RioCan Real Estate Investment Trust (REIUN) Earnings Call Transcript & Summary

Chairman, I would like to welcome you to the 2024 Annual Meeting of Unitholders of RioCan Real Estate Investment Trust. This meeting is being held in a hybrid format with many of you joining us in person, and others joining virtually through our live webcast. Welcome to everyone in attendance today. It's great to be able to see some of our unitholders in person for the first time since the onset of the pandemic, actually, I think it will be the first partially in-person meeting since 2019. So it's been a while. A recording of this webcast will be posted to our website for a period of time after the meeting. We're pleased to have our trustees in attendance today, and I would like to acknowledge the remarkable efforts of the team at RioCan over the course of the last year leading RioCan to achieve its financial objectives and exceptional operational success as it celebrates its 30th anniversary. I'd also like to thank those unitholders who have chosen to attend this meeting today in person and to all those who submitted their proxies in advance on a timely basis. It's now shortly after 10:00 a.m., and I would ask that the Annual Meeting of Unitholders come to order. I will act as Chairman of the meeting. I will ask Ms. Jennifer Suess, Senior Vice President, General Counsel, ESG and Corporate Secretary, to act as Secretary of the meeting and representatives of our transfer agent, TSX Trust Company to act as scrutineers. Today, we intend to first proceed with the formal items on the agenda. Following which, Jonathan Gitlin, our President and CEO, will be making a presentation. Following Mr. Gitlin's presentation, we will answer any questions from unitholders. The minutes of the last annual and special meeting of unitholders held on June 13, 2023, are available upon request. But before we begin, we have a few administrative matters to note. [Operator Instructions]. Each Trust unit represented at this meeting is entitled to 1 vote. Anyone attending in person who is yet to cast their ballot -- their vote can do so by ballot. If you require a ballot or would like to submit your completed ballot, please raise your hand, and someone will pick them up or provide you with a ballot. For those participating through the online platform, when we are ready to take the line of business for a vote, you will see voting options appear on your screen. If you have voted in advance of the meeting and do not wish to revoke your previously submitted proxies, then you do not need to do anything. During the meeting, we may also pause from time to time to renew -- to review messages from Ms. Suess. Thank you for your patience as we do so. I will now ask Ms. Suess to provide an advisory regarding forward-looking statements and information that may be discussed in today's meeting.

Thank you, Mr. Chairman. Please note that I would like to draw your attention to the advisory posted on the slide regarding the use of non-GAAP measures and forward-looking information that may be discussed at today's meeting. Certain information to be discussed during the meeting or in the management presentation, which will follow the formal portion of the meeting, contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws. All of the forward-looking information and statements that we may provide at this meeting, which includes all information other than statements of current and historical fact is qualified by the cautionary statement that is posted on the screen and additional information can also be found in the Trust's most recent management's discussion and analysis for the period ended March 31, 2024, and annual information form, copies of which are available on our website and on SEDAR+ at www.sedarplus.com. Forward-looking statements are not assurances of future performance and are subject to risks and uncertainties that are difficult to control or predict. The actual results, performance or achievements of RioCan and its business may be materially different from the anticipated results, performance or achievements expressed or implied by forward-looking statements. Forward-looking statements are based on RioCan's officers and trustees, beliefs and opinions, and undue reliance should not be placed on any forward-looking statements. I will now give the floor back to the Chairman to proceed with the Annual Meeting of Unitholders.

