TAG Immobilien AG (TEG) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the conference call of TAG Immobilien AG. At our customers' request, this conference will be recorded. [Operator Instructions] May I now hand you over to Martin Thiel, CFO, who will lead you for this conference. Please go ahead.

Yes, many thanks, and good morning, everyone. This is Martin from TAG. Many thanks for dialing in today's conference call regarding the acquisition of ROBYG, and please accept our apologies that we approach you so shortly before Christmas with this conference call, but we thought it'd be useful for you to get some more information and some more color on the transaction that we have effectively signed yesterday evening and announced -- talk announcement in the press release yesterday evening. So therefore, we can discuss everything that is helpful for you during this call. But let us start with a short presentation that we have published on our website this morning and perhaps you had a chance already to look at it and to download it. And perhaps we start with the executive summary on Page #2 and some general words about rationale of the transaction and the main components of the deal. Yes, we're happy that we signed yesterday evening an SPA to acquire all shares in ROBYG. ROBYG is the largest Polish residential developer with a really outstanding track record over the last 20 years. And with the help of this acquisition, we're clearly enlarging our footprint in our business in Poland. You know that we're in the market now since 2 years, hedged, from our point of view, really a success story with the help of our team at Vantage in Poland, and we simply gained a lot of confidence even during this, yes, difficult time, the last 2 years. You know that the pandemic is still there. Basically, we have been in this market only during this pandemic. And even in this situation, the market has been proven to be extremely not only stable but also grown. So therefore, with the help of ROBYG and with the help of Vantage, we're really looking forward to expand our business in Poland. And if you look in rough numbers at our growth targets, I mean, so far, we've been talking about a midterm target of 8,000 to 10,000 residential units in Poland. Effectively, we are today doubling this target to more than 20,000 residential-for-rent units in Poland as our new target. That would account to approximately 20% in terms of units of our current portfolio. Yes, ROBYG has a secured pipeline. And that's, of course -- for us, of course, great interest of roughly 23,000 residential units in 4 major Polish cities. These are not only cities where we already are, like Warsaw and Poznan and at least to a certain part, TriCity or Gdansk. This is -- especially also Warsaw. So this acquisition enables us also to enter, from our point of view, an attractive market in Warsaw at a very reasonable price. Out of the 23,000 units in the land bank or in the pipeline according to our business plan, as we have it today, roughly 12,000 units should be held upon completion as yielding assets, and the remainder of this development pipeline is already in the process of being sold or will be sold in the future. Looking at the purchase price, the purchase price is not exactly determined yet. That's depending on the exact amount of certain cash distributions to the existing shareholders. We expect that the purchase price will be around PLN 2.5 billion, and that's in euro roughly EUR 550 million. So we think for us, this is really an attractive price, especially knowing what kind of company that means what kind of outstanding track record, excellent team and attractive land bank we're buying. Looking at the financing, the purchase price as well as potential refinancing of existing debt and working capital is funded by a bridge facility that we have already in place of up to EUR 750 million. So we'll take a close look at that later. The difference between the purchase price and bridge facility, so roughly EUR 200 million, is available, for example, for working capital for further investments or also for the early refinancing of existing debt, if needed. The takeout of this bridge facility will take place in the course of 2022. And let us say very clearly, we are absolutely committed to maintaining our BAA3 investment-grade rating in Moody's. So we will clearly take this into account when looking at potential take-out transactions. Closing of the transaction is expected to take place in the first quarter of 2022. The only thing we basically have to wait for is the mandatory antitrust clearance. I mean, clearly, we have to wait for this. But if you ask us if this is the high risk, no that's definitely not a risk. So we expect that antitrust clearance will be positive and that the closing will happen in the first quarter of 2022. There are no other conditions. Looking at the next slide, we show you, yes, some charts about our overview of our track record in Poland and the track record that we have realized over the last 2 years together with the help of our colleagues at Vantage in Poland. We have grown the business quite significantly. The total pipeline units in our current business, in our existing business in Poland are already above 12,000 units, out of which roughly 8,500 units refer to the build-to-hold pipeline and roughly 3,600 units refer to the build-to-sale pipeline. Looking at current results, if I put -- need to say that simple -- we are simply better than planned. So FFO, 2 contributions, first project that we are already renting out at Vantage, first rents that we see, that's all a little bit better than expected. And again, having in mind that we are really in a difficult time in light of the COVID-19 pandemic, this makes us very optimistic that we not only have already a good team in Poland in place, but also that the market is extremely stable and promising. Page #4 of the presentation shows you some more details about ROBYG's