Eurocommercial Properties N.V. (ECMPA) Earnings Call Transcript & Summary

Hello, and welcome to the Eurocommercial Full Year 2024 Results Conference Call. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Mr. Luca Lucaroni, Investor Relations Director, to begin today's conference.

Good morning to everybody. My name is Luca Lucaroni, Investor Relations Director. I'm happy to be on this call with Evert Jan van Garderen, our CEO; Roberto Fraticelli, our CFO to present Eurocommercial results for the year 2024. The agenda for this conference call is presented on this slide. Evert Jan van Garderner will talk about the operational results of the company, followed by Roberto Fraticelli will discuss in more detail the financial results. Evert Garderner will finish the presentation with some closing remarks. We will then open the call for any questions and comments you may have.

Thank you, Luca, for introducing us and presenting the agenda for today. Good morning, everyone, and thank you for joining us this morning. I will start with an overview of the operations of Eurocommercial during the financial year 2024, and we'll finish this presentation with some remarks on the share buyback program, the dividend proposal and the guidance for 2025. 2024 was a year of internal growth, which we achieved through the remerchandising of several of our shopping centers, including our flagships Woluwe Shopping in Belgium and Carosello in Italy. The current EUR 3.9 billion of retail property portfolio comprises 24 shopping centers and provides diversification in terms of geography, size and type. Our 4 countries, Italy, France, Sweden and Belgium are shown here weighted by value. As a consequence of the external valuations at 31st December 2024, the portfolio spread changed slightly compared to December '23. Italy went up from 44% to 45%, Belgium and France remains the same at 14% and 21%, respectively, whereas Sweden reduced from 21% to 20%. In addition to providing a good country diversification, our shopping centers are well spread in those 4 countries and are all located in wealthy regions like, for example, Northern Italy or close to the Swiss border near Geneva, or in the wealthy catchment of Woluwe Shopping in Brussels. This slide provides the maps of the 4 countries showing where our 24 shopping centers are located. Italy remains our largest market at 45% of the portfolio, a weighting that we're happy to maintain as all the positive economic and retail indicators that initially attracted us to the Italian market remain, namely extremely high wealth levels in Northern Italy and in particularly in Lombardy, where our 3 Italian flagships, and Cremona Po and Curno are located. Very low online penetration, which has only just reached 10%, low levels of household debt and more importantly, very low shopping center density and therefore, competition, partly because shopping center development started relatively late in Italy from the early '90s, meaning that even today, retail densities in our Italian catchments are half of the French ones. The existing portfolio also provides asset diversification with its 5 flagship shopping centers balanced by the remaining 19 suburban hypermarket anchored shopping centers. The 5 flagships are located in their respective countries' capital or main economic cities and our important shopping centers in the national context and retail hierarchy. These flagships attract a broad international tenant base and have a higher discretionary spend component, particularly fashion. By contrast, our 19 suburban hypermarket anchored shopping centers have different and more defensive characteristics with over 60% of the floor space devoted to a broad range of essential and everyday retail, including groceries. Most were strategically sited and originally developed by the hypermarket themselves in the wealthy catchment of important provincial towns and cities. And these types of shopping centers provide a broad mix of both national and regional tenants and an increasing range of services for their more local communities. The company showed a strong operational performance in 2024. On the slide, you see an overview of the important operational metrics for the year, which underpin that statement. I will comment in more detail on each of these metrics in the remainder of this presentation. Like-for-like rental growth was 3.5%, well above our 10-year average of 2.8%. The growth was driven by indexation and turnover rent, although the indexation was lower than in 2023 due to much lower inflation. The rental growth was obviously the driver behind the 5.9% net property income uplift. We are pleased to be able to report that on 275 renewals and relettings, an average rental uplift of 4.5% was achieved, and that is on top of indexation. These lease transactions represent 18% of the minimum guaranteed rent of the portfolio. We were able to attract new tenants with our 104 relettings, achieving a much higher uplift of 9.1% and confirming the continued strong demand from retailers to open new stores in our centers. The highest uplifts were achieved in Belgium and Italy. Over the last 12 months, the Italian leasing team signed 92 new deals, resulting in an overall rental uplift of 7.9%. 47 of these transactions were new lettings, producing an overall increase in rent of 14.1%, with the highest uplift achieved in Collestrada, 22%. In Belgium, at Woluwe Shopping, the leasing team successfully concluded 24 lease renewals and relettings, resulting in an overall rental uplift of 6.6%, including 13 new lettings producing an increase of 16.6%. These figures demonstrate that our prime portfolio continues to be well positioned for leasing retail space to an expanding tenant base under sustainable conditions at affordable rent levels, while active tenant rotation and the regular introducing of new concepts ensures that our shopping centers remain attractive and relevant for their customers. Low vacancy is usually a good indicator of the quality of the properties. Over the last 4 years, we have reported vacancy rates in our property portfolio ranging between 1.3% to 1.8% with an average of 1.6%. Last year, the EPRA vacancy rate reduced steadily down to 1.4% by the end of December. The company has always been known for its low occupancy cost ratios, and we are, therefore, pleased to report a 9.8% occupancy cost ratio for our portfolio as per the end of December '24. This percentage is still one of the lowest in the industry and implies that the rents are affordable and sustainable as was also confirmed by the full rent collection figures that we have again reported. The service charges and property taxes have remained stable over the last 3 years, whereas the rent increased resulting in a slightly higher OCR than 3 years ago. Last year, retail sales in our shopping centers increased by 2.7% compared to 2023, with all 4 markets producing positive growth. Belgium performed particularly well as a result of the remerchandising at Woluwe, a process we internally refer to as the musical chairs. If we look at the various sectors, we see that most sectors performed well last year with some clear winners, which were health and beauty, sport, books and toys, food and beverage and services. This slide illustrates the fastest-growing sectors in our malls over the last 3 years, i.e., since the pandemic. The growth in terms of retail sales, which were health and beauty, food and beverage and sports and lifestyle with growth of 13%, 19% and 11% per annum, respectively. The growth in the health and beauty sector was driven by a number of international brands expanding across our markets. Rituals have opened 3 more stores in our shopping centers, bringing their total number in our portfolio to 13 with Fiordaliso joining this autumn. The French fragrance designer, Adopt, opened in Passage du Havre and Les Atlantes. Wycon Cosmetics opened 3 additional stores in our Italian portfolio, taking the number to 7. The sector is also seeing the expansion of specialist beauty centers such as Medi-Market, who are substantially increasing their footprint and unit size to provide a range of in-store treatments in addition to their normal product range. Medi-Market have recently taken an enlarged unit in Woluwe and opened in Cremona Po. The food and beverage sector is continuing its rapid expansion with a range of new brands, concepts and formats. To satisfy this increased demand from both customers and operators, we have recently completed several F&B projects in our markets, repositioning food and beverage as a central pillar of attraction, increasing both footfall and dwell time. The sports and