Trade Estates REIC ($TRESTATES)

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome, and thank you for joining the Trade Estates Real Estate Investment Company conference call and webcast to present and discuss the full year 2025 financial results. We have with us today Mr. Vasileios Fourlis, Chairman of the Board of Directors; Mr. Dimitrios Papoulis, Chief Executive Officer; and Mr. Demetris Panayi, Chief Financial Officer. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Fourlis. Mr. Fourlis, you may now proceed.

Thank you very much. I would like to welcome everybody to our today's conference call. We are happy to present to you our results for 2025, which has been indeed very good, even surpassing our latest forecasts. Mr. Papoulis will later on present the results in detail. From my point of view, I would like to reemphasize our commitment to our strategy of specialization. We believe that our strategy of specializing in 2 specific real estate sectors, retail parks and logistics, have proven to be the right one, both in terms of long-term growth and short- and medium-term profitability. Therefore, we continue on our specialization, on the path that we have taken with our strategy, and we intend to grow the GAV of the company even further. Mr. Papoulis, your floor.

Thank you very much, and I would like to welcome from my side all attendance for the presentation of our financial results for year 2025, which has been a year of growth, strong performance, exceeding both the gross financial rental revenue and FFO guidance, upholding the high occupancy rates, increasing rental income throughout -- through active asset management and leasing of new delivered space, continuation of execution of our investment plan, which has been completed by 47% to date, and the additional value, both in terms of revenues and gross asset value. Finally, it has been a year of portfolio optimization with targeted disposal of noncore assets, continuing the preservation of our financial soundness. In terms of gross asset value, we have topped EUR 602 million, while our net asset value stands at EUR 340 million. Our gross leasing area at 394,000 square meters in 15 projects, our remaining buildability at 59,000 square meters, the annual gross rental income at EUR 41.1 million, the weighted average and expired lease term at 9.7 years, the gross rental yield at 7.8% and our occupancy rate at 94%. Our EBITDA at EUR 49 million, while the adjusted EBITDA at EUR 31.3 million. Funds from operation at EUR 22 million, and the interim dividend already paid at the end of year 2025 at EUR 7.9 million. Finally, our LTV at 47.4%, or our net LTV at 43.2%. In the 2025 highlights, the acquisition of a Evitenco Company, the holder of land and building of the Interikea Logistics Center, regional logistics center that will service Southeastern Europe, Middle East in terms of the Interikea mix. The development of the property was a final stage at the end of the year, and has already been delivered to the tenant for the preparatory works of operation that is forecasted to start producing income for Trade Estates on Q3 of year 2026. Our participation in the tender offer for the development of the Gkonos ex-military camp that is a strategic piece of -- in the regional logistic hub story of Greece, with an opportunity to develop more than 350,000 square meters of logistic area, a consortium that participate -- Trade Estates participated by 20% alongside the Goldair company and Aktor construction company. Also the acquisition of a land plot in Heraklion, Crete, after the opening and the successful performance of Top Parks Heraklion. So Trade Estates intends to operate the second logistic park in this upcoming area of Crete. Also, the sale of 50% participation in the company Sevas Ten adjacent to our existing investment of Smart Park in Spata that has delivered a profit of EUR 2.35 million for our company or more than 100% return on the initial investment done. And finally, the strengthening of our tenant mix in Smart Park that includes new major tenants such as TGI Fridays, Public Electronics, Kiabi, Pandora and other very important international brands. In terms of our financial and corporate management activities, management, during year 2025, has doubled its shareholdership stake in the company from 0.97% to 1.87%. Also, the company is proceeded into the payment to shareholders of interim dividend worth of EUR 7.9 million or EUR 0.065 per share. Further, the cost of debt of the company has been reduced to 3% through loan renegotiation and new interest rate hedging agreements, as we continue to enhance the bottom line performance by actively managing assets and lower operating and financing costs. Last but not least, we have joined the European Public Real Estate Association, EPRA, and target to gradually adopt EPRA best practices reporting, an action that will deliver absolute comparability of our performance alongside with our European peers. Our financial performance and position has been constantly in strong operating performance, delivering an annual -- compound annual growth of almost 30% in the total gross rental income, in our adjusted EBITDA and in our funds from operation between year 2022 and year 2025. In terms of our financial performance, as it relates to our -- to the guidance issued for year 2025, we have achieved, in terms of gross rental income, 102.7% achievement, in terms of our adjusted EBITDA, 100% achievement, and in terms of funds from operation, 104.8% achievement. I want to point out that in terms of funds from operation, in November 2025, we have issued a revision to our guidance compared to the initial guidance of EUR 16.5 million to EUR 20 million that finally ended up at EUR 22 million. In terms of our financial performance, we represent sustainable growth in returns. Our net asset value has increased from EUR 311 million to EUR 340 million or an increase of 9% year-on-year. Our gross asset value has increased from EUR 541 million to EUR 602 million, or an increase of 11.1% year-on-year. Last but not least, we have intensified our dividend policy, reaching 7% dividend yield for year -- for full year 2025. In terms of our interest cost, our total debt at EUR 285 million, our net debt at EUR 260 million, our LTV, as said before, at 47.4%, our net LTV at 43.2%, our loan maturity at 7.6 years and our weighted average cost of debt at 3%. It's important to emphasize that out of EUR 285 million total debt, we have EUR 205 million or 73.7% fully hedged with an all-in ECB ceiling at 1.94%. This is the result of our top rating in terms of our credit rating at AA from ICAP, that has enabled us to negotiate our bank spread deals. Also, in combination with the RRF financing, we have managed to have a non-lien final cost of 3% at the end of the year 2025. As initially stated, our company has joined in November 2025, the EPRA association for which I will call Mr. Demetris Panayi, CFO of Trade Estates, to provide some further explanations.