portfolio. ROBYG is currently working in 4 cities, I already mentioned them. And it's important to point out again that we are now entering the Warsaw market with the help of the acquisition. And when we combine the Vantage and the ROBYG portfolio, we see this on the top right of Page #4, the total pro forma combined number for the portfolio stands at 39,000 units. This includes, just to make it clear, 4,000 units that are already sold by ROBYG. On Page #4, you also see an overview of Polish developers and that makes it clear that after the acquisition of ROBYG, TAG or the new TAG group, that means Vantage including ROBYG, is by far the largest developer in Poland. And of course, that's our core business, the largest residential-for-rent company in Poland. Page #5 shows some numbers on ROBYG, and that's hold and build-to-sale pipeline. We think it's remarkable what margins, what gross profits the company ROBYG is achieving. So the gross profit margin for the financial year 2021 is expected to be above 30%. That's clearly outstanding. And with a team of around 450 employees and the history of more than 20 years being in the market, we have a lot of confidence that ROBYG will contribute extremely good results for us, for the new TAG Group, in Poland in the future. Looking at the type of apartments that we want to build with the help of ROBYG, basically, the product is very much comparable to what we are already building with the help of our Vantage team. And looking at average total investment cost per square meter, that's a little bit higher than our current pipeline. So looking at the details of Page #5. For example, the build-to-hold pipeline, the average total investment costs in euro per square meter around 2,300 units (sic) [ EUR 2,300 ] that compared to roughly EUR 2,000, that's a little bit less at our current Vantage portfolio. The difference is mainly attributable to locations like Warsaw and TriCity where ROBYG has a larger part of the portfolio. Simply, these are the markets with, for example, higher rent prices, but also on the other side with higher rents. So taking into account average rent per square meter in euros between EUR 12 and EUR 14, that would lead to an average gross rental yield for us effectively up around 7%. And keep in mind that we're talking about the capital city of Poland, Warsaw, that we're talking about a city like Gdansk, we think this is an extremely attractive project for us. Yes, Page #6, again, highlights the strategic transaction rationale. We're clearly expanding our existing footprint in the Polish residential-for-rent market now with that potential in a pipeline of more than 20,000 residential-for-rent units, out of which more than 6,600 are in the Warsaw market, which is a new market for us and highly attractive. And again, the Polish residential market clearly offers a dynamic outlook. Looking at the existing housing shortage in major Poland cities, looking at demographic developments, looking at general development in the Polish economy, this really makes us confidence that we are on a very right way. Page #7 outlines the funding. On the left side, you see a simple chart how we are financing the deal. Again, the purchase price will be EUR 550 million approximately and to have in place additional working capital or potential for early refinancing of financial indebtedness at ROBYG, there are other EUR 200 million possible, which are then secured by a bridge facility of up to EUR 750 million provided by 4 capital market banks. Just to make clear, you see this in Footnote 1 on Page #7, how we derived at the purchase price of PLN 2.5 billion, while basis for that was a total transaction consideration of PLN 3.15 billion. And as the company has a lot of basically excess cash at the moment in the balance sheet, the existing shareholder presumably will pay out a dividend of up to EUR 700 million to them. And it's clear we are deducting and distributing payment from this transaction consolidation. So the effective purchase price that we are paying will be around PLN 2.5 billion, that's the EUR 550 million, which is then effectively what we pay. It's there that we want to take out the bridge facility in the course of 2022. And let me confirm once again that we're clearly committed to maintain our BAA3 investment-grade rating. We have, of course, then all options on the table. Of course, we will also look at equity contributions. This could also be the case that we do selected disposals, whether this is within the Polish portfolio, whether this is within the German portfolio, and that's something that we will work on in the next month. And therefore, we have now the good situation really to look over the next months and quarters when we find the right timing to do here capital market transactions. And it's clearly that looking mid- to long-term, our LTV target of 45% will be unchanged. So we will not weaken our financial metrics now with the acquisition of ROBYG. And this is basically unchanged to what we have always said when acquiring Vantage, or when entering the Polish residential-for-rent market, that we clearly want to have the financial metrics in good shape as they are today. And some final words on Page #8 on the time line. Yes, clearly, the announcement was yesterday evening, what is now and next. We are basically waiting now in the next weeks for antitrust clearance by the authorities. In case of our Vantage transaction that happened quite quickly, as far as I remember, this was something between 4 and 6 weeks. So normally, time frame would be around 2 months. So an estimate would be the closing prep takes place in the course of February or it's in early March, but that needs to be seen. We definitely expect that this takes place in the first quarter of 2022. Yes, that's it from our side, a short overview of this important, that we think, highly attractive acquisition of ROBYG. And of course, we are here and are happy now to take your questions.

