Elanor Investors Group (ENN) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Elanor Investors Group ENN investor Conference Call. [Operator Instructions]. I would now like to hand the conference over to Mr. Glenn Willis, CEO. Please go ahead.

Thank you. Good afternoon, and welcome to this results presentation call for Elanor Investors Group. This afternoon, I along with my senior leadership team colleagues, will be pleased to provide an overview of our results for the first half of this financial year and discuss the group's achievements over the half, talk a bit about our outlook for the group later in the presentation. On the call today, we'll be referring to the presentation pack that was released to the ASX this morning. If I can now refer you to Page 4 of that presentation pack, here, we provide an overview of Elanor's Funds Management business. As you can see, we're approaching $3 billion in Funds Under Management with these funds under management being made up of investments across our current 4 sectors of focus. The investment sectors of focus we are currently focused on, are the Retail real estate sector, the Office real estate sector, the Health Care real estate sector and the Hotels, Tourism & Leisure sector. I'd like to add here that we've now reached $3 billion in funds under management, following our recent acquisition of Riverside Forum -- Riverton Forum, I should say, a retail asset and 2 hotel investments. Over the last half, we achieved another period of growth in Funds Under Management, a period where we also returned a significant amount of capital to investors as a result of several highly successful realizations, realizations that resulted in very strong investment returns for our capital partners and realizations that directly reflect our primary focus on delivering investment outperformance for our fund investors. We firmly believe that we'll continue to achieve strong growth in Funds Under Management for the group if we continue to maintain what we call our performance first approach to investment management rather than a fund first approach. We've often seen the folly of fund managers adopting a growth for growth's sake approach to managing funds and we'll no doubt see it again. Having said that, our approach to investing has us well positioned for strong growth in Funds Under Management and strong scalable growth in earnings. At that end, over the last half, we've made significant progress in building out our funds management platform to enable us to deliver on our robust growth ambitions. We made significant progress in investments in people, talent and capability across the group, progress in our capital raising capacity, progress in developing new sectors and progress in strategic opportunities. And with our balance sheet capacity, we made good progress on a number of fronts. If I can now refer you to Page 5 of the pack, here, we provide a snapshot of our results for the last half, periods where we achieved, as I said, strong growth in funds management earnings and a period where we made significant progress in the build-out of our funds management platform. Over the half, we achieved core earnings of just over $10.3 million or 7.3 cents per security, slightly above the guidance we provided in December. We're pleased with the growth we achieved in funds management earnings over the half with Funds Management EBITDA increasing by 74% on the prior corresponding period. Recurring Funds Management income increasing by 33% on the prior corresponding period, both being pleasing results. This earnings growth was on the back of growth in FUM of 18% over the prior corresponding period and 6% over the half. And importantly, this growth in Funds Under Management was achieved in the half where we returned over $220 million of capital. I mentioned this being a result of several very successful realizations for our fund investors. As we achieved this growth in Funds Under Management, over the half, we raised over $250 million of equity for our funds relating to over $450 million of Funds Under Management for the half, a rather pleasing result. The progress we achieved in our sustainability initiatives over the half was also pleasing. As you may be aware, our mission for Elanor is to be the leading real estate funds management group known for delivering exceptional investment returns. But we also strive to make impactful social and environmental contributions, the communities in which we operate and more broadly. That end, we made significant progress in our environmental initiatives across the group over the period. In progressing the significant solar energy initiatives across our portfolio of retail assets, we also made significant progress in our initiatives to improve energy performances and transitions through renewables at our office and health care assets. The progress was made in the numerous environmental initiatives at our hotel assets. We'll talk more about our sustainability endeavors in Page 17 of the pack. Particularly pleased to note with that partnership with the Smith Family to support over 100 Secondary School students across Australia and the other initiatives we engage with the Smith Family for disadvantaged us. Smith Family is a wonderful organization, doing fantastic work in helping so many disadvantaged kids across the country. We believe that Elanor is well positioned to help a lot more disadvantages through our strategic partnership [Audio Gap]. As I said, we'll talk more about [Audio Gap]. I'll now hand over to Paul Siviour, Illinois Investors Group's COO, to discuss the group's last half results in more detail. Paul?

