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

Good afternoon. This is the chorus call operator. Welcome to the presentation of Business Plan Guidelines spanning 2025, 2027 of IGD. [Operator Instructions] Let me now turn the conference over to Mr. Roberto Zoia, CEO of IGD.

Good afternoon to all of you. And thanks for joining us today. The way we are meeting today is not the usual one normally. Business plan is presented once completed, but somehow, we are tracking what I told you before on May 7 when we presented the first quarter results. I told you that we wanted to be very transparent vis-a-vis the market and to share the different steps we are undertaking with you. And so we've come up with the main guidelines to roll out our 3-year business plan and today, I will try and walk you through them. And of course, today's question and also in the coming weeks, I myself will be fully available together with my team to listen to your suggestions, remarks, comments for whatever you think is worth sharing with us. And the 3 action lines along which we will be working with for the 3 years spanning 2025, 2027, has already advanced, but we've gone further into them -- we've deep dived into them. And it's -- 2 of them, let's say, are very much tied in with the business. That is to say our core business, increased the profitability of our core business. And then we want to further create value through our business unit that provides services to third parties. And we want to better plan, the timeline of our financial maturities to match them more consistently with the cash flows. So these are the main 3 action lines we are going to engage in and they run in parallel somehow. We started working to really fine-tune these priorities. And therefore, they are running in parallel over the same timeframe. What do we want to do starting from business -- from our core business. I think we -- when you have a relationship between a landlord and his tenants especially in the retail industry, we have to come up with a new role. What we are proposing is a new -- it's a different landlord tenant relation. And we've built what we call it an ecosystem where it's a shopping mall ecosystem, and we want to have a partnership between landlords and tenants and it's going to be a relationship that's not just based on a contract. It's not just -- you get to rent to lease or rent a space, but rather, we want to build a much more strategic relationship with them. What does it mean? Somehow, we want to strengthen what we already have in the pipeline. We want to strengthen it and enhance it. And I'm talking about digitalization and digital tools that will help us and support us in communication to tenant and also communication to clients, to visitors. We want to build a commercial partnership with initiatives for -- and I mean event and advertising, both sides of the matter and co-marketing and based on, again, the shopping center. We want to value the relationship with our tenants and coworkers. We want to enhance the spaces that are let or leased to really make them available for online sales as well. We know very well that all of our tenants are somehow rely on an omnichannel policy and they say sending product, home is very costly. We have a problem of returns. So we will build a partnership to try and make sure you buy whatever you like, the client buys whatever you like, but they pick up from our shopping centers. So we wish to service [indiscernible] management, which is more specifically that have a high asset value. The [indiscernible] disposals were aimed exactly up that. IGD is still managing the disposed assets with the same level of attention that it was paying before with the same priorities we had when we owned those assets. And all of that will be, of course, reliant on ESG vision. We know very well that it's no longer an option, but it's something we must have, but we're not going to deal with ESG as a world apart. It is very important that in every action, we perform on a daily basis, we have to have an embedded ESG vision. And -- an ESG compliant vision. In today's presentation, you will see many slides with color top, displayed top right on the slide, and they recall what you see on Slide 4, the 5 actions, the 5 lines along which we are committed and that we want to really transfer into any day-to-day activity we run. Some of you have probably noticed that we've already completed the first action, completed by the new IGD governance, and it meant reorganizing things. We went through a reorganization, nothing beyond the little boxes on the screen. This really bears witness to the fact that there's a new way of working, an innovative way of working. And I know many companies who are in the same business as we are. But -- once again, I see they -- "there's a very stiff approach" and I see it both in owners and coworkers. And what we did was come up with a business set up that is very close to the stakeholders, is very close to the assets. On Page 5, you see that are -- what I highlighted are the different operations that go from asset management, they range from monitoring, constantly monitoring performance. So not just footfalls and revenues, but whatever is happening inside the shopping mall. Unlike what we had in the past