Immobiliare Grande Distribuzione SIIQ S.p.A. (IGD) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call operator. Welcome to IGD's conference call presenting results for the first 9 months of 2022. [Operator Instructions] Let me now turn the conference over to Mr. Claudio Albertini, CEO of IGD.

Thank you. Good afternoon to all of you. As you probably read in the press release this morning, the Board of Directors met and approved the Q3 results. And is the last round ever we have with you this year, and then we'll meet and talk again in February when we'll present full year results. So this is Q3 results. And if you move to Page 3 in the presentation, you see our highlights for the main economic indicators, and we are talking about rental income, rental income in the first 9 months of 2022 landed at EUR 102.1 million. And here, we have 2 comparisons: one versus 2021 in absolute terms and then versus 2021, but restated. So it's a comparison taking into account that at the end of November 2021, we disposed of a hypermarket and supermarket portfolio, and we changed one of our master leases -- so in order to have a consistent like-for-like comparison. As we also did in the previous quarters, we try to provide you with a consistent comparison on a like-for-like basis. So if we have a 6.5% decline in absolute terms, if we look at it, restated, it's up 1.7%, and it's up 2.2% on a like-for-like basis. And the same applies to rental income, net rental income landing at 83.6 million, down 3.8% versus 21%, but up 6.3% versus 2021 was stated. And on a like-for-like basis, instead, we have up 7.8% on Core business EBITDA lands at 76 million, down 4.5% in absolute terms, up 6.5% restated. And then FFO transfer operation, 50.4 million, up 4.1% in absolute terms, slightly above our revised guidance. The guidance we revised in August when we presented the 6-year report, the range was 2% to 3% and then up 19.9% versus restated. If we move to Page 5, if we look at the operating performance. Q3 and Q2, a lot less Q1, we confirmed a growing trend when it comes to tenant sales. Over the 3 quarters, the trend is slightly below 2019, but still in line with those figures. So we have minus 0.3% progressive versus 2019 and up 19.1% versus 2021. But let me remind you that in 2021, we have closure days because of anti-COVID measures. If you look at the bottom of the slide, Q1 was negative, down 6.4%, we're always talking about tenant sales and then a good recovery in Q2 and Q3, respectively, up 3.8% in Q2 and up 2.8% in Q3. So that overall, the first 9 months are just down 0.3% versus 2019. These data, however, they are inflation adjusted, to be fair but the only marginally factor in inflation, the inflation effect. -- footfalls are still negative versus 2019, down 17.1%, but with an improving trend going from minus 20.5% in Q1 to minus 16.5% in Q2 and down 15.6% in Q3. So we have a 10% increase versus 2021 as a whole. So the kind of improvement is moving on. And starting from Q2, we've witnessed that improvement. The average ticket is growing sizably, up 19%, 19.5%, and we are comparing September 22 versus September '19. And we also recorded a positive contribution provided by new openings, the remodeling of, for instance, the downsizing of hypermarket and the remodeling of new services within the shopping mall and a very positive Contribution is provided by fashion that accounts clothing that accounts for 50% of our merchandising mix and fashion is including are doing very well, especially in bigger services. And then another positive piece of information is that hypermarkets still confirmed to be a very attractive anchor tenant versus 2021 compared to 2021. And if we move to Page 6, -- from a commercial perspective, we see that occupancy went up versus the full year figure up 10 basis points and up 20 basis points versus the first half of 2022. So we are above 95% with an average upside on those servers and renewals. We're talking about 130 contracts. So an upside of about 1.6%. So we had 80 openings in the 9 months, and let me mainly focus on jewelry and household goods because those are product categories that are performing really well. They are the best performance in our tenant portfolio clothing and fashion are performing really well, too. That's what I mentioned before. And that is very important because it still accounts. As I said, faster still accounts for 50% of our merchandising mix. Well, turnover is good. 93% of the collection rate is 93% with