Thank you. In order to make the best use of our time today, certain unitholders have volunteered to move and second various resolutions where required. While this procedure will facilitate the efficiency for handling of the formal matters, this is not intended to limit in any way your right to participate in the meeting. Unitholders who wish to make comments relating to these motions may do so by raising your hand or through the online platform after the motion has been seconded in the manner previously noted. As mentioned, there will be an opportunity to ask general questions following the management presentation. As with prior years, the Trust used the notice and access mechanism to furnish proxy materials over the Internet to unitholders instead of mailing paper copies. Copies of the proxy materials are also available on the Trust public profile at www.sedarplus.com and on its website. I've been informed by the scrutineer that prior to the meeting, proxies received from the holders of approximately 56.85% of all units entitled to be voted. As a result, we have a quorum for this meeting, and the meeting is properly constituted for the transaction of business. Before I begin the formal meeting -- the formal part of the meeting, I would like to share a few thoughts. At the beginning of this year, RioCan celebrated its 30th year as a publicly traded real estate investment Trust. I can't help but reflect on RioCan's story and how far we have come. Respective colleagues surprised me 10 years ago when we pointed out that the Trust I started had to come in his words, and institution. It began by ringing the opening bell at Toronto Stock Exchange in 1994. And today, RioCan stands as a cornerstone of quality, growth and strength in the Canadian real estate landscape. It's not lost on me that there are some parallels between our current economic climate and that of 1994, our beginnings. For those old enough to recall, the early '90s were marked by severe liquidity constraints and a pretty bad recession. The conditions facing commercial real estate in 1994, were far more dire than what we are currently experiencing. In fact, in many days, what is happening today is simply a -- merely a fraction of what was happening in the early '90s. However, I referenced the similarities. As a reminder, that RioCan was born in the most challenging of economic conditions for real estate. Our ability to thrive in adversity is part of our DNA. Since its inception, the Trust has weathered a range of macroeconomic volatility from the storms of the 2008 financial crisis, the 2020 pandemic and the ongoing disruption caused by inflation and interest rate fluctuations since 2022. RioCan is not simply persevere through the numerous ups and downs in the last 3 decades. We have thrived. We are entrepreneurial at our core and we have consistently adapted our strategy to do whatever was required to prosper as the world and operating environment has changed. The Trust has used each instance of adversity to sharpen its resilience, increase its stability and position itself for future growth. The values that guided us over the last 30 years are the same ones that the Trust embodies today, and they're fundamental to our success. The RioCan team has curated an irreplaceable portfolio of high-quality assets strategically located in Canada's most sought after markets. In the current landscape, where retail space is scarce and new supply is virtually nonexistent, RioCan stands out. Simultaneously Canada is experiencing a significant population expansion. Against this backdrop, RioCan's unwavering commitment to portfolio quality positions it perfectly for long-term growth. Grit, resilience, stability and growth potential are embedded in RioCan's portfolio and in the people who work here. Under the leadership of Jonathan Gitlin, RioCan's President and CEO, our executive team embodies intelligence, dynamism and battle-tested experience. I have absolute confidence in RioCan's success, supported by our well-qualified and diverse Board of Trustees of which I'm proud to be a part. On that note, I want to take this opportunity to welcome our newest trustee, Guy Metcalfe, to RioCan's Board. I'm looking around for Guy, but he is here. I know that. There he is. Okay. Welcome. His wealth of experience and extensive knowledge of capital markets in the real estate and banking industries on a global basis, perfectly complement the depth of expertise currently on our board. In closing, I would like to thank you all for your continued confidence in RioCan. Our collective efforts will undoubtedly yield rewarding results. Now, I have to move forward with the business of this meeting, followed immediately by Jonathan's insights into RioCan's present and future. After his presentation, we will, as mentioned, address any questions that have or will be submitted. We'll now proceed with the first item of business for the meeting and present the financial statements for the year ended December 31, 2023. A copy of the 2023 audited consolidated financial statements are available on the Trust's website. and at www.sedarplus.com and were previously made available to unitholders in addition to the proxy materials. Unitholders do not have to take any action regarding the financial statements. Ms. Suess, are there any questions or comments submitted with respect to the presentation of the financial statements that ought to be addressed at this time?

Thank you, Mr. Chairman. There are no questions received relating to this item of business.

Thank you. Second item of business -- sorry, question?