Thank you, Glenn. And before we talk specifically about the strong performance of Elanor during the half and FUM growth, we want to talk through very significant funds management achievements during the half, and I refer those on the call to Page 6 of the investor presentation. This page provide further detail on the 2 major categories of achievements during the half in respect of funds management. They were, firstly, returning over $220 million of invested capital to our investment partners as part of realization events that generated investment outperformance. And secondly, raising $254 million of equity in respect of Funds Under Management totaling $457 million. These 2 categories of activities reflect, firstly, our ability to generate outperformance for investors and provide realization events; and secondly, in respect of the equity that we've raised, position the group strategically for future growth and also reflect the demand from both institutional and wholesale investors for our investment offerings. So specifically, and we'll spend a little time on this page and take you through each of the categories that reflect what I've just described. Firstly, in respect of the Elanor Healthcare Real Estate Fund. During the half, we successfully raised $165 million of equity from an Asian-based institutional investor, who is going to be our partner to grow that portfolio of core health care assets. More specifically, this fund was established in March 2019 with wholesale capital. But over the last 2 years in particular, investors have recognized the defensive nature of cash flows and the strong risk-adjusted returns that health care real estate presents. As a result of that, there was significant institutional interest in this fund and in partnering with us moving forward. And we're delighted to have executed on that recapitalization event during the half. As I said, this enabled us to provide a full liquidity event, $145 million of capital returned to our wholesale investor partners within that fund. -- who generated a strong total return. And equally importantly, it enables us, sets us up with a strategic institutional partner to grow that fund in respect of core health care assets. Secondly, Elanor Property Income Fund was launched during the half in November 2022. Those that have attended our calls in the past will recall that this launch results really particularly from the successful privatization of Elanor Retail Property Fund. We announced the privatization of that fund back in June 2022, and that was as a result of, frankly, notwithstanding the strong performance of the underlying portfolio of real estate assets to fund the securities continued to trade at a significant discount to NTA. We've been able to generate significant security holder value for the investors in ERF who have received as a result of the privatization a 15% premium over the trading price of Elanor Retail Property Fund prior to the announcement. In addition, we were delighted that having provided a full liquidity event and offer to all Elanor Retail Property Fund investors that 70% of those investors decided to remain as investors in the Elanor Property Income Fund. The fund, the Elanor Property Income Fund, importantly, is an open-ended multi-sector property income fund that delivers reliable monthly distributions from real estate that have strong and differentiated attributes and competitive advantages. The fund has been distributing -- monthly distribution since launch that reflects a 6% distribution per annum. Equally importantly is that the establishment of this fund strategically positions Elanor for retail capital inflows into what we plan will be a significant flagship fund for the business. Thirdly, in respect of our retail managed funds, 2 major fund management successes in the half. Firstly, we established the Tweed Mall Mixed-Use Real Estate Fund in October. In respect of that fund, we raised $52 million of equity from our wholesale capital partners, and there was very strong support for that offering given the strong total return that fund presents. The establishment of the fund in turn enabled the distribution of a $0.36 special distribution to investors in Elanor Retail Property Fund, and that was a component part of the 15% accretion that investors enjoyed -- ERF investors enjoyed. Secondly, we establish -- in respect of the Riverside Plaza Syndicate, this is a fund that we established some years ago, back in 2020, we acquired the Riverside Plaza Shopping Center in Queanbeyan for $60 million which really represented deep value. And the main reason for that was the purchase price did not include any consideration for a vacant DDS space. Our team had a number of plans in respect to the repositioning of that space in terms of leasing to government or to medical or indeed a medical hub. During the half, we successfully executed a 5-year lease to the Australian Electoral Commission over that space and the value of that asset was uplifted to $115 million. This enabled us to refinance that asset at modest gearing of 47% and pay a capital return to our wholesale capital partners in that fund that was essentially 50% -- a little over a 50% capital return to their original investment and generated an IRR since inception of the fund of 45%. In respect of our Elanor Hotel