an assumption to further improve -- forecast to further improve in Q4. What I mentioned before was for Italy. On Page 7, you find data for Romania, occupancy picked up, recovered nicely in Q3. As you can see, 220 basis points versus first half of 2022, and almost 500 basis points up versus full year 2021. And percentage-wise, the upside is similar to that of sorry, occupancy is similar to that at the upside is on 170 contracts. It's about 2.4%. So let me give you a few examples of new openings in the 349 new openings, sorry, in the first 9 months. correction is even better than Italy, 95%. As you are aware, I am sure this was presented through a press release and also when we match for the half year report, we have a co-marketing project with Copesan our main shareholder and one of our main tenants as well. And this initiative is called Arapaho, double up your shopping. And it double up your shopping is the latest initiatives. The one initiative we are -- the one we are launching now. We've been launching it over the last few weeks. And there are coupons being issued and given 2 visitors who can spend the coupon, both in shopping malls and hypermarket for twice the value of what they have paid and targets are quite simple. So we want to increase footfall and sales in our shopping malls. We want to unfold and increase synergies among tenants, and we want to speed up the buildup of our CRM databases in line with IGD's digital plan, and that is part in itself of the -- of IGD's business plan as presented last December. And then a topical theme, we are mentioning the actions we have started. Now we have started management actions in that respect because there has been a very -- a huge increase in the energy build. On the left-hand side, you see the management actions. We updated the maximum allowed minimum and maximum temperature to reduce the number of hours during which the HVAC systems are open to use less intense light ventilation optimized. We started investments in the last few years. We invested in photovoltaSystems -- and the intention we have is to install more of them in 2023 and in the following years as well. And there are more data available. If you wish the artificial intelligence, we are running pilot projects. And then we have a rollout on our HVAC systems. And that, of course, in line with -- we made an agreement with a special consortium, the CEE constonsortium experience energy are helping us to better use electricity and natural gas and better purchase as well. Moving on to Page 10. If you read the info, we started a 3-day open day initiative in Livorno, and that was -- it's a development project we have in Livorno was started in 2008. It's been going on for about 14 years now with on the area for 14 years. We've already developed some projects there and more will be developed over the coming years. We're not far from completing it. We have to put off the opening of cinestoric, which is the commercial heart of the initiative. It was put off until 2023. -- and we wanted to present our projects to the main institutions. So the mayor to local media, but not only that. And we had a tour of our site to talk about the project, more than -- sorry, more than 16,000 square meters of GLA, the T2 retail and entertainment. We have a beautiful gym swimming pool, 4,000 square meters the load to them. We've marketed more than 80% -- more than 80% pre-letting was achieved, and we want to achieve full occupancy by the time we open the cinestoric. -- hopefully, between the end of Q1 and the beginning of Q2 2023, hopefully before Easter 2023. And then this initiative is also involving residential areas, 42 apartments. In addition to the 73 flats, we've already built for Piasa Martin, and we've already sold completely already. We just have one more notary deed by year-end, but they've all been sold. So these are 42 more apartments, and we've already received 30 binding proposals for them. They will be delivered end of November, and we should be for novel of them, but for at least 25 of these apartments on the 30 apartments, we should have the relevant notary deeds by year-end with an incoming cash flow of about EUR 10 million. And that is as far as the Parana project is concerned. If we move on to Page 11, we'll be able to look at the project we have completed the styling of the La favorite shopping mall in Mansur. It's a very important shopping mall. It's a reference for the province of Mansueto very far from the city center. And we did