Thank you, Mr. Papoulis. We have elected to adopt additional performance metrics, as Mr. Papoulis mentioned, in line with EPRA's best practices commendations. The EPRA performance measures provide additional financial information that enables standardization, transparency and comparability of listed real estate companies in Europe, as you all know. Out of the total 8 metrics recommended by EPRA, in this annual report, we include 3. These are in EPRA earnings, the EPRA NAV, which is presented under 3 scenarios, and the EPRA LTV. As you can see in the table presented, the results of the EPRA metrics are close to the results of the alternative performance metrics that the company has been utilizing and reporting. Specifically, the EPRA earnings in 2025 is at EUR 22.4 million, while the FFO is slightly lower at EUR 22 million. The EPRA NAV under the 3 scenarios, net restatement value, net tangible assets and net disposal value is at EUR 340 million, which is about the same as the NAV calculated per International Financial Reporting Standards, IFRS. Lastly, the EPRA LTV is almost the same as the net LTV ratio that the company has been reporting this part and is around 43%. We should note that in this -- in the appendix of this presentation as well as in the annual financial report of 2025, we haven enclosed the tables with detailed calculations and a short note for each metric and its use. Both the financial report and the presentation will be posted and be available on our website after this call. The floor back to you, Mr. Papoulis.

Thank you very much. And let me emphasize once again how important it is for international investors to provide the comparability of performance for Trade Estates. So further, we would like to point out the shareholder structure [indiscernible] with the year-end 2025, plus to note that we have initiated the stock buyback program that was decided during the General Assembly of 2025. So at present, Fourlis Group is the major shareholder of Trade Estates at 47.8%, Autohellas Group holds 12.82%, Latsco Hellenic Holdings holds 7.53%, free float of the company stands at 30.56%, management owns 1.87% and own shares are at 0.14%. In terms of our portfolio analysis, as mentioned before, our gross yield is at 7.8%. And it's important at this point to mention that from a gross asset value of EUR 682 million (sic) [ EUR 602 million ], EUR 580 million worth of investments is income-producing assets and 3% of the gross asset value reflects capital investment in development projects. In terms of consumer sales and visits, the consumer sale -- the total consumer sales under our roof have topped EUR 556 million or an increase of 14.8% versus the year 2024, while the like-to-like performance of consumer sales was at EUR 506 million or an increase of 7.4% versus year 2024. Accordingly, the number of visits at 23.96 million visits or an increase of 19.5% versus year 2024. And the like-to-like visits at 21.1 million visits, an increase of 7.2% versus year 2024. In terms of our portfolio analysis, we observe a balanced geographical presence throughout Greece. And we also have presence, as stated before, in the markets of Cyprus and Bulgaria. In terms of our portfolio analysis as regards the rental income analysis, we have stated before that one of the strategic targets of Trade Estates upon its inception was the deleveraging of the dominant tenant rental income. So while the dependency on the IKEA brand back in the year 2021 was at 99% of the income of the company, today, the rental income from IKEA represents 34% of the total income. Accordingly, there is