and unlike other players, we've come up with an organization which is not just the leasing structure. It is based on digital and innovation as well because we want, of course, sign contracts with our tenants, and not just for individual spaces, but to rely on something and contractualize something more. And of course, we are deeply -- we have decision-making powers for -- to manage our shopping malls at best. We work a lot more in the past with an asset-by-asset approach. And this is what I asked my teams, I asked them to have really a maniac approach and attention to whatever is happening in the shopping mall -- in the shopping center. And luckily, we have technologies and means of communication that are very modern and that are looking forward from how we are looking up to the future. And in order to increase profitability, we have to focus on enhancing our portfolio, and we need to identify new opportunities to increase our net operating income. We have to contractualize whatever we can inside the shopping mall. And, of course, we want to look at investments on an asset-by-asset basis. It's not -- we don't want to have prevailing elements such as ESG or sales data out or the purchasing of a technology. Depending on the type of asset, we want to have a constant assessment in the area, in the geography we are active. And then I give you this philosophy. We are already unfolding it, proposing it to our customers and clients and the proposition will be even stronger in the future as we move forward. Let's move to Page 6. And you see that asset services -- asset management services for third parties. So having a parallel business units that is not talking to the main business units that I described before, it's we have this asset management business unit. We have dedicated teams that have the know-how so as to be able to directly manage assets and so that they can transfer that know-how to clients. So this business unit will not just work based on fees, but it will somehow share with clients, a long-term vision for the asset, they provide services for. So we will not have any overlapping of business unit. We want to optimize costs. And we do want to leverage on our know-how and we want to show our clients that the same way we manage our own assets, we're going to manage theirs as well. We want to be partners for our tenants. And day in, day out, with the help of our shopping center management, we want to come up with plans that is an ad-hoc plan for each and every tenant, so that they all have opportunities maybe to work on led walls to have their own promotions shown. For those who want to organize an event, we will be partnering with them, supporting them to really make our shopping malls really attractive vis-a-vis customers because at the end of the day, that' bread -- that's our bread and butter, because we want, of course, to increase revenues and profitability as well. And in order to do that, we have started up on a pathway that is well, whatever we've done is of utmost importance. And I mean what we've done with CRM systems, which enable us to have a full knowledge of our clients to make them more loyal, of course. And we want to communicate, not just for selling purposes, not of physical sales, but also for online sales. You can buy on any channel you want and you pick up from the shopping mall. That's why we have to provide our tenants with a communication tool. We've our old clients because of -- those are the clients who come once a week to the mall, once a month or every day to the mall. We know exactly who they are. And if we can talk to our tenants about them, we will achieve a shared result that will improve performance for us and the tenants. We are not reinventing anything. We're not providing anything new. In the previous 2 years, we've worked on digital. We worked on websites for our shopping malls. We've worked on totems, led walls, Wi-Fi, whatever was needed to really provide a communication. And in 7 shopping malls, we've already launched an app project. So once we've captured a client, the client is constantly receiving promotions. And based on the success of a given promotion, the client itself can have either add purchasing points or beneficial bonuses. And in turn, we will get more data of the client. And we are working -- of course, we're being cautious because it's been the talk of the weeks and talk of the year. And I'm talking about artificial intelligence, if you focus on digital applications or social applications and apps. We cannot talk to our current clients on a one-on-one basis but we need to have an advanced, and evolved system to build [indiscernible] system. And we are already working on it from a marketing perspective, but also from a point of view of maximizing our equipment. Today, AI can help us maximize the switching on and off of the systems, energy systems or whatever it is to exactly maximize energy savings. On Page 10, let's talk about co-marketing. Co-marketing for us is a must. Managing to somehow contractualize, not just space but also marketing activity to be able to offer one-of-a-kind exclusive content and also -- and that helps footfall, organize events an initiative in cooperation with tenants. And we think that is a key to success. And we've already