[indiscernible].

Well, then my agenda is incorrect. Thank you for the correction. The second item of business is the election of trustees. I'll try to remember that as I continue on. The Trust has advanced notice provisions in its Declaration of Trust, which allows nominations to be made by unitholders up to a certain date prior to the unitholders' meeting, which this year, was May 5, 2024. No nominations have been received from unitholders and consequently, there will be 11 nominees presented to the unitholders for election to the Board of Trustees at this meeting. The management information circular provides detailed biographies setting out the valuable qualifications and diverse backgrounds of the 11 nominees proposed by management for whom proxies will be voted for their election, in the absence of instructions to the contrary. Ms. Suess will now read their names, and we refer you to the slide on the webcast. I declare the polls open on all resolutions. Please read the names.

The names of the nominees are as follows: Edward Sonshine, Jonathan Gitlin, Bonnie Brooks, Richard Dansereau, Janice Fukakusa; Marie-Josée Lamothe; Dale Lastman, Jane Marshall, Guy Metcalfe, Siim Vanaselja and Charles Winograd.

Thank you. If elected, these nominees will hold office until the next annual meeting of unitholders or until their successors or -- successors are elected or appointed. I now recognize Ms. Franca Smith, Senior Vice President of Finance for a purpose of a motion for the nomination of the 11 nominees named in the Management Information Circular.

I nominate the 11 persons whose names have been read to this meeting for election as trustees of the Trust to serve until the next Annual Meeting of Unitholders or until their successor is duly elected or appointed or they otherwise cease to hold office.

Seconder?

My name is Terri Andrianopoulos, Senior Vice President, People and Brand, and I hereby second the nominations.

Suess, were there any questions or comments submitted in connection with the nomination and election of the trustees?

No, Mr. Chairman, we have not received any questions related to this item.

Thank you. 11 persons have been nominated for elections trustees. There are 11 trustees to be elected. Unitholders have been provided with the opportunity to vote for each trustee or withhold their vote on an individual basis in accordance with the rules of TSX and RioCan's majority voting policy, details of which were provided in the management information circular for this meeting. Will the Secretary please confirm whether the number of units represented by proxies received that were in favor of each of the 11 nominees has reached a majority of those votes.

Mr. Chairman, I confirm that prior to the meeting, proxies were received in favor of the election of each of the 11 nominees as trustees from the holders of units representing more than the majority of all votes cast by proxy in accordance with the Trust majority voting policy for the election of trustees.

Thank you. May I now ask Franca Smith, Ms. Franca Smith, to move and Ms. Terri Andrianopoulos to second the formal motion for the election of each of the 11 persons nominated as trustees.

Mr. Chairman, I so move.

Mr. Chairman, I hereby second the motion.

Meeting will now vote on the motion. The unitholders and proxy appointees attending in person and cast their vote by filling out their ballot. I will now also ask the unitholders or their proxy appointees attending virtually to cast their votes to the online portal. As a reminder, if you have already voted or sent in your proxy, there is no need to do anything unless you wish to change your vote. No hands up, that's good. So thank you for casting your votes. The scrutineer will tabulate the votes cast, and we will report on the results towards the end of the meeting. Final results will be provided on our website and at www.sedarplus.ca later today. Next item is the approval of the reappointment of auditors. Third item is -- the third item and if thought appropriate, to approve the reappointment of Ernst & Young LLP as auditors of the Trust and authorizing the trustees to fix the remuneration of the auditors. May I have a motion for the approval of this resolution.

Mr. Chairman, I hereby move that Ernst & Young LLP be reappointed auditors of the Trust and that the Board of Trustees be authorized to fix their remuneration.

Mr. Chairman, I second the motion.

Thank you very much. Ms. Suess, were there any questions or comments submitted in connection with the reappointment of the auditors?

No, Mr. Chairman, we have not received any questions related to this item.