lifestyle sector also continues its rapid growth with the increasing popularity of branded sport and leisure fashion. Many of these brands are increasingly operating cross-border with JD Sports being particularly prominent with whom we already have 6 stores covering France and Italy. Increasing demand for sneakers and training shoes has seen the expansion of specialist footwear retailers such as Courir, Foot Locker, Snipes and Skechers. This slide illustrates the fastest-growing brands in our shopping centers over the last 5 years in terms of floor space. I just mentioned JD Sports, but on this slide, I would also particularly mention Normal, the expanding Danish value retailer, who is present in all our 7 Swedish shopping centers and are also performing well in France, in both Passage Duolingo Havre and now in MoDo in the suburbs north of Paris. Fashion continues to be the cornerstone of our galleries, representing 37% in terms of mall floor space. However, the big change in this sector is that it now comprises fewer, much larger stores. This is most evident with Inditex, who recently doubled and even tripled their store size at Woluwe and Carosello in order to showcase the latest full Zara concept. All the Inditex brands are expanding their representation, and we're currently having 26 of their stores, mainly in Italy and Belgium. This slide shows the concentration of floor space of the largest fashion groups in our portfolio who are demanding bigger stores in dominant shopping centers while vacating smaller stores in secondary retail locations. 47% of our fashion floor space is let to our 5 largest fashion retailers as illustrated on this slide. With our ongoing remerchandising projects, we can provide them with the right retail space in terms of size, layout and design. And I will show you 2 outstanding examples, which are Carosello near Milan and Woluwe Shopping in Brussels. At Carosello, MediaWorld relocated into the former Coin department store, thereby creating the retail space and opportunity for a major remerchandising, including a new full format Zara store of around 4,600 square meters, a new Bershka and an enlarged Stradivarius. These Inditex stores were all completed and fully opened for trading in early October '24 and collectively became their flagship representation serving the Eastern region of Milan. As part of the remerchandising, H&M have relocated and established their latest concept in the former Zara unit next to the main entrance. During 2024, important remerchandising improvements were completed at Woluwe Shopping with the successful spring opening of the new enlarged Zara store, 3,300 square meters, Carrefour Market, who replaced the Match supermarket in May, focusing on fresh and quality products to better serve the essential and everyday needs of Woluwe's wealthy catchment. This was followed in June by the opening of the latest C&A concept store. And meanwhile, INNO completed the refurbishment of their 12,000 square meters department store during the autumn when the Medi-Market paraharmacy also relocated into a larger store of 675 square meters to provide a wider range of products, where most recently, Massimo Dutti relocated to a larger unit for its latest concept. Woluwe and Carosello are examples of creating internal organic growth through delivering major remerchandising projects to enhance the performance of our shopping centers, thereby growing the company's business while preserving the dominant position of its assets over the medium and long term. The impact of these remerchandising projects is already visible. In the fourth quarter of 2024, Carosello's overall turnover was up by 18.1% and the footfall numbers were up 5.7%. Furthermore, Carosello became even more dominant as Zara closed stores in competing centers and the Inditex Group increased its presence in Carosello with a full format Zara and a large Stradivarius store and a new Bershka. In the fourth quarter, Woluwe also saw a significant increase of 6.1% in retail sales and a footfall increase of 18.7%. The remerchandising has increased tenant demand, resulting in 100% occupancy and year-end valuation uplift of 3.3%. In Sweden, at Grand Samarkand, Vaxjo, the development of a new external retail store for the expanding value retailer, Ekohallen, is almost finished. The 8,200 square meters unit has been let on a 10-year lease and is scheduled to open at the end of this month. The development will provide a return of at least 8% on cost, which is a total amount of SEK 130 million. In the past, we developed a similar store for Ekohallen at Nörköpping, illustrated in the picture at the bottom left of this slide, and we sold that investment at a yield of 6%. Our property portfolio has strong fundamentals to generate internal growth as we achieved with the remerchandising strategy executed at Woluwe and Carosello. To summarize, what are these strong fundamentals? It's the retailers' flight to quality, no supplier of new retail space and strong demographics. Point one, retailers are prioritizing fewer but larger and fit-for-purpose stores. In order to create a unique customer experience, brands are increasingly offering new products and services, which can be easily accommodated in shopping centers in dominant commercial areas. Most retailers have an omnichannel approach and need physical stores to be successful. E-commerce is no longer a threat but an opportunity with consumers shifting towards experience-driven retail where physical stores play a crucial role in brand engagement. With our portfolio, we can serve this demand from retailers. Number two, while new large-scale developments face restrictions in many countries and building permits are harder to obtain, this creates a competitive advantage for us. Limited new supply means that our existing high-quality assets become even more valuable, reinforcing our dominant market position in our catchments. Point three, beyond financial considerations, demographics play a pivotal role in our success. Our presence in densely populated areas with above-average purchasing power and low unemployment rates ensures a strong customer base with consistent demand for quality retail spaces. It is very clear that our strategy of creating internal growth through remerchandising is already showing positive results. We intend to repeat this strategy over the next 2 years in Italy, at Gigli, Collestrada and Cremona Po, where we have opportunities to deliver growth from similar remerchandising projects, but also in Ingelsta in Sweden. In addition to those 4 shopping centers, we continue to identify similar opportunities at other assets in France, Italy and Sweden. Before I hand over to Roberto for discussing the financial results, I would like to say a few words about some of the ESG activities listed on this slide. We finalized the double materiality assessment to identify key ESG topics and to evaluate Eurocommercial's impact on the environment and society. We have identified 6 material topics on which we intend to report in the future. 3 items concern environmental topics, 2 items concern social topics and 1 item concerns a governance topic. However, the very recently published so-called Omnibus Proposal of the European Commission, if endorsed by the European Council and the European Parliament, will on the basis of currently available information, imply that Eurocommercial is no longer in scope for the Corporate Sustainability Reporting Directive, the CSRD. We are monitoring the further developments to understand what will be applicable for the company. Meanwhile, we will continue with all our planned ESG activities. The recertification of our assets under the new BREEAM-In-Use protocol Version 6 is progressing well, and the certificates we received are either excellent or very good scores. We continue to make further progress with our sustainable finance goals, having added green and sustainability-linked loans for financing Belgium, Italian and Swedish shopping centers during 2024, which loans Roberto will cover in more detail as part of the financial review. This slide provides the major ESG achievements reported over 2024, but also an update on the percentage of green leases out of the total leases per country and the electrical vehicle charges in our shopping centers as well as the gas removal we are achieving. Much more detail regarding our ESG activities for each of our countries can be found in the comprehensive country commentary section of our press release. This is the moment to hand over to Roberto, who will discuss in more detail the valuation of our property portfolio, the funding and the financial results.

