MERLIN Properties SOCIMI, S.A. (MRL) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome, and thank you for joining MERLIN's 9 months '24 Trading Update Conference Call. As in previous quarterly results, our CEO, Ismael Clemente, will provide you with the main highlights of the period. Thereafter, we will open the line for Q&A. [Operator Instructions].

Thank you, Ines. Good afternoon, everyone. Welcome to MERLIN Third Quarter Results Presentation. On Monday, we were heading to approve the Board of Directors and report to market an excellent set of results, both quantitatively and qualitatively given particularly the progress on the data center business plan. Disgracefully, given the news about the attempted modification of the SOCIMI regime, these results have been all a sudden overshadowed by uncertainty and anger, two of the worst enemies of the stock market. Our shares plummeted on Tuesday by more than 7%, and we have been unable to recover the previous level during the week. It's not being our fault, but we feel sorry for this, and beg your pardon for being subject to such a volatile regulation, depending on political agreements outside of what one could consider common sense. As of lunch time Monday, there was a draft law about the minimum taxation of multinationals. That law was a transposition of the EU directive. That EU directive very precisely exempt the REITs from being subject to the scope of that minimum taxation. There were some proposed amendments, including #80 by the Socialist Group, assuming the tax of the directive and exempting the REITs. All of a sudden, the meeting among parliamentary groups to prepare the approval of the draft law was adjoined. A new meeting was called exclusively between the Socialist and Communist groups, and the gates of hell opened right above our heads. The Communist Group, called Sumar in Spain proposed the elimination of the SOCIMI regime and somehow the Socialist did not oppose, which is strange given that in 10 years of operation and many meetings with their policymakers and regulators, they have always manifested that they perfectly understand the social and economic motivation of the SOCIMI regime within the framework of the internationally recognized [ raised ] REIT regime. Luckily for us, the parliamentary agreement raised by the Socialist Group on Monday did not meet sufficient consensus to be finally approved since it was not consulted with -- nor supported by the technical bodies of the government and the economic office of presidency. It was also not supported by the Catalan and by the Conservative parties. Next Monday, a new meeting will be held among all parliamentary groups. Till then we have to remain necessarily prudent, and consequently, we have been analyzing the financial impact of an elimination of the SOCIMI regime and determining the course of action of MERLIN should such elimination finally be materialized. With the current tax regulations in place, we have estimated an impact should this measure have theoretically being applied to financial year '24 of approximately 8.5% of FFO. This assumes managing the company on a business-as-usual basis. Of course, this wouldn't be the case going forward as we have a number of tools to further reduce this impact. In compliance to our fiduciary duty with shareholders, we will need to quickly address sheltering income and profits of Portuguese source from spurious double taxation in Spain. These represent at present around 12% of our cash flow, and with the ongoing development of Vila Franca de Xira data center or data campus, this figure could easily drift up towards more than 20%. Moreover, any potential future income and profit from other European countries needs also to be protected. Spanish income and profit would remain fully taxed, and it will make no difference staying here or moving abroad. We could operate here through what is called a permanent establishment and the assets will continue to be -- could remain with the existing debt. The conclusion is relatively easy to grasp for anyone with economic or tax knowledge. IBEX-35 will continue drifting towards [ IBEX 5 ], drawn in the wave of populism. Now let me talk about what really matters and bring all of us here, which is our results. Our results have been excellent. Thanks, God. The FFO has been increasing organically at close to 7% and the overall occupancy continues growing, being at present at 95.6%, improving quarter-on-quarter on all asset classes. Given the fact that we executed at 20% total shares outstanding capital increase in July, of course, the FFO and NTA metrics have worsened minus 11 and minus 7, but you can easily notice that this corresponds favorably or this compare favorably to the 17% theoretical dilution. So we are clearly recovering part of the dilution caused by the capital increase already in 2024. As a consequence of that, we have proposed to the Board and obtained approval for the distribution of a dividend of EUR 0.18 per share that will be payable on the 10th of December. Moody's has upgraded our debt rating to Baa1, which comes on top of the upgrade by S&P to BBB+. Going down to the business. In October, we signed a couple of large leases, securing more than 500 million in backlog rents. That includes close to [ 135 square meters ] pre-let turnkey for 3 sheds in our Lisbon Logistics Park in Vila Franca de Xira, on a 25-year basis, and a 15-megawatt lease, 10 years with extensions in our data center in Barcelona, BCN01, which is now fully let, and will impact the whole building, will impact our income next year by around EUR 23 million, which is above what we had internally forecasted in our business plan for the year. Regarding the rest of the businesses, we had very satisfactory like-for-like growth in rents, both in offices 2.5%, logistics 3.2%, shopping centers 2.3%. The release spread was positive to with 1.7% in offices, 4.6% in logistics and 5.5% in shopping centers. What is more important, the three asset classes are pointing to a continuation or even a sharpening of the good performance towards year-end. I mean logistics is currently around 98% occupied. We expect to finish the year above 99%. Offices, we said to you that it will be between 92.5% and 93%, is going to get above 93%, and shopping centers are going to be around flat, 96.2% or similar because we have reached probably technical full occupancy. I mean the rest is simply rotation of shops. There's always shops we need to rotate. So the company is clearly in very good shape. Traditional asset classes are firing with all cylinders up, and data centers -- the data center strategy is starting to show some signs of its real potential, of which we expect to continue giving you positive news in results presentations to come. Without further delay, I will move into Q&A. But I wanted to comment because it's been the subject of a number of analyst questions, what is the FFO guidance for the year with the new share count? We are pointing towards a minimum of EUR 0.54. The dividend guidance we are pointing at around EUR 0.40 with the new share count. Remember, last year, we distributed EUR 0.44. So we expect the organic performance of the company to continue eating on the dilution cost by the capital increase. We will make also a number of disposals, but it will not be a relevant figure, around EUR 30 million. Another point of information, which is important, is that given the tragedy of the floods in the eastern coast of Spain, we requested and obtained Board approval in order to provide some relief aid to the victims in an amount of around EUR 1 million, which is equivalent to EUR 0.0018 per share. That will be complemented also by employee donations. Basically, it's being addressed at the main deficit in the area, which is heavy machinery in order to remove the mud, the debris and the cars from streets. We are currently working in 2 schools, and we are trying to restore them back to normality. There are some priorities that have been established by the regional government, and schools, of course, are among them. We have also provided some direct aid to employees affected, not employees of ours, thanks, god, but employees of condominium associations with which we have a daily contact or relationship. And we have also addressed part of the relief aid to a little town in Albacete, Castilla La Mancha, Letur, World Heritage, which has almost disappeared as a consequence of the flood. None of our assets in the area have suffered significant damages. The has been the Ribarroja Logistic Complex which is right next to the barranco del Poyo to the protagonist of the disaster. And although there was a dam effect of the A3 highway, it ended up flooding and we are now cleaning up together with the client, and in about 2, 3 weeks should go back to normality if nothing goes wrong. We have also suffered some minor leaks because the rainfall was bigger than the extraction capacity of some of the collectors, in a number of other assets, but nothing to remark or to report. We have been very, very lucky in this situation. Okay. Let's move into Q&A because I am sure you will bombard us with the SOCIMI regime. I mean, I can say what I can say. I cannot make future predictions. But eventually, I am all yours and we'll be openly answering any questions you might have.

