Cromwell Property Group (CMW) Earnings Call Transcript & Summary

[Audio Gap] office or through the online platform provided by our registry, Link Market Services Limited. The Cromwell Board thanks all security holders for their participation. Today's Annual General Meeting is held as a hybrid meeting. Cromwell is committed to diversity and inclusion, and we believe the hybrid meeting format creates the most inclusive meeting environment for our security holders and stakeholders. To further promote engagement and transparency, we will upload an archive copy of the webcast to our website after the meeting. To begin, I acknowledge the traditional custodians of the lands on which we meet today and pay my respects to their elders, past, present and emerging. Next, I would like to introduce my fellow Directors of Cromwell Corporation Limited. First, joining me here in Cromwell's Brisbane office, we have starting from your left and my right, Independent Non-Executive Director, Rob Blain. Next to Rob is Independent Non-Executive Director, Lisa Scenna. Next to Lisa, independent Non-Executive -- Deputy Chair and Senior Independent Director, Eng Peng Ooi. Next to me on my left, Independent Non-Executive Director, Joe Gersh, AM. And next to Joe, Independent Non-Executive Director, Tanya Cox, managing [indiscernible] to coordinate the virtual component of our meeting. Mr. David Rodgers is also present here today. David is a partner of Deloitte Touche Tohmatsu, which is Cromwell Property Group's auditor. Later in the meeting, you will have the opportunity to ask Mr. Rodgers questions about the financial statements and the independence of the auditor in relation to the conduct of the audit. As a matter of housekeeping for everyone here at the Brisbane meeting location and the unlikely event that we need to evacuate the building, please follow the emergency exit signs and directions of staff to safely move down the stairs and towards our assembly area in the Brisbane Botanic Gardens. Please do not use the lifts. I would now like to open the meeting. I have been informed that a quorum for the meeting is present, and I formally declare the meeting open. On behalf of the Cromwell Board, I would like to welcome you to the 2022 Annual General Meeting of Cromwell Corporation Limited. I will start with a few remarks before handing over to Managing Director and Chief Executive Officer, Jonathan Callaghan. Cromwell is an international business with operations in 14 countries across Europe, Singapore, Australia and New Zealand and assets under management of $12 billion. Our managed portfolio extends across 216 properties, with more than 2,300 tenants across 3.4 million square meters. I'm pleased to note that over the 12 months to 30 June 2022, Cromwell delivered a stable return during what have been quite challenging economic conditions. Underlying operating profit was up 5% to $201 million, reflecting adjusted funds from operations of $173.7 million, with distributions for the financial year ended 30 June 2022 of $0.065 per security. Importantly, the group reduced gearing to 39.6% inside our target range with further initiatives to continue this reduction as we face uncertain global conditions ahead. At our AGM 12 months ago, we announced a new strategic direction for the business led by our newly appointed Managing Director and CEO, Jonathan Callaghan. I am pleased to be able to provide you with an update on our progress today. Under Jonathan's direction, we have introduced several strategic initiatives to move the business towards the goal of becoming a capital-light fund manager as well as navigating external and macro challenges, which have arisen over the period. During the financial year, we completed the sale of 4 noncore assets, being 200 Mary Street in Brisbane, Regent Cinema in Albury, Village Cinema in Geelong and the TGA Complex in the ACT. All assets were sold at a premium to book value, freeing up approximately $160 million in capital to reduce gearing and be reinvested in more strategically aligned initiatives. With a view to further simplifying our business and realigning to our core skills, we recently announced the sale of our 50% interest. As we announced on 7, October 22, the sale of Cromwell's interest was structured in 2 parts: initially, Cromwell received a payment of $20 million for its 50% equity interest in LDK; secondly, Cromwell's secured interest-bearing loans will remain in place until the end of February 2023, with an option for LDK to extend repayment until the end of June 2023. The sale proceeds represent a 67% premium to the book value of Cromwell's equity interest in LDK and on repayment of Cromwell's loans to LDK the sale releases total capital of $168 million. The proceeds from the sale and repayment of loans will be used initially to reduce Cromwell's gearing further. We have also commenced the disposal process for our portfolio of retail assets in Poland, which, as at 30 June 2022, was valued at $720 million, inclusive of our 50% interest in the Ursynów asset with Unibail-Rodamco, and also our Italian logistics assets valued at $91 million. These assets have also been identified as noncore and are being marketed for purchase as portfolios or on an asset-by-asset basis. We will update the market and investors as those initiatives develop further. The current economic climate has also resulted in us putting our proposed AREIT listing on hold until volatility in the global equity and debt markets begins to ease. We believe the transaction will be an important milestone for Cromwell's strategic direction and continue to work on simplifying and derisking the business in preparation for conducive market conditions. These ongoing key strategic initiatives are part of our renewed strategy to simplify the business, which we believe will enhance long-term value for you, our security holders. The Board has full confidence in the team to continue to execute the strategy. And on this note, I will now hand over to Jonathan for his address. Thank you.

