One United Properties SA (ONE.RO) Earnings Call Transcript & Summary

[Audio Gap] So these assets are -- as they will be finished and added to our portfolio, will generate more rent for our business. On the other hand, we are looking constantly to dispose some of the rented assets as we've done also in the past. So you might see in the future that some rented assets go out of the portfolio in order to recycle the equity and to move it from lower-return asset to a high-return asset. We have a good pipeline for new offices. We have, in Cotroceni, plots of land to develop another 3 phases, One Cotroceni Park 3, 4 and 5. And we are looking actively for tenants in the market in order to build-to-suit for their needs. In parallel, we have secured also a plot in the northern part of the city on [indiscernible] Street, where we are pitching also a number of tenants, and we try to build-to-suit for them their headquarter on that site. Last year, especially in the second part, a lot of shareholders asked us what measures do we take for cost optimization and we took this recommendation very seriously. So we started this year a very thorough cost optimization program. We try also to use AI where it's possible in order to optimize our work. But we managed to cut a lot of unnecessary expenses, and we managed to decrease almost 20% the general administration cost for the first 6 months of the year. This is a concern for us also going forward for the second part of the year. So we hope to see some results on that also for the rest of the year. As part of this process, we decided also to relocate part of our team, financial, legal, architecture to a neighboring office building that we own. It's called Eliade Tower. It is a building that was built in the '80s, but a very good building, which used to be in portfolio of Globalworth before. And it's a nice view to the lake, but the rent costs less than half than in this building. So part of this process, we decided also to cut the expense with the rent. Regarding shareholder value, the most important thing on which we focus is making profit for the shareholders. We think this is the most important thing that you can do as a company to create value for your shareholders. You see in the first half of this year, our profit reached almost EUR 60 million, gross profit, and we increased around 12% versus the first half of last year. Now how we distribute this value to the shareholders? There are 3 ways which we see as distribution to the shareholders. The first one and very important is the reinvestment of the profits in new development. Of course, there is -- there are the dividends that we are giving to the shareholders. Although, we are not a dividend company, we are a growth company. Still, we are paying constant dividends to our shareholders. And we want to continue also with our buyback program. And we recently announced also a TPO ( sic) [ PTO ] program that we proposed for approval to the General Meeting of Shareholders from October. And you'll have the opportunity to ask more about this from our Chairman, Mr. Cisullo. As overall target that we have for the company, we plan to quadruple the value of the company over the next 10 years. This means we need to reinvest the equity of the company with a compounded annual return of 15% per year for the next 10 years in order to achieve this target. Thank you very much. And I will let -- my colleagues continue.

Thank you very much, Victor. I would like now to ask -- as I mentioned, for the very first time on the stage of ONE Capital Markets Day, I would like to invite our Chairman of the Board, Mr. Claudio Cisullo. How are you, Claudio?

Super good. And how about you?

Very good.

You always look very happy.

Thank you.

I tried to copy you on that. Let me see if I'm managing this.

I'm happy when we have a room full of investors excited to hear about our plans. We have 20 minutes to discuss the PTO among many things. But I would like to start with a little bit about your involvement with One United Properties because we've never actually discussed this with our investors. You first became a client of One United Properties, then an investor, Board member and finally a Chairman in 2021. And I wanted to ask you, how did you get to learn about ONE because it's no surprise, you're not a Romanian. So -- you're a Swiss-Italian businessman. So we're always happy to have foreigners investing in Romania. Why did you decide then to join the Board of Directors and finally become a Chairman in 2021?

Thank you, Zuzanna. So I'm -- it's a big pleasure to be here today. And my journey with United Properties began actually to my broader activities in these Eastern European market with my other companies. We had to decide for, Chain IQ is the name, a procurement-managed company where we place our nearshore center. There was -- we looked at market like Poland, Hungary, Czech, Romania and so on. We decided for Romania because there was many factors which we have seen there in terms of, let's say, the culture, the opportunity of the growth, the ability of enlarging the business but also the workforce, which has a quite well, let's say, knowledge base and study base to involve and develop. So that was the -- basically the -- more or less the beginning. Then I saw very fast the opportunity of the real estate market. I was saying, okay, this country has, for sure, a big opportunity for the future in the -- I was thinking on the 10-year space, in the real estate market. And so I then started through my investment company to buy apartments from One United Properties. And that then brought me together to get to know the co-founders, Victor and Andrei. And as in business, you can have the best product, you can have the best market. If the people would not be the right one, you cannot do anything. So it's all about people, right? So you're investing in people, not only in Romania, but everywhere in the world. And I saw these 2 gentlemen, which made me a very unusual Romanian way, business-wise. I was very thrilled actually. I said to myself, well, okay, I mean, the way how these 2 guys are thinking, are acting, are committed, they could be easily, in that regard, also Swiss, but be happy that you are Romanian because the Swiss are a little bit boring. So that basically, beside of I saw the project, like this one where we are here, I was fascinated about the architecture of this project, the style, how One United One Properties is building and concepting their developments, which I said, okay, this is a game changer for Bucharest. And I said, okay, I think I should have a more closer look at it. So that then brought me that, in November 2020, was -- I had the opportunity to buy the first batch of shares from Victor and Andrei. And then in March, I joined the Board at that time as well because the investment was not a small investment. Usually, when the investment is quite enough, you should also have the right to be in the Board, to, a little bit, see what is going on and feel and bring your experience as well. And in March 2021, then I bought the second batch of the shares. And then I was elected as the Chairman of the Board. This was before we did then the IPO by mid-June 2021. All of that was not a coincidence, but it was based of -- reflected of my confidence in the company, the leadership and the long-term strategy. So I saw opportunity and also to help its governance as a global investors, positioning us, let's say, a transition into the public listed company in Romania. That's a little bit the storyline.

Thank you very much. We're very happy to have you share this part of the story because I think it's amazing, in the past, for example, we also had Marius Diaconu, who also went from a client to investor to Board member. So I think it speaks volumes to the quality of the product and also the relationship that all of you have with the company. So as a reputable international investor, what are the advantages and the strengths, opportunities that you see both in the real estate, but also in the capital markets in Romania?

So Romania represents or presents a compelling investment opportunity. I think this still stands even though the world has a little bit changed, a little bit a lot, to be honest, since the last 4, 5 years -- actually in the last 2, 3 years. Nevertheless, if you look at the country's GDP, according to the OECD Economic Outlook, the forecast was for this year, I think, 1.5% in '25 and for the '26 is 2.4%, reflecting more than a stable but improving, let's say, macroeconomic environment. If you look at other countries in Europe, they are definitely not that stable in terms of GDP growth. You look at France, you look at Germany, you look at Italy, I mean, you can look around, it's quite a very unstable situation. So I think this is one point which I have foreseen at that time already. Of course, the growth was much higher. While Romania capital market remains relatively modest and currently representing only approximately 20% of the GDP, which is very well below the global and European average, it still holds a significant potential for expenses -- for expansion, sorry. And I mean, we are proud as One United Properties to be listed on the Bucharest Stock Exchange market. And we believe that the market is poised for growth. That needs a little bit of effort as well because for foreigner investors, it is not so easy to access the capital market in Romania. It's still, let's say, complicated. And this definitely needs to change because it doesn't make any sense. And I think if that's going to happen, then we will see even very exciting moments on the capital market in Romania. I mean, among some attractive sectors is real estate for sure, which stands out of the several key drivers. I mean, especially the high homeownership rates compared to the other European countries. I mean this is something which really -- it's unbeatable. When I speak with other countries and investors and whatever -- partners and so on saying that 90% of Romanians owns real estate, I don't see where you find this, again. So that's something which is really telling you something. I mean the economic fundamental positively influenced by the residential and commercial segments are definitely something also which is helping the GDP to grow as well, not to underestimate. And compared to other markets I'm active, Romania offers a unique combination of affordability and high growth potential, as I said before already. I believe that One United Property is optimally, okay, positioned to profit from this potential, and that helps us to be confident in terms of the forthcoming years.

Thank you very much. Back to the Board. So you mentioned about joining in 2021. How did the Board evolve? We had some changes in the Board. I think, we have 4 years on the Bucharest Stock Exchange under our belt. What do you see as the Board's main priorities right now to ensure the governments keep up pace with the growth of the company while also protecting shareholders' interest?

Yes. I mean, since the IPO in 2021, we made a lot of steps. Also, we brought more international experience body into the Board, which, of course, helps in terms of the credibility also for outside investors of Romania, but also for Romanians. I mean the Board has very clear tasks and goals, which we need to make sure that we have a rigorous oversight and mechanism and align our practice with the global minimum standards. So ensuring the governance keeps pace with the company's rapid growth. I mean, the company is growing very rapidly, and we just need to make sure that we maintain the transparency and the protecting shareholders' interest. As you have heard before from Victor Capitanu, shareholder value, it's absolutely the top topic for us to make sure that we have everything in line and done by the best effort to protect capital -- that we do capital protection for our shareholders. We have also focused on ESG standards. Even though, I mean, this ESG, it's a little bit floating -- or let's say, a moving target because if you were hearing ESG in the past years, ESG there, ESG this, ESG the other, World Economic Forum in Davos was all about ESG, ESG, ESG. Today, they even don't name any more ESG because somehow they disappeared. Nevertheless, I think there are some certain elements in the ESG, which is very important. And on this, we are focusing. If we would do too much ESG, we would overwhelm our company in a way that we will have probably the best ESG, but not productive and profitable business. So that's why we try to maneuver it very diligently. And at the end, I mean, for the Board of Directors, so we are 5 independent Board members and 2 executives. At the end, it's all about creating shareholder value and ensuring reliable governance structures because -- I mean, also that I need to say, the 2 gentlemen, the co-founders and the co-CEOs, they are not like I have seen in the past. I'm 41 years in the business as an entrepreneur by myself. And some of, let's say, entrepreneurs which build the business, and then they are coming some, others in, which are telling what to do. Not everyone can manage this well. In that regard, I have to make a very big compliment to Andrei and Victor. They are doing it fantastic, okay? You can imagine we have, of course, also quite intensive discussions, but that's good, keeps us young, no face lifting. So everything in order. And it's needed to get at the end to the best decision, which is for the company and the shareholders.

Thank you. And now we move to the, let's say, main point on the agenda. I expect most of the questions today, and I already saw on the chat, are about the public tender offer announcement that we made. We convened the General Meeting of Shareholders for October to approve a PTO of up to RON 884 million, approximately EUR 175 million, to buyback and subsequently cancel up to 20% of our shares. This, by far, made big waves in the media because it's one of the largest buybacks ever announced and by far, the largest ever announced by an entrepreneurial company. So could you give us a little bit color on what's the Board's strategic reasoning behind this decision? Is it mainly about valuation or about governance, signaling confidence to the market? And also, how do you respond to concerns that were voiced that such a large buyback would also be a step towards delisting the company from the Bucharest Stock Exchange?

