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 H1 2023 results. [operators instructions]. Let me now turn the conference over to Mr. Claudio Albertini, CEO of IGD. You have the floor, sir.

[Interpreted] Thank you very much. Good afternoon to all of you. As you probably read in our press release this morning, the Board of Directors approved the half year report as of end of June 2023. I'm sure you received or downloaded the press release and the presentation. I'm going to walk you through in a few minutes. Let's start from Page 3 in the presentation, and we're looking at operating performance and occupancy rates. As you can see, we have plus signs before the figures, especially on operating performances that were applicable for the half year, but also in Q1 2023, we had an overall cumulative growth between first and second quarter, equal to 8.5% with footfalls increasing 6.6% and the comparisons, of course, are with the first half of 2022. Tenant sales, we have to underline that, tenant sales are not just the results of a consequence of the impact of inflation we have in Italy, but also half of it is inflation effect, half of it is actual real growth achieved by our tenants. Foot force went up. They are not yet to the pre-pandemic levels in 2019. We're still about 11%, 12% below the pre-COVID levels. But let's say, the track has been said. Probably, you won't go back to 2019 levels. But as the average ticket has increased, all this is leading to the results that you're seeing on tenant sales. Let's talk about occupancy. It's flat versus year-end and it's practically the same as that of Q1, we are at 95.2% in Italy. Full occupancy between hypermarkets and malls. In Romania, we land at 96.8%. If you look at the next page, it's Page 4 in the presentation, you see our financial highlights with the main indicators. The main indicator is that rental income, as you can see landing just below EUR 60 million, EUR 59.1 million, up 3.4%. But on a like-for-like basis, there would be 7.8%. School business EBITDA, EUR 53.8 million, up 3.8% versus the same time frame in 2022. FFO, funds from operation is close to EUR 31 million, down 9%. And let me remind you, as I did to the Board meeting, you should calculate EUR 31 million multiplied by 2 to have the full year results because if you remember the guidance we gave you when we approved full year 2022, that is to say in February, our guidance was EUR 53 million and somehow anticipating what you will see in the final slide. So -- in the second half, we'll have a full effect of financial management on transactions that we have closed in May around EUR 250 million. The market value of our real estate portfolio is slightly above EUR 2 billion to EUR 0.005 billion down 3.6%, and we look into this later, mainly driven by or due to fair value valuation, which are negative. And then the EPRA NRV, the old NAV enough is down 7.1%. It's 9.54 per share. And then again, you have an effect driven by valuation and also the dividend payout in May 2023, EUR 0.30. So valuations being the same by year-end, we expect growth not to go back to the value add at the end of December. They range between EUR 54 and EUR 10. So operating performance. Q1 started really well, as you can see on the slide, we've already given you the [Audio Gap] footfall up 9.4% and tenant sales up 12.7 since Q1 2023 versus Q1 2022 and the second quarter, we had a slowing down. However, values were still positive, and that leads to the data I showed you in the previous slide. So Footfall is up 6.6% half year on half year. Tenant sales up 8.5%. That was as far as the shopping malls were concerned. And also hypermarkets and supermarkets that we own a 4.6 increase between first and second half for the first months of 2023. And the following slide on Page 7, you see a detail of a breakdown by product categories, where we have broken down data so as to be able to show you the performance of tenant sales, electronics as well that is recovering somehow versus Q2 in 2022, very good slowing down. So expecting the positive plus or up 1.8%. But let me stress reference, even though the weight on total rent is relative, it's still driving items for the shopping malls. So it's up almost 21%. And this is a trend we have been identifying for a few quarters now. It's picking up even though we are not at prepandemic levels. Also positive, as you can see, it's a trend that was already started in the post-pandemic time frame, it's household goods. They're up 17.2%. And let me stress on a positive note that clothing is also growing and clothing has a very strong weight on our total rent. So it's slightly -- it's around 8.3%. As I said, the rate of clothing on our merchandising is 48.3%, almost 50% accounts for almost 50% of our total rents. And then services, up 6.6%. And then culture leisure, gift items are also growing all positive trends. And the full average -- the total average is 8.5%. Half of it produced by the inflation effect. And we try to work that out the product category by product category. And the rest is a real growth, real increase. Often, we are asked what -- the impact -- of the impact of online commerce of e-commerce on our business. On Page 8, you see some ideas that we would like to share with you, the e-commerce penetration rate on product is flat -- has been flat for 3 years in a row, we're talking 2021, '22 and the first half of 2023 and was up 11%. As you can see in the chart, we witnessed the growth between 2018, '19 and '20. And then the penetration of e-commerce online versus products partly came to a stop and only grew up on the service side, services on product between 2021 and 2022 every year in December, which is by definition, the month where you have a richer e-mail performance with Black Fridays and the Christmas gifts. You see it's still flat even during the December month. Why was that? We have no more pandemic effect when many people used to buy things online instead of going to physical shops because they couldn't go there. And our tenants, generally speaking, but also our people, our team have been putting in place any channel strategies with both online and physical offering that is going to be the set up for the future -- it's