CPI Property Group (O5G) Earnings Call Transcript & Summary

Good morning, and welcome to CPI Property Group's webcast covering our financial results for the first half of 2026. This is David Greenbaum, CEO of CPI Property Group. As usual, I'm speaking to you today from Prague, where I am joined in the room by a fantastic group of colleagues who have worked very hard to deliver the results that we are presenting today. So please allow me to introduce Pavel Mechura, our CFO; Michal Felcman, Deputy COO and Co-Head of Group M&A; Kveta Vojtova, Co-Head of M&A and Head of Transaction Legal; Mindee Lee, Director of Corporate Strategy; Petr Mizera, Head of External Reporting; Marketa Vecerova, Group Head of Real Estate Financing; Martin Matula, our General Counsel; Petra Hajna, Group Sustainability Officer; and Moritz Mayer, who's responsible for Capital Markets and Investor Relations. Stefano Filippi, our Head of Corporate Finance, is also on the line, just not in the room today. After today's presentation, we will be happy to answer your questions about our results for the first half of 2026 and our plans for the rest of the year. As usual, we'll do our very best to answer each question, and we have plenty of time. Please use the tool on the webcast to ask your question as we go along. Today, we will be referencing CPIPG's H1 2026 management report, and you should be able to see the relevant pages displayed on the webcast. The same management report is also available on our website, cpipg.com. If you have any technical issues, please reach out to Moritz even during the call, and we'll do our very best to sort it out. Before we begin, I wanted to talk about why we are here. Why do we do these calls? Why do we put so much effort into the preparation of 114-page half year management report with extensive detail on everything we do? Well, the answer is obvious. We do it for you, for our fixed income investors and to some extent, for our banks and other partners. We do it because we are proud of what CPIPG has achieved and because we prioritize transparency and are open to discuss our challenges. I hope you have come to expect this from us, and we appreciate the dialogue with all of you. During the months of September and October, we will be meeting many of you at various conferences and roadshows arranged by our banks. CPIPG does not plan to issue any more bonds this year, but we want to make sure that we are available to our bondholders. So we look forward to that. Well, today, I'm in a pretty good mood, and I'm sleeping very well at night. There are several reasons why. First, CPIPG's liquidity position. We made huge progress on liquidity during the first half of 2026 from a position that was already strong, and we now have liquidity of EUR 1.6 billion, which is sufficient to cover all debt maturities until the first quarter of 2028 and all unsecured bond maturities until the third quarter of 2030. We also reduced gross debt by EUR 159 million in the first half. Our undrawn revolving credit facility was upsized to EUR 500 million and extended to March 2030 with 9 banks participating. In general, our bank relationships are super strong, which has translated into a very easy time rolling over secured bank loans as we will describe later. So we're quite happy about that. I guess my only complaint is the trading levels of our bonds don't seem to account for the strength of our liquidity, not yet at least. Anyhow, strong liquidity gives CPIPG time to focus on 3 other key objectives: operations, disposals and corporate simplification. On all 3, our team has made very nice progress, which we will describe in more detail today. But the key message is we are in a good position. We are focused on what we need to do. Okay. So now we can move on to the real presentation. On Page 3, do you remember where we began the year? Well, things were looking reasonably optimistic in European real estate in January and February. Property markets were stable, transaction activity was picking up and financing conditions were supportive. The Iran war interrupted that momentum to some degree. Just like we saw in 2022, war pushed interest rates higher and impacted risk appetite. However, the magnitude of the interest rate rise was far less than 2022 and appetite for real estate has not been much affected. In fact, European transaction volume in H1 was up 10% year-over-year, and our group's disposal program has not been affected either. As Michal will describe later, we are well on track to meet or even exceed our disposal targets. We also continue to invest in our real estate portfolio. So we're watching interest rates. But back to the liquidity point, we simply do not have much refinancing at least in senior unsecured over the next 3 years. On the secured financing, tighter margins because of intense competition among banks is helping to offset higher rates to some degree. So far, we have also not seen any direct effect of higher rates on valuations. Okay. Time for some numbers on Page 4. CPIPG's total assets were EUR 19.9 billion as of H1 2026, and our property portfolio was EUR 17.5 billion. Consolidated leverage was 49.3% and net ICR was 2.2x, both unchanged from year-end, and contracted gross rent was EUR 902 million. Consolidated adjusted EBITDA was EUR 341 million and FFO was EUR 145 million, lower relative to H1 2025, reflecting the impact of our disposal program, which included both yielding and non-yielding assets. With the completion of developments to hold and developments to sale next year, we hope to stabilize our income metrics while reducing gross leverage in a more meaningful way. Occupancy was 92.4%, slightly below the 93.3% we had at year-end, but up slightly year-over-year and like-for-like rental growth was 2.1%. Overall, valuations were stable, but it's worth mentioning that we proactively revalued some residential assets down in the U.K. and UAE and up in the Czech Republic