Shurgard Self Storage Ltd (SHUR) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Shurgard Year-End Results 2020 Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to our first speaker, Ms. Caroline Thirifay. Ma'am, you may begin.

Thank you, M. Good morning, everyone. Thank you for joining us for the full year 2020 results earnings call. I'm here with Marc Oursin and Jean Kreusch. Before we begin, we want to remind you that all statements other than statements of historical facts included on this call are forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected by the statements. These risks and other factors could adversely affect our business and future results that are described in our earnings release and in our publicly reported information. You can find a press release and an audio webcast replay of this conference call on our shurgard.eu website. With that, I will turn the call over to Marc.

Thank you, Caroline. Good morning to everybody and very happy to share with you our great results for this part year 2020. And just before starting, again, the presentation, I would like to come back to, I would say, the support and the great involvement that we got during this very particular year from all our employees. You know that it's easy to look at numbers, but in the end, these numbers are coming from the work of people. So again, I take the opportunity here to thank the whole organization of Shurgard. Secondly, important message, all the KPIs are at the top of the range or above the guidance. So I think it's good to be remembered. And then this is what you see, if we start to look at Slide #2, where you see the revenue have grown by 5.5% for the total company for the full year at constant exchange rate. We got actually a good grip on the cost. And we got also some benefits from one-off gains. You remember that during the first lockdown in April, May, we almost shut down in France and in other countries the level of investment on Google because there was no demand, and we got the benefit of that. So that's why the NOI of the company globally has been able to grow faster than the revenues at 6%. And you will see this later with the same-store, too, even more. And then while talking about same store, we have been able to deliver a 3.2% growth of the revenue for the whole year, which is significantly higher than our guidance. That was 1.50% to 2.5%. Secondly, in terms of how this has been built up. So you know that this revenue, you have 2 effects. You have the value effect and the volume effect. If we look at the volume effect, so let's say, do you simply rent more square meters? So is your occupancy growing during that period of time? And actually, it did significantly. The portfolio actually has been able to enjoy an average occupancy for the whole year of 88.9%, which is close to 89%, knowing that we are talking about more than 220 properties. And there is no major discrepancy per market. So again, it shows also our capacity to manage with a great consistency across the 7 countries, our portfolio, and the growth has been 1.1 percentage points. And if you look at the closing occupancy, actually, it's even better. So 89.4% at the end of December, with a growth of 1.7% -- percentage points, sorry, versus last year. So that's the volume effect. On the top of that, we had also a value-effect positive, all the rates in-place rents, so what people who are renting are paying to us did grow by 1.3%. So that's why the combination of this volume effect plus the rate for the value has been able to grow the revenue same store by 3.2%. As I said on the cost, we have been able to have a good grip on the cost, especially also on the same store and the benefit of these one-offs that we got in the end have been able to raise the margin by 1 percentage point, which is pretty significant to 64.6%. And then if you go through the bottom of the P&L, EBITDA has been able to grow by more than 8%. And the adjusted EPRA earning, which is the measurement of our bottom line earnings, have been able to tap EUR 118 million with a growth of 10% versus 2019, which is a pretty significant increase. Then specifically regarding the dividend. So the proposed dividend is actually EUR 1.06 per share, which is an increase of more than 11% versus 2019. And this is, of course, is less the interim dividend that we paid already in October for the first half of the year. That was EUR 0.49. And the payment of that dividend should take place May 11 this year. So again, a great set of results for the full year. And