a fueling of both the mall, the fast and the parking area, and it will be opened on November 10, 2022. So next week. Let's drill down into a greater level of detail for economic and financial data. We are on Page 13, 13 now, and it's always a comparison versus 2021 total value, absolute terms and versus 2021 restated to factor in the disposal of the hypermarket portfolio and also to factor in the change in the master lease. I mentioned before. So the total is 86.9 million. We stated 78.7, so down 8.2% because of the portfolio disposed of we disposed of. So we have a decrease percentage-wise when it comes to net rental income for the first 9 months and an increase in that over the restated figure of about 6.3%. How did these asset classes perform? The shopping malls in Italy went up 1.8% on a like-for-like basis. So we're talking about 2.1 million as a whole and shopping was 1.8% and Italy hypermarket slightly above 2.6%. So Romania did better and was up 5.2%. We're on Page 14 now. And the core business EBITDA is improving and also the EBITDA margin is less improvement. We have a comparison in absolute terms versus 2021, 79.6%. We stated figures 71.4%. We have a 4.5% reduction decline in absolute versus the absolute figures, whilst we have a platform, sorry, plus 6.5% restated. So EBITDA margin from freehold -- so just the owned real estate is about up 2% and lands at 72.5%. The core business EBITDA from 69.8% to 7.7%. So net financial position is improving. We are on Page 15 of the presentation, the hypermarket portfolio disposal gave a large contribution to improving our net financial position, but also the financial management improved in absolute terms. We're moving from slightly less than 25 million in 2021, first 9 months of 2021 to 200 million in the first 9 months of 2022 with a decline of 18.1%. FFO funds in operation were on Page 16 of the presentation. Again, double comparison in absolute terms and with the restated figures -- so 48.4 million is the absolute comparison. 42 is a restated one. And core business EBITDA went up 4.8% and a slight decline in the delta as far as the leasehold rents were concerned and an improvement in the financial management. The FFO for the first 9 months of 2020 to be slightly higher than 50 million. So 50.4 million, up 4.1% and definitely improving versus the restated figure versus 2021, almost 20%. Net financial position, as I said before, we're on Page 17 now. So our net financial position was below 1 billion by year-end, the previous year. 987 million was the end of 2021 figure. Now it's back to those levels. end of September 2022, it was -- it landed at 98.7 million. And here, you can see the cash flow generated over the first 3 quarters, 10.7% the first quarter, 13.4% Q2 and then 12.9% Q3, and then we paid out dividends SEK3.6 million. That led us to the current net debt. We've made investments, and we'll do more in the last quarter. Net financial position. So net debt will be flat by year-end to loan-to-value was 48.8% at the end of 2021, and it's back to 44.8% at the end of September 2022 with an ICR and interest cover ratio that went from -- that is now at 3.74x versus 3.3x and average cost of debt that went from 2.2% in 2021 to 2.11% in the first 9 months of 2022. When it comes to our financial structure and the maturity profile, let me remind you of the current situation, the most recent conditions. I'm sure you read that a couple of days before our first half year report, we issued the first green loan -- following the green financing framework released that was March 2022, and that was a couple of days after the actual signing of the contract with the banks of the dedicated pool. Both Fitch and S&P on September 16 and September 20, that is to say a few days after that, confirmed their rating and such state investment-grade area, BBB- stable last year outlook was S&P BB+ again, with a stable outlook. If we look at the available committed credit lines that they're not -- you not drawn about 60 million committed lines and not drawn. They were renewed recently for another 3 years. So basically, we've covered all of our financial maturities for both 2022 and 2023. Following maturities are in 2024 and we are already working a financial department is already working to cover those 2. I think that's it as far as I'm concerned, of course, we are -- I am here together with my colleagues from the different head offices to answer your questions or request for clarification. Thank you very much.