[Operator Instructions] The first question comes from the line of Ignacio Dominguez from JB Capital.

I have two. Firstly, could you provide more color on how you reach the 8.5% impact to FFO? And my second question is about the new contracts, signing data centers, could you please share your thoughts of how the actual conditions compared to what you had in mind in the beginning of the year? How do you see demand for data centers evolving?

Thank you, Ignacio. Look, regarding the 8.5%, it's been a relatively complex calculation because you need to make a simulation of consolidation and subsidiaries versus mother company. I mean it's been complicated. It's been performed during the week by the financial department led by Miguel. The number stands out of relatively simple combination that all of you as economists know how it works. We are a company with a lot of accounting and tax depreciation of assets. Furthermore, we, of course, have financial expense which can be deducted from the tax basis, although there are a number of recent limitations that have been introduced by law. And on top of that, we have significant amount of high-quality tax loss carryforward stemming out of our merger with Metrovacesa, which can be also employed within the legal limits, which sometimes move like a roller coaster, but within the current legal limits, can be employed also to smoothen the effect of taxation in our FFO. When I say that this is business as usual, I say this is business as usual because, of course, we have a number of assets mainly coming from Metrovacesa, which are accounted for in our tax books at a relatively high tax basis which is not corresponding to its appraisal or market value, and we could easily get rid of one of those assets per year and eventually shelter most of our ordinary result for the year, further reducing the effect of cash of these arbitrary measure in our shareholders. So this is basically how we have calculated. Regarding the lease in Barcelona. Well, as you know, we have to be relatively prudent, so we cannot review neither client nor specifically conditions. All what I can tell you is that it is a 10-year lease with significant number of renewals, and that our Phase 1 business plan assumed -- once it was recalculated, assumed an average rent in the region of [ 1 12 per kilowatt per month ]. And at present, we are running above that level. I mean -- we hope that in future leases, we can continue beating that number. But I prefer not to provide the exact price at which the deal has been closed.