if you look at on Page 3, so which is a zoom on the last quarter, so Q4 2020. Actually, globally, it's an acceleration. Our revenue total company has been able to grow by 6.5%. While if you remember, from Q1 to Q3, we were closer to 5.2% or clear acceleration between this quarter and the rest of the year. Secondly, on the NOI, we have been able to keep the growth of the NOI at the same pace in the growth of the revenue, 6.4% or 6.5%. And then if you start to look at the same-store section, here, we have been able also to keep the pace, 3.2%, so above the guidance and which is the same speed than the previous quarters we experienced during the year 2020, that was also at 3.2% growth of revenues. Occupancy wise, as we said -- also as I said in the previous slide, the acceleration is also there. We have been able to grow on the quarter by 1.4 percentage points versus Q3 that was 1.2. So you see this acceleration. And then we have been able to reach 90% across the portfolio out of the 7 countries and, as I said, to more than 220 properties, which is, we believe, a great achievement. And on the NOI margin, we have been able also to grow the margin. That's why you see the acceleration in Q4 by 1.4 percentage points for the quarter versus last year with reaching 65.5% of NOI growth. Regarding rental collection, that was a topic that we raised and shared with you early in 2020 during the COVID. So I would say everything is fine here. We have a 97.5% historical pattern, and there's no problem. Everything is okay in all the countries, so fully under control. And for the current quarter, Q4, we have been able to deliver an EPRA earning -- adjusted EPRA earning growth of 16.2%. So then if we go to the pipeline, which is Page 4, and you remember, we have shared with you many times that we have 3 levels of growth times 7 countries, so potentially, 21 options of growth, and the 3 levers are: first, optimizing the current property, so what we call redevelopment because 95% of our assets are fully owned, so we have the grip, and the ownership of these assets. So we can potentially increase the size. So this is what we call redevelopment. Then the second lever is organic growth. So simply buying lands and building properties or buying a property and converting it into self-storage. And the third one is merger and acquisitions, so buying properties, existing properties operated or owning -- or being owned by competitors. So what is tremendous is that we have been able to reach 9% of our current total fully leased out, so the footage of the company [ should be firm ] in this pipeline. So the 3 levers of growth, which is more than 100,000 square meter. But interestingly, what you need to remember is that out of this 9%, 5%, which is more than 60,000 square meters, are to be delivered in '21 and also in '22. So it shows also our capacity to consistently grow the pipeline and to be able to deliver more square meters every year from the 3 levers of growth that we have. If you zoom it on the -- on 2020, so the year has been very active despite the COVID. We have done 4 redevelopments in France, in Paris and Marseille area. Then if you look at the openings, we were supposed to open 6, and we opened 4 properties, actually, 1 in London, 1 in Paris and 2 in Berlin at the end of the year. And these 2 delayed properties or postponed properties, one has already opened in January, Barking in London, and another one in Paris area, Argenteuil, that will open in Q3. And on the top of that, we have done 2 deals and bringing 6 additional properties, 2 in Paris and 4 in Munich, which is the most affluent area of Germany with an expected deal at maturity of 8%. And back to '21, '22, so what we are facing. Well, here, to make a long story short, we will open 7 properties in '21, so -- which is for the 5 that were foreseen for '21 plus the 2 that have been postponed from 2020. So it's going to be a very active year for construction. And secondly, in terms of preparing the pipeline, we have also already a couple of projects for '22, and the team is working very hard to build up this '22 and '23 pipeline. And on the top of that, we have a couple of redevelopments with a major one in Amsterdam, where we are doubling the size of one property. As we have done 2 years ago with City Airport, it's exactly the same thing. We just copy/paste the existing building by creating a new one and doubling the size of the building. So now I will let Jean going through the highlights of 2020 regarding all the financial section. Thank you.