Yes. I mean, look, what we are doing here is might be maybe new for the Romanian market, but for, let's say, very developed capital markets, this is just normal, okay? So indeed, RON 884 million is definitely the largest Romanian history -- I mean, deal history, PTO deal, among -- and especially among an entrepreneurial company. I mean, since our listing, One United Properties has made a significant use of the capital market tools, which is, by the way, a good -- which is, by the way, for that is it here, okay? And securing financing as well, accelerating our growth, expanding our investor base, I mean, these are all needed instruments, which helps you to grow the company in the best possible way. And also, we established a long-term partnership. So with the PTO program, we are once again employing another instrument, which the market -- the capital market and the FSA and the regulators and so on are giving us for deliver future value to our shareholders. At the end, again, as you have heard before, shareholder value stays in front of everything. This initiative is not a retreat from the stock exchange, just to make it clear, it's rather an opportunity to make full use of the mechanism which we have and the options for the equity base. While reaffirming our strong commitment to remain a transparent forward-looking and dynamic public listed company, I think this is something -- even though the announcement was that we would aim until up to 20% of the shares, I mean, at least you need to have some goals. Let's see what will happen and in which way it will happen, time will tell. And I mean, what is the rationale behind of it. These kind of instruments you basically use because of different elements. One of them is the valuation. We do not only believe the market undervalues the company in [ intrinsic ] growth. I mean, the valuation really looks something that it's -- when we discussed in the Board, the share price was much more lower as well. We discussed it, and we said we need to do something to reinforce the different elements in terms of also, as you mentioned before, signaling something to the market. So I mean, at the end, it's -- the buyback is a signal of our confidence in our long-term strategy, the believing of our company in the segment where we are, in the way how we do business, -- of course, you can do always better. That's no doubt, everywhere. But this is basically where -- some of the points we focus. With the governance, we're reducing the float and optimize the company capital structure and improve again, long-term shareholder value, return of equity, it's one of the point -- fair market value is one of the point. And if you see that you do quarter-by-quarter, excellent results, but your share price is not compensating it, okay, you need to do something, okay? You really need to do something when you're trading 2.8x below the net asset value or at least the fair market value, okay, then I mean, something has to be done. It is also unfair in some way. But also, it's a signal to our investors, okay? Because naturally, one of the key motivations behind this PTO is also a clear signal to our actual investors, but also for our future investors. So let's see where the journey goes. Last but not least, I mean, our financial strength, it's a strong financial performance, which we have, for the big wheel which we are turning. I mean, I'm just living -- just opposite of this building, and when I'm looking out of the building, I see only cranes and their cranes are all from One United Properties, not the cranes, but the work for the cranes. Having 20,000-plus people working every day on the ground to develop these projects, I mean, this is a big contribution, also a social contribution to the country, to the city, which is not adhered as much as we would wish. But at the end, we are following our pattern. We will not let us destruct by no meaning. And the PTO is definitely one of those elements, which we strengthened -- or strengthening our position. And we just want to nail down those points, which I just mentioned before. I'm sure there will be a lot of questions more about the PTO, which I think -- also I hope that everybody respects that I cannot make too much comments on this. I do not want to enter in any situation of influencing market prices and getting against the law. So therefore, I mean, I can -- maybe if there are questions, I will try to answer whatever that are. But nevertheless, we need to be very careful on how we are saying. And by the way, we are working, of course, for the PTO. There are clear rules, governance. FSA is involved. We involved them very fast, very early in the discussion. So we do not want to make any mistakes. And I mean, we are looking forward now for our next steps on the PTO.

The next step, 15th of October, General Meeting of Shareholders. We invite our shareholders already in advance to this event. You mentioned about the pipeline under construction. So we're talking about EUR 1.5 billion that in the current moment is being developed by One United Properties across the residential and commercial segments. And actually, this brings me to a question that I already saw on the chat for you and also a very important one. So ONE has a very diverse pipeline, again, residential, commercial, hospitality segment. So how does the Board decide the capital allocation between reinvesting into developments, distributing dividends, doing buybacks, PTOs? How do you balance this big buyback with the need to fund acquisitions and developments in the pipeline?

That's a very good question. By the way, all the questions are good. But I mean, it is a very dedicated balance. But -- I have to say but, I mean, we have, with the co-founders and the co-CEOs, 2 unbelievable super profits, okay, experts. They know the best, okay? In the Board, we do not interfere too much in terms of decision, is this project now a project which is worth or not worth to do, because these 2 gentlemen are covering all the interest of the shareholders because, of course, they are also big shareholders, remained big shareholders. And I mean, we, of course, discuss. We are informed by the CEO updates, what is going on and so on. But the allocation of the capital or, let's say, cash allocation in projects and so on, we completely rely on our co-founders and co-CEOs. They proved over the last -- I don't know, 10, 12 years, whatever is the -- how long is it? 20 years, maybe, yes? Well, since long time, they proved their capability. And so again, it is the allocation, as I said before, is a delicate balance. We have a very good CFO, Cosmin, which is doing a fantastic job. By the way, not only him, all the team, the management team is doing an amazing job. Otherwise, you cannot produce these results. So -- but for our investors, it's our responsibility to maximize the shareholder returns, which you heard before by Victor. And in the light of this, I mean, there are certain capital allocation, which are based on certain KPIs, which are chosen then with a lot of other factors. And I mean, we in the Board, we concentrate ourselves in terms of the boring governance, which nobody likes so much, but it's needed. We are looking very carefully, of course, on the share price. The dividend policy is also something which the Board always has a very clear focus on it. You heard before, we are a growing company, not a dividend company. I think at the end, it's a mixture between all of these 3 elements to take the best out of it. And also here, I mean, we do not need to invent the wheel new. There are many, many thousands of companies which are affected by those kind of, let's say, discussions. But at the end, we have a broad range of financing options, and we ensure that we leverage the most suitable instrument for delivering the optimal value for our shareholders. So that's basically what we are doing.

So before I go to the last question, we have 2 questions on the chat that I would like to pass to you. So the first one is, how would you argue this intention to buy back 20% of the share capital, considering that the development margin, that ONE targets, is 35%? So does it mean that the return on the buyback of the shares has a better return than the development margin of 35%?

The good news is both of them have a very good return. So that's why we try to take both of them to have the better return. I mean, this is not a correlation between the 2 numbers, okay? It is a fair point to point out these 2 numbers, but it's not a correlation. Again, the correlation is only one that we believe we see -- we believe and we know that the company is producing profitable business, okay? And therefore, we aim that if the capital market doesn't adhere these values, then we do it by ourselves. At the end, I mean, it's a contribution to all our investors, which are today, into the company because reducing the shares from the market means a higher value from them as well.

Exactly. I think this is an important message that one doesn't forbid basically the other. So the company can do both the buyback and development. So these are not selected. One more question. So last year, you raised EUR 70 million through the capital increase, indicating the need for expansion. So how should investors interpret the current buyback that could reach up to several tens of millions of euros? Do you no longer need the money?

We always need money. We always need money. I mean, look, the situation is a different one. And maybe -- yes, so the situation is a different one. When you're building projects, it's not that you start today, and you finish tomorrow. I mean, usually, it's a 2-, 3-year journey, okay? You are faced with certain elements, which are not seen in a business plan. Might be a shortage of, let's say, whatever -- of products, might be related to certain, let's say, development, unexpected involvement, might be on permitting, might be on many factors, okay? So that's why this business, it's like -- and that's why I was pointing before Andrei and Victor or Victor and Andrei, that they are real experts, but they also can only work with the expectation which you can expect. At the end, to your -- to the question, so we also allocate our balance sheet in a way that we don't show the full turnover when we sell the project. This comes over the time. The closer it goes to the delivery, the higher it is, okay? So if you see the incoming cash out of the sold products, which is incoming in the next, I don't know -- 2 years, something like -- please, correct me, EUR 300 million or EUR 400 million, I mean, EUR 400 million, right, not RON, not Chinese renminbi, euros, okay, are coming in. We need to do something with that, okay? So what is best to do with that? To that, it means that we invest in our company and in projects. We also said to ourselves because the world is changing quite fast, we don't want to put more project in our mouth than we can bite, okay? We want to be prudent, but this is also an act which is a little bit difficult. It's like you say to somebody, drive slowly, I'm in the hurry. It doesn't work, okay? But this is exactly the magic behind of it. And there, we try to balance. Therefore, I mean, the commitment into the company, into the share buyback, into the PTO and with EUR 400 million coming in and managing our future projects, which you will hear then later today. When you have the interview with both of them, they will, for sure, give you a little bit more insights, and you'll get a better feeling. So yes, we need the money, and we allocate the money in the best way -- in the best possible way. I hope I answered the question.

I think you did. Thank you very much, Claudio. I have one last question. So I have a privilege of meeting the Board every quarter, delivering updates on our shareholding capital markets evolution. We analyzed the shareholding of the company. And I wanted to ask you, how would you like to see the shareholding of One United Properties in 5 years, more institutional, more retail investors, more foreign investor? What's your perfect mix?

So I basically stopped to think in 5-year terms, to be very honest, because all the time when I was putting the 5 years, I was disappointed already in the first year somehow. Nevertheless, I mean, look, as I said, in general, the Romanian capital market remain underrepresented. This is a fact. And I mean, the coverage afforded by the international investors will be very welcomed. We will -- we have a lot -- I mean, especially, Victor, myself, you, we have a lot of discussion with foreign investors and potential investors. They are looking at the Romanian side quite -- sometimes a little bit unbalanced, okay? But the liquidity, the liquidity is the most important. Unliquid markets are not a good selling point. And this, again, doesn't help no company in Romania in terms of attracting more international investors. Okay, we will not rest on doing that. We will keep going on. I would not give you any expectation in terms of I would like to have more rather retail investors or institutional investors in percentage and so on. I'm for sure not doing this. I have something in my mind, but it stays in my mind. So at the end, I mean, the right balance is one thing. I mean we also have long-term investors, which committed to the company in good times. And when I'm saying in bad times, I mean in bad times in terms of the share price, okay? They are here and you see some of them also in this room, including the co-founders, myself and others because at the end, it's a journey. And it's a long-term looking journey, and we focus more on that. And at the end, I think everyone is invited being retailer or an institutional investor to join our journey. And maybe one point which we forgot before -- or me, I forgot is, you have seen in the communication that the PTO, which we are doing, it might be a question as well, which was raised up. If not, I will do it right now. So the Board of Directors, including the co-founders, myself and my colleagues, we do not participate in the PTO program. So -- because I mean -- that's a very important message as well. We do not have any intention to cash out or such of things. We were committed, we are committed, and we remain committed.

And I think that's the perfect last message for our session. Thank you very much, Claudio. Thank you for coming for the first time to our Capital Markets Day and doing this Q&A session with me. I invite you to, of course, stay for the remainder of the conference. And now I would like to invite Beatrice Dumitrascu. We're going to start.

Thank you, Zuzanna. So for sure, I will stay. And sorry that I -- for one time, I was the one which screwed up the timing. Normally, I'm the timing pope, but now I was the other one.

It was worth it. So don't be sorry.

Thank you so much.

Thank you very much. Beatrice, the CEO of Residential Division.