a balanced income spread through other companies such as Trade Logistics, the Inditex Group, AB Vasilopoulos and Leroy Merlin and other tenants of our portfolio. In terms of sustainability initiatives, we are rolling out the program of installing solar panels throughout all our roofs. We already operate 2 solar panel installations in Patra and Piraeus. And we -- at the moment, we are installing the third installation in Heraklion. Our target is to produce almost 47% of the energy produced under our roofs from green solar energy. Even more, we have an active participation in the deployment of electronic vehicle charging throughout the market of Greece as we have an active MOU with Greece's biggest energy provider. And we have already deployed 6 supercharging in the -- supercharging stations in our retail parks. In terms of our investment pipeline, as we have announced back in the year 2023, the 5-year investment plan of EUR 250 million for the 5 years 2024 to 2028 has already been completed at the end of '25 by 47% or EUR 116 million, and there is a remaining investment plan of approximately EUR 134 million in the years 2026, 2027 and year 2028. Our investment plan was spread in 6 projects, out of which 3 are already complete and income producing, while the remaining new projects are the flagship project of the Hellinikon Retail Park, the Elefsina Logistics Center and the second retail park of Heraklion 2. In terms of our investment pipeline, it's approximately EUR 132 million, which alongside our EUR 602 gross asset value at the year-end 2025, will bring us into an estimated gross asset value by year 2028 of EUR 740 million to EUR 760 million. That's an increase of 23% to 26%. With this, I want to thank you for participating in our call. There is also an appendix. Following our presentation, it will be uploaded -- that is already uploaded in our website that provides more detailed information on all the metrics shared with you and in terms of our strategy. Thank you very much, and we are at your disposal for further questions.

[Operator Instructions] The first question comes from the line of King Martyn with Edison.

Can I just start, have you got numbers on like-for-like growth in base rents and turnover rents?

Can you repeat the last part of the question, please? Like-for-like growth in...

Yes. I was just interested in the like-for-like growth in the base rent and also the turnover rent. Perhaps there's no difference in the numbers you've got, actually.

Yes, one moment please. So Demetris can you...

Yes, I can share that, Martyn. So the total increase in rent was EUR 3.6 million. About 65% of that comes from the new leases from the 2 new projects. So everything else comes from the existing portfolio. 21% of the increase is turnover rents and 14% is what we call adjustment from contractual -- from the contractual transactions like releasing, renegotiations, tenant placements and such.

Yes. That's great. I saw the note, I didn't -- wasn't sure how to interpret it. Also, the valuation move is about 3.6% of the opening value of the portfolio. Is that all driven -- I can see that the gross yield of 7.8%. Is all that valuation increase driven by the rental growth?

No, because we also have deliveries of new properties. So the properties that we deliver, especially Aspropyrgos property has contributed to the valuation. We have about EUR 18 million pickup in the fair value gain, so you can see in the financial statement. So we have the Aspropyrgos. We have strong performance at Smart Park. That added roughly EUR 10 million to EUR 11 million in valuation gains.