Thank you, Marc. So combined by a solid growth of our earnings in 2020, as Marc explained, we end the year with also a very robust balance sheet with a loan-to-value at 18.1% and a net debt-to-EBITDA at 3.7x. Our cash position at December 31 was EUR 103 million. We're also very pleased to announce we refinanced the upcoming EUR 100 million U.S. private placement fund coming to maturity in July with a green U.S. private placement of EUR 300 million. The senior unsecured green notes have a coupon of 1.24%, are denominated in euro and have a 10-year maturity. The offering was very well received with a strong level of oversubscription. Part of the proceeds will be used to finance green initiatives to support our growth. EPRA net tangible assets grew by 11.4% to EUR 2.5 billion. Moving on to our financial performance for the year. Real estate operating revenue grew by 5.6%, with our fourth quarter showing a flat acceleration with a 6.5% growth at constant exchange rates. The bulk of the increase comes from our same-store growth and the expansion of our store portfolio, mainly through the 7 stores we acquired in the last 2 years. Our net income from real estate margin increased by 0.3 percentage points at constant exchange rate, reflecting the operational efficiencies of our scalable platform. The decrease in G&A was mainly due to temporarily lower development costs. Finally, our adjusted EPRA earnings grew by 10% at constant exchange rates to EUR 118 million. On Page 7, our current operating results at constant exchange rate for all stores in that segment continue to demonstrate our ability to grow the top line while leveraging our standardized and digitalized platform to deliver economies of scale. Our same-store revenue grew by 3.2%. We had a strong finish of the year with the closing occupancy at 89.4%, up 1.7 percentage points over 2019. The average in-place rent increased by 1.3% over 2019. Same-store NOI margin increased by a full percentage point to 64.6%. On Slide 8, our 3 levers of growth are contributing to the 6% increase in NOI with the same-store NOI growing by 4.7% and contributing EUR 7.6 million to the growth, while the acquisition added EUR 2.6 million of additional NOI. Moving on to our cash flow. Our cash from operations increased by 20%, reflecting our improved EBITDA and differences in timing in tax payments year-on-year as well as some tax refunds in Germany. We invested EUR 131 million in 2020, reflecting a higher volume of acquisitions. The cash outflow from financing of EUR 110.7 million reflected our payments of interest and dividends. On Slide 10, we continue to show a solid balance sheet geared for growth. Our EFRA NTA grew by 11.4% from EUR 2.3 billion in 2019 to 2.4 -- EUR 2.5 billion in 2020, following positive fair value revaluation of our investment properties. Finally, as Marc already elaborated early on, we have a pretty massive pipeline. At December '20, 9% of our net rentable square meters, up 1% in quarter 3, has been acquired, developed, is under construction or have been signed.