[Operator Instructions] And the first question is Kai Klose from Berenberg.

Yes. It's Kai Klose from Berenberg. Maybe I have 2 questions? The first one is on Page 4. Could you explain or give more details on the 2 numbers that you show here for ROBYG? Under the table at the top right, you say 27,100, then in the chart at the bottom it's 23,200? May -- could you explain how -- what the difference is? There's some information in the bottom left, but may can we have more -- a bit more details? And the second question is what changed your view on the Warsaw market being a bit more positive more quickly, that Vantage was not there, was not a negative for you? So I think now going to Warsaw might also change the profile a little bit. The last question would be on the Moody's rating. Have you already been in contact with the rating agency, and if they keep waiting temporarily -- even if temporarily the LTV goes up?

Kai, many thanks for the questions. Yes, of course, happy to explain this. Honestly, perhaps a little bit confusing number 23,000, 27,000 units. So 23,000 units, that's the pure land bank where construction not has started and where nothing has been sold. An additional 4,000 units have already been presold and is under construction. So we can look at the pipeline in 2 different ways. If you count everything, so whether they are already sold or not, that's the 27,000. If you exclude the already presold units, you arrive at 23,000. So that's the difference between these numbers. And then...

Sorry, then you say presold means en bloc or conduit sales?

Or sold -- simply sold, perhaps more exact, to individual buyers.

Okay.

So it's already sold, but the handover has not yet taken place.

So they're in the consumption phase, so to say?

Exactly, exactly. What has changed our view on the Warsaw market? I would say simply with the help of this acquisition, we are really able to enter this market at an attractive price. Our assumptions in the last 2 years, 3 years was that Warsaw is, of course, an attractive market regarding the development, like demographic development, like rent development, but when we looked at land prices, we always felt well the yields that we effectively would get when acquiring single land bank, single land plots are perhaps not that attractive in comparison to a project that we see in Wroclaw or in Poznan. Now with the help of this acquisition, we're effectively buying properties in Warsaw. When you look at the total investment costs and compared it with the expected rents, it is close to 7% gross yield. So -- and you know that we are not much looking at numbers. And this is something which is, of course, highly attractive for us. So basically, the acquisition of ROBYG allows us to enter the Warsaw market at a really good, good price, that's the conclusion. And regarding the BAA3 rating with Moody's, of course, we are already in contact, and we have discussed this acquisition with them. We know that we are more exposed to development risk. We know that also the Polish market is something that is -- has a different view from every rating agency compared to the German market, but we are very optimistic and very confident that we keep the BAA3 rating. I mean we have a positive outlook currently. So before the transaction, we were more moving towards a rating upgrade. So that should provide us definitely with some kind of buffer. But it's clear, Moody will release it's comment not in the next days as there's a kind of Christmas base, but I think in the -- as far as I know in the course of January.