Thank you, Evert Jan, and welcome, everybody. We'll just have a quick look. The first slide is the financial performance in 2024. In this slide, we are giving you the overview of the most important financial metrics, and that's really important, and then we're going to look at them more in detail in the coming slides. As you see, as Evert Jan already said, property investments went up to EUR 3.9 million. That's a plus 3.1%, which is very, very important. The loan-to-value ratio went down from 42.5%, it went down to 41.3%. And that's also thanks to the fact that the debt -- the net debt actually remained stable to the EUR 1.6 billion. So that's very important. That also, of course, caused an increase in the EPRA NTA per share, which went up 5.6% to EUR 41.79. If we then move to the property income and the profit and loss, we see that the net property income went up 5.9%. That's a strong increase, up to EUR 197 million. That's mainly due to 2 things. One is, of course, the very good results of our property. And on the other hand, we also managed to do some savings in the cost. So that -- we hope you appreciate that. And that leads, of course, to direct investment result of 2.39% (sic) [ EUR 2.39 ]. There, it's important to consider that the interest expenses were capped, thanks to the 80% interest rate hedging level, which shielded us from the increase -- strong increase in the Euribor this year. And then that allows us to propose a dividend of EUR 1.80, which is also an important increase of almost 6% compared to last year. In the key financial metrics, you see the most important one. So the average cost of debt, as we said, stable, actually diminished a little tiny bit, but that's very important. The interest coverage, it went down from 3.7 to 3.5. That's due to increase, the EUR 5 million increase in interest expenses. But you saw also the improvement in the net debt to EBITDA, which went from 8.9 to 8.5. We also show the EPRA LTV, 42.8%. Of course, we believe our LTV ratio is much more relevant. But you also show the average loan maturity from 2.7 years, it went up to 3.3 years. That's also thanks to the loan renewals that we did during this year, which we'll discuss further in the presentation. And also, we were busy with hedging. So the average interest rate hedging maturity went up from 5.3 years to almost 6 years. If we then go to valuations, then what we see it's really interesting because the valuations can depend on several factors. One of them is the debt initial yield. And we see that the net initial yield is actually stable because it was 5.8% last year, and this year is only 5.7%. So a minimal change. So that means that the value is actually value which is being created in the properties, and that's due to an increase in the MGRs and the ERVs. So that's very important. I think we owe a big thanks to our property and leasing teams who have been working flat out to achieve these results. But it also tells us that if yields remain more or less stable, then for the future, we can also see that the possible increases in MGRs and ERV can have a possible important results on the valuation also for 2025. We look also at the valuation split, which is something that we usually do. You see from 5 dominant flagships, the yield actually stayed the same at 5.4%, and there was a small improvement from 6.2% to 5.9% for hypermarket anchored shopping centers. But the values increased for both, and that's extremely important. Now to a slide which we are particularly proud of. Luca, Jaco, Tom, Emilie, they all contributed to this effort. And we thought it was also nice, as Evert Jan mentioned before, to put some green color here and there because indeed, the renewals of the loans that we did were actually green. It's either green and sustainability linked, green loans, sustainability-linked loans. And there are 3 loans which are not green, but they're easy to explain. Let's say, the last 2, the small ones, we just extended the duration by 1, 1.5, 2 years so that they could match the extension of the larger brothers, which were expiring, which we will see on Fiordaliso and I Gigli. And the other one is the SEK 550 million in Valbo. We are finalizing the paper so that we can also in discussion with the bank also qualify that as a green loan. So give us some more time on this. Then our usual financial summary at the 31st of December 2024. What's important to see is, of course, total net borrowings stayed there at EUR 1.6 billion. The average term of the hedges increased from 5.3 years to 5.9 years and the overall interest stayed at 3.2%. What we decided to do this year was also to give you a split of the loans which are expiring in 2026 and 2027, just to give you the overview. What you see, the main loans which are expiring in 2026 are on the 3 flagships, which is Italian flagship -- sorry, which is Fiordaliso, Carosello and I Gigli and there is also an amount on C4, Swedish asset. C4, we have already started discussions with the bank. We are optimistic about these discussions. In Italy, Luca and the team have already started also the renegotiations. Actually, on one of these loans, we are pretty advanced. So we hope we can finalize it by the end of H1, but we are very hopeful with these negotiations. If we look already at 2027, what you see is that Curno is expiring. We are also very positive. We have a strong relationship with ING, which is financing the asset and also a very strong relationship with Nordea, which is financing the portfolio in Sweden, which expires in 2027. Lenders shares, as usual, 34% the Netherlands, strong Italy and Germany with 25% and 22% and we got Sweden at 13% and France at 6%. Then if we go to the interest hedging, also, we need to thank Luca and the entire team in Amsterdam. As you see, the top gives you the past, the bottom gives you expectations and future. So what you see is actually the hedging has been stable at 80% or slightly above or slightly below. That helped us keep the interest expenses stable, as we said. And we also put for a comparison also the curve of the Euribor so that you can actually see the movements in the Euribor during these years. Bottom, you see the hedging ratio. As we said, our policy is to have the 80% of the -- of our loans -- net loans hedged, and that's also the case for the foreseeable future. So all in all, we think a very stable financial picture for you to take into consideration. If we then go to the financial position, and that's the net EPRA team doing this fantastic job. We -- what we usually put here for you is the financial position on the right-hand side with the IFRS figures. So you see the increase in property investments, you see the stable net borrowings, and you see also the increase in the NTA and of course, per share, the increase in both -- in all 3 items, actually, net asset value, adjusted net asset value and EPRA NTA. If we then go down to our bridge, you see if we start from the EUR 39.59, which we had at December '23, we add the investment results, we add the direct investment result. Then we take out the dividend distribution. Then as you can see, the share buyback equalized the stock dividend that we had. And then, of course, for EPRA, then we have to adjust for the deferred taxes and the financial instruments. And then we have -- the other is mainly exchange rate, the euro-SEK impact that we have in our accounts. And that gets us to a final EPRA NTA of EUR 41.79 which you see. Then we go down to the income statement. There as well IFRS figures on the left-hand side. You see the rental income going up from the EUR 215 million to EUR 219 million. So a nice increase of EUR 4.4 million. Net income increased by EUR 9.9 million. Direct investment result increased by 3.9%. And of course, there is the limited impact of the interest expenses, which is thanks to the 80% interest hedging that we have put in place. And we're almost there, direct investment result here also a bridge just to give you the overview of the impact of the -- on your direct investment result. You see we added EUR 7.3 million of rental income. Then we have an amortization of lease incentives as Evert Jan has been -- has told us, we have a lot of remerchandising that we've done in our shopping centers. So that's really important. We also had a positive result for bad debt. We actually managed to collect some of the bad debt we had already lost hope for. And so there are some one-off here. Net service charges is also positive. So that means we managed to collect some more service charges than we used to. So the net result is actually more positive for the company for EUR 3 million. Here, you see the impact of the interest expenses, the EUR 5.3 million. And then IT expenses, as you know, we are busy with our digitalization program. So we got some very nice investment, which [indiscernible] has been making with his team to move us forward in this digitalization path. And then we had a one-off in Sweden for corporate income tax, which is also helpful and other is just a little mix of everything. And that gets us to the EUR 127.9 million of your direct investment results for 2024. And last but not least, we try to give you also the picture taking into account the EBITDA. As you see, rental income, property expenses, net service charges, company expenses, other income and expenses, and that gives you to an EBITDA of EUR 190 million compared to an EBITDA of EUR 181 million. So that's plus 5% compared to last year. And then, of course, then you see the impact on the recurring earnings. And on this positive note, I would hand back to Evert Jan.