So the next question comes from the line of Jonathan Kownator from Goldman Sachs.

Just to follow up on the data center demand, can you perhaps give a bit more color to the discussions you are having currently, the type of tenants looking at this space generally. I mean, obviously, I understand you cannot go necessarily into specifics, but at least the type of people that are looking at it and also when you expect effectively to convert other bookings into leases. And perhaps if you have any color to give on the level of bookings versus the space that you have available currently? So that would be my first question, please. And the second one is just on revaluation gains on the back of signing leases in the data center business, how you expect essentially NTA to evolve and revaluation gains to evolve as you sign these leases? What is the timing of recognition essentially of capital gains there?

Okay. Thank you, Jonathan. Look, regarding the type of tenants, I mean our data centers are pretty flexible, and we do not discard or reject any demand that we might have. But of course, I mean, from a time to cash flow perspective, we prefer, if at all possible, filling them up in big blocks because it gives us, let's say, a speedier conversion of cash flow and therefore, a speedier compliance with the business plan that was relied -- was released to market. Sometimes we entertain conversations with enterprise clients, which come normally with technology integrators, but those are normally very small demands. I mean, between 100,000 to 200,000. Of course, they can be very -- I mean, you can charge a very high rent, but you will not fill up your space very, very quickly. In all cases, in all data centers, we always leave a little room for maneuver with enterprise traffic, oscillating from 0.5 megawatt to 1.5 megawatt, something around that. We normally leave a little bit of room to play with that. Then our conversations are normally addressed at cloud operators. This is important because they can contract a significant blocks of IT capacity. And even bigger blocks, when you talk to hyperscalers, and more recently with artificial intelligence operators or as they call themselves, artificial intelligence hyperscalers. Those companies, they have varying degrees of financial creditworthiness, but we performed an analysis of their balance sheet, P&L, statements of cash, et cetera. And we try -- I mean, not -- you can never be 100% right, but we try to engage with those whom we believe are more creditworthy because we remain -- we are -- we have the spirit of a real estate company. So of course, we want to have clients and tenants who comply with their obligations. So this is the type of clientele we are entertaining conversation with. Regarding the other two data centers and the status of bookings, both are fully booked. However, the cases vary. In the case of Madrid, it is booked, but we are going to receive the first tranche of 8 megawatts from the distribution company at the end of November. And frankly speaking, we didn't want to slip in a lease in Madrid and then not have the electricity. So we have dragged our feet a little bit and waited to really have the electricity and then entertain serious conversations in the market. But we are in the middle of those. And hopefully, in 2025, midyear, those conversations should come to fruition and eventually, we will convert cash flow. But we will convert cash flow in small amount. I mean it will not be -- I mean, the total capacity -- total maximum design of that data center is 20 megawatts IT, and that requires around 30 megawatts of utility supply. We are trying to work our magic and find other sources of electricity, but for the moment, all what we can rely to market is that the full capacity will not be in the data center until the beginning of '26. In the Basque Country, it's a very, very different situation. It's simply that we have the number of bookings, but one of them was particularly good. And we have decided to take a commercial risk and double up. So instead of just talking about the booking and conversion into lease of building #3, which is, by the way, it's been the first building that we have built. I mean for some reason, it's 3:1. So instead of just limiting our conversations to building #3, we have included building #2, which is the one we are starting to build as of end of this year. We should be receiving the license momentarily because we know that the municipality has now all the papers ready. And eventually, I mean, option for the future of building #1. If that happens, of course, we would significantly derisk, I mean, more precisely, we will 50% derisk, the execution of Phase II. And I'm sure the market will be very, very pleased, of course. Regarding conversion of all these into NTA, I mean, we have commented on many occasions that, Jon, that we believe the conversion of NTA will ramp faster than the actual cash flows. Of course, we are doing our best to bring cash flows as close to 0, I mean, 0 as possible. But as we progress with commercialization as the market sees evidence of what we are doing, and more importantly, as people compares us with the -- for example, with the recent transaction of [indiscernible] I am sure there will be an NTA recognition, which probably will happen faster than the conversion of cash flow. I wouldn't love to get the market too much carried away. But of course, I know it's part of life, is part of the market hype these days. And I cannot say no. I mean it's good for shareholders.