Thank you, Gary. Good afternoon, everyone. I'm Jonathan Callaghan, Managing Director and CEO of Cromwell. I would also like to extend a warm welcome to security holders, my fellow Cromwell Directors and attendees joining this meeting in our Brisbane office and online. I want to take this opportunity to share with you a few initial observations from my first 12 months as CEO. Firstly, we have an exceptional and unique global platform with which to grow the business and drive security value -- securityholder value. Secondly, the strategy we are implementing to become a capital-light funds manager is the right one for Cromwell. As CEO, I can assure you there is an urgency within which -- within the business to accelerate this initiative as quickly as possible. Equally, it is important that we continue to make considered and smart decisions on timing based on current challenging market conditions. Finally, we have outstanding people in this business to execute the strategy and to ultimately deliver value for you, our security holders. As a business, we continue to make real progress against our 40:40:20 gender diversity targets and our gender pay gap continues to reduce. We have continued focus on improving leave and time-off benefits, well-being programs, reward and recognition programs and implementing performance-based incentives for all staff. Our approach to ESG is becoming more embedded in our evolving strategy. Externally, our investors are continually raising their expectations of the impact we have and the legacy we leave on the environment, both physical and social. We are absolutely aware of this. Internally, our staff see the importance of living our values in our relationships with employees, tenants, investors, the communities in which we operate and being accountable for the impact on the land on which our buildings sit. Our ESG program is going through a review currently, setting new baselines and targets and is due to be announced imminently. We look forward to demonstrating our commitment to ESG as we formalize our strategy and science-based targets to deliver sustainable outcomes and a resilient future for all our stakeholders. Periods of working through -- there's a very large echo, but I'll just push on. Periods of working from home during the COVID-19 pandemic have led us to reflect on how business will operate in the future and what role the office plays in that. We believe that the way in which tenants use office space will continue to evolve as businesses try to find the balance between coming together and working collaboratively and adopting more flexible work practices. I do not think that the balance is right at the moment, and more time is needed to let things find their natural order. It is difficult to be certain about what the impact this will have on office demand. What I am certain of, though, is that offices will continue to be an important place for work communities to meet indefinitely. Our purpose is to assist our tenants in reimagining and reconfiguring their workplaces to suit the purpose and needs of each business. The repositioning and repurposing of assets has always been a key part of Cromwell's DNA. So we are very comfortable working in tandem with our tenants to deliver this. When local markets improve, we will execute the separation of the Australian assets from the operating business. This remains a key initiative for Cromwell, which will enable both parts of the business to be traded at levels that reflect their inherent values. The work undertaken to date puts us in a good position to move on this quickly when the markets allow. Our European business continues to be strengthened by both new mandates and continued growth in our Singapore-listed Cromwell European REIT over the last year, reaffirming our ongoing strong relationships with local capital partners and trust in our teams to use their local property knowledge and expertise to successfully uncover value. Amid impacts of rising inflation and interest rates pressure, we continue to be proactive in capital management initiatives, including hedging and ongoing open discussions with lenders. We believe the strategy we have set Cromwell on is the right one, and we will continue to execute on our key initiatives to position the business well to take advantage of opportunities as they arise. I'll now hand back to Gary for the formalities. Thank you.

Thank you, Jonathan. We now move to the formal part of the meeting. Cromwell Property Group is a stapled enterprise consisting of Cromwell Corporation Limited, which is referred to as the company and the Cromwell Diversified Property Trust, the responsible entity of which Cromwell Property -- the responsible entity of Cromwell Property Securities Limited. Today's meeting is the Annual General Meeting of the company. I will now address some meeting formalities. Shortly security holders will be asked to vote on 4 ordinary resolutions to be put to this meeting of the company. In accordance with the Corporations Act, voting on each resolution will be conducted by a poll. I appoint Rachel Teo of Link Market Services as the returning officer to conduct the polls. I address the following comments to attendees here at the Brisbane meeting location. One, security holders and proxy holders who have registered to vote will have received a yellow voting card. You will use those cards as ballot papers for each poll. You will be asked to complete your voting card at the relevant time, and they will be collected at the end of the meeting. Only security holders or their duly appointed corporate representatives or attorneys and proxy holders are entitled to vote. Two, if you registered to vote on your own securities and as proxy or representative for securities of one or more other security holders, you will have received one yellow voting card for your own holding and one separate yellow voting card for all other security holdings for which you are appointed as proxy or representative. If you are a proxy holder with a directed proxy, that is, you have been appointed as a proxy by a securityholder who has instructed you how to vote on the relevant resolution on their proxy form, you just need to hand in the yellow voting card when they're collected. You will be treated as having voted in accordance with those instructions. For proxy holders, the For and Against boxes will only be used to record open or discretionary votes, that is, you have been appointed as a proxy by a securityholder who did not instruct you how to vote on the relevant resolution on their proxy form. Five, nonvoting security holders will have received a blue nonvoting card. And finally, visitors will have received a white visitor card. Turning now to those attendees participating online, I make the following comments for your reference. First, security holders and any proxy holders holding open proxies who registered to vote at today's meeting will need to click on the Get A Voting Card button and follow the prompts to receive an electronic voting card to enable you to cast your vote. Secondly, if you're registered to vote on your own securities and as proxy for securities of one or more other security holders, you will have received one electronic voting card for your own holding and one separate electronic voting card for all other security holdings for which you are appointed as proxy. Thirdly, proxy holders holding only directed proxies have no discretionary votes and will not have received an electronic voting card. The directed proxies are lodged in accordance with the securityholders' direction. In line with statutory requirements, details of all proxies in respect of each resolution will be recorded in the minutes. Each Cromwell director who holds Cromwell Property Group Securities has voted in favor of Resolutions 2, 3 and 4. They have not voted on Resolution 5 because they are excluded from doing so by the Corporations Act. As Chair of the meeting, I intend to vote undirected proxies in favor of each of the resolutions. Cromwell security holders, proxy holders and security holder representatives will be provided with an opportunity to ask questions or comment on the resolutions. For security holders and proxy holders here at the Brisbane meeting, please use the microphone available. Before asking a question, please show your yellow voting card or blue nonvoting card, then state your name and, if applicable, the name of each security holder you represent. For security holders and proxy holders participating online, you can ask a question by clicking on the Ask a Question button within the online platform and typing your question or comment in the box provided. Security holders and proxy holders can also ask questions verbally by phone. Information about asking a question by phone, including the number to dial to access the facility is contained in the virtual meeting online guide. To ask a question by phone, you must use your unique pin that was provided when you registered with Link Market Services to use that facility. Please note that you may not vote by phone. Visitors are not entitled to ask questions, make comments or vote. So I'll turn now to the actual formal business of the meeting. The business of today's meeting is described in the notice of meeting sent to security holders, and I will take that notice as having been read. The minutes of the 2021 Annual General Meeting of the company were approved by the board and have been signed as a true and correct record. Those minutes are available for inspection by security holders, if required. The first item on the agenda is the consideration of reports. Cromwell's 2022 annual report has been made available to security holders. It contains the financial report, director's report and auditor's report for the year ended 30 June 2022. This item of business for consideration by the meeting is intended to provide an opportunity for security holders to raise questions on the report and on the performance of the company generally. There is no vote on this item. I now invite discussion and questions in relation to Cromwell's 2022 annual report. If you wish to ask a question or make a comment, please wait to be acknowledged and then give your name. All questions and comments should be directed to me initially as Chair of the meeting. I will call on specific directors or senior management to respond to your question or comment as appropriate. Are there any questions or matters to raise in relation to the 2022 annual report? Lucy?

Thank you, Gary. Any questions [indiscernible].

No questions down here.

Okay. Thank you. Are there any questions or comments from telephone participants?

Sure, there are no phone questions.

