Baltic Horizon Fund (NHCBHFFT) Earnings Call Transcript & Summary

Good afternoon. This is Tarmo Karotam, Fund Manager of Baltic Horizon Fund, and I'm happy to present Baltic Horizon's last year's interim results, and talk about last year and the challenges that we had and also the view forward, and also an overview of the portfolio as usual. So let's kick this off. I'm planning about 30 to 40 minutes to present. There is a question box where one can also list questions. Hopefully, I'm already able to answer some of them during the presentation. Okay. So notable events for us last year. Overall, it's been a very busy year, and we have continued with our previous engagements. Continued to complete Meraki, the business center in Vilnius next to Domus Pro that we have already started in 2020. And I'm happy to say that the first tower is almost finished, and we have already several tenants signed up that are looking to open their premises also in spring. And currently, we have aimed to complete only the first tower and with the underground parking. I was also able to visit it now a couple of weeks ago, it's a great extension of the Domus Pro complex definitely, and I'm looking forward to open the doors there now in the springtime. Then we have continued to be rated by S&P Global Services and they are -- the rating agency has maintained an MM3 rating for us during the COVID period, some -- one of the stronger and larger real estate groups -- commercial groups in the Baltic states. Last year, the main change also for our portfolio was the review and processing of the property management partners, and we brought on board CBRE Baltics as our new property management and accounting services partner, which we believe will provide us more and Baltic and regional sort of understanding of how to best develop and manage our properties on a daily basis where so far the change was 1st of September, and the takeover has been quite smooth and we're very happy with what we see right now, and we continue to develop our property management module, also data gathering, analysis, and that's definitely one of the priorities for Baltic Horizon going forward. And then I think one of the main key events last year was also selling of the G4S property. I have already commented on this in various occasions before. But for the record, we held this property for more than 5 years. It was the first property we bought after we were listed on stock exchange 2016, July. And when we were reviewing our portfolio then we thought that, that this property could be one that we could sell, because of the return, I think expected to happen next year and this year, the investment that we considered to -- need to be made for this building was quite considerable. And then we had also a direct interest from a local developer -- very, very serious and very continued interest, and then we made our calculations without negotiations and saw that it is best to sell the property free equity for our newer investments. And this is also part of the plan of Baltic Horizon to renew its portfolio, meaning that some of the buildings that we don't consider viable for us long term, we will sell and new acquisitions are also planned of buildings that have much better quality on a long term basis because that's what attracts the tenants. And then, of course, key -- one of the main, let's say, events or topics of last year was, of course, related to our 3 large centrally located shopping centers that were forced to be closed beginning of the year, especially in Riga and Vilnius and to manage all the issues around that to keep good relations with tenants, make plans for the future, and we have progressed quite a bit with that, seeing new sign-ups in Europa and the renewal of the concepts that are happening, but I'll talk about that a bit later. And as well, even though the environment is quite, let's say, uncertain, still overall from my perspective as well, it's quite an interesting period of time when we still have the pandemic as a force affecting everyday life still and some of our properties still. Then you have the geopolitical tensions in the region with Ukraine and Russia, influencing the market. And of course, inflation, cost of energy and potential hikes in interest rates. So these are all what are on our minds and then what we try to manage one way or the other. So I'll be also offering some insight of how and what we are doing to manage these risks. But still, given that we are in an uncertain environment, we are considering a private placement at the right moment this year to continue our growth plans. And this is a quick snapshot of the financial summary. And as one can see, the gross asset value has been affected overall from the portfolio perspective and mainly the changes on valuations have been related to our 2 largest assets, Europa and Galerija Centrs. So as well, our net rental income has been affected by the major lockdowns last year. So we totaled about EUR 17 million of net rental income for the last year, so several million less than what we should have made without any restrictions. So it's clear to say that restrictions and closures, lockdowns have had a direct effect on some of our properties, especially on Galerija and Europa and we'd have to give quite a few rental discounts during this period of time. In Latvia, we were able to also get a support measure of around 440,000 last year and for this first