Cibus Nordic Real Estate AB (publ) (CIBUS) Earnings Call Transcript & Summary

Welcome to the Cibus Q1 2025 Report Presentation. [Operator Instructions] Now, I will hand the conference over to CEO, Christian Fredrixon; and CFO, Pia-Lena Olofsson. Please go ahead.

Good morning. Good morning, everybody, and welcome to our webcast for our quarter 1 2025 results. Christian Fredrixon speaking here, and joined as always by Pia-Lena Olofsson, CFO. So, welcome everybody and thank you for joining. Let's jump to the next slide, please. So my favorite slide, you will recognize this, converting food into yield. This is still what we do and are planning to continue to do. We are now doing it, though, on a pan-European basis. As you will see, what's the biggest news in this quarterly report is, of course, that we now have -- we are now reporting with the 2 acquisitions made earlier this year in Benelux, the Forum Estates acquisition, and the Danish portfolio of 9 assets, which we closed also earlier this year. And those figures are included about 2 or 3 months of this quarter. So Cibus converting food into yield. Most of you will recognize what we're saying here. But what we do is we're a real estate company focused purely on daily goods properties. We're the only listed vehicle in the Nordics to do exactly this, a couple of European peers and other stock exchanges in the U.K. and some in Germany. But we're the only ones listed in the Nordic. We've been listed since 2018. We've been paying monthly dividends to our shareholders for this is the fifth consecutive year we've done that. And we've grown from a Finnish supermarket portfolio into the pan-European grocery real estate player that we are now. Our market cap in mid-April was about EUR 1.1 billion. And our aim is to create these stable cash flows, which I'm going to talk about a bit later and also increase earnings capacity per share, which is our key metric, which we follow internally very, very closely. So our properties in the Q1 2025. For those of you that have followed the pro forma, which we have talked about before, latest in our Q4 results, you will recognize many of these numbers. A point to make there is that, the Forum Estates integration is going very, very well. I think we're very happy to see, of course, both that the integration is working well, and also that the figures are in line with what we said in the pro forma. So you'll recognize most of these slides. We have now 640 properties, a property value of about EUR 2.4 billion, and an earnings capacity of EUR 156.3 million, and 1.3 million square meters. And if you look at our tenant share of NOI, you will see that, we have a very well-diversified portfolio when it comes also to our NOI and counterparty risks. You will see now that, some of the household names from Europe, other parts of the Nordics have increased. And just summarizing some of the figures you will recognize before, 81% of our rental income is from noncyclical daily goods tenants, which is a high and good number. 95% of our properties are anchored by daily goods tenants and our average property size is 2,100 square meters, which is more or less a supermarket. We have a supermarket portfolio more or less in all of our countries. 99% of our rental agreements are index-linked, which is very important when it comes to growing organically just by itself. So we tend to follow what happens in the CPI-linked agreements. That's how we grow some of our NOI. Our WAULT, I know Pia-Lena will talk a bit more about this later. But in Belgium, there's a statutory right for retail tenants to give every 3 years to give notice to leave the building. That gives us the opportunity now to present the WAULT in 2 ways. What we call the WAULT, which is 5.8 years, which is the long contract in Belgium, what's actually in the lease. And then a worst-case scenario is the WAULT B, where every single Belgium tenant would give their 3 years' notice when they can. So the truth is somewhere in between. The underlying portfolio, the Nordic portfolio has had a WAULT of about 5 years since the company's inception and is stable around that figure. And 90% of our leases are net to triple net, which shelters us from property increases from the tenants and or on the properties. And this is a win-win situation for us and the tenant because for the tenants, these stores are a very important part of their operational infrastructure. They want to be able to manage the stores and the sites in the way that they seem fit. So the customers and deliveries can get in and out in an easy way, but they don't necessarily have to own the assets. So we're happy to own the assets with these net and triple net leases. And creating stable cash flows also comes from a large hedging ratio. 97% of our debt is interest hedged, and we've been working throughout the quarter to extend that. And so the end of the quarter, it's 2.7 years, our interest hedge maturity. And when it comes to the actual quarterly figures, a very strong quarter, we're happy to report today. As you see, rental income is up 28% year-on-year. And please remember, this is only including the new acquisitions for 2 of 3 months of the first quarter. Net operating income up 30% year-on-year. And then, the profits from property management amounted to EUR 38 million, up from EUR 12.2 million. Worth noting, of course, there's a very big other income post in here, which is a EUR 20.5 million negative goodwill post. And this arisen from the acquisition of the Forum Estates portfolio, where it was carried out at a discount. When it comes to earnings per tax, EUR 31 million and when it comes to the unrealized changes in value, which is minus EUR 7.3 million in the quarter. Unrealized changes in values. So when it comes to the value changes in this quarter, values were up in all of our countries apart from Finland. So in 6 countries, they were up, and we're happy to see that, it's stable yields and increasing slightly in those 6 markets. What we see in Finland is also stable yields and stable property market. What we see here is that, there's 2 properties where our tenant, Kesko has given notice that they sooner or later will leave. And this is really nothing out of the ordinary. This is normal course of our business. The tenant -- some tenants come and some tenants go. In this case, there was a hit on value in Finland for these 2 assets. But I think it's -- partly, it's normal course of business. And then, I think we've already shown, as we've demonstrated and mentioned in press release from last week and also in the report that we have active plans on how to manage these types of assets. In Finland, when the Kesko left one of building in Helsinki, we have now, during the quarter, sold it to another grocery chain, who will open their own store in that building. So I think, there's alternative use for our assets, and I think we've proven that. So that's how we deal with these types of assets. Our EPRA NRV is almost EUR 1 billion and EUR 12.6 per share. So this is our growth time line, a bit of a hockey stick at the end, of course, as seen with these large portfolios. And a comment worth making here is that, we look across all of our 7 markets, geographical markets, and also in