Thank you. Gary, we have received the following online question. I'll just send it through to your screen now, but I will read it for the benefit of participants. It's a question asked by [ Stephen Mayne ]. We claim to have audited net assets of $2.7 billion, yet the market current capitalization is only $1.9 billion. Could auditor, David Rodgers from Deloitte, comment on just how rigorous the property valuation process was in the full year audit? If the audited book value remains at [indiscernible] premium to the market's assessment during the upcoming half year audit, is he going to change his approach to write-downs?

David, perhaps you could address the question that's been passed.

Yes, certainly, Chair. In relation to the valuation of investment property, I draw your attention to 3 places in the annual report. Page 86, which is the critical accounting estimate on the valuation of investment properties, the policy on Page 88 and our key audit matter on Page 129. It is important to remember that our audit report relates to the financial report as a whole and the consideration of one -- only particular procedures in one area could be misleading. In auditing the valuation of investment properties in accordance with Australian auditing standards, I considered whether the values have been determined in accordance with the company's accounting policies and whether those policies comply with Australian accounting standards. The key audit matter on Page 129 details the key considerations on the risk and the policy elements. And our procedures set out in the key audit matter detail our response and procedures on that risk. Do note the regularity of investments have increased over the period since COVID. And in the accounts and notes that 93.7% of the portfolio was subject to independent valuation at year-end. The procedures in the key audit matter have been applied in auditing management's assessment of the valuation of investment property and we have obtained appropriate audit evidence that the valuation of investment property is a reasonable estimate. Finally, in relation to the final element of the question, it isn't reasonable now to comment on 31 December 2022 valuations.

Thank you, David. Are there any further online questions?

No further online questions, Gary, and I can see that there are no further questions in Brisbane. Thank you.

Well, as relating to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements or the independence of the auditor in relation to the conduct of the audit of the company. I confirm that we did not receive any written questions on these matters prior to the meeting. Lucy, are there any questions?

Yes. I beg your pardon, Gary. I think I have jumped the gun previously. No questions in Brisbane. Any online -- any telephone questions, operator?

There are no phone questions.

Thank you. And nothing further online, Gary.

Okay. Thank you. So thank you, David, for your response to the earlier question. As there are no further questions, we'll now move to the second item of business. As this item of business relates to my reelection as the Director of the company, I will vacate the chair in favor of our Independent Non-Executive Deputy Chair and Senior Independent Director, Eng Peng Ooi.

Thank you, Gary. The resolution relates to the reelection of Dr. Gary Weiss, AM as the director of the company. Dr. Weiss is Cromwell's Non-Executive Chair, and the notice of meeting contains Gary by graphical details. The resolution reads that Dr. Gary Weiss, AM, who retires by rotation in accordance with the constitution of Cromwell Corporation Limited and offers himself for reelection, is reelected as a director of Cromwell Corporation Limited. The proxies are displayed on the screen. I now invite Gary to give some comments to the meeting.

Thank you, Eng. I was appointed or elected by shareholders in general meeting as a director of the company on the 18th of September 2020. As a representative of the ARA Group, the single largest securityholder in Cromwell. On 17 March 2021, I was elected as Chair of Cromwell. Since my election as Chair, the Board has overseen first, the appointment of Jonathan Callaghan as Chief Executive Officer of Cromwell. Jonathan is, as is well known, one of the most outstanding property executives in Australia. Secondly, the development of a group strategy for Cromwell with a view to simplifying the group structure moving forward and potentially leading to improved returns to security holders and also the necessary reduction in group gearing, bringing gearing now down to levels within the group's target gearing range. Much has been achieved. There is a lot more to do, but we are very much dependent on prevailing market conditions as well as geopolitical factors, particularly in Europe. I look forward to continuing to make a contribution to the restoration of value at Cromwell in the event that I am reelected at this meeting.

Thank you, Gary. Are there any questions or comments on the resolution?

No questions here in Brisbane. Operator, are there any questions or comments from telephone participants?

There are no phone questions.

We have 3 questions from [ Stephen Mayne ] on this resolution. I'll send the first one through and also read it out for the other participants. So Gary Weiss is the long-term CEO of public company, Ariadne, where he owns a 33% stake worth about $28 million and was paid a salary of $719,328 in 2021, '22. How does he find the time to serve on 6 other boards, including being the Non-Executive Chairman of Cromwell?

Thank you, [ Stephen ]. I'm quite happy to accept the track record for the various companies with which I'm involved. I fully understand the obligations and the duties imposed on a company director in Australia. And I believe I faithfully adhere to each and every one of those obligations. In terms of my commitment to Cromwell, it is a very significant one. And I believe that I faithfully fulfill all requirements of being the Chair of Cromwell. I may potentially defer to Tanya Cox. Tanya, sorry, as Chair of our Nomination and Remuneration Committee, perhaps to add some further comments.

Thanks, Gary, and thanks, [ Stephen ], for your question. I just thought that I might be able to add that over the last 12 months, Gary has been able to attend every single board meeting. And in fact, every single committee meeting that Cromwell has held during that period. Gary has also worked very closely with the new CEO, who we know was appointed in October. They worked closely together to review and refresh the strategy of the business along with the Board. And Gary has additionally been engaged with the management team on various practices, including renewal of the insurance program and other management initiatives. So the Board annually considers the effectiveness and the commitment of directors and the chair and we did so in 2022. The Board remains supportive of Gary's leadership, and we'll continue to review so.

The next question from [ Stephen Mayne ] on this resolution. Gary is 69 and is arguably the busiest professional director in Australia as well as being a public company CEO at Ariadne. How does he juggle all these commitments? And is he planning to wind back any of his commitments. Also, is Gary committing to serve a full 3-year term? And could he expand on the status of his relationship with the controlling shareholder that he represented through the shareholder activism campaign?

Sure. Thanks, [ Stephen ]. A number of points to address there. Yes, I am 69. These days, that doesn't seem huge barrier to do anything when you look at Joe Biden, President of the United States, I think at age of 78 or 79 and Donald Trump announcing today that he's throwing his hat into the ring for the presidential election in 2024 and a similar age to Joe Biden. Thankfully, I'm in excellent health, keep fit. I'm very stimulated by the professional roles that I fulfill. And at some stage, yes, I probably will wind back, but not for the foreseeable future. In terms of the 3-year term, yes, I do intend to commit to serving throughout the next term of my appointment. And in relation to our largest shareholder, I have a professional relationship with them in the sense that I represent their interests around the Board table of Cromwell and try and ensure that their views in terms of the company's direction, strategy and so on are brought to the Board table so that similarly in the case of my colleague, Jialei Tang, the interest of the Tang family is the second largest securityholder brought to the Board table so that the Board is conscious of the views of a significant part of the ownership of Cromwell.

