GDI Property Group (GDI) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the GDI half year results tel co. [Operator Instructions] I would now like to hand the conference over to Mr. Steve Burns, Managing Director and CEO. Please go ahead.

Good afternoon, and welcome to the GDI call. I'm joined by David Williams, our CFO. And I thought I'd start on Page 3 of the presentation, which is the highlights. We really do continue to drive the FFO growth, which is up 29.1% for the half with a good Co-living contribution, up some 37% and property FFO up nearly 14%. We continue to basically drive the property FFO, as you'll see from the charts, which shows this has been a good 3-year effort. The NTA was stable at $1.20, with Westralia Square and Murray Street carparks increasing in value despite cap rate expansion. Our Moranbah Co-living acquisitions takes total rooms to over 920. So we feel we're building a good business there, which is showing through in the results. We've seen the rewards of strong leasing efforts, not only in this half, but over the past couple of years, achieving over 13,000 square meters of office leasing. And it's worth pointing out that this result that we achieved was underpinned by a really strong December quarter for the broader market, which saw in the order of 49% of the year's leasing activity achieved in that final quarter, which brings us really to the momentum carrying through to the first quarter of '26, which looks strong, both at GDI and a market level. Turning over the page and continuing the highlights. We've completed over $250 million of asset sales across the business, including the car yard sales of $74 million, which was achieved a 50% over the acquisition price and settled on Friday. We continue to see good interest in selected asset sales and the office market appears to be on the verge of transacting. We're very focused on $100 million noncore target, and that is ongoing. We extended the facility by $25 million and have over $52 million of undrawn liquidity. The -- probably the highlight has been this leasing environment definitely strengthening into that at the end of the year and continuing on. The 5-year supply gap in office buildings is resonating strongly not only with commentators, but tenants, and tenants now with 3-year expiries are looking to bring them forward to avoid what is likely to be a big jump in rents. Tenants are still expanding. 68% of the '25 year deals were expanding tenants and tenants also continue to move into the CBD, accounting for 27% of deals in '25. And there's still some very large unfilled inquiries, such as 20,000 square meters for Western Tower. We're likely to see something new for Perth called withdrawals, which is likely to add to the supply shortages. An example, would be St. Martin Center at 40 to 50 St. George's, which is likely to result in some 27,000 square meters of net withdrawal. And it's worth mentioning that this is something that hasn't really been discussed in Perth, but those of you who remember Sydney benefiting from the metro, withdrawal of buildings, it is quite a factor, and it will go to vacancy forecast from now on. Of course, we're going to see rents rising significantly. They will have to go anywhere near the breakeven rents for rational construction. And it's probably worth noting that the last time there was a supply gap of 5 years back in 2009, the net effective rents rose nearly 3x. And at the moment, we're seeing agents revising their forecast for rental growth. CBRE is about 39% over the next 5 years, and the variety of other agents are also forecasting such growth figures. There, in my view, likely to significantly underestimate the actual growth that occurs. So we're likely to see a squeeze occur at some point. I'll just quickly hand over to Dave to concentrate on the financial snapshot.

Good afternoon, everyone. Stephen has already mentioned a lot of this. But if we turn to Page 5 of the presentation, for those of you that have it in front of you, NTA is $1.20 as it was in June. The main assets that were revalued with the Westralia Square ones. They went up slightly $5 million in total that notwithstanding the cap rate going from 6.375% on both out to 6.5%. The 2 carparks were also revalued one went up $4 million were down $1 million and that's largely resulting of the performance of the Murray Street one, which is CBD-located is continuing to perform very, very well. The result of that, of gearing is 35%. The syndicated facility and how they measure it, the LVR is 41% as it was in June, and the ICR is 2.3x versus covenant of 1.5x. Stephen has already talked about the strong year-on-year growth in FFO. There's a little chart down the bottom to show you how strong that has been. For distribution, we determined for the first half, the distribution of $0.025 and are confirming the intent to pay the cash distribution of $0.05 for the year. And I just want to point out that for those that read the tax components of the distribution, it is again out of capital. That is for tax purposes. There is a lot of depreciation benefits that we're holding from the building of WS2 and some of the spec fit-out strategy. From an operating point of view, the distribution is getting very close to being covered from operating earnings. Turn over to Page 6. Again, Stephen talked about the nearly 14% growth in property FFO. All the major assets are improving largely on the back of kind of occupancy. Westralia Square is an interesting one because it's got a public carpark for 350-odd cars in it. That is the revenue that just keeps going up and up. That's been a great performer for us. The carpark at Murray Street, like I said, was up the Wellington one was down a bit. So that's consistent year-on-year. At 197, it's all about just the occupancy increasing. It's now up to 91%. And not all of that 91% is rent paying just yet, but it's not far from it. Funds Management division FFO was down in the 6 months. That was largely because we have sold -- we sold IKEA, which settled in June. In this current 6 months, there will be a disposal fee for the dealerships that settled on Friday. So that will flow through for the 6 months. Co-living, we'll go into a little bit more detail later. That site by site as they have outperformed where they were this time 12 years -- December '24, and you add in also the accretive acquisition of Moranbah, and that is that's really an interesting part of the business that's performing very well. Net interest expense was lower. We had an expensive swap that expired in December as well. Rent went up. The facility went up marginally $5 million during the period, and corporate costs are pretty flat. If you just look at the debt on Page 7. I said it's this is pretty much what you saw in the August presentation. The only real change has been $5 million of debt was drawn down in the period and an expensive swap has expired.