Hello, everyone. Okay. So welcome to Capital Markets Day. Today, I'll walk you through our Residential business. I will invite you to know more about the strategy, our early performance -- latest performance, about the market fundamentals and as well about our pipeline and outlook. What is important to know, first of all, is that our goal is to show you, more than numbers, we would like to show you the long-term value that we can have, the potential of growth because, One, it's continuing to shape the landscape of this city. Let me start with the strategy. So what you see here is that ONE is continuing to consolidate its premium leadership. We have scaling large and accessible master plan, which is successful. And we have proven over the years that we have pricing power and a great absorption of our product on the market. We also have to share with you that technology is something that is going to lead us further with great opportunities, and we intend that in the next 12 to 24 months to have predictive sales velocity, to have pricing guidance that will lead us and will be translated in higher conversion and lower cost on acquisition -- lower customer acquisition cost, which is very much important. The digital customer journey, we know that it is very important for our clients, and we know that we attract a lot of clients just because we do deliveries that the clients are recommending us because as you can see at any launch of our developments, we do sell a lot in the first month. So we'll have, after this digital journey improved, more handovers done faster and as well a better NPS, which means a Net Promoter Score. The Net Promoter Score brings us, all the time, new clients because if you are recommended by your clients that bought from you, usually you gain more audience. We stay committed to quality, innovation, sustainable living because they are our keys to brand -- as the brand differentiators. We have to mention that technology is not the only strategy that we have. It's not only the most important thing that has to happen to us. Also, the community and our partnerships are very valuable. We have alliances with leading brands, enhancing lifestyle. We do take care of our One Community that we are step-by-step raising and nurturing with events that are done for them because we know for sure that this is translated to the long-term value and brand equity, of course. Our performance -- our latest performance reflects that we have a great strategy, reflects the fact that we are resilient. And also, you can see that we have sold 301 residential units, 332 parking units. So we have generated EUR 95.4 million in sales -- pre-sales and sales in the first half of this year. This shows us that we have the ability to maintain a solid pace of transaction even in a more selective market environment. We have a pricing power that we have discussed earlier, because it is strong. We have 20% year-on-year increase on the price per square meter. And this shows us that we have attractiveness on ONE development because we do both combining premium positioning and accessible master plans. Deliveries are reinforced. We have a strong position on the market. Our customer trusts our brand. We have seen that before. And you've seen as well that everything that it's launched, it's very attractive to the market, even though the prices increased with 20% per square meter, as I've said earlier. Again, we have to underline that we have a robust sales velocity. You have seen that we have 79% of our stock already sold, which means that, what was mentioned by Claudio earlier in exact figures, you can see here that we have EUR 364.4 million contracted inflows secured until 2027, and out of which EUR 71 million were already collected in H1. The company enjoys a very -- a very high cash velocity and visibility and financial predictability, which is -- there are 2 of the most important things for us. Behind the results, we see a strong market -- we have strong market fundamentals. You can see that in Bucharest, we have a structured housing deficit. 70% to 80% from the housing stock was built before the '90s, which means that we have a major replacement cycle towards modern energy-efficient communities. We also know that we have the highest homeownership rate in the EU, 96%. This means that we are both supporting trading up and replacement demand. Also, what we know is that we are stable on the affordability for mortgages with fixed rates of 5% to 6% in 2025, and you see that led to a growth of 24% year-on-year in the first half of 2025. So this is the conclusion. We have active market debt. Prices among Europe, in Bucharest are in top 3 as being affordable. You can see that our price per square meter, it's around EUR 1,757. And other major capitals in Europe are -- like Paris, EUR 9,500; London over EUR 10,000; Luxembourg over EUR 11,000. The market depth is there. In Bucharest and Ilfov, there were 25,700 units sold, but only 35% we have on national transactions in the country. Our growth runway, it's strong. You can see that we have under construction 3,884 residential units with a GDV of EUR 1.44 billion. We add to that our landbank, which is GDV EUR 2.2 billion. This is adding more than 9,000 residential units to be built in the future. Our next milestone because we do have ONE is to surpassing 1 million square meter deliveries within the next 12 months. We also know that we have the opportunity of a massive share gain. Why? Because we know that in our city and Ilfov as well, it's only 25,700 units sold, as I've said earlier. Again, we have a very balanced portfolio with both premium projects and large accessible master plans. We know that technology is something that is going to bring us higher conversion, faster velocity and lower cost on acquisition -- lower customer acquisition costs. The outlook is there. We know definitely that we have a structural demand, a scalable pipeline, which means that we can sustain a growth visibility over the next 10 to 15 years. So to conclude, what we know today is that One United Properties is combining a scalable pipeline with strong market fundamentals, with a strong commitment to technology, to innovation and good quality. We stay strong, and we strongly believe that the market is going to be focused on growing, and we have the well positioned to get more market share while we are going to strengthen our premium position. Thank you.

Thank you very much, Beatrice. Please join me on the couch. I have several questions for you. I also see our investors have questions for you. We have actually 11 minutes, so we'll be straight to the point. First question. You mentioned uptake in price per square meter in the first half of 2025 versus last year, 20%, which is very significant. Could you give us a little bit of explanation why do we see such a big increase in the sales price versus last year? Is it about the demand? Is it about the supply? Is it about the offering that you and your team are managing right now?

You gave the response already. It's about the demand. It's about that we have lack of stock on the market, and it's also about the product. Because if you have a good product, if you have all the benefits and all the attributes that I mentioned before, saying that we have great location, we do have a great mixture, we do address to different types of segment of market, this makes you have a good product that it's all the time on the market, clients are willing to buy from you. So there are a lot of things that are completing this increase of the price because it's due to the fact that we do not have a lot of offer on the market. And as well, we have a great product.

So what is also very interesting, and we've seen this -- investors are asking us. So in the last financial report for the first half of 2025, as of June 30, 79% of what you had to sell has already been sold. This is the highest pre-sales level we've ever accomplished at One United Properties, which is impressive. But it also brings a question, now you have 1,250 units available for sale. Actually, you did. Now you have less. So you did as of June 30. Is it enough? Do you have plans to bring new developments to the market this year?

We do have plans to bring new developments on the market in the next 6 to 12 months, like One City Club and One Cotroceni Towers. I know that everybody is talking about ROCAR, which is One City District, but it's going to be on 2027, as I said before. We are paying a lot of attention to our stock because we cannot give all we have on the market. We do have a pipeline, which is huge. We do have the stock which can be placed on the market very soon, but we don't need that. We have to have a customer which is dedicated to buying what we are offering. And even though the market is not very high, we have a very good market, and we've seen, in all the reports, not only ours, that we don't have a huge price on the market, in none of the segments. What we know is that we have to pay attention to our portfolio. Right now, we have a bit over 1,000 residential units under construction and about 50 units which are finalized. But we have to pay attention because construction has its cycle. You've seen that it takes 2 to 3 years, maybe more, to build a development. And you have to put a lot of energy, a lot of money there, and you have to be concentrated on delivering good product. So we are coming up next, but it's according to our strategy. All these decisions are according to our strategy.

One of the questions I also saw come up on the chat is VAT increase. So by far, 2025 is the year of fiscal changes, that our investors actually would like to know if they also affected you. So for those of you who may not know, the VAT in Romania increased from 1st of August from 19% to 21%. That also covers development. And the question is, one, did you see impact on sales, a slowdown of sales starting August 1? And two, what was your strategy in terms of pricing with the VAT increase? Did ONE absorb those 2%? Or did you pass those to the clients?

We've been here before. It was the 5% to 9%. The only thing that happened at that point, like now, it was that it was a little bit of delay on decision for the client. So we are selling the same, but the only thing is that it takes a little bit more time for the client. We do pass it to the client. Of course, we didn't do something like decreasing our pricing. We do have our strategy that we have promised to our investors, and we are not changing that. But the only thing that is changing to us because I've seen this all these years because fiscal changes every -- all the time happens, this was one of the most important. But what we see is that the clients are coming back to us, they are just delaying their decision. So nothing changed in terms of this thing because we had a hard year during -- we had the elections and this was tough, also the financial changes. But the only change that we've seen is a delay on the decision. That was all.

A question from our chat. Could you provide a breakdown of the buyer profile for One United Properties' residential development, specifically the proportion of end users purchasing single unit versus investors acquiring multiple apartments?

What you have to know, first of all, is that there are investors that are buying 1 unit as well. So those ones can be investors as well. The fact is that because we are proud to say that we have a very good product on the market, and we -- you can see that we are reshaping the landscape in residential in Bucharest, we do not have as many investors as people think. For example, right now, I can say that we have clients that are buying only 1 unit as an investment or 2 units as an investment. But of course, we did have clients that bought 30 units, but they are very rare. So it's not passing, I don't know, a few percent.

Thank you. And I remember when I joined One United Properties after the IPO, it was -- the concept of 30% plus 70% payment option that was introduced together with entering the medium to upper segment. So for those of you who don't know, until 2021, ONE was selling units with full prepayment. As of 2021, the launch of One Cotroceni Park, the company introduced 30% prepayment at the signing and 70% upon the delivery. Could you detail estimate what percentage in the last 4 years for the delivered development, such as One Cotroceni Park, what percent of clients actually contracted mortgages?

We have a premium brand. So what you have to know is that we were having 5 equal installments up, we were finalizing the developments or concentrating them until it was delivered -- the product. You will be surprised, but we don't have more than 10%. Because the product, it's good and people are trying to put their money somewhere to be sure that they are gaining a lot of money in the end, of course, because it's safe to do investment in residential. So most of the people are buying in cash. So you will see that we have a lot of people buying in cash and as well in the future, we know that what we predicted is not going to raise a lot.

The premium affordable. So that was the big announcement of our last year's April 2024 Capital Markets Day, which you mentioned, the former ROCAR, One City District. It will host 3,000 residential units. And I want to ask you, this will be our closing question, how will this development differ from what ONE has been doing from -- firstly, from what ONE has been doing in other developments, but also what other developers have been doing in Bucharest because it is, after all, for you, for your sales team, it's a novelty, this premium affordable segment? How do you want to address the clients? How do you want to differentiate the product on the market? But also, how do you want to keep the premium perception that ONE as continuing to be active in the luxury segment?

So first of all, ONE is a premium brand. So it doesn't matter where do you locate your future development, you deliver premium for that segment. The difference is, they will be seen because where we go, we create communities with schools, kindergartens and other facilities, with commercial spaces that are very much needed because you do need a 15-minute city, so you can do whatever you need in that area. And what is important also to know is that -- I don't know -- 13 years ago, I do remember that the difference between other block of flats, even though there were 1 or 2 of One's, there were the windows, which were larger. There were the facades, which were ventilated. There were the balconies that were in glass and so on. So we are trendsetter everywhere we go. So I'm definitely sure that we will set up a new trend where we are going to go to accessible segment.

I can't wait. I will not ask you about the pipeline because you already announced it. I think we have some great news there coming to -- great developments coming to our investors to the market. Thank you very much, Beatrice.

Thank you.

Thank you for this chat. I will now invite Mihai Paduroiu, CEO of the Office Division, our second core segment, to deliver his presentation.

Hello, everybody. So hello, everybody. Again, thank you for taking the time and being here with us. I will be very fast going through just a few slides in order to allow more room for questions and for the interactive and engaging discussion with Zuzanna. So just a few key developments from the office and commercial portfolio within One United Properties. I will start with the current strategy, which is very straightforward. We are today in a very fortunate position being able to focus on consolidating the existing collection of occupiers. We have today over 200 mainly multinational corporate players within our office portfolio. So main focus, consolidation. Then, of course, expansion. We are very carefully and strategically looking at new locations as demand post-COVID stabilizes in Bucharest. Part of this strategy, we are also exploring further build-to-suit developments similar to the one we are currently building for Infineon. And also looking at regional cities. Romania is very fastly developing also outside of Bucharest. This creates opportunities for secondary office hubs to develop around the main economical centers in the country, places like Constanta, Sibiu, Cluj, Iasi, Timisoara, we've seen tremendous growth in the past years as well. So that's always on our radar, exploring opportunities for office development. And of course, something that Victor also mentioned, we are looking again very strategically and carefully at asset divestment in order to recycle the equity and always make sure that we deliver very good margins for our shareholders and investors. A few key developments. So number one: today, the entire office and commercial portfolio is virtually fully leased. I use the word virtually because there's always some movement in terms of tenancy and footprint. That means that there's always a company that is growing, maybe someone else is contracting. So there's always something like 500 square meters here and there that is being passed on from one occupier to the other. It's like a living organism, having such a large community of occupiers. But today, after 5 years, we are virtually fully leased. Another very important aspect, which is sometimes quite difficult to underline in our financial reports or just in our overall communication, but is a critical element is the weighted average lease duration. So every lease agreement obviously has a duration. This duration is directly linked to the performance of the asset. Obviously, the longer the duration is, the more valuable the asset becomes. We are very fortunate to have an above-market weighted average lease duration across the entire portfolio. This is essential for shareholder value because, as I said, the lease duration is in direct relation with the valuations of each asset and, of course, the entire portfolio. Going forward, we will be launching soon the One Community app. We have always targeted the value creation within the ecosystem of our portfolio. So bringing together the office occupiers, of course, the residential function and also the retail and the amenities, which have proven, especially in the past years, to be one of our strong points, to be one of our major attraction and retention factors for our occupiers. And the One Community app will continue to support this ecosystem, will provide the residents and the talent of our occupiers with a broad range of benefits, direct communication and many other things. So we will follow up with more on that as we get closer to the launch date. We are in asset management, looking at -- always looking at cost optimization, of course. But also, we are exploring ways to deploy AI in order to obviously make everything more efficient and cost effective. As you will see in the last point that I touched upon here, operational expense has become a major factor in terms of the decision-making process of each occupier. So basically, that means that an asset is preferred if it can provide lower operational costs for the occupier. That means service charge, utilities and so on. Luckily, with our in-house innovation, design and technical specifications, we are able to provide a very competitive OpEx level for our occupiers, even with all the developments in the past years, which have pushed all the costs up. So this is, again, one of the strong points of our portfolio, especially going forward. As the assets in the market become older and older, the new assets with sustainable and innovative technical specs will become more and more valuable. In terms of results, end of the first half of the year, we've seen a sustained level of new relocations attracted into the portfolio. Maybe the most important was the relocation of NN. After almost 20 years, they left their location in Opera Center and chose One Cotroceni as their new home. This is very important as NN is one of the most complex organizations when it comes to the workplace and the way they treat the fit-out and everything which is related to their office. So this was a great deal for us and also for them, of course. Another important aspect, which is, again, maybe sometimes overlooked, we are continuously involved in a prolongation process with all of our occupiers. Basically, that means that every year, we proactively approach the occupier community within our portfolio in order to make sure: number one, all their needs are met always; and number two, that they intend and that they have a clear strategy to stay in the portfolio. And this allows us to convert a lot of prolongations, ensuring what I was mentioning earlier, the weighted average lease duration, which then creates more value for the assets and the portfolio. In terms of cost, as Victor said, we ran a substantial cost reduction program also within the portfolio. We were able to achieve substantial administration cost reduction, which again drives our margin to a higher level. Collection is also a very important item. Sometimes when, let's say, the macroeconomical outlook isn't great, collection immediately is adjusted. So we see that with competitors. And in general, luckily, collection for us has been great even during the past years, which we saw different types of macroeconomical challenges. This is very important for the cash flow of the company. And also, we are continuously driving community efforts. The One Community app is a great example of that. Our community team is constantly working to create engaging events for the talent of the occupiers. This is, if you would like, a soft factor, but for the occupiers, it is very important. So that really creates a very strong relationship between us and them. And it also creates certain habits for the talent, which then become very difficult to change in a positive way. So if someone then gets a suggestion to relocate, they will obviously not be in favor of that. So again, it supports our efforts to keep our occupiers in the portfolio. In terms of pipeline, we are now focused on identifying the right opportunities for the future phases in One Cotroceni. Also in the north, as infrastructure develops, office development is very, very linked to the public infrastructure. So the new metro line in the North of Bucharest will definitely play a major role also when it comes to our office strategy. It's very important to underline the fact that in terms of office -- new office development, we are taking a very cautious approach, meaning that we are not going to start any opportunistic or any speculative developments. We are only going to start developments based purely on pre-leases, very similar to what we did with Infineon. This will ensure that we can have immediate access to bank financing and basically have a very long financial overview over the entire performance of the construction and then the asset as it becomes income generating. As I mentioned, we are looking at secondary cities as well. And also something very important, which I always like to emphasize is the fact that we -- everything that we develop and that we design today, incorporates cutting-edge innovations, which really make a big difference. I know it's sometimes difficult to see this in the financials or to really understand how it works, but this is why we are here. For example, incorporating technologies like geoexchange and the Infineon Building is a great example of that, really sets us apart and really creates a unique competitive advantage for us as a designer and developer of ultra-prime office buildings, which we see now that, that is the future. So looking at core markets, which I always like to follow, in Western Europe or even in the U.S., you will notice that while the demand profile has shifted dramatically, the deals that are getting done, the buildings that are being sold or built today are highly innovative buildings in great locations. So this is what we are also focusing on. And as I said, we strongly believe this is the way to go in the future.