experimented with it in the past. And today, somehow, it's under our radar and because of the transaction on -- KIKO, we've been cooperating with them a lot, they organize events in our shopping malls where they offer makeup sessions. It's good to increase footfalls, but also it's good for the tenant and good for the brand to increase sales. All of that, it has a purpose, it has a goal and of course, it's that of attracting upward or anchor tenants, it is those brands that really make a difference in a shopping mall and then help us attract more brands. Also -- and that means for us increasing our revenues and profitability. We put a few pictures telling you that whatever you have a certain brand, a very attractive brand, it's much easier to attract other tenants, other brands. Needless to say that IGD has never been talking just on only shopping, but we're building very effective shopping experience for wellness. It's like not just shopping, it's wellness, cinemas, restaurants, you name it and a number -- a bouquet of services, if you wish. And all that is really prepared, lays the foundation to build a new relationship with our tenant, so that we can talk to them, we can maybe apply higher rents, but telling them that IGD is going to invest for their benefit, to benefit them. To deep dive into a greater level of detail as I said before where I'm walking you to Slide 14. Indeed, we want to increase occupancy, the malls occupancy. At the end of March, shopping malls had 94.2% occupancy in Italy and 95.5% occupancy in Romania. And here, there's still a lot to do. And what I am sharing with you today is that really want to aim into the top vis-a-vis when it comes to occupancy. But our strategy is diversified. Depending on the different assets we are focusing on. We've clusterized also to really come up with the right figures in our business plan. We've clusters -- we've broken down our portfolios in clusters, 3 main clusters just to mention. We have 9 so-called key assets with an occupancy that's quite high, ranging between 97% and 99%. And those account for 62% of the shopping mall asset class value. This is where we have to earn money and make money to be very blunt and very transparent. And we already have a very occupancy -- very good occupancy rate. And today, it's a matter of really aiming to increase our net operating income, reducing -- its cutting expense and going increasing rents. And leveraging anchor tenants for appeal. And then we have 11 assets that have a potential to be better unlocked, so to say. And we said, realign their metrics to the best-performing assets, the one we would have on the first line, and they account for about well less than 30% of the full portfolio, and there's still a lot of work to be done and maybe more investment to be made. And then we get to the so-called value-add assets, and there's a specific box for them. And we have a dedicated team focusing on these aspects so that they can be brought to the right levels by increasing the sales of level changing the destination the use changing into gyms or something different. So some areas of the shopping mall are the so-called last mile logistics because end customers are somehow under the same roof as a tenant. But we are leading ad-hoc studies on these value-add assets so that these 5 assets too that account for about less than 10% of our total portfolio, to bring them to occupancy levels that are in line with the remaining part of the portfolio. And here again, when we stress the investments and CapEx are of 3 different types, commercial, maintenance and ESG but all of that, as being part of the overall asset strategy that is set up for each and every asset we have in our portfolio. We are working and I think that in Q2, we'll be able to share results with you -- interesting results with you. As I said last time, today, because of COVID on the one hand and because of the pressure we got from big retailers. We have evolved, weighted average lease rate landing at 1.8 years. But in this business plan, 2025, 2027, we have to increase that because that means we want to make our retailers tenants more loyal. We have want to have less turnover, less stress for everyone. So we'll see that already in the interim report but it's going to be one of the must for our business plan -- upcoming business plan. Having said all that and with those rationales in mind, let's talk about this new business unit. Why did we build this business unit? Because as we've seen with the last 2 disposals, where I was personally involved and committed to maintain -- to retain our asset management for those assets because we stayed in the setup as a minority. And then I think it would be a pity for a company like ours to waste the resources or lose business, manage, asset management business. And we've seen that our clients very much appreciate what we do also with a special vision in mind. This business unit already has an excellent profitability, but we want to further enhance it by retaining what we have and at the same time, as of next year to start and seize up more opportunities. It's not that we want to enter a market that's too poor in low added value services. We are proposing ourselves as fully fledged asset managers providing asset value services. And