Okay. Turning to the Perth WA economy on Page 8. The macro backdrop looks positive for the office market and Perth and WA in general. If we look at the private mining CapEx, it's nearly doubled from 2019 levels of $17.1 billion to $35.5 billion today, and exploration CapEx has increased strongly as well, which adds obviously directly to the office leasing inquiry. Domestic economic growth is strong, which is circa 3% for the September quarter versus 1.9% for other states. We're seeing strong wages growth, unemployment below the national average, strong population growth and very strong retail spending. If we turn over the page, and focusing on GDI. The CBD office sales front, we witnessed 5 sales campaigns, concluding with an actual transaction. Nonetheless, they're still sitting there. We're likely to see some of those transact over the next period. What was interesting was that there were some fairly solid bids. About 59% of the book was bid for those assets was from syndicators and about 26% from high net worth there was a little bit of foreign interest, but it mainly flowed through to other asset classes like Mapletree buying [ student.com ] and a number of our assets where we sold non-office such as IKEA, $164 million but it feels like it's getting close. 2025 really looks like a year of the standoff on the sales front. Average volumes for Perth market were in the order of $734 million. And last year, there was virtually none in the office. So there will be a catch-up period most likely once the buyers and sellers work themselves out. And we think that we're likely to see some bids after the recent campaigns. We've seen 2 more assets come on to the market. One of those is at 81 St. George is more likely to be a conversion to resi, so withdrawal. So we're hopeful that we're basically on the edge of a transaction campaign that is going to be successful. And I think that the best way to sum it up is that the transactions are really the missing piece to the strengthening story, given that Perth office looks to be on a structural upswing, particularly from a rental perspective, given the economic rents required and the supply gap. So you can see through the bottom chart there, it's really pointing towards the potential supply commentators have still got Rio in there, which is questionable in 2030 plus. The blue lines there really reflect the backfill from tenant movements, and it's worth noting that a little bit of withdrawal could knock that supply out very quickly. Turning over to the supply gap and the impact on vacancy. The Positive net absorption continues. We saw over 79,000 square meters of leasing deals done in the over 500 square meter scale. Around 83% of that was done in A and B class space, indicating that tenants have been cost conscious. 68% of tenants have expanded, 27% of all deals represented tenants moving to the CBD with Mordecai mentioned. There's been a definite pickup in the government OI campaigns. And we've also seen effectively the withdrawal of 20,000 square meters for development in Northbridge not taking place, which will, again, have to come back in terms of demand for fitted out or non-fitted out space at some point. GDI has experienced good leasing interest in our Eastern Perth office assets, which is really interesting. It's probably the highest level we've witnessed and there's multiple inquiry across those buildings. If we look at the chart, it really shows absorption scenarios for different levels, again, it hasn't netted off for the withdrawals that I mentioned before, and the likely candidates there are going to be St. Martin Center and also the 81 St. George asset to mention a few. But basically, you can see that there's a distinct lack of supply on the horizon. The vacancy rate can tighten quite considerably based on those various scenarios. Average take-up or net absorption has been around 20,000 in the past. We expect it could be quite a bit higher. A lot of the vacancy in the prime end resides in 1 building. If we look to the next page, just a little bit on rents. Clearly, market rents need to rise substantially. The market seems to have a range of between $1,180 to $1,300 net sales for the premium end. And if we use the rent of $1,280, they'll need to grow from around $880 today, which is about 64%. As mentioned, CBRE is forecasting 69%, which may prove conservative. Most of the premium vacancy resides in QV1. So out of 55-odd square meters, there's about 23,000 sitting in QV1 which can be moved pretty quickly because there's some shuffling going on. It only takes 1 or 2 tenants to move out of A grade into premium or 1 of the tenants coming in from the city, such as Western Power, and it will fill it very quickly. Incentives are still sticky, tends to be the case but it varies according to the condition of the space, whether it's refurbished, whether it's a spec fit-out or whether it's an existing fit-out, but that's healthy. At the moment, they're likely to come down, keeping in mind that the Brisbane market has done well and still got very high levels of incentives. Turning over the page turns to the property portfolio, noting there that the the non-office property component has shown around 18% after the successful settlement of the car yards that will drop to around 12. Valuation policy resulted in independent valuations for WS1 and WS2. As Dave mentioned, they held their value and increased FSA slightly despite cap rate expansion, showing the growth in income, particularly for WS2. We saw Murray Street carpark lift by $4 million despite having a fatter cap rate. And Wellington was a bit softer, and Townsville was a bit softer. Turning on to Page 18 to save -- turning to every page of the preso, we're going to talk a little bit about Co-living.