So the next question comes from the line of Ana Escalante from Morgan Stanley.

So I have a question slightly related to the SOCIMI regime. I know that you cannot comment a lot on that, but my question is more in terms of like business related. Do you think that the possibility of the potential removal of the SOCIMI regime also opens the door for a development for this company like yours to maybe accelerate developments either in the data center space or in other asset classes, given that you will not be longer forced to pay out the dividend and you will be able to retained earnings and also to increase your development exposure?

Well, [Foreign Language]. It is a yes. I mean, if we would need to change a little bit our management style in order to reduce as much as possible the tax profile of the company. And one of the possibilities, clearly, if, let's say, regular corporate legislation applies to us, will be to accelerate our development of data centers and try to shelter as much income as possible and eventually reduce the tax basis to as close as 0 to -- that is clearly a possibility. However, once the legislator gets into priority, you can never discard further actions stemming out of that kind of populist stance. But anyway, I mean, we clearly have all the options open, and we'll need to do further analysis regarding that, of which, of course, we will be very happy to talk about the results with you.

Okay. So the next question comes from the line of Florent Laroche-Joubert from ODDO.

Thank you for this presentation. I will have two questions, if I may. So the first one would be on the SOCIMI regime. Maybe if you can give us maybe more color on what could be the central scenario that you can expect. So that would be my first question. My second question would be on the occupancy rate for offices. What could we expect now in 2025? So could you reach maybe 94% of occupancy rate, maybe for next year? And my third question would be on the data center, and mostly on the management of flood risk, so how data center are well protected against flood risk today and to the asset classes. So do you think that you will now [indiscernible] differently this flood risk for offices, shopping centers and logistics? Okay, my three questions.

Okay. Look, Florent, the central scenario at present, as we speak as of this time an hour, is that the modification or the better said, the elimination of the SOCIMI regime finally doesn't take place. This is our central scenario. Of course, we have to be prepared for the worst. But this is at present, the central scenario according to the information we have. Then regarding offices, occupancy rate forward in 2025, only god knows. I mean, we don't know what will be at present. We are preparing or we are doing our management reviews, our bottom-up analysis together with the asset managers for next year, and we will relay some guidance to the market during the February 2025 financial year '24 results. At present, I cannot know what is going to be the occupancy of next year because I need to sit down with all the teams and see exactly how they see. They have very valuable information. And of course, by consolidating all that information, we normally can always up with a very accurate number. I mean, you have seen us giving relatively accurate numbers in past years. Regarding flood risk, well, in the case of data centers, that is obvious, but it's also an easy answer. I mean, one of the design requirements of any data center is to be at least 1.5 meters above the 500-year flood level, whether calculated by theoretical models or by empiric evidence. So for example, have we built a data center in Valencia, it wouldn't have been located where the low land where the flood happened, it would have been located in a different place. Same applies for the one in Lisbon, which as you know, is close to the Tagus river, but it's clearly above the 500-year flood level. And with the ones in Madrid, Barcelona and Basque Country, which again are theoretically protected against floods. I mean you are never fully protected against an act of god. But in principle, this is this is the spirit of the design of our DCs because it is super important. In that case, imagine you will provoke a blank of the data center, and you will of course, prejudice or you will inflict a lot of harm to your clients because they will suffer, stopping operations, it would be [indiscernible] effect.

So the next question comes from the line of Fernando Abril from Alantra.

I have three, please. First piece on going back, apologies, going back on the 8.5% impact on FFO, just to make sure that you are not including the use of tax credits or yes?

No, we are including the legal use of tax credits that we have in our balance sheet as of today. And you might question how long will those tax credits last? I mean, many years. We have significant tax credits stemming out of the merger with Metrovacesa. So we will be able to shelter income for a number of years until [ common census ] recovered.

