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

Welcome to the Cibus Q3 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, everyone, and thank you for dialing in and listening to our Q3 presentation for our 2025 Q3 results. Let's dive straight into things. Speaking to you today, Christian Fredrixon now, CEO of the company. I'm joined here by…

Pia-Lena Olofsson, CFO.

And we're calling you from our head office here in Stockholm. And the picture here is of us comparing apples-to-apples in one of our stores down in the Benelux and Albert Heijn has happened to do. And as you know, our slogan, converting food into yield, is exactly what we do. But before we dive into the slides, I thought I'd just summarize the quarter in 2 main points. It's another stable quarter for our underlying business. Profit from property management is up 54% year-on-year, which is 9% per share year-on-year when excluding one-offs, which were in the comparable quarter 1 year ago. Our earnings capacity is up 8% year-on-year per share, 8% up year-on-year per share, and that's mainly due to accretive acquisitions coming through and also lower financing costs. So then back a bit more on what Cibus is, converting food into yield. We own real estate, which is let to daily goods operators in 7 countries. We focus purely daily goods properties. We're the only listed vehicle in the Nordics to have this large share of grocery daily goods assets. We've been listed since 2018. We grew from Finland, supermarket portfolios there into now a pan-European platform. Our main aim is to create stable cash flows and increase the earnings capacity per share. Market cap is around EUR 1.3 billion end of the quarter, and this is our fifth year where we pay monthly dividends to our shareholders. We have said -- we're told we're the only listed company in Northern Europe or in the Nordics to do so. And buying the share at yesterday's share price, we've given approximately 6% annual dividend yield and paid out monthly. And sticking and looking at our portfolio to the right, you can see that about half of our portfolio is in Finland. We own about 10% of all daily goods real estate in Finland. Then we grew into Sweden and then into Denmark and Norway and most recently into the Benelux. So our second largest market is Denmark and third largest is Belgium. And Norway is our second smallest market, where we've managed to make an accretive transaction there as well, which we'll talk about a bit later. Then looking at our properties at the end of Q3, just over 640 assets will increase further in Q4 as we close some of the deals we've already announced. Our property value now EUR 2.5 billion, which is a unique platform in Europe for grocery assets. Looking at our tenants, you'll recognize many of these household names. Our tenants are the main daily goods chains in each country and a very well-diversified tenant base. We integrate stable cash flows in all parts of our profit and loss or income statement. So line by line, we try and create stable income by owning assets which are left at 81% rental income from non-cyclical goods tenants, 95% of our assets are active by daily goods tenants and the average size of our asset is about 2,100 square meters. So that's a supermarket size, average size asset. And then being anchored by a grocery tenant means that often it's the only tenant, maybe there's a smaller tenant like a flower shop or hair dressers or a tobacco shop or something next to the supermarket. And important in growing those stable cash flows is, of course, being following the CPIs in each country. So 99% of our rental agreements are linked to CPI. We have a very stable WAULT yet again this quarter, it's a steady WAULT of 5.8 years. And important on the cost side of things is that we have over 90% of net triple net leases, which helps us from the cost increases. Creating stable cash flow is important also to have a high degree of hedging. 95% of our interest rate-bearing debt is hedged. And there's full transparency on every single hedge we do in every quarterly report. So then diving into the Q3 figures a bit. Looking at the rental income, up 38% year-on-year. Our NOI up 38% year-on-year also, so great numbers. And our profit from property management up 54% year-on-year, as mentioned, excluding the one-off effect in the comparable quarter in 2024, and that equates to up 9% per share. Unrealized changes in values, minus 2.9%, which is a number, but compared to our portfolio of EUR 2.5 billion, that's only about 0.1% value reduction unrealized. Our EPRA NRV has increased by EUR 1 per share over the last 12 months. So serving you just some key takeaways of the third quarter. I think the first box up to the left, we've already spoken about, but the second box here, earnings capacity per share, which is one of our key metrics. Important to say that we're happy to see that that's growing again, the ninth consecutive quarter in a row, growing 8% year-on-year, as mentioned, and also 2% quarter-on-quarter of our earnings capacity per share. EPRA NRV, we've already talked about, but also in this quarter, it grew EUR 0.1 per share. One