Hyprop Investments Limited (HYP.JO) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the Hyprop Preclose Operational Update as we head into the financial year-end. Morné and the team will run through a couple of slides with regards to the update, and we'll have a Q&A session thereafter. Just some housekeeping issues before we begin. Please remain on mute and ensure your video is off. And you're welcome to post your questions during the presentation in the chatbox. But the Q&A session, you can raise your hand to ask the question directly or you can e-mail me as well. Thank you to the Hyprop team for giving us this opportunity to host them. And over to you, Morné.

Thank you very much, Nazeem, and thank you, and welcome to everyone, it's already afternoon. And thanks for joining us. The operational update we will cover today is really from the -- of our interims from the 1st of Jan 2022 to the end of May of 2022. We will just go through a few slides. This is very much to cover the summarized version of what we have put out in our SENS. I know this SENS was only released at about 1:00. So there wasn't much time to look at it. And then at the end of this presentation, we will answer some questions. In terms of the company, we remain committed to creating safe environments and opportunities for people to connect and have authentic and meaningful experiences. And that we do by owning and managing dominant retail centers in mixed-use precincts in key economic nodes in South Africa as well as Eastern Europe. If we look at the headlines, we have made quite good progress in terms of our key priorities. One of the key things we have been working on quite a while is the Hystead liquidity event and that has been successfully implemented now. Just to recap on that, we have disposed 2 of the noncore assets, and Hyprop acquired the remaining 4 malls from Hystead. The sale of Delta City in Podgorica was implemented in May and the acquisition of the 4 assets by ourselves was implemented at the end of March 2022. There are 4 malls, just to recap, we've acquired was City Center One East, City Center One West; both in Croatia; Skopje City Mall in North Macedonia and The Mall in Sofia, which is located in Bulgaria. As part of the transaction, we took over the asset management as well as the property management teams and they have now fully been incorporated with the Hyprop team. We further strengthened our balance sheet by reducing our Euro equity debt to EUR 111 million, and we reduced our fully consolidated LTV to around 40%. Brett will give a bit further detail on these numbers. If you look at our SA portfolio, over the last 3 years, we have made good progress understanding our shoppers and making good progress with the repositioning of our portfolio. And this was quite evident on how quickly our portfolio recovered when the restrictions were lifted. We opened a number of new stores in the portfolio and reduced our retail vacancy to about 1.4% as at May 2022. The Checkers at CapeGate was made bigger and was upgraded to the latest Fresh-X specification, which includes Starbucks. We successfully opened the first Zara as well as Ted Baker in our SA portfolio, and both these stores were opened at Canal Walk. The Zara is trading exceptionally well. Unfortunately, we can't disclose these stats, but they do give us some updates every now and then. We also opened 2 new concept stores at Canal Walk, which is the first in South Africa. The one is the Woolworths' quick service restaurant, which is called NOW NOW and the other is Retail Box, which supply beauty products, which is the first physical store for this online retailer. The Rosebank Mall's performance has improved since the offices -- since the office tenants returned into the precinct and a number of the surrounding developments have been completed. We relocated the Exclusive Books with an in-store Vida E Caffè overlooking the Rosebank pedestrian walkways. To complete the iStore offering, we've opened a store for the new products and that is working very well with the existing preowned store that is right next door to the new store. We learned a few lessons in terms of our operational side of the storage facilities at Rosebank Mall, and we're busy rectifying these so we can roll out further facilities on the portfolio. Just to clarify, the lessons we've learned is actually a big drive in the storage facilities is to get your facilities filled up thereafter the management gets quite easy. So we are implementing a number of changes to drive that building of the storage facilities. At Hyde Park, we've improved our offering by securing a new restaurant, which is a steakhouse. It's George's Grill. We've also secured Skins, which is a high-end cosmetic brand, as well as Calvin Klein. At the third level at The Glen Shopping Center, this area in the mall was always struggling, we did change that, and we improved the value offering with the latest format of HiFi Corp Store as well as stores for Crazy Plastics and Crazy Pets. In terms of our European portfolio, the vacancy at the end of May was 0.8%. The team successfully completed the Skopje City Mall project, and that included rightsizing of tenants, improving the tenant mix, improving the internal flow within the mall as well as upgrading the food court and toilets. The last part of the development was completing the outside play area, and I must say it is quite a big attraction for the people in North Macedonia, and it has increased our footfall to the mall. At The Mall of Sofia, we're in the process of upgrading the bathrooms, and this will be completed in the second quarter of 2023. At Africa, unfortunately, due to dollar liquidity, the Ikeja sale has still not been finalized. One of the positive things is that Actis is very committed to do this transaction. And I do think as soon as liquidity comes back in the market, this transaction would be implemented. All the centers within the African portfolio is trading well, and we're making good progress, specifically on the Ghana portfolio and reducing our vacancy. Ikeja City Mall trades very well, and it remains fully let. In terms of our nontangible strategy, we've opened a SOKO District in Rosebank. It is trading well. But one of the things we want to do with the business is splitting the technology platform and the physical districts. In terms of the physical districts, we actually realized how the online retailers, when they come into the physical space, there's a lot of things they don't know, which we didn't cater for initially, and we're addressing these issues. We're also revisiting the whole layout of the physical district, which we do believe we can improve the trading densities in this area. We're very excited about NIKA, the digital gift card. We're busy finalizing the redemption of the card with the retailers. That is one of the last points that's required to do. And what is very positive, some of the retailers have shown interest to use a white label format of this card. We're in the process of reviewing how we want to roll out the nontangible asset strategy in the future, and we will be communicating that to the market when we've got finality on that. If we go to the next slide, Brett will give us a little bit of an update on the balance sheet. Thanks, Brett.