Accommodation Fund, we've acquired 3 assets during the half, 2 to be settled shortly, but all equity in respect of those acquisitions was raised during the half, $37 million in total. That takes our portfolio of regional and luxury hotels to 18 hotels with a portfolio value of $424 million, and provides the opportunity to further leverage our integrated hotel operating and funds management platform. Finally, I'd like to mention the Elanor Commercial Property Fund. And there's a call on that fund at 2:00. So just briefly, this fund has performed exceptionally well in the half. It has a high-quality portfolio of assets that are located in markets with strong fundamentals and the assets themselves are performing strongly as a result of their differentiated positions. Specifically, the portfolio is 96% occupied with 84% physical occupation of the assets, so tenants in occupation physically day by day. During the half, we achieved like-for-like income growth of 4.7% off the back of significant leases that were executed at a 16% positive leasing spread, and we continue to reaffirm guidance for FY '23 of 9.4 cents distribution at an 81 payout ratio, reflecting a distribution yield of over 10%. Turning to Page 7, which sets out a breakdown of our funds management EBITDA that those that have dialed in before would be familiar with. Importantly, this sets out the makeup of our core earnings EBITDA, $17.1 million for the half, and the reconciliation between that and core earnings is simply depreciation, interest and tax. In respect of our Funds Management EBITDA, we generated Funds Management income of $29.9 million, which was up very significantly on the prior comparative period. More importantly, Funds Management EBITDA of $13.3 million, that was up 74% on the prior comparative period. We'll talk specifically to some of the component income parts in a moment, but we can see an opportunity for growth across the various income streams that comprise our Funds Management income. The second key driver of our core earnings, co-investment income, which is the distributions that we have received in cash or our receivable in cash from our co-investments has increased 60% to $4.8 million, and that's primarily due to a significant increase in distributions from our co-investment in our hotel fund, as it continues to improve and drive operating performance. And we see further growth in our co-investment income moving forward. And finally, in respect of transactional income, very significant contribution in the prior comparative period of $7 million that related to the establishment of our hotel fund, only a modest contribution this half. Turning to Page 8, we provide further breakdown of the growth in our recurring funds management income or fees. This has grown 33% to $19.5 million for the half. Our recurring fees relate to management fees, our hotel operator fees, and our leasing and development fees. Excluded from this analysis are our acquisition fees, which were down on the prior comparative period. We had good growth in FUM but more modest than the prior comparative period. And it also excludes our performance fees, which were pleasingly $6.4 million for the half. I would point out in relation to the performance fees that, that relates to the healthcare fund, but primarily the Riverside Plaza fund. But the performance fee that we have reported only relates to 50% of the total performance fee if indeed there was to be a full realization event of that asset. But back to our recurring management fees, our core management fees of $14.1 million for the half will grow as a result of the full year flow-on impact of the fund increase in the first half of '23, $152 million. They'll grow because of the fees we will earn on the $130 million of new assets that we'll settle within the next few weeks, that Glenn mentioned before, that take our total FUM to $3 billion, and they will grow from further FUM that's added during the second half of FY '23. In respect of hotel operator fees, $2.6 million for the half that will grow as we continue to see improvement in the performance of that portfolio and indeed growth in the portfolio as a result of new investments. Leasing fees, which a central part of our asset management capability, particularly across retail and commercial will continue to grow as we move forward; and as will our development management fees, primarily for the moment, we'll touch on it later, related to our retail and hotels portfolio where we conduct important value accretive repositioning in respect of our assets. I'll turn now to Page 11 and 12. Just very briefly, and not to provide any real commentary, but it does outline our mission being a leading real estate funds manager, delivering exceptional investment returns and making positive and impactful social and environmental contributions, but also our key objectives, which folks are familiar with. We're very focused on a value for risk and sustainability lens when we originate. We have a differentiated multi-sector real estate funds management platform, and we unlock value through a highly active approach to asset management. Turning to Page 13, just to touch on our development pipeline, I referred to our development management fees before. In respect of retail, this pipeline is significant and relates to the repositioning