due to significant developments in those markets. On Page 5, diversification remains a key aspect of CPIPG's strategy. At times, new investors have told me this makes our portfolio harder to understand. That might be true, but what I've also found over the years is that when investors really take time to analyze our segments and what we are doing, they see the benefits of this strategy. Offices remain our largest segment, and we are still super happy with CEE capital cities. Warsaw, Prague, Bucharest and Vienna are doing well. Budapest is improving post election and leasing activity in Berlin is picking up to a significant degree. Retail is in excellent shape due to low density of retail across the CEE region. We have a market-leading network of retail parks and shopping centers. And due to our scale, the group has excellent relationships with tenants, and we are a preferred partner for new tenants entering a market. This is a segment where we continue to invest. We're happy with our hotel investments in CEE, where we continue to expand as an owner-operator and residential has been part of our business since the 1990s. Complementary assets, mostly land and development, are also core to our strategy, going back to our origins as a family company. CPIPG thinks in long-term horizons, and we have made some excellent returns over a long period of time in both land and development. Considering today's higher financing cost environment, development is increasingly important as a source of higher yields and higher returns, and as I mentioned earlier, central to our overall strategy around debt reduction and improving our credit metrics. On Page 6, I've covered some of this, but just a few more important points on strategy. I already touched high level on operations, but disposals are another big part of our story. Today, disposals are not only about reducing leverage for our group. That might have been the case in past years when CPIPG had more short-term debt to repay and capital markets were closed. But today, we see disposals as a major engine of progress for the group. Disposals allow CPIPG to reshape our portfolio to focus on our best assets and to invest in places which bring better returns. We have signed or closed EUR 542 million of disposals this year, and we made EUR 155 million of acquisitions and spent EUR 226 million on CapEx and development. The first half was also particularly active from a financing perspective. We completed EUR 1.4 billion of financing during H1 and EUR 2.3 billion year-to-date. As a result, you should not expect to see us in the bond market anytime again soon. Gross debt came down by EUR 159 million during the half and liquidity increased to EUR 1.6 billion, as I mentioned earlier. Also, I want to flag that during our last investor call in April, many of you asked about our hybrid that was callable beginning in July. As promised, we addressed the hybrid through a tender offer and new issue, replacing the old style hybrid with our new Type A structure. We now have only one remaining old style hybrid due in 2028, and we will look to address that bond either in 2028 or even sooner if the opportunity presents itself. As I mentioned earlier, consolidated leverage was stable at 49.3% and net ICR was at 2.2x. I know these are 2 numbers that many of you focus on, and I'll just be straightforward about it. Neither ratio is where we want it to be, but we believe time and patience as we execute our strategy will bring results, particularly from 2027 as proceeds from development start to come in. We made solid progress on corporate simplification in the first half. We completed the squeeze-out of Next RE in Italy. And as most of you have seen, we are doing some internal reorganization to streamline how real estate assets are managed and pooled together, such as the recent announcement that CPIPG and our subsidiary, CPI Europe, would explore combining our retail assets into a dedicated retail platform. Our ratings are stable at Moody's and S&P, and I hope they can see the wisdom of our strategy and how many steps we are taking to improve our group's prospects for the future. We were upgraded by MSCI on the ESG rating going from BBB to A during H1. I was really happy about this one because we've been doing so much on the governance and environmental side. On Page 7, just to mention that our portfolio's EPRA topped-up net initial yield is now up to 5.8%, a full percentage point increase since 2022. On Page 8, I already mentioned all of our financing, and we repaid a lot of short-term bonds with our recent issues in sterling, euros and Swiss francs. As you can see in the chart on the bottom right-hand side, our liquidity of EUR 1.6 billion is sufficient to cover all of our debt maturities through the first quarter of 2028 and our unsecured bond maturities through the third quarter of 2030. As I mentioned earlier, we also increased and extended our revolving credit facility to EUR 500 million running through to March 2030 with Citibank and JPMorgan joining us as new lenders, which we're really, really happy about and really welcome them to our bank group. Anticipating questions about the impact of higher rates, let me remind you that 96% of our debt is fixed. That also means our near-term sensitivity to movements in market rates is limited. For example, even 100 basis point increase in market rates would increase the average cost of our existing debt from 3.73% to only around 3.77%, so about 4 basis points based on our current hedging profile. The more relevant sensitivity over time is refinancing fixed rate debt as it matures, but our business plan already assumes refinancing at current expected market rates. Our average cost of debt at 3.73% was an increase of about 10 basis points as we took on some higher cost debt in order to strengthen liquidity for years to come. Now let me hand it over to Michal to give you more information on disposals. Michal?