quarter, there is also a second financial sort of incentive that we are aiming to get for the closures that happened last year. All in all, that has affected, of course, as well our net asset value, but what we have seen, and I think this audience knows it already themselves, that the restrictions are being lifted across Europe and finally mentality has set in that we have to live with this virus and manage things better than just locked -- making lockdowns every 3 or 4 months. So for this year, we do expect quite a few million euros of recovery in net rental income, and that's solely because of the fact that, hopefully, our shopping centers are allowed to keep open the doors because that is the most difficult moment when everything is forced to being in the shutdown. Also, our year-end valuations showed somewhat -- some recovery already, which we're quite satisfied about and the reasons for the recovery -- 2 reasons. One is as well as the positive view on rental income in our larger shopping centers. Last year, we had a drop in Galerija and Europa of around 70%, so a major drop and, of course, it was influenced by the closure. But we definitely aim to recover at least half of that now in the coming quarters. The second reason was -- for the valuation gains was actually a very active commercial real estate market that has started to push down yields a bit and also for the office portfolio that we have, so near the city centers that are -- where lease agreements have been renewed, especially in rentals and many, many other buildings that we have. So I would say, I would look at the commercial real estate market quite positively regardless of the events what are happening, because generally, the economies of the Baltics across the pandemic have been doing quite well, and especially our majority of the sectors, apart from tourism and entertainment. But overall, that has increased the average spending capacity of the people, also the retail sales in general. So we do hope to capitalize ourselves now from this trend. And what I foresee is that the footfalls of our shopping centers will recover more slowly than the turnovers, meaning that people are willing to spend more. And as the trend has been that the purchases -- average purchases have increased considerably, and we continue to see this trend as well. But overall, we are quite happy with the results, and we can definitely say that there are positive expectations for the upcoming year in terms of continued active -- continued activity in the commercial real estate sector. Of course, there are certain risks and one question is about the new developments in the office segment and how quickly the supply will increase and/or -- and are some projects being postponed because, in the office segment, the demand is estimated to have definitely recovered, but not being like it was in fact in 2017 and '18, when the demand for new office space was incredible. But going forward, definitely, there will be growth in the office segment. And there's also one, I think, notable news from last year was that in the Baltics, it's usually the commercial real estate transactions are about EUR 1 billion per annum then it -- based on the first calculations by Colliers it seems to be closer to EUR 2 billion. So a lot of transactions in the retail segment, so it's definitely believing in bricks and mortar, also going forward in the retail segment, which is relatively mature in the Baltics. There is investments needed for concept changes, and if investors do that correctly, then retail is a very interesting asset class going forward. And I will talk about that a bit later as well even more. Then overall, we have -- now since the sales of G4S we are looking for new acquisitions. We have one or 2 investments in -- shortlisted, and we have also evaluated the investment need in our own portfolio, especially regarding the Europa shopping center concept change and, of course, Meraki. So -- but regardless of that, we have a strong cash buffer, and I think that's something that one would rather need today than to invest every last penny into any new acquisitions. So I think considering all of the uncertainties still around, we're still relatively careful about maxing out the investments in the portfolio, however, still very actively looking for good opportunities. And once we have also improved visibility in regards to these sort of regional aspects then we will then maneuver accordingly. But we're quite comfortable with the position that we have today and ready to attack when we do actually see a good opportunity out there. Overall, the portfolio valuations over the past 2 years have dropped, but there was -- there was a recovery definitely last year. We're still about still about 6% or 7%, approximately from the previous peak, and hopefully, we'll regain some of that value during this year. And what needs to happen for that is definitely increase in occupancy in our shopping centers and definitely prolongation of the leases that we have and that we have been working on during the pandemic and continue to work with in upcoming years. So we definitely see more opportunity here now than risk. When it comes to the financial debt structure, then we have about EUR 200 million worth of loans and equivalents, so EUR 50 million bond maturing next spring in 2023. And as well since we have made several acquisitions over the years of 2016, '17, '18 and '19, then