of real estate for a higher and better use across our retail portfolio. There's more detail in respect of each of those projects on Page 14. In respect of hotels, we conduct with our fully integrated fleet operating platform capability and development capability, various upgrades and refurbishment to our hotels that drive rate and occupancy for improved performance and, of course, development management fees for the manager. And in respect of commercial and health care, we see a pipeline -- a strong pipeline emerging in relation to a number of development opportunities at 3 assets in particular, but perhaps to particularly mention Pacific Private at Southport, 1 of the key assets in the Healthcare Fund, and Burke Street with a significant development opportunity. Essentially, these opportunities are to meet tenant demand. Turning now to Page 22, I'd like to just highlight some key points in respect to the valuation of our managed fund portfolio at 31 December '23. In summary, the retail portfolio has seen an increase of 8%, but that reflects valuation uplifts across Riverside in particular. I would mention the significant uplift in value of that asset, but also at Warrawong, partly offset by an approximate decompression of 10 basis points across the portfolio. There's also increases in the value of our portfolio as a result of CapEx in relation to current development projects. In respect of hotels, we acquired a new hotel early in the year, Tamworth, in August, of $16.5 million. That's a part of that increase. Essentially, the hotel portfolio has held valuations consistent with June '22, and the portfolio balance at 31 December reflects approximately $6 million of CapEx on current projects. In respect of office, that portfolio has seen cap rate decompression of approximately 25 basis points across the portfolio. But that has been offset by improved market rents. I mentioned the strength of the leasing performance at ECF earlier, and that's a significant contributor to offsetting, if you will, the decompression of cap rate during the half. Our health care portfolio is valued in line with the transaction that was completed towards the end of the half. And our wildlife parks value is essentially similar, some reduction in the value of Mogo, but improved trading performance at Featherdale and Hunter Valley. Turning to Page 23, we have a strong interest rate risk management focus in respect of the debt facilities of our managed funds and indeed the group as a whole. This page sets out the nature of the hedging position across the portfolio by sector. I'd point out that in respect of retail, we do not make -- put further hedges in place where we see realization events in the short term, and we typically also do not hedge development facilities as they are being drawn. In respect of Hotels, Tourism and Leisure, the weighted average hedging profile of 49%, we see hotels as a natural hedge to interest rates and inflation given the ability to reprice room rates on a daily basis, and we believe that is the appropriate level of hedging for that fund. Touching on our current investments on Page 25. Co-investments on an equity accounted basis carried at $206 million at 31 December. Those on the call with the presentation can see a bridge from the carrying value at 30th of June. We've invested alongside of our institutional capital partner health care fund. We've invested 5% of the equity. They've invested 95%. There have been some disposals and recycling of certain co-investments. We received that special distribution in respect of our holding an ERF for the year, which reduces the carrying value and the other category really relates to fair value adjustments. We see the opportunity to recycle and realize $50 million of capital from our co-investments in calendar year '23. This primarily relates to realization -- part realization of our co-investment in the hotel fund, which we expect to realize $50 million and have us retain an ongoing 10% co-investment level. Turning to Page 28, this is the presentation of our core earnings. I won't take you through it other than to remind listeners that core earnings EBITDA of $17.1 million during -- about halfway down the page is what we analyzed earlier in the discussion. And you can then see the final adjustments to core earnings relate to depreciation, interest and tax. On Page 30, we set out our capital management for the group, which comprises $40 million of unsecured notes. This is an attractive form of funding. In our view, it's essentially replacement equity, fully unsecured and at an attractive rate in terms of the cost of that effective equity, replacement equity. And importantly, we have a secured and fully revolving debt facility of $65 million, which gives us significant flexibility with our capital management. Our gearing at 31 December was 27.2% which is a reduction from the 30.2% at 30 June. In respect to the balance sheet on Page 29, we just point out to -- make 2 points in particular. One is that in respect of cash and available debt, that is total cash available to the group at December of $31.5 million to support our growth. And as I mentioned earlier, our gearing has reduced during the half to 27.2%. I'll now hand back to Glenn, who will make some remarks in respect of outlook and some closing remarks.