Thank you, Stephen. I think I'll just give a little bit more detail in this presentation than what we've done in the past. And you might want to sort of have a finger on Page 23 as well as we do this. When we made the investment, we had an objective of a 20% return on the initial invested capital, which was $33 million, which is about $6.6 million for the year of FFO contribution. And it only had the Norseman asset and South Hedland. South Hedland, the team in the Cove, the head office is 6 people now, plus some outsourced accounting staff. There's over 100 all up, including all the site workers, very stable at site manager level. The beauty of having the 4 facilities now are able to move site managers between the villages, we're able to grow system site managers into site managers. There's pathways, stuff retention at a more seasonal level is easier with more of them. And it's sort of showing through in the results. The team has done a really good job at Hedland. It's gone from -- I won't say last resort, but the CapEx investment and BDM investment it's meant that we are preferred supply status for a number of users in the South Hedland market now over $5 million. There's a chart on Page 23, which compared the deck 24 to deck 25 across each of them. But we're really pleased with how South Hedland is going. And the preferred status gives us a lot of comfort around what that ongoing occupancy will look like at least for the next sort of 12 to 18 months. The Norseman, we face Pantoro Gold, but since we invested in '23, Pantoro has been on a pretty incredible journey. We've put 76 rooms on the mine site. They have a very, very quick payback, and we're in the process of delivering another 64 rooms. They will be delivered shortly. Norseman is going very well. Pantoro going very well and the price of gold is very high. I think our challenge is to keep up with the room demand of Pantoro. Newman's a really interesting one. We settled in May '24, the first 6 months to Dec '24 $900,000. Again, putting the teams [indiscernible], and his team, changing the branding, focusing on the delivery of the service, focusing on BDM. It did double that in the deck 25. And then in October, we settled the Moranbah acquisition. It's 245 rooms. The first thing they've done is rebrand it. So there's changes from 3 different brand names to 2. 144 rooms have the benefit of the -- we got a take-or-pay contract with Stanmore coal. And the other two, they're more of the traditional style line accommodation. They are the 2 brick motels. And there's work to do to bring them up to the occupancy and performance that we want. But I look at the -- what we did at Newman and have some comfort that we'll be able to achieve those similar results on those 2 rooms, which is about 100 all up of the 225 and have solid growth as we look forward to the next couple of years. on the

