to 7 and 10 years, further extending our maturity profile and allowed us to secure competitive coupons across currencies, reinforcing the depth of our investor base and our proven market access. In total, we raised in 2025, EUR 3.3 billion new debt and repaid EUR 2.6 billion of debt. Taken together, these issuances clearly demonstrate our ability to raise capital at improving terms while maintaining broad access across markets and currencies. On Slide 35, we highlight the perpetual note issuances executed through 2025 and January '26. The 2025 EUR 1.3 billion issuances were used to reduce the perpetual balance by EUR 0.5 billion and the remaining for refinancing at a lower coupon rate. In January '26, we raised EUR 750 million new perpetual notes at a lower coupon and 40 basis points tighter spread compared to the October '25 issuance, supported by strong demand with a peak order book nearly 4x oversubscribed. The proceeds from this issuance were utilized to repay EUR 268 million of perpetual notes with first call date in '26 with the concurrent tender offer and GBP 153 million of perpetual notes carrying an effective 6.95% coupon through a combination of tender and redemption. The remaining balance of the 2026 perpetual notes are expected to be called in Q2 '26. As a result of all these transactions combined, the annual coupon in '26 are expected to remain below '25 levels, supported by the positive impact of perpetual transactions executed in Q4 '25. In total, in '25, we raised EUR 1.3 billion new perpetuals and repaid EUR 1.8 billion of perpetuals. On Slide 36, we present an overview of our strong financial profile and debt metrics. LTV decreased to 41%, mainly as a result of both net disposals and positive property revaluations in the period. In addition, we continue to maintain a large balance of unencumbered properties, which amount to EUR 17 billion or 17% of rental income. Our ICR was 3.9x compared to 4x in '24 and net debt-to-EBITDA 10.9x in '25 compared to 10.7x in '24. Barak, please continue on the next slide.

On Slide 38, we present our guidance for 2026. In 2026, we guide for an FFO I in the range of EUR 250 million to EUR 280 million, translating into per share of EUR 0.24 to EUR 0.27 per share. This does not include the targeted share-to-share transaction with GCP, which is neutral on a per share basis, but will increase the total FFO. We revised the dividend policy to 50% of FFO I to balance between attractive shareholder distributions while also retaining capital for debt repayment and to pursue accretive growth opportunities. The guidance is impacted by full year impact of disposal from 2025 as well as expected disposals in 2026. As we exclude the contribution from assets held-for-sale from the FFO I, the reclassification for the properties under advanced negotiation to held for sale has no further impact. On a run rate level, this amounts to EUR 23 million. In addition, FFO I will be impacted by refinancing above current cost of debt and the full year impact of 2025 refinancing. These negative drivers will be partially offset by the impact of conservative rent increase assumptions, impact from acquisition closed and signed, cost efficiency measures as well as the net positive impact of perpetual note transactions, including the expected refinancing of remaining 2026 perpetual notes. On a per share basis, we expect the share buyback will positively impact our guidance with the exact impact depending on the price development of the share.

This concludes our presentation. As always, you can find further materials in our appendix. [Operator Instructions] Could you provide an updated assessment of your growth strategy? Do you expect changes now that you launched a share buyback?

The recovering market environment, combined with increased transaction volumes has allowed us to focus on capital recycling. This strategy enabled us to sell properties at a low yield and acquire new ones at higher yield, thereby creating strong accretion. A successful share-to-share transaction with GCP will also support FFO growth, reducing significantly the FFO contribution to minorities. Effectively, since the share discount of the two entities is broadly similar, the transaction enable us to further buy into residential properties at very attractive FFO yield of 9% without harming our leverage since we are using 100% equity and not using cash. On a per share basis, the transaction will be neutral, which is good. In the midterm, we expect this transaction to contribute to a per share growth with very strong and defensive cash flows from the residential portfolio. We continue extracting our internal growth potential. We have started to ramp up investments in our own portfolio already in 2024 and expect this to continue in the coming periods as we extract the embedded potential through targeted refurbishments and conversion projects. That being said, we're still scanning the market for external market opportunities. We also continue to observe an asymmetric market recovery with smaller players facing financial pressure while larger participants benefiting from stronger access to capital and generally improved financing conditions. We're looking to acquire quality assets at high yields with meaningful upside potential, allowing us to capture the accretive spread between disposal and acquisition multiples. This is achievable without compromising on location or quality as we're looking for sellers which are under financial distress. There are no huge quantities which fit this criteria and so far, we are reviewing an acquisition pipeline of several hundred million euros, primarily in residential and hotel property. Additionally, at the end of January, we initiated a EUR 250 million share buyback program, which allows us to repurchase our shares at a significant discount and utilizing disposal proceeds from selling properties at around book values. We anticipate buying back nearly 10% of our shares, which will, in turn, enable us to grow the FFO per share by close to 10%. Taking into account our leverage levels, our current focus is on per share growth, which will be partially realized in 2026 and fully captured in 2027 as the current program is expected to run throughout this year.