I don't see any hands raised here, so the meeting will now vote on the motion. Unitholders and proxy appointees attending in person can cast their vote by filling out their ballot. I will also ask unitholders or their appointees participating virtually to cast their votes through the online portal. Thank you for casting your votes. The scrutineers will tabulate the votes cast and we will report on the results towards the end of the meeting. Final item of business is the approval of a nonbinding say-on-pay advisory vote on executive compensation. This nonbinding advisory vote forms an important part of the ongoing process of engagement between unitholders and the board on executive compensation. Full particulars of the Trust's approach to compensation and details of the say-on-pay vote and unitholder engagement are set out in the management information circular for this meeting. The say-on-pay advisory vote requires the approval of a majority of the votes cast by unitholders entitled to vote who are present or represented by proxy at this meeting. Although the results will not be binding, the Board will take into -- will take the results into account when considering its policies, procedures and decisions and in determining whether there is a need to increase engagement with unitholders. Also, the People, Culture and Compensation Committee will take the results into account when considering future executive compensation arrangements. So it's an important one. In the event the say-on-pay does not receive their support of at least 80% of the votes cast, the Board has indicated it will disclose to unitholders as soon as practical and no later than 6 months following the meeting, a summary of the comments received and any changes to the executive compensation plans that are intended to be made. May I have a motion to approve on a nonbinding basis, the Board's approach to executive compensation by way of a say-on-pay vote.

Mr. Chairman, I hereby move that the Board's approach to executive compensation as set out in the Trust's information circular dated April 19, 2024, be approved on a nonbinding advisory basis.

Mr. Chairman, I second the motion.

Thank you very much. Ms. Suess, were there any questions or comments submitted in connection with this item?

No, Mr. Chairman, we have not received any questions related to this item.

Meeting will now vote on the motion. Unitholders and proxy appointees attending in person can cast their votes by filling out the ballot. If you have not already done so, I will ask unitholders or their appointees participating virtually to cast their votes through the online portal. I see no hands. So thank you for casting your votes. The scrutineers will tabulate the votes cast, and we will report on the results towards the end of the meeting. Ms.Suess, is there any other business to come before this meeting?

No, Mr. Chairman.

In that case, ladies and gentlemen, this brings us to the end of voting on the items of business before this meeting, and I, therefore, declare the polls closed. If there are any proxies to be handed in, please put up your hand so the scrutineers can pick them up. There's just 1 at the back here, please. Thank you for casting your votes. The scrutineers are in the process of now completing their final tabulation of the votes cast. Based on the preliminary voting prior to this meeting, including proxies received we can confirm the results of each matter. I'm pleased to report that on the election of trustees, the preliminary voting results show that each trustee nominee received votes by more than the requisite majority required. Accordingly, I'm pleased to declare that the proposed trustee nominees have been duly elected as trustees of the Trust to hold the office until the next annual meeting of the unitholders or until they resign or their successors are duly elected or appointed. On the appointment of auditors, the preliminary voting results show that the requisite majority of votes cast were in favor of reappointment of Ernst & Young LLP charter professional accountants as auditors of the Trust. I therefore declare that Ernst & Young LLP chartered professional accountants are reappointed auditors of the Trust and the trustees are authorized to fix the auditor's remuneration. On the nonbinding advisory say-on-pay vote, the preliminary voting results show that a majority of the votes cast were voted in favor. So I declare this motion carried. The final voting results will be available after the meeting and posted to Trust's SEDAR profile at www.sedarplus.ca. If there is no further business, I will now ask Ms. Franca Smith to move, Ms. Terri Andrianopoulos to second a formal motion to terminate this meeting.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. All in favor, please raise your hands. Contrary, if any? I hereby declare the motion carried and the meeting terminated. And happy to turn over the podium to Mr. Jonathan Gitlin, our President and CEO. You'll note there is a disparity in height. So there's some adjustments required.