Thank you, Roberto, for presenting all the figures. I also would like to say a few words about the share buyback program, which Eurocommercial executed in the summer of 2024 as it is related to our dividend policy and in particular, to the option to elect for shares instead of a cash dividend. The objective of the buyback program was to avoid dilution as a result of offering stock dividend to shareholders in 2024. We announced the start of a buyback program of our shares for a maximum amount of EUR 15 million. The program started on 13 June and ceased on 30 September as the maximum amount of EUR 15 million was spent to buy back the company's shares. The total number of shares bought back was 640,000, representing 1.2% of the issued share capital of the company. In the press release, we included the dividend proposal, which will be tabled at the general meeting scheduled for Tuesday, the 3rd of June 2025 for approval by the shareholders. On balance, we are optimistic about 2025 and therefore, propose to increase the total dividend per share from EUR 1.70 paid in 2024 to a total dividend per share to be paid in 2025 amounting to EUR 1.80. This is an increase of 5.9% and translates into a 75% payout ratio, which is our payout ratio target. This proposal implies a final cash dividend of EUR 1.12 per share. We will also offer shareholders the option to elect for a dividend in shares instead of the cash dividend of EUR 1.12. As these shares will be charged to the fiscal share premium reserve, there is no Dutch dividend withholding tax due, which may be attractive for those shareholders who cannot obtain a reduction or a credit for the 15% Dutch dividend withholding tax. The take-up of stock dividend last year and in January 2025 confirm that around 20% of our shareholders appreciate this option. The ex-dividend date will be Thursday, the 5th of June 2025, and the dividend distribution date will be Thursday, the 3rd of July 2025. The outlook for 2025, albeit solid for our shopping centers, remains linked to the evolution of the macro environment and also the geopolitical tensions. On the income side, 2025 indexation in our markets will have a positive impact on rental growth, which we expect to be further improved by our renewal and reletting program and higher turnover rates, notwithstanding some temporary vacancy during the remerchandising projects. As said before, we're on balance optimistic about 2025. And therefore, assuming no major deterioration of the macroeconomic environment, we expect the direct investment result for the year 2025 to be between EUR 2.40 and EUR 2.45 per share. And I would like to conclude this presentation with a statement that as Management Board, we're truly thankful to all our teams in the various countries for their hard work and their continuing commitment to Eurocommercial. And I will now hand over to the operator for questions.

[Operator Instructions] The first question comes from the line of Valerie Jacob calling from Bernstein.

I've got 3 questions. The first one is a bit broad, but I just wanted to understand how we should think about your commercial in terms of capital allocation in the next 2 years. So if you can talk about maybe the CapEx that you plan to spend on development projects. If you can talk about share buyback, do you think you're going to do a new one with the dividend and also opportunities you see in terms of disposals and acquisition? That's my first question. My second question is about your values that have been quite strong, especially in Italy. I think that's similar to some of your peers. And maybe if you can give us some color on investment markets and any transaction that maybe can support this growth? And my third question is about financial costs. What -- I mean, do you expect any increase in your 2025 guidance? Or do you think this will remain around current level?

Well, thank you, Valerie, for your very valuable questions. And I think some of your questions Roberto will comment on. Maybe I should kick off with your first question about capital allocation. Indeed, we have quite some options. But one of the allocations will certainly be what I talked about, the further remerchandising projects we have on the go. And although we are not yet in a position to give more details, we do hope that, that will be the case when we come out with our first quarter results on the specifics on the various centers. But we flagged at least 3 more in Italy where we can do the project as well as in Sweden. So there will no doubt be more capital allocated. Of course, these are not always big amounts. But in order to reshuffle your tenants around, there is, of course, some CapEx involved. And then you said what about the buybacks and also disposal acquisitions. I think the share buyback for us was a last year success in the sense that we neutralized the dilution by the stock dividend. Whether we will do that again this year, we will, first of all, have a look at where we will be in the summer, whether it makes sense. I think it also depends on opportunities we might see. We have the feeling that markets are in -- at least in our countries where we're active, opening up a little bit more than maybe 6 to 12 months ago. Obviously, interest does play an important role and the interest has come down rapidly in the second half of 2024. But of course, in today's world, it's quite an uncertain element as well. I mean, with the biggest jump we saw in German bonds only yesterday or was the day before. So that's something which may determine, again, the appetite in the market. Having said that, I think appetite for -- certainly for good retail property has increased. I think it's always a relative game. And if we see other asset classes, I think retail still has good fundamentals, typically, I think, in our world of the shopping centers. And that brings me to your question, what will Eurocommercial do? I think the rotation model, which we talked about a lot in the past, I think, is probably a bit more on the horizon than it was some time ago. For example, I know it's a smaller project, but we showed you Ekohallen, which is a stand-alone box almost ready. And I think that could be certainly one where you could say maybe it makes sense to look at some disposal there and reinvest it in really the shopping centers themselves, which is, of course, our core business. So on that note, I hand over to Roberto -- unless Valerie, you meanwhile have an additional question? Or is that something which answers your broader, as you said, the broader questions on Eurocommercial and where we're going?

Yes. No, no. I mean, I think that's clear. In terms of country allocation, I mean, as you mentioned at the beginning, Italy has mechanically become bigger. Is it something that you're comfortable with? Because you're spending a lot of money in Italy. Are you comfortable increasing the share in Italy? Or would you like to have more balance in investment in other countries?