not going to be either e-commerce or physical commerce, but more and more, there will be a planning number to convergence of the two. Let's move on to Page 9. And here, we see leasing activities in Italy, how our portfolio did, 87 contracts. Let me tell you, as you see in brackets, it's just a small sample. It's 4% of our total rent. So it's not very representative which 60 renewals and 27 turnover. So there was a downside of 4.4%, not very meaningful, and we made a projection in the second half. And on full year, we expect minus 2, so there will be an upside. This is our forecast in the second half of 2023. Bear in mind, these 87 contracts were also -- has already factored in inflation, and there are inflation indexed for about 70% on average. So the effect has already been discounted. So renewals were with this extra percentage. Occupancy, as I said, in the introductory slide lands at 95.2%, it's flat versus Q1 2023 whilst the collection rate is around 92%. And the performance is even better in Romania, where we had an upside of 2.3% on more than 300 contracts, 212 renews was 99 turnovers, occupancy was nearly 97%, again, flat versus Q1 2023 and the collection rate is even higher than that for Italy, it's around 95%. On Page 11, we see an example of -- we thought it was worth sharing because it's a virtuous example of how -- the turnaround of the shopping mall that had some problems in the previous years through this turnaround, a change of -- on the one hand, the change of the food anchor and the then remodeling of the merchandising mix, we achieved despite of performance. Footfalls went up 16% 2023 versus 2022. Occupancy is 100% and very interesting to notice is that with the downsizing of the hypermarket, we have 3 new medium services, to open and one will be open in September. So the hypermarket productivity, thanks to the new remodeling went up per 77.0% square meter. So we are in Palermo Lator and it's a mall that is very satisfactory as a performance. As an example, Page 12 CSR sustainability is part and parcel of our strategy. And it's part of our business plan, and we have sustainability goals within our business plan. More than 50 goals were identified in our business plan of spanning 2022, 2024, and we are halfway through it, halfway through the plan. And with the closing of H1, we're half way through the business plan, as I said, and therefore, we are perfect -- perfectly aligned with achieving objectives. We hope we'll be very close to 100% and very close to 100%. What we like to say is -- what we'd like to share is Page 13 in the presentation is the award. So the recognition we got in the States in the top part of the slide, but first and foremost, in the bottom part of the slide as well for the standing of the two daily's that awarded these prizes. Its financial times and [indiscernible] among the most virtuous companies from a sustainability perspective. Now on Page 14, I know it's a small project, but a small project actually make companies great. I don't want to say this too much, but this is something we really like doing and we'd like to share with you, too. We organized the so-called [indiscernible] at our Central [indiscernible] shopping mall -- it's a big [indiscernible] and it's a smooth thing, but it's very -- also very appealing very interesting. Let's now move on to IGD's portfolio, Page 16. As I said before, the first half saw strong write-down impairment in the change of fair value and if you look at CapEx, about EUR 80 million, the effect you can read on the page. So we go from total portfolio full year 2022 of EUR 2.80 million to 2.005, down 3.64%. And then including the le hold property, which is EUR 25 million, the only real estate investment, which is about EUR 20 million, we get to EUR 22 billion * at the end of -- first half of 2023. To be underlined is the increase in yield, the growth in yield, net initial yield for the Italian portfolio, so shopping malls and hypermarkets imported 6%, whilst in Romania it's 50 basis points higher, 6.5%. If we include step rents in different contracts, the net initial yield topped up growth to 6.3% in Italy and to 7% for Romania. The growth was 50 basis points versus full year for Italy and Romanian stead recorded 50 basis points growth versus full year 2022. On the following page, you see the bridge of how we went from EUR 2.080 billion to EUR 2.005 billion. The very strong impact comes for Italy, EUR 69 billion worth of change in fair value of impairment. And as you see in the central box, it's mainly driven almost entirely driven by the applied interest rates, both for actual and the net exit yield for actual yield and net exit yield. Less in Romania, even though of actual net exit yield increased, but the effect on Romania, as you could see before, is much lower than that for Italy. Let me remind you that asset classes that you will see that you see at the bottom of the slide, EUR 2.005 billion is accounted for 70% move,19.1% is hypermarkets and then it's other EUR 73 million, 4.6%. As you can see on Page 18, shopping malls, shopping centers are confirmed to be a profitable asset class. And here, we have a comparison between different asset classes siding from offices, high state, logistics, hotel, high street and also the BCP Gov 10-year BTP yield. Shopping malls have been centers that really stand out for the high amount of yield, which is on average, 6.5%. But the average yield of IGD is even higher, you're talking about net-net exit yield, it's almost 7%, 6.95%. If we go back to sustainability, Page 19, we talk about our assets. We have 6 locations in use that we have acquired over the last few years. We have 10 shopping centers that are premium certified. The market value for these shopping centers is about 2/3 of our total Italian portfolio, shopping mall portfolio. And the certification was vertically obtained starting from the North, Milan geographically Minerva , Central Italy, but also Southern Italy, Capane and then Poretterinatoli acquired this certification and the BMS. As to the investment pipeline, Page 20, our business plans planning 2024 had assumed EUR 82 million in the first -- the first half, we are in line because we have reached EUR 43 million