Very slight Ed, only very slight. But as Ed said, I'll echo it, great to see people here in person today, and welcome to all of you to the 2024 RioCan Annual General Meeting. I'm excited to share our progress toward our goals. RioCan's 2023 results showcased operational strength and efficiency, achieving our financial objectives. In light of this in February of 2024, we announced an increase in the distribution payout to our valued unitholders for the third consecutive year. Now before diving into the formal update, I want to express deep appreciation for RioCan's talented leaders and employees. Our people and our culture are as foundational to our growth strategy as our remarkable portfolio. Their hard work and commitment make our success possible. Now as Ed mentioned, RioCan celebrated its 30th anniversary earlier this year. During this milestone, we reflected on how we've curated an irreplaceable portfolio of high-quality properties. Over the last decade, we struck a balance of boldness and prudence, focusing on portfolio quality. We divested lower growth in secondary market assets while investing in our core of high-quality major market assets. Additionally, we strategically developed mixed-use assets to prime transit-oriented locations across Canada. I'll focus today on how our investment in portfolio quality translates into strength and stability now and growth long into the future. Retail space scarcity prevails due to Canada's tight zoning regulations and the vast gap between replacement cost and market value. It's currently impractical to build any meaningful volume of new retail supply. Simultaneously substantial population growth, particularly in this country's major markets drives demand for transit-oriented locations. And RioCan's portfolio is heavily concentrated in these supply-constrained markets. In fact, stand at any major intersection in any of these areas, and you'll find yourself in close proximity to a RioCan shopping center. This backdrop, coupled with our strategy and unrelenting emphasis on portfolio quality over the years has put us in a position to fuel long-term organic growth. All indicators are that the type of space RioCan offers will continue to be in short supply and of course, high demand. Beyond supply-demand dynamics, our strength comes from disciplined management. RioCan's current strength and stability are a function of unwavering discipline in responsibly managing every aspect of our business over which we have control. This focus has resulted in a portfolio and team designed to thrive in promising conditions and to deliver strength and stability in downturns. This means we face both the current macroeconomic conditions and the future with confidence. Now here's why. RioCan's portfolio has never been more desirable or more defensive. Densely populated areas surround our assets within a 5-kilometer radius, the average population is 260,000 people with a $140,000 average household income. This demographic profile provides a compelling opportunity for our retail tenants. The desirability and density of the population surrounding our assets also makes our properties logical candidates for redevelopment. RioCan has a development pipeline of more than 42 million square feet, which provides an industry-leading opportunity to service value when the time is right. The quality of RioCan's tenant base continues to advance in lockstep with the improvements in our portfolio's demographic profile. We prioritize strong and stable necessity-based tenants. Currently, 87.9% of RioCan's annualized net rent comes from such tenants. I'll take a moment now to summarize RioCan's 2023 operational achievements. RioCan's superior property fundamentals and the high demand for our space resulted in outstanding leasing spreads and record occupancy. Same-property net operating growth for our commercial properties for the year was 4.8%, exceeding our 3% annual target and providing the foundation to deliver per unit FFO of $1.77, representing growth of 5.2% on a compounded basis since 2021. Leasing velocity remained a dominant theme driven by RioCan's high-quality, necessity-based retail portfolio. 2023 new and blended leasing spreads were in the double digits. Retail committed occupancy also reached an all-time high of 98.4%, positioning us very well as we entered 2024. The demand for our space and our team's deep experience continues to create positive tension in lease negotiations whenever there is vacancy. Our ability to capitalize on these opportunities safeguards our occupancy levels and enhances our productivity and profitability. When weaker tenants vacate the short-term transitions while creating nominal downtime, present opportunities to backfill with more productive leases. This was perfectly illustrated by the recent exit of big-box retailers, bad boy and rooms and spaces who ceased operations in the first quarter of 2024. These 2 tenants previously occupied 10 locations and 261,000 square feet of space in our shopping centers. As of May -- as of early May 2024, 6 of the 10 locations have been leased at significant higher -- at significantly higher base rents, higher embedded year-over-year growth and with far fewer restrictions and exclusions. Negotiations are underway for the remaining 4 locations. Now we understand vacancies typically raise concerns over tenant weakness, the cost to refit space and foregone income. However, RioCan's defensive portfolio and leasing expertise turn these temporary vacancies into long-term benefits with shopping center upgrades and space recycling with new tenants. These healthy transitions are necessary for long-term portfolio health and outsized growth. It's worth noting that only approximately 2% of our portfolio comprises what we call transitional tenants, which are businesses that can be more susceptible to macroeconomic volatility. However, when RioCan units do become available, we're strategically positioned to select relevant, resilient tenants to enhance cross-shopping convenience and drive higher rents. Our roster of strong and stable tenants remains healthy even in this inflationary environment. Vacancies allow us to accommodate the increasing space demands of tenants like Loblaws, Sobeys, Shoppers Drug Mart, Dollarama and TJX banners. I'll dig a little further into the