The next question is from Thomas Rothaeusler, Deutsche Bank.

A couple of questions. Firstly, I mean the step is quite an expansion. What would you say is the maximum exposure to Poland, your plan for TAG over time?

Yes. Thomas, I mean for now, we have more than enough work to do. I mean buying a company, buying land bank is one thing, but really getting this into real projects, real renting these properties out, really realizing the sales over the next years, that's a lot to do. I mean we're talking here really about mid- to long-term cycles. Yes, the total pipeline at ROBYG will take to 2028. If we really realize everything built all the units, so we're doing this step by step. Currently, in terms of units that would account for approximately 20% to our existing portfolio, that seems to be for us as a good number. But as we also always said, I mean we look at such markets permanently. I mean we will review this continuously. Should you expect a further increase shortly? No, that's not the case. So for us, it's clear that we have our core market, that's Germany, which is an extremely stable, extremely reliable, extremely predictable market. But as you know, also a very competitive market where it's more and more difficult to buy portfolios at attractive yields. And then comparing that with the possibilities that we have in Poland, yes, of course, combined with a certain higher risk, as we are developing these units, but seeing that we're here building brand new products and new houses, important larger cities, in good locations, really good construction quality at a 7% gross yield, that makes us very confident that this is the right thing to do and that it deserves a higher share than the originally 10%, now more than 20% of the portfolio.

Okay. Another question, I mean, what is -- what would you say is the key motivation of ROBYG's management, also its shareholders, to sell it now?

Well, of course, I can't comment really what the shareholders or the existing shareholders are thinking, but knowing that private equity investors or -- observing that the private equity investor after 4 years of investment, selling its investment that seems to be kind of typical investment time. Yes, and of course, it's also for selling shareholders a good deal. And that does not mean that we are overpaying, from our point of view. That's definitely not the case. But we simply have to acknowledge that they have entered the market 4 years ago when perhaps at that time, the confidence in this market from investors was much lower. So they, for sure, had made a good return and since it's something which is absolutely key for us, as you know, based on the existing purchase price, we are still able to achieve very attractive returns for our shareholders.

And can you comment on the deal pricing, let's -- I mean, if you take EV/EBITDA multiple, is it correct that the EUR 550 million corresponds to EV and then it would be roughly 7x EV/EBITDA? Is it the right view or is that different?

Yes. That's -- the total financial debt at ROBYG is currently in euro million, roughly EUR 170 million, so 1-7-0, out of which approximately EUR 30 million are bank loans and approximately EUR 140 million are of the bonds. So if we put that on top of the EUR 550 million, then you're around EUR 700 million, then there's a certain cash balance in the balance sheet that brings you perhaps then back to more EUR 600 million, EUR 650 million. And comparing that with the expected EBITDA for 2022, then your EBITDA multiple below 8x, perhaps between 7x and 8x. So that would be a kind of pricing perspective from a developer point of view. But you know that we look at that. That's more from a residential-for-rent perspective. And we do that and quite simply say, okay, what are we effectively buying. We're buying a portfolio at a 7% gross yield, so little bit more than 14x multiple. We're buying at a little bit more than EUR 2,000 per square meter total investment costs, including land, including construction costs, including fit out, and these are, for us, of course, highly attractive numbers.

If you compare the pricing, I mean, if you take the multiple and compared with the Vantage deal, is there the big difference or...

That's higher. But I think this is a normal market development compared to 2 years ago. But since looking at the overall results, that's definitely, for us, attractive pricing.

The next question is from Sander Bunck, Barclays.

Sander from Barclays. A couple of questions. Just one thing first on the purchase price, just wanted to get clarified. I think in the announcement, it says the purchase price is approximately EUR 700 million. You're also talking about EUR 550 million as being in that consideration. The delta is the EUR 150 million. Is that effectively what's going to the sellers? And is it basically that you're paying the sellers or is it going straight out of the company?