[Operator Instructions] First question comes from the line of Dario Michi from Paribas.

Good afternoon to all of you. I have a few questions. The first one is just a clarification because it was mentioned during your presentation is the guidance, the growth guidance of 2% to 3% growth is confirmed? And what are the drivers that would lead to a reduction in the growth going forward.

I'm very sorry, could you please repeat the last part of the question. Over the last quarter, you said?

What are the drivers in that lead to a further decline of the results you achieved in the first 9 months, so about 4%. So in Q4 2021, you'd already factored in part of the hypermarket disposal? And then second question, what is the expected cost of the co-marketing project you have started with go up? And then the third question is after looking at the first 9 months, could you confirm your guidance going forward? Or have you already thought about dividends going forward?

very well, I'll start by answering on guidance. We -- for the time being, we reconfirm our guidance in a range between 2% and 7%. We are being very cautious. This morning, we looked at the first preliminary results. We don't expect an improvement in our guidance going forward. Probably will be in the lower range when it comes to final results. The market is so volatile that -- and as we've always been very cautious in our guidance disclosure. So far, we assume we are going to confirm our guidance, and it's probably be in the lower part of the range announced in August. On Q4, Raffaele will answer, and I'll quickly tell you about the co-marketing cost, coating project cost, about EUR 1.5 million for the year. This is what we are -- we have a proatboth in Q2 that's already been included in the half year report in the interim report. And then in Q3, we have the Laval. And then as I mentioned before, during the presentation, we have the most important initiative with the coupon. It's the most expensive one, but it was broken down over our Palatabase in over 2 quarters. last part was in Q3. Dividends. So far, we have no evidence not to confirm the 2022 dividend -- so there are no elements so far to say that that rate can be higher or lower. It should be around the level we had, the dividend we issued last May, that is to say 0.35. As to the fan on the Q4 Florio. So what -- when it comes to the FFO reduction, -- the mechanism was very clear from the very beginning. And even during the year-end call, when we first provided you when we gave the first guidance, it was more or less along the same lines, there are mathematical components, mechanical components, so to say, over the year, the gap between the first FFO compared with the first quarter, which was very positive indeed. I think it was above 30%, if I remember correctly, and then declining towards year-end. And it was driven by the fact that last year, the covid impact were almost fully recorded in the first quarter. And then over the year, a lot less of the delta was being offset and taken in a little by little in the following quarters. And then other factors kicked in. You reminded us of the portfolio disposal that was end of November last year. So it's going to be consistent just for 1 month on a like-for-like basis just for one month. And -- but it will have an impact also in October and November. And then last but not least, the sonovelties, recent novelties that led us to be more cautious, especially when it comes to the last quarter. The increase in utilities that had only been partly factored in, in the previous quarters. So partly, that has to be added to the further small reduction of the FFO. I know that not all of you like the comparison with restated very much. But I think it's very important to have it because despite -- from our perspective, we made a decision to dispose of part of our portfolio to reduce our net financial position. So in order to have a real comparison, it means we will have a sizable increase in FFO on a like-for-like basis, up 2%, 3% in absolute terms. But as we have given up a part of this portfolio by disposing of AFFO, despite that is still growing, it would be even more so if we were comparing it with the restated figures -- thank you very much.

Next question comes from the line of Simonetta Chiriotti with Mediobanca.

Good afternoon to all of you. I have a couple of questions. The first one about October, -- what are the main trends? What was the performance like -- what are you -- when it comes for the consumer confidence with the expectations we have of energy bills going up a lot. So what are the trends you are -- you have noticed for October? And then also, if we look at 2023, of course, it's going to be a consistent comparison with 2022 on a like-for-like basis. But my question is -- what are your expectations -- when it comes to the order of magnitude of the growth you may experience going forward. Do you expect something more? Could you elaborate?