the rest of Europe to see where we can get the best yield spread and the best return for our shareholders. That means that, we grow only when we see cash earnings per share accretive transactions. Growth in itself is not a target we have, but we see the opportunities to grow right now. We are the only listed real estate company owning retail assets listed in Europe that are trading at a premium. And that, of course, gives us opportunities to grow. Earnings capacity per share, as mentioned, this is the key metric for us, and happy to see, this has now grown for the seventh consecutive quarter. And the pro forma figure of EUR 1.04 is what we hit dead on target now here in our Q1 earnings capacity, and that's 8% up year-on-year. And as mentioned, this grows through top line indexation growth, 99% index-linked leases. We have lower margins both on banks and bonds, and then there's large acquisitions which we've carried out. So as a point here on the key takeaways from 2025, improved results, NOI up 30%, as I mentioned, profits from property management up to EUR 38 million including the negative goodwill. EPRA NRV per share up 8% and earnings capacity up 8% quarter-on-quarter, I should say, and then increased earnings capacity per share, 8% year-on-year. Integration is going very well and delivering according to plan for our Forum Estates acquisition. In 2025, I'm happy to say that, we've also already announced some transactions. We've made some accretive acquisitions in daily goods assets in both Belgium and in Finland. Very happy to see that we are working and cooperating so well with our new Belgium colleagues, which have also allowed us to sell a number of nonstrategic assets in a couple of our markets. In Belgium, we've sold a number of DIY assets, which is not really converting food into yield. During the quarter, we've also been busy with refinancing of bank loans. As announced last week, we carried out a refinancing of about 19% of our total bank loans with more than 50 basis points lower margins. And then we carried out the bond earlier this year in January at a 250 basis point spread. And that's moved the average credit margin of all debt with -- now in Q1 from 2.9% to 2.3%. Hedging, as mentioned, we've extended this to 2.7 years at attractive levels. We carried out a spread, or a new hedging here in April when markets were really, really choppy and volatile and managed to get that at 1.7% -- 1.97%, which was a great achievement at the time. Now, we'll see where interest rates are going. I mean, it's anyone's guess what's going to be the strongest here of the factors are driving inflation with what's happening in the U.S. and with what's happening with European defense spending, et cetera, or is -- will central banks cut interest rates because of recession risks and the recession we're seeing. So the way we handle that is we prefer to be very -- have a large part of our debt hedged -- interest rate hedged and extending maturities on those to make sure that we can continue to deliver stable cash flows. And as point 7 here on the macro and geopolitics, I think it's worth saying that, we're very happy and pleased that we're in the daily goods sector. It's a noncyclical and resilient sector. Not much food is imported from the U.S. into the EU. So won't be one of the most hard hit sectors from any of this continued tariff and trade wars. And also, people need to buy and eat food irrespective of if it's a pandemic or if it's high inflation or if it's trade wars. So happy to be in this sector, stable cash flows and stable tenants with stable margins when it comes to the large grocery chains. And then looking forward, we are happy that we have been given a 20% new mandate for the Board to raise new equity. So happy that our owners have supported us there at the AGM, which is a tool we can use, and if we see the right accretive acquisition opportunities. And short on the transactions we have announced in 2025. In Q1, we bought a grocery store in Beringen. It's a Jumbo store. Jumbo is a Dutch retail chain, which is prevalent in Belgium. As mentioned, it's an 18-year lease, but then there's, of course, these 3-year breaks. And the way that the Belgium system works -- Belgium lease system works when tenants have this 3-year break option is that the properties are let out more or less as shell and core, which means that the tenants often invest between EUR 2,000 and EUR 2,500 per square meter. So when tenants are that heavily invested, they're not likely to leave within short notice. They're invested heavily and they invest themselves long term into the buildings. And we acquired also a store in Finland, a newly built or it's a store under construction with an 18-year lease with a major grocery chain in the town of Espoo in the middle of Finland. So we made acquisitions for EUR 9.3 million, which are -- have been announced. Only one of those was in Q1. The Espoo store is in Q2. And then when it comes to the divestments, I'm happy that we are regenerating some of our internal capital as well. We've sold these DIY stores in Belgium, as mentioned, led to the DIY chain GAMMA for EUR 10.2 million. But we've also sold these grocery stores in Helsinki, which I mentioned. One is a store which Kesko is leaving. And then immediately, we sold that at a significantly higher value than book value. We sold that to another grocery chain who wants to open a store and move in. And I think that's exactly what we see, and I talked about before, when it comes to grocery that more or less, all of the major chains across Europe want to grow. In Lidl in Sweden, for example, they want to open 100 stores as soon as they can. ICA is opening 10, 15, 20 new ICA Maxis, which is their hypermarket. So there's a lot of pressure when it comes to opening new stores and wanting more space. And I think this -- if you compare this to other sectors where there's a bit of questions on what's occupancy rates and what's the demand going forward, when it comes to grocery, demand is very strong for these locations or for the store type. In Q2, we also sold a former coop store in Eslov, Sweden, where we chose to sell it to the municipality, so they can continue to do an urban development of that site. So that's another example of the alternative use for our properties. So we manage -- the takeaway in conclusion here is in all these countries, we managed to sell properties at above book values. And then over to -- oh, yes. Thank you. Thank you. Yes, just a quick point on the One+ joint venture, which you'll find in our report as well. This is a very interesting new source of growth for Cibus. This is something that Forum Estates had set up with this developer -- with the developer TS33. What this joint venture is we own about 31%. It's about 5 retail properties there. And what TS33 does is it builds newly built retail assets or grocery assets. And when the grocery assets are completed, this joint venture has the right of first refusal to purchase these new grocery stores. And One+ has a strong pipeline of these supermarket opportunities, and it is a potential additional source of growth. And it's well governed, and we can say no to -- yes and no to things, which is great. Now, over to you, Pia-Lena.