Thank you, Gary. We do have some additional questions from [ Stephen Mayne ] on this resolution. The next one is there was a 20% against vote on the proxies. Did one of the proxy advisers recommend against and which shareholders are seeking the removal of our Chairman from the Board?

So the position is that we're not at liberty to share proxy adviser reports or recommendations. But in summary, there were 2 firms have recommended against my reelection on the basis of a topic described as over boarding, which [ Stephen ] has already referenced. Two other major proxy firms recommended for my election.

Thank you, Gary. One further question from Mr. [ Mayne ]. The notice of meeting talks up Gary's contribution to a 50% reduction in our corporate insurance costs. Please provide more detail on how Gary personally delivered this for shareholders.

Well, I'm happy to expand and leave it to any other directors to make any comment. But what's not widely known is that as part of the role that I fill as Chairman of 3 public companies, I involved myself, uniquely the insurers [ tell me ] as Chairman, in presentations annually to directors' and officers' insurers and lead the presentations. So we have direct involvement with the insurers. As I said, I am advised by the many insurers that I deal with, that this is a relatively unique occurrence amongst listed companies in Australia. And I think everyone would be well aware that the trajectory of premium for directors' and officers' insurance cover in Australia has only been one way and premium have escalated dramatically. In the case of Cromwell, together with Jonathan and our key executives, I led the presentation to our directors and officers insurers in the course of the year, and that resulted in a 50% reduction in our corporate insurance costs.

Thank you, Gary. And we've received no further online questions.

Thank you, Lucy. In accordance with the Corporations Act, voting on this resolution will be conducted by a poll. And so now I put the resolution to a poll. For security holders and proxy holders here at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxy holders holding directed proxies do not need to do anything at this time. Please retain your yellow voting card because you will need it to vote on the next resolution. For security holders and proxy holders participating online, please complete your electric -- electronic voting card for this resolution. The Cromwell directors unanimously recommend that security holders vote in favor of the resolution. Dr. Weiss abstained from voting on the recommendation. Please complete your voting card now. [Voting]

Thank you. I will now hand -- I will now vacate the chair in favor of Gary.

Thank you, Eng. The next item of business is the reelection of Joseph Gersh, AM as a director. Joe is an independent Non-Executive Director of Cromwell, and the notice of meeting contains Joe's biographical details. The proxies in relation to this resolution are displayed on the screen. I now invite Joe to give some comments to the meeting.

Thank you, Gary, and good afternoon. My name is Joe Gersh, and I'm seeking reelection as the director of the Cromwell Property Group. My professional career has spanned to approximately 20 years since, the first as a senior partner of the well-known law firm Arnold Bloch Leibler, ABL, practicing mainly in commercial real estate development and finance, but also private mergers and acquisitions. The second 20-year stint -- second part of my professional career has been as the founder and principal of Gersh Investment Partners Limited, which is engaged in investment, development and advisory activities almost exclusively in the residential real estate sector. Separately, I've served as a director of the Reserve Bank of Australia's Payment Systems Board for 15 years. And as the inaugural Chairman of the government's $10 billion terrorism reinsurance scheme, known as the ARPC for almost 10 years, also as Deputy Chairman of the Australian Council of the Arts. Currently, I'm a director of the ABC and chair of its People and Sustainability Committee. I believe I bring significant Board and Board committee experienced to Cromwell as well as commercial and legal expertise, including in major property developments and the commercial property sector. Except for the initial challenges, I've enjoyed most of my time on the Cromwell Board, I'm very pleased to now be part of a collegiate highly professional Board focused squarely on advancing the interest of all of our stakeholders. I'm committed if reelected to use my best endeavors to continue to do so. Thank you, and I'll now hand back to Gary.

Thank you, Joe. Are there any questions in relation to this resolution?

Thank you, Gary. No questions here in Brisbane. Operator, are there any questions via telephone?

There are no phone questions.

Thank you. Gary, we've received one question online on this resolution, and it is from [ Stephen Mayne ]. I'll address the question to you in the first instance. It is good to have a successful property veteran like Joe Gersh on our Board. Could Joe share his insights into our controlling shareholder in terms of how it exercises influence through the Board? Also has Joe ever seen a bigger disconnect between book value and market value in the REIT sector? And what are his thoughts on whether this will narrow or whether we should attempt to realize assets at close to book value and return the cash to shareholders?

Okay. Joe, over to you.

Well, first of all, thank you for describing me as a successful property veteran. And I don't believe I can add any insights into how the -- either of the major shareholders or any of the other stakeholders exercise their influence. The Board operates entirely independently taking into account, of course, the interest and the presence of other major shareholders. As to the disconnect between market values and book values that seems to be the case across the whole of the REIT sector, I have overseen a bigger disconnect. I'm not sure, I don't think so. Do I think it will narrow over time? I certainly hope so.

Thank you, Joe. And just to note that the reference to controlling shareholder, that the ESR Group holds 30% of the issued capital of Cromwell. In accordance with the -- sorry, Lucy, are there any other questions.

Yes. I beg your pardon, Gary, there's just one that's been lodged just this moment. Let me send that through to you, and I'll just read it out. Joe sold his business to Babcock & Brown at one point and then bought it back. Could he explain the history of his dealings with Babcock, which collapsed in 2009 costing shareholders and lenders almost $10 billion, not that Joe was in any way to blame for that. That is a question from [ Stephen Mayne ].

Yes. And I'll take that and [ Stephen ], you're perfectly correct that Joe have seen nothing to do with the collapse of Babcock & Brown. This is an Annual General Meeting of Cromwell Corporation. And I don't think any discussion on the question you've put is pertinent to the matters today. Are there any other questions, Lucy?

No further questions, Gary.

In accordance with the Corporations Act, voting on this resolution will be conducted by a poll. And so now I put the resolution to a poll. For security holders and proxy holders here at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxy holders holding directed proxies do not need to do anything at this time. Please retain your yellow voting card because you will need it to vote on the next resolution. For security holders and proxy holders participating online, please complete your electronic voting card for this resolution. The Cromwell directors unanimously recommend that security holders vote in favor of the resolution. Joe is abstained from voting on the recommendation. Please complete your voting card now. [Voting]

The next item relates to the reelection of Lisa Scenna as a director of the company. Lisa is an Independent Non-Executive Director of Cromwell, and the notice of meeting contains Lisa's biographical details. The proxies in relation to this resolution are displayed on the screen. I now invite Lisa to give some comments to the meeting.