Yes, Sander, happy to clarify this. Well, let's put it like this, basis for the variation is a purchase price or a transaction consideration, let's put it like this, of EUR 700 million in rounded numbers. And the existing shareholders will receive a dividend from ROBYG of around EUR 150 million. So that means the company after the dividend payment is valued at EUR 550 million, and that's what we pay.

Okay. Sorry to -- is the EUR 550 million consideration post the dividend payment?

Exactly.

Okay. Fine. That's great. Second question I had is on the kind of -- on any guidance on potential value creation going forward. I mean there is some -- like there's quite a lot of numbers flying around in terms of the amount of units that are going to be constructed over the next couple of years. But is there anything you can say in terms of the returns that you expect or the profits that you expect to make from that? And over what kind of time frame we have to think about?

Yes. Well, first of all, we will, of course, give much more details on the future business plan of ROBYG once we have closed the transaction and once we are able also to intensively discuss our business plan with the ROBYG management. And what we can clearly say today is that the overall return yields are very much comparable to what you know from us from Vantage. So looking at gross yields, I already mentioned it's 7%. Looking at EBITDA margins, north of 70%, 75%, as you know from Vantage, we should also apply such EBITDA margins to ROBYG, that it's very much pretty comparable. As I said, in the sales business, the gross profit ROBYG is currently achieving is above average. So while as we're looking at our Vantage portfolio where the gross profits of around 25% or margins of around 25%, that's at ROBYG more at 30%. That's not only due to a different market, like Warsaw, like Gdansk, it's due to the fact that ROBYG is not directly employing construction workers, but is doing the whole coordination, like a general constructor externally normally would do internally, so that brings an additional margin. So that means the sales business should be clearly above average. And then regarding the pipeline, as I said, we expect that this pipeline of the residential-for-rent builds will be completed in full at the latest in 2028. And we will now basically right after closing start to work on the first residential-for-rent projects. And as you know, with our history from Vantage, that will take then 1.5, 2 years until the first residential-for-rent projects are finished. So that means from the beginning of 2024 onwards, we will have the first resi-for-rent contributions from ROBYG, and that is then increased year-by-year until 2028. And again, we will definitely come up with more details also with the guidance for the financial year 2022 after we know when the closing happened and after we have discussed also confirmed our business plans with the ROBYG management.

Okay. Great. And just -- did I hear you saying that ROBYG basically does their construction internally, i.e., their own construction platform?

Yes, they coordinate in the construction work. So that means they're not directly hiring people, who do the construction...

As a general contractor?

Yes. They've basically their own general constructor.

Okay. Fine. Okay. Great. And just a last one for me. Just on the balance sheet of ROBYG. How are currently the assets being recognized? Are they currently being held at cost or is that already at fair value?

Just a very small part of it is valued at the fair value. This is a land bank where the concrete planning has not yet started. You can take a look at the ROBYG balance sheet, by the way, also on the ROBYG homepage. ROBYG is not a listed company, but it has issued listed bonds. So they're issuing quarterly financial statements under IFRS. But by far, the largest part of the portfolio is valued at cost.

Okay. So -- and that is because that's mainly then the inventories, which I guess is the largest item of the balance sheet at the moment. That's all how that cost...

Exactly.

The next question is from Peter Papadakos, Green Street.

Just 2 questions, maybe on the software side of things with regards to ROBYG management team. So can you say anything about -- is there a lockup period for them? And also just how's the integration between ROBYG and Vantage? Will there be more of an integration? Will it be sort of 1 company? Or sort of is the intention to keep them separate and, obviously, the senior people there separate? And then sort of related to that, will there be someone from TAG sort of some in senior even in the executive team that will sort of focus intensely on the Polish portfolio. I imagine, Claudia is really busy as it is. So how do you see that in terms of putting more resources from TAG in that business? And then finally, just a little bit on the bidding itself. Was this portfolio or this platform shopped around, sort of was a competitive bidding process or did the sellers approach you a few months ago and you took it from there?