I think we are comfortable if it would tick up a bit more. Of course, we like the spread over the 4 countries because they do have different qualities, and that helps us overall for the portfolio. For example, Sweden, we have the exposure to the Swedish krona and sometimes you lose, sometimes you gain. I mean we've seen a very strong appreciation of the Swedish krona over the last days for all obvious reasons. So that's then suddenly a plus. No. But if -- even if we would go to 50%, I don't think we would find that in a difficult position. On the other hand, we do like the spread over the countries. But as you say, obviously, it's also linked to where are the opportunities. And the next opportunities in terms of remerchandising are certainly -- sorry, certainly Italy. So that may have a tick up a little bit in percentage.

We will see if we feel good enough. The second question, Valerie, was on values in Italy. I mean, you're absolutely right. I mean there's been several transactions all over Europe, but also in Italy, I mean, we can recall Romaest, we can recall Forum Palermo, we can recall Valecenter, but there are many more which are actually in discussions, which also gives us a good idea of where the market is going. I mean before we used to have just investors looking for high double-digit yields, and then it went down to low double digit. And now we're actually looking at yields which are more in line, let's say, with yields we would expect in a normal market. So we're getting there. If we're still there, I don't think so, but it will take a while. But the direction is a good direction. And if you look at the values, to be fair, as we saw, the EPRA net initially didn't change for the flagship. So it was really value creation through the increase in net operating income, the increase in ERVs. So what we are seeing is -- and that's also the judgment of our independent valuers is that the value creation, which has been made is really translating into the value of the assets, if that answers your question before we go to finance.

The next question comes from...

No, no. Wait because Valerie had the third question, which was finance. We expect the finance cost to go up or down or remain stable. Our expectation is for them to remain stable. Of course, they will go down a little bit. But let's assume that they remain stable. And it really depends also from what we saw in the past 2 days. Things can shift so quickly. So we really need to be cautious and we really need to go ahead with our hedging program and keep the thing as steady as possible.

Next question is from Stephane Afonso calling from Jefferies.

3 questions actually. The first one on indexation. What are your expectations for this year? And if possible, could you share a breakdown per country as you used to do? And regarding the drop in the like-for-like growth in Belgium, I understand that you granted a 2-year rent-free period for the Woluwe department store. So maybe could you please give us more color on this situation? And finally, besides this specific situation, what are the typical incentives rented to tenants when these are signed, both in terms of rent-free period and CapEx?

Yes. Thank you for your questions. On indexation for 2025, what we can say about that is that for Italy, the index is 1%. It was last year 0.8%, but it's now 1%. And for the indexation in Sweden, 1.6% is applied. And these are the indices we apply as from January for those 2 countries. If we look at France, that is more a blended percentage, which is around just under 3% if we look at our portfolio. And then Belgium is a monthly indexation. So that's something which is going forward during the year. But in our budget, we use 2% to try to get that in our budget. So that's probably the best guess for now for Belgium. So these are the 4 countries with their indices. Then we go to your second question about Woluwe Shopping and particularly what happened there in terms of lease incentives. Indeed, the department store renovation was one of the big steps. It's now a great store. We did contribute there to the tenant. Not that there is a rent free, but there is certainly a contribution and that has an impact, of course, on the measuring rental growth because the rental growth per country does include any lease incentives, whether it's step rents, whether it's also a rent-free period or some other -- Well, the contributions are, of course, in -- maybe can also be sometimes in the CapEx, but it's really an effect. So that's true, but it's not that it's sitting there for at no rent, I must stress that. And then you also asked what are the sort of lease incentives in general, what we see today, as we just talked about is a fit-out cost, there could be a contribution to a tenant fit-out cost, a step rent is probably something you see as well. Real rent freeze, I think these are exceptions. But it's mostly, I think, more in the area of fit-out cost today than so much in the rental income, which is, of course, also -- yes, you can actually explain because we should not forget how much tenants actually invest in their stores. And certainly, these new flagships or latest concept, they're not cheap. And if you look at -- it's not always so easy to track it, but you have to think about 200 -- sorry, EUR 2,000 to maybe EUR 2,500, sometimes EUR 3,000 per square meter if you really want to build a nice store. So that means that these retailers do invest a lot of money in our shopping centers, which is, of course, a sign of confidence. And we like that. It means that they also believe in the medium to long term of the shopping center and therefore, make the investment. And for us, it's, of course, a clear sign that there for the medium to long term. So it's really a partnership. Does that answer your questions?

Okay. And just maybe one question regarding the incentives, how have they evolved over the past 3 years or since the pandemic, for example?

Well, let's say, the lease incentives, obviously, we are obliged under IFRS to have the amortization of the lease incentives in the top line revenue that's -- so you have to spread them out over the term of the lease until usually the first break in the lease. So there is a variety of depreciation terms. So once you've granted a lease incentive, yes, it's something which you will also see in the years to come in your rental revenue. But I think it's fair to say that the lease incentives as such haven't changed that much in terms of what tenants demand. It's more that, yes, if you do bigger works like we do with the remerchandising, you move around a lot of tenants, which means that they have to build a lot of new stores, which is what we want. And therefore, the overall lease incentive is probably bigger than if you have a mall where there's nothing happen.

Yes. So it's really time related, let's say, to the projects. So that could be that if there are big projects as we've seen for this year and we are seeing for next year, then, of course, there are important amounts which are being involved.

And just coming back to Woluwe department store. What is the remaining lease term for the lease agreement?

Let's say, we entered into a brand-new lease with them. And the usual term in Belgium is 9 years. So actually, in '24, we signed a lot of new leases with those big tenants we talked about. So in terms of the WAULT, as we say, in the sector, it's a very good improvement of the length of the leases in Woluwe. It also is, of course, a little bit what happened to the valuation of Woluwe because, yes, the value you see brand-new leases for the long term, which obviously helps your cash flow model, et cetera.

The next question comes from the line of Francesca Ferragina calling from ING.

I have 3. Do you prefer me to go one by one?

Francesca, if you can do the 3 together, then we will answer them like we did for now.

Okay. The first one is about Italy. I see a very, very strong organic performance, especially strong when it comes to renegotiation and rental uplift. Can you elaborate a little bit on this? And do you -- what do you expect for, let's say, the first half of 2025? If I'm not wrong, the organic performance of Carosello was not included, and I don't see it explicitly mentioned. Can you give us a sense about the trends in rents that you see there since the remerchandising plan is now completed? The second question is about your investments. Can you elaborate a bit on the investments that you expect for 2025 when it comes to refurbishment, enlargement, things you are planning for 2025? Can you help us to quantify? And the third one is about external growth. I escalate a bit the question of Valerie. In the past, you mentioned to be open to JV. Is this something, for example, you are still keen to? And about disposal, would you be open to disposal eventually to make room for some new investment opportunity? And when I talk about disposal, I'm referring to certain non-prime assets that you still have. That's it.

Well, thank you, Francesca. I didn't pick up the last words of the third question. That was about...

Open to disposals.

Yes, yes. But she referred to something specific, Francesca, about the disposal.