between 2022 and EUR 8 million for this half year. We have EUR 21 million in the pipeline in the second half to somehow make up for some delays that we have and then another EUR 19 million in 2024. We put them in a different color, a lighter color than I can bring in '21 and 19 in 2024 because they are all noncommitted investments. We're not forced to make them, it will very much depends on the financial situation. And so we can be very flexible in that respect. We are also about to complete -- it's not going to be the full, but it's the only development project we have for mixed use. It's a redevelopment project of the Livorno waterfront. The first Gecamadine was completed a few years ago, both offices and residential, so retail and residential. We sold the last flat in the first half of 2023. We refurbished a historical building the [indiscernible] with public spaces and the Levornos authorities being there, and we are about to open [indiscernible] but also to move on in completing sales of the residential units of [indiscernible]. You see we already have a date, you're invited, of course, to the opening that will happen on September 14, 2023 in the morning, the day before on the 13 in the afternoon, we will have a press conference, and we will have a visit of the premises together with some, all the local authorities, the municipal authorities and other guests. Preletting is to really well. We're in excess of 90% with brands that are really top notch, they are really attractive, Starbucks for instance, -- there's one we wanted to put. We cannot put it in yet. For contract reasons, I'm sure you know who we're talking about. I cannot name the name, but not even the initial, I can tell you. And on the residential the only thing [indiscernible] 73 units in [indiscernible] -- we have [indiscernible] it's 42 flats, finished flats, and 29 of which have been sold. 3 already have a binding proposal and due to the notary public will be in the second half, but in the current half probably 2 will be deferred to the first half of 2024. Cash in was EUR 7 million in 2022. The expectations for 2023 is another EUR 7 million. Two projects underway with selling projects. Let me give you an update PortoGrande, Asclepion. There was a complete restyling that started in January 2023 and should be completed by Q4 2023 by year-end this year with a full resigning of both the mall and the external part. We also made a start on CentroLuna [indiscernible], the province of [indiscernible]. We started in May, a couple of months ago, practically on the shopping center side. And as far as the -- and with the second quarter in 2024 for the external part. As you sure you read it also in the press, the catastrophe we have, the terrible floods we had in Minaromania, especially in the Romania region, the big floods. We wanted to tell you that the floods did not have -- luckily enough did not have a major impact or meaningful impact for IGD. We still have 6 locations in the area that was heavily flooded in the Romania area. So we have [indiscernible] 5 IGD shopping centers that are the largest for those areas were not affected or they were open, except for one that was only closed for 4 days, temporary closed for 4 days, but then out of precaution, so for precautionary measures. And so the only center that was strongly affected was the Cavena Lugo [indiscernible] shopping center, which is close to the Savoie river and we are somehow refurbishing and we have all the necessary insurance coverage. We've triggered all the insurance coverage, luckily enough, we had a almost coverage -- insurance coverage for the damage catastrophe, the damages, rent loss you name it, everything is covered. And the hypermarket opened at the end of June, so a month after the flood practically. And on June 24, stores are still closed, but the idea is to open even though not in full, open the shopping center on September 15. Luckily enough with no major damage compared to an event that had 21 flooded rivers, land slides, floodings in 37 towns, et cetera. Let's move on to the economic and financial results. We start from the net rental income. As you see on Page 28, as we already said in the introductory slide goes from 57.1 to 59.1, thanks to an improvement in the rental income delta. But also, thanks in reduction in rental costs. The growth was quite consistent, 5.4 [indiscernible] hypermarket, [indiscernible] 5.7% Romania. So those were the 3 asset classes that we have, core business EBITDA, and I'm referring to the following page, Page 29. We have a strong improvement of 1.5 percentage point of the EBITDA margin from -- core business EBITDA margin from 31.3 to 72.8, and EBITDA margins from [indiscernible] 73.3 to 75.1, so 1.8 percentage points of growth. So financial management. Financial management, it was growing, and we had projected it for the transactions we've completed last year. In August, we issued the first green loan to EUR 115 million worth. And this year, funding EUR 250 million drawn, only EUR 130 million were drawn, but it was secured loan. The first one was a unsecured loan. And these loans were made at higher conditions than our average debt stock, which was slightly higher than 2%. So it went up about 1 percentage point. So that's financial management going up 1 percentage point, EUR 0.96 of the growth of those conditions, so a EUR 4.7 million growth in the cost of financial management, and that will be applicable in H2 as well, even higher than that in the first half because in the first half, we only had 1.5 months of impact of the second loan, EUR 250 million was in the second half, we will have a full effect coming on stream. And that leads us to Page 31, FFO, funds from operations. Going from EUR 34 million to EUR 30.9 million. That is to say, 9% down versus 2022 center of 2022. And the decline was lower than expected. We have -- we should not do 30.9 multiplied by 2. We have slightly increased our guidance, but of course, it's not double the figure, of course, it's not in excess of EUR 60 million, so you also see the exact figures. Moving on to EPRA indicators, Page 32 here too -- we've already underlined the introductory slide and we go from EUR 1028 million to EUR 954 