Thank you, Gary. Good afternoon. My name is Lisa Scenna, and my executive career expands over 25 years of experience in real estate and infrastructure across Australia, U.K. and other international markets. I began my career as a chartered accountant and have worked in Australia for both Westfield and Stockland collectively for 15 years, holding various senior finance and operational roles. As part of the leadership team for both organizations, I developed extensive corporate experience as they expanded into new markets and sectors. In 2007, I relocated with my family to the U.K. and with Stockland and took up the role of Joint Managing Director. Since then, I've remained in the U.K. where I continue to build my executive career, initially joining Laing O'Rourke as Head of Explore, where I was responsible for real estate and infrastructure investing across the group across the U.K., Canada, Middle East and Australia, focusing primarily at that point on infrastructure investing activities. I then joined a U.K. listed construction and regeneration company called Morgan Sindall Group as Managing Director of their investment business. During this time, the business was repositioned to focus on major strategic joint ventures with local authorities, rebuilding the team and the development pipeline and raising specialist investment JVs with U.K. institutional investors to support the development activities of the business. I was a director of the Morgan Sindall Investments Board as well as a member of the group executive. In addition to my executive career, I was the Deputy Chair of the Private Infrastructure Development Group Supervisory Board, which is an infrastructure development and finance organization, delivering infrastructure in the most disadvantaged and fragile countries. PIDG, as it is known, is a multi-donor platform supported by 8 countries, including the U.K. and Australia. My role is to represent the donor's interest and lead the organization through a restructure to enhance governance, thus enabling further support from donors in terms of funding. Since 2019, I focused on my nonexecutive career. In addition to my role at Cromwell, I'm on the Board of Genuit plc, where I'm also the Chair of the Remuneration Committee, and I'm scheduled to take on the role of Senior Independent Director in March 2023. I'm also a Non-Executive Director of Harworth Group plc with both organizations being listed on the London Stock Exchange. The notice of general meeting -- the notice of meeting for today's AGM was issued on the 11th of October. I'd like to let you know of an update to my biographical information contained in the notice. On the 31st of October '22, I acquired 25,000 Cromwell Property Group stapled securities, and so now I hold 150,000 stapled securities. Cromwell released my change of director's interest notice [ by the ASX ] on the same day. In conclusion, I believe I bring to Cromwell Property Group, significant local and international experience in real estate funds management, investment management, public policy and government as well as skills and leadership culture, public -- people, risk management and experienced managing capital partners. The last 3 years with Cromwell Property Group have been very busy but rewarding and the Board continues to work very well together. I will continue to work hard and diligently for all stakeholders, and I look forward to the opportunity to continue serving the security holders of Cromwell Property Group should you do so. Thank you, and I'll hand back to Gary.

Thank you, Lisa. Are there any questions or comments on the resolution?

Thank you, Gary. No questions here in Brisbane. Operator, are there any questions from telephone participants?

There are no phone questions.

Thank you, Gary. We have one online question from [ Stephen Mayne ]. I have sent that through to you in the first instance. Could Lisa comment on whether we have enough corporate memory on the Board with knowledge of Cromwell's history? Does anyone on the Board have an ability to reach out to former CEO, Paul Weightman, and tap into his knowledge or are those relationships fully severed?

Lisa, do you want to respond?

I believe we have sufficient corporate memory across all the directors on the Board. And I extend that also to management who have remained with the organization. In terms of Paul Weightman, I think I might pass that one back to you, Gary.

Yes. The board is fully confident in the capabilities and competence of the current management team and senior executive at Cromwell to deal with the conduct of the business and to deal with a number of legacy issues that -- some of which we've dealt with and others, as I've indicated earlier, it also matters that we propose to deal with in the coming term. Are there any other questions, Lucy?

No further questions, Gary.

In accordance with the Corporations Act, voting on this resolution will be conducted by a poll. And so now I put the resolution to a poll. The security holders and proxy holders here at the Brisbane meeting location, please complete your yellow voting count for this resolution. Proxy holders holding directed proxies do not need to do anything at this time. Please retain your yellow voting card because you will need that to vote on the next resolution. For security holders and proxy holders participating online, please complete your electronic voting card for this resolution. The Cromwell directors unanimously recommend that security holders vote in favor of the resolution. Lisa has abstained from voting on the recommendation. Please complete your voting card now. [Voting]

Thank you. The last item of business relates to the adoption of the remuneration report. The notice of meeting contained commentary about the resolution. I'll take the resolution as read. The proxies in relation to this resolution are displayed on the screen. I remind security holders that this vote is advisory only and does not bind the directors of the company or the company itself. The notice of meeting contain details of the Corporations Act requirements in relation to voting on this resolution. Voting exclusions apply for this resolution, and those exclusions are stated in the notice of meeting. I've taken the notice as having been read. Are there any questions or comments on the resolution?

Thank you, Gary. No questions here in Brisbane. Operator, are there any questions from telephone participants?

There are no phone questions.

Thank you. Gary, we have one question online from [ Stephen Mayne ]. I've sent that through to you, but I will read it out. When disclosing the outcome of voting on all resolutions today, including this rem report item, could you please advise the ASX, how many shareholders voted for and against each item similar to what happens with the scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of [ Metcash, Altium ] and Dexus last year and Webjet and Tabcorp so far this season.

Thank you for the question. We comply with all ASX disclosure requirements. We'll take the point made in this question on notice and discuss at a Board level. Any other questions, Lisa?

No further questions, Gary.

In accordance with the Corporations Act, voting on this resolution will be conducted by a poll. And so now I put the resolution to a poll. The security holders and proxy holders here at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxy holders holding directed proxies do not need to do anything at this time. For security holders and proxy holders participating online, please complete your electronic voting card for this resolution. The Cromwell directors unanimously recommend that security holders vote in favor of the resolution. Given online registration of voting opened 30 minutes before the meeting started, the poll on this and all prior resolutions will remain open now for a further 2 minutes. Please complete your voting card now. The security holders and proxy holders participating online, please ensure you submit your electronic voting card through the online platform. I declare the poll for the resolutions closed. For security holders, I probably jumped the gun a bit there, Lucy, a little ahead of myself. So we'll just pause.

Thank you, Gary. That's -- 2 minutes. [Voting]

Thank you, Gary. Two minutes have elapsed.