Thank you, Jean. And now let's go to the section regarding EST before going to what we are doing with customers and the conclusion. So we are on Page 12. So the first thing is why GRESB? And you know that this institution is very well reputated for real estate world. So that's why we decided at the moment of the IPO that was more than 2 years ago to focus first on how we can be well rated and improving our rating across the years with GRESB. So well, I have the pleasure to share with you the results that are astonishing from our point of view. Because just within 1 year, we have been able to grow our score that is above studies rated over 100 from 60 to 78, which is a massive increase. Secondly, we became the runner up in our peer group. Out of 6, we are now on the number second and very close to the #1. And in the end, we got 4 stores out of 5. It's like the ruble reduced, if you prefer, from GRESB. While in 2019, we had only 1 star. And more than that, this rating is actually spread over 3 major KPIs, so environmental, social and governance. And for each of them, we are always above GRESB average, which is across 1,200 property -- companies, sorry, listed and also above our peer group. So fantastic achievement, and I would like also to thank the team to have been able to reach that just within 1 year. It's a great score. Then if you go to Page 13, where we're entering more into the details. So I will not bother you with all these KPIS. But just one thing to understand the GRESB line. So you see all the different major criteria used by actually GRESB, and this document is actually coming from GRESB. And you see a green line and a gray shadowed area. The green line is showing the score and you see the max is 100 for these KPIs. And the gray is the performance of our peer group, so self-storage in the world. So you see that the green line is always above, except for one item which is water consumption, and I will come back to that. And I picked up, for example, one example, which is on the left side, the GHG, so the emission of CO2. And actually, you see that we are already very good but will be even better because we took the opportunity during Q1 2020. If you remember, the price of oil was very low, and therefore, the price of megawatt in general was also very low. And we decided to go for 100% electrical supply coming from green or, let's say, clean energies. So for example, hydraulic. So the dams, for example, the wind mills, PVs. And so we have been able to contract all our European markets valid from January '21, 1st of January, so it has started already for more now than 50 days and in the 7 markets, and this is contract for 3 years. So we got the benefits of having low price for the energy and having a clean energy. So we are now 100% zero carbon emission for all the electrical parts of our supply. So that's a great achievement. And this will be in the scoring of 2020 that we will get from GRESB in October this year. The other thing to mention is that our industry is a low-emission, I would say, industry versus a class of assets in real estate. Just to give you some perspective, I don't know if you have this kind of numbers in your head. But Caroline and the team have done a great job in our annual report to give you clear numbers and comparable numbers. That's why we are using all the EPRA tables that you can check. And if you take the CO2 emission of the -- of Shurgard in 2020, actually scope 1 and 2 for the ones who do know that, they will understand. And we have 5.5 kilo of CO2 emission per square meter rentable, which is, by the way, 14%, so 1-4, less than '19 and it shows to give you some perspective. If you go for residential or for office building, it would be 10x this, which is also in a way quite normal because in our properties, when the customers are not there, the corridors are not lit. And secondly, the level of heating is not the same in terms of heating than offices or residential. But nevertheless, we have been able to reduce by 14% this CO2 emission between the 2 years. And the last point on that, all these numbers and this great achievement has been realized, why? Because we have a chain of command that is pretty clear. We have an ESG Committee internally in the company that is meeting every -- actually every month and going on the different items and making sure that the actions are taking place. This committee is actually delivering the review of that every month also to our Executive Committee. So we're the executive of the company. So the 5 of us are checking and discussing to speed up and how to do this. And every quarter, we go back to the Board. We have an ESG committee at the Board level. And then we share with them the way we are moving on regarding all these items. So that was just an example on that page to show you how we are managing that. If you go to the next, Page 14, another very well-reputated institution in the real estate world, which is EPRA, actually, has given us 3 awards in 2020, while in '19, we just got 0. So again, just showing that on the GRESB side on EPRA, we are really moving on and trying to do the best we can to get and to be rewarded with these actions. Then if you go on Page 15, now we leave ESG directly, but indirectly, it's part of it. It's actually what we have developed for our customers. So we call that e-rental, which is 100% fully digital experience from searching till moving in, if you prefer. So from browsing on your phone, on your desktop, on your iPad, to moving in into a property. And what I would like to share with you is what we have done and the first results of that regarding this great customer journey or experience. So first, e-rental is fully digital, and that's a big difference and I will come back to that later. So -- and this has started already a long time ago, 8 years ago, with the full transparency of our website for prices. What you need to know is that in Europe, still many operators, and by the way, quite a lot and quite significant in the U.K., do not disclose a full transparency of their prices on the web. You need to give your name, to call back and to get the real offer. While, in our case, the price you see is the price you pay, very simple, like any other industry, and we started that 8 years ago in all the markets. And what you see on that slide is, what is the experience? It's pretty simple. You go on the web, again, you take your phone or your iPad, then you browse, and then there is this fantastic website of Shurgard in the 7 languages. And finally, you find on that website a unit with the location, so I need a 4 square meter in Romford or in Stockholm, and