Well, we do not yet have any evidence on tenant sales for October because as you probably know, we normally get those figures in the third week of the following month. So it's a bit too early. We don't have that piece of information yet. I don't expect tenant sales to be very different from what we had over the last few months because this -- well, this breaking this putting the foot on the pedal break as far as consumption is concerned, will be more to be felt between end of November, early December and then the first 6 months of 2020. So far, also thanks to what we've put in place and how things are running, how the economy is running and our services are being delivered. You're probably aware, this were among the best item for us. Really, they have been driving the September GDP. So services have been the main drivers. So I don't see any major slowdown. Maybe there could be a slowdown in account it in October. I see the slowdown more in November and December. As I said before, 2023, it's not going to be easy. It's not going to be easy to build a budget for 2023. We will, of course, do so. And we are submitted to the Board, and then we'll provide a guidance for 2023. There are some positive items because there were some delays, some of the openings had to be delayed. One of them is of genetic were supposed to be opened this year and that for a number of reasons, among which the slowing down of works because of Covid had to be put off until 2023. And that will have a decent impact rent wise. And then other openings were also delayed. We already have contracts signed for 2023. So we expect further growth. And the growth will partly be -- and this is a 2-phased piece of info inflation will push us forward well -- but at the same time, we will try and be very cautious as we've had as we've been this year because we will probably have to grant temporary discounts. Our line is very clear. We're not going to change contracts. This year, we've used all of them, but we have funds available for possible temporary discounts. So we have to still have to quantify the same type of discounts for 2023. But so far, the scenario, the backdrop, assuming all macroeconomic variable is so volatile that it's impossible to come up with precise forecast for 2023. I don't feel in a position to be able to make those forecasts. I say I told the Board sitting this morning.

Next question comes from the line of Davide Candela, Intesa Sanpaolo.

I have 3 questions. The first one is a clarification on the Park Amar project contribution on a yearly basis going forward. starting from beginning or mid-2023. And then cost of utilities that indeed will have an impact on direct cost costs. And I was wondering whether you've had any talks with the government as to possible contribution that you may get from the government. So after help to be able to help both you and the tenants when it comes to utilities increase. And then portfolio appraisals towards end of 2022, what are your expectations? What are the changes that could either improve or reduce the value of your portfolio?

First question, -- we're talking about annualized discounted figures when we open a new shopping mall for a few years now, we haven't opened malls. But normally, when we open a mall, we have deference rents go on full stream after 2, 3 years. We have a start-up for the first year, it's EUR 2 million discounted or annualized to then get to BRL 2.5 million in the medium term and medium run. That's the forecast discounted, of course, annualized. And then next year, we'll start more or less end of March, early April, so it's not going to be difficult to compute that. Cost of utilities. Rafael, would you like to take the floor? Well, Mr. Abertis speaking, the government has only just started its mandate. We are lucky enough to have a group Chairman of CMCC, is with us, and I can give you the floor as the President of CNCC probably, I don't think yet sending any requests to the new government for support, support to be provided to tenants and malls because in 2021, there were no subsidies or support and then fair value -- valuations. Roberto?

Yes. Good afternoon. As to energy costs, all shopping malls have been asking 2 things. One, what other requests was met as to tax credits on the energy on the cost for energy delta. As you know, commerce has not been considered as an energy-hungry industry. So normally, you're going to get 30% -- they have a 30% consumption versus other industries that have a 50% energy consumption. So all the industries, however, are asking for tax credit, at least from now to year-end, 50% tax credit on the delta that is defined as cost -- energy cost increase. And we don't know what the government will do the same as the previous one, but this is a focusing on energy communities to have renewable energy systems built, maybe, for instance, potable systems that can be used by a number of players that can serve both the malls that can serve different meters common areas, the malls or individual stores within a mall. When it comes to energy communities, there are a number of subsidies and tax breaks or benefits. So far, there are no regulations in place, but the regulation should be approved and applied and come into force in the coming weeks. And then it will be in existence -- we have IGD. Also during the presentation, we are assuming a speeding up of the building of photovoltaic systems on shopping more rules and in parking lots. As to fair-value valuation or appraisals, this is a very special year because we have 3 very important factors that come into play and somehow anomalous factors differ from the previous year. So we have inflation is foremost that has an impact on rental and lease contracts, and it's a positive item as such as a stand-alone item, but it also has to be kept very much and the scrutiny under control. Sustainability, rent sustainability is of paramount importance, and it has to be linked with sales sustainability. It is -- all that will be mitigated with other indicators, for instance, discounts that will have to be applied to certain contracts in an up hawk manner so that once the fees should the fee be no longer sustainable versus sales and then the cost of money, of course, that will have an impact on actual discounted cash flow discount rates. And so when it comes to procuring money, getting money with average leverage of 40%, 50%. -- there the discount rate that will be a few basis points higher and then capitalization rates that might increase because the expected returns with a higher interest on borrowed money may -- well, these values might go up. But we never forget that retail in 2020 and 2021 has already adopted a valuation policy whereby the factoring in interest rate increases differently from other asset classes such as logistics, where rates were somehow decompressed because they were very appealing as assets. So those 3 factors I just mentioned. And then retail has much more interesting returns than logistics or other asset classes, such as offices or other. So maybe it's a bit too early to say that. But as we said during the entire presentation, volatility, we'll have to try and understand going forward. We'd like to try and understand how it can be somehow linked to discounted cash flows.