of the reasons behind the increased earnings capacity per share are the lower financing costs. I'm very happy to see that the financing costs are increasing even further as we grow and we obtain cheaper financing. As seen, our average interest rate is now below 4%, 3.9%. And one can compare that to our average valuation yield of 6.4% and the valuation yield is also down from 6.5% to 6.4%. And we see bank margins falling. It's our all-time low bank margins of 1.4% and also our overall average credit margin for banks and bonds has now fallen to 1.8%. That's also all-time low. ITRs are increasing and our forward-looking net debt to EBITDA is below 10% and then 9.7x. We haven't lowered our financing costs, we've also created more stability on the debt side of things by extending our financing maturities. So our debt maturity is now 2.3 years, up from 1.7 years last year, and our hedge duration is now at 2.8 years. Also, that's up a full year compared to 1 year ago. We also use caps. 27% of our hedging is caps. And I think that's a good instrument for us to use as in this volatile interest rate environment, if interest rates fall, then we can reap the benefits of that. And if interest rates were to fall 1% across the board, we would -- our financing costs would be reduced by EUR 4 million per annum, all other things being equal. So I think that's a good instrument for us to use in these volatile times. We're good at leasing. We had the activity in our leasing. We roll out our daily goods tenants and we work a lot, of course, with our non-daily goods tenants, those 19% of our rental income, which are not daily goods. Our occupancy rate has increased in the quarter even if the third quarter usually isn't a big letting quarter. Usually, new lettings are done in Q2 and Q4, but happy to see the occupancy rate has continued to grow and the team in our various countries are doing a very good job there. And box #6 here, I think that's one of the most important ones as well, of course, in this quarter. We carried out accretive transactions since the capital raising we did in June 2025. We raised about exactly EUR 1 billion in June 2025 -- sorry, SEK 1 billion, about EUR 90 million. And we've now announced deals that, that money has been deployed when those deals actually closed. So very happy also to show that we managed to build a strong pipeline. We can deliver on our acquisition pipelines and very happy with the team's work in our 7 countries that we can carry out these transactions in a short period of time. I mean this was a summer period. And in just over 4 months' time, we managed to deploy capital announced transactions. And that's kind of a repeat from what we did in September 2024, when we raised an amount as well, which we took us 3 months to announce transactions to carry out those accretive transactions. So happy about the growth we're showing and looking for more. Box #7 here, we grew in Norway this quarter as well. Happy to see that as well. Norway has been a market where it's been slightly more difficult to grow accretively just because financing costs are slightly higher or higher than other European markets we're in and yield spreads haven't been that attractive. But we're happy to see that we grow with a sizable portfolio in Norway, 12 assets, which we acquired. I'll tell you a bit more about that later. There's a slide on that. But I think the key takeaway here is that we added property value of about 60% and 50% more assets in Norway, so growing there. On the operational side of things, we also opened our first office in Denmark. And the reason there being two-fold really. One is as we grow, it said that we have one of the largest daily goods real estate portfolios in Denmark. It makes sense both from a financial perspective and from a tenant awareness and tenant closeness perspective to have our own boots on the ground. So we've opened an office in Denmark. And now we have our own offices in Finland, Sweden, Belgium and Denmark. Earnings capacity per share, very important metric for us, as mentioned before, up 8% year-on-year, ninth consecutive quarter of growth and up 18% since mid-2023. So we're happy to see our earnings capacity per share growing. And why is it growing? Well, top line indexation growth, important even if we don't carry out any transactions. As long as CPI is positive, we will be receiving top line indexation growth under the rental agreement in place. Other drivers of earning capacity growth, lower bank and bond margins, as mentioned, and then, of course, the transactions of accretive nature. So looking back at our time line and our expansion, you will see the yellow dots here represent where we have raised capital and raising capital for acquisitions is an integral part of our business. Smaller acquisitions we can carry out with our own funds. But if we were to do a larger transaction or when we feel that we have built up a strong enough pipeline, we will come to the market to ask for funds in order to carry out these accretive transactions. And as mentioned, that's exactly what we've done this time around as well from June when we raised the money