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

As per December 2025, we recorded like-for-like rental growth of 3% across the portfolio with the strongest contributions coming from Berlin, Leipzig and London. Positive like-for-like rental growth was recorded across all asset types. Strong structural supply-demand fundamentals continue to benefit the residential portfolio, which recorded rental growth of 3.6%. The hotel portfolio achieved rental growth of 3.5%, supported by the repositioning measures implemented in the recent periods. Office assets recorded rental growth of 1.8%, supported by indexation. We expect the positive momentum to continue going forward, particularly within the residential, hotel segments, supported by favorable market fundamentals and increased investment. In the office segment, we anticipate a slightly positive rental growth in the near term, supported by indexation and reversion of reletting, but partially offset by some continued vacancy pressures. We do, however, see meaningful upside potential as broader economic conditions have started to improve in recent months, supported by the fiscal stimulus in Germany. We expect to continue unlocking value through targeted repositioning and selected conversions across our portfolio, and we expect overall like-for-like rental income growth in the range of 2% to 3% for 2026.

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

Our hotel portfolio continues to perform well, supported by the broader recovery in European hospitality and by the strategic repositioning work we have carried out across the segment. In 2025, we saw steadily improving momentum, which translated into like-for-like rental growth of 3.5%. This reflects both healthier market conditions and the targeted upgrades and the concept shifts we have implemented in selected assets. Hospitality remains a strategically important part of our diversified European platform. Demand in major cities such as Berlin, Brussels, Paris and Rome continues to be underpinned by a broad mix of business travel, public sector activity, events, culture and leisure. The fundamentals in the sector continue to look strong. International arrivals have surpassed pre-pandemic levels and global hotel investment volumes have increased significantly from the 2023 trough. We also see sustained momentum behind modern hospitality concepts, particularly service departments, which combine longer stays with efficient operations and fit naturally into our mixed-use strategy. These formats help activate buildings, support office to mixed-use conversions and provide resilient cash flows even in more volatile market environments. We started the refurbishment of our hotel in Frankfurt, the former Intercontinental. We expect to complete the renovation within 2 years and reopen the hotel, which was closed in 2021. We also expect to complete the refurbishment and reopen our hotel in the City Center of Hannover this year. Both properties, which are currently part of the development asset portfolio will not contribute income this year, but in the following periods. We will also complete this year the refurbishment of an additional 260 rooms of our Cardo Hotel in Rome. We have plans for more upgrades of hotels this year. The CapEx costs are part of our 1.5% CapEx for investment property. At the same time, we remain mindful of risks. Geopolitical uncertainty can influence travel flows. We address this through diversification of locations, tenants and hotel products. Looking ahead, growth will be driven by our repositioning strategy, contractual rent step-ups and indexation and our continued collaboration with strong brands.

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

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

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

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

What is the connection to the GCH Group?

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

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

The office segment performance remained broadly consistent with the levels seen in the recent years. Overall, demand is still somewhat muted, which largely reflects the softer macro environment in Germany, which is the main driver of office take-up. That said, we are beginning to see improvements in business sentiment and the fiscal stimulus package enabled by the German government is starting to support economic growth, which in turn is expected to translate into gradually increasing office demand. At the same time, new supply remains limited with construction activity subdued and an increasing share of assets being converted to alternative uses, supporting a more balanced long-term supply/demand dynamic. Those, it is difficult to assess where the vacancy rates will develop as could be at an inflation point. Note that since 2020, our office vacancy rates have increased by only 1.4% to 13%, which shows that even in hard times, the office sector performs well. Although the letting market is challenging, we are able to deliver solid results with a positive rental like-for-like performances of 1.8% in 2025, driven by in-place rental growth offsetting the impact of increased vacancy during the year. During the period, we renewed 160,000 square meters of leases at an average WALT of 5.1 years, achieving rents 3% above previous levels. We also signed new leases for 140,000 square meters with an average WALT of 10 years at rents around 8% above prior rents, reflecting the continued attractiveness of our assets. Conversions continue to be an important value driver within our office portfolio. We are actively identifying assets that are suitable for conversion to alternative uses, such as service apartments, regular residential supported by the new Bau-Turbo framework, which simplifies change-of-use procedures. In parallel, we are assessing data centers use cases in selected locations as other avenue to unlock value wherever appropriate.