Thank you. So looking at the net operating income, it was EUR 36.6 million for the first quarter. Administration costs now include the office in Ghent, with 12 employees from Forum Estates. We have a nonrecurring income item of plus EUR 20.5 million, which comprises of the negative goodwill, which arose in connection with acquisition of Forum Estates, since the acquisition was made at a discount to the net assets. Net financial items includes an exchange rate change of minus EUR 0.9 million, mainly due to the stronger SEK. Profit from property management, excluding nonrecurring items and exchange rate differences was EUR 18.4 million. We sold 2 properties in Finland, which gave a realized change in investment properties of plus EUR 2.4 million. We had somewhat increased underlying property value in all countries, except Finland, as Christian mentioned, where we had a negative unrealized changes mainly due to 2 properties where Kesko had announced notice of future termination. Earnings for the quarter was EUR 31 million, or EUR 0.42 per share. Earnings capacity, the first -- the earnings capacity of the 1st of April 2025 shows a net operating income of EUR 156.3 million, which is an increase of 37% since the 1st of April 2024. Profit from property management minus the expense for the hybrid bond and adding back noncash items amounted to EUR 79.2 million or EUR 1.4 per share, which is an increase of 8% since the 1st of April 2024. And after the period, as we announced the 17th of April, we announced the outcome of the refinancing of bank loans of EUR 232.5 million at reduced credit margins by more than 0.5 percentage points. Since the earnings capacity is a snapshot, the 1st of April, the lower financing costs are not included in the earnings capacity. Looking at the net operating income, the effect of changes in occupancy was fairly unchanged since Q4 at minus 2%. Indexation increased NOI with plus 1.9%. And as you can see, it is the acquisition that is mainly driving growth. Cibus segment is countries, and we now have 7 countries. Belgium, Netherlands and the Luxembourg is part of the group since the 27th of January this year. So their part of the NOI will be higher in the second quarter. Our property value, Finland has 47%; Denmark, 17%; and Belgium is the third largest with 16%. Looking at the balance sheet at the end of the first quarter, property value was EUR 2.4 billion, secured debt of EUR 1.2 billion, giving a loan-to-value on secured debt of 50.6%. Unsecured bonds was EUR 245 million, giving a net loan-to-value of 58.7%. Net asset value, EPRA NRV was EUR 965 million or EUR 12.6 per share, which is an increase of 8% since the last quarter. The weighted average remaining lease time is shown in the graph on the top, both without Belgian termination rights, which then is a WAULT of 5.8 years or with Belgian termination rights, which then is 4.2 years. In Belgium, as Christian said, the tenants of retail properties have the right to terminate the lease every third year. And to minimize that risk, this is usually offset by that the tenants invest significantly in the premises and thus want to stay. Looking at funding, as you can see, bank financing is still the largest part of Cibus' external funding with 81%. And as we said, we have done refinancing after the period at much lower margins. We have senior unsecured bonds that is 16% of our financing. And the 10th of January this year, we did a new bond of EUR 50 million, which was issued with a 4-year tenure at a margin of 250 basis points over Euribor. For Cibus, stable cash flows is very important, and Cibus continue to have a high degree of hedging with 97% of our loans hedged. Based on the earnings capacity and taking all the interest rate hedging in consideration, an increase of the market interest rate with 1 percentage point would affect profit with minus EUR 1.5 million annually, and a decrease of 1 percentage point of market rates would affect profit with plus EUR 2.7 million. And why an interest rate reduction has a greater impact is due to that we have interest rate caps, which is about 42% of the hedging on loans. Looking at the key metrics, net LTV was 58.7%. And since the funds raised through the directed share issue has been deployed, it's slightly higher than before and also that we have the new bond. The covenant in the MTM program is 70% net LTV. So good headroom to that. Interest rate coverage ratio was 2.3x and also well above the covenant of 1.5x. The net debt to EBITDA increased in the quarter due to -- we've done the acquisitions which has increased the debt, while the EBITDA is built over time. And if you use the earnings capacity, the forward-looking net debt to EBITDA is 10x. Cibus generates stable cash flow, so we can pay out the dividend to our shareholders on a monthly basis. This year, we have a 5-year anniversary of paying out monthly dividend. At the AGM, they decided on an unchanged dividend of EUR 0.90 per share paid out in 12 installments. And the dividend yield on the share price at the end of the quarter was 6.9%. Looking at the share price performance, the share price at the end of the quarter was SEK 148.05 per share. And Cibus is a very liquid share with more than twice the average than other real estate companies with a market cap of SEK 10 billion at Nasdaq Stockholm. I'm not having easy with the computer and jumping. So just a good snapshot of our shareholders, which we are very proud of, and they've been with us for a very long time. And we're also happy that we have 55,000 shareholders. Over to you, Christian.