the 4 to 5-year loans are now becoming renewable and we have been so far quite successful in renewing them. Just one comment about this slide is our strategy, and this is how we aim to -- and have always aimed to manage the interest rate Euribor increase risk is to hedge all of our loans -- well, up to 80%. So 80% of our loans have been and will continue to be hedged in one way or the other. So when you ask about what do I expect in terms of the Euribor increase, then there's definitely more push for it than ever before. It's definitely a balancing act for the European Central Bank and how to manage the increased debt burden as well of the countries. But they've also been quite straightforward that that's something that every country needs to worry about themselves. So their priority is to keep the inflation intact, and that's definitely a worry. It may mean that we will see a positive Euribor already by year-end, but we have to really monitor the situation. And -- but I don't expect an increase of up to 2% or 3% in one or 2 years' time, I think it would be definitely gradual. It's -- the signals that ECB are sending when they are changing their focus is also something which will impact the market. So it's not only about how much they will increase, but that they are potentially considering the increase in Euribor. But then again, nobody knows we will continue to prolong our loan agreements. And so we have already reached an agreement with all of the counterparties for the loan agreements that are maturing in 2022. So already now looking at 2023 when some of the other loans that are coming for renewable, including our bond. And we'll be having as well shortly discussions with our main bondholders. They are -- majority of the bond has been taken up by 2 of the largest Baltic pension funds. So we'll be discussing how there is a way forward to roll over terms and so forth. We do have various options. We may consider as well refinancing some part of that fund even or the entire bond with bank loans, but that all remains to be seen now over the next 3 to 6 months. We'll be working on the renewal of the loan portfolio. But the banking sector seems to be very -- on very strong pillars right now. So what we have achieved also during even the difficult times -- terms for example, prolongation of Galerija Centrs are quite similar to what we have done before. So our priority is to maximize the amount of loans that are bullet loans so that we can keep generating the cash for the fund and for the investors so, so far, we've been very successful in that. Dividends, and this has been a very important topic for us and for the investors. And I think our position today is definitely so that we have started to recover the rates -- of the payout rates and it's the -- at least the uncertainty regarding the pandemic has stabilized, and the expectations are much more positive than a year ago. So the ending of the lockdowns, opening of the centers and travel should definitely positively affect our retail centers. And I see that when we are signing new leases or renewing leases that tenants are ready now to sign. There are 5 new leases coming in Europa. And the list of tenants is also for Galerija. And Postimaja expansion is definitely there, we are in negotiations, trying to maximize the terms for us. And so we have made an uptick now in Q3 already, paying out $0.017 per unit and $0.019. So in Q4, we also recorded, if you look at the generated net cash flow, then we recorded the lockdown impact of Galerija Centrs, so that's why the generated net cash flow is slightly lower than in Q3. We do expect some recovery definitely in this quarter and next and -- hopefully, and that is our best case to continue paying out stable -- stably increasing dividends over the upcoming quarters. Of course, every dividend decision is based on the most recent info and so it's difficult at the moment to forecast what the dividend will be for this year. But I think based on the third and fourth quarter, one can see the trend. Then just diving in a bit into the portfolio since we sold the G4S property, then Estonia allocation today is the lowest. Lithuania's allocation is the largest. Our focus for new acquisitions today is definitely Estonia and Lithuania. I would say in Latvia we're currently satisfied with the portfolio that we have. But yes, in Vilnius and Tallinn, predominantly, that's where our focus is. In regards to the top 10 tenant list, yes, G4S is not there anymore, but the rest of the tenants have remained virtually the same. If you look at these tenants, then the one that has slightly decreased their premises during the pandemic is Lithuania Tax Inspectorate giving back -- using the right to give back about 1,000 square meters of office space. We have already found a tenant for half of that. That has been leased out and -- now in January, and the other half, we are fitting for short term smaller tenants that we do also see much more demand in the office segment for shorter term premises. And -- but slightly higher average square meter price. So that's also a new trend, I think. And I also believe that coworking spaces will benefit now quite a lot from the, let's say, uncertainties or the more flexible needs of tenants going forward. So it is not that we are planning to move into that space as an operator, but definitely for some of our office buildings, we'll be looking for a coworking tenant in the future. And also some of the vacancies we plan to convert ourselves for -- sort of not full-service coworking space, but coworking space. And that's -- these plans are not only in our office buildings, but we are considering that also in our shopping centers when upgrading the concepts. So overall, portfolio occupancy has remained quite stable at around 90%-92%, and especially office buildings and if -- just to go over some of these properties. And in Duetto we were very successful in prolonging now the leases. And 2017 the property was built also then there were 5-year leases. 