there's a price. And from that, you are able to go through the whole process, which means you can do the contract online automatically, and you can pay online also, which means that we are -- and then you get your unit. So you just go to the property. Actually, even if the property -- the office is closed, you can go at 8:00 pm, you can go at 6:00 am, and you will get your unit prepared for you. This is exactly the same concept than other industries that we know very well, that we're doing this for many years now, the hotel business, if you want a room or like the airplanes, and now many industries that are selling products or services do allow a complete 100% digital experience. So this is what we have done. We have launched that in November in the Netherlands, and it's already 20% of the total move-ins that we are doing in the Netherlands. So it's a pretty good achievement. And we will have all the markets available with this new technology and process by the end of the first semester '21. Talking about customers on that slide, you see on the right side the spread per, actually, a generation. And here, I would say numbers to me are not at all surprising. So this is the share per generation. So the baby boomers, people above 60 years; the Generation X people, between 40 to 60 years old; the millennials, 20 to 40; and Generation Z, below 20. And what do you see here? This is total Europe for Shurgard. You see that 1/3 are the baby boomers, more than 1/3 Generation X or EUR 40 million to EUR 60 million a quarter and very marginally Generation Z. Again, this is not surprising. When you're a student, you are 20 -- let's say, 20 years old, what are the assets you have? Well, maybe the laptop you have in your room at your parents' place, and this is it or maybe your motorbike. And that's it. So the older you get, the more assets you have, which means that the older you get, the more assets you have, the more space you need and you are facing also, as we said, the life events. You know that our business is driven by life events and density of population: divorces, death, marriage, birth, professional relocation. So when you are 20 years old, you don't know that you will face all these very nice events. But when you are 40, you have already experienced some of them. And when you are 60, you have experienced them even more than when you are 40. So to me, these numbers are not shocking at all. It's logical. But when -- if you flip the page, and which is Page 16, and when you start to look at the e-rental, and that's very interesting. So if you look at the chart on the top, you have on the left side the share in the e-rental in the Netherlands of the different generations. And on the right side, you have for the Netherlands in the total number of movings the share per generation. What do you see? Something that is pretty intuitive. The younger you are, the more you use e-rental. So you see that the baby boomers, who do represent 29% in our older contracts, do represent only 12% in the e-rental. While the Generation Z with 3%, it's more than the double in e-rental, 7%. Then Generation X is more or less the same, and the millennials is 57% more. So the younger you are, the more you use the e-rental, which is, I think, again, by having channels allowing the different generations is great, which means that Generation Z, millennials and Generation X will be very happy, especially millennials and Z with e-rental. And the baby boomers, very happy to use the call center or to come and doing door-to-door and say, "Hello. Hi, Marc, I'm looking for a space here." So that's, I think, very interesting to understand that. And the second important point regarding -- and the outcome regarding customer behavior is when these people are doing the business. And here, we are -- and we are discovering that we are able to align availability of customer with availability of doing the business. So what do you see? This is the blue bar chart below. You have the hours of the day, so from 0 to 23, 24 hours during the day. The red lines vertical are showing you the opening and closing hours of our offices. And what you see, you see many blue bars before 9:00 a.m. and many blue bars after 6:00 p.m. and all these blue bar, out of the office hours, represent roughly 25% of the total movings done by e-rental. So which means that if you are on the left side, it's 9:00 p.m., 21. You're on your sofa, you are browsing on your iPad or your phone and you are looking for a unit. Well, you can do that, and you can do the contract and you can pay online. So that's great. There are some crazy people who do -- never sleep. You see that there are 2 or 3 in the morning some guys are doing some contract, that's their problem. But in a way, very happy to do that because they can do it with this e-rental process. So again, the main conclusion is we have started that in December in the Netherlands. It's doing very well. We'll have all the markets by the end of the semester. Fantastic outcome and also insights about the way customers are using it for generation, how they are behaving and all of us in the organization are super excited with this new product. So if you go to the conclusion, which is Page 17. We -- the key items to remember, first, is very strong performance in 2020 and, of course, the resilience of the company during the COVID. Secondly, as Jean mentioned regarding the portfolio in terms of expansion in the pipeline, we have a very large pipeline and a vast majority of it is fully secured for '21 and '22 to continue to be active or meaning just to do deals in M&A. And here, we will, of course, continue to do so in '21 and the years after. And the last point regarding outcome -- sorry, outlook and also the guidance. So here, clearly, you have in Page 49, in annual report, the guidance medium term, and we stick to that. So the guidance medium term doesn't change. But for the beginning of the year and this year, '21, we are just simply cautious, as it is written here. We will come back to you during the course of the year, so to confirm and to give some orientation on this year, knowing that you know that each country today is having different patterns in terms of exiting from the COVID pandemia -- pandemic, sorry, situation. If you take Germany, if you take France, if you take the U.K., Sweden, Copenhagen, it's different. So we just want to make sure that we have a good understanding of how these evolutions are impacting or not our business. So that's why on that side, we simply want to be cautious. And we'll come back to you after the disclosure of Q1. So that's our story for 2020, Caroline.