Thanks, Morné, and afternoon, everybody. So just to -- it's almost reconfirming some of what we said when we did the transaction with Hystead and where various of the debt parameters have landed post that transaction. Our fully consolidated LTV is sitting roughly at 40%. It's -- we're using the estimated or the sort of approximate number only because the detailed calculations for each entity have to be done and for each bank, and we usually just do those off the audited balance sheet, but it's roughly 40%. On our Euro equity debt, we reduced from EUR 373 million in December 2021 to EUR 110 million currently. That Euro equity debt sits in our entity, Balkan Retail now and will be consolidated onto the balance sheet at 30th of June. The in-country debt in the Euro portfolio has reduced from EUR 365 million in June 2021 down to EUR 285 million currently, and that is housed in the propcos of the 4 property assets that we have there. The Euro LTV has reduced from 94% down to 65% as a result of the repayment primarily of that Euro equity debt, through the transaction where we acquired the 4 assets as well as the disposal of the 2 assets that were sold in the 8-month period. We've also created Euro equity of EUR 180 million, and that will provide some shield in a weakening rand where previously when we had guaranteed more than our fair share of the assets with the liabilities we guaranteed with more than our fair share of the assets, you had a negative impact on the LTV when the currency weakened. Now if the currency weakens, we will have a positive impact. You can go to the next slide, Lizelle. We've just -- we've set out on this slide just a comparison of the ratios of the different -- the debt in each of the portfolios compared to the property values to give us a proxy for how the LTV has been calculated. The left-hand half of the table relates back to 31 December 2021, where you can see the debt and cash positions and the property values in each of the portfolios. At that point, the South African portfolio of 15% was the LTV or the ratio of debt-to-property values at that time with Europe sitting up at around 94%. Africa was so very comfortable at 35%. When you look at 31 May 2022, we have restated -- or we've updated those numbers for where we are at the moment. The South Africa portfolio, the net debt has increased then up to ZAR 6 billion. That's nearly ZAR 2.6 billion is the increase that is effectively the change in the cash and the gearing when we settled the purchase price of EUR 173 million to buy those European assets, and that was as expected. The LTV on the SA portfolio has, therefore, increased to about 27%. When you look at the Euro portfolio below that, the numbers I've just mentioned, in-country borrowings of EUR 285 million and the equity debt of EUR 110 million, we have EUR 22 million of cash in the business at the moment, and that gives us a net borrowing of EUR 373 million, down from over ZAR 650 million at the December date. The LTV there, you can see compared to the value of the 4 properties, which were valued at EUR 575 million for the transaction. That gives us an LTV there of 65%, which is much better than the 94% we reported previously. If you look at Africa, there's been very little change in the debt in Ikeja. The growth from $59 million to $61 million is because we are capitalizing the interest on that loan. That interest is secured by a cash deposit, which we have in Nigeria that's pledged to the bank, and that's why the cash balance there has increased as well. Ikeja is continuing to generate good cash flows. And the only reason we can't service the interest on the debt is because of an inability to buy dollars. But the banks are very accommodative and comfortable with the arrangement and the facility does make provision for us to capitalize this interest. So the LTV in Africa is 34%. If you look at the combined total, you'll see our ratio of property values to debt is roughly 38% at the moment and that compares to the bank LTV covenant of 55%. And you will recall that we agreed with all of our major lenders that should we do the Hystead transaction and consolidate all the debt, they would increase the LTV covenant to 55% for us for June 2022 and going forward to December 2022 as well. I think that's all on this. Thanks, Lizelle.