So turning on to Page 19 and reinforcing our strategy. We're very focused on doing what we say all do. And to that note, we believe we are executing in line with strategy. We're relentlessly focused on leasing. And with a strong result for the period, we're very focused on the remaining lease-up utilizing the spec fit-out strategy, of course, which has proved very fruitful to filling space. Financially, we're driving the FFO growth whilst balancing out those liquidity requirements to deliver a full year $0.05 distribution. We continue to recycle at good prices with over 250 million realized and more to come. We're very focused on bringing performance fee outcomes to account and we're carefully managing the strategic growth plans at both the property and the business level. And noting the improved contribution that Dave has just talked to on the JV business. We're always focused on asset improvements. That's our job and returning the benefits to investors including mill green and assets within the funds management business, such as Broadmeadow. So with that, I'll just turn the page on to Page 20, which shows Mill Green, we're working on a stage concept with initial focus very much on an extension of our spec fit-out strategy, which is really to fix up the ground floor of vacancies for 197 St Georges and 5 Mill, which run together and boost the income from retail repositioning and tenant amenity. And then if you turn the page longer term, the total site lends itself to a stage repositioning. There's nothing to worry about there. We're not rushing out to spend money, but you've got to best position your assets to extract the best prices. So with that, if we turn on to the next page, Broadmeadow sits in one of our funds, and it's interesting to note that received a big boost in valuation, up from $44 million to $78 million. It's basically a rezoning from industrial to mixed use, which could include up to 1,700 residential units. The key here is that this can deliver a very high performance fee to GDI, which on our numbers at the moment is in excess of $17 million. So with that in mind, it's important to realize that you've got to position your assets to get the best prices to take advantage of the growth and to optimize value for investors. So in summary, GDI is well placed for FY '26, particularly given the Perth office market tightening. And I'd just like to thank you for listening, and I'll hand over for Q&A.

[Operator Instructions] Your first question comes from Andy McFarland with Bell Potter.

First one, if I may, just in terms of fundamentals, just interesting in terms of what you're seeing in terms of incentives and leasing spreads and some of those metrics in the rental market in Perth.

Yes, sure, Andy. I think the rider on incentives is you've got to break it up by the type of space. But if you looked at refurb space bearing quality and location, you could be anywhere between 38% to 50%. That's what most agents will quote you. And you're probably looking at 5- to 10-year terms, and that could be in premium to A grade for that space. I mean you've got the spec fit-out category, which is where we concentrate because the incentive is a lot lower, it could be between 5% and 25%, noting that we have done some without an incentive. Not all landlords are doing -- willing to do spec fit-outs, as you know. And the lease terms there tend to be on a 3- to 7-year and it's mainly in that A-grade space where you can capitalize on your spec fit-out strategy. I think existing fit-outs or next-generation fit-outs, they're going to vary between 20 to 45 depending on how strong your marketing is you there's going to be a lot of variability in quality, style and location, but they tend to be for your 7-year ranges as well in terms of lease term. But it's fair to say, Andy, that the incentives are still there in the Perth market. But what is interesting is that we've noticed a few cases where tenant reps have missed out on deals because they've been holding out. And we are at an inflection point on basically a bit of a handover of power to the landlord because it is tightening up, particularly if you've got river views, et cetera, in good space, it's noticeable. And the other trend there, Andy, which will come together with incentives is a lot of the renewals, a lot of tenants, particularly big ones, looking at their space expiring in, say, 4 years' time and again, we don't want to get hit with that rental growth. So they're trying to bring it forward now and negotiated deals.

And any color just on lease spreads, if so?

Well, because you've got such a variability in incentives, we tend to get a pickup in situations where we do a quick shift. So in 5 Mill or 197, where you can actually make a positive spread. But quite often, you're basically converting capital to income. So it depends. I wouldn't give an average figure. I know rental growth for the market was up around 4.1%, but a lot of the instances that we see and building by building because we've got to lower outgoings and a lot of tenants, we can be quite competitive so we can push the rents. But Dave, did you have a comment there?

Andy, just in terms of our portfolio, in particular, both 197 -- 5 Mill Street has got pretty short leases. So it's always at market leases that rolling profile. 197 has a lot of the hard work has been done. So they're not long leases. So we are conscious of that sort of '28, '29 and I'm very happy to have expiries dropping into that period. Again, Westralia Square complex and WS2. A lot of the leasing has been done in the last 2 years. So we feel that so our portfolio is pretty much at market at the moment. It seem to be below.

Some of the UGL portfolio looks like you've made some good inroads there. kind of disposal was the one asset for Meadows and not so markup. I talked about this last asked, but just any sense on disposals for that unit trust or fund and therefore, when a performance fee might manifest if so?