Thank you very much, Mihai. I'll invite you now to join me. I think you delivered a very good presentation because I have a lot of questions for you, also from our audience. So -- but I'll start with -- I would like to make the arch, the parallel to our 2024 Capital Markets Day when you also held the presentation. And back then you flagged low supply being the main driver of the pricing in the commercial segment. Has this played out? How is the demand today? And how do you see it going forward? Because there is not many office buildings being built today in Bucharest. Does it actually make sense to build new office buildings in Bucharest today?

So that's a great point to touch upon and to start our discussion. First of all, yes, supply is an all-time -- is at an all-time low in Bucharest today, and it will continue to be so for the next 3 to 5 years. This, of course, has a tremendous consequence for us as an office landlord with standing assets, with a great new portfolio, sustainable, fully-let, because obviously, the market is shifting towards the landlord side. So it creates an advantage for all the existing portfolios, including ours, especially with all the competitive advantages that we have that I mentioned also earlier. This also creates pressure on the rents to increase, which again is a great factor that allows us also to increase the income, not only based on indexation, which is there anyway, but also based on the lack of product on the market. And we have done so in the past 2 years. If you look at the headline rent evolution of our portfolio, it has been growing substantially. And also, this creates room for opportunities for new development. So definitely, as a conclusion, the market is shifting towards a landlord market. So that creates for us as well a very comfortable position.

How do Bucharest yields compare to other Central and Eastern European markets like Warsaw or Prague. And you mentioned divestments. So is Bucharest attractive market for investors in office assets?

That's one of my favorite discussion points because I attend a lot of conferences also in the region, Prague, Warsaw, Vienna, and we are always making a positive case for Bucharest, especially for Romania in general. And the yield spread is one of the best examples, and you see other developers like CTP in Industrial or Globalworth taking a big advantage because of this with their pan-European portfolios. Basically, what this means is the fact that Bucharest is the largest capital in the CEE. It has the highest potential to grow. It has the lowest taxation, lowest average real estate price, lowest fit-out cost per square meter. So it has many, many advantages, cultural advantages as well, talent pool and so on. It's a very, very long list. But at the same time, it has the lowest new and, let's say, A class square meters of office per capita. And at the same time, it has the highest yield. So this yield, if you look at the fundamentals, doesn't really make sense except for the country risk. But the spread is too high. If you -- let's say, the yields today in Bucharest are between 6% and 7% because some might argue, but let's say, it's 6% to 7%, Warsaw is 5% to 6%, and Prague is even below 5% to 6%. While their talent pool is lower, the market is 3x more developed in terms of square meters. So competition is very, very high, and we've seen this in Warsaw, especially many times, that a fund goes in, they buy a building and the occupier in 2 years goes next door. And then the asset manager in New York is like, "Okay, so what do we do now?" And this never happened in Bucharest, which again is another argument for the investors to come here. So it's just a matter of time. This is the message until this yield spread contract. And Bucharest will be on the same level as Warsaw, Prague, Budapest and the other CEE capitals. So this creates a huge opportunity for the investors to basically place capital in a collection of assets, which are great performing, but will also have a valuation uptick once the yield compresses. So only from the yield compression, you stand to have a substantial potential future growth in value of our portfolio, and I'm a very strong believer in that. And this also attracts more and more institutional investors. To answer to the second part of the question, we believe that if a deal makes sense in terms of profitability in order to recycle the equity, we are looking at divesting some of the assets in our income-generating portfolio.

Thank you. This was one of important questions. Another one, you talked about build-to-suit deals. So last year, we had a big announcement about Infineon. You talked in detail at our Capital Markets Day. Does this mean that ONE will no longer do speculative developments, meaning starting development of an office asset without having at least, let's say, at minimum 50%?

To be honest, definitely, our strategy today is to avoid that, unless it's a very small asset and then it makes sense. But otherwise, no. We are only looking at developing based on pre-leases because that immediately allows us to access bank financing and then everything is very straightforward and very visible for the entire cycle of development and the lease cycle. Office development is profitable and is very, very stable and very easy to model and forecast for a very long term. This is the, let's say, the beauty of commercial and office development. You are looking at long periods of time after development with just asset management effort and a very predictable income. So because the initial cost is very high, you are fully reliant on bank financing. So therefore, you need a solid leasing base when you start. Otherwise, it can make sense, but it's a bit more risky and a lot more stressful. So I believe, going forward, this is our strategy, yes.

You mentioned in your slides today, secondary cities like Sibiu and Constanta as places for potential expansion also for the office division. How deep is the demand for prime office development in those markets?

So you are Polish, right?

Yes.

So we always believe in the Polish model in terms of infrastructure development, also commercial office development. I think it's one of the great examples in the past 10 years across the entire European Union. And also the geography helps, but you will see in Poland that there is a collection of 10 regional cities. You have Tri-City and then you have even other 7 cities, which have developed as regional office hubs. And this has a great, great contribution towards the entire national economy. And we've seen this in Romania as well with places like Timisoara, Cluj and Iasi. But also, we strongly believe that in the next years, following the development of the country and following what happened in Poland, especially, other secondary cities will develop. I can tell you from our conversations with occupiers that there is always this question that comes up, like: "This is great, but we need something in Brasov. Do you have anything?" or "This is very nice" or "We need something in Sibiu" or even in the more developed areas, like Cluj. Cluj, today, again, has a very, very low modern office supply. There isn't almost anything substantial under construction in terms of office. So that's -- also is the second largest market in Bucharest for office in Romania. So I think the country will offer also a lot of opportunities. Of course, these will be smaller tickets, maybe 10,000 square meters, but this also creates a lower-risk profile. So I believe a lot in Constanta as well. So I think with the evolution of the port and the new highway network and the overall geo situation -- geopolitical, Constanta will develop a lot, and it has almost 0 modern office. So that will create very good opportunities for us.

Thank you. Two questions about the numbers. So what is the occupancy rate for the properties under management for the commercial division?

So as I said, we are virtually at 100%. Of course, there is always -- like 500 square meters that comes up and is taken over by someone that is growing or something like this because having such a large portfolio, as I said, is like a living organism. There's always something going on in terms of occupier footprint. So someone is contracting, someone is growing, someone is buying someone else and this creates -- someone is consolidating and so on. But we are virtually at 100%.

What is the weighted average duration of the office and commercial portfolio? And what is the market benchmark?

So I can tell you that, for example, One Tower, the weighted average lease duration is close to 7 years, which is one of the highest levels in the market. Usually with an asset collection, which is substantial, so over, let's say, 100,000 square meters of gross leasable office area, the average is around 4 years. So in One Tower, we are at 7. In Cotroceni, which is more than half of the portfolio, we are at 6 years. Again, this is something very, very important and that I believe we should underline this more because this shows you the stability of the income profile for the long term.

And the last question, I think we already heard the answer. But what is, in your view, the most important deal of your division so far in 2025?

So as I said, for the first half is definitely the relocation of NN to Cotroceni, and the prolongation of Superbet, which is one of our anchors, also in Cotroceni. We also prolonged Sanador here, one of the anchors in One Tower. So that's notable as well. But in -- because always September comes with a lot of deals in the office market, we have finalized additional deals that we will announce by the end of the year. And we will have a newcomer into the portfolio, new company setting up in Romania, huge, EUR 7 billion corporation and also another healthcare giant that has signed with us. So we will be announcing some more very, very important transactions. The sizes are not that impressive, but the name itself and the fact that such companies choose us as their partner when entering Romania, when entering Bucharest, I think, is very, very important. And it shows -- because these people, they are very educated. They have hundreds of ultra-modern offices around the world. They have dedicated teams for workplace, and they make very, very educated choices. So they run processes for more than a year. When they benchmark, they make a lot of measurements, comparisons, they run very competitive processes. And when they finally choose a location, a developer, it's very important because it shows the level of quality, the technical specs and also the professionalism of the team and the trust that they have in that brand.

Thank you very much, Mihai. We have a lot to look forward to for the Office division. I would like now to invite Riad Haidar, who's going to deliver a presentation about the hospitality division.