Thank you. So speaking a bit about the future, let's jump and talk about our common future on this globe, ESG. What we try and do is we want to provide sustainable marketplaces. And ESG is an important factor for real estate. I mean, real estate in general is one of the -- and heating of real estate is an important contributor to global greenhouse gases, of course. Cibus has a path to climate neutrality 2030 to be climate neutral. We have reported in our annual report for 2024, we voluntarily reported under the CSRD reporting directive. And among other things, we can show there that 49% of our assets are taxonomy aligned, which is up from 31%. And this is, by the way, at the end of the year. These are figures from the Q4 figures. What interesting as well is that we have 79% -- almost 80% of our tenants have their own SBTi goals, which is what we've been talking about before is that our tenants are consumer-facing companies, grocery tenants with large aspirations within ESG themselves, and that feels great. But of course, returns are the most important thing for us. And let's not forget that. But if we can do some good along the way, that's great. When it comes to the financing, we, of course, have our green and sustainable financing framework in place. But I think what's worth listing here as well is the S in ESG. These assets and the supermarkets and supermarket chains, they are a part of social infrastructure in our societies, an important part of this resilient society is feeding a population. People need to eat in pandemics and people in times of crisis. And as I wrote in the CEO comments, I think a perfect example of this is what we see in Finland, where the Finnish government and the grocery chains have launched an initiative to make 300 grocery stores across the country into self-sufficient distribution points for grocery, even if there's no electricity. So the government and the chains are cooperating in making sure that these sites and these stores continue to operate, even if there's power shortage, even if it's times of crisis, and a place where you can meet, get information and also charge your mobile phones, et cetera. So a very interesting initiative there in Finland, which kind of I think, proves the point that this is an important part of infrastructure. Also, mental health, a place to meet for many people, the supermarket is the place to meet if you live alone, slow cashiering we've talked about before. And important for us and what we can add to this is to see what we can do to create safe and accessible marketplaces for everybody. And then when it comes to what we're looking at moving forward, I think, these are the main 6 areas. We want to continue to grow our earnings capacity per share in all parts of the business, and we grow the earnings capacity, as you've seen, both through acquisitions and through organic growth through indexation and cost control, et cetera. So it's all about creating that earnings capacity per share. Continue to work with and further integrate our platform for growth in the Benelux, the Forum Estates platform. We will continue to work with balance sheet optimization, refinancing and hedging, very important, of course, now with what we're seeing of the turmoil and volatility in the financial markets. We want to continue to create these stable cash flows and deliver to our shareholders. We want to look at cash earnings per share accretive transactions. We see interesting opportunities in our 7 existing markets, and we're actively evaluating other opportunities and other markets in Europe. I'm proud of the team, working very hard. We're a small team. We used to be 12 people. We are now 24 with the Benelux team, a small but diligent and forward-leaning team, which are very proud of what we're doing. And I'm very happy to see that we've carried out these transactions earlier this year with our Benelux team and the strong Nordic teams continue to deliver as well. And lastly, but definitely not least, we are committed to deliver shareholder value by continuing to convert food into yield. That's just a commercial break, that's right. So let's move to the Q&A.