until now on October when we announced that we have carried out those transactions. So happy to see the accretive growth we are delivering. And then diving into a bit about the transactions that we have announced. Let's start in Norway. So as mentioned, this is a very pure grocery real estate portfolio. It's in Northern Norway. We bought it from AKA AS, which is a grocery real estate specialist in Norway and Denmark now. And I think it's a very interesting and very accretive transaction and portfolio we managed to get our hands on here. I think the photos here do not do Northern Norway justice. It's a beautiful place in the world with the forts and everything. So those photos do not do justice. But people live in Northern Norway. It's pretty difficult to get between the various cities and towns up in Northern Norway. And there are quite a few people living there. In Norway, they have a very vibrant rural communities. And people wake up hungry also in Northern Norway and they need to go to the supermarkets. So happy to be able to bought this portfolio. The portfolio had 9 REMA 1000 assets, which is a discount chain and as a Norwegian discount chain. They're active in Denmark now as well. They didn't carry out a couple of acquisitions on the Aldi portfolio, et cetera, are growing in Denmark, but they are a Norwegian retailer. Kiwi and Spar belong to Norway, it's good, but it is an independent retailer grocery chain in Norway. Most of the assets were built -- everything was built off 2002, but most were built a lot later than that. So happy to put our hands on that portfolio and to also grow our Norwegian portfolio, but more importantly, it was an accretive transaction. And then another transaction we recently announced is the buyout of our joint venture partner or our part owner in the One+ company, part own company in Belgium. One+ was a company which Forum Estates had already set up before Cibus acquired them earlier this year. One+ is a company which buys already developed grocery assets in Belgium. And now what we prematurely did was buy out our development partner and got our hands on these 5 assets and which are then thereby fully consolidated in our accounts from our Q4 accounts. So 2 Jumbos and a Lidl and then 1 store in Mortsel where they hasn't been announced which grocery retailer will be opening a store there, but the lease is signed. So have to get our hands on these assets as well. And we continue to trim our portfolio, converting food into yield is what we do. And if it's not really food, then it's not really our game or our investment. So what we've done in this quarter is we have sold 3 assets. These 3 happen to be in Benelux, in Belgium, one in De Panne, which is the picture to the left here. And I think this is an interesting also reletting story. This used to be a Lidl store, which Lidl vacated and then the team quickly re-let that. Divided that into 2 spaces, into an Action, which is a discount store and also Wibra, which is a non-food discount store. So when that was done, we could sell that for a good price. Kruidvat in Lanaken is also a non-food discount. And then we had an odd one out in Ostend, which was a gym, which perhaps doesn't fully fit the Cibus setup. So those are the non-strategic assets we've sold. Following up in our Q2 presentation where we described a case study and how we work with active asset management, we thought we'd bring out some more case studies for you this quarter. Showing you 2 case studies, this one and on the next slide. The first case study is in Naantali in Finland, where we are redeveloping a K-Supermarket, so let to Kesko to a Tokmanni. So the story behind this project is that Kesko is moving out to build their own asset just across the street, a lettable area of 2,500 square meters and this older building, it's a bigger store. And they are then leaving our assets and then we have immediately re-let it even before Kesko left the premises, let it to Tokmanni. And then we're now redeveloping it for Tokmanni, signing a new 10-year lease. So I think it's an excellent re-letting story of how we actively can go from one daily goods player to another. The second case study we're showing is also in Finland. In this case, Kesko and we together are redeveloping this K-Supermarket in Finland, close to Oulu in Northern Finland. This resembles the case study we had in last quarter where in Kuopio, where we, together with Kesko doubled the store size in Kuopio. Here, we're doing more or less the same thing. So this K market is being redeveloped into a larger K-Supermarket. So together with Kesko, we have acquired the neighboring sites. We will be building a new building on the extended site. And when the new store is finished and opened, we will close the old store and demolish that building into larger parking because parking is very important in our business in all of our markets because most of the traffic -- some of the traffic is car driven. So good attractive yields, both cost on -- yield on cost and IRR. And I think this shows also our commitment to our core tenants and our property development skills. So Pia-Lena, over to you.