Thank you. Thank you, Mihai. So good morning. So setting the groundwork for One Hospitality division. I will have a clear presentation about why we're tapping into hospitality, what's our plans and where we sit in our strategy. So our entry into lifestyle hospitality, mainly our vision is to deliver a premium lifestyle hospitality experience in Romania, especially in Bucharest and mainly we take the lead in Eastern Europe, and we have One United Properties is the innovator and the pioneer in developing lifestyle hotels in Eastern Europe. Our foundation for growth strategic launch in Bucharest leading the introduction of international hotel brands to Eastern Europe. As mentioned, we are the first developer to bring Mondrian Hotel to Eastern Europe and especially to Bucharest, which is a premium lifestyle from Ennismore-Accor brand. Then as well, Hoxton, which is as well a lifestyle hotel brand from Ennismore. We are the pioneer to sign with them the MOU and to develop it in Bucharest. So why are we doing this? Why are we entering into hospitality? For real estate developer -- premium real estate developer as One United Properties, residential, offices, hospitality, it complement the portfolio and it build a strategic alliance with a global international well-positioned brand. And we can see the global hotel market is growing fast, EUR 25 billion up to EUR 40 billion in 2030, which is 7.1% yearly growth. And we want to -- we find very good opportunities, especially in Europe as it's going from EUR 8.2 billion to EUR 12.1 billion, and this complements our vision for 2030. So European luxury hotel market is to reach EUR 68.3 billion by 2032. And here as well, Romania is following. The average growth yearly in Romania is 7.83%, which is above the European market. And that is -- Romania is up to EUR 3.6 billion in 2030, investment in developing luxury hotel and lifestyle hotels, which is quite solid. So ONE has a big opportunity here. We capitalize on rising demand for branded lifestyle. We are studying as well to develop mixed-use project with international brand, branded residence as well position ONE as leading lifestyle hospitality developer in Romania, leader in our partnership, not in the number of rooms. We are building strategic partnerships with strategic players globally in the market, in hospitality market. And then Ennismore is one of the global player in lifestyle, the premium player in lifestyle hotel development. Execution strategy and partnership. Strategic partner, as mentioned, Ennismore global leader in lifestyle hotels. We have 2 project road map, Mondrian and Bucharest, which is a concept and development already kick and we're planning to open by last quarter of 2026. Yes, Hoxton Bucharest, as mentioned, MOU signed already. So our approach, yes, we give the best to the operator. We invest, we develop and the operator they manage. And mainly lifestyle hotels, they only sign management agreement for one reason to maintain the quality and consistency of the guest experience, which fit exactly our strategy. We're not trying to cut corners mainly in quality or in delivering lifestyle experience. So our vision for 2030 mainly is to deliver 5 lifestyle boutique hotels, which 2 of them is in pipeline already. We have 3 more -- we're looking to many projects in Romania, mainly in Bucharest and some major city like Brasov, Constanta, Mamaia sea view but we are being very careful as first, the brand needs to make sense and the shareholders' profit as well need to make sense. So each hotel size, we're looking in between 100, 150 rooms, up to EUR 50 million annual turnover and achieving EBITDA above 35%, which will make a very profitable business model. We develop with minimal upfront capital. We leverage brand partnership and existing real estate to deliver stable long-term return. By 2030, our vision mainly to stand a solid player in lifestyle hotel development in Romania as well in Eastern Europe. Thank you.

Thank you very much, Riad. Welcome to our couch. I would like first to ask you, talk about lifestyle hotels. What is the lifestyle hotel? And how is it different than the traditional hotels that many of us know from Bucharest because again, Beatrice and Mihai were talking about being trendsetters, I believe ONE is also a trendsetter and talking about lifestyle hotels. So tell us a little bit. What is it?

Mainly lifestyle have many definition. If you ask 5 people, they will give you 5 different definition. For me, what I understand from lifestyle, mainly there's 2 main focus in developing a lifestyle hotel. One is design. Yes, the design connect with the local city with the local people. And second is the programming of the hotel, which is very important because it will define the future guest journey mapping. So third point as well is food and beverage. We don't want to have restaurants and lobbies empty, which we see it mostly in many classic hotels. So 3 components. These 3 components design, programming and, food and beverage component. I believe it's a DNA of a lifestyle hotel.

And Lifestyle Hospitality. So this is a new business line for One United Properties announced last year. Why? Now is the moment. And we see also other brands teasing, coming to the market, like just as you mentioned about our partners at Ennismore. Why now? Why 2025?

Why 2025? It's very clear. Our CEO's, they had the intention and they had the data to enter in the right time. And as mentioned by the data, we see the investment in Romania is up to EUR 3.6 billion up to 2030. And we are the pioneer and the first one to invest in premium lifestyle luxury hotels. So we see a big opportunity in it. And we secured our strategic partner, which dominates the global lifestyle hotels brand in the world. And we're moving with this partnership to develop it in Romania.

So for One United Properties for you, you have years of experience in the hospitality segment. What's the rationale behind choosing Mondrian and Hoxton brands part of Ennismore as the launch pad for the One Hospitality division. How open actually was Ennismore to bringing these 2 brands? And how much is actually your efforts to convince them to do so?

Look, I copy the model of One United Property, the founders are the CEOs. Ennismore hotel brands, the founders are the CEOs. So it's not a copy paste corporate setup. And we can see the founders of Mondrian, Ian Schrager or Sharan Pasricha as well. They're very successful businessman, and they are the CEO of this brand. And Accorinvest and they bought this brand. So we're following the brands that have really future growth and future expansion plan.

I'm very excited. I can't wait for Mondrian, especially. Hoxton also announced they're going to be also expanding in Krakow. Actually, it was news 2 days ago. So I think it's -- Central Eastern Europe definitely is on the map. But now I would like to move to a question about the setup of the division because we've noticed questions from our investors and analysts, how is this division going to function from the operational and financial standpoint. So you mentioned that by 2030, the target is to have each boutique hotel -- that each boutique hotel that will be operated by them should generate approximately EUR 15 million in revenue. Who will be operating these hotels? How does that -- what does the turnover actually entail? Is this the total sales made by the hotels annually? Is this part of the revenue that comes through you that is shared with the brands? Can you give a little bit of color to our investors on how the setup works in this industry?

Mainly what -- we're not here -- One United Property is not investing in creating hotel operation and start a learning journey based on our funds. That's why we choose the best brand who only sign agreement to operate the brand. They don't do franchise agreement. So this is first strategic decision for us. Secondly, when I say EUR 50 million turnover, this includes food and beverage, commercial leases as well event space, wellness. So mainly is a mix of rooms, food and beverage, wellness revenue. Why EUR 50 million our projection, which is on a lower risk because the data show like year-to-date, the market in Bucharest is 72% occupancy, above last year by 3%. The average daily rate, EUR 150 for 4-star hotel up to 5 star, yes, above EUR 5 by last year. So the market is solid. Local market is solid, yes, and corporate market is solid. So this is as well another strategic point for us.

There is one topic we discussed at every Capital Markets Day. It's related to the promotion of Romania, Bucharest abroad. There could be always done more, I believe, in terms of the country brand. And these projections that you shared with us today, how sensitive are they to the tourism cycles in Bucharest? And do you think Romania and Bucharest will need a boost from the PR standpoint on a global stage to deliver on these numbers? Or you're confident that we, together with the Hoxton and Mondrian brand can actually be the driver for tourism?

Look, bringing international bank to Romania has already boosted the tourism because these brands are worldwide, well connected, and they have their own distribution channel. Second, the local market, as mentioned before, is quite solid, and it's feeding the local business, yes. But of course, extra marketing, PR for the government, this will help a lot the tourism and Romania being part of the Schengen, nowadays, we can see increase as well in the prevalence.

I think that was one of the biggest boost actually for Romania in the last period. So you mentioned a bit about expanding regionally, analyzing other cities like Constanta, Mamaia, Sibiu, Brasov. Can you tell us what are you looking in those cities? What should be the main drivers for one to consider hotel development there as well as are you looking outside of Romania? Is this option on the table?

Look, for Romania, as I said, there is major tourist in city, which is quite solid. For hospitality being innovative in this part, yes, our strategy as well is to compete the residential where ONE is present in residential. Hospitality might find the opportunity to invest and develop a hotel brand. But as well as the business plan need to make sense and need to have good returns for the investors.

Thank you very much, Riad. This concludes our session. I would like now to pass the microphone to our CFO, Cosmin Samoila, who is going to give you a little bit of an update on our financial results for the first half of 2025.

I'll start presenting some financial highlights we had in the last period. We have the rating process, the initiative with the bonds, the digitalization status and also the financial results in the last year. Related to the rating process, we started this year discussions with all the big 3 rating agencies. To make a small note about them, they are institutions, each of them founded more than 100 years ago, and they cover globally more than 95% of the market. After we had the preliminary discussions and we got proposals, we decided to go further with 2 of the rating agencies. We appointed the first agency in March and the second agency in April. We started the rating process. It was a very intense process with the agencies scrutinizing our history, looking at our business plan for the future 3 to 5 years, analysis, including site visits in Bucharest. There were teams coming from Madrid, from Frankfurt, from Warsaw. Also multiple meetings with the management team, both physically and also conference calls. And we finalized the processes in May with the first agency issuing the rating and also on 25th of June with the second agency issuing the rating. Both ratings are private ratings. So we cannot disclose the results. But we can say that the results were very good. What is coming naturally after rating processes or it is somehow including in this process, it's a bond initiative. If you remember, we had an approval from shareholders in April 2024 to have a program of issuance corporate bonds up to a value of EUR 300 million, maturing up to 10 years, and this program is valid for 3 years. We basically started discussions with some of the international banks to assist us in this process. We discussed with JPMorgan, Goldman Sachs and Citibank. We took proposals from one of them. We assessed the expertise, the approach and the pricing, and we decided to give a mandate to JPMorgan to support us in this initiative. At the moment, we are looking for targeting the European market, but also the U.S. market and also potential listing on Luxembourg Stock Exchange or Euronext Dublin. On the current status is that we achieved the rating already, which is an important preliminary step in this process. And we are looking at the best moment to go out with actually kicking off the process. What we see is that after you kick off the process, it takes around 3 months to actually reach the issuance of the instruments. And we have here below also a table with actual bonds issued by peers in the region or other real estate companies, including their pricing, and we see that the market is currently good and it's going to be also on a normalized level in the next period. Related to digitalization, we had many implementations during the period. Most important and the first one we implemented is the Microsoft Dynamics Navision, the ERP of the company, which we implemented starting 2021. Also e-invoice and SAF-T, these are mandatory implementations by the Romanian Fiscal Authority. What I can say is that we implemented both around 2 years before they were mandatory for all the companies in Romania. We have also implemented the open banking platform that is integrated with the ERP and reunites all the banks we are working with and all our current accounts. We are currently working with 10 banks, around 400 bank accounts. We also had an implementation of a tool that eliminated the last process run in the finance function that was still going by paper-based, meaning the petty cash accounts. Now they are fully electronically. And also the latest implementation that we finalized last year after the Capital Markets Day. It's a tool for budgeting and planning. Tagetik, which is developed by Wolters Kluwer. It's very widespread globally, inclusively Toyota Motors Company is using it, and we finalized this implementation in November last year. And this year, for the budgets of next year and the years after, we will use this tool in our process. Also, we have in progress other tools, reintegration in databases and archives of artificial intelligence that can scrutinize the documents, find information, respond to user request, even do reports, complex reports. We are testing this alternative. I can tell you that we have in our databases and archives for the entire group, more than 1 million documents for finance function. We also work on a solution to have the IFRS 15 revenue recognition to be made live. If you know, we are using this approach of recognizing revenue based on the stage of completion of the construction. How we are doing it right now is that at each quarter end, we are doing this entire calculation, and we presented in the financial statements. And also, we are doing it on a monthly basis for internal purposes in a shorter process and much simple. With this tool, we want to see live with each sale, with each supplier invoice that adds to the stage of completion of the construction to see immediately what is the revenue generated by that transaction. Also, we are looking to integrate the collection process to have some QR codes or some links on our invoices. So for clients, it's very easy to do the payment. And also together with Mihai, we are looking for an application that will support the leasing and property function of the company. It's called Yardi, is used by the biggest company active in real estate property management and leasing. And also this -- it is in plan to be implemented. Related to the financial performance, I took the starting point 31 of March last year, which was quite before our Capital Markets Day from last year from April, which basically it's a timeframe of 5 quarters. And we see total assets increasing 15% up to RON 5.9 billion as of the end of June this year. We see equity increasing even more than this with 21% up to RON 3.6 billion. This has -- this was generated by the profits of the company in this period, but also by the share capital increase we had last year. And also net current assets increasing 33%, up to RON 1.8 billion, showing a very strong liquidity position. In terms of the performance in this period, we have turnover reaching RON 461 million in the second quarter of this year and the accumulated value in this period since March last year of RON 1.8 billion. We have the operating profit growing from RON 93 million in the second quarter of last year, up to RON 250 million in the second quarter of this year and accumulated RON 623 million profit -- operating profit. And also the bottom line, the net profit increasing to RON 152 million, more than double compared to the RON 71 million that we achieved in the second quarter of last year. And we see that this year, the profit -- the net profit is higher compared to last year and the accumulated value in this period of RON 464 million. Thank you.