That was originally a 7 asset fund. I mean it is great story for investors in it. 6 of the assets have been sold on still to settle when that settles, the investors would have received over $1 back for the money they put in there. The units are still valued at $1.21 after all fees and costs. The [indiscernible] Council last year delivered their Broadmeadow place which identified this site for mixed-use as Stephen has already talked through. We are going through a DA to get it rezoned in accordance with what Newcastle council want for it. So we're not really pushing the envelope on what they want. I mean to be fair, since we've bought it, we've been working with the council about its alternative. So once that DA is formally received, we would look to wind up the current fund, but it certainly wouldn't be looking to move on the site. So [indiscernible] how long it will take. We hope to have the DA for rezoning in this calendar year and then the council process that may take a year. That's why we talk around what the fee would look like if it was done at 31 deck 27. It may be sooner or maybe longer.

Yes. I think also, Andy, just in terms of the scale of it, sitting in the fund that's in now at some point, they'll need realization. But as far as GDI staying involved, there's 10 years plus of profits in this type of deal. So it's a matter of how you look to position for that and bring the requisite expertise and all that to pass. So it would go through a different form of funding at the right time.

Just on noise, and you talked a little bit about that. It sounds like things are progressing pretty well there. Just wondering what you're kind of seeing in terms of room rate growth and I guess, what that might mean on an annualized EBITDA basis?

The ones that are contracted, so Norseman and North man and a good chunk of Moranbah, you're basically getting CPI increases. It's very formulate in the relationship with the main user on the take-or-pay, so it's been volume increases at Norseman that's added to the earnings. Very, very good payback on the temporary ones on the mine site. The Hedland and Newman, we would you trade room rate for occupancy certainty to some extent. So we actually had a very good occupancy in FY '25, but the revenue was down because there was more certainty to it from what it was in FY '24 when we first bought it. But the answer is you're not really it's not as simple as just saying you're getting CPI, right? It's about occupancy. It's about certainty and you trade those two.

Since we're around occupancy of your existing and where required, so for example, Pantoro to meet their needs, it's about expansion and how you deliver additional rooms, right? So we think we've got a good spread across the different types, but it's not just as formulaic as adding a room rate and increasing and it's a bit more nuanced than that. And as Dave mentioned, obviously, we at the start of the JV. We started off with 6 years of night sold forward to Pantoro. And all they've done since the gold price has gone crazy, and they've started pulling more gold out of the ground is that they've had to expand. So we're flat out keeping up with their expansion. In terms of other asset opportunities, we're very mindful of not adding too much to the GDI balance sheet. So we look at other ways to recycle and to fund that, as we've explained before. And you can see from our sort of investment philosophy, we're very focused on that target return of over 20% on our initial capital because it really does deliver a good level of cash flow and profitability to GDI.

Final one, if I may. Just interested in some color around if you have to talk on your comfort of the $0.05 distribution kind of going onwards and just, I guess, in relation to income and kind of what's coming through -- you talked, David, you talked a little about an element from capital, just wondering just comfort level there around what's coming through from income going forward?

I think what I did mention, and if you go to the cash flow in our accounts, you can see cash flow from operations is getting very close to covering the distribution, which it hasn't done for a while, given we're in leasing up stage of WS2 and building it and then leasing it up. So we feel very -- if you look at the FFO numbers compared to the distribution numbers, we're very comfortable to talk around the $0.05.

[Operator Instructions] Your next question comes from Lynn McFadden with Bell Potter.

Just a quick one. It's on the incentive amortization and the sort of cash flow. So just it looks like your leasing costs and incentives, and Andy touched on this has jumped to 10.1% from 8.1 pcp so it's sort of like 20% of you if my math is right, 26% of your gross rent and recoverable outgoings. So I'm just more interested what do you expect the peak level incentive amortization as a proportion of gross rents will be going forward, given you've got sort of 197 SGT 5 Mill Street?

That is quite you're trying to boil without me.

No it just sort of..

Or they're just in the numbers. What do you got? So the $9 million. We've got $9 million.

So you're at 26%, right? Because you've gone from 10.1% to 8.1%. I'm thinking, okay, you guys have got a bit of spend ahead of you. And I'm just trying to reconcile when the drag that could start reversing or the -- then we might be able to see a lower incentive requirements?

Here it is. We're just looking at where you got your numbers from an on have you got that?

Business like GDI that running towards leasing risk in markets that we like will always have a high incentive number. We truly believe that when you buy an asset like the Westralia Square Complex, we're steering at 100% vacancy when we bought it and building a new building like WS2, we put incentives as a capital item and our cash flows reflect that. If you go to the cash flow statement, it shows that the incentives are a capital item. I think if you hold on assets through multiple leasing cycles, they start to sort of really start to be viewed more as an OpEx number rather than a CapEx number. As our buildings get full, we would like to think that at that building level, we often bring in a partner or realize the asset or move it on. That is difficult in Perth at the moment. But generally, we'd like to say that once the building is fully leased, and we've got it to maturity, we'll look at what we can do with that building. At the current portfolio, you're getting -- it is pretty full, so you're getting close to peak number.

