VGP NV (VGP) Earnings Call Transcript & Summary

Welcome to the VGP First Half 2023 Financial Results. My name is Jess, and I'll be your coordinator for today's event. [Operator Instructions] I will now hand over to your host, Jan Van Geet, CEO, to begin today's call. Thank you.

Thank you very much for the introduction, and good morning to everybody on this call at the occasion of the presentation of our first half 2023 financial results. I will immediately start with the highlights of the first half. So we had a very busy first half. We signed EUR 36.2 million new and renewed lease agreements, and that brings the total committed annualized rental income to EUR 328.1 million, or an increase of 8.2% year-to-date. And there is a lot in the pipeline, so we are very confident for the second half year. The net rental and renewal energy income on the back of more than 1 million square meter deliveries last year, grew a lot on a look-through basis, with more than 60% year-on-year to EUR 75.6 million and we had quite some cash recycling out of the first 2 Allianz JV closings in this year, almost EUR 268 million. And we expect to close by the 31st of August, Thursday next week, because all the conditions precedent have been fulfilled and the financing documents have been signed. First closing with Deka, which will provide us roughly more than EUR 450 million of cash coming back inside of our books. We report on a pretax profit of EUR 48.6 million, which reflects the EUR 33.3 million of net rental and renewable energy income, or an increase of 96% year-on-year. And we have EUR 45.5 million net valuation gains on the portfolio that consists of a lot of movements, but Piet will go through them later in detail when he presents the financial numbers. Currently, we have 732,000 square meters under construction. We've been very prudent last year. I have stopped most of the developments, which were speculatively because of the high construction price. At the moment, we have 24 projects, which represent EUR 50.6 million in additional annual rent once fully built and let under construction. That pipeline is 90.7% pre-let, versus the market average of circa 50%. We have initiated in the first half year 236,000 square meters, which represents EUR 17 million of rental income once it will be fully built and let and that -- those 236,000 square meters are currently pre-let at 81.5%. We have also delivered 13 projects or 317,000 square meters. They are 97.2% let. There is only 1 small unit for which we are currently doing the final negotiations and which will be let soon. That's in Brasov. All the others are fully let, and that represents EUR 18.7 million of rental income once it's fully let. And that brings the total completed assets to 4.6 million square meters or 207 buildings, which are almost 99% let and with an average age of 3.7 years which underlines, I think, very well the very dynamic growth of VGP. We exist since 1998 and after 2013, we never sold any big buildings anymore. We kept everything in our portfolio. So you can see from out of that, that we really have a very big growth rate. We repaid EUR 150 million of bonds in April '23, and aim to repay also the other bond which comes to maturity now in September, EUR 225 million, and that is fully covered by further joint venture cash recycling. I will first start maybe a little bit more in detail with the market update of what the market is doing at the moment. As you know, I always look at Europe as 1 market, and I go for pragmatic from country to country to take a look at the best opportunities at the top locations and we see that the European average vacancy rate is slowly but steadily climbing up a little bit. It's still at all-time lows. But -- and we see still very healthy demand. We have a big park in Hamburg, as you know. There is a unit coming vacant at the end of the year. We have 18 people demanding whether they can take over the space, and it's a fight. So the price of the rental income is still very stable or even upwards a little bit still. If you look at the rental growth, it's actually what I told you before, you see it's still mostly increasing or stable. We think it's going to stabilize in the rest of the year because construction prices are coming down a lot, and it will also give arguments to our tenants, of course, to find negotiations. Having pre-let our pipeline, more than 90% with construction prices coming down, I am very -- and with a very attractively priced land bank, I am very confident that we will be able to be very competitive in the market in the second half year. Also the space under construction across Europe at the end of the second quarter in '23, it's coming down a bit. You can see that if you look at the last 2 quarters, that the vacancy is slowly being absorbed, but it's still 46% of speculative developments. We have decided last year not to participate in it because of the construction prices. Now that they're coming down, we think that we can buy back good value for money if we start up new construction. So that is where we are going to focus on in the second half of the year. On the operational performance, I will first start with the leasing activities, a bit more flavor so that you have an idea about what we have been doing. As I already said, we signed and renewed rental income of EUR 36.2 million in the first half. Inside of that is a component which is the indexation of course, which was a little bit more than EUR 9 million, which we have done, which has compensated also, to a large extent, the valuation losses, which we had to book. Piet will go into detail later on. We have now 505 tenant contracts. The committed annualized leases are EUR 328 million, the full year at '22 was EUR 303 million. And the occupancy rate of -- with an occupancy rate of 99% for the completed portfolio, as you can see. The majority share of new contracts are sites within the light industrial segment. We see a lot of onshoring. There is also a lot of activity back now in Eastern Europe, mainly Romania has been very active for us and Hungary in the past and also the Czech Republic, with very nice yields on cost. But the new lease agreement -- so the deliveries which we did in the first half year, they are mainly -- you will see it later on, they are mainly logistics. So there is a shift from logistics going to light industrial. You see the names; Inter Cars we signed in Brasov, it's a very -- and we have them also in Bucharest. It's a large one. It's a 60,000 square meters. ASMPT, it's something in Hungary. DACHSER in the Czech Republic. Yes, it's a bit mixed everywhere. Rieck is in Germany. Apollo Tyres in Slovakia. So they are big, nice tenants, and you see light industrial is 66% out of all. On the -- it still leads to a diversified and a blue-chip tenant base. What I think speaks a lot for our portfolio is not only the age, 3.7 years on average, but it's also a very long-term lease. The weighted average lease term is 8.1 years. I will go into detail a little bit later. And the top 10 tenants represent only 33% of committed leases. And even that is spread over a lot of lease agreements because we have a lot of tenants which come on a regular basis back and with which we have on several locations, several lease agreements. And if you look at the portfolio breakdown, you see it's very evenly broken down into logistics, light industrial, a bit of e-commerce and then the others, which are mainly the retailers directly. Yes, we can go to the next slide. The active annualized rental income, and that's maybe an important slide to look at. We are, of course, in the first place, a developer and many people look at us as a developer, but underneath, we are also becoming a bigger and bigger source of rental income. We are turning into a REIT partly. It's a combination of things. In December 2022, we had a net activated rental income of EUR 238.2 million. The new leases, which are activated. So that's assets which are paying rents. The new leases, which were activated during the first half of '23, they bring in another EUR 47.2 million of annualized rent, which is now being activated, so that brings the first half of '23 to EUR 285.4 million, and the signed leases to be activated in the next 6 to 12 months. They are another EUR 42.7 million. So you see that the majority of our assets, the 207 buildings which we have ready-made and the others, 24, which are under construction, are now generating actually cash. So -- and that is spread EUR 136.7 million sits in our own portfolio, EUR 191.4 million in the joint ventures and the EUR 136.7 million on our own portfolio. From that, EUR 53 million will be shifted to the Deka Joint Venture in the next 12 months with the first big part next Thursday, the 31st of August when we close the first part, which is roughly EUR 700 million of gross asset value. The net rental and renewable energy, hence, has grown a lot with 60%. So you see the first half of '22, we had EUR 47 million of net rental and renewable energy income and that's increased to EUR 75.5 million. And we are confident. It can't be different. The second half of the year will have a similar growth, so we will close off the year with more than EUR 150 million for sure of net rental and renewable energy income as we keep on delivering a lot of new buildings in the second half and a lot of new renewable energy, Martijn will a little bit go into detail later on. We are fully let, I already told you on a long-term basis, but -- and very stable. If you look over -- even if you look back to whole our history, we have never been below 95%, but if you look at the last 5 years, since 2017, we've always been near to 100%. Even now today, our joint ventures are leased at 99.2%. Our own portfolio, 98.1%. So very long-term WALT. And even WAULB, it stands at 7.8 years. It's only 3 months of difference. And the top 10 customers, KraussMaffei, it's still the biggest one. Some people think that KraussMaffei is the producer of the Leopard tanks, but that is not our KraussMaffei. Our KraussMaffei is a machine building engineering company, which make plastic molding machinery a very big one, one of the market leaders in the world. And then you see the Amazon, Rhenus, Zalando, Ahold Delhaize Group, Drylock Technologies, all of them are spread over more than 1 lease agreement, even several lease agreements. So actually, the risk even on the biggest ones is very spread going out through the things. Yes. KraussMaffei is also 3 different lease agreements in 3 different locations and 3 different business units. On the deliveries, what we delivered in the first half. So we delivered 13 buildings, which represent 317,000 square meters of cross lettable area. As I already said, the only little thing which was not let completely is a park in Brasov, where we have 1 unit free right next to Schenker in 1 building, but we are in final negotiations to lease that out also. It will -- it is EUR 18.3 million rental income and 35 -- spread over 35 new contracts, and all of them are rated Breeam Very Good. Actually, most of them are rated Breeam Excellent or DGNB Gold or Better. And the breakdown, it's very evenly spread, but Romania has been the biggest deliveries. Germany, 23%; Slovakia, 14% and the rest is spread over the rest of the countries. On the pictures, which you see in the presentation, you see our park in Bratislava, which is right next to the airport with a direct access from the highway, where we have done delivery this year very -- to one big tenant, Hossa Family and Coca-Cola. Then