Thank you, Marc and Jean. Now we open the line for your questions.

[Operator Instructions] And our first question comes from the line of Steve Bramley-Jackson from HSBC.

I just had a couple of questions, if I may. Firstly, just on the development pipeline, you highlighted on Slide 4 that you've got 5 developments that you're targeting to start in 2021 and '22. Question really, should we also expect an 8% stabilized yield on those developments? Or rather any reasons why that stabilized yield could be lower or even potentially higher? And I don't see any comments about acquisitions intent, either regionally or prospective sites that you might be buying in 2021. So any comments around that would be very helpful. And then secondly, second question, just on Slide 22, your stabilized tax rate. That's moved up a little bit. You talk -- I think the heading on that side is something heading towards normalization. Just a question as to what that normalized tax rate would look like.

Thank you, Steve, for the question. So I will answer to the first one and Jean will take on the second one. So on the first one, regarding the redevelopment and the yield, yes, we have actually 4 projects and this is what you see on Page 6, actually, of the also the press release where you have the table. So we have 4 that are under actually already refurbishment. So we have actually 1 in Munich, 2 in the Netherlands and 1 in the U.K., plus 1 that we are working on for '22 in Southwark, a major one. And the return that we're expecting for those is 10% in terms of yield for these actual redevelopments. And secondly, I think this was the first part of the question. The second one is regarding M&A. Yes, we do not disclose anything about M&A till we have done the deal, to be on the safe side. And so we are very active in terms of discussions, negotiations, so we should be able to bring what we have said in our guidance medium term, which was at least to bring 3 properties, both from competitors.

And Steve, on the tax rate, we're indeed moving up as we said before. So we are now at [ 16% ] stabilized tax rate. And our guidance is that we will be reaching 18% to 20%. That's where we should stabilize. So you can expect a tax rate...

Our next question comes from the line of Herman Van Der Loos from Degroof Petercam.

It's Herman. I have, well, one question again on the stabilized yield on your portfolio. Could you also give us a view per country? I understand perhaps that some countries, this stabilized yield might go down because land goes up? Are you going to refrain from further expanding if a yield, which is after a certain threshold, cross that certain threshold? Then a question on the e-contract. Do you -- I was amazed to see the response during opening hours. Is there a possibility there to reduce further FTEs? Or have you already reached a minimum? And then a more philosophical question. Well, I do understand your qualms not to issue a guidance, but you have a resilient business. You have a nice pipeline. You also mentioned that your e-contract is also going to help to have a contactless and seamless experience. Could you perhaps elaborate on what kind of specific uncertainties you are looking at that might perhaps make a guidance difficult?

Thank you, Herman. So 3 questions. All right. So I will let Jean -- Yes. Yes, okay. It's a question of terminology. Okay. So 1 sentence and 3 questions or 1 question with 3 sentences, up to you, Herman. But that's fine, no worries. That's great. We love to have questions actually. Makes things in this call more entertaining. So Jean, could you go through the cap rate?

The cap rate? So we have seen a manner -- a contraction of our cap rates in all the countries where we operate, with the exception of Germany, which substantially went up. Otherwise, all the countries went down, I would say, with the Netherlands contracting the most and I think that's in line with several transactions happened on that market in the Netherlands in perhaps a couple of months, public transactions that helped on the cap rate side. And also, I would say, we have, as you've seen, our performance in the Netherlands in terms of occupancy and growth has been very solid, and that's also been reflected by the value.