Peter, sorry, the line was quite bad. I didn't -- I'm not sure whether I got your second part of your question. And perhaps I'll start with the first one, which referred to the ROBYG management team and how we will set up the company structure. I mean first, the good situation is that we have now 2 really excellent management teams in place in Poland. So that's the already existing platform, which is our Vantage team, where we're very happy with delivered excellent results over the last 2 years. And then we are, of course, very happy that we have now an additional management at ROBYG, who has proven over the last 20 years how strong results they can deliver. So therefore, the idea is, I mean, first of all, clearly, we have to wait until closing. And then we will combine it to the 2 companies and we will work with both management teams together on a new kind of platform. What is the exact legal structure needs to be seen. I mean there's always such things, then there's more tax implications. But really looking at that from an operational platform that should in the midterm be than 1 combined company. And yes, we need both teams on board. I mean we have clearly growth ambitions in Poland. So therefore, for us, it's clear, we need the people. We want to keep the people on board. It does not only refer to the management team, that also refers to the employees. So therefore, it's good also to have a larger platform to realize the ambitious plan that we have for the future. And at TAG, we have not been members of the management Board important so far. And this is also not the plan for the future. So we are members of the Supervisory Board at Vantage, and we'll be also members -- this is the current status of the Supervisory Board at ROBYG. And we are then clearly active. I mean we should be involved in all the major decisions, but we have a lot of trust and confidence in the already existing management team as well as in the future combined management team today to do the day-to-day business because they've really proven impressively how capable they are and have proven their skills. And Peter, perhaps you can -- if this was perhaps one of the question. If you can repeat the second part of the question because this was hard to understand for me?

Yes. Sorry, I was just asking was the portfolio put on the market by the sellers, sort of it was shopped around? Or did they sort of come to you a few months ago almost off market?

No. This was an auction process, which was more or less also public. So as you've seen some press releases, so it is not in an exclusive process, but it has been a public option. And looking at such transactions, looking at transaction volume, I mean, for us, as a company, that's clearly manageable. We have the access to the financing that is needed. For the Polish market, that's a large transaction. So EUR 550 million purchase price for the German residential market would be definitely nothing small, but nothing unusual, I would say. For the Polish residential market, it's a huge transaction and, therefore, not everyone will be able to have the financing in place for such a purchase price. And this was clearly an advantage and also related to the fact that we are able to pay that quite quickly, which is on a German market, honestly, not really anymore in argument, perhaps more than argument with respect in Poland, that's still an advantage.

Understood. And maybe just in terms of our modeling for the bridge loan, what type of all-in interest rate should we be assuming for our FFO calculation in '22?

I can't give you the exact basis points, but let's assume that is something between 0 and 0.5%, so in that range. So that should not be really that significant, especially as we clearly want to look at it as take out, not too late in the course of 2022.

The next question is from Tom Carstairs, Stifel.

Questions for me on -- when you look at the units that you want to retain versus the ones you're looking to dispose of, what's the criteria that you have there?

Tom, I would say the apartments themselves are not so much different. It really refers mainly to the micro location. That means for the resi-for-rent product, we clearly need a location which is more central, which has a good connection to public transport and so on where the city center is not too far away. Whereas the residential-for-sale business we're not investing in the outskirts of the cities, but even a little bit far away from the city center, this is something that really works. So it's more something like looking at the micro location compared to a different -- and it's not a different or a total different kind of apartment.

Okay. And on the gross profit margin, you highlight 30% and why it's been so high. But I mean, equally, 2019, it was down 21%. Should we be looking at this 30% as sustainable or is that a sort of exception?

We don't think that this is an exception. So also for the year 2022-2023, we are expecting such margins on the disposals. And clearly, also in Poland, rising construction costs are an issue, but we have seen simply a very strong price growth in the resi-for-sale market in Poland, and we don't expect that this is coming to an end as affordability ratios are simply still in good shape. So the price increase is on the back of really growing household income. And it's not the case that we see here a lot of supply coming to the market. The bottleneck in Poland is really getting successful land banks. And that's now our big advantage when we acquired or big -- that we have this land bank of 23,000 potential units. So therefore, we also expect for the, let's say, foreseeable future a margin -- a gross profit margin north of 30%.