we have our Boxy building in Hungary, which is also right next to the airport. It's our VGP Park in Budapest. And then we have in Giessen, where we have a top location, actually. We delivered the first building, which is rented out to UPS Pharma and to Rhenus. And the one -- the other buildings you see on the left side, they are leased out to Zalando. That building will be delivered at year-end to Zalando and will be transferred also to the Deka Joint Venture in the beginning of next year. It's a very big one. In total, it's, I think, EUR 12 million, EUR 13 million of rental income, yes. The largest share of these new developments, as I already told you, are delivered for tenants active in logistics. And you can see a little bit also the examples which are there. So on the left, on the bottom, it's actually also UPS, the VGP Park, San Fernando de Henares. It is done for Picking Farma. So it's pharma industry that's been bought by UPS, and they are now the tenant, it's a 10-year lease. The one right next to you is the one which I already mentioned, Giessen am Alten Flughafen in Rosendal, you see a building which we delivered to Loendersloot. It's a logistics company. And on the right side, you see actually the building which has 1 vacant unit, that's the Schenker building in Brasov, the first 1 on the [ foreground ]. Yes, we can go to the next one. I have brought a little bit of pictures because otherwise, it's always so difficult to imagine what we are doing. So this is our VGP Park in Magdeburg, which has -- it's a big park. It's got more than 60 hectares. We have more than 50% of construction on it. It's fully let. It's fully pre-let also. What we have, the big tenants are the Bundeswehr. We have REWE as a big tenant, which is still under construction. That's a building you can see under construction. We have CATL, which have taken on this year, the second half of the building, which you see, which actually 100,000 square meter building. CATL, it's the ones who announced last week that they will deliver new batteries for the car industry by next -- beginning of next year, which will charge 400 kilometers in 10 minutes. So they are actually in our building in Magdeburg. Can you go to the next slide? On the development side, so what do we have under construction is 90% pre-let, and that represents EUR 46 million of new leases. In the first half, we started, we had 24 buildings under construction. That equates to EUR 50.6 million of annualized leases. Western Europe is still 70.8%, but it will shift because we have a lot of big constructions, which are going to be started up in the second half year, more weighted towards Eastern Europe. And as I already said before, 100% of the new development started in '23 are rated Breeam Very Good or Equivalent or Better. And we still -- we also have some picture with us. Maybe I already mentioned most of them, but one in the middle is our VGP Park in Wiesloch-Walldorf. It's the main seat of SAP. You probably know the company. And there is also Heidelberger Druckmaschinen and it's a typical example of what we are mostly doing now. We're reconvening -- we are reconverting brownfields into new sprinkling of life, new business units of VGP. The building which you're seeing there, it's fully let. And the second building, which is under construction, we are in final negotiations with a very big automotive tenant to take also the second building. We can still deliver quite a lot in Wiesloch-Walldorf as we did 2 consecutive transactions within that park -- within that consolidated unit of Heidelberger Druckmaschinen. Can go to the next one, Piet. So it's very well spread. Of course, the biggest developments are still in Germany. It's the biggest market. So the units are also bigger, but we are going. Austria is doing very well at the moment. At the right side, you see also our park in Belgrade in Serbia. We only started Belgrade this year, but we hit the ground running. We signed our first lease agreement, a 15-year lease agreement immediately with a retailer called Ahold Delhaize to the Belgian people among us, it's -- and the Dutch people very well known, I think, and also the American people. It's a very big retailer. And we just signed a new lease with another retailer. In total, Ahold Delhaize in several phases, it will take up more than 100,000 square meters, and the second building, which we are starting construction now, it's another 30,000 square meter which already for the biggest part pre-let. On the bottom, you see our VGP Park in Laxenburg. The picture doesn't say a lot, I know, but it's really on the border of Vienna. And we also signed a lease agreement with the REWE Group and the first building, actually, the first pillars are standing. We started construction and the construction price is really very attractive for us. So we're very happy. We're going to start up also in Ehrenfeld in Austria, and we are delivering [indiscernible] our last buildings. We can go to the next slide. Yes, this is the detail of Belgrade. We can go to the next slide immediately. This is Brasov. You see we have already started the groundworks for the Inter Cars building, which is the biggest unit, which we have under construction there today, 60,000 square meters. It's also a 15-year lease agreement. By the way, very beautiful, you could see the mountains. In Laxenburg, as I already said, on the left side, on the bottom, you can see the view towards Vienna. The other one is a little bit abstract, maybe except for the fact that we have a direct access to the highway on and off in both direction [indiscernible] and direction Vienna, and it's really very well located. So -- and it's already more than 50%. The first building, which we are under construction is fully let to REWE, where the