nature of our recent leasing activity. RioCan secured 3 new agreements with grocery stores in the first quarter. The deals over 65,000 square feet -- the deals cover over 65,000 square feet at an average net rent 50.3% higher than the rents previously paid on the same space. Negotiations with 2 additional grocery stores and at Costco are also nearing completion. The nature of this leasing activity has practical impacts. It bolsters the resilience of our portfolio and further enhances our income quality. In addition, tenant upgrades lead to enduring organic growth. Great retailers attract other great retailers. Moreover, with demand for our site surpassing supply, we're negotiating favorable terms that support sustained growth, including annual rent increases, reduced overlapping use restrictions, increased flexibility in development rights and, of course, green lease clauses. Transforming open-air assets into highly valued grocery-anchored centers also boost net asset value. And importantly, grocery-anchored centers often have a lower capitalization rate due to the market's recognition of their stable income potential. Everything roots back to the leverage we've given ourselves through creating a better portfolio. Our income is further enhanced by our RioCan Living residential rental portfolio, which generated $21.5 million of NOI in 2023. This is an increase of nearly 58% over 2022. The RioCan Living portfolio currently has more than 3,000 purpose-built residential rental units in operations spread across 14 buildings in Toronto, Montreal, Ottawa and Calgary. Supply constraints in these markets make RioCan Living's rental accommodations highly desirable. Tenants are attracted to well-located amenity-rich rental accommodations with easy transit access. I'll take a few moments now to talk about The Well. So The Well is our flagship mixed-use development in Toronto's downtown West and it exemplifies RioCan's boldness and forward thinking. As of May 7, 2024, 97% of the total commercial space at The Well was leased with approximately 1.4 million square feet in tenant possession. Despite the challenges posed by the global pandemic, we committed to populating this remarkable project with the innovative retailers and inspired food service offerings that Toronto has been waiting for. In November of 2023, RioCan and our partner Allied Properties REIT celebrated the retail components launch with a community ribbon-cutting ceremony. We were thrilled to further advance the evolution of Toronto's food seen last week with the incredibly successful opening of Wellington market at The Well, which I'm still full from. The Market has over 50 food and beverage merchants. The diversity of the food offerings and the planned programming of Wellington market are fueling further excitement for the already busy Well. Turning now to our balance sheet. RioCan is well equipped to take prudent steps to fortify our future and mitigate interest rate impacts. In Q1, our net debt-to-EBITDA ratio improved to 9.17x. And this is from 9.28x at the end of 2023, moving us closer to our aggressive target of 8 to 9x net debt to EBITDA. We've charted a clear road map, starting with repatriated proceeds from inventory property sales. Between 2024 and 2026, the 2,573 condominium and townhouse units we currently have under construction are expected to generate approximately $800 million in sales revenue. These proceeds are earmarked for practical uses, including the repayment of debt. Additionally, with over 14 million square feet of zoning approved development sites, our portfolio is rich in development density and low cap rate properties providing flexibility for further enhancements should attractive opportunities arise. Prudently, we've also reduced construction spending this year. This is a proactive measure. With no material construction starts, we allocate capital to more accretive uses such as debt repayment by temporarily scaling down construction spending. While RioCan remains focused on operations and our balance sheet, we're also committed to responsible growth. Our achievements in sustainability, ethical governance and fostering a positive culture have garnered numerous accolades. Notably, we're taking steps to mitigate the impact of climate change, aiming for net zero greenhouse gas emissions by 2050. We're pleased to confirm that our targets were approved by the science-based targets initiative in 2023, a significant validation of our commitment. I'm also proud to report that in the 2023 GRESB real estate assessment, we maintained our first rank amongst our Canadian peers. Being Canada's longest standing REIT isn't just a status symbol for us. I stand in front of you today, not merely as the leader of Canada's longest standing REIT, but as a steward of an irreplaceable portfolio, a collection of high-quality properties that has weathered storms, adapted to change and consistently create value. I speak to you today from that position of strength with the perspective and knowledge afforded by a long history and a clear vision for the business. Our journey has been marked by boldness and prudence, a delicate balance that has fortified our position. Let me share a few brief reflections before I wrap up. Our perspective is shaped by 3 decades of experience and a clear vision for the future. We manage risk, maintain a healthy balance sheet and access diverse financing channels. Our curated portfolio demonstrates its potential and is built to thrive in any economic climate. Our culture of excellence attracts and retains the best minds, the architects of our success. You can count on our stability and our unwavering commitment to long-term outcomes. Our assets fuel growth and mitigate risk positioning RioCan as a best-in-class retail portfolio. Our strategy, fundamentals and self-funded growth plans inspire confidence. We aim to achieve total unitholder returns driven by an entrepreneurial spirit and dynamic leadership. Your trust is in good hands. In closing, I look to the future with confidence, retail dynamics favor us and our commitment to responsible growth insurers, stability and prosperity. Together, we create a lasting legacy that transcends short-term turbulence and delivers enduring success. Thank you to our unitholders for your unwavering dedication and trust.