Yes, I was thinking maybe non-prime assets that you still have.

Non-prime. Okay. I picked up Primark, which, of course, is an important brand to us. Okay. non-prime. Yes, thank you so much. I'll -- Roberto will start because he's the expert, of course, to talk about Italy, Carosello. And again, I think we would have loved to talk more actually about Italy today because there's a lot cooking, but we couldn't because, of course, we are always in partnership and with the retailers who -- well, who are involved in this case. And of course, we need to always check whether everybody is comfortable with certain information being published. But that came just a bit -- this press release too early, but we do hope to say a bit more in the Q1. But Roberto, please take the floor on Italy.

No. I mean you're absolutely right, Francesca. I mean, there is an organic strong performance of the Italian market, and we see that in all shopping centers. So that's interesting to see that there is, when we do the renegotiations, an important component in all our shopping centers. If we look at the rental uplift that we have, let's say, the expectation -- what are the expectations for the future? Let's say, the expectations are for it to grow. Evert Jan mentioned -- he gave a hint on 3 big projects that we are finalizing in Italy on Collestrada, on I Gigli and on Cremona Po. We expect also a very strong contribution. And what we are doing is really setting these assets ready for the future. So really long-term investments, not only on our side, but also on our retailers' side that they are making a lot of investment in the assets. You asked about Carosello. Does Carosello give an indication? Yes, we haven't published yet. We have the relettings that we performed in this last year after the refurbishment, but that show an increase well above the 20%. So that gives you an idea. And that's not, of course, including the musical charts that we did. So after that, what you see the effect on the renewals and relettings with our tenants. So it's really important to keep on doing these projects.

Yes. And Francesca, you asked about '25 and capital expenditure investments and to quantify that, obviously, we have our budgets. I think it's fair to say that what we have done over the past years, that's probably a good example of what you will see us doing going forward is that of the overall result, which we achieve, and then I'm talking particularly the direct investment result, let's say, 75% of that is now used for dividend. But the remainder is allowing us to do all those capital expenditure projects, including, by the way, also ESG investments we're doing, which is important not only because we want to achieve the goals we set out, but also sometimes important in terms of timing because you don't want to miss subsidies or tax breaks or other economic incentives, which we can pick up by doing a particular investment on a particular timing in order to qualify for that kind of incentive. So bearing that in mind, I think you would probably not be surprised if going forward, we do a sort of similar overall CapEx expenditure, which is a maximum, I would say, 25% of the direct investment result. So the other 75% being available for dividend. That's the sort of ballpark figure I can give for now.

Yes. And also, as you correctly pointed out, Francesca, I mean, those investments also in ESG, they are allowing us to reduce service charges, which is also important for the growth, the rental income growth in the shopping centers. So that's we -- yes.

Yes. And then the last one, Francesca, are we open for joint ventures? We have been saying that for some time, and that hasn't changed. I mean we're still enjoying 2 nice joint ventures today with AXA and Finiper in Italy. So we're used to doing so with institutional investors, us running the show, doing the asset management, but with a long-term partner. And I think that concept would work also for maybe the one or more of the other flagships we have, which could be then further in Italy or -- well, we have now Woluwe in a very nice shape. Maybe we don't want to do a JV immediately on Woluwe because we probably would like to enjoy a bit of all the hard work done there and further uplifts we expect. But again, these are big assets and Woluwe is actually -- but we don't disclose individual asset values, but it is fairly large asset, but there is now one larger asset in our portfolio. But these are, of course, ideal for joint ventures. So we would still be interested to do so, and it's on our list.

And as you know, you asked about disposals or non-prime assets. Let's say we have a business plan for each of our shopping centers. So we actually look at the present and the future of these assets. So for those assets where we believe we can no longer strongly contribute to the growth, then those assets for us are assets where we could do some capital recycling in favor of other investments where there is more potential growth. Have we answered your question, Francesca?

Yes. Everything is very clear.

The next question comes from the line of Steven Boumans calling from ABN AMRO ODDO.

2 questions. So first, if I look at retail sales and footfall numbers, it seems that Italy and Belgium are outperforming Sweden and France. What's the key driver here? Is it the remerchandising projects? Is it the geographic footprint, quality of the assets or given maybe that destination centers are outperforming the regional centers in general? And how should we look at that forward in '25? Then the second question is on the occupancy cost ratios. They have been trending upwards. And I guess, especially for Italy, the OCR remains low. Hence, the question, where could these OCRs land in, let's say, the next 5 years, especially for Italy? That's it for me.

Okay. Well, thank you, Steven, for your questions. Maybe I start with the footfall in particular, yes, what you saw in Belgium and again, particularly in the last quarter, which I couldn't resist not to talk about because it's amazing what is happening there. And yes, that we have much higher visitor numbers and an increase in turnover. If I look at Woluwe, I can only say that's, I think, 99%, you could say, the result of the remerchandising project. I mean, if you now visit the mall, it's great. It has nice brands. We also upgraded, I think, in a way, the retail offer in Woluwe and it's very much appreciated. We know it's a wealthy catchment. And yes, it attracted a lot more visitors than previously. So I think it's certainly that result. And having said that, I think what also helped that was maybe something where we were a bit lucky, but that Carrefour Market is there now replacing Match and they are quite attractive to the catchment, and we picked up that actually they're gaining market share actually as a brand. So that's all good news for Woluwe. In general, whether destination centers do better than the smaller ones, we've seen, of course, some positive news from peers as well on reporting on the larger centers who were really popular, I think, also in the fourth quarter, also with the Christmas sales. So maybe there's a bit of effect as well, but it's for us difficult to actually measure that for Belgium. OCRs, Steven, I think it is still, of course, for us, important that we have attractive OCRs, and they are still at the lower end. It ticked up a little bit, but I think there is some effect from Sweden, where they still had high indexation over 2 years, almost 11%. And then on top of that, again, 6.8%. It's now down to 1.6%. But obviously, that in 2 years' time, you would say 20% higher rental levels, which obviously will then increase OCRs unless your turnovers really keep pace, but that's not always immediately the case. So a bit of effect there. But particularly OCRs in Italy, Roberto. I was talking.