[Operator Instructions] The next question comes from Oscar Lindquist from ABG Sundal Collier.

A couple of questions from me. If we start on the transactions announced last week, are there any more sort of noncore assets that you would like to divest from the former State portfolio?

Yes, there are a number of assets. They had slightly less grocery converting food into yield assets than we do, we as in Cibus Nordic. So yes, there are a couple of more assets we're looking into how we should treat them going forward. But I mean, they're strong cash flowing assets and with strong tenants, just not kind of nonstrategic for us as we like to convert food into yield, but there's nothing wrong with them, and they are cash flow producing. So the price needs to be right for us.

And could you give any indication of the volume here?

No, not really. We'll -- you'll hear about it when and when it happens -- then and when it happens.

Yes, yes. Sure, sure. And also on the transactions that you announced, could you give sort of net impact on rental income?

We're not giving...

On the divestments and the acquisitions?

No, we're not giving that figure. But so far, they're minor acquisitions, of course, 2 acquisitions of 2 stores. So quite a small impact so far from acquisitions this year.

Okay. And I am correct in assuming that these transactions are not reflected in the earnings capacity, right?

Yes. The Jumbo asset in Beringen is because we closed that in -- during Q1 and the earnings capacity is forward-looking from 1st of April.

Okay. And then on acquisitions, can you give any insights here on where you're looking, what markets look the most interesting? And do you have any ongoing discussions?