million and here, you see the bridge leading to the impact on NAV per share, 0.28, its FFO per share, a decline of EUR 0.70 of fair value or real estate asset fair value. And then of EUR 0.30, that is only for this half year, it's paid out dividend, it's EUR 0.30. And valuation being the same as at the end of 2022, and we should increase, maybe not go back to the levels we had at the end of 2022, but somewhere in between 954 and 1028. Net financial position going to EUR 976 million to EUR 982 million, up about EUR 5 million. And here on the screen, you can see cash flow generated in Q1 and Q2 from the operating results, EUR 0.30 dividend, on EUR 110 million worth of shares. So despite the dividend payout, IGD managed to be cash generative for about EUR 28 million in the half year, loaned value, mainly due to the impairment of fair value valuation is up 200 basis points from 45.7% to 47.7%. We expect by year-end loan-to-value valuation being the same around without disposals, of course, being told around 47%, hovering around 47%. Cost of debt about 1 percentage point higher, 0.96 basis points from 2.26% to 3.22%. On the financial structure, I'm sure you have questions there. During the Q&A, we confirm what we already disclosed when we presented our business plan. We want to retain, maintain a [indiscernible] financial [indiscernible] some investment-grade profile. We have 2 ratings. One is sub investment grade, Fitch with negative outlook. S&P [indiscernible] and then with the 2 ratings. One is Fitch, one is [indiscernible] have been revised, both of them. We've seen in the next recent months what the 2 rating agencies will say. We want to have an early -- an early refinancing of maturities, and we're particularly referring to the EUR 400 million bond maturity in November 2024, but also the bond coming into maturity in January 2024. We already have that with the EUR 250 million loan, of which we've only drawn EUR 130 million will draw another EUR 120 million close to maturity to close that loan, the pre[indiscernible], a private placement we did about 7 years ago. I think we have proven a meaningful track record of financing transaction and sustainable finance tools. In the next slide, over the last 12 months, we have refinanced about 50 -- or more than 50% of our debt stock, EUR 486 million worth of debt stock, of which EUR 215 million senior unsecured green loan in August 2022. And the signing was just before the half year report, the actual drawing of the loan was of the facility was in the following days and then EUR 21 million worth of unsecured loans with such a guarantee, and then as I reminded you the green secured loan, EUR 150 million last May, drown were EUR 130 million. We still have EUR 120 million to draw, committed to draw that we will need to restructure further debt. And then we have a slide for debt maturities in a couple of pages, that's going to be much clear. That was Phase I. We knew that in the business plan 2022, 2024, we were supposed to refinance almost our target -- so we've now done more than 50% Phase 3, as you can see the refinancing of the EUR 400 million bond maturity in November 2024. When we reiterated, will be refinanced early on and net of disposal cash in and disposals, which is Phase 2 are underway. Let me stress that both disposals and refinancing are 2 tracks that are running in parallel, but 1 does not exclude or rule out the other. So disposals can definitely help us in the refinancing activities. Talking about disposals in the following slide, you can see, we want to have a strategic asset rotation to reduce leverage. And in our business plan, disposals were optional. Now they are part, they are fundamental part in our strategy. We want loan-to-value to go back to being below 45% within the business plan time range was going to be 40%, 43%, and that can already be achieved through disposals, and we are committed on that front on our disposal strategy. And we are going -- we hopefully are going to complete by year-end. So these are the asset classes we have included in our business plan. It's potential disposals around EUR 180 million to EUR 200 million, there might be -- they might change because we have investors who want bigger sizes than we are putting on the market. So it's supermarket, hypermarket, but we do not rule out some malls as well as shopping centers. Then we have Romania, which we [indiscernible], but the appetite for Romania is not very high now, even though we've had interactions underway, and then the 3 [indiscernible] land to be developed, but this is a small, about EUR 20 million is a small portion of the total, but we're working on it to get all the necessary permits. So strategic rationale is to reduce our financial leverage, [indiscernible] debt maturity profile, thanks to the 2 transactions we have refinanced between 2022 and 2023. We spread our debt maturity up to '27, '28. So we are going to draw the facility in second tranche of the secured green loan facility, EUR 250 million, EUR 130 million withdrawn, EUR 120 million will be drawn. Second tranche will enable us to refinance the debt expiring up until the first half of 2024 [indiscernible] in it. Final slide. And then, of course, I'll be -- together with the colleagues, I'll be here ready to take your questions. I'm going to [indiscernible] considering the solid operating results achieved and based on the currently predictable scenario, the company expects FFO for full year 2023 to increase compared to what was disclosed on February '23, that is to say EUR 53 million. So we expect a growth approximately EUR 54 million, EUR 55 million to, first of all, to tell you about the debt backdrop, the better operating results, read the note at the bottom of the page as well, the estimate does not include the economic impact stemming from any refinancing transactions or disposals that could be completed in the second half of 2023, of course, we want to engage in them, but we cannot estimate the time line so far. So far, this is what we can share in an improvement of FFO ordinary of how recurring and not as one-off that takes into account the backdrop. We have about 20 minutes now for the Q&A. Thank you very much for your attention.