Thanks, Paul. Now I refer to Page 32 of the pack where we briefly summarize our outlook, but I'll add some more comments to the page. Like most market participants, I presume, we're seeing the current economic environment, one that presents both challenges and opportunities. The economic outlook seems somewhat more unclear than usual at present as is the outlook for inflation and interest rates, which indeed underpins the pricing for all asset classes. Having said that, in my view, forecasting is always short of difficulty. For many years, I've observed forecasting failures and in recent times, the forecasting failures at some of our central banks, certainly could remind us just how difficult it is to forecast. Given this view about forecasting now and the inherent difficulty in forecasting, our investment approach has always been to acquire assets that we believe will perform across the cycle, not to invest in assets where 1 has to rely upon the market, deliver value uplift. We have free kick, so to speak, in the shape of cap rate compressions or multiple expansions. But if we look across our sectors, the sectors that we invest in our present, our office portfolio across the group being 98% occupied. And as Paul said, 84% in use, so to speak, positions those assets very well. Look at our hotels portfolio, we're seeing a strong rate story with average daily rates for the portfolio being up about 25% against the pre-COVID times. And whilst occupancy has been slower to return, we're very positive about the growth in the corporate sector, the inbound tourism and also the conferences and events sector, which is proving to be growing strongly. The health care portfolio had almost no impact across COVID and continues to perform very, very well. Our retail portfolio or retail assets across the group, in total, 96% occupied. We're now seeing leasing spreads returning -- positive leasing spreads returning with almost all assets in that group performing well. So the group's investments are well positioned. Say, for a couple of assets like, all portfolios, there a couple of assets that we need to give additional focus to. Having said that, pretty much all the investments in the group are well positioned. So looking to the growth drivers and the outlook for the growth drivers for the group, we think about the growth drivers as being in our existing sectors, in new sectors and also in strategic opportunities. Regard to originating high investments value opportunities in our existing sectors of focus, we continue to be able to acquire properties at prices that we believe reflect deep value. Our latest investment, Riverton Forum was acquired at a price that now more than reflects providing changes to the interest rate structure and risk-free rates. But we're still seeing somewhat wide bid office spreads, so to speak, with vendors often or maybe generally yet to a price or cap rates to reflect the recent interest rate increases in cases and risk-free rates. Whilst we're planning for it to be challenging to get assets, we call deep value prices in the short term. That's indeed what we do, and we are indeed borrowing assets in that regard. I'm pleased to report that we have an active pipeline of opportunities across all of our sectors of focus, so we're expecting some good Funds Under Management growth over the period. In regards to new investment sectors, we continue to build out our funds management platform into new sectors. That is our objective. And indeed, we're looking to establish funds in both the industrial and ag sectors in the short term. And finally, we continue to actively pursue strategic acquisition opportunities for the group, opportunities to achieve our growth ambitions to deliver strong growth in both Funds Under Management, and more importantly, security holder value. We see this environment as one where such opportunities are more likely to eventuate. I'd like to close by saying that we're acutely focused on delivering strong earnings and distributions for security holders, focused on just that, but also focused on continuing to invest in building out our funds management platform. Our ongoing investments in the group's funds management platform will, in our view, not only deliver scalable growth in funds under management going forward, but more importantly, deliver scalable growth in earnings and security holder value. Please, now to take questions.