2022 is when many of them became renewable and many of them have been renewed already. In Duetto II the same. And then in Domus Pro, which is a complex currently of small office building and retail part, then the only changes that have been there are in the shopping center area, some of the satellites -- small satellites closed down, so we have some 1% or 2% vacancy there. We're looking for a larger tenant now for these premises in the Domus Pro shopping center. In office property, one tenant moved out to larger premises, but we had Narbutas take the vacancy. So they moved into the vacancies, so the office part is also now close to 100% leased out. In North Star, that's what I mentioned the tax agency reduced their space by 1,000 square meters, which now has been partly already filled, and we continue with the completion of Meraki office tower. For Europa, we are -- the concept change we started, well, there is a separate slide for that later on. In Upmalas Biroji, it's an office building in Riga we have a major tenant SEB and some of the other ones, BOSCH and Johnson & Johnson. SEB has decided after a long process to move out to a new property to where they actually need even more space. So Upmalas Biroji was a bit too small for them. At the end of the day, they will be moving out next year '23 second -- beginning of the second half, so after summer. So we have started now the search for new tenant in Upmalas. Vainodes property, no changes there. Actually, Latvijas valsts mezi, the state forestry company they had subtenant, a pharmaceutical company, but that tenant moved out so they took over the premises. So they are now 100% tenant in the property. And in LNK Centre, the situation is also unchanged. We have 2 major tenants, the LNK Industries, the major construction company, and American -- the IT company. And Sky Shopping Centre is a property that has performed very well during the pandemic and we have been in discussions in potential exit of this property. Our expectations are quite high. So this discussion continues. But we do see that on short to medium term, when we get the right price, then we are willing to sell the small supermarket that we have in Riga. And Galerija Centrs, our largest asset in the center of Riga, which has now been also opened for business, and they had -- there was a lockdown in October for a month, but -- we start to see more and more people coming also to the city center and old town. But of course, the recovery at the moment during this weather is relatively slow, but we are using this time as well to reconstruct the fourth floor to a foothold and do the similar thing that we have done in Europa quite successfully. So we aim to complete the conversion of the fourth floor by September. So ready for -- ready after the summer holidays and that's something that Riga city center hasn't seen before. We have interested food operators. So I think it was an 8% or even 9%. So quite happy about that to see tenant interest as well into the newly created premises. And in Tallinn, we currently have 4 properties. And so when you ask about Postimaja and Coca-Cola Plaza, then the preparation is continuing, so we haven't stopped that process. But the turmoil in the construction pricing and overall tenant interest, we try to -- we really want to maximize the potential here and not sign any -- not beneficial lease agreements for us. So we are currently in a difficult, let's say, moment still that the construction prices are still fluctuating. But the very positive is that we are negotiating with all top tenants, including the cinema, new lease agreements for 5 and with cinema even for 10 years. So we definitely believe in the long term potential here. In Lincona, we have made no changes. There was some small occupancy on the ground floor, which is a cafeteria space. But we -- I think just last week, we found a tenant there, so they will be moving, in taking up the vacancy. So in the next month or 2. If you know Lincona then the ground floor is full of tenants that are in the business of interior design or interior sort of appliances. So it will be another interior design shop coming to the building. And in Pirita Center, it's been -- the trend has been positive for the turnovers and visitors, so we are also now discussing with MyFitness some of the upgrades for the second floor for their premises. They really want to upgrade their premises to now attract in the post-pandemic world their customer base. And regardless of what news are out there, I can confirm that people are coming back to the cinemas, and people are coming back to the sports facilities. And of course, nobody can wait for the restrictions also to end in Estonia. So Europa and Vilnius. So on the left, you can see already the ready -- the opening -- the pictures of the open food hall. And what we understand from