Thank you, David. I'm now on Page 9. As David mentioned, we have closed or signed EUR 542 million of disposals this year, including 2 large transactions that each exceeded EUR 100 million. The price of all the deals together is 5% above their book value. I trust that this is a good reflection of investors' appetite across our region, including larger transactions and bigger institutional investors participating in the deal. The majority of disposals have been office or retail assets. We also sold a meaningful amount of nonyielding land bank, representing 22% of total divestments this year. The most significant portion of this was the remaining land bank located in Bubny in Central Prague. Our divestment strategy is focused on 4 categories: assets that are noncore by location or quality, non-yielding landbank, assets with limited future upside or assets which are mature, fully priced where we can receive attractive offer. Our total disposal pipeline now exceeds EUR 2 billion with more than EUR 330 million currently under signed LOI or in advanced stage of due diligence. This means we expect to reach upper end of our target for this year, which was between EUR 500 million and EUR 750 million. Our disposals are expected to combine both small and large assets from our portfolio. The average value of our 500 commercial properties is around EUR 36 million, which is a size that suits many local investors. On the other hand, we are also looking at the sale of large assets or portfolios, which characteristics fit into one or more of the 4 categories. After all the divestments, the overall goal is to remain with portfolio of buildings that deliver high yield, are of a good quality with sustainable rental income and effective operation. And now I will turn the floor over to Pavel.

Thank you, Michal. I am now on Page 11, and I will start going deeper into the figures. Net rental income declined by 5% to EUR 375 million, reflecting our disposals. Net business income declined by 7% because of lower hotel income. It was mainly due to the sale of our Marriott hotels in Vienna and Budapest last year. At the same time, we reduced our administrative expenses by 4% to EUR 57 million, continuing our cost discipline. The difference in net profit is mainly driven by our very slightly negative valuation result versus valuation gains in H1 2025. Our property portfolio declined by about 2% as we continue to sell office, retail and residential assets. As a result, our total commercial assets declined from 510 to 498. Our total hotel rooms increased due to the completed hotel development in Berlin, Czech Republic and Budapest. The decline in equity is mainly driven by our distributions via share buyback in Q1 2023. CPIPG did not make any distributions during 2025, and our distribution this year was equivalent to 42% of our 2024 FFO I, so below our target of 50% of FFO I. In fact, the target itself was reduced from 65% just last year. Our net debt declined by EUR 270 million. As David mentioned, key credit metrics such as consolidated leverage at 49.3%, net debt- to-EBITDA at 12.7x and our interest coverage ratio at 2.2x were unchanged during the first half. Improving these metrics meaningfully is going to take time. It requires selling more of our nonyielding land bank and development assets, which is exactly where our disposals are focused right now. We have to continue to reduce our costs, and we should see our income-generating investment to the top line. We see 2027 as the year when we should start to see this benefit our numbers. On the balance sheet, secured leverage increased slightly to 24% and the secured share of total debt rose to 48.8%, largely due to the bond repayments and tenders we executed during the half. We still maintain a healthy balance between secured and unsecured financing with unencumbered assets covering unsecured debt at 178%, slightly below year-end but still the book. Going forward, I would expect the share of unsecured and secured debt to fluctuate 50-50. We will repay some unsecured debt, particularly the legacy SMO retail bonds in Austria, while also repaying secured loans alongside disposals and through the completion and sale of development. Now I will turn the floor back to David to walk through the real estate portfolio in more detail. David?