[Interpreted] [Operator Instructions] This question comes from the line of [indiscernible].

I have a couple of questions. The first one is about the market. We've seen that your portfolio valuation was mainly impacted by rates. And also would like to have a comment on the lack of scarcity of transactions we've witnessed over the last few months. So what's your comment on that? And then a clarification on unencumbered assets on Page 47 to avoid misunderstanding, the figure we see will it cover the full value of the collateral provided, even though it was not fully drawn, and if you can it will be nice to have a bridge between values between end of December and end of June to calculate the different effects, repayments, et cetera.

[Interpreted] Good afternoon to all of you. As you said, the market -- transactions in Italy was very weak in H1. It's EUR 2.2 billion of real estate transaction versus EUR 11 billion in 2022. So it's definitely a much more, much slower market. And then, of course, interest rates have an impact, and that has been somehow slowing down investments. And the increase in interest rates and the cost of money, so to say, makes forces main investors in the real estate arena to be full equity investors because otherwise, it would be hard to finance these portfolios. Fair value wise, the increase in interest rates led to an increase also in -- an increase in discount rates used in the DCS model and also led to an increase of rates -- rates that generated the impairment practically. At this stage, if we look at -- if we break this impairment effect down, we see basically that hypermarkets and supermarkets are standing their ground, holding their ground somehow. That is -- and that isn't the most interesting area for investors because it's long-term contracts are less risky in the investors' view and instead, a much stronger impairment, this is what we are going to see on shopping malls or shopping centers because right now, they are perceived by investors as a risker asset. And when the CEO, our CEO talked about disposals. He said that right now, what we are seeing, what we are witnessing and we have started a number of dialogues. So it's only for hyper and supermarket asset plan, which are somehow a tail of the disposal, the EUR 140 million disposal we did in 2021. That's still a tailor about. And the market that has been growing in 2023 in [indiscernible]. I'm sure you know that there were supermarket transactions starting in the U.K., then also in France, Spain, Italy as well, there was 1 deal on fixed hypermarkets, [indiscernible] but that's the market right now. It's -- that's the more responsive as a market than that for malls. Second answer, Andrea, maybe you would like to answer that.