customer feedback, it's been very positively welcomed. This area, if some of the older investors remember, used to be a Vapiano. They were taking up to, I think, close to 1,000 square meters, so very large space. And what we see also from the quality offering, but also from the -- from the revenue potential that these 1,000 square meters is now much better used. There are 10 outlets. I think there's one still to be opened, but the top -- the most popular ones are, of course, the burger and the pizza joint and then sushi bar. So it has a very -- it has had a good start. It was opened end of January. And on the right, there are still visualizations of the center of the other areas. So on top is the Konstitucijos Boulevard and how to make that also more pedestrian-friendly, entice people to the shopping center. And below is the amphitheater. On the other side of the shopping center that should and would address the growing need of flexible working space or a flexible gathering of people, spending more time and meeting up. So we would definitely want to create Europa a good meeting point, and that's why our foothold is also called Dialogai, so a dialogue. So that's the concept of Europa going to the future. So it will still take a few months to fully get refurbished, also the other areas, the amphitheater and some of the escalators will be changed, so we want to be fully ready by late spring. And hopefully, then we'll also be able to have an official opening. Currently there are still restrictions for that. So very much looking forward to the spring. And I guess that has brought me to the end. So that -- it is a summary of what I've been talking about. That our focus is definitely on our centrally located shopping and service centers, so Europa in the middle of -- in the heart of Vilnius where skyscrapers are still being built. There is a lot of residential being built in the area. So definitely an increase in people, in the area as direct customers for Europa. And also for Galerija Centrs foothold, the fourth floor, we've seen the success of the Europa's foothold. Food is the new fashion. We want to copy that also in Galerija Centrs to be a new destination point for not only for the people living in the city center and working there, but also for tourists. And of course, preparation of the Postimaja reconstruction project. And we probably will take the step-by-step, so Europa first, then Galerija and then Postimaja as a larger project end of this year or early next year. Then, as I mentioned, we do have cash for our new acquisition and looking for a good opportunity would really suit our portfolio, a good quality project. And then, of course, focusing on sustainability issues, which means that with our ESG officer [ GRESB ], we are mapping the data that we currently have. But there's a lot of data on our centers. We have already upgraded the processes, introduced the green lease clauses and also invested into solar panels in properties that have been able to sustain them, and definitely, this plan continues. Our longer-term target is to become Net-Zero emissions. So we aim to achieve that by '28 or '30, the latest. So the plan for that is in development, and we are making very heavy calculations how to achieve that. Then absolutely with CBRE, now first thing that we want to get done is get our vacancies filled again. And there's definitely positive momentum there. And I think you will see that after the Q1 results are out, and hopefully, restrictions will be history, the society has to manage the process -- the virus and everything that is related to it in a different way. So considering still some of our disposals like Sky, maybe one property more, we are analyzing that. And last but not least, the new website is coming where we want to make it more dynamic, and we have seen the feedback of some of the investors that we need a more dynamic website that has more regular communication on even the smaller things that we are doing. So as of also last spring, we have a new Chief Marketing Officer on board, Charlotte from Denmark. And together with our small marketing team we're -- and communication team we're giving our best to match the info expectations of the investors. And then last but not least, if one looks at the stock exchange, then our unit price has not yet recovered and I believe it is because of the uncertainties of all around the lockdowns and -- but it is also interesting to see that our fund is one of the most traded securities in the Baltic stock exchanges, with a total turnover of more than -- or close to EUR 30 million last year, and that has increased every year since we got listed back in 2017, where -- or '16 when -- and in '17, you can see that the turnover was around EUR 8.7 million. So definitely, lots of trading happening on the stock exchange. And I do hope that with understanding of our plans and the recovery of our shopping center NOIs, the investors will see the potential, and that's definitely, in my opinion, going to happen some recovery this year already.