Thank you very much, Pavel. I'm now on Page 14, starting with offices. We continue to believe strongly in capital city offices across the CEE region where limited new supply in most cities keeps working in favor of existing landlords like CPIPG. Office occupancy was 88.3% at H1, essentially flat year-on-year, but a touch below year-end as occupancy simply fluctuated across individual cities. Net rental income declined 3.8% to EUR 188 million, reflecting our disposals. We sold 4 office properties in the first half, so we now have 138 office properties. On a like-for-like basis, the picture is more encouraging. We still have positive rent reversion potential of 11% across our key cities, and our multi-tenant buildings are attractively priced relative to the market. On Page 16, Berlin remains our largest office platform valued at EUR 2.4 billion across roughly 900,000 square meters and 42 properties. The German economic recovery remains gradual, but Berlin continues to be the #1 city for start-ups in the country with start-up funding increasing by 14% year-on-year in H1, and the Berlin office market actually saw a 46% jump in take-up versus a year ago. Our portfolio's average rent rose again to EUR 11.68 per square meter still well below the Berlin market average of roughly EUR 26, which is precisely why our leasing volume has stayed strong even as occupancy in the mid-80s takes a bit longer to recover. We finished 2 small developments, Julius, which is fully leased and frames, which is being progressively leased up, and we continue to find creative alternative uses such as commercial living, lime home, schools, and gyms. Page 19, Warsaw, where our portfolio of EUR 1.6 billion means we're still the top owner of offices in the city and we're really happy with how the portfolio is performing. Warsaw is still the center of gravity in Poland and new construction is limited, but I also believe our team on the ground is making a big difference. Occupancy in our portfolio of 95.8% compares to a market average around 91.5%. Net rental income grew 3.3% and we signed more than 35,000 square meters of leases in the first half, 2/3 of which were renewals with existing tenants always a good sign of tenant satisfaction. Warsaw's vacancy rate continued to fall down to 8.5% on the back of limited new supply and prime rents reached a new high of EUR 28.5 per square meter. Page 22, Prague, our portfolio declined to EUR 768 million as we sold 3 low-yielding office buildings above book value during the half, and as a result, net rental income decreased to EUR 22 million. Like-for-like rental growth was solid at 2.3% and occupancy was high at 95%. The Prague office market vacancy fell to 5.8% basically back to pre-COVID levels and new supply remains genuinely scarce. Page 25, Budapest is seeing a gradual recovery with occupancy now at 87.3% and net rental income increasing to EUR 29 million. We had a strong leasing results in the first half with more than 39,000 square meters signed, representing about 18% of the entire market activity. One of the stories in Budapest office over the last few years was the government's effort to move state-owned and state linked tenants into state-owned office bills would have presented a real challenge to CPIPG with 30% of our tenants falling into this category. The good news is, under the new government, we are seeing our state tenants extending their leases. And in general, we are seeing renewed interest in Hungary from potential tenants across office and retail as well. On Page 27, Bucharest, where CPIPG is one of the largest owners of offices in the city, both directly and indirectly through our investment in Globalworth. Occupancy improved to 91% above the market supported by a healthy weighted average lease term of 5.6 years, much of that reflecting long leases that we have signed with hospitals and clinics, a niche that we have really developed in recent years. Net rental income declined to EUR 15 million, reflecting our disposals adjustments and some owner cost impact. Romania is a market we still now believe in, but Romania will also face some interesting times ahead with austerity measures, including higher VAT and dividend taxes, but we are optimistic about the economy going forward. Romania, just key moving forward, it's a young and hungry population, and you can really feel the buzz in Bucharest. Moving on to retail on Page 29, CPIPG is one of the largest retail landlords in CEE and this segment continues to be a bright spot, occupancy of 98%, effectively full and like-for-like rental growth of 2.2%. The net rental income rose to EUR 190 million. The Czech Republic remains our largest retail market by far, followed by Romania, Poland, Italy and Hungary. We continue to add scale through development such as retail parks in Croatia and Serbia, while selectively disposing of noncore assets, including the sale of 2 retail parks in Italy. The refurbishment of our flagship Sun Plaza in Bucharest is nearly complete with 99% of leases already signed, which should provide a nice uplift to rental income. Our scale continues to make us the first call for retailers expanding across the CEE region and we're seeing that translate into multi-location leases with both existing and new international brands entering our core markets. Turning briefly to residential on Page 36. Residential is 7% of our portfolio, of which 2% is located in the Czech Republic, where we are the second largest residential landlord in the country. Like-for-like rental growth was super strong at 10.1%, reflecting the ongoing housing shortage across the region. Occupancy in the Czech portfolio was steady at just over 90%. We continued opportunistic disposals of leaning assets in France and the U.K. plus select sales of check units at attractive pricing Part of the reason you'll continue to see the absolute set of this segment shrink even as underlying rental growth remains robust. Now I will pause for a moment and hand the floor over to Mindee. Mindee?