[Operator Instructions] The next question is a follow-up question from King Martyn with Edison.

Could I ask share buybacks. They're obviously accretive in the short term, but you've got a lot of opportunity to invest in the portfolio. How do you -- how will you balance that?

Sorry, Martyn, I'm sorry, the sound is not very good. Can you please repeat the question? We didn't hear you.

Yes, of course. Share buybacks, they're obviously accretive in the short term. But in the longer term, medium term, you've got a lot of opportunities for accretive investment. And I just wondered how you think about the -- balancing the 2, the short-term accretion versus the longer-term investment opportunities?

The share -- Martyn, the share buyback program has been there. Mainly when it was decided, the realities of the price, the stock price were quite different than what it is today. So -- and our intention is not to execute in full the up to 10% opportunity for the share buyback program.

Let me add to that, Martyn, that, of course, you are right. We have a lot of growth opportunities in front of us, not only in terms of development projects, but also in write-out purchases of income-producing assets. So the buyback program is there in case there is a high opportunity, a big opportunity because of whatever issue regarding the price, but in general terms, we are looking forward to using our available cash for growth.

Yes. That makes sense. And is there any -- are there any other assets that might be sold? And I was just interested if you could just say that the disposal, the stake, the interest in Seven Ten, if you could just tell me why that was for sale basically, why you sold that? And is there anything else that you can sell?

Of course. So the Seven Ten plot was a 32-acre piece of land sitting right opposite to Smart Park. It was purchased in a partnership with a local -- with a regional developer. And the opportunity that we pursued back then was to build commercially on the deficiencies of Smart Park and the synergies with Smart Park. Fortunately for Trade Estates and for its investors, the opportunity of purchase of Smart Park came along the way after we have purchased this land plot, and we were able to acquire this strong commercial property. And as you know, this has generated a very important value-added for Trade Estates. And we have a continuous recommercialization and optimization plan that is delivering constant value for the company. In the meantime, we had the opportunity to exit the land plot with more than 100% profit, but also taking guarantees for -- of noncompete versus the Smart Park in the development. Finally, this project is -- this land plot is being used to develop a data center from the purchaser. And for Trade Estates, it has been a very, very profitable exit with -- alongside commercial protection for Smart Park.

Yes, that makes good sense. And is there anything else that is possible that you'll sell?

So we -- as we move along, Martyn, we review our core assets in terms of size and performance. And as we move along, we review every 6 months, the possibility and the reasoning behind the disposing any asset that does not fit our long-term strategy.

But nothing in mind?

Nothing in mind at this point.

Mr. King Martyn, have you finished with your questions?

Yes.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

Well, thank you once again for attending our company. Year 2025 has been an exceptional year for Trade Estates, both performance wise, but also strategically. As we move ahead, we look forward to the value creation initiatives. We feel strong about the prospects of the Greek market and the region. I want to emphasize at this point that with the results posted for year 2025, our company trades on a price to FFO level of 10.8 multiple while our interest coverage ratio trades -- is at 3.1x. These 2 metrics have special value for those that dig into the comparable performance of -- peer performance of companies like Trade Estates throughout Europe. One more point. I want to emphasize on a latest development around our flagship investment in the Hellinikon. We have just received the news that the industrial adjustment that have been in the process for issuing, there is -- the renewed building permit of Hellinikon have all been finalized, and we are in the final stage. My expectation is that within the next month or 2, there will be the issuance of the building permit of the Hellinikon. In other words, this means that effective midyear 2026, we are entering the 36-month period of construction of the project, of the commercial hub project. And we therefore see the initiation of the Hellinikon project in midyear 2029. With this, I would like to help -- to thank you for attending our earnings call. And we urge you to keep following Trade Estates as a preferred real estate investment company partner. Thank you.

Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.