Thank you. Thank you very much, Cosmin. Let's start a little bit with a question. I think you're sick of that question because we talk about it every single time. But can you help our investors understand a little bit better the revenue recognition? Because you presented the key financial indicators. And one of the big questions that we get in discussions with our investors actually is how is the net profit margin recognized from the residential segment? How does it impact the profit? And this is one of the big questions actually that investors ask us. So maybe let's start with that.

Yes. So basically, our financial statements policies in line with the IFRS are recognizing the revenue based on the entire duration of the construction. So based on the sales that we are signing with the clients, the profit and the revenue associated to the sales is recognized gradually on the entire duration of the construction in line with the stage of completion and the progress of the construction. So this is a very good methodology to show the profits and the revenue on the entire duration and not only at one point in time when you actually deliver or when you actually do the sale of the construction.

You had a slide about the rating process. In general, does this rating process impact the future financing? And I don't want to talk about the bond specifically, but does it matter in relation to the banks? Is this something that is a differentiator now for One United Properties having gone through that very thorough and detailed process?

For sure, it is a differentiator. And everyone, I mean, we are not allowed to disclose it publicly the rating because it's a private rating, but we are allowed to disclose it to the consultants to the banks, to the ones that we are working on implementing transaction. So I can tell that everyone was very positively impressed by the achievement. And it is a matter of confidence and credit worthiness that is verified and vouched by international agencies on one aspect. And on the second aspect, it's also something statistically because looking at the bond market, there are always companies that might be similar in terms of size, operations, geography and so on. But all the time, the companies that have also rating managed to get more investor appetite for the bonds and also to get a better, lower cost of capital when issuing the bonds. So for sure, this is a differentiator. And it's one of the major differentiators in this market.

And from the -- I know you cannot disclose the rating but from the discussions with rating agencies, what are the main triggers that could improve our One United Properties rating outlook in the next 12 to 24 months?

Yes, we cannot disclose the rating. We can say that it's not a AAA rating like Germany and I don't know, other big countries. So for sure, we have space to improve it in the next period. The triggers to improve the rating are basically to increase the size of the company. We saw that in the peer analysis, companies that had similar ratings like us or even lower ratings like us were bigger companies in terms of size. Another trigger is to expand the geography of the operations because this is also a criteria in the rating analysis to have a spread of the operation and not to have concentration on a single market, on only a few markets. And the third trigger that can increase is to enlarge the duration that the company is operating at a high scale. Basically, we are operating at this scale for around 5 years. And in the rating methodology, they score better companies -- they score a better rating to companies that are operating at the same scale -- at a large scale for at least 10 years. So basically, these are the 3 triggers that can increase even more the rating of the company in the next period.

Going to the slide on the balance sheet with the 6 key indicators that you presented, it's clear that since our last Capital Markets Day because the cutoff, you compared the situation from the end of Q1 2024 to first half of 2025. So ONE assets and equity have grown very strongly for such a short period of time. We're talking about 15% increase for equity and 21 -- excuse me, 15% for assets and 21% for equity. How sustainable actually is that pace?

For sure, it is sustainable, and it's also in line with our strategic plan. So basically, I can say from this point of view, what we announced at the Capital Markets Day from last year, we already achieved for the last -- for the first year. And it is sustainable because in the period before 2024, before last year, our growth rates on average were 30% to 40%. So we grow -- we managed to grow even at higher rates in the past. Right now, because we are looking on a company being at a larger scale and also we are looking on the bigger time horizon, we had this strategy to have a more moderate increase, and this is why we are fully confident it can be achieved.

And the last question, you had a slide about heavy investments in digitalization. I know it's a difficult question, but what is the expected payback from these systems in terms of cost savings and efficiencies? Because, again, cost savings have been a big theme in the last 1 year. What does it translate? Can you actually indicate a level of savings or...

I see from the cost savings or efficiency, cost saving is not necessarily something that you do for digitalization. Digitalization, you do more for efficiency because there are processes that if you don't digitalize them, even if you employ 5x or 6x more people or more other resources, except digitalization, you will not manage to do them in time. So in my opinion, the speed is the most tangible payback of the digitalization process because just to give an example, we had in the past processes in the finance department that were taking 3, 4 days human effort to be completed. And such process is now done in 10 seconds by the system automatically. So this is what you get, in fact, you get the speed. And in our case, being a listed company and having some very, very clear deadlines you need to achieve, you need to have the speed of the operation of the implementation of different types of procedures in order to fulfill in times of requirements. Just to give an example, I think if we take out all the digitalization solutions I presented, let's say, we take them up, we don't use them anymore. I think even if we triple the team in the finance department, we will still not be able to do in time what the applications are doing.

And I have 2 questions from our audience. How long is the cash collection cycle? I believe it relates to the residential segment, how long it takes to collect the cash from clients?

The cash collection cycle, it's in line with the development of the residential projects. We have 2 collection cycles. We have a collection cycle in the residential segment that is going to -- in average to 1.5 to 2 years because not all the sales you do in day 1. You do sales all over the period. And then in the end of the development, you collect everything. And also, we have another collection cycle in the commercial segment. In the commercial segment, the collection cycle is 1 month.

Thank you. And the question about the rating. Is this normal for the rating not to be public? Or how usual actually is it that the rating is not public?

Yes, it's very normal. The rating is -- almost all the companies are initially doing a private rating to see the results and to understand how they are positioned. And then after the private rating, when you go to the next steps in a bond issuance, then you also do the rating public. So all the investors that are interested about the bond issuance can see them and can take a decision having all the information on the same page.

Great. Thank you very much, Cosmin.

Thank you.

And I will kindly ask my colleagues for another microphone, the third one because now I will be inviting on the stage Victor Capitanu, Andrei Diaconescu. Our traditional sit down at the end of the Capital Markets Day. How are you?

Hello. Great.

Hello.

We have a lot of questions. So I left many questions just for you from our chat. And I will start actually with the one that always comes, the connection between real estate development and the mayorship, the direction that the city is going. And I -- how do you see the Bucharest Real Estate segment going? The city currently still needs to have the mayoral elections. But the fact that we don't have a mayor right now, the one elected by the people, does it mean that there are blockages with permits, developments? Are things actually well functioning in the current setup? And how exposed is ONE today to permitting delays?

Well, that's a good question. Before that, perhaps I would like to comment on something that Cosmin mentioned earlier, which is the revenue recognition. Personally, I didn't understand very well. So I will try to explain myself so that people get a better understanding. So a project usually lasts, let's say, 4 years. during the first, let's say, 3 years, you have managed to acquire the land, do the permitting, perhaps do the structure and do part of the facade. So in the next -- in the first, let's say, 3 years, 3.5 years, so 75% to 80% of the lifetime of the project, you will achieve a building that everybody can see, because the structure is ready, facade is almost ready. You will probably have, let's say, 50% sales. In terms of investment, the investment is 50% and the sales are 50%. So what you can recognize after 3.5 years of work is just 25% of the revenues. Imagine that if you complete a building that have 0 sales, you have 0 revenues. If you 100% sell a building and do nothing in the construction, you have 0 revenues. So after 3.5 years of work, you have just 25% of the revenues and profitability recognized. In the next 6 to 9 months, you will have the rest, hopefully, of the 75%. So this is how revenue recognition works. The curve that goes just like that. This is why we are saying that most of the time, the way we recognize revenues and sales doesn't reflect the actual progress of the business. And that is even more valid today where this -- in the 6 months of this year, we finished 7 huge projects that will have a severe -- a significant impact in the financials. Now coming back to your question -- obviously, I cannot know when the elections will happen. Normally, they should be in 90 days. Most likely, they will be towards the end of this year or perhaps Q1 or Q2 next year. The way I -- so my perception is that things are going a little bit better than before. The General Urban Plan is advanced. So most likely, it will be complete in, let's say, 1 or 1.5 years regardless of whether we have a new mayor or we have an interim mayor. Generally speaking, the administration is, I think, positive towards investors. We had 4 or even more than 4 years of a shortage, but I think what I -- my perception is that there is a relaxation in terms of encouraging developments. So more of that -- there are, I think, enough areas of Bucharest that are already zoned, which means that they can be developed as they are today. So honestly, I don't see necessarily an issue with continuing development in Bucharest over the next 1 to 4 years. So to sum it up, I'm comfortable about continuing development in Bucharest.

Just to add something here. So we said it before, but just to make sure people understand it, the blockage in Bucharest was mainly related to approval of new zoning, what we call PUZ, Plan Urbanistic Zonal. So there was no new zoning permitted in the last 5 years or so. But One United Properties never focused on lands that need to be zoned. So ever since we started the business, we focused on lands that have very clear zoning and when you know -- where you know exactly what you can build from the moment you acquire the land. So this means, we were not affected over the last 5 years by the blockage of the zoning. And that's why we could continue our business, get new permits and reach -- you see now we have almost 4,000 units under construction, which is much more than we delivered in all the life of the company. So we managed to reach this because we never focused on lands that need to be zoned. So I think this is very important to be mentioned. And also for the future, although we have some partnerships on potential lands that might need zoning, this is not a priority for our company. And the priority for our company is to acquire and develop lands that have very clear zoning. So all of these are much easier to be permitted.

Last year, so 2024 was the year of consolidation. So except for One Lake District, the second phase, there were no new developments presales launched. 2025, so far nothing. We have a lot of impatient investors, a lot of interest for the new developments coming up. But before we jump into that, I wanted to ask you what is the next plan? So let's say, 2025-2026 is the year of deliveries? And how is the next cycle going to start? Because we've seen there's been cycles of launching sales, presales together with the development and then deliveries. Do you see this continuing in 2026? Or do you see any change to the strategy for residential segment?

Thank you, Kurek. Thank you for the question. Very valid question. But I would like to focus a little on the initial part. We only launched One Lake District Phase 2. You have to understand One Lake District Phase 2 is a huge development, 800 units. Only a few years -- this is more than what we had under construction only a few years ago. It's equal to 1/3 that we ever delivered up to now. So the fact that we only started One Lake District Phase 2, it's a bit understatement because it's more than other companies developing all their life. Now coming back to today, so this we launched in June last year. Coming back to today, of course, we are now focusing to deliver on our peak of deliveries that is coming now. We already finalized Mamaia North Phase and One Lake Club Phase, and we are signing final contracts with clients, but much more developments are being finished over the next 6 months. Nevertheless, we plan to launch new developments even this year. We have One City Club, which is a development of around 200 units on Ramuri Tei Street, very close to here in Floreasca, which we plan to launch this year and is focusing on medium to high income and high income. And we are launching also this year a new development called One Park Line which is -- we are launching the first phase, which is another -- around 200 units from a total development of around 1,500 units, which is located on [indiscernible] Street, very close to Romexpo and [indiscernible]. So we are launching these 2 new developments this year with around 400 units. And of course, for next year, we plan to launch One Cotroceni Towers. And 2027, most likely, we are launching One City District. So this is a bit -- the thing that we can disclose today. Of course, we have many other things in the cooking, but we save it also for later time.

But I think we already have some exclusive news for the market today. So I'm very happy with your answer. I think our investors as well. I want to talk a little bit about the land bank because this is somehow the hidden weapon in a sense that not many people realize that today, the land bank has space for 9,000 additional residential units. This is excluding what is under negotiation. So this is land bank that is already on our balance sheet. The gross development value of the land bank is EUR 1.9 billion. How many developments estimated from that land bank already have the building permits? And theoretically, the construction and the presales could start right away. I'm asking this because there is always the, let's say, the question of is -- are the launches a part of strategy? Or does it happen just because we get the permit? And I want to clarify it for our investors that there is in fact a strategy behind it.

Yes. Of course, we have a very clear strategy of what we acquire, what we develop, what we launch. Coming back to the pipeline, you have to understand that the land bank is the most important asset of a developer, having best locations acquired of decent prices. It's the biggest value that a developer can have. The fact that we have secured such a big amount of land, you have to see it's around 50 hectare, 500,000 square meter of land, prime land in the center of the city, we are in very good conditions for the company. So the fact that we secured this land bank, it's critical for the future success and the future profitability of the company. Now in terms of what is permitted, we are permitting gradually based on how fast we want to launch. So it's not that -- if something is not permitted yet, it's -- because it's not due to be launched yet. And from the developments that are already permitted, only One Lake District Phase 3 has a building permit. And we expect very soon building permits for what we announced earlier, One City Club in Floreasca and the One Park Line on [indiscernible]. We expect building permits to come soon. And when they will come, we'll make it public, and we'll start very fast construction and sales for those 2 developments.