Thank you, David. I'm now on Page 39. CPIPG owns one of the largest hotel platforms in the CEE region, primarily congress and convention hotels in capital cities. The segment continues to add diversification and yield to our overall portfolio. Performance was resilient in the first with occupancy at 60.3% and an average daily rate of 89.9 years. Gross operating profit margin held stable at 32.6%, which is a generally good result given we're still absorbing preopening costs and ramp-up expenses from 3 new hotels we owned in Budapest and Renault. The new hotels added 350 units to our total, which now stands at 4,701 rooms and contributed an additional EUR 1 million of gross operating profit this first half. Furthermore, we saw particularly some RevPAR growth between 6% and 15% in Rome, Bratislava, Warsaw and Vienna. Reported net hotel income declined sharply to EUR 2 million from EUR 11 million. But as Pavel mentioned, that's entirely the mechanical effect of the Marriott sales in Vienna and Budapest that closed in 2025. This is the last period you'll see that year-on-year distortion. We also secured attractive new financing this half. It's EUR 170 million loan against a portfolio of Czech hotel properties that matures in 2031 with Raiffeisen Bank International. This reflects continued strong bank appetite for hospitality assets. We are also progressing on the sale of 2 small noncore hotels, which we expect to close later this year. Continuing on to Page 42. Complementary assets, which is mostly land and development. As David mentioned earlier, land has always been part of our group's DNA, and this segment is where a lot of future value creation sit. We have 7 projects currently under construction, an average expected yield on cost above 7% and with pre-letting already close to 90%. We counted the development of 3 retail parks, 2 offices and a hotel during this first half of 2026 at a yield or yield on cost of 6%. Development sales were modest this first half, just EUR 5 million, but that reflects timing more than anything. We expect a substantial step starting from 2027 when part of the residential development for sale will be completed. Moritz, do you want to give a bit more detail?

Thank you, Mindee. I'm now on Page 43. In the Czech Republic, our residential development project, mostly in Prague and Brno, are about 67% presold on average and we are targeting roughly EUR 500 million of sales proceeds from these projects to be completed between 2026 and 2029. at healthy expected margins well into the 30%, 40%. The desire of Czech people to on brakes has not changed. If anything, we see it stronger given how tight housing supply remains relatively to demand. On Dubai, we currently own 19 luxury residential properties, of which 15 are still under construction. In our opinion, the UAE has done an excellent job defensively and scale politically in the past months. And Dubai remains a great place to live, and we do not see that changing. During H1, we signed a loan with Emirates NBD to cover a portion of the remaining CapEx in Dubai, which is another sign of confidence. Combined with our remaining U.K. residential assets, we still see more than EUR 500 million of sales proceeds available in these 2 markets over the next few years. Finally, on Page 45, we're in long-term investment mode. In the Czech Republic, we continue to progress on our redevelopment plans and transformation of the vast land block in Nová Zbrojovk in Brno. There are already several commercial and residential projects ongoing, but there are also future plans in the works for the remaining area. In addition to that, our land bank around Rome, which we have acquired in recent years and to potentially move to come over time, is now seeing some projects move towards the permitting and planning stage. The most notable project is the former Alitalia headquarter site at Muratella, roughly 107,000 square meters of buildable land, where we are planning around 1,300 residential units alongside the school and commercial spaces. We expect the presale phase to begin in 2027. So Italy remains a story that will play out over the balance of this date rather than this year. We think long term and we see Italy as a wealthy country with a desperate need for modern residential assets, ideally with air conditioning after the someone that we thought just experienced. And back to financing on Page 47, I will not remind you of the key points around liquidity, but we're very happy with the current situation. This is a point we continue to emphasize with our rating agencies, and we typically catch up with them around our results publication. Leverage remains stable with S&P and within the rating guidance and improved for Moody's as a result of our most recent hybrid transaction at the end of June. The ICR as the key credit rating metrics remain in focus and should be within the raising guidance for both rating agencies based on our calculation using their rating adjustment standard approach. As previously mentioned by David, given our high hedging rate of 96% and the completed refinancing activity in H1 2026 with a very limited interest rate sensitivity, protecting us against the recent rise in rates. So overall, we see a steady picture while we need to continue to execute our business plan to show meaningful improvements in our credit metrics. Now I will turn over to Petra to discuss ESG.