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

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

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

The year-end revaluation confirms a stable and positive trend we have seen throughout the year, with values broadly tracking the solid operational performance. Accordingly, we recorded positive 1.6% like-for-like revaluation, excluding CapEx and 3.1%, including CapEx. In the residential portfolio, we saw 3.6% like-for-like value growth, 0.8% in the office portfolio and negative 0.2% and positive 0.6% excluding CapEx in the hotel assets. The hotel assets were impacted by the ongoing repositioning efforts in the portfolio, resulting in higher CapEx investments and new tenant leases, which support operational value growth in future periods. The drivers behind the valuations for operational improvements in our repositioning investments. The overall result reflects solid fundamentals and increased cash flows, which remain the key drivers of valuation momentum. Portfolio yields have remained largely unchanged compared to the levels recorded at the end of '24. While we do not anticipate meaningful yield compression in the near term, we continue to see room for yield improvement over the medium term, mainly for residential hotels as market conditions strengthen further. Any such movement would add to the organic value growth already generated through operations. Referring to the hotel yields, it is worth mentioning that the rental income presented in the run rate refers to current contractual rent and does not include contractual ramp-up rents for the hotels we reopened late last year.

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

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

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

It is evident that Viceroy has dedicated substantial effort and time to the analysis of our company based on public information. As they wrote in their report, they initially looked at us as a short case. Based on what Viceroy wrote, they have not identified material negative aspects of the company's business or governance. On the contrary, Viceroy has found the company to be conservative, transparent and undervalued. We understand that this is a report to take a long position of Viceroy, which are usually well known for the short positions, which we believe speaks for itself. We are constantly answering a large amount of investor questions and meetings at conferences and through e-mails. We have a very large analyst coverage who each do their own modeling and assessment. Regarding our portfolio valuation, we do reiterate that our portfolio valuations are externally assessed by internationally recognized valuators and any weakness of the office segment is already priced in, in our valuations and as a result, in our NTA per share of EUR 7.80. Our valuations in NTA are further validated by our massive number of disposals on average by 2% above book value across different asset types and locations over many years already with a total of EUR 10 billion, which you can see on Page 12 of our presentation. On the basis of the extremely discounted share price, we have also issued a share buyback program, which will further increase our NTA per share. We also see the value uplift potential in our portfolio, which is embedded in the reversionary potential of our rental income together with periodical realization of value of properties under the development and invest portfolio.

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

Office to service apartment conversions broadly follow a straightforward execution path. These projects generally fall within the same zoning framework and can proceed with a standard building permit, typically obtained within 6 to 12 months. We recently completed the first project in Rotterdam and have several projects ongoing, including a newly signed project in Frankfurt City Center. There is strong demand for service apartments, and we are working with many different tenants for this hospitality living concept, as you can see in our presentation. The rents are higher compared to office rents with longer lease terms of 15 to 20 years. We are in discussions with many different operators who are looking to expand and are interested in a strong partner as us with a wide portfolio. Including the recently finalized project in Rotterdam, we are converting 44,000 square meters, which is 2% of the office portfolio. All the presented projects in Page 18 will generate over EUR 15 million rental income, which represents a yield of 15% of the CapEx.

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

The newly introduced Bau-Turbo regulation streamlines the change of use processes and shortens approval periods, making conversions from commercial to residential more practical and expanding the range of the viable projects, including when appropriate, full conversion to traditional residential. We have already entered into discussion with municipalities across several of our locations in Germany and have received good feedback for about 120,000 square meters of offices. Following this feedback, we're currently working on the business model to confirm the economical aspect. We understood that the German government's plan to offer certain subsidies for such projects, which is expected to be disclosed this summer. We will provide further updates with the progress we are making, but generally see strong upside potential from this new regulation. This regulation will also have a general market effect by reducing office supply due to conversion from office to residential, hotels or data centers.