One of the big news of this year on the market was the announcement of the Sibiu acquisition. So that was the first. One of the big questions on both of our previous Capital Markets Days has always been when do you go to specific cities. So we had, of course, interested investors who wanted ONE to develop in their cities. And I see a lot of questions, why Sibiu? Why not Brasov? Why not Constanta? Why not Cluj? Why did you actually choose Sibiu? And how does it fit in the strategy? And also, if you could tell us a little bit about the project because I think it's a beautiful project in a sense that you're bringing what the landmark development, which has the part of urban regeneration also featured in it?

So basically, it's not -- it is the first one. We are already developing in Constanta for a while. It's true it's in Mamaia, so it's the resort part, the summer part of Constanta. But as I mentioned earlier, we focus very much on the city of Constanta, and we are hoping to make an announcement later this year about developing in the center of Constanta for the people that live there. But it just happens Sibiu to close faster. And why you chose Sibiu, is not because of the size because it's not maybe in the top 15 cities of Romania. That's why we said we focus on top 10, 15, not on top 10 because Sibiu is not even in top 10 in terms of size. But what we found there, we found a very good partner, the landowner and a very good land located in the center of the city. So we could make a very good deal with [indiscernible], the landlord in which we can leverage the value of One United Properties and of our brand without putting too much equity before permitting the land. And also, the development is a very beautiful mixed-use development that will have also a bit of office, a bit of commercial, a lot of residential, which we think will add a big value to the city there. So basically, going forward, when we expand in other cities, we'll not focus only on macroeconomics and on size of the city. We'll focus on the opportunity for our company to leverage our brand and to create value for our shareholders.

And realistically, what cities are you looking at outside of those where we already announced?

So any city in the top 10, 15, as I said, it's within in our target, but we'll not do anything unless it's a great deal. Great deal means location has to be fantastic, costs have to be low, equity deployment minimal. So we will have this all the time in mind. So we'll not just go to, let's say, yes -- just to have a yes checked on our list. We only do deals that are good for our shareholders.

We have on the chat some questions related to One Lake District. And the first question is about the ongoing development of that phase and the delays. If you see any problems with connecting the entire complex to the city grid? And also, what's the strategy with Phase 2, which was where the sales started around a year ago. And the foundation is barely there and there's not yet parking. Like what's happening at One Lake District basically?

Well, obviously, One Lake District is a very, very complex development. It's a very big -- it implies a lot of infrastructure development, opening roads, buying neighboring properties in order to enhance the property, so it's a very, very complex project. Now regarding the stage of the construction, what everybody needs to understand is that the land over there, it's a former brick factory, which is very close to the lake. And that implies the fact that we have to strengthen the land. That means that below every building, there are thousands of very deep piles that go inside. And usually, that takes about a year to complete. Also, because we have the geo-exchange, we have all the piles for the geo-exchange. So before you can see anything, let's say, above the ground, we have put millions and millions below the ground. And that takes, unfortunately, a lot of time. What you can see now is basically the ground floor, which is being erected, which means that we have completed all these preliminary works. So with regards to the progress of the works there, that is, let's say, the technical cause. We will probably obtain building permits for Phases 3 and 4 in the near future that has also included the -- that the existing structures that not many people appreciate, which are on the land, which will be demolished, I think, in the next 1 month and then a completely new image of the project will be unveiled. We have restructured roads. We have done a lot of, a lot of improvements compared to the initial plan that we have presented and that obviously took some time.

So you already answered because we did have a question that at One Lake District, there are some old buildings in the middle of Phase 1 and the question from our participant was if there is -- they are going to be demolished before the delivery of Phase 1?

So alongside with the permits for Phase 3 and Phase 4 will be the demolition of the existing building that were already acquired. We also acquired the auto parts service at the entrance of the project, which allows us for the enlargement of the entrance. We have also done a huge roundabout as you enter the project in order to basically show the dimension of the project and to have a proper entrance to such a large project. So again, once permitted, all these improvements that you will see will dramatically change the phase of the project. We have eliminated the parking spaces from the ground floor of the buildings. We have included commercial spaces in those locations. We have increased the green areas. So there were huge dramatic improvements to the overall site that are going to be extremely, I think, beneficial to the future residents.

Question about the third and the fourth phase of One Lake District. So Phase 3, does it have PUZ or the authorization for construction?

So nothing requires PUZ, as Victor mentioned earlier, especially in this project. So Phase 3 will be basically built upon the structures that will be demolished, so those in the middle of the project. Phase 4 is going to be neighboring the Lidl. So it's between us and the Lidl. The restructuring also includes the extension of the promenade that the city of Sector 2 has built around the lake. So that will be extended with approximately 500 meters towards our property. We are also discussing with the City Hall now this is -- it's in the phase of a dream, but I think it may come true to do a bridge that will connect our property to the bridge -- to the church across the lake because lakes shouldn't be barriers in the life of a city. Basically, they should be -- there should be a way to averse them and basically closed-loops for cycling, running and so on and so on. We will develop, as you probably know, one school and one kindergarten. The total investment is around EUR 10 million. So there will be a massive, I think, development and change in the area.

And do you already have estimate how many apartments will Phase 3 and 4 have in addition to the over 2,000 units in Phase 1 and 2?

I don't want to be wrong, but I think it's more than 600.

Thank you. Now we move to another landmark development, even though sales haven't started yet, One Cotroceni Tower. The question is, do you -- did this development had an update to PUZ or the authorization or not yet? I know the land had authorization PUZ before, but it needed an update?

Yes. So basically, just to be clear, when we bought the plot, the plot is permitted already, yes. So we still have that permit, which is more or less what we want to do. But it had a lot of, let's say, inefficiencies in terms of apartment layout, in terms of apartment heights, in terms of the commercial area of the parking area. So we basically decided that it is in the interest of the company and of the customers to upgrade -- to heavily upgrade the way the project will look. In order to do that, there are certain parameters that we need [Technical Difficulty] a building, which we should shape it basically as square because it's much more efficient and so on and so on. So for that, we had to do a PUD and subsequently to obtain a new construction permit. The PUD was obtained. As you know, we are now working on the new construction permits, and we hope to be able to obtain it next year and subsequently to start the sales. Completion of such a large project should be around 3 years.

I want to ask you something. I have a question. Maybe you can explain to everybody the difference between PUD and PUZ because maybe people think it's the same.

Okay. So you have basically 3 zoning permits. You have the general city plan, which basically regulates the entire city. You have the PUZ that regulates an area, a larger area and so not just one plot, and you have the PUD that regulates just plot. Now the PUD basically doesn't change anything from the coordinates that the PUG or the PUZ already mentioned for that particular plot. It just regulates, let's say, how far buildings are from each other, where are the entries on the plot, if there are certain distances from neighboring properties, if there is certain, let's say -- I don't know how it's called. So if you basically put a shade on neighboring buildings, so things that have to do particularly just with your plot. Because it's related to your plot only, the PUD is approved by the local City Hall, so in our case, Sector 5 and not the General City Hall. What we know and what everybody knows is that the PUZ were blocked in the General City Hall. We didn't need a PUZ. We need a PUD, which was approved already by the Sector 5 City Hall. Obviously, we will make a school over there, just like in One Cotroceni Park already. That was a requirement of the City Hall, and we happily complied.

I think we can, for the time being, wrap up the residential segment, and I would like to move to the office and commercial. Firstly, on the office, I know you talked in the past, Victor, about the fact that the hard part about office development is first to build an office, then to lease an office. Then at the end of the day, you might just leave the asset in your portfolio and keep collecting the rent. Today, you mentioned that you're open to the divestments of the assets and I wanted to ask you, can you detail a little bit if there has been a shift in the strategy or you look at it as a good opportunity considering also the yields that Mihai mentioned today during our Q&A? Or what drove you actually to this -- to sharing this part of the strategy?

So basically, it's true that today, we are enjoying the work from the last years because like 5 years ago, we had 0 rents. So now with EUR 30 million net rents per year, which is going at a good pace, we are enjoying this and indeed, the work now compared to 5 years ago is much, much easier. On the other hand, the fact that we are looking to dispose some of the assets based on market opportunities is not different to our strategy so far. There's no deviation from our policy. If you look over the last years, we constantly have divested from our assets. You can look One Herastrau office, you can look the two work class, you can see the Lidl. So constantly -- Norgate, the office building from Norgate. So constantly, we have divested from our office portfolio. And why we are doing that? Because while we are enjoying the rents, the return on equity for our shareholders is not nearly as big as from the development of new assets. So basically, it's just recycling equity from a good return because all these rented assets make around 12% compounded annual return for shareholders. So it's not a bad return. This is a good return. 12% per year increases your value 3x in 10 years. It's not so bad. But on the other hand, if you look to how we deployed equity in One Tower or One Cotroceni Park, we made between 3x and 5x return on our equity within 5 years, which means a return of 30% plus per year compounded. So it's very attractive when you look to One Tower, and you know you put EUR 15 million equity and you made around EUR 60 million, EUR 70 profit on that in 5 years, it's very attractive to move some equity from rented assets to development. So this is the core of our thinking. It's just moving the equity to better returns for the shareholders. On the other hand, we are anyway under development with a substantial number of rented assets. As I mentioned earlier, we have One Gallery, we have Infineon Technology headquarters, we have Mondrian Hotel. Only these 3 assets alone, which are estimated to be delivered to tenants next year, will generate more than EUR 14 million net rent per year. So half of all our existing portfolio. So we are not sleeping. We are investing in new rented assets, which at least up to now, you've seen that although we sold some of those, the rent has increased steadily. We'll see for the future, maybe some years will even decrease the total rent. But over the long term, our plan is on growth, as we mentioned earlier.

I have some questions from the audience related to specific assets. So the first one is Eliade Tower. You mentioned about the part of the teams moving to Eliade Tower. Now investors would like to ask what's the plan about this asset because indeed, it doesn't fit the A class portfolio of One United Properties?

Yes. I think it's a very valid question. And up to now, we decided not to include it in our report with the rented assets, which we plan to change most likely, I think by the end of this year. I think you know better this. So we decided to include it in our rented assets. Just because in the beginning, we didn't know exactly how to proceed but for the time being, we decided to fully rent the building. We already have a high occupancy rate and by the end of this year, we hope to have a full occupancy rate on the building. And we keep it in our portfolio until maybe the general planning of the city will change or until a day where a new zoning can be approved for this area. And when that day will come, most likely, we will demolish this building and build something else instead. But in the meantime, we keep it as an office building. It's a good building. It generates around EUR 1 million rent per year, which is around 10% on the cost. So it's a good investment for the shareholders of the company. Even if it will remain like this forever, it still would be a very good deal for the company.

Now a question about Bucur Obor. This is a company in which one has a controlling stake. It's a company -- also a public company. And we have questions from our investors regarding the strategy of One United Properties in relation to Bucur Obor and if you will be participating at the share capital increase?

Okay. So Bucur Obor priority now is to improve the standard of the building because the building is built in the '80s and not much investment has been done since. So we are doing a very important investment, which is changing everything material from the facade to air conditioning, some partitioning, but we will not change the look and feel of the building because we need to deliver to our clients what they want to get for that specific location. And it's a bit challenging because we are doing this in parallel of -- we're trying of not disrupting the business. So we are just taking a little part of the building, then a little part of the building. So that's why you see maybe the building does not appear 100% occupied. In reality, it is 100% occupied. We just take some parts of the building and we are upgrading it. So basically, this is the priority for us now. And after we finish this, priority is to maximize the rent for the shareholders and then on the long-term strategy, we'll see at that moment.

Somebody is asking if Unirea Shopping Center could be a potential acquisition?

Why not? Location is good for sure, but you have to have a good entry price.

And I would like to say that right now, I think we have also the know-how of operating such a shop in case it will become available for acquisition.