[Interpreted] The value we have, it's EUR 1.274 billion unencumbered assets, Page 47. It's all the assets, but also used as collateral for the EUR 250 million facility with the first tranche in May. We closed other financial instruments secured and they freed up other assets. So it takes that freeing up into account and also the value of [indiscernible] single asset. We found that the exact value to build the bridge Raffaele, she will share them with you. This unencumbered EUR 1.2 billion worth of unencumbered assets, whereas typical assets from our portfolio, 7 of which are green assets for slightly less than EUR 0.5 billion.

[Interpreted] Thank you very much. So it's very useful if you could give me the actual data you have promised. Thank you very much.

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

I have 3 questions, the first one is on valuations. What you expect for the second half of the year, valuation-wise, -- we've seen interest rate movements. According to you, will it be necessary to run a new [indiscernible] valuation? Or what are the most likely scenarios according to you? Slide, Page 9, instead I'd like to understand if I understood correctly, when you say that [indiscernible] 4% downside -- does it mean that, including inflation? Does it mean that the contracts had already been adjusted for [indiscernible] inflation and then renewed with a 4.4% discount? Then last question. When you said early on, early refinancing -- how early, what are we talking about, month-wise, time-wise, when is this really going to be up and running?

Let's say that with the impairment -- we applied in June. They were quite heavy. It was also presented in the slides. We had an increase in excess of 100 basis points driven by rate increases, we will see what's in autumn, how the ECB will -- what the ECB will do should there be any signal of slowing down? Maybe we could be more optimistic. And another one is if transactions pick up again, maybe we could have a stabilization from that perspective. There's still an important piece of information we presented today, but is to say that today, the average of IGD's shopping malls to the 695 cap rate -- it's very interesting if we compare it to many other asset classes. So I think that -- we have come to a point where we have valuation with embedding a major repricing. That's my perception. And then between September and October, we've seen how rates will do and if they pick up again, it is transactional rates -- if transactions pick up again, we'll be able to have a much more dynamic market.

[Interpreted] I would like to add something in addition to what Roberto said, the interest rate growth that has an impact on valuation was not the only effect. There was another one. It should not be negative, but it always has been negative. It's the appraisal location in the first half, we had full rotation of appraisals, -- if when you get a new appraisal, of course, they tend to be more conservative than the previous ones. It's not quantifiable, but you will have to bear that in mind to it did have an effect. On the second question, a clarification on Page 9. We have Laura Poggi, who our Head of Leading activities. What you said is correct. Very important piece of information, however, is that in these contracts, 35 of these renewed contracts had already been subject to adjustment because of inflation. So if you deduct that, we have an even better effect. So it has a positive twitch to it. It's a quite limited sample. It's 4.4% of our total rent. If in the second half, we get a minus 2 means that in H2, we will have an upside offsetting the minus 4 of the first half. We talk about a delta of EUR 280,000 on this minus 4.4%. By year-end, we will have contracts that should generate upside on shopping centers [indiscernible] offset that. On the last question, Andrea on the timing of refinancing, Simonetta. As we wrote on Page 35 in our financial strategy, we are going to refinance very early on when we said, very early on we say, 12 months in general, where even rating agencies think it's the right thing to do in compliance with our rate in current rates. And this is the time line we give ourselves. Of course, it very much also depends on disposals and also the type of instrument, we choose will depend on the overall amount of the transaction.

Could it be the same type of modality that you used for the last -- the latest refinancing drawing these lines over time.

It's still too early to say that because it very much depends on the instruments we will pick and known whether or not disposals will kick in again. I can't tell you more about it.