Thank you. I think Christian has covered all the significant events during the quarter already, except for the update of the MTN program that we do every year. So I think we'll flip to the next slide. So after the period, we have made 2 taps on our loan 108 bond amounting to EUR 20 million and EUR 10 million, respectively. And as Christian mentioned, we have acquired the remaining shares of One+, which will be consolidated into a Cibus as a subsidiary. Additionally, we have initiated a new joint venture, Two+, which will be owned 50-50 together with TS33. And Two+ will be consolidated as a subsidiary from start. Looking at the P&L, we have no non-recurring items in the third quarter. We see the impact of the lower credit margins reflected in our finance expenses. Profit from property management was EUR 21.8 million. Unrealized changes in property value amounted to minus EUR 2.9 million. And all countries with the exception of Finland show increasing unrealized property values, but the values in Finland declined due to the changes in the valuers' letting assumptions in their models. The average initial valuation yield on the portfolio as a whole fell during the third quarter from 6.5% to 6.4%. Looking at the earnings capacity, rental income has increased as a result of acquisitions. Property expenses have increased due to acquisitions as well, but we also have a positive impact by the divestments that we made. Administration expenses has increased due to the acquisitions and also the addition of new personnel. Profit from property management increased with EUR 0.02 per share since the last quarter to EUR 1.07 per share. And then we have calculated on the new number of shares after the share issue in June, but also included the assets that we've taken possession of until the 15th of October since the share issue funds were used for those acquisitions. Looking at the net operating income in our comparable portfolio, the negative impact from the change in occupancy amounted to minus EUR 1.6 million. However, 3 properties amounting to minus EUR 0.6 were assets where Cibus in agreement with the tenants has terminated the lease early to enable development of the property. The Naantali asset mentioned earlier by Christian being one example. The effect of indexation amounted to EUR 1.5 million or 1.3%. CPI, particularly in Finland remains low. The effect of acquired and sold properties increased NOI by 44% . In total, NOI earnings capacity increased 43.4% to EUR 165 million. Cibus segments is countries and Finland remains the largest segment, contributing with 50% of the NOI and then Denmark followed by Belgium, each account for 15% of the NOI. Looking at the balance sheet, property value amounts to EUR 2.5 billion. Secured debt totaled EUR 1.2 billion, resulting in a loan-to-value of 49.8% for secured debt. In addition to this, Cibus has unsecured bonds of EUR 243 million, but also hold some funds from the share issue in June under other assets, bringing the total LTV ratio to 56.1%. The EPRA NRV was EUR 12.9 per share at the end of the third quarter. The WAULT remains to be very stable, as you see in the graph below, and was 5.8 years, excluding the Belgian termination rights with the termination rights was 4.3 years. 82% of total funding consists of bank financing. The average bank margin decreased by 0.2 percentage points to 1.4% in the third quarter compared with 1.6% in Q3 2024. And the average capital maturity extended to 2.3 years from 1.7 years last year. Subordinated loans of EUR 12.2 million from the former owners of foreign states were called and then repaid on the 12th of September, 2025 using the funds from the directed share issue in June. So the subordinated loans are no longer part of Cibus funding sources. Cibus is currently 95% hedged with an average fixed interest maturity of 2.8 years. And all else being equal, the hedging ratio is expected to increase to 97% in the fourth quarter. Interest rate sensitivity shows that the reduction in market interest rates have a greater impact on earnings than the increases as a large part of Cibus hedges are interest rate caps. And 1 percentage point increase in market rate would then affect earnings by minus EUR 0.6 million, while a decrease would affect with EUR 4 million NRV. Net LTV stood at 56.1% at the end of the third quarter. The funds from the share issue in June are temporarily reducing the net LTV and are expected to increase again back to the Q1 2025 levels once all the funds have been deployed. The interest coverage ratio increased to 2.4x. The net debt to EBITDA was 10.7x. But as acquisitions debt immediately, while the EBITDA is built over time, we focus on the forward-looking ratio, which was 9.7x. Cibus generates stable cash flow, enabling monthly dividend payments to our shareholders. Based on the closing price of SEK 169.55 per share, the dividend yield was 5.9%. Cibus is a liquid share trading 1.6x its market cap, which is more than 68% above the average for other real estate companies with a market cap exceeding SEK 10 billion at Nasdaq Stockholm. Cibus continued to enjoy strong support from its shareholders, many of whom have been with us and invested in Cibus for several years. The total number of shareholders keep growing, now reaching 59,000. Over to you, Christian.