Steven, thank you so much for your questions. The -- we're, of course, taking out of the picture indexation wars and prices of raw materials, They, of course, have a strong impact on the service charges and therefore, on the OCRs. What we do see, which is actually interesting is higher conversion ratio. So the people actually coming in our shopping centers tend to spend more than what they used to. And that's due to several factors. And one we hope we can be a little bit proud of is also the communication that we started to do with our clients in cooperation with our retailers which is part of our digitalization effort. So we -- what we are seeing is actually also a change in the catchment areas. Just to give an example without a different reference. But when you introduce Primark in one of the shopping centers, then, of course, your catchment area increases a lot. And that, of course, is extremely good for the turnover of all the tenants within the shopping centers. That's the same if you introduce a large Inditex. So those are all things which are extremely important. So you see an increase in the catchment area, you see an increase in the conversion power. And that's, let's say, those are the little bits that are in our hands. If we just look at those little bits, then we are positive for concerns the increase in turnovers in the coming period. That would have a positive effect on the OCR. So that would mean that if we keep the OCR stable, we will be able to increase the rents. As you know, we are not here to squeeze in retailers on the country, we have to work with them. So we're not going to be too greedy. Of course, on the other hand, there is all the questions on consumer spending, interest rates, fear of war and all those things. So as we said before, keeping those outside, that's a bit our view. Does that answer your question, Steven?

Maybe a bit more specific. So let's say the OCR a bit below 10% seen today, it's unlikely that, that will be 12% in 3, 4 years.

Well, I mean, taking out the exogenous consumer spending, wars, interest, price of gas and the rest, let's say, we do believe that we are going to pick it up, but it's difficult for us to foresee that we're actually going to 12% or 13%. I mean that would not be in our policy of operating with our retailers.

The next question comes from the line of Amal Aboulkhouatem calling from Degroof Petercam.

Actually, I have 3 questions. The first one -- do you hear me?

Yes.

Yes. The first one is about the retailer demand. You have been discussing and we have been commenting a lot the demand and the rental uplift in Italy. And you also mentioned in your press release a word that triggered me. You mentioned the rental tension regarding the Italian market. Can you quantify that and especially with regard with the current context in Europe, how do you see the demand for new stores? And Evert, can you give us some color of any waiting list you would have on your portfolio? That would be my first question. The second one is about the risk of bankruptcies within your portfolio. I noticed that there is slightly higher number of units under administration. It's a small increase in terms of units. But in terms of MDR, it's slightly more significant. Can you comment on that one? And the last one is again on Woluwe. The question is that following the remerchandising and the relettings that you have done, do you still see any potential for negative reversion in the current, let's say, lease agreement and tenant base you have in Woluwe? And that's it for me.

Well, thank you, Amal. Italy is very popular this morning. So I ask Roberto again to give some color on Italy and how many people are queuing up for our units and waiting list, et cetera. But we are in the middle of that.

We paid them. Now there is, as you said, a lot of retailers demand. I mean what we have seen is a big split between the centers performing well where capital is invested, where things are kept in a nice and efficient way, where the retailer mix is actually the retail mix, which is adapted to the catchment area. Those centers are performing well. The others where -- there are quite a few when there is very little investment, the tenant is selected on the basis of how much can he actually pay and there is no real link between the offer within the shopping center and the catchment area, that's a bit more complicated. So we got Ilaria who's doing a fantastic job for concerns consumers, the identification of the different groups. And what we are trying to do is really to match the requests of our catchment area to the services and goods that we can provide. And we listen to our customers quite often every year, but also directly now with our CRM program. And what we do is we use their feedback to understand also what we -- what they suggest that we do as improvements in our shopping centers. So you've seen quite a change in the offer that we have for concerns our retailers, the services that we provide within the shopping centers. And there, we have to say there is a list. We got some centers where actually the main difficulty that we have is size, is vacancy because there is no vacancy, there is no extra space that we can rent. So there, what you see is what we are trying to do is actually negotiate with some tenants which are performing less well so that they can leave the center before so that we can remodernize the space and rent it to somebody else. I mean one example is in Carosello, where we had to wait for Coin to reach an agreement with them to have them out of the shopping center so that we can use -- we have been able to use the space for MediaWorld and then move Zara in the space that MediaWorld and H&M then had left. And this is something that we're doing for all the shopping centers. Of course, it takes time, negotiations and sometimes you really have to wait for the end of the contract because otherwise, there is no way that they're going to leave the shopping center. So we do have a wishing list. We do have, let's say, waiting list. I do not like it to put it that way, but we do have a wishing list for the tenants that we would like to have -- for the retailers that we would like to have in our shopping centers. And I have to be honest, our leasing teams are actually have been extremely active to try and find possible combinations whereby we could find -- yes, suitable. There's nothing like perfection, but a suitable space for some of these retailers. So maybe you get a smaller space than you would actually want, but you got the space in Carosello, you got the space in I Gigli, you got the space in Fiordaliso. And that's what we've been doing so far. So there is rental tension. There is a wishing list. There are tenants who I cannot wait actually to get in the shopping center, but we are being very selective. We'll just go for those tenants, which actually give a contribution to the improvement of the services and products that we offer to our catchment area. Does that answer your question, Amal?

Yes, it's very clear.

Yes. And then Amal, your 2 other questions, tenants in administration and then the potential further in Woluwe. And tenants in administration indeed ticked up a little bit. But yes, I think it is still happening in markets. I mean, I just take Cassa, for example, in Belgium, which filed for bankruptcy with an effect in Belgium and the Netherlands. So you cannot exclude these casualties. But again, it's not always a bad news because in a number of cases, quite the majority, they still pay rent. Sometimes it's taken over by a better brand. So you benefit from it. I think the GO Sport Intersport case was a very good example for us. So it's not always bad news. And yes, it's not something which we can say, oh, that is a worrying effect. But it does happen in retail. I think there are still winners and losers. But overall, it shouldn't affect us also not for the near future. So tenants and administration, we're monitoring it, but we're not suffering from it. Potential...

Sometimes it's an opportunity.

That Is an opportunity indeed. And then Woluwe again, is there further reversion potential? I think Woluwe is a very good example of a mall which has a history, of course, and we see in the deals and they're very specific that with a certain unit, if it is a decent unit. And the trouble is sometimes that still some of the units are, of course, rather deep and not have that much frontage, which is obviously the result of a mall being more than 50 years around. And therefore, some letable space is easier than others. But I think we still have the potential to -- on the back of the success of the mall in general with the increase in footfall to do some good leasing deals. On the other hand, I'm not excluding cases where we definitely want to get a brand in that maybe we cannot achieve the current rent on this specific unit because some of these units are units with rather high rents per square meter, which goes well, sometimes well above EUR 1,200 or more per square meter. So that's a case-by-case matter, I think, Amal.

I understand. To put it differently, do you still have tenants where you think that they are paying rents above market rent levels?

Yes. I think, let's say, there's always a unit where you could say this is maybe a rent which is too high. The other thing, which we should not forget, if a tenant is paying maybe too much, but we also should relate it to the sector the tenant is in. So if we -- if a tenant is probably maybe struggling with the rent level, if you change the sector, for example, you could have -- end up with a situation where it is affordable because the tenant is doing a different business, higher-margin business, for example, and therefore, you can afford the rent. So it's not always so black and white. So we're trying really to do it in a tailor-made way.