I now declare the poll for the resolutions closed. For security holders and proxy holders here at the Brisbane meeting location, please place your completed yellow voting cards and directed proxies in one of the ballot boxes being circulated by Link Market Services representatives. For security holders and proxy holders here at the Brisbane meeting location, as everyone who has a yellow voting card completed and handed in the card. If not, please raise your hand and do so now. Now that we have dealt with the specific business of the meeting, in accordance with the requirements of Section 250S of the Corporations Act, I would like to offer security holders the opportunity to ask further questions about or make comments on the management of the company in addition to the questions and comments already made on the items of business earlier in the meetings. The 2 questions received in advance of the meeting were on the topic of Cromwell's recent performance. And my remarks and Jonathan's remarks earlier in the meeting sought to address these. However, I would like to make some remarks from a macro perspective. Until recently, property companies such as Cromwell enjoyed conditions of record low interest rates and [ with ] low capitalization rates, which led to improving returns for property companies. Quite simply, those factors no longer apply. Leaving aside the obvious complications arising from the COVID-19 pandemic, we have witnessed the fastest and sharpest increase in interest rates ever, and that clearly has a consequential impact the other way. That is the increased cost of borrowing and potential reversal of cap rate compression. This is not something that impacts Cromwell alone. It impacts the property sector more broadly with property companies trading has already been observed at significant discounts to stated NTA. And indeed, we have seen the share prices of competitors across the entire property sector having reduced significantly. Lucy, are there any further questions or comments?

Yes. Just [indiscernible].

[indiscernible]. We've had shares in your company for [indiscernible] years or so. When you were instigating a takeover, you promised Cromwell -- just about the word, you said that the [ Board ] is not good that we had that you were going to give us more value. And at about that time, the share price was around about $1.40. Today, it's 70-something cents. And the dividend has been reduced to $1.38. Now for a Chairman with your experience, you ought to know because I bloody wouldn't know that -- and I can remember the days of 18% interest, and you should be running the business that you know that interest rates were never going to stay as low as they were. You've sold millions of dollars' worth of property and in your address, you've said how you've reduced a hell of a lot of debt. So to use the excuse of interest rates going up, which is still only a pittance compared with where they could be, I just got no confidence that this Board is doing the right thing. As you said you were going to do when you took over this company and I find it extremely disappointing the situation that Cromwell is in at the moment.

Thank you. So just to correct a couple of points that were made. The takeover, I think you have your -- with respect to a couple of points slightly wrong. The share price had at one stage, several years ago, been up at $1.30. The ARA takeover was made at significantly lower levels than that. I can't recall the exact price, but it would have been approximately $0.90 a share. So that was the takeover that was made at the time, not $1.40. As to what we inherited, let me just remind you that we inherited a company where gearing was already outside the target range for this group. Target range for this group, stated group policy was to have gearing of between 30% to 40%. At the time I joined this Board, the see-through gearing of Cromwell was north of 47%. So we have been on a path to correct that position by reducing gearing. And we've been, I think, very successful to date in doing so. By 30 June 2022, we've sold $160 million of noncore assets, all at a premium to book value. Subsequently, as we've announced, we've had the sale of our interest in LDK and a commitment to refinance or to repay loans that Cromwell had made to LDK. In aggregate, that will see a return of a further $170 million approximately to Cromwell to reduce debt. Only with those proceeds, will we get to being just within the target gearing range [indiscernible] security holders about. We think we need to de-gear further. And that's the -- for that reason, we've announced that we're proposing to explore the sale of our Polish assets. As I mentioned in my remarks, we have $720 million worth of retail assets in Poland. These were assets acquired towards the end of 2019, and it is unfortunate to say the least that the fortunes of those assets were badly impacted by the onset of COVID and attempts that we were then about to make with COVID at that stage 6 or 8 months ago, hopefully coming to an end. We started to begin preparations to look at marketing those assets. And then unfortunately, we were met with the invasion of Ukraine by the Russians. And as you're well aware, Poland is a neighboring state to Ukraine. So the conditions have hardly been conducive to selling those assets, which the Board has been of a mind to do so for some time to reduce gearing. And it's only with reduced gearing that we will be able to mitigate the impacts of the rapid rise in interest rates that we have seen across the sector. Now the Board is not happy with where we are. We understand that. But we -- as I said, we have been active in the program of selling noncore assets. Those assets that we have sold have all been sold at a premium to book value, which of itself in the current climate is something not to be dismissed lightly. And we do intend to do our very best to continue to try and restore value. But the best way to do that in our view is to focus on balance sheet strength to reduce our gearing and to position Cromwell to be well placed to participate in the potential to acquire assets at the right time of the cycle.

Excuse me. How many percent do you still have in LDK, which I'm not impressed with LDK at all because I live in Canberra, and I know a lot of the assets that Cromwell hold. It's okay because I've done my research, I come here every year for a meeting, except for the last 2 years. So early day LDK will be...

Well, I'm pleased to...

I'm not interested in LDK, I'm sorry. But I live there, I married there [ 40 ] over years and being a political [indiscernible] for long, long time. So I know your assets sometimes when you use [indiscernible], there was good asset [indiscernible] because I'm very outspoken, having been working in the travel and tourism for a long, long time with the government -- with ACT Government and now with the Living Power, not really keen on LDK because their business model doesn't make me happy -- sorry.

Well, thank you for your comments. And LDK was identified very early on by the Board as an asset that was noncore to Cromwell. And we engaged in the process to look at not only selling our ownership interest in LDK but also looking to retrieve a very significant amount of subordinated loans that Cromwell had made to LDK. So I'm pleased to say that we announced in October that we've sold our equity interest, our ownership interest in LDK to Anglicare at a 67% premium to book value with a commitment to refinance and to repay the loans that Cromwell has outstanding to LDK no later than the 30th of June next year.

[indiscernible].

So it's not. LDK is no longer part of Cromwell other than the fact that we have a subordinated loan of about $150 million waiting to be repaid, which contractually, we expect to get no later than 30th of June next year and that will then terminate our involvement with LDK.

Mr. David [indiscernible] of the Australian Shareholders' Association.

Chair. My name is David [indiscernible] from the Australian Shareholders' Association. You've been discussing between making the distinction between core and noncore assets. Can I -- can we ask for a better understanding of the criteria that's looked at in determining that, please?