[Interpreted] [Operator Instructions] So the first question comes from Antonio Casari with Northlight.

[Interpreted] So my question is about shopping centers in Italy. Can you tell us about the cap rate you had on the transactions. Did you share anything about that. The 6 hypermarkets that you sold this year, is there any info you can give us about the cap rate or yield, maybe it's not your transaction, but is there any info available in the market, something you can share with us? And then the second question tied in with the previous question, being very early on, so 12 months before for the refinancing. As you do not yet have any disposals announced and the time line to complete those disposals. I think this -- the time line is a bit tight, say, 12 months. So is there any alternative, any contingency plan? Any contingency assumptions you have made also.

[Interpreted] Of course, today we are -- so we performed in 2021. We are talking to them. We are talking about fair value, pricing. The big average for hypermarkets yield-wise is in excess of 6% versus 560, which would be the -- the ICG portfolio -- so slightly higher return of the yield. But then we will have to see what kind of transaction will come about. We'll be able to put together whether it's going to be the same ICG transaction we had with ICG, where we remain [indiscernible] within vehicle or whether it's going to be 100% disposal on the time line, it's clear it's a tight time line. But today, as we do not have any news, final news, I need to share with you, we have to be very cautious. And -- it is a pathway that we started quite a few months ago, the due diligence phase for this portfolio is much simpler than for shopping centers because there's one contract, it's property, revenue-generating properties, real estate with a track record both for the permit authorization, revenues. They are easy to see and track somehow. So it's clear that right now, the main thing would be to or will be to -- in case of a binding agreement to disclose it and then it happened with ICG, it will take 40 days to do the close and it will still all be very well. The main [indiscernible] roughly get to the binding -- the binding proposal. And we've opened a very interesting [indiscernible] and investors are the same that are active all over Europe for this size of property. So it's quite a simple dialogue because the objects are the same all over the -- all over Europe in all countries.

[Interpreted] This 6% you gave for Italy, is it refer to a valuation parameter.

[Interpreted] Yes, it's tied in with fair value. This is what we have in fair value. Now it's slightly higher -- because contracts for hypermarkets were increased by index according to the [indiscernible] requirements. We tell you in a minute. I'll get back to the slide. If you go to Page 16, you will see that hyper Italy go from 401 to 398. So basically, they are flat. Considering that there was an increase in rents. It means that yields went up, not for us is good. And for investors is good because they end up on a like-for-like basis, they have a higher rent and a higher yield. So that was the effect whilst the largest effect that you can see on Page 16, was on shopping malls indeed, there was an increase in rent and you see yield, but also there was also an increase of both actual and cap rate rates that led to a 4.11% impairment or delta. So the effect on hypermarkets versus December is that they are more profitable and more appealing.

[Interpreted] One last thing when you talk about [indiscernible] cluster or group of investors with which you have dialogue and conversations, is it for the home portfolio. Do you want to dispose of hypermarkets or -- or is it different conversations with maybe smaller lots with smaller investors.

No the core is the same for everyone. And we are talking about EUR 170 million, EUR 180 million worth of hypermarkets. And then, we came up with a menu, so to say, as Mr. Albertini often says, we have a menu because some investors want a bigger size of deals, others smaller size. So we're trying to come up, we're waiting to see. We can be flexible. So that's -- that I would stop here because there's not much more because we have a time constraint -- and we cannot give any more. But it was interesting to understand that you have flexibility around the quarter. That's very good. Thank you.

[Interpreted] [indiscernible] very flexible and very active.

[Interpreted] Yes, we are very flexible and very active on this. [indiscernible] once we have a binding agreement, of course, we have to inform the market, and we will disclose it. I mean we'll get to know. So far with a very intense job across the board to get results. And then eventually, on the time line, we thought we were clear enough in the previous answer for the refinancing and Andrea, would you like to reiterate what we said before.

What I would like to underline is that the 2 trucks, the 2 disposals and refinancing up to trucks, they are connected with 1 another and not mutually exclusive. And we will disposal that the results we get on disposal will then have an impact on the amount tied in with refinancing. So -- the amount of disposals will have an impact on the type of instruments we will pick. We will try and stick to the time line we gave you. And on the selection of the instrument, we tell you soon.

Ladies and gentlemen, there are no more questions in the queue. Thank you very much for joining us today and have a good -- enjoy your holidays. We hope you have good holidays. Thank you very much.