Okay. Okay. And then a couple of questions on data centers. So if I remember well, the Bilbao assets, the building #3 is the first that you are building. It was going with only a quarter delay compared to that of Barcelona. So -- my question is, I don't know if is it possible to -- for you guys to reach a pre-letting for the entire building soon? Or you are holding conversations with several tenants and could probably take place later in 2025? And then last question also on data centers. So you have a big step-up in CapEx next year. And I don't know how -- what is the visibility on this as of today based on the conversations you're having with suppliers and so on. And just wondering if things are going as expected or better or worse?

Okay. Look, on Bilbao, as commented before, Fernando, we have tied our building #3 with our building #2. So that it's, of course, good and bad because it will delay a little bit the time to cash flow. But if we get to cash flow, it will be more cash flow. So our timing is mid next year to close an agreement, and towards end of next year, start of payments. So this is what we are managing at present. Very importantly, business is about taking calculated risks. So if for some reason, the conversations with the tenant blow, I mean, don't jump to the roof. I mean we will simply find other tenants and fill up building #3. And then we will fill up building #2 when it's ready. But if we can close this deal, it's clearly a much better option for the company for a number of reasons, including qualitative reasons, it is good for us. Okay. And then regarding CapEx '25, look, all good. I mean we are not seeing any significant variations in the price of equipment as of yet. And we are even starting to see prospectively. I mean, then those numbers need to be tested with reality. But prospectively, we are seeing some efficiency gains in our construction costs on our per megawatt basis, stemming out of the fact that, first, our learning curve has clearly evolved. And second, if you build denser buildings, with denser clients, you normally achieve better prices per megawatt. So this is what we are seeing at present.

The next question comes from the line of Celine from Barclays.

Just one question for me, please, on the possible evolution of the SOCIMI regime. Can you tell us what that means for your dividend payout ratio going forward? Do you have to revise that down if that was to be implemented?

Look, in principle, if we were to continue managing the company, let's say, business as usual, the effect in FFO of around 8.5%. You could translate that to the dividend payment capacity on a like-for-like basis. So the dividend will reduce by around 8.5%. However, if we can make more efficient the sheltering of FFO, and we go down that 8.5% mark that would also move [indiscernible] to the dividend payment capacity. And regarding policy -- dividend payment policy, in principle, it should remain relatively equal, because even though our policymakers may not give us the treatment of SOCIMI, the market recognizes us as SOCIMI. So there is no way in trying to do things different. It will be very comfortable for us, of course, to suspend the dividend and accumulate a lot of cash flow that will self-finance our data center effort. But I am not sure all shareholders of the company will welcome such a measure because we are perfectly conscious that a very significant number of our shareholders are dividend driven. So we need to continue performing. We are private sector. In private sector, you make a living out of complying with your word. So we need to comply with our word to market, which is to distribute dividend. We would simply probably -- simply move jurisdiction and pay dividends from a different jurisdiction. And that's it, but we will need to continue paying dividend.

So the next question comes from the line of [ Callum ] [indiscernible].

Just to apologies if you've already answered this. You talked a lot last quarter about the problems with data center supply chains and potential delays for Phase I. Could you just give a quick update on the delays and what you're seeing in November? And then secondly, we've seen a lot of news about big tech companies investing heavily in Spanish data center market. Microsoft, Amazon, Blackstone. How are you viewing the competitive landscape today? And could this be a potential headwind or tailwind going into 2027?