So it's a very good question. Let me just say, probably there's some very obvious responses to that, having an investment in aged care living where we weren't involved as operators ourselves. That was effectively management was in the hands of others, and our role was fundamentally financier. As the sort of asset that we didn't feel was part of Cromwell's ongoing future, small assets often in -- there's some prime locations, [ cinemas ] and Geelong, et cetera, would clearly fall under that category. And as I said, these are assets that are -- which I've already indicated fall within that category, assets where we don't feel that there is significant further upside available for Cromwell security holders. And clearly, assets such as the Polish retail assets, which were assets acquired by Cromwell at a time that are proposed to look to sell down those assets fairly quickly after acquisition. But as I've indicated earlier, with the onset of COVID and then added to what has been the destabilizing events in Europe have meant that disposal of the initial thought process of selling down and keeping a small holding and managing those assets is no longer possible. But we do need to get our balance sheet down and I think from a risk management point of view to the extent that we are able to achieve a significant reduction in gearing and look to deploy our assets, I think a clear focus back on the Australian market and key areas in the Australian market where Cromwell has a well-developed level of involvement and experience will be where the Board would look to invest, but we're not there yet.

David from the Shareholders' Association again. And that leads me to my next question with respect to the European exposure. This morning, we walked to the news that Mr. Putin had dropped a couple of missiles into Poland. So can I ask for some commentary looking forward with respect to the very heavy exposure and weighting that Cromwell has in Europe, please?

Yes. Well, ageism is [ rare that's heard ] in this forum already today, but President Biden has just announced that apparently these missiles that landed in Poland, the trajectory indicated that they couldn't have come from Russia. So where they came from, I don't know, but leave that for a moment. Clearly, it's a very, very difficult position that we're in. As I said, the -- leaving aside the magnitude of the acquisition of these assets in the first place, we are where we are, as I indicated to a prior questioner, I'm disappointed by the performance of where we are in terms of Cromwell, but this Board has been decreased a number of very significant legacy issues for us to deal with and Poland is one of them. Due to COVID travel restrictions, as a Board, we've actually been unable to go and have a look at these assets up until earlier this year. I'm pleased to say that the assets are real, pretty well located, anchored for many of the assets by a large nondiscretionary retailer. But you have to really ask yourself what on earth is Cromwell doing in Poland, which is exactly the question we all asked ourselves, but we are where we are. With any luck, we will be able to hopefully reduce our exposure, but we do not intend to do so in a manner that destroys value. I guess the Board is -- the current Board is composed of some very significant -- people with very, very significant property experience, both in Australia and globally. And it's a question of finding the moment to hopefully realize value out of these assets, including -- I also mentioned we have a portfolio of logistics assets in Italy that were purchased by Cromwell with a view to forming a fund to put them into, we've been unable to do that. So again, we will be looking to dispose of those and apply the proceeds to debt reduction.

Yes, [ Mike Collins ], again, Mr. Chairman. Wouldn't it be prudent for the Board to really seriously look at the situation in Poland? I know you said you got a good deal on insurance, but I don't think insurance cover war. Even to take some sort of a haircut as minimal as possible, obviously, to get out of that situation because the situation is not going to get better.

Well, yes, as I said, we have a Board here that I think has particularly experienced in the property sector. And all the skills of the Board together with our executive team, and we have a very, very good team in Poland that are being harnessed to try and find the best way out of this difficult situation. Now I can't give you an assurance about how this will play out. All I can tell you is, by way of example, we had a discussion earlier about LDK, a noncore asset for Cromwell, where we held a 50% interest, but no operating control. We were passenger on this vehicle, but we had near $200 million exposure. I think we have negotiated a very, very successful outcome for what could have been a tricky situation for Cromwell. So if I could just remind you, we sold our equity at a 67% premium to our book value. We are scheduled to get back in full all the amount of the loans that we have made to Cromwell no later than the 30th of June next year. And thirdly, and just as importantly, we sold our interest to Anglicare, a not-for-profit organization, dedicated to looking after the care and well-being of elderly residents of the population in LDK homes. So I'd just cite that as an example of how I think this Board and together with a very talented management team have negotiated [ exit ] in very difficult circumstances. There's a lot more I could tell you about some of the issues we confronted in exiting LDK, but it's not particularly helpful. The good news is that we've dealt with that. In the case of Poland, we do have a very good team on the ground. These assets in their own right are good assets. We think if we deal with it professionally and with some measure of skill and utilizing the experience around the Board table and our management team that, hopefully, we will be able to find a basis to at least reduce our exposure to Poland. So I can't provide any assurance of any outcome, but it is a difficult situation. As I said, this Board didn't buy these assets. We're here to improve the position of Cromwell, and it's our view that the position of Cromwell will be improved if we're able to negotiate and exit from either all or a significant proportion of that portfolio and redirect our funds to reduction in gearing and an enhanced focus on the Australian market where we believe we have a competitive position in the property sector.

[indiscernible] Fund. With your experience with Poland and Italy, has the Board got any plans to retain all the investments in Australia or will they still seek to go overseas?

I think the Board's strong preference is to refocus our efforts in Australia. And saying that, we have significant assets in Europe. I'm not saying that we intend to abandon our efforts in Europe. We do have a significant investment through CEREIT in Singapore and through CEREIT, significant investments in Europe and with a very good portfolio of assets. But we do believe that we have a competitive position in the Australian market. And I think the preference of the Board would be assuming we find appropriate investment opportunities to refocus our efforts on the market close to home or at home, where as I said, I do believe, particularly with the rejuvenated management team led by Jonathan that we have a competitive advantage.

[indiscernible].

[indiscernible], I'm a private retail shareholder. I bought in the Cromwell a handful of years ago, I couldn't tell you exactly what, but I remember the pitch at the time was that it had a strong portfolio of real estate assets, mostly with long weighted average lease expiry to government tenants in Australia. Now I'm not hearing a lot of discussion about that at this meeting. So I'm assuming that the majority of the Board discussion and focus is on these problem assets that you seem to be talking about here. Can you give some insight into what the relative proportion of what I would deem those traditional assets are to these more problematic assets overseas in terms of the relativities of the capital value of those assets versus the amount of Board focus we're getting in each of those areas?

Sure. Let me just say that you're perfectly right. We haven't -- the questioning hasn't focused on what is an excellent component of Cromwell, which are the significant assets that we have here, [ long WALEs ], good government tenancies, [indiscernible], et cetera. These are real strategic assets for Cromwell. And -- but the fact that we haven't really discussed them does not mean that we don't pay particular attention to them. But clearly, as I said, we are well aware of some of the issues that we need to confront and that's where a lot of our efforts are focused. But Jonathan -- if Jonathan is still there or Michael, perhaps might be easier, Michael, for you to talk about the mix of our property composition in terms of our core Australian assets, which potentially would be earmarked for an Australian real estate trust.