So let me see if I have any questions. Okay, quite a few. The question on the NAV and when compared to another real estate fund, EfTEN's III fund, which is listed in Tallinn as well that how come their NAV has risen more. I think the answer there could be that their valuations -- they haven't had major drops in valuations because of their assets, even in secondary cities and it's been more stable. The other thing is that, we have paid out quite a bit of our net cash flow, which is also increasing the NAV during the pandemic and if you compare the payout ratios, then I think even during the pandemic, we paid out an attractive dividend, that also decreases the NAV. So we are -- we want to -- let's say, we want to rather pay out more dividends than less dividends also going forward into the future. The question on Galerija Centrs loan terms. What I can say is that actually, the margin was the same when we prolonged it, but there were certain other conditions that we had to renegotiate with the bank, and that was related to certain guarantees and other things. So I would say, overall, quite similar terms we would like to prolong. So the question on the developments happening in Tallinn and Porto Franco. The Laeva port is -- there's a lot of commercial real estate being developed. And I think I think definitely that would enliven the city and provide new office space and commercial space. So the question is that would it attract any of work tenants to these areas. Then I would say that, if you look at the asset base that we have currently in Tallinn, then I think if you look at Pirita shopping center, so they are definitely very specific tenants that want to be there. And like we have a wine shop, a pizza place, post office, gym, so I don't think that's any direct competition there. If you look at the Postimaja tenant base and Coca-Cola Plaza, then the location of Postimaja is still very, very central and the busiest intersection in Tallinn. I don't see that going anywhere. I think whatever is happening in the area and in the Rotermann, when new office building was finished, there's another 400, 500 employees that need food and services in the area. So I think the Porto Franco is definitely a complement to Postimaja and the cinema. So making the city center more attractive place to come to, not only for tourists, but people around. So -- and when it comes to our Lincona office building, then there are certain type of tenants there that have a good lease agreement with us at quite favorable terms. And if I look at these new developments, there's no reason really to develop unless you will ask at least EUR 14 or EUR 15 per square meter for the office space as rent. So I think it's a different segment of tenants. But overall, it is good to monitor the demand of the office tenants in Tallinn, and I would say it's not absolutely robust, but definitely the IT sector, info technology companies are growing and they need space, and I do hope that also with the help of the government they are not moving their headquarters anywhere else, because they definitely will give good demand for the commercial real estate segment and the office segment, in particular. So I would say there's new developments. They are being finished in the next 2 to 4 years, they will definitely have some impact on the market, but I think a positive impact. There's more space for companies to grow into. And the biggest challenge there is in Riga has been for a long time is that there's no -- there hasn't been no new office space being offered and tenants have looked -- companies have looked for a lot of solutions. And now in Riga the office -- new office space is almost 50% of what it is in Vilnius. So definitely, it's a chicken and a egg question, but I believe that the strong developers might Kapital as they complete their projects that's definitely going to be good for Tallinn commercial real estate segment in general. The question on the private placement. So we are working on the private placement, and we will see when we can execute. Today when speaking also to regional investors, then it's a bit of a standstill due to the uncertainties in the geopolitical world, and it has definitely affected the view on some of the investors on the Baltic states. So we'll continue to work with our current investors and new investors. As well our cash position is quite good right now. So if we really do see the need for additional capital in a larger amount then we'll continue to push this forward. So it's difficult to give you any kind of specific dates, but probably in the next one or 2 weeks. The question of what else can we do in our portfolio or can we do something in Pirita center? We do have a plan actually to build the -- there are large terraces there on both sides of the property to include them in the space of MyFitness. So we'll see how that goes, but we're definitely looking for various options how to add value. Towards the end of last year, I started with a team -- a project to see what else can we do in Lincona. There's one part of the property, the 4-floor building, which is quite an old part. And in the area, there is quite a lot of new buildings coming that -- and that were already been built, which are 8, 10, 16 floors, so to see if there's any potential to rebuild that old part in Lincona. So we're always looking for ways how to create value. But I think the main focus is currently on our centrally located shopping centers. They are also the largest assets, so the potentially the largest value drivers. So in regards to new acquisitions, once more, we are not rushing it. So we're definitely looking for the right asset for us and we're looking for a brand-new office building, either in Tallinn or Vilnius, or a well locate new logistics assets. So that's our priority. Right now, we are