these opportunities will also enable us to somehow have to rely on the management of a wide number of assets when we deal with retailers and therefore, also have the opportunity to partner with clients, we offer services to through our asset management unit. Just to give you a few figures to crash because in the past, we've never realized anything of this kind. Today, we have 28 assets owned by third parties that we are managing for them. A large portion, a large chunk comes from the last disposal, the food fund, with Prelios, SGR. We had 6 hypermarkets with Savills, SGR. And then we have more with third-party clients. So there's 28 of them that we manage assets for -- and it's not. And it's a good portion. We have 2 master lease contracts expiring 2026 and 2027. And we can, with the owners make an agreement and offer services -- management services to them. So 28 is already a good number. And IGD's positioning in this type of business could be appealing, could be interesting, I think. And today, we have large asset management companies that engage in asset management, but then they have to outsource facility management services, [indiscernible], construction, leasing, marketing, et cetera. We have everything in-house. As I said before, we have this universe of resources that can be used and they're all on one asset we are all colleagues, we drink coffee, we talk, and I think this will lead to a good result. It's a good -- it's a plus to have in-house resources that either work or full time or 20%, 30% of the time for this business unit without ever wasting energy or in looking for novelties that we have in-house and said, the digital business is not that we just keep it to ourselves. In the future, it could be a way to offer our clients a digital service that they had maybe not thought of or that they maybe did not want to invest into, in case they had one when they have a startup, for instance, in a given asset. I very much believe in this type of operations, investments -- investments and CapEx. Today, it's very important to our assets attractive, modern, we don't want them to decay or degrade because then tenants do no longer want to lend them and then trying to invest in the digital world, in technologies, in this very idea of offering an ecosystem. All comprising also digital tools, et cetera, and then targeted actions we need to perform targeted actions. Shopping malls in Italy, not just IGD shopping malls. Normally, they are 15 to16 years old. So systems have to be -- all the systems and facilities have to be updated and modernized quantity wise, the first thing I want to share with you is that we expect a reduction of total investment. But that doesn't mean, we're just happy with what we did. We don't want to do anything else. It means that in the last 3 years, we have to complete the Porta a Mare development that really took up a lot of resources. So in our CapEx rationale, ordinary and business as usual investments were in line with the expectations, but the overall amount of investments spanning 2025, 2027 will probably be lower because we've completed the big Porta a Mare project. And then on Page 22, I wanted to give you a couple of examples of the so-called value added. In the first picture, you see the [indiscernible] pausing of hypermarket, we've engaged in quite a few of them. And then average services in shopping malls and then former reserves, we have the coming up with so-called Smile Logistics to improve online sales for our tenants -- it's not for everyone. It's devoted to the tenants that are in our shopping malls. We had restaurants as well. It's smaller now. I just took to -- it was a close up for a former restaurant. The restaurant was downsized it to offer a different product class within a cowork -- we have a coworking space. They are not only used by workers but also by our tenants and you pay for the space when they have to run training courses for their personnel they use those spaces, they reserve the room and use it. Let's now move on to Page 23. And for the first time, we want to commit on disposals -- major disposals. We've been talking about them for a long time. In previous business plans, we've always talked about or focused on stand-alone solutions. And I think now it's -- the time has come from our perception of market approach. We need to focus on disposals. You know that -- we've mentioned that before, the targets are Romania and the 3 Porta a Mare areas. On Romania, we changed our strategy and successfully so, if I may say that, because we have had a lot of interest shown to these sales in clusters. So not full portfolio, but clusters -- portfolio clusters, I don't have any practical to share with you yet, but the -- we have witnessed that the market sentiment is very positive. So business plan will include disposals in the range of EUR 100 million, EUR 120 million. If everything goes well or as expected and our financial condition becomes well balanced. We cannot keep selling. And considering Romania as non-core. We could also envisage a possible asset rotation towards the end of the business plan timeline to achieve targets or given target or to have A+ cash in versus the 2027 FFO results. This is something I would engage in tomorrow morning, but our priority is that