Thank you, Moritz. This is Petra Hajna. I am the Group Sustainability Officer and would like to walk you through the ESG highlights. Starting on Page 63. We are pleased to report steady progress in our green building goal. As of the end of June 2026, green-certified buildings represented over 52% of our total portfolio value. What is even more important, nearly 95% of these buildings had very strong certification, 3M very good and above all lead gold and advance. On top of that, our life on project in Warsaw offshore listed for the BMW 2020s, which highlights our commitment to top-tier sustainable standards. Moving on to Page 64. I would like to highlight another great ESG milestone the Financial Times and Statista recently named CPIPG, one of Europe's garnet leaders for 2026. Within the property sector, we achieved an incredible second place and rank 28 overall among all participating companies. To add to this success, MSCI recently upgraded our ESG rating from BBB to A. Turning on to Page 67. Our Board of Directors went through some changes during the first half, which we see as positive. Mindee Lee joined the Board which now consists of 6 members, of which 4 are independent and 2 are [indiscernible]. We believe the Board now has the independent experience and diversity of perspectives required to govern our group effectively for years to come. I will briefly discuss sustainable finance, which starts on Page 71. In January 2026, the group published an updated sustainable finance framework and our third European green bond back sheet both independently reviewed by Moody's rating. Moody's assess both documents as very good, confirming strong alignment with market standards as a meaningful contribution to sustainability. In July 2026, the group issued our inaugural European green bond of EUR 550 million. continuing our leadership in sustainable financing in CEE region in the real estate sector. The green board and EU Green bond allocation and impact report is an integral part of the half year management report starting on Page 72. As of 31st July 2026, 100% of the net proceeds from green bonds and EU green bonds were located to the eligible tester. For the Green bond portfolio, 91% of the proceeds were located to 35 bin building followed by sustainable farming holding the cost certificate. For the new print bond, 100% of the proceeds were located to the EU economic aligned assets with an energy performance certificate rating of A. The environmental impact of the green bond portfolio for wind building representing annual greenhouse gases emissions reduction of more than 5,000 tonnes to equivalent in 2025 and by the new taxonomy line projects achieved annual greenhouse gases emissions reduction of more than 1,000 tonnes due to equivalent in 2025. Finally, in August, Moody's conducted their annual review and rewarded our efforts by breaking both the Winbond and European green bond allocation and impact reports at best practice. If you would like to see the details, the official annual review letters are already published on our website. David also mentioned earlier the MSCI upgrades from BBB to A. There was another good reflection of all the work we are doing, and I'm very happy about that. So this covers the ESG section, David, please?

Thank you, Petra. Okay. So I think we can move on to the Q&A. So our typical practice is that Moritz will read out a question and then we will decide who answers and how to answer. So Moritz, do you want to start with the first one?

Okay. The first question. Can you explain how CPI Property could monetize its stake in retail co and holdco do you intend it to deleverage?

Okay. I'll start and maybe Martin Matula, you can correct me if you want, but I'll do my very best. We had a number of questions from you around both the RetailCo and the transaction involving CPI FIM. So let me try and give you a bit of context. I'd say, as everyone knows, and I think we've been very clear Corporate simplification is very, very important to us. And we are quite a large group. And we're trying to really think around how to organize ourselves better for the future, both operationally but also to create optionality for the future. So just to start and say, I think baseline, really what we're doing is trying to have a better, more streamlined internal structure. So looking at the RetailCo, the RetailCo really would involve us pooling together all of our retail assets or the vast majority of our retail assets into one company. Now that just may be where it stays, right? It may just simply be a good operational internal book. However, it does also create some optionality for the future for equity investments or other strategic transactions that we might look at. So it's a bit of housekeeping for the retail co, but also a bit of optionality. I'm not saying that we're going to do an IPO of it or sell a portion to reduce leverage, but certainly creating the framework gives us the option to look at those things in the future. On the [ EMO ] Holdco transaction with CPI FIM, that's really more about housekeeping from my perspective. CPI FIM is our subsidiary. We own 97% of the company. And frankly, there's just been a number of real estate assets that have been held within CPI FIM for a long time. And from our perspective, it just made more sense to put the physical retail assets -- we keep keeping retail physical real estate assets into one company, and that's really what that's about. It's really just about making sure that the real estate is all in one place. Does that also potentially create optionality that's maybe not towards the top of our mind right now, it's really more about housekeeping. Martin approved. So we can go on to the next question.