Thank you, Gary. I'm Michael Wilde, Chief Financial Officer for the Cromwell Property Group. So we've got -- the Australian portfolio is roughly $3 billion worth. And as Gary was indicating, that was the target for us for the -- the rate that we're going to move into a separate vehicle to manage. As we've already noted, the Polish assets are valued at $720 million and the Italian assets at just over $90 million. So that's the sort of mix that we're talking about. But the balance sheet is still underpinned by the $3 billion of Australian assets that is the core component of what Cromwell looks after.

Okay. Are there any other questions?

Thank you, Gary. No further questions in Brisbane. Operator, are there any questions from telephone participants?

There are no phone questions.

Thank you, Gary. We do have 8 questions online. I'll work through them in the order in which they were lodged. I've sent the first one through to you, and I will read it for attendees. Since the December '20 distribution of [indiscernible] to the current distribution receivable on Friday of [indiscernible], the annual rate of distribution has fallen 27% from an annualized rate of $0.075 per unit to an annualized rate of $0.055. This has not been a successful change since the removal of the previous Board and management. What is the Board and management doing to restore the previous rate of distribution? The question was put by John [indiscernible].

Okay. Michael, perhaps I could ask you to comment on the distributions.

Yes. Thanks, Gary. I think as we've already discussed today, one of the key focuses we've had has been on the gearing of the group. Now one of the advantages of the high gearing has been the ability of the group to pay up higher distributions. But that's always been something that has put pressure on the group long term to sustain those distributions. And I think as the Board has already indicated, the focus has really been on managing that gearing down. And one of the [ flow-on ] impacts is to make sure that the ongoing distribution rate is therefore sustainable for the group going forward. So we've always got a keen focus on making sure that we can continue to deliver as much as we possibly can to all security holders but within the confines of the gearing range that we need to operate in.

The next question is from [ Stephen Mayne ]. Well done on getting out of the Anglican joint venture in LDK at a 67% premium to the book value of Cromwell's equity interest in LDK. If we really believe the book value of the rest of our assets, why don't we realize some of them and return the cash to shareholders? Proving the market is wrong to impose a huge discount to claimed net assets?

Well, I think the answer to that, [ Stephen ], is that we are realizing assets. But having regard to the balance sheet that we inherited, the first call on realization of asset sales is to reduce gearing. And that is something that we have a laser-like focus on. We need to get our gearing down. We want to get our gearing down. Balance sheet strength is going to be critical in the coming period. And so that is our very clear focus in terms of proceeds.

Thank you, Gary. The next question is also from [ Stephen Mayne ]. I've sent that through to you. It reads, it was a brutal change of control battle at Cromwell spread across multiple shareholder meetings. Looking back, could Chair, Gary Weiss reflect on whether the transaction costs of this battle were too high or worth the effort? Could the representatives of the controlling shareholder also comment as to whether they are happy with their investment?

Well, I don't think there's much that can be commented on beyond the fact that the battle that is referenced here was a request by the single largest security holder in Cromwell for Board representation and that had been rejected. It was a desire to ensure that there was a level of representation around the Board table of the largest owner of Cromwell. And I think the position is now that not only as I've indicated earlier, the ESR Group, which acquired ARA, represented around the Board table, but also the second largest security holder, the Tang family is similarly represented. And I've commented previously on how the Board as a whole believes that the imported [ receives ] in terms of views of its largest owners is instructive for the further strategy and workings with Cromwell.

Thank you, Gary. The next question from [ Stephen Mayne ]. The Chair mentioned in his address that our gearing ratio is 39%, but isn't that against book value as opposed to market value? How large is the net debt today? And are there any triggers in our banking covenants relating to market capitalization?

So the response to the last question is no. And the second is that it is against book value. And the figure that I mentioned just for the sake of clarity is on the assumption that we received by the 30th of June next year, the repayment of loans that Cromwell had made to LDK, and it does not assume any further asset sales during this period.

Thank you, Gary. The next question from [ Stephen Mayne, ] I believe may have been answered by your earlier remarks but let me read it. What is the history of how Brisbane-based ASX-listed company finished up with $720 million of retail assets in Poland? What are our initial responses to the killing of 2 Polish citizens by stray Russian missile yesterday? And what impact has the war in Ukraine had so far on our Polish assets? And are we selling in part due to the war? Are we confident of getting near to book value?

I think I've already addressed that question.

Very good. Thank you. The next question from [ Stephen Mayne ]. Cromwell is effectively controlled by the combined holdings of ESR and the Tang family. Could the ESR and Tang family representatives on the Board, please comment as to whether they are stable, long-term shareholders of Cromwell and whether their shares in Cromwell are secured or pledged 20 finance years through margin loans or other structures.

Well, I'm not in a position to comment, and I don't believe [indiscernible] -- so yes, the position is that the 2 holders mentioned between them hold nearly 50% of Cromwell. They're represented on the Board through their respective representatives, and we'll just leave it at that.

Thank you, Gary. Two final questions from [ Stephen Mayne ]. The first, we knew all about COVID and the Ukraine war at the full year results, why weren't the Polish assets written down at that point? And how much did we pay for the Polish assets? What changes to book value of these Polish assets have occurred since we bought them?

So the carrying value of our Polish assets reflect independent valuations of those assets. There has been some write-down of the Polish assets since acquisition, Michael, do you know approximately what the reduction in book values been since acquisition?

Yes. Okay. So we bought the portfolio for around $800 million, and 30 June now carried at $720 million. So that's the reduction.

Thank you.

Thank you, Gary. Final question from [ Stephen Mayne. ] I've sent that through to you. Delighted to hear that the Polish assets are real. Who have we hired to try and assist with the Polish divestment? Is it traditional Wall Street investment bankers, local real estate agents, Warsaw-based lawyers or a combination of all 3? Have the auditors taken a look at these assets as part of the latest audit process and when were these assets last independently valued?

So we have, as I indicated in earlier remarks, a highly competent team in Poland, and we're working with our team and advisers to look at how we can potentially maximize the value of our assets. In terms of valuation, these assets were last valued at 30 June. And as I said, they were valued independently. Are there any other questions?

Thank you, Gary. No further questions.

Thank you. So I thank you all for your attendance today and those online. Thank you very much, and I hope to be able to bring you better news when next we meet. But thank you for your attendance today.