of focusing on our debt of course, reducing our debt. So disposals will be mainly targeted to reduce our debt. A short focus on Romania. You know assets are in the very center of cities, where the city hall is located in this medium sized Romanian cities. They are very interesting as locations and also the tenants that are in these shopping malls a very interesting ones or indeed. And the advantage they have -- can you hear me? Yes, okay. So all these assets are in city centers and those who are showing interest want to understand how many square meters they are. So definitely they want to further -- maybe they have a different development in mind versus the one that is currently ongoing. No, no. We thought you could no longer hear us because I could no longer see the link on my PC -- can you hear us? Yes, we can hear you very well. Apologies, as Mr. Zoia. We're talking about Romania, came up with these clusters. Page 25, you see on the clusters. We have a premium asset, which is worth about EUR 40 million, 4-0, and that is for more institutional investors. We have fix medium-sized assets, ranging from EUR 7 million to EUR 12 million. 7 minor assets ranging from EUR 2 million to EUR 7 million. So typically assets that will be for family offices, or private clients. And one of this building worth EUR 2.9 million, which accounts for 2.4% of our total Romanian portfolio. It's a single tenant, stayed single tenant. And it could be suitable for the purchase from -- sorry, purchased by a family office or a private investor. The 3 areas based in Livorno, we've mentioned many times, it's 3 areas for mixed use, as we've said before. It could be residential, it could be a hotel, something for the tertiary sector or for not core related businesses. We have 12 apartments, 103 were already sold. Out of the 12, 5 already prefetch deed with a notary public. And we have a cash in plan for 12 planning at EUR 6 million and the 3 mixed-use sections, as I mentioned before, and the value is roughly EUR 20 million on the 3 sections. And there will be possible disposals for 2025 because we have the latest authorizations that are ongoing because we want to see -- sell plots of land. And then financial strategy. We have a concentration of maturities in 2027, EUR 572 million, so quite meaningful. We would like to -- or we are working to reduce this cliff, to extend maturities and reschedule them and therefore, have a better balance for refinancing purposes. On Page 28, you see that 2027 cliff. We've already started to talk to bank and investors. As I said before, we are working on organization, business plan, rate increase services and not to leave anything untouched. We've started quite a few meetings with the banking world. For sure, the repayment in May, post the closing of April 23, we repaid EUR 155 million, not really put everyone in a good mood, both on the bank and investor side. So everyone is in a much better mood now. So we're working to revise our financial strategy. And how are we going to achieve that to maybe relying on the traditional banking world work more on mortgage loans, amortizing mortgage loans over the years. And let me remind you that IGD today relies on EUR 1.1 billion worth of unencumbered assets that could be used as collaterals. So we have a -- the opportunity to offer the traditional banking system with a number of sizable collaterals -- assets to be used as collaterals. And in the coming weeks we'll talk to them so that we can have a better organized refinancing strategy. I've already mentioned our focus. But I think I have to mention one last thing. On May 7 after a question, I said that we want to increase the profitability of our portfolio. We want to have targeted investments on an asset-by-asset basis. We want to ratify our financial set up, and we want to return to dividend distribution. As you know, that is of paramount importance for CQ as we are. And by definition, we should have revenues that are consistent over time. And so we want to be able to go back to distributing -- paying out dividends. And that, if we somehow do our homework. And I am confident we will definitely be able to do our homework and work on all of the elements, I mentioned before. And I think that IGD can be at the highest levels of the European market. And I'm not just saying European market by chance or to really boast -- to really be boastful and proud of our operations. But of course, if we are competed with European peers if we talk about listed property companies, you know that the very big companies, [indiscernible], Eurocommercial, you name it, are all retail players. And we know we have a smaller, much smaller size. But if we look at the discount to NAV level and some indicators and ratios, you will be able to see and appreciate that IGD can play on a level field with other peers because we have the same abilities, the same features, et cetera. Same peculiarities. Last slide, we've included our agenda going forward, both corporate and Investor Relations. They are confirmed as of today. So from now to year-end, you can see very well that we have a number of days, and there will indeed be opportunities to talk to you also in depth about the different matters. Let me now turn the conference over to you for questions.