Currently, investments in the residential segment are significantly higher than those from -- than the revenues from the commercial segment. Do you consider in the future to balance them? Or do you want to remain preponderantly a residential developer?

But I'm not sure this is true because, as I mentioned earlier, 27% of our profit comes from rent. But the rent, it's not one-off. The rent, if you listen to Mihai earlier, it's a long-term contract. Our average in the portfolio is around 6, 7 years. So the actual value of the rent in our profit, I would say, is at least half because also the profits from rent have different valuation than the profits from development of residential. If you look like multiple for rented assets is around, what, like 15, and for profits from development of residential is like half. So if you take this into consideration, I think the rental business is a very significant value for our company. And over time, as I said, maybe for some time, can also decrease, but over long term, will increase.

And this -- in this -- remaining in this topic, we have a different question. What is the most profitable market you see going towards 2030? Residential, office, commercial or hospitality? And what profit margin generally do you see in each market?

Look, I mean, for us, all of them are more or less as profitable because otherwise, we wouldn't invest. So we look -- we are looking to make a minimum 25%, 30% compounded return on equity per year for the new developments regardless of the sector. And if one of these sectors would deliver less, for sure, would not be as attractive for us. So -- but I think to answer more precisely, I think for our business, we see in 2030, most profit coming from residential development.

Yes, most likely. I think it has to do also with the international players' capital allocation. Wherever you have more capital allocation, which is largely the commercial, you will see a bit lower profit margins perhaps going forward and that's why probably the residential sector will maintain a higher profitability going forward.

Before we move to financial topics, so a little bit more on the numbers. We have a question. To what extent is ONE guided by market data versus management's entrepreneurial intuition?

I think already market data is much more important than intuition. I mean, intuition is good when you start a business as an entrepreneur. Intuition is good all along the way as part of the ingredients, but real data and most importantly, client data and to be always aware of what the client wants, it's much more important.

Cosmin talked a little bit today about the bond issuance, and I wanted to ask you about the time line for this issuance? And also what market conditions do you consider that should be met before the launch of such an offer? And connected today in the current market environment with high interest rates, if this bond -- what is the rationale behind a potential bond issuance?

So thank you for this question. It's good to clarify. If you remember last year, the General Meeting of Shareholders approved a mandate to the Board for 3 years in which we have to research the market to perform a rating and to find if there will be a good moment or not to issue bonds over the 3 years of approval. It is not something imminent, so it is not something for this year, but Cosmin wanted to update everybody to know that we are fulfilling the request of the general meeting of the shareholders. We have done the ratings that they required us to do. And we are scouting the market and we are looking careful. So yes, that's it. And regarding the cost of the interest rates, maybe it is not so high. So if you look at least for our sector, are the lowest interest rates that you -- where you can borrow from the last 3 years. So interest rates for us have decreased steadily over the last 2, 3 years. And I think bonds for real estate industry in Europe are at one of their lowest points in the last 2, 3 years. So let's see how it goes next year.

Last year, at the Capital Markets Day, we presented ONE 2030 blueprint, which included a 4-year target. So the targets between 2024 up to 2028. And we have an investor asking if the targets mentioned last year for 2028 are still in place. It was approximately EUR 650 million turnover and EUR 205 million in net profit?

If you remember, Cosmin, I think already answered this question. He said that last year is fully in line with what we presented at the Investor Day last year. So last 12 months are fully in line to what we presented last year.

I think that's a great answer, so thank you. And a question about the current microclimate. So does the ONE 2030 blueprint take into account worsening microclimate, a downturn in global economies and ours and increasing geopolitical turmoil. If not, how would this affect your plans? Do you have any stress tests on how would certain key metrics be affected under these conditions?

Okay. So our thinking is all the time like this, prepare for the worst and hope for the best. I mean we are looking constantly to all the risks. We are taking also into consideration worst-case scenarios, but this does not mean that this is what we want to happen. So let's see. What we see is that the market fundamentals are amazing. There is a huge structural demand for good quality living and good quality working places, and we try to deliver on that. And if you see, we try to launch larger and larger developments with a lower price point in order to increase our target client audience. And we think this can be even a bit more defensive on the bad times. So if you do a business, you cannot expect every day to be only good times. If you make a business, you make it for maybe 50 years, maybe 100 years, tens of years anyway. So we expect during this time to be some turbulence, sometime market to go down, not every day to be sunny. But if you prepare every day and take very good care of your risk all the time, I think you can pass through all these times. And if you look, crisis become like a new constant reality because we -- you said about the deficit crisis that is now happening and before we had the war in Ukraine, which is still happening and maybe it's worsening or we don't know. And we had COVID. But even before COVID, we catch also Brexit and we almost lost this deal where is this development today because of Brexit because our investors did cancel their commitments, and this wouldn't have been good. And before this, it was the Greece crisis and then it was Lehman Brothers. So if you look, you have constant crisis. So you need to be agile, adapted and to manage very well the risk in this always volatile environment. Maybe, Andre, you want to add. Maybe, Andrei, you want to add something.

Yes. Yes. I just wanted to mention that going forward, what you will see from us is a lot more projects smaller because inherently, a smaller project has a smaller risk. Even in the large scale project, you're not going to see phases of, let's say, 1,000 or maybe more apartments. Even the large projects can be sliced and basically phased in such a way that you have a really low risk associated with the particular project. So if you see also in the presentation of Mihai in terms of offices, we are looking for preleases before starting. So we have, let's say, we see all these signs. We obviously internalize them, and we try to tailor our strategy towards minimizing the exposure of the company.

I think a great example of this flexibility because it's also about your flexibility was One Cotroceni Park, which initially, I believe it was 3 or 4 phases, then it became 2, then it became 1.

We started with 4 phases. So we started to build 250 units, including commercial. And then it was sold very fast. We decided to do 500, and then we decided to build all 1,000. But initially, the plan was to build it in 4 stages of 250 units. 200 units per phase, it's a good size. That's why in One Park Line on [indiscernible], we are launching also only 200 units this year, although the whole development is 1,500 because we think it's better risk management for the company.

You -- so you mentioned on these different crisis from global, regional to local. And we have a question -- one of our investors who was asking, in the current context, how do you assess that the real estate market will be influenced by fiscal measures taken by the government to correct the budget deficit? Do you expect any impact?

For sure, there has to be some impact. I mean, maybe in VAT, not so much because we are not so much on the 9% VAT. So I think we have limited stock there. So let's say, we have this 2% impact that has a certain -- has a certain effect. But the overall effect on the market theoretically should be in the slowdown of demand. So if the impact of the market slows down the demand, you have to take that into consideration.

Maybe I think another big impact will be on the cost because all these measures, they put a very, very high pressure on the cost. So we see already cost increasing by, I don't know, 5% to 6%, which is an enormous increase only because of fiscal measures. And it may be higher if you look, I think today, the government -- the National Statistic Institute published the running inflation, which is 10%. So we may -- and we are prepared for that. We are expecting a significant increase of the cost, which obviously may translate in a certain increase of the prices as well. So that, as Victor mentioned, may mean a slower demand over a period of time. So we are factoring in all these issues.

We have now a few last questions. We have 5 minutes, so we'll do them rapid fire. How do foreign investors you discuss with you the potential of Bucharest versus other capitals in the region, Budapest, Warsaw, Prague?

Yes, I mean I'm meeting with foreign investors virtually every day. So from all around the world and what I see the most difficult is to bring them to Bucharest because a lot of people, they don't know Romania exists and Bucharest exists. When they come here, they love the country, the city, they love our company and a lot of the people that come here invest in Romania with us or maybe with other companies. So I think this is the biggest challenge because in reality, the brand of Bucharest and Romania are not -- the brands of Bucharest and Romania are not very well known, and they are not very well desired. So I think this is the most difficult step is to bring them actually on the ground because if people come here and we see -- they see how beautiful is this place, how fast it's developing, how prepared is our talent pool and how skilled is the workforce, then they love it and a lot of them even move here or -- I saw the success rate on investments very, very high for people that actually come here. So I think -- I don't know, if we could do more to promote our country brand and our capital brand internationally would be amazing. We are trying to do our part with our lifestyle hotels business. And if everybody does their part, it will be good for the business.

What is the strategy to transform one from the best in Romania to globally relevant?

I think it's very difficult in real estate to be globally relevant. I think there is -- I don't know if there is any company globally relevant. I don't know. I mean, maybe the most -- the best brand in the world -- the best well-known brand in the world is MR. And I think maybe they touch a few countries, but they are not for sure a global brand. So I think this is very difficult. But if we manage to expand our business maybe in 1 or 2 other countries or to have local success, this would be a good achievement for the company. And we will analyze this gradually. As you see, we don't take decisions -- strategic decisions fast. Even if we announce something, it takes time until we actually do it because we want to ponder very carefully all the risks and all the potential of that decision. You saw this with ROCAR because everybody was asking why we don't close ROCAR. It took some time because we wanted to make sure we really buy a good land. The deal is really good. And we've had some time to raise investors. So every deal in reality takes time. So this will take time as well. Even to open only one more development in one more country will take time. So global relevance, I think it's maybe too high target.

What do you want to be known about ONE in 2040, the main storyline, that's like 15 years from now?

You want to answer that?

[indiscernible].

Let's consider this question answered. So we'll see, we'll see.

So okay, let's agree this when we have the Capital Market Day in 2040, maybe put this video.

Yes, that's great idea. I hope I'll still be here. I mean I don't know.

Why not -- we will, for sure.

That I'm sure. And on this regard, actually, I have a perfect closing question for you. Victor and Andre, you started together a great -- successful company, Capital Partners, from which you entered -- exited completely in 2016. For an offer that cannot be refused, would you leave, sell your shares in One United Properties?

For the time being, this company is our life, and we invest all our time and effort in growing this company. We think there's a huge potential ahead. And for the time being, we are not interested into that. You saw that since we listed the company, we only raised capital. So we didn't sell anything from the company. You saw we raised $173 million in 3 capital raises. So we try to -- our push is to raise money to develop the business maybe before other people find out about it.

I'll also ask Andrei.

Yes, I think it's extremely difficult to find a better business. So the answer would be no, probably.

Okay. So it's clear and also a confirmation to what Claudio said earlier that the Board members, including our co-founders, are not participating in the upcoming PTO. I think this is an important message for our shareholders as well.

For Capital Partners, you have to understand that Capital Partners was a people business. So it's very dependent on the people working in the company. It's a service business, investment banking advisory. And it's very difficult to scale that. And because we already started One United Properties, which is an asset business, which is easier to scale. The sector is very large. So you can build a big business. You can build in real estate, the largest business in the country, for sure, because the sector is so large. So we thought it's a bigger opportunity to focus our time on One United Properties. And we decided with our partners that they continue the business under Banca Transilvania ownership at that time. So it was more like an opportunity cost decision. We decided to go out of investment banking advisory and focusing full time on real estate development. So this was, let's say, the rationale for selling Capital Partners at that time.

Thank you very much. Before we leave the stage, I would like to mention that we have a surprise for all of you. I don't know, Victor, if you'd like maybe to give a little bit of teasing of...

Yes. Basically, last Capital Market Day last year, we promised that we will launch a documentary about how we came together, how we met each other, how we grew up and how we founded this business, and we teased it last year with a few minutes teaser. So we decided this is the proper moment to launch it. Although it's finished already for a while, we kept postponing it to find a good moment to launch it. So we are launching it today on YouTube, and it's available. I hope they have good subtitles in English because the movie is in Romania. But I hope you'll all enjoy it.

Thank you all very much. This concludes our 2025 additional Capital Markets Day. I would like to thank you all for joining us, be it here live at One Tower or online. I would like to thank my colleagues, those who you saw today on the stage as well as those who you haven't seen on the stage, specifically Lavina Ana Maria, thank you all for your support for making another event a great success for our -- and I hope very useful for our investors and analysts. Right now, we're going to invite those of you who have joined us for a small dinner, and we also have property tours planned. They are going to depart. We're going to meet at 2:50 in the lobby of One Tower. If you have registered for a property tour, we expect to see you there. Thank you all very much, and we look forward to seeing you next year.

Thank you.

Thank you.