What are your plans with your development projects?

We identified this project as growth opportunity either through refurbishment conversions or with a few exceptions, new construction. As each asset is unique, we're exploring several different alternatives, how to lift an asset's potential and what is the relevant most profitable business plan. So far, in a few cases, we decided that the best strategy to lift the upside is through preparing the plans, receiving the permits and then sell the property with the permits. And in some cases, the best way is to execute CapEx works, mainly following a pre-let contract. This includes conversions into residential on the back of Bau-Turbo or conversion into commercial living. Two of these projects include the former Intercontinental in Frankfurt, where the renovation works began a few weeks ago, and Maritim Hotel in Hannover, which is expected to be opened at the end of this year. You can find in our presentation and our website a list of assets with the project details as we see it now. Note that although a future value driver, it makes up only 7% of our portfolio.

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

The main idea is to explore innovative ideas and real-time test these for our business. If they are only in a start-up phase, they can run through our accelerator program, but we also target scale-ups. The main strategy is to find innovative ideas to improve our business and implement these early on and have a first-mover advantage. We, therefore, expect to leverage technology as a value driver with our real estate assets as a base. We see three main pillars to extract this potential. The first is in revenue generation, the second in increasing operational efficiency, mainly through automation and digitalization, where AI utilization can lever the most. And the third is in sustainability and energy. We believe that a big part of the way to net zero emissions should result from innovation in technology and not just cash investments and therefore, putting significant efforts in exploring the new technologies and implementing those we think are most promising. As we are already testing several strong ideas and will increase our access significantly more over time, each solution will be in a different implementation stage.

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

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

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

We have taken a wide number of measures to strengthen our position in the last years. This has allowed us to navigate successfully the difficult market conditions, and now we are seeing a continued market recovery with positive valuations recorded, increased transaction volume, improved financing conditions and an overall improved outlook. The bond and the perpetual markets were totally open for us since last year, and we have raised successfully billions of euros. This gave us the confidence to initiate the dividend distributions. Since we also initiated the share buyback of EUR 250 million, we have decided to recommend to the AGM a partial dividend payment of EUR 0.08 per share, reflecting around 30% of our FFO I per share. Including the ongoing share buyback, the results in a strong shareholder return of more than EUR 350 million after a few years of our dividend holiday. Going forward, we decided to amend the payout ratio from 50% of FFO I per share from 75% previously.

Do you plan to increase the share buyback program?

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

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

For the year 2026, we guide for an FFO I per share in the range of EUR 0.25 to EUR 0.27, which midpoint is the same as the 2025 FFO I per share. As we have executed several successful debt issuance in the end of '25, finance expenses will increase in '26. The impact of debt refinancing will be mitigated by the strong operational progress with the like-for-like rental growth in the range of 2% to 3% and the full year contribution of assets repositioned or re-leased during '25. These operational tailwinds will partially offset the net impact of disposals executed last year. On the financing side, we've executed several measures successfully to partially mitigate the impact. Our issuance spreads have decreased significantly since our '24 issuance. We refinanced debt with perpetual notes at lower coupons and repaid a significant amount of expensive perpetual notes. The FFO I per share guidance is including the share buyback program, which is very accretive. The share buyback program will take most of the year to execute. It will have only a partial effect in '26. And therefore, we will see only in '27 the full year impact and further per share growth compared to '26. It is very important to note that although FFO I is declined due to disposals and increased finance expenses, the FFO I per share is expected to remain stable as a result of rent increase and the share buyback program.

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

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

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

First, on the FFO I, which is accretive through reduction of minorities and will increase our FFO by close to EUR 50 million. The fact that we are buying into GCP at an FFO I yield of over 9% is very supportive, especially on the back of GCP's strong portfolio. On a per share basis, FFO I will be neutral on day 1 and expect it to be accretive in the midterm. NTA per share will go slightly down as we offer a premium to GCP's NTA in the short term. but we see an upside potential in GCP's portfolio, which will drive valuation creation. On the debt side, EPRA LTV will improve slightly as we will have a larger portion in GCP's low leverage and as no cash payment will be carried out in this transaction since we will use our treasury shares.