The next question comes from the line of Kai Klose calling from Berenberg.

I've got 2 quick questions on the financials and one on France. The first one is on the current taxes in the direct results statement. I saw the footnote, which described or explained the reduction year-on-year. Just want to understand if this effect for '24 will also be repeated in '25. So if the cash taxes or the cash tax rate is likely to remain as low as it was in '24? Second question is on the shift in property expenses and company expenses. Could you maybe indicate adjusted by the shifts, what was the normalized or yes, the adjusted increase year-on-year? And the third question -- third and last question would be on the renewals in France, where you explained the slight rent decrease. Is it fair to assume that some of the -- there's a similar effect we could see in '25?

Yes, that is the renewals in France, whether -- because there, we had a minus, a little minus and whether that's something we could expect for '25. Maybe I take the last question first, Kai, and then I leave Roberto with the other 2 questions, although I can imagine that maybe on the property expenses because that's quite technical that we sort of get in touch with Kai to show how this normalized position is then in order not to lose you entirely in the call in terms of a lot of numbers. Renewals in France, no, let's say that was particularly linked to the Pull&Bear lease in Passage du Havre, which we also already reported in the summer. As you know, with renewals, relettings, these are figures which concern a 12-month period. We, of course, roll it forward. So every quarter, you lose the oldest quarter and you get a new one. So if there is a deal, a negative deal in there, you will see it for some time being published. Going forward, I think in France, it's -- France is probably one of the markets where it is a bit tougher in terms of the leasing. So I think there is still some upside here and there, but I wouldn't compare it to Italy. So going forward, I think on renewals and relettings, I would be less optimistic. I think still a little plus, but less optimistic like what is happening in Italy and in some individual cases actually in Belgium.

And I'll take the financial ones. Yes. Then for concerns the current taxes, it is a one-off that we had in Sweden. So that -- please consider the previous levels at the standard levels that we have. For concerns the company expenses and property expenses, I'll just tell you shortly what we did. And then, of course, we can sit together more in detail -- to go more in detail on the single items. But mainly, let's say, we had the reclassification of the property tax in Italy, which we had in the property expenses, we reclassified to the service charges. And there's a reason for that, that's because all property taxes are in the service charges for all countries. In Italy, they were not because the legislation before didn't allow for property taxes to be recharged to tenants. That's now changed. So property tax can be recharged to tenants, and that's also what we are doing. So it was more accurate to report in the service charges were below. IT costs, that's part of our digitalization, let's say, what we did before, we just had general IT costs, which were related to the maintenance of servers, connections, the computers and all the user stuff, let's say. But what we do have now is that real input for concerns the digitalization in our shopping centers. So you can -- and it's really an investment which is done in each of the shopping centers. And that's -- you can see -- you can look at it as CRM, for example. You can look at it as digitalization efforts like digitalization screens and the management of them and everything. So we thought it was more appropriate to have it where it belongs, which is the property where we are investing it so that we're also getting some results. And we talked about the conversion ratio, for example, that's the increase in the conversion ratio, and that's also part of the effort that we're doing. But your disposals when you want to go through more in details in all of them really with pleasure.

[Operator Instructions] As we currently have no questions in the queue, we are going now to take some questions in the meantime from the webcast. The floor is yours.

Yes. Thank you, operator. We have a look at the webcast, and there are 3 questions coming from Belgium and [ Legrand ]. And the first one is, why is Belgium like-for-like rental growth lower compared to the rest, while vacancy is down and rental uplift was higher than average? I think we probably touched upon this with the discussion we had earlier on the rental growth and the INNO department store and lease incentives. So like-for-like rental growth is always concerning the entire portfolio. So in this case, it's the total rent in Woluwe, whereas rental uplift is only talking about those deals where you have effectively done them in the 12 months period. So that can be only a proportion of the total, which you use for rental growth. So therefore, rental uplift and rental growth is not necessarily always going hand in hand. And the vacancy is down, yes, because, let's say, doing all this nice remerchandising, we attracted a lot more additional tenants, bringing us to a very low vacancy in Woluwe. The next question is, do you see continued positive acceleration reversion on reletting renewals in your portfolio going forward? Again, I think we touched upon what we expect in the next months in the coming period on renewals and relettings. If I would have to give an overall ballpark figure, I think we should, as always, be cautious. And I think there is still reversion. But if you can add maybe a 2% overall for the portfolio, don't forget indexation is still there as well, then that would be something which we could expect. And the last one, do you intend any additional share buyback for 2025 to offset dilution from scrip dividend? Again, we talked about capital allocation. Last year, we announced the buyback when we also announced the scrip issue price for the stock dividend that was in June, just before our Annual General Meeting. So that is probably the moment if we want to do it again to announce it, but it also depends on what we see in the market if there is an opportunity where we say the capital raised with the stock dividend, we will use together maybe with some leverage to acquire something where we have an accretive deal on the table, then that could be maybe preferred over considering a buyback. So for now, it's a bit too early to tell. So we'll let you know when we're there. And I think those are the questions in the webcast. Operator, any other investors or participants who would like to ask questions.

Yes. We have another one, the last one from Lynn Hautekeete -- sorry for the pronunciation -- from KBC Securities.

Yes, just the last one, a quick one from my side. I was just wondering why the investment expenses doubled in 2024? And what do you see in 2025 regarding that item?

Yes. Well, thank you, Lynn. Thank you for your question. I think, Roberto, you would like to comment on that.

Yes. You're absolutely right, Lynn. We have an increase in investment expenses this year. So if you look at it, a lot of it is IFRS 2, and that's the share performance plan. And what we also have is part of the bonus, which is linked to the indirect result is also there increasing. And then we got the valuation fees, which are always there. And one important contribution was also for aborted acquisition costs. So we looked at some items, as you know, but they didn't go through. So that's the entire composition of the investment expenses. And looking forward, well, we think it will possibly stay -- be reduced next year. It really depends on what's going to happen. But does that answer your question, Lynn?

Yes.

Yes, investment expenses are always a bit volatile because they do include some one-offs, but we will be also in our annual report very transparent about what the composition is. But Roberto just gave you the description. So that's something which we report separately because we clearly have a distinction between the direct investment result and the indirect investment result, which is probably a typical Dutch way of looking at a P&L. But for us, it's also important to follow those Dutch particular rules. Okay. Lynn, does that answer your question?

Yes, it does.

Well, ladies and gentlemen, we currently have no questions. So I will hand it back to your host to conclude today's conference. Thank you.

Okay. Well, thank you so much, everybody who participated and who asked us questions. I hope it gave a lot of insight, and we experienced a nice conversation today. So let's stay in touch. And thank you for now wishing you a pleasant day. Thank you.

Thank you very much.

Thank you for joining today's call. You may now disconnect.