Jonathan, thank you very much for that presentation. And at this point in the meeting, we are pleased to answer any questions that you may have with respect to the Trust, its financial statements and its operations during the year. Ms. Suess will let us know if any questions came in online. And if anyone here wishes to answer a question, please raise your hand.

[indiscernible] And let's -- no one knows for sure going forward, but if the rates do not go down very much, looking at the future, what do your maturities look like on your debt? And are you prepared for that scenario in the [indiscernible]?

Paul, thank you for your question.

So for the benefit of everyone online, the question is with respect to the maturities that we have coming up with our debt ladder, what steps have we taken to ensure that we are prepared?

So it has been a very volatile interest rate environment over the last few years. You're absolutely right, Paul. And we've always set up as one of our foundational elements to have a debt ladder that has expanded such that we never have an outsized amount of debt coming due in any 1 year. And we benefited from that in 2023 when you saw a significant spike in interest rates, and we'll continue to benefit from that. One of the things we're doing for the future is to continue with that debt ladder and in fact, expanded out by getting longer-term debt in some of our recent financing such that our weighted average term to maturity will extend out and that mitigates risk of further interest rate spikes. Beyond that, we focus on having plenty of liquidity and also a very low payout ratio, meaning that we have recurrent cash flow that we take in and can utilize that for paying down debt. And in all that exercise of continuing to pay down debt, of course, is also a very strong mitigant against future debt increases. Thank you.

I'm told there are no questions online. Are there any other questions from the room? Please raise your hand, if so? Well, there doesn't appear to be any further questions. So I'd like to thank everybody for attending this first hybrid meeting. And Jonathan, thank you for a great presentation, and thank you all for coming.

Thanks, everyone.