Thanks, Brett. If we go into the operation performance, this is quite an interesting graph. It shows the historic trading performance. It's on a rolling 12 months up to May, and it indicates really what's happening with our vehicle count, trading density, foot count, turnover and effort ratio. One of the things that has been a concern for me since I've joined Hyprop was the fact that our tenant turnovers was dropping, and it's quite evident as you can see up to just pre-COVID it was dropping quite a bit -- was not growing much, but it was actually dropping in 2017. And then you actually had the COVID impact in 2020 and 2021. What is very positive to see is that the tenant turnover has increased by 13.3% for 2021. The footfall has grown by 7%. [indiscernible] seeing, and I think it could be an ongoing trend and something we are working hard to improve is to increase our footfall in the malls. But what has happened is people are visiting the malls less frequently, but they do spend more when they do visit and that you can see in the size of our basket size, which has increased. We are working hard on the repositioning strategies to make sure we've got the right tenant mix. We're also working on some omnichannel capability, and ultimately, hopefully, all of these will drive the footfall and then ultimately increase tenant turnover. In terms of the effort ratio, which is the blue bar, you can actually see, we actually have had a reduction in the effort ratio, which is positive, of 9.8%, and that compares to 2017. That means our tenants are trading better than before. Obviously, you had a reduction in your rentals. And I do believe this is actually showing a good indication that you should actually start seeing some growth in your rental income in time to come. If we go to the next slide, what we've done here is actually just compared 2022 with 2019, '20 and '21, and we only used the 5 months trading for this last period up to May. And you can actually see there we've had shown very good growth. We actually in terms of trading density and tenant turnover, we are back and some of the months we even are above pre-COVID numbers. The tenant turnover increased for these 5 months by 16.3% compared to 2020 and 7.4% compared to 2021. Foot count and vehicle count is still lagging, and that is evident with the bigger basket size per visit. If we go now to the next slide. Similarly, then with the South African slide, this shows the historic trading performance on the European portfolio. It's also a 12-month rolling period up to May. Similarly then South Africa, you can actually see there has been an improvement in the trading stats. This is definitely in line and in some cases better than the pre-COVID levels. The tenant turnover increased by 15.8%. Effort ratio is at 10.5%, which is the lowest level yet, if you kind of look -- compared to the history. This -- you can also see a lot of our reversion is positive reversion when we actually have lease renewals. All of these malls are situated in NATO countries and the currencies is directly or indirectly pegged against the euro, which is positive for us. And even Croatia is in the process of changing their official currency to the euro. Lizelle, if we go to the next slide. Similarly, we're showing the 5-month performance compared to the previous years of 2019, '20 and '21. And you can also see we are seeing some good growth in terms of these trading stats. May and April were 2 exceptional months, and the performance was above the pre-COVID levels if you look at May specifically and tenant turnover and trading density. The tenant turnover increased for these 5 months by 37.4% compared to 2020 and 15.4%compared to 2021. Similarly then South Africa, there is still -- the footfall and vehicle count is lagging, but we do believe that there's a few of our initiatives, specifically around the marketing of these malls which we believe we will increase those and ultimately increase the tenant footfall as well. Going to the next slide, Wilhelm will give us an update just on the Sub-Sahara portfolio.