Thank you, Pia-Lena. Thank you for that run through. So moving on to the future. First, looking at ESG, what are we up to there? I mean despite what's happening in the world with omnibus, et cetera, ESG is a very, very important part of our business. We are voluntarily reporting CSR according to the CSRD framework already in 2024 and we are planning to continue to do so. I think what's very important just to lift out here on the ESG side of things is in the E. 49% of our taxonomy of our assets and taxonomy aligned and also almost 80% of our tenants are sustainable tenants according to the SBTi framework. As they are consumer-facing consumer goods companies, ESG is very important for them as well. Highlighting here in this quarter also is that we -- as we purchase some of our energy for our tenants, 96% of our purchases are fossil fuel energy. So of course, a very high number and that has helped us achieve our SBTi targets already in 2024 in Scope 1 and 2. How are we working on it on a daily basis? Well, we're installing solar panels where we can together with our tenants. We are adding EV charging everywhere we can as well. So there's a big rollout of that happening. And then also, we are looking into more renewable heating sources. So we're trying to move away from natural gas, for example, and instead going to district heating or geothermal heat pumps. So a lot of work to be done there. The S is very important in our asset class as well. This is social infrastructure. People go to the supermarket not just to buy food, but in many places to interact with people. So it is a meeting place. It's somewhere to buy food, get fed, but also to meet people. But also, it's a very important part in social infrastructure when building a resilient society. Due to the geopolitical turmoil in Europe right now, this is, of course, much, much higher up on the agenda for governments and the population of Europe. I know I've been talking to you before about what the Finnish government and the retail chains are doing -- grocery chain in Finland, where they are setting up a network of preparedness stores. So 150 stores spread out over Finland, which will have -- with self-sufficient on electricity, it will be a place to come and get information, food, fuel, charge your phone, et cetera. So the Finns are really moving ahead on that side of things. And now the Norwegians and the Danes are coming up with the same kind of setup. So a retail chain in Norway and in Denmark, they've said 100 stores and 50 stores, respectively, which will be the same kind of preparedness stores, which are supposed to be self-sufficient for a number of days, both from electricity, but also from supply chain disruptions. So there's a lot happening on that side of things for our asset class. I think that's a very natural development. And we'll see what happens in our other markets. Sweden seems to be lagging a bit behind even if media is picking up on a lot of what is actually being done about Swedish preparedness. And then moving forward, for Cibus, what are we focusing on? 6 main points. One, continue to grow our earnings capacity per share in all parts of the business. I think that resonates with what we've been saying before. Let's continue to do what we've been doing. Two, continue to consolidate this asset type and asset class across our pan-European specialist platform. So we're sticking to doing -- converting food into yield but doing it in 7 countries and looking at other Continental European markets as well. We'll continue to work on our balance sheet, optimizing that, refinancing and hedging as we've done. Carry out -- #4, carrying out those CPS accretive transactions just as we've done previously, executing opportunities in existing markets and others and looking at other main European markets, as mentioned. When it comes to the organization and team, we have a competent and experienced set of employees. We work in pan-European across our business. And we have a focus on slightly more in-housing where it makes financial sense and/or sets to become a bit closer to our tenants. And importantly, as well #6 here, we're committed to deliver shareholder value by continuing to convert food into yield and grow our earnings per share. So that was the last slide for us and moving to the Q&A.