in discussions with one specifically property and I expect that if everything goes well, then we should be able to have a new asset in our portfolio after this summer. And Europa reconstruction, the new brand concept will be opened in spring -- late spring. April or May, we'll have to see how to time it. So there's a question on Meraki office building. So we have one tower where we have about 7,000 square meters of leasable area. We have secured there already a clinic on the ground floor and iLunch as a lunch operator. Actually, iLunch is likely to -- it's a new concept. In Vilnius it works very well. They are also replacing, hopefully, the cafeteria in the Duetto office building. So -- and I cannot say more, but we're in discussions with 2 other tenants for larger premises. And now that one can visit the property and all the floors then we expect the leasing to definitely speed up in the next quarter. There's a question on forecast on the NAV of the fund by end of this year and by end of 2023. We have discussed this internally, of course, made various budgets and plans. I think to maybe give a higher view on this is that our primary goal is to regain the values that we have lost during the past 2 years, and that's related mainly to the centrally located shopping centers. So the plan is to -- so if the NAV was EUR 150-some million before COVID, then that's what we want to achieve by 2023. And half of that difference we want to achieve already by end of this year. So that's the answer here. We want to recover 50% of the lost value and the NOI by end of this year and the remaining by the end of next year. There's a question on headwinds and tailwinds. So hopefully, I did already mention some of them. And I think if you talk about -- we talked about the headwinds, the issues that are still there -- geopolitical issues, Euribor increasing and the pandemic still with its ending restrictions. Then I think tailwind, I definitely see quite a bit of potential in our office portfolio. It is located near the city centers and I think, eventually -- and at quite competitive rental levels. So eventually, we have to keep the properties in good shape, maintain them well. Sell maybe one or if we feel that we -- it needs too much investment. But the good quality property near the city center, I think, has potential both in long term rental growth if it's maintained well, but also some drop in cap rates. Because the top yields, as usual, first start to drop in the city centers, but then if properties are deemed too expensive, investors start to look a little bit around from the CBD areas. So something definitely. So if you ask me what's the future for Baltic Horizon in 1 or 2 sentences is -- then it's focus on our city center assets, extract maximum value out of them, make required investments for that and then definitely keep a good portfolio of new well-located office buildings in or near the city centers. And we have today 8 office buildings, we definitely want to grow that. People are, let's say, slowly coming back to the city centers. The question is that when are the people coming back to the city centers. And I think it's been talked about for a long time now that people -- some people, the home office has worked well. But for majority of the people with families and all the rest, they want to still -- they prefer to have the private and professional life separated. Plus, of course, companies are very much expecting people to come back to the offices to cultivate corporate -- good corporate culture, good coworking, good teamwork so all the rest of it. However, yes, there will be more flexible working in the future. So if you ask me, when are people back, I think given that the restrictions are now history, then I think by -- after summer holidays, I would expect the same amount of -- almost the same amount of people in the city centers that were there before that. If you've been to Stockholm lately, then you see how -- I was there during December, not even during Christmas sales time and it was still -- it was like a big party. Restaurants were full, shopping was happening, people were in the offices. So I think it's a good sort of model to sort of deduce our future as work from. And now the final question is on the buyback. Are we considering buyback of fund units? Then actually the answer there is, we're definitely considering that. And -- but in order for this program to put in place there has to be certain processes. I'm not saying that this is something we will for sure do, but we are definitely monitoring the unit price, which I personally believe is well below the NAV and the potential of the fund, so -- on a long-term basis. So it may be the reason. We may reason that. But I think if we decide to do that, it's one of the tools in our toolbox to create value for the investors. So if we decide to do that then there will be a stock exchange announcement with all the details with it. So -- but yes, definitely something that we have talked about. Okay. Well, thank you very much for the questions. It's been a good hour. So yes, we're continuing with our plans as discussed. Any further questions, I'm always happy to consider them and answer over e-mail, I prefer that very much. So if there's a lot of forums out there, we cannot monitor all of them. But direct questions would be very good, if something still remain unclear. So once again, thank you again, and let's be in touch.