No. I think we're looking -- I think the strength that Cibus has being in 7 countries and being able to look at more countries is that we are investigating where we can find the best return for our shareholders. As communicated previously, what we're looking for is stable grocery market. I mean, stable in the tenants are performing well. There's dynamics among the tenants, which works well. We're also looking for kind of stable economies and stable real estate guidelines and rules and zoning plans, et cetera. And -- but we don't necessarily, as many other investors, maybe need to look at stable real estate market. I mean, we're a buy-and-hold player. Many other investors are kind of need to time things, time buying and selling as we're a buy-and-hold player. We feel we can look a bit more freely there as long as the dynamics are right. And the assets bought are cash earnings per share accretive from day 1.

Okay. And then finally, on refinancing, you refinanced 20% approximately of your bank debt now in April and the margin on average was down 50 basis points. How would you say that this translates to the remainder of your bank debt? Do you have the same potential here?

I mean we do have good dialogue with the banks, and they are continuing to giving us support and want to have more volume and want to do more business with us. So yes, it's looking good, but we will come back with the refinance we do also going forward. But we have positive dialogue with the banks.

Okay. And then one final question on the new JV One+. Could you give any indication of -- should we expect to see some material contributions in the near term? Or how is the pipeline looking here?

I wouldn't say material contributions. It's a pretty small joint venture. It holds 5 assets right now. And the developer is not a huge developer, but they have very good relations with the grocers. So it's more of a future potential pipeline of new assets. And we want to lift it forward also because it is an interesting fountain of new potential growth. And we're happy to look into to see if there's more opportunities like that out there in the market.

The next question comes from Viktor Hokenhammar from Pareto Securities.

Starting with the occupancy rate now above 95%, how does that compare between Nordic and Continental European portfolios of yours?

Yes, I can take that. Yes, we have higher occupation rate in the Forum Estates deal, which is contributing to the higher occupation rate that we have in the quarter. Otherwise, it's quite stable in the Nordics and the other parts also, but the increase in occupation was due to the Forum Estates too.

Yes. A comment on the Nordic side of things is, I mean, it's business as usual. We extend leases with grocery players. We've let some of non-grocery space as and when there is some vacancies. But as Pia-Lena mentioned, it's a stable quarter as expected.

Sounds good. And then just a final question on refinancing of bank loans, as mentioned. What is the average secured credit margin now after last week's announcement?

I mean we haven't commented on that, unfortunately, so I cannot do it on this call. But of course, it will have an effect, which we will disclose in the Q2 report.

The next question comes from Svante Krokfors from Nordea.

Svante from Nordea. Actually, most of my questions have already been answered, but a couple of them left. So perhaps first on -- you have now been integrating Forum Estates for some months. Is there any negative or for that matter, positive surprises that you have encountered or has everything been as planned?

No, everything has been as planned. I think -- I mean, we did a very extensive due diligence during 2024. I'm very happy that the figures, of course, not surprising to us, but now we can present that the figures really match up to what we've said. I think a positive surprise. I'm happy to see that, we've managed to do these transactions so fast and really hit the ground running together in selling these non-strategic assets and also buying one asset in Belgium.

And then a question a bit touching on an earlier question here. But I mean, you now have authority to issue 20% new shares that would enable around about EUR 500 million in acquisitions. Would you look at completely new markets? Or would you primarily use the base that you have in Forum Estates?

I would say both. I would say, when -- if and when we find the right cash earnings per share accretive opportunities, then as long as it meets the criteria, I mentioned earlier about new markets, then we would be happy to enter a new market. I think the Forum Estates acquisition and also the large Danish acquisitions we did kind of prove the point that we are able to do so. But of course, the company should grow in kind of a steady flow, if possible. But I feel that we've managed to integrate Forum Estates, that's worked very well. And if the opportunities arise, then we're happy to look at other things as well.

And then perhaps a final one, do you have any comments on changes in the transaction market in your operating countries recently? Or is it similar as it was 3 months ago?