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

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

First question on the guidance, please. Have you included additional disposals that have not been signed just yet for 2026? And if so, can we have an order of magnitude perhaps this hotel portfolio that you're talking about? And also related to the guidance, do you assume or do you have already information about new properties that will be effectively put into your refurbishment program or your reconversion program? That would be my number one question. Second question, on the buyback, I think you're talking about doing 10% of shares over time. So is the current buyback for this year and this new buyback would be for subsequent years once you do disposals? And the last question, please, on Grand City. Are you still planning to expand to new country beyond Germany and London, be it the United States or Middle East? If you can give us more clarity on that, that would be helpful.

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

Then asking about any acquisitions and also outside of other locations. So acquisitions that we executed and signed, mainly on the GCP level are included in the guidance going forward. Clearly, we'll have to see more on an opportunistic basis. The largest accretive growth opportunity that we took now here was the share buyback. As we said, the share buyback, we assume will take most of the year because we're limited to buy a certain amount of shares per day. So we're not going to take an assessment here in the following years. But clearly, as we stipulated several times already, we are selling assets and pulling these proceeds into recycling into higher accretive growth opportunities, which was right now, the share buy was the most accretive one. And in terms of locations, look, we're always happy to look into other locations. We have a focus, which is Germany, Netherlands and London. And with the hotels, we have been more open to expand into other locations, mainly because they're relatively easy to manage and operate because they are completely leased out to tenants, and they manage everything by themselves. So yes, if there's a good opportunity and it has to be on a deal-by-deal basis, we will also look into other locations as we've always been open for.

The next question comes from Kai Klose from Berenberg.

I've got four questions, if I may. The first one is on Page 8 of the presentation, where you say that you have successfully completed office to service conversion, service apartments conversion. What was the total amount spent? What was the yield on cost? And what is the new rent compared to the loss in rent from the former commercial properties? Second question, what was the office lease retention rate? Third question is, could you explain why we had a small drop in values for hotels, excluding CapEx? Was this a function of the insolvent or one of the insolvent -- the potential insolvent hotel operator? And last question would be on Page 250 of the annual report. Could you indicate the increase in equity accounted investees. I just only saw a footnote that this was for investment for a power plant increase. How much can we expect here to be invested going forward?

In terms of your first question, in terms of the successful conversion, this is a property which we in our company presentation. Here, we invested about EUR 43 million in terms of CapEx, in terms of yield, somewhere around 15% on the CapEx. In terms of -- the third question in terms of hotel cap -- and valuations. So you're right, devaluation is about 0.2%. If you consider the CapEx spend as well, it's positive 0.6%. As you can tell, we invested heavily in hotel repositioning over the time. This CapEx also is not all reflected in the valuations currently, especially we expect this to help us boost rental income in the coming period. Not all of this is already reflected in valuations, and I think clearly means there's potential upside there in the valuation increases going forward.

Then on the re-leasing spreads on the office. So for the prolongations, we had around 3% higher than previous rents and on the new lettings, over 8%. And regarding the increase in the equity account investees, as you point out yourself, that's mainly the power plant that we're looking to in Greece. So we decided to become a player in the data center business. Obviously, we pointed out several times now. So we understood that the keyword is power. So if you have access to power, you can actually build data centers much easier and not rely on regulatory or energy constraints. So we also understood that having just one data center doesn't give you just access to big hyperscalers, so you need more and especially bigger sizes. So we found an opportunity to develop a gas-based power plant in Greece without any material initiation costs. And we partnered with a national Greek energy company as a main partner as well as other investors to build and operate this project. So we currently hold a minority stake in the project with an expected CapEx commitment of less than EUR 50 million over the project lifetime. And the power plant is expected to generate 870 megawatts in combination with a potential large-scale data center in the close proximity. So the construction of the power plant is scheduled to start in probably this year with completion target for 2030. And we are already in advanced negotiations to secure the lease for the data center land in the close proximity.

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

Next question comes from Marios Pastou from Bernstein.

I've got two remaining questions from my side. Firstly, can I just clarify with all the acquisitions you're looking at, will they all be via the TAC fund or you're also considering whole acquisitions on your own books? And then secondly, I appreciate the additional slides on the increased ownership plans for Grand City. I appreciate this has also been a recurring question for some time. I suppose really the question is, why is now the right time to take this larger stake? This has been a question for a few years.