That'sone part of the question. Then there's also, I think, in your -- in the first section of your question, the -- potentially in terms of future development, and you know that we have given a target of 8% cash-on-cash for the yield of development organically. And here, per market, probably, if you look at Berlin, there is more tension. I think in Berlin, we are closer to a 7%. But in Paris region and even in London areas, we're able to be between 8% and 9%. So globally, we believe that the 8% is still the right number to focus on. The second point regarding the e-rental with the full-time equivalence of the impact on staffing, I think it's too early to talk about that now. What is important is first to roll out by the end of this first half, sorry, of the year for all the markets. We will see if all the markets are behaving the same in terms of penetration of this e-rental in the total number of move-ins. And after that, as I said, you've seen that the most important for the time being, second most important are the baby boomers. And these baby boomers, they need to call and they need also to do face-to-face. So I don't want to lose 33% of my customers to try to save one FTE in the properties. So we need to be careful with that. So doing cost cutting is great or cost killing, but I don't want to do customer killing either. So we need to choose the right model here. And the third question was, was it [ box ]? Sorry, I missed it.

The [indiscernible] on the guidance.

Sorry, yes. So why are we cautious? The reasons why we are cautious on this outlook for '21, 2 things. As I said, is, for the time being, we don't have a good view on the potential impact and the speed of getting out of this pandemia or not. So some -- for example, you take Germany and the Netherlands, taking much stringent measures in certain areas and what they were doing a year ago. And this could have an impact if they tighten that even more. And the second thing, we still believe that there is some intensities regarding the Brexit effect, Brexit in the U.K. specifically and in London area. This has been hidden partially by the COVID, and we just want to be, let's say, comfortable with that. So that -- these are the main 2 reasons why we have said that we'll come back to you later on during the course of the year.

And our next question comes from the line of Frederic Renard from Kepler Cheuvreux.

Can you hear me?

Yes, very well.

Just a few follow-up questions. Maybe on the guidance, we are 2 months in the new year. Can you give some color about the occupancy rates currently? And are you expecting some decrease in occupancy rate going forward in your same-store business? That's the first question. And the second question, if I may ask it, the second question would be on the green note you issued yesterday for EUR 300 million. You have still a cash position of [ EUR 100 million ]. I understand you would refinance the USPP of EUR 100 million, so that is actually a nice firepower. Can it bode well for -- beat M&A? Or is it safe to assume that?

Okay. Good. Thank you, Frederic. So for the first one, what we can say is that you remember that when you look at Q4 2020 versus last year, so '19 and the -- so the speed of Q4 versus the rest of the year 2020, there was an acceleration, occupancy and revenue and the occupancy -- while the revenue was coming from this growth of occupancy and this acceleration, but also on the right. But what is interesting is that for the timing at the beginning is showing the same trend. And the interesting factor is that the level of move-outs that we're anticipating actually to go back to a certain level, which is back to normality, is not really taking place. So if you remember, the different calls that we have and what we have shared with you guys during the different quarters of 2020, we experienced and we are not the only ones. It's the same in the U.S. It's the same in the U.K. So a decline of the number of move-outs. So if you prefer, you are emptying the properties less than the previous years, which is good for occupancy because the level -- even if the level of moving has been same store for the whole year negative, the move-outs are less -- actually, even more. And therefore, you are keep gaining occupancy to the difference of speed of variance between the 2 years between moving the ins and the outs to -- okay. So what I can say is that globally, the beginning of the year is showing the same trend. So -- and so we are, for the time being, happy with that. So on the second part of the question, Jean will answer to you regarding the green note and its potential.

Yes. The green note, yes, indeed, we ran -- we can do the math, EUR 200 million more than the refinancing of the funds. We were planning to use that in our development, both organic and acquisitions. As you know, we're also paying 80% of our adjusted earnings in dividend. So if you do the math, that plus or increased development and you see that our pipeline is increasing, that EUR 200 million will be used quite quickly. So that's why we decided to take the opportunity of the fantastic conditions we got to increase actually our offering and get the EUR 300 million note. So we see that position for the future with that.

And your next question comes from the line of Marc Mozzi from Bank of America.

Yes. Just one remaining question for me essentially. I'll assume that your NPA calculation is now excluding transfer tax from the previous guidance or previous way of presenting it, you've been doing previously. What has led to you to change your mind about now excluding -- in terms of tax on your NTA calculation?