And then lastly, when you acquired Vantage, you supplied a graph, which showed the rental development in the target cities. How have rents evolved during COVID?

Yes, in some cities, when the pandemic started, rents dropped, which is perhaps nothing unusual for a nonregulated market. The reason for that was that was mainly happening in markets like Gdansk, but also a lot of short-term lease apartments came the market. So this is kind of typically Airbnb apartments in Gdansk at the Baltic Sea where simply no one went to holiday, where students were not there and so on. But rents have really recovered quickly. So looking at rent levels today, we are already above -- at least in most locations above the rent level that we had before the pandemic. And as I said, this whole development on resi-for-rent market as well as resi-for-sale market gave us much confidence, as you know, well, these 3 years, where we are in the market in Poland are definitely not easy years as the pandemic is still there. And on the sales side, on the rent side as well as on the construction side, we've seen how good this business develops.

[Operator Instructions] The next question is from Simon Stippig, Warburg Research.

Great. My first question would be in regard to your capital market financing. Will you undertake that in Polish zloty or in euros?

Simon, no, this will be in euros.

Okay. And do you intend to extend over the longer term or starting in 2022?

If you can you repeat this, the line was a little bit bad.

Sorry, when you finance your Poland exposure, which will grow a lot in the future, I just wonder if you will hedge your Polish zloty exposure?

Well, that's not the plan effect at least for 2022 and perhaps also not for 2023. I mean we are long-term investors in Poland. And we will be now involved in Poland for years. And the -- basically, the profits that we realize, for example, with the resi-for-sale business will be directly reinvested into the resi-for-rent units. So therefore, that at the point in time when we really effectively need to change zloty into euro, that will not be 2022 or 2023, as we have years of investments ahead of us. Currently, a little bit weaker zloty helps us. So paying the purchase price on this foreign exchange rate is a little bit more attractive than before the pandemic. And this view might change when we had our phase, let's say, okay, now we're really in the yielding phase, and we expect the significant dividends paid out from our Polish subsidiaries to TAG, the holding company, then we think it makes sense to think about foreign currency hedges, more to secure visible cash flows over the next 2 to 3 years to protect dividends. But it's not the plan to do a high foreign currency hedge exposure right now because, again, we are different than, for example, a fund whose investor knows exactly 5 years, exactly 10 years, we have to repay the debt, we have to repay the equity. And that's not the case in our company. So therefore, it's more a long-term view that we -- if we look at that.

Okay. Great. And second question would be in regard to alternatives to your current acquisition. Have you looked at, for example, Murapol, which was intended to IPO in August or later this year? Did you consider that as well?

Well, based on sentiment, we cannot comment on certain companies or certain transactions, but perhaps have been also aware that several transactions in the Polish residential-for-rent market -- or Polish residential market, I should say better, have happened in the last 2 years, last 3 years. And it's clear we are active on this market. We've been taking a look at that as over years and also in this transaction, we are disciplined. So we had not really pressure. I mean we have an existing platform in Poland. We have a good team in place. We have a good track record. So we were not under pressure now to buy something. And therefore, ROBYG was, for us, simply a good opportunity to buy a really outstanding company with a large land bank at a very reasonable and attractive price for us.

Okay. And maybe 1 more question in regard to your units upcoming for the next 2 years, which you say would be around 7,000 units. So as you mentioned before, your rental portfolio from ROBYG should start to provide rents in 2024. So can I assume that those 7,000 units will be sold over the next 2 years?

Yes. The total sales volume should even be for the next 2 years a little bit higher. Again, we will come back to you with detailed numbers when we have the closing, that's hopefully quite soon. It's clear 2022-2023, these are years where we have significant EBITDA and cash contributions from the resi-for-sale business. Basically, this is very visible because what is handed over next year in 2022 is more or less completely sold. And what is handed over in 2023 is perhaps also to a certain part in the sales process is already in construction. So these EBITDA contributions from disposals are very visible for us. But clearly, for the next 2 years, that's mainly a resi-for-sale business as it was the case with Vantage. If you look at the figures at Vantage, years 2020, 2021, these are resi-for-sale years, if you want to. And now we have the first project finished after nearly 2 years, and the resi-for-rent business kicks in, and this will be very similar with ROBYG.