Hello, everybody. Overall, the operational performance was encouraging for the first half of the financial year. But more recently, it's been negatively impacted by the depreciation in the cedi versus the U.S. dollar exchange rate. And the reason for that depreciation is the downgrade of Ghana sovereign rating. You'll see that in the tenant turnover and trading density numbers, the top 2 graphs there are in U.S. dollars. Obviously, the figures are much better in cedi. But nevertheless, we prefer the U.S. dollar operating stats. With regards to COVID, most of the restrictions have been lifted, allowing restaurants and cinemas now to operate at full capacity. Ikeja City Mall in Nigeria remains fully let and there's a waiting list of very strong prospective tenants. At the beginning of the year, we also signed up Shoprite, although it's been sold to a Nigerian operator on a 5-year U.S. dollar reference lease. The lack of U.S. dollar liquidity remains a challenge, and that prevents the payment of interest on U.S. dollar debt to the lending banks and interest or dividends to us and Attacq as the 2 shareholders. There's been a question from Nazeem regarding the price of oil and why the liquidity persists. There's no correlation between the price of oil and the U.S. dollar liquidity situation in Nigeria. It's predominantly due to production problems and all of the revenue from the sale of whatever they produce not finding its way into the state coffers. So I'll leave it at that. On the Ghana side, turnover and trading density has been affected by the depreciation of the cedi, as mentioned before, and that is something that we're closely monitoring because it's likely to play out in collections and rental rates. With regards to the overall portfolio, foot count from the whole portfolio remained largely flat year-on-year and collections have been robust throughout the period. Vacancy levels have reduced nicely from 11.7% to 10.9% over the past 12 months as a result of focused asset management. With regards to the senior bank debt, we've reduced the bank debt collectively and that is us and Attacq combined by USD 5 million in March of this year. And we've also agreed with the incumbent lending bank to extend the term of the loan that expires at the end of this year by another 2 years. With regards to the sales process of our 4 Sub-Saharan African assets, we're making progress on both transactions, both the Nigerian transaction and the Ghanaian transaction, and we'll update you in due course. Things are obviously going much lower than all of us would have liked, but we are making progress. We will continue to pursue the exit strategy of our African assets while driving value creation through active asset management. Back to Morné.

Thank you, Wilhelm. Just in closing, obviously, we will -- we still believe our strategy is working, and we will be focusing on our strategy going forward. It is that we will take a rather conservative approach. One of the key things we will do is to improve our balance sheet even further. We want to start looking at securing new growth opportunities because we do believe we need to grow going forward. Our asset portfolio will still keep on repositioning debt as well as improving the dominance in our European portfolio. And then lastly, we will find or reviewed a nontangible strategy. With that, we can open the floor for some questions.

We've got a few questions already. [Operator Instructions] First question is from Pranita. What were the retail reversions during the period for both SA and CEE?

As I've mentioned, we've got positive reversions in the EE portfolio. I think at the -- at our interims, we did disclose our reversions improved from about minus 20% to 13%. And what we have seen, we haven't disclosed the numbers, so I can't give the actual number, but we have seen an improvement in terms of those trading densities. It's not positive as yet, but it is much better, while it's better than the 13%, rather put it that way.

Cool. And I think this might be a question for Brett. The Euro debt that's currently sitting on the balance sheet is comprised of 2 components: the equity debt and asset-backed debt. Can you give us a sense of what proportion of the debt is fixed, Euro debt?

Thanks, Nazeem. I'll leave it on for now on. The -- our policy is to hedge 75% and both of those portfolios are hedged more than the 75%.

I've got a question from [ Lwando ]. We have seen significant mix changes, increase in grocery retail, for example, and we have seen property-related expenses increase over recent years. This has made it difficult to use trading density changes as an indication of net rental income growth. Can you give an indication of the net rental income performance in the last 5 months?

No, I can't really because I will disclose that with my final numbers. What I can show -- and it's quite a valid question. I mean there is a concern in -- specifically in the listed market, your gross expenses, there's some that we can manage and some we can't manage, for example, rates we can't manage. Utilities, in a way, we can manage because you actually can bring solar and you can look at water saving initiatives and those types of things. But rates is the one that been increasing very much above inflation and actually do put a little pressure on your rental growth. But the key thing, I think, for South African portfolio and that's the focus is how do you grow your tenants turnover and if your tenants are trading well obviously, your effort ratio start reducing and then you can start getting that growth in the income. And I think what we also are seeing specifically since the restrictions has been lifted specifically on our SA portfolio, we have started getting -- attracting some of our competitors' shoppers into our malls. And I do think it's going to be positive growth going forward. As these numbers are showing, tenant turnover is going up, but unfortunately, your retail growth will only lag because it's set in terms of fixed leases and there is turnover provisions in your leases, but your big kickers comes in where you actually renegotiate those leases in the future.