[Operator Instructions] First question comes with -- from Simonetta Chiriotti with Mediobanca.

I have a couple of questions. The first one is about your asset management operations to third parties. What is the competitive universe like? Who are your competitors? What kind of clients, are you going to target -- I imagine from? But could you elaborate on that? The competitive scenario and the clients you're targeting? And the second question is about the -- your objective to go back to paying out dividends as you are a SIIQ company, it also depends on your ability to increase profitability, but also on how profits will share and impairments. In a few weeks, you will show your -- disclose your interim results. Is there anything you want to share with you ahead of -- with us ahead of time already?

Very well. Right now, if I look at the Italian market, the competitive scenario, the main asset managers are former firms or owners who over the years disposed off their assets, but retained the management. But in Italy, they have a couple of assets and a contract. Pradera has a number of asset management contracts. Pradera is probably more in capital markets. [indiscernible] has a couple of shopping malls as a JV. And this is more or less the market of asset management, whilst if we talk about other services, is CBRE, for instance. I'd like to stay at the high end of the bracket, so to say, we have 60 assets that we own, that enable us to have a very strong organization supporting it. Others have a very small supporting organization. And every time they acquire a mandate, they have to reshuffle everything and they have to increase their costs. Today, we instead -- well, this is the competitive scenario, the reference market is one of the most profitable ones with SGR, Prelios and Savills and then another -- a third one, which was a private player with a shopping mall in Veneto. We had a master lease. We dissolved the master lease. Everything went to the private owner, who said, dear IGD, I would like you to keep on managing my assets. And there, we have a very strong profitability given by the fact that we do everything for them. The owner stays at home and in the evening, he wants to just know how much he cashed in. And he gave us practically the key of the place, so to say, if you wish -- if you allow me to say that. Funds, there are a lot of funds, SGR a lot of them also with large assets. But very often, they're not specialists in the retail world. If you think of Prelios, they are the main -- these main SGRs have a lot of offices, logistics over the last few years, especially, some hotels and the retail is not in their DNA. And that, for me, is a market I can address definitely, I can attack. You have a fund, you do your homework as an SGI, you, do your work at SGR and the remaining part, the business part, I can manage for you. And another benefit for our clients -- regulated clients, I mean is that IGD is also regulated as a player. I've seen the latest last contract with Prelios and Savills, and the type of contract went through World Bank of Italy, clearance, et cetera. And for us, it's bread and butter. It's day-to-day business is business as usual. So for the sake of the SGRs transparency vis-a-vis the funds having a listed company as a service provider is indeed a plus. So I believe in this type of competitive advantage, competitive edge that we can have vis-a-vis our peers. And on the second question, we'll talk about it on August 1. The background is not -- the backdrop not very aggressive, let me say, Claudio is going to hit me, but I can say that discount rates have not gone up because ECB, did a first rate decrease of -- well, 25 basis points. So discount rates are still the same, and so that -- this is piece of information. On the rest, we still will draft, still have to be enforced plus the auditors plus the auditor's work. I mean on August 1, we will have data to disclose. But the only thing that I see today is that I didn't see rate-wise, any major differences that the house view of all the [indiscernible], I've talked about discount rates, of course. And there's something else officially. If we think of inflation levels, we have estimated in December, in December's account and the real inflation we see [indiscernible] with lower level. But if we look at discounted cash flows and we look at individual rent increase is maybe a percentage point around a bit because in the perception of inflation -- well inflation levels are slightly lower than the levels we had in December. Just to be let's say, give you a general perspective, but just a few weeks from here to the interim report disclosure.