So for you at over 88% and improving on that, the incentive levels should drop. In this case, they should because a lot of the vacancy sits in good space. So you've got 2 floors in WS2, for example, where we're holding out for better rents given the squeeze and its premium space. If you were just full of not good space, then you might have to pay more on it. But you can actually get there different ways. You don't have to necessarily push an incentive through there. It's only if you really need to spend and to get them. And we're getting above market occupancy levels now, so we can start to pick and choose. I think the more important way of thinking about it is we want to capture the growth of this cycle that we see coming. So we're happy to sit there with a bit of vacancy. So we're not going to just go and spend on incentive to cap our rents, right? So it gives us a bit of flexibility to bring some good tenants in and really get the market.

It's all about filling the space. So the next Stephen talked about interest in our East Perth properties, 1 of which is on the balance sheet, 188. that with 5,000 meters with an incentive, which should come to that line and then be amortized, right?

And one final one Townsville. Yes. I mean Townsville because what I can't work out there, guys, Well, when I say I can't work out, you own, what, 43.7%. You've written that down by 4.4% to 40%. So you got what that 8.75 cap rate? What I'm just trying to work out, what's a realistic assessment of a re-leasing risk and an outright sale, is that being considered?

Yes, we tried to sell it. a year or 2 ago, ran a full can. Beautiful document didn't get anywhere. It's got a shorter way on it. There's a bit of movement in the tenants. We've just we've signed a head of agreement with one of them for an extension, which is good. That is over 4,000 square meters of the space. So that's a very good deal. We believe we'll get a renewal on another large space user there because they spent so much on their fit-out. They're likely to stay, if you look at the Townsville market. There's only 4 properties suitable for government occupation and through them 100% full. So we feel that we're in a good position to be able to extract some value from that, notwithstanding the shorter WALE and a bit of movement in the vacancy. And yes, we'd be delighted to sell that for the right price. But like all our assets, we won't -- we'll try not to sell them at the wrong price.

Reversely, there's been more activity in the North Queensland office market in terms of capital transactions that has been in Perth. There was a similar sized asset traded in Cairns in June last year.

[Operator Instructions] Your next question comes from Matt Ward, Private Investor.

Looks like you're doing quite a good job there in a lot of ways, but your share price is $0.60-odd, $0.62 in your NCAA. So if you bought back shares, presumably, there's a potential 100% upside almost. Can you tell us what sort of strategies you're using? I mean, it seems to me like you need to get bigger. The market cap of $300-odd million just seems too small. I would have thought a scrip deal with somebody based on NTAs, might be a way to go with some as long as the decent properties to some people? What are your thoughts on that?

I agree with you there. you can get us an equivalent scrip where we get the benefit. We're all for it. If you look at some of the other people that have gone through this exercise of swapping scrip out or realizing their portfolio. One, I would argue they did it at the wrong time and didn't optimize it. But two, they weren't suitable candidates for us. So looking in the rear-vision mirror, there wasn't many stocks where we felt we had to have their assets. If someone wants us, then that's up to them to tell us all about their scrip. We're basically running the business and trying to drive the FFO up like we have and the other businesses and the cash flow and maintain the distribution. But totally get the point and theoretically buyback at current prices would result in a lot of money if it was for the whole company. To be able to fund the buyback of that size, you've got to be able to sell your best assets at the right price. Now there was a sales campaign of 5 assets in Perth run last year and none of them sold. So it's not transacting yet. You can't actually get the leg of the trade that you need to get the money to do the buyback. So that's in simple terms, what you can't do. But totally, if there's better scrip out there and it increases our size and gets us liquidity, that's great. But at the moment, we'll do what's in our control. and try and optimize the returns. At some point, the transactional market will return. And as we've stated, part of our strategy is obviously to sell a whole lot of noncore and then at some point, we would JV on our good assets, but only at the right price because otherwise, it's like doing a steeply discounted rights issue and we're not in that business. thanks.

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

Thank you very much all for joining us on the call and look forward to catching up with those who want to see us on the marketing afterwards. Thank you.

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