Next question comes from the line of Francesco Sala with Banca Akros.

Good afternoon. Thank you very much for your presentation. I have noticed that you have a sizable chunk of your debt with maturities in 2024. I don't know in which month exactly. But when are you going to start working to refinance that debt? Are going to start in 2023 already or in 2024? Thank you.

Thank you very much for your question. Debt maturities, 2024, EUR 500 million is to bond. One is EUR 100 million. As you can see in the -- it's a private placement with maturity in January 2024. And the largest part, EUR 400 million is a bond as a public bond issued 5 years before, so the maturities October -- end of October 2024. So in 3 years' time, practically starting today. We are already working on that. We're not waiting for 2023 to come. I'm and over-wait over to Andrea, who will tell you more detail. So it's work in progress already that of refinancing our 2024 debt. Good afternoon.

March, we came up with a green financing framework. We started initiatives to come up with a sustainability financing framework because if the market were to change, to the present date is not yet viable for the Eurobond market because we haven't seen any transaction for real estate companies starting in September, early September. But should the market change, we could be ready to issue in both ways that are appreciated by investors informed that are appreciated by investors. And then we have adopted different financial instruments, convertible bonds, private placements, convertible loans, banking loans, both secured and unsecured -- next year, we will have some maturities coming up for the secured debt. We have JPY 1.5 billion worth of assets unencumbered assets. So we might even look into the way to retain the lowest possible cost of debt, we might look into the way of secured debt route, so to say.

So the key word here is flexibility as Andrea pointed out, we do not rule out any pathway. We already have some ideas of the most viable pathways, but the tools available are any numbers and we've already used them in the previous years. So if I'm not mistaken, before 2009, we've also issued a convertible bond something we're not going to do now. We don't want to do now. But by principle, so in line of principle, we do not rule out anything. But as work in progress before I turn the conference to Ander, the refinancing of our debt maturities is already work in progress. We are already working on it. Thank you very much.

Next question comes from the line of [ Alvaro Mata, Andrea Asset Management.]

And the first question is about what to expect in terms of CapEx for 2022. Year-to-date CapEx is only EUR 15 million, and I was expecting the full year CapEx to be close to EUR 40 million. So if you can confirm that the CapEx should be lower than the EUR 40 million I was expecting? And then someone asked you about the expectations in terms of Portamare contribution for 2023. And I missed the answer. So if you can repeat what the expected contribution and not only that, but as well, what is the CapEx, the amount of investment left in that Portamare project to the time that the project has been ended. And then lastly, last question is if there is anything to report in terms of additional liquidity lines that you have signed recently, what you expect to sign in the near future. I'm asking this because during the last call in August, you mentioned that you were looking at the possibility of signing a new 20 million, 23 million liquidity line. So is there an update on that?

Great. On CapEx, 2022 -- the forecast from now to year-end, together with the first 9 months and CapEx to complete the project, Roberto Roy will take the question. And then on the rental income for 2023 and going forward, also for Portman will provide the answer with the Commercial Director. And then Andrea will give you an overview on the financing -- that is about to be issued for about EUR 20 million on the so-called such guaranteed line. Roberto will start.