[Operator Instructions] Your first question comes from [ Mike Thyme ] from [ Camden Equity ].

The corporate cost line, 33% jump there, I'm assuming that has a performance component included in that. If so, could you just articulate to what extent that is the case?

Mike, in respect of corporate costs, when you say performance components, I'm not sure if you're referring to bonuses?

Yes, something like that. I mean it's a big performance fee number in the income line. I'm assuming it's matched by some incentivization expense in the cost line.

Yes, well, we do -- we have a short-term incentive scheme and the costs of that are separately identified within the P&L outside of those corporate costs. But that's an important feature of the way we motivate, remunerate and retain our key people. In respect of our corporate overheads, yes, there's been growth there of about $4 million period-on-period. And the vast majority of that, 90% of that relates to salaries, our people costs as we continue to invest in the capability and scalability of our platform.

We don't have performance or a reward structure that's related to a specific investment, the group-wide toward structure.

I understand. So for all intents and purpose, I could say that, that is -- that forms the new cost base of the company going forward, give or take, a bit.

Yes, the STI paid with certain hurdles of performance are met in respect to security of return.

Your next question comes from Edward Day from MA Financial.

Glenn and Paul, maybe it's an extension of the last question, but just wondering if you've got a feel for the EBITDA contribution out of the hotel operating platform. Because I know you called out the revenue, but possibly some of that increase in costs relates to the operation platform.

Well, the increased costs, as I endeavored to call-out during the presentation, we continue to make significant investments in the platform. Paul said predominantly in people, talent and capability to enable us to continue to build our Funds Under Management. And indeed, build into new sectors for other group's funds. So the growth in -- the growth will be -- the increased investment in our people is directly targeted to growing our Funds Under Management. And we're very confident about the -- getting a strong return on those investments in the near term. It's been the approach we've taken since we've established a business to invest in the platform whilst seeking to deliver good investment returns, good distributions along the way.

And perhaps just to add to that, Ed, I'd refer you to the hotel operator fees of $2.6 million during the half. That relates to our position as the hotel operator in the fund and excludes our funds management income from managing the fund. Our fees is, as we've shared before, are referable primarily to the hotel operating EBITDA within the fund. And therefore, we're aligned with investors, but if I just take that number, and we would expect it to grow in the second half, but if one just says what is it on an annualized basis, $5.2 million, you can see that some -- when you add our funds management income from the hotel fund, which has GAV of $424 million now, that part of our business is making a strong contribution to the performance of the overall business. And yes, as part of the salary increase, we mentioned costs increasing on a prior comparative period basis of $4 million. Part of that is building out the hotel platform. But as I mentioned, it makes a strong contribution.

Just 1 more, just on your co-investment income, if you annualize the income during the period, it's about a 4.5% yield on your $206 million stake. What's your, I guess, outlook for that near term? And if there's any weakness in that number, where is that coming through?

No, I wouldn't expect so, Ed. The hotel fund continues -- of that $4.8 million, $2 million is from the hotel fund. So we would expect the underlying distributions to show some improvement in the second half. And my only comment further to that would be, of course, as we realize some of our co-investments in certain funds to release growth capital for new funds management initiatives, that quite obviously reduces the distributions we're currently receiving, and it's replaced by the distributions we would then receive on further investments we make. So it's going to be impacted as that plays out in respect of our -- what we've described as our capital-light strategy where we have significant capital at our disposal for growth.

Your next question comes from Gerard Ahhot from Holt Asia Investments.

Can you hear me?

Yes.

Yes. Calling you from Singapore. First, just a general question. Given the higher interest rates, have you seen some investors postponing or delaying some investment projects into our funds? Maybe because they have some alternative investments maybe in the fixed income space. Have you seen that?

I think your question, Gerard, is that given higher interest rates, the returns provided in the broader fixed income asset class representing alternatives that perhaps more favorable than the real estate class?

Yes, yes, that's my question, yes.