Next question comes from the line Federico Pezzetti with Intermonte.

I have 2 or 3 questions out of curiosity. First of all, the timeline of possible disposals because of what you wrote about Porta a Mare, on Romania, I think I had the perception of a rather positive sentiment. I don't want to rush too much. Can we assume 2025 as a possible year for Romanian disposal? Maybe not all of them but to actually unfold Romanian disposals. From an operating viewpoint, you talked about occupancy rates. You talked about net operating income that could improve, thanks to an increase in occupancy. Do you see any results that you can achieve in the short-term? Or will you need investments in order to achieve these for us to see results along the NOI line or other? And then medium, long-term curiosity, you talked about asset rotation. It's not a priority, indeed, but maybe it's something that could be interesting at the end of the business plan. But could you elaborate on the asset profile, assets that could be of interest to you, what I mean. And I'm thinking of the disposal that you made 3 years ago of the portfolio, you now have 40% of? So what could be under your radar in that respect going forward?

Thank you very much. Let me follow the order of your questions. It's a plan spanning 2025, 2027. So disposals. We're going to start talking about it in about them in 2025, otherwise. Well, I still have to keep something that I have to work on in 2025, leaving jerks aside, maybe I've already said it, but the disposal of Romania based on different subclusters, portfolio subclasses will be probably more well, lengthier and more cumbersome. Maybe we will sell an asset worth EUR 7 million or EUR 8 million. It won't be no, [indiscernible] but it will still require a lot of work. So -- but I hope that between 2025 and 2026, we'll be able to close most of our Romania, based on the new strategy I defined. To be clear, if somebody asks for EUR 2 million assets, well, we put in the same amount of work and commitment. To me, this is a priority. It's more -- well, it takes more work. It's going to take longer, but I think it's going to be the more efficient and effective. So 2025 and 2026, I think those will be the 2 years for the completion of that disposal, just like for Livorno. And they've just had the elections. And luckily, we have the same people, what we had before. And then the authorities that we still have to talk to them at year-end. So 2025 could be reliable year. On the net operating income, we're doing a lot of work on it now. So, you should see the first -- well results on August 1, the actual effect, the full effect rents with the upside even seen in October, November, you won't see the actual effect. The growth on like-for-like, you will probably see them from year 1 in the business plan, asset rotation, you asked a question, and you've already answered your question yourself. What more than the juice disposal, whether we're stand-alone. And I said that last time, it was a tactical disposal. It was a very meaningful to take home EUR 155 million, but we have to sell hypermarket that were in 5 shopping malls where we own the shopping malls. And therefore, yes, the fact that we -- that for some of these shopping malls, we could, for instance, get back, hypermarkets is one of the goals of today, the contracts for juice and food portfolio has no clause. The contract has no call or put clauses. It's clear that once we have the right conditions in place, it would be interesting rather than go out and look for opportunities elsewhere, this is something we've always said, and we see it day in, day out owning shopping malls and hypermarkets to have one single ownership indeed has a value is a plus. And even before in the drawings I showed you, it was Spain, we own everything there. And indeed, that is a bonus, that is a big advantage.

Just a follow-up on your asset-by-asset approach. Will that not entail additional costs? Could that approach lead to additional costs because you talked about maximizing efficiency, et cetera.

According to me, it's exactly the opposite, meaning that if decisions are made in areas where we have our own shopping malls. It's much easier. As I said before, there's no overlapping. We maximize resources. There's no overlapping of resources. And the fact of having decision made, scaled too high makes things more difficult. Groups work with clusters of assets tend to cut costs and even our business unit. Today, we talked about it, and it's no secret. The service contract on the food portfolio is EUR 600,000 per year. And I haven't hired any resource for that. It means that if I unfold synergies, in-house among the different themes, whatever I make, it's a profit, it's then -- if we're really good, we will have to do even better. And so far, both the juice and food portfolio, we did not have any need to acquire additional resources. So I see it, this asset-by-asset strategy. I see it more as a way to maximize cost efficiency and time more than anything else. And I think it will be a winning play going forward.

The next question comes from the line of Giuseppe Grimaldi with BNP Paribas.

I have a couple of questions. The first one is worth -- the asset service business unit. Have you identified a pipeline, an asset pipeline already that could be addressed by you? And to what extent -- well, how much would be the pipeline work? And then on disposals, in your press release, you said EUR 100 million, EUR 120 million worth of disposals. Romania, if I remember correctly, towards year-end was EUR 120 million. Did you -- were you particularly conservative or you are not expecting to sell a full portfolio within the business plan time, range timeline.

First question on the service business unit, we launched it. We have 2 negotiations underway, especially on the 2 master leases that come to expire. And much as we could understand, in 2026 and 2027, we could reach that time that agreement. Now we are, of course, taking actions to as I said before, it's been weeks and we've been working on a number of fronts. The target is the announced one -- the one announced with the first question. More specifically, there'll be 2 lines along which will work SGRs that do not have a specific expertise on retail. And the second one, it could be private owners who are not -- who don't have the necessary resources and who may need a company like us going forward. EUR 100 million, EUR 120 million of disposals. Of course, there, we want to be cautious. The selling of Romanian subclusters for full-year subclusters, the large portion, the large chunk would be between '25 and 2026. It's not that we want to sell at a discount because it was EUR 122 million and now I say EUR 100 million simply because I might have a tail left practically over the time span. What we are thinking figure-wise, for our business plan implies that as we dispose off assets, we will also 0 set the full organizational setup for that asset. You know that in Romania, it works differently. We have a company that owns the wall, so to say, the building and then another company providing services and with the personnel. Most of the personnel is hired by the asset. So when we dispose off the asset -- of the building, people will go with the asset. And we've included in the disposal system that will hit our bottom line. We're going to reduce direct costs, cut direct costs. Once we've disposed off -- of enough assets, we will then address the headquarters where we have central functions, consolidated, especially admin functions and legal functions, but we're talking about just a few FTEs or heads. We've put together all of those synergies and assumptions one way or another.