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

So firstly, on the One+ acquisition, I understand it's 64% grocery. Will you be looking to sort of refine that exposure or are you happy with that?

Yes. I think that's a fair assumption. One of the 5 assets we bought is a gym, a basic fit gym, which doesn't really fit in our strategy long term, but it's a very nice asset and we're happy to have bought it and consolidate that for now.

Good. And then also on the new JV Two+. Can we get a sense of the project pipeline and potential going forward?

Yes. I think what's important here is that do you work with a skilled developer who is hungry to deliver assets to the joint venture where the developers also owns 50%. So we're hoping that they can establish a very attractive pipeline and assets for us to jointly buy and hold it in Two+. And we have the right to first refusal for any retail development that this developer carries out in Belgium. So let's hope for some very interesting volumes in Two+ going forward.

And what do they have ongoing now and/or plan to start in the near term?

Yes, they have ongoing plans for sure. I mean as a developer, it's pretty long timelines to get projects out of the ground just as we know the across the Nordic countries to get planning permissions, et cetera. So they're actively working on an interesting pipeline. And I think one could assume that we find the pipeline interesting. That's why we're entering into a new joint venture with them.

Yes. Okay. And then on sort of activity in the transaction market and pricing, could you give some color to where you see -- have you seen any sort of material yield compression or which markets are you looking more closely on?

Yes, sure. I think it's fair to say that we are seeing yield compression also in our valuation, but also in the market. I think it's fair to say that perhaps valuations are lagging behind market developments. That's what usually happens when markets turn. And I think it's fair to say in our asset class, it has turned. We see now that competition has been quite high in Sweden for quite some time, as you've heard me say before. Lots of institutional players in Sweden chasing our asset class, the listed players, private equity. A lot of investors have realized the stability and attractiveness of the asset class, especially in Sweden. And now I think it's fair to say that that's trickled over to Finland. So we see both Principal Properties and Balda buying in Finland instead of in Sweden. And I think that over time makes more competition. Over time, that should mean the yields go down as interest increases. But it also means that perhaps supply will increase because good pricing and the good processes tend to bring out more sellers to the market as well. So a bit more competition in Finland, high competition in Sweden. In Norway, yields and accretive transactions have been a bit difficult to carry out. I think we're very happy to have done that in Norway. I hope to grow more there as well. Denmark has been a liquid transaction market throughout 2022, 2023 as well. Lower financing costs due to the mortgage bond system there in Denmark, lower yields as well, but interesting portfolios. In the Benelux, we have a great local platform with local people and the economies of scale, adding even more assets and they're very close to the market and delivering a very interesting pipeline for us, also since the acquisition. So I think that's something we should talk a bit more about is that the Forum Estates platform is not just a great deal for the Cibus shareholders for the Forum Estates shareholders, but it's also a future potential pipeline of nice assets in the Benelux region. And then we're looking at other markets in Mainland Europe. As the only company trading at a premium to NAV owning these types of assets across Europe, this of course, gives us opportunity.

Okay, good. And then finally, on the negative value changes in Finland. Were they attributable to the redevelopments you mentioned in the report or what are the drivers here? I understand the valuers have taken new assumptions on long-term occupancy in the quarter.

Yes, that's right. I think this is -- let's take one step back. We value all of our assets externally every quarter. So 100% of our assets every single quarter. Not everyone does that, but of course, we do that. We like the transparency it means. And what's happened in Finland is we see certain asset yields have compressed. And in other assets, we see that there's been slight change in occupancy assumptions. And also, of course, when a quarter passes, then if market rents have changed or occupancy or assumptions have changed, then that day comes a bit closer. That said, it's difficult to say what's going to happen in the next quarter. This is all -- it's what the valuers' assumptions are changing. And looking at it, it's a very small number. It's EUR 3 million out of a portfolio of EUR 2.5 billion. So yes, it is a number, but it's a very small number.

Okay, yes. And sort of on letting activity, how would you say that it's progressing? Is it -- do you see any themes in tenants that are struggling particularly or expanding?

No, I think letting activity is not a very big thing in our business. 81% of our rental income is from daily goods and grocery tenants. And there what usually happens is the rental agreements roll off. Where we need to do a lot of work is mostly in our non-grocery tenants. And there, it can be discounters who are moving, et cetera, et cetera, and durable goods, et cetera, where there's a lot more competition and some of them are more in the tougher space, but that's why we're staying to the converting food into yield space of things. But in general, I would say there's a trend across our markets for any tenants performing badly or in general. I mean we own very little sporting goods, for example, which has been under pressure for a number of years. We don't own much of this. We don't have any [indiscernible] or anything like that, which is a chain which has been struggling in Sweden. So I'd say it's a natural churn in our non-grocery tenants. That's what's driving some of the letting activity.