As to the CapEx -- we are going to close 2022 with EUR 35 million instead of EUR 40 million, as you said. The EUR 6 million -- well, 6 million lower figure. So the lower CapEx due to the fact that Oficina will be completed in 2023. Whilst at the beginning, we expected to open it at the end of 2022. And in addition to that, we put off or delayed, so to say, other CapEx, especially when it comes to downsizing hypermarkets in Sicily, part of them were delayed to year-end and others were put off to the first few months of 2023. So 2022 will end with CapEx in the range of EUR 35 million as against the EUR 40 million we had assumed for the entire 2022 year. And then as to the Oportun Astoria, we have cost to complete of about -- around EUR 6 million, and that will be in 2023, assuming an opening that should take place end of Q1, beginning of Q2. And then after the impact, I hand it over to Laura too, who will elaborate on.

Well, good afternoon. First year as Mr. Albertini was explaining, we are using stack rents so that our tenants can get to a sustainable level to best launch the mall. So the income is going to be EUR 2 million to then get to EUR 2.5 million in year 3, meaning rental income -- and then on the finance, the question on financing. 2022, the idea was to have unsecured that BRL 235 million, EUR 25 million, as Mr. Albertini was saying, were underwritten at the beginning of August for the remaining part, we are finalizing the agreement. So within 10 days, we should be able to complete that unsecured loan for an additional EUR 21 million.

Are there any other questions?

Can you hear me...

Yes, we can hear you. If you take a while first and I think you'll be called second. Please go ahead, sir.

Okay. Now if I have the opportunity, I will ask one more. And the only question is, if there is anything to report in terms of asset disposals, expectations for the next few months.

Water in the business plan, some disposals, 3 disposals were included -- we are thinking of disposing of Romania because it's no longer a core asset. But so far, we have no negotiation underway. It's part of the business plan. It's an objective in the business plan, but we have 2 more years to get to that objective. But currently, and because of the market conditions and situations, we don't believe conditions are there for the disposal of that asset. And then as a second objective for a disposal portfolio disposal on of hypermarket and supermarket noncore portfolio. So we have some talks, but we have not yet -- not yet clear evidence of a real negotiation. But that's another target. Another objective we have in within the business plan. We don't think it's going to be feasible within this year, but maybe next year, we'll see whether we can complete that negotiation even though we don't have a real negotiation yet, and it's about BRL 40 million, 4-0. And then last but not least, as we said before, always in the business plan, we have the target to dispose of some areas that we are not going to develop that belong to this Patemaproject for a smaller amount, but then it will take time because we are still working on the development change of destination of use. So we see this further ahead down the line, so to say, just like Romania. But whilst we are quite confident that on this portfolio where we already -- last year, we've already made the disposal. So if it's true that the retail market is does have a very big demand for new investments. The hypermarket and supermarket asset class still attracts interest, maybe not as in the past, but still attract interest. That's why we are more confident there. But last year, it took us about 8 to 9 months from when we started the negotiation when we actually completed the disposal end of November. So -- and here, we're not even halfway through the process. So that's it. So in the coming months, definitely no, not in 2022, hopefully, in 2023 and hopefully in the first half of 2023, -- and the volatile suggesting to me that we have no intention to reinvest our cash -- the cash flow coming from the disposal. But instead, we want to use it to cut to reduce our net debt -- our net financial position.

The next question comes from the line of [ Peter Wilde ].

Just one question for me, please, which is whether you're able to give any information about the pricing on the unsecured loan that was signed in Q3.

It unsecured or secured, it's an unsecured loan...

Yes, unsecured, yes...

The pricing was around 300 basis points of spread.

[Operator Instructions] There are no more questions.

Thank you very much, and have a pleasant evening.

This is the Chorus Call operator. The conference call has come to an end. You may disconnect your phones. Thank you very much.