Maybe let me ask the question in a different way. We've seen a huge rebasing of NPI, primarily because of, I think, top line rentals renewed over the last 2.5 years, actually have started in 2019. By when do you anticipate that the NPI will at least flat line to marginally improve going forward? Has a lot of that rebasing story being done? It appears so given that reversions are improving and vacancies are steady.

It's quite right. I think we are at a tipping point given some of our malls. What we are doing on some of our malls, we are busy with redevelopments where you're actually going to ship tenants around. So on those specific ones, you go and see the growth, but most of the other ones, you will see the growth going forward.

We've got a question from Pranita, again. Will you be distributing EE earnings in full or retaining a portion thereof?

No. We're not paying out any dividends for the near future. In terms of EE, I think we are -- we have got finality on our dividend policy. We have discussed with our board. That will be communicated at our financial results. So I think we will rather address that question when we address it in the -- at financial results presentation. But we've got a plan. I think it works quite well. That will be communicated. What I can say to you is I don't think we will go to 100% payouts. I think it's prudent to actually retain some money for your maintenance and CapEx, and therefore, potentially, we will have a reduced payout ratio than 100%.

And maybe not to get too technical, but maybe just a reminder to the listeners, how does the tax work with regards to the benefits of retaining within CEE and what gets taxed from a REIT perspective in SA on distributable earnings and retention there? Brett, I assume you know what I'm talking about.

I hope I know the answer. No, I think -- so the big change that's happened that's impacting us in the current year is previously dividends received by Hyprop from its offshore entities were tax-free because we hold more than the 10% in the foreign entities. And that exclusion from the foreign dividends has been taken away from the REITs because REITs were receiving tax-free dividends and then paying them on to the shareholders getting the 25BB deduction and basically shielding SA taxable income that way. So we've lost that deduction. The further complication with this is even though you lose the tax deduction on the -- sorry, even though you lose the tax deduction nature on the dividend, if you leave the dividend overseas, you might still be taxed on the income in terms of the CFC rules. And I think everybody's circumstances are unique, and you've got to understand those CFC rules. And those are 2 things that we will take into account in the dividend policy.

I've got a question from [ Yash ]. In light of the global surge in inflation, please remind us if the highest tenant leases are euro-indexed and/or have turnover clauses?

Most of those leases are indexed to CPI. So you actually could see a growth in those rental income going forward. Obviously, we will take a view on those because these increases in the CPI could be above market. And obviously, we want to ensure we retain functional malls. So there is upside for us as tenants. But if we need to, we will actually assist our tenants through this time and maybe have a clawback in the future. But that's something we will consider. But to answer the question, there is index based, and there is an increase in those in terms of CPI inflation increases.

But it seems like it's flexible with regard to...

No, no, no. Well, that's flexible -- it's flexible if we allow them or if we say we will assist them. But I mean, in terms of the leases, that will increase as CPIs increase.

A question from [ Etienne ]. Do you plan to convert the EUR 100 million to ZAR? I assume he's talking about the Euro equity loan. If yes, do you have timing on that?

I think for the time being, we're comfortable with that Euro facility. We have mitigated that balance sheet risk as clarified by Brett on the balance sheet strength because we have created real Euro equity, which we haven't had before. And we must also take into account that debt is the much lower cost of -- interest rate cost compared to our SA interest rate. And that facility is also, Brett, is about 2 years to run. So I definitely don't think we will do something at this point in time.

Morné, it's got a year to run. So it's beginning of July 2023 is when it matures and that will be the time to reduce it, if that's what we choose to do. I think the with the Euro LTV being the highest in the portfolio, that's the logical debt to try and reduce, but it is a balance, as Morné says, in terms of the funding cost and the overall cost of borrowings across the group because that debt is costing just over 2%.

So maybe this goes back to my question at the beginning. Have you set a target LTV for your Euro business because it's currently at 65%, have you set an eventual or a place where you want to be and how do you intend to get there?