The next question comes from Victor Hokenhammar from Pareto Securities.

Great to see, as mentioned, increase in both earnings capacity per share and occupancy. I have a question starting with the investments in existing properties that have increased somewhat both quarter-over-quarter and also compared to Q1. And I understand that it's both given the mentioned redevelopments and ongoing portfolio growth, but they are also up as a percentage or share of your total portfolio value. Do you have like any guidance for Q4 and '26, either in terms of -- in absolute terms relative to your portfolio size?

Yes. I mean, yes, we have invested in our properties. But of course, then EUR 2 million of those are tenant improvements, which gives yield in line with the existing portfolio. And then also we have property development that is also driving some of these investments. And compared to the portfolio size, it's quite a small number in that sense. But of course, we are more active, you could say, in also in the property development and TIs with the tenants to be able to do prolong agreements and do these new lettings, so to say. We haven't guided on the size of the investments for the year as a whole, but it's not a large number, so to say, for our size.

Okay, perfect. It's very clear. And then a question on M&A. Can you -- could you comment on whether you looked at the Coop transaction that NP3 completed a few months ago and why you didn't choose to buy it?

Sure. Now I think it would be fair to assume that a grocery -- any grocery portfolio in our current markets that are moving, we will look at. And I think the takeaway from that transaction is very interesting to see that another listed player, NP3, which is not really focused on retail in that sense, decided to buy that portfolio. So great to see that others have understood the attractiveness of the cash flows of grocery and also the future of Coop. I mean there's been a lot of media coverage about what is the future of Coop. So I think it's interesting to see that there's other skilled listed players who know what they're doing, who are actively investing in the asset class also with 100% or close to 100% of to Sweden.

That's clear. I agree. And you are more in the market, do you expect the deal activity now in Q4 to increase both in the Nordics and the Benelux region compared to Q3?

Sorry, did you hear the…

The acquisition activities to increase.

Generally in the market, I think that Q4 -- sorry, Victor?

Yes, sorry. Go ahead.

Yes. I think generally, in the property transaction market, Q2 and Q4 are quarters where there's a lot of action before mid-summer and before Christmas, that's when people want to get things done. So just based on that and the increased attractiveness for our asset class, I think it wouldn't be a surprise if transaction volumes do increase in general in the market.

Yes. And then a follow-up from Oscar's questions. The Two+ joint venture, do you expect that to contribute anything to your earnings over the next 12 months or should we more view it as a new long-term earnings contributor?

I think that's not something we are communicating. As and when and if Two+ does its first transaction, we will let you know.

Okay, perfect. And lastly, as mentioned, you focus on your current markets and you also mentioned that you're actively evaluating opportunities in Mainland Europe. What will you say in the next 18 months? Will you stay in your 7 markets or have you entered new ones?

We're actively looking at markets, new markets, just as we did. We're actively looking at Mainland Europe when we did the Benelux transaction. When and if the right platform comes along with the right deal metrics and it's accretive for our shareholders, then we're happy to transact on that. And there are interesting markets in Europe for our asset class. So people wake up hungry every morning all across Europe as well, just as they do in the Nordics and the Benelux. So there's plenty of interesting markets, plenty of interesting grocery chains. It's the same kind of dynamics as they used to from our markets in Mainland Europe. So we're actively looking at Mainland Europe.

The next question comes from Svante Krokfors from Nordea.

A couple of questions left, most have been already answered. But could you repeat the occupancy rate improvement quarter-on-quarter was quite significant. Was it seasonality only or was there something else?

Yes, the occupation rate, 96.1%, it's, of course, due to some of the new lettings that we have and some seasonality. But usually, it is the new lettings that we've been able to do and also the composition with new acquisitions coming in with higher occupancy, I would say.

And regarding your M&A firepower, you had -- you added EUR 91 million in the share issue and now have acquired over EUR 180 million after that. What's your own opinion about how much M&A firepower you have left?