Look, that's definitely the case. And -- we are obviously seeing the investments in the broader fixed income space as competing with investments in property. But having said that, we're very clear about what sort of returns our investors need. Total returns, but income returns and capital growth, therefore, total returns. What our investors need relative to the broader interest rate structure and the fixed income alternatives. And oftentimes, investors don't -- perhaps don't fully appreciate the difference in the risk of -- risk for a specific fixed income investment versus another specific fixed income investment or even a real estate investment. So therefore, I made the comment before that the rising increased interest rate environment, it is -- we are finding fantastic investments, notwithstanding the rising -- the increased interest rate environment. We are forecasting for it to be more challenging to originate great investments that give total returns that are outstanding value for stock, but they've been outstanding there comparable to fixed income alternatives. But yes, we certainly are cognizant of the fact that we are in a rising interest environment, and it's investors or vendors, I should say, at this juncture, anyway, generally speaking, having adjusted prices to reflect the new rate environment. But again, I made the point that that's what we have been doing, that's what we do. And we have, as I said, an active pipeline of opportunity set that we believe present investment returns that outsized investment returns for the risk and very good investment returns relative to the fixed income alternatives more generally.

I have another question on the operations. So could you share with us the level of occupancy for the hotels currently?

Occupancy at the moment is [indiscernible] 60% across the portfolio. As I mentioned, our rates, the rate story is very good for hotel owners, hotel investors, being up about 25% on pre-COVID levels. We're very positive about the occupancy improving. There's no doubt that during the December quarter that the interest rate announcements by the Reserve Bank in Australia took a bit of the wind out of the sail for the leisure, the leisure tourists. But again, we're seeing good growth in the corporate traveler market, inbound traveler market and also the conference and events market. So we are positive, and we see growth in occupancy. And indeed, at this juncture, it's sort of occupancy for the portfolio is higher than it was last quarter and continues to grow.

And another question on the office assets. You mentioned a high physical occupancy, more than 80%. So this is above the average, I think, in the market. So are there some specific elements that you could share with us that explain this high physical occupancy for our properties?

For our office properties?

Yes, office properties, yes. Physical occupancy.

I'll let Dave answer that, but I'll preface it by saying that it's a direct result of investing in assets that -- and investing in office markets, but particularly assets in their respective markets that have clear competitive advantages. And as Paul said, the ECF our office fund is a fantastic fund delivering fantastic performance. But Dave, you should answer it.

Thanks, Glenn. In addition to that, it's really the nature of the tenant base we have in our portfolio as well, which is a really high-caliber tenant base in industries which are performing pretty well in this environment. So it's not only the locations we're in general supplies as trade markets. We have a good tenant base. And as a result, we've got very good physical occupancy in our portfolio. The other point to make, there's a real bifurcation in office markets at the moment where the good assets are performing well and secondary assets are underperforming. So there is a benefit from being good assets in our markets, which are performing well.

Okay, and just a last 1 for me, in terms of capital management, when will we have the next significant refinancing exercise in terms of loans or credit facilities in the coming years?

Gerard, is your question -- if your question is in respect of the group...

Yes, the group, yes, sorry. For the group, yes.

The first maturity that we have upcoming is 2.6 years away. It's in August of '20 -- if I get my years right, August of '26 -- '25, excuse me. So quite some time away. All of the corporate debt facilities were refinanced in June of 2022 for either 3 or 4 years' tenor.

Okay, so we have nothing significant until 2026, right?

2025.

Yes, post 30 June '25.

Oh, '25. Okay.

There are no further questions at this time. I'll now hand back to Mr. Willis for closing remarks.

Thank you very much, and thank you to all on the call today for your interest in the group. We very much appreciate your time. And I'd like to take this opportunity to thank the broader team of Elanor Investors Group for another terrific contribution over the last half. We look forward to providing further updates on the progress of the group in the short term. Thank you, and have a good afternoon.

That does conclude our conference for today. Thank you for participating. You may now disconnect.