Okay. Thank you, [ Callum ] Look, regarding the delays if you -- have you been with me during the summer, I was quite a nervous person, because at the end of June, we started hearing among clients a lot more that they were not getting certainty of date of delay of components from the usual suppliers or the usual supplier. And during the month of July, those rumors intensified. And finally, in August, we knew that two of the main -- the main two chip makers of NVIDIA, TSMC and ASML had detected some chips with -- well, the percentage of flaws, let's say, in the delivery of chips to NVIDIA was above average, historical average or tolerance average for the Blackwell GB200 Series. So most of the people who had -- was in the waiting list for the delivery of GB200 couldn't be assured as to the date of reception of their equipment. So most of the waiting list of GB200 moved to the H100 and H200 series, which are the current state of the art. GB200 is simply too new, but a H100 and H200 is what is currently being installed in most data centers. So that also created a problem of the waiting list of the H100 and H200. We immediately noticed that a number of clients with whom we were entertaining conversations in order to convert bookings into lettings, basically, stopped those conversations because their legal departments were very clear in advising them that without certainty of date of delivery of components, they couldn't commit to a certain date of start of cash flow disbursements to the landlord of their premises. So it was a very, very bad period. However, towards the end of August, we started hearing some different music. And in September, it was confirmed that they have been able to overcome the situation, and they were resuming normal production, mass production of GB200 series by November. And the reflection in our life was immediate because one of the clients who have stopped conversations with us regarding Barcelona, came back to us and we were able to convert into a lease, I mean, full format lease with a certain date of a start-up payment. So that was the situation. And at present, GB200 is now back to normality. Of course, there is a significant delay in obtaining that machinery because it's expensive and sophisticated and not every client has access to it because NVIDIA is quite selective in serving that machinery in order to avoid spurious copying by your strategical rivals. And the H100 and H200 are now on a very short delivery time. So now this is highly employed by people who doesn't need necessarily a super-high computing capacity that they don't need to go to racks of 120, 130. I mean, if people who can stay within the 60 to 70 range, are now massively employing normally H200. So this is the situation at present. Thanks, God. But have you made me this question in August, I will have cried probably in your shoulder, but it is what it is. Regarding the big tech competition, look, to me, rather than a threat, I see it as an encouraging factor because it clearly shows that we were right in betting about Iberian Peninsula as a data center hub. And second, it will create a cluster of technology and efficiency and stuff which is always very interesting. I mean it's very, very good that in Spain, more and more engineers who are currently electrical, mechanical engineers, telecom, that people get recycled into the data center business because in the future with the amounts of IT capacity that just us -- that we are developing, we are going to need a significant number of those highly skilled professionals working with us. So it's always very good that people gets into the business. This is what I can say. I mean we do not feel too much threatened about that. And in some cases, news relate to market differ a little bit from reality. So sometimes those big announcements, et cetera, not necessarily convert into reality because we know they will not convert into reality.

So the next question comes from the line of Marc Louis Mozzi from Bank of America.

Yes. Just wanted to confirm -- I might have missed it. Your guidance for -- the FFO this year per share, I think it's towards a minimum of EUR 0.54. And my point is around, are you taking into account the benefit of the EUR 1.7 billion cash you have in your balance sheet on the earnings -- income, you're going to get from that to kind of a 3% return, which is about EUR 12 million per quarter. Is that taken into account in this guidance? And why is that? Why do you need to know from the EUR 0.59 or EUR 0.58 that the market is currently forecasting?

What the market is forecasting, Marc, I believe, is an average that has been created by a computer. I mean, I don't know about Bloomberg or I don't know, but I believe it is a mix between the former share count and the new share count, because with the new share count, getting to EUR 0.58 will be impossible because remember, we have just caused a 20% dilution to the share count of the company which translates into a 17% dilution in returns. So our guidance for year '24 with the former share count was EUR 0.58, then we upped it to around EUR 0.60. And in reality, we were running a little bit more towards EUR 0.61, maybe EUR 0.61, EUR 0.62 in a very good day, but I don't think so. And if you apply 17% to those figures, it is impossible that you get to EUR 0.58 or EUR 0.57 or EUR 0.59. So the number is EUR 0.54, which corresponds more to EUR 0.6 weighted, averaging the number of months we have been with one result and -- one share count and with the other share count. We will, of course, try to improve it because that EUR 0.60 is below what we were running for, EUR 0.61, maybe EUR 0.62 in a good day. So we will try to improve it, but don't expect miracles. I mean we can improve it to maybe EUR 0.55. But we are going to be far from that EUR 0.58 or EUR 0.59 that some people is telling us.

To make sure that we are -- I'm not missing anything here. What number of shares are you taking into account on average over the year? Is it a full number of shares? Or it's in average -- weighted average number of shares you're taking into account for that calculation?

Total number of shares as of today. We are talking about number of shares as of today, not weighted because weighted is bull****, I mean, you cannot pay dividend based on weighted. We have to pay dividend based on real. So we always talk real, okay?

Okay. So that's where the difference comes from. Okay. So effectively, you're taking the 564 million shares, total number of shares inside of 510, maybe weighted average number of shares, which is where the difference comes from. Okay. And I do agree with you on the dividend. The dividend makes absolutely sense. No doubt about it. On the FFO per share, you have effectively created on the 6 months of new shares, you're going to get 6 months of additional cash where income from [indiscernible] million cash you raised, that's what I wanted to make sure. Okay. So that's where the difference comes from.

Okay. So there are no more questions. We thank you all for joining today's call. And as always, we remain at your disposal if you have further questions afterwards. Thank you very much, and have a great weekend. Bye-bye.