Thanks, Marios, for the question. So look, the TAC fund was launched as a leverage-light opportunity for us to buy. And remember, this was also in times when interest rates were much higher, still had an impact on -- a negative impact on the valuation. So for us, it was a good opportunity to take equity and buy properties. So we built up the TAC fund with clear rules. And some of the clear rules are that any certain asset types and locations have to be bought through TAC, unless TAC declines. So it could be that they decline because of IRR expectation, again, location, asset type, whatever, then around or GCP could instead decide to buy. But again, don't look at it necessarily something separate, yes. It's basically -- our equity is also inside, right? So it's institutional equity, our equity, so we're buying it together and we're managing it. I also want to point out, it's very important clearly that there's no cross-buying and selling between TAC and Aroundtown or Grand City. So it's very -- again, one of the very clear rules that we have.

And in terms of your other question relating to the share offer, which we announced this morning. As you know, and I think as we illustrated also in the presentations and elaborate narrative of today, Grand City is a strategic holding for us. And I think over the last couple of years, we put a lot of efforts in terms of managing our balance sheet, brought leverage down and as also communicated in more recent times, we're also open again looking at acquisitions on a accretive basis. And having already a strategic stake in Grand City and thereby very comfortable with its assets, we consider acquisitions, an obvious choice there clearly is also Grand City. But a very attractive FFO yield in which we're potentially able to acquire shares, this from our point of view, also in comparison to the other opportunities we see out there is from our point of view, I would say, a no-brainer in terms of considerations, and that's why we're also considering this at this point.

Look, it's a unique opportunity, obviously, yes. It's -- the share price is trading right now and the FFO yield, you don't get this in the market. Obviously, through our control situation already, we are in the sweet spot to take this opportunity. So the question of like why not before, why not now, like question should be like -- or the answer should be like, finally, we do it. So look, it's an opportunity we're taking here. Let's see, it's a voluntary offer. Let's see what the market sees and how the shareholders accept it. But from an FFO perspective, as we explained before, very accretive because our FFO deducts all the minority in GCP. And on a per share basis, because the offer, the way it's structured is relatively neutral. So on an FFO per share basis, neutral. So the share buyback really helps in that aspect on the per share base to support. And on an overall FFO potential here, let's see how the transaction goes and how much acceptance there will be. But that will definitely support our FFO growth again going forward.

The last question comes from Manuel Martin from ODDO BHF.

Two questions from my side. First question is on the property valuation result for the full year. I'm not sure, but I guess you might have done a full portfolio revaluation process at the end of the year? If yes, maybe you can give us some color why there was almost no valuation gain. That would be the first question, in the second half of the year. The second question regarding your intended offer for Grand City shares. Changing a bit the perspective, what could incentivize Grand City shareholders to tender their shares into Aroundtown shares while having already an exposure to German residential at maybe a good price. So these are the two questions, please.

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

And your second question on the share, why you think Grand City shareholders would accept it. Again, I think we outlined really well in the presentation, but happy to repeat the point basically. So we see the transaction beneficial for both shareholders, and that was important for us when we constructed the transaction that really -- both shareholders really benefit here from a combined stronger company perspective. And from a GCP pure perspective, again, look at it, your -- the free float is relatively low. It's already building a certain hurdle. With our increasing stake, that hurdle will just become bigger and will make more difficult for institutional investors basically to flow in. So accepting the offer gives you actually a bigger company, bigger market cap, bigger liquidity entering indices. Aroundtown, as you know, we just announced the dividend. So all the GCP shareholders who accepted will become eligible for the dividend. On top, we have the share buyback program running. And it's also a diversification in terms of demand drivers. So first, they still have a strong access to a residential portfolio which is like around 1/3 of the portfolio, but also very strong upside drivers, clearly, depending on where the cycle is. But we see where the hotel cycle currently is. Let's ignore the situation that happened this week. But the hospitality industry has been recovering really, really well after the COVID pandemic. And our upside potential is not done because we have obviously much more internal potential, which we can lift through our refurbishment and repositioning measures. converting a lot of assets into hospitality and residential, so the living concept. So potentially increasing also our share to residential. So there's a stronger overlap from the commercial to the residential. So we see it also as a, let's say, beneficial offer besides the clearly the premium over yesterday's share price, also the premium over the -- whatever you look at it 3 months or 6 months, VWAP. So you get a short upside, but also long-term upside in this company. Okay. So since we don't have any further questions. With that, I'd like to thank you all that participated in this call and the questions you raised before and during the call. As you know, you can always reach us by e-mail and by call. We're going to meet you, obviously, in upcoming conferences. And all the best, and goodbye and stay safe.