No, that's a good question. Thanks. I forgot to touch upon that in the presentation. Summarizing, Sweden, very hot. Lots of institutional and private investors chasing grocery assets. Retail parks with grocery in it, we mostly only want the grocery, not the other things, the building materials or the gardening or the sporting goods. But there's a lot of investors, both institutional and also private individuals, both private equity and also more kind of syndicates looking at these assets in Sweden. We see the same thing in Denmark, very active market. And the Netherlands is a very active market when it comes to real estate transactions in general, and for our segments with various types of pooled capital buying a number of these grocery assets. So I'd say, most of the transactions happened, of course, before all the major turmoil in the markets from -- after the 2nd of April. But in general, lots of interest for supermarkets. And in my view, supermarkets are and should be one of the most resilient sectors when it comes to the trade wars and other things happening, because they're high yielding, they're stable tenants, everyone needs to eat and buy food. And they're small liquid assets or can be small, at least the ones we target and then should be a very interesting property segment for many going forward.

The next question comes from Ventsi Iliev from Kempen.

I hope you had a wonderful Christmas break. A couple of questions from me. First one, of course, I appreciate that you're selling noncore assets and vacant assets. But would you consider selling some more core assets as long as you can sell them at a premium?

The price is always of interest for us. We are a buy-and-hold player. We enjoy the cash flow and the stability of those cash flows. So yes, go ahead and make us an offer, and we'll see how we react. A bit more concretely. I think we're on a trajectory where we're creating a more diversified portfolio. We're becoming a larger company. There are certain economies of scale, both in diversification and also becoming slightly larger. So it would have to be something significant of interest for us to divest some of our core assets. I think one should expect us more to look at kind of continuing to divest noncore assets and investing into more core assets.

All right. And then on the Kesko assets on the notice of termination, is this something linked more specifically to Kesko? Or is it just a coincidence? So I'm asking is -- or does Kesko want to be the owner of its assets? Or is it more a similar story that they can just plan to build or they can build a store nearby?

Yes. I think there's no -- in my view, there's no cross read that this happens to be Kesko. This is a normal course of business for a grocer. I was 7 years at ICA Real Estate, as you know. And sometimes you close a store because you want a bigger store, sometimes there's some new infrastructure in a town, a new roundabout, which is a slightly better retail location for what you're planning as a grocer in that specific location. Perhaps you move to a demographic location, which is closer to your price strategy. If you're a high end or low end, the discount of maybe demographics change and income changes in the local market. So there's always a bit of movement. And I think these are examples of that. But when -- they're doing something else in those locations. And as mentioned in the store that Kesko did leave, we could immediately sell it to another grocer for them to open their own store. When it comes to Kesko, they both lease, of course, with us, almost 150 assets. They own some of their assets. They own through the joint venture, which they had with AMF and Ilmarinen, which they now have with Ilmarinen and their own association -- their retail association. So they own and let just as most -- many grocers do.

All right. And then maybe just one more of a clarification question. On the like-for-like, I see that the vacancy impact is minus 2%. But then, of course, if I look at your vacancy and I know it's a snapshot and impacted by the Forum Estates acquisition. But then as you mentioned earlier, the Nordic vacancy is more or less stable. So then one doesn't really match the other. Could you add a bit more color there?

Yes, I can elaborate. I mean, both in Q3 and in Q4, that figure was 1.9% and now it's 2%. So it's very, very stable, so to say. So it's not a dramatic jump in any way, you can say. So overall, it's stable in the Nordics and on the comparable portfolio, as you can see. So, no.

Yes. So in the quarter, not much happened, 0.1 percentage points.

Exactly.

Okay. So this is more from, let's say, Q2 last year?

Yes, exactly. That figure, that's comparing the earnings capacity 1st of January 2025 -- sorry, 1st of April 2025 with 1st of April 2024. And in 2024, we had a number of rental guarantees, for example, in Denmark, which ran out and thereby create vacancies. And those are the rental guarantees, which we knew at some point, this would be extremely difficult to let. So we knew that already when we purchased that portfolio in Denmark.

[Operator Instructions] There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions or closing comments.

Yes. We have no written questions. But we have one -- well, we have one question regarding the presentation. This will, of course, be available on the website. Sorry for the echo that some has, but you can listen in on the presentation on our website shortly later on today. It will be available.

Great. Well, thank you, everyone, for joining us today and all the best for a continued 2025. Thank you.

Thank you.

Bye.