Okay. And maybe lastly, the -- what's your risk that the antitrust authority in Poland will restrict or block this -- the acquisition?

We consider this to be a really minor risk. And the reason for that is if you look at the markets where we currently already are with Vantage, that's mainly Warsaw -- sorry, not Warsaw, that's mainly Wroclaw, that's Poznan, that's Lódz, and to a small part Krakow, looking at the markets where ROBYG is currently investing in the largest part of the portfolio, that's Warsaw and TriCity. So it's not the case that we are -- have in one city. Now a big combined exposure comes from 2 companies. And therefore, we think that also knowing that this is still a fragmented market, the antitrust clearance should definitely not be a risk. But clearly, we have to respect that and wait for the decision.

And the next question is from Andre Remke, Baader Bank.

Two questions. First on the purchase price. Did you receive any external view by appraisers with regard to the price? And could you provide a first indication on potential goodwill? This is the first question. And the second question is on -- again, on your rating. Well, with an even now higher development exposure, is there any risk that this will be viewed more negatively by the agency? And in addition, is there any risk on the EPRA membership due to high EBITDA contribution from development? These are the 2 questions I had.

Andre, first of all, we have not yet done a full portfolio valuation. This will be done now with the closing. So therefore, it's difficult to comment on the exact goodwill. I mean, we have done a quite detailed, also DCF valuation on the business. And that takes into account more or less every single project. And you can assume that the valuation is definitely not below the purchase price that we have paid. So also with the Vantage acquisition, it was hard for us to predict what is the exact amount of goodwill. I assume there definitely will be a goodwill, but let's see what we find the outcome of this also, yes, technical valuation will be. In terms of the rating, I would say that this -- rating agencies do like nothing more than the German residential-for-rent market. So -- and then every other market, let's say, is not something negative, but is, of course, from a rating perspective, somewhat weaker than the German market. And again, this is not necessarily a statement that rating agencies have ever negative view on Poland, I would say, to the contrary, but German market is if you want the AAA market. But I'm very confident, I mean, we are in discussions with our rating agency about our business in Poland for 2 years. And we have proven that we are successful, both segments -- TAG perhaps knows the market better than 2 years before. We're basically doing nothing completely new. So simplifying this transaction a little bit, we are doing the same again, but in a larger size. And we have shown how we are able to change the business model away from this purely developer model to a business model with a focus on the resi-for-rent business and an additional state business. So -- and I think this will also help not only the rating agency, but also perhaps certain investors to understand our view and our business model, and that we are not now changing the company into a Polish developer. So we are still, let's say, German residential-plus company. So the basis for our business is still German. And then we have this, what we think, highly attractive growth opportunities in Poland also coming from developments. But to the largest part, the developments in the future will be for the resi-for-rent business. And the fact that we have a significant EBITDA contribution in 2022-2023 from disposals, from my point of view, that's not necessarily negative if EBITDA contribution, as I said, is very visible. Very large part of that is already sold. So -- and that's simply something that needs to be worked on, but the results, I'm going to say, are almost realized. We have to finish the consumption process, and that's clear, but they're very, very visible.

And the last question on the EPRA EBITDA contribution, the calculation for that? Is there any risk that you will drop out the entities?

No, we don't see here any risk.

And there are currently no further questions. I hand back to Martin Thiel for closing remarks.

Yes. Many thanks all for joining this conference call so shortly before Christmas. As always, we're here for any further questions also after Christmas and in between New Year's Eve. Please feel free to contact us any time. And we surely will have a dialogue on our Polish business in the following weeks and months. So far, I wish you all a good Christmas time. Stay in good health. And talk to you soon again. Many thanks.

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.