Nazeem, we would like to get the LTV down below 40% on a group basis, okay? And with that objective in mind, it's easy to see where you've got to do it. You've got to reduce the Euro debt because that's the highest and we can afford to put more debt on to the SA balance sheet. We do have a plan about how we want to do it. There's obviously amortization of the in-country debt in Europe is something we're doing already. We currently pay about EUR 10 million of amortization on the in-country loan and that will continue. And where possible, we will try to amortize that Euro debt more if we can. Settling the EUR 110 million equity debt right now is pretty expensive because you've got to pay break costs to the banks. And with the currency, those break costs can be quite substantial, but it is something we're looking at. And I think we linked to the dividend policy, we have a plan and guys are just going to have to wait until we announce the results and the dividend policy, and we'll see what we can then achieve in terms of that plan.

Maybe this is a stink of a question, but you're talking about managing the debt cost and the benefits of having at your equity debt because it's got a lower cost of funding. But that's not sustainable as a part of your funding structure, at least in my mind. Is -- do you intend to continue with some level of equity funding as a part of the euro debt position? Or is this something that you intend to get off your balance sheet and have asset-backed debt sitting in Europe at a relevant rate and SA debt sitting in the SA balance sheet?

Nazeem, I think, I will maybe try and -- I'll give you my view and then -- I think at the end of the day, and I think Brett touched on it, if you look at the overall LTV, I think if you look at LTV and ICR, that's the most important things. I think where we actually were under pressure historically in terms of our LTVs was given the fact that it was 100% geared in euros. So you didn't have any equity in terms of euros. So whatever happened with your -- with depreciation of our rand, your debt went up with that amount and because it was guaranteed with SA assets, you actually were in a negative position. I think given the fact that we have got euro equity, that creates a buffer in a sense when the rand depreciates. So you actually have that covenant, that cover. And then I think we also must take into account the cost of funding. So I think Brett has touched on it. Your in-country debt is more expensive than your current year equity debt. So to get that LTV down on your European portfolio, potentially amortizing the in-country debt is the first priority at this point in time. As he said, when the EUR 110 million come up for renewal, we will take a view on that point in time.

And then just sticking on this topic [ Mo ] asked, what is your expectation for Euro funding costs going forward? Let's make a similar assumption is if we had to reprice the debt today and they all came up for refinance, what would be -- what were you sitting on an average rate today versus your historical rate? Do you have a sense of that number?

In euro, specifically?

We've started -- look, we've got EUR 173 million of in-country debt that matures also in July 2023. We've started the discussions with the banks in terms of the refinancing of that already. We're looking at fixed rate loans there where you might be paying a 1% more than what we're paying at the moment. So currently we're paying about 2.83% on some of that debt, you might be paying 3.84% on most of the indicative rates that we've got, but we're not committed to anything. And that's a fixed rate loan.

What I can say, the indication is also to get better margins with the refinance. So it's not like your debt has increased. Obviously, your base is going up, but the margins that they're indicating they will reduce.

Got you. Question from [ Zweli ]. Is the lower than 13% reversion rate inclusive of new deals or is that purely on like-for-like renewals?

No, that was all-in-all. I think in December, it was something a split then renewals was 15% and your new leases was a little bit less. But in average, it was 13%.

Okay. And then what sort of proportion of renewals have been completed as of May 2022? So what percentage of the portfolio was renewed over this last 11 months?

Yes. Nazeem, I don't know if the...

I'd assume it's somewhere sitting back between 18% and 20%.

We will rather put something out. I can't recall. I don't have the stats know if that's in front of me at the moment.

Cool. We've got a question from Adrian. EE vacancies are low at 0.8%. Do you have capacity or any plans to expand the footprint of these malls?

Yes, it's something that we definitely want to do specifically in Croatia. I don't see we will do it in the Sofia. Sofia has already a 64,000 square mall around there. Skopje, we'd actually have restrictions to increase that, but we won't increase that. But in Croatia, we definitely are looking to potentially do extensions on both of those malls. And because there is sufficient tenant demand and there is some tenants we want to rightsize and meaning rightsize potentially make them bigger, so we definitely want more space there. So that is something we've been working hard. Unfortunately, the town planning regulations is a little bit different than ours. You got something what you call the GUP and that can only be increased by government, but you do -- you can buy adjoining land and then by consolidating the land, you can actually use that bulk on the other site. So that's something we're investigating at the moment.

And then maybe just to add on how will that actually be funded because equity is unlikely. So are you selling in SA to fund that? Is it from retention of cash flow in CEE? What numbers are we talking about? And then second part of the question, what is the strategy in CEE now with regards to growing that portfolio? How are you actually planning on doing that?