second one is partly pre-let. We are going to start it up in the second half of the year. Our land bank. The buildup of our land bank is we owned at the end of 2022, almost 8 million square meters. We started to use in the first half, 533,000 of that. We acquired 701,000 in the first half of '23, which we will go through the details. And we have another 1.4 million under commitments. So there is embedded over 4.4 million square meter of development potential in the total land bank, which today we have, including what we have under construction, we are at 5.2 million, so we can nearly double what we have in the -- already ready now or under construction, we can nearly double it on our land bank. Nevertheless, we are focusing on -- but I will go to the next slide. We are focusing on expanding our land bank still, and we really need to, mainly in Germany, France and Denmark because there we have to -- we are at the end. We're coming at the end of our land bank. We have seen last year, and I've told you this before, we have seen a crazy bidding frenzy on many iconic land plots going through the market, a little bit everywhere in Europe. And we have been unable to bring in any bit, which made sense for us. That has changed dramatically. We have signed some exclusivities on really top iconical land plots in Europe, and I will reveal them in the second half year, as we actually buy them for a fraction of the price at which they were on the market last year, and that makes us very hopeful for the future. We think they are going to considerably help us to increase again our margins to really very nice levels. And our existing land bank is also bought at very attractive prices. As you know, we've already told you in the past. We can go to the next one. So one park which we bought last year is our VGP Park in Rouen. Rouen is the capital of Normandy. 550,000 inhabitants, and really very well located on the Seine. We have a first -- we are in final negotiations for our first lease agreement, which is nice because we are just going to have our building permit in September, and we have our first general -- we have our first building contracted within budget. So we are going to start construction this year in Rouen, and it will be the first building, which you see, the prominent one, which has more than 40,000 square meters and will be fully let. And then we have bought a big park in Leipzig. Leipzig is a city where we are prominently present in Germany. And this one, we have done also the urbanistic plan. So the B plan, as they call it in Germany, that's now fully done and we can start construction by the year-end. We can construct more than 225,000 square meters. We have a lot of tenant demand. We're just waiting for our building permit to be able to start. That's also acquired in this year. I'm going to take a pause, and I'm going to give the word to Martijn to explain a little bit our evolution on the renewable energy investments.

Thank you, Jan. As the title of the pages, the installed power has increased by nearly 50% compared to the June '22 numbers. But actually, what is even more stellar is if you look at the actual production because we've also benefited from sites that became operational and start to -- start to produce for the full 6 months. And there you see that the actual production doubled where we had 24 gigawatt being produced in the first half of '23. That doubling has not necessarily resulted in a doubling of the revenue. As you see the -- in our financial statements, the gross revenues from renewables was EUR 2.9 million, which is more or less in line with the revenues of last year, which is something we also highlighted at the results call for the full year. That is obviously impacted by the lower energy prices that we've seen. Energy prices continue to come down, which is obviously a good thing in terms of payability towards the energy for our tenants and consumers, but it has impacted this revenue line. If you look forward, 2 additional important things. One is that, there is another 86-megawatt peak that is currently under construction. Of that, we currently have earmarked 60-megawatt peak that is coming to actual production in the second half of this year, which means that our overall production capacity, if there's no delays with grid connections, should double again if you look towards the next year. So that is in the pipeline. Secondly, the business line is also benefiting from lower installation cost. Certainly, the solar panels prices have come down significantly. I think they've sort of halved compared to a year ago, and our yield is certainly well into double digits for these new projects as well. Later on, we have an update on the ESG performance for the group. I will then touch a little bit on the tenant consumption and how this photovoltaic business is benefiting our ESG performance. Last thing, I think you see at the bottom, EUR 92 million has so far been invested. So that's what's driving this doubling that I alluded to earlier. Hand it back to you, Jan, for the joint ventures.

Yes. I'll give you an update on our joint ventures. So with Allianz Real Estate in our 2 joint ventures. First, we did a closing in the Rheingold 10 transaction in the beginning of the year, and then a little bit later, the Aurora 4 transaction that is written 6, but it should be 4. So far, through these joint ventures with Allianz, we realized over EUR 1 billion of historical buildup valuation gains to our joint venture closings. And this brought in EUR 268 million of cash inside of VGP back, which we recycle to be able to reinvest, repay bonds, et cetera, going forward. So that was on the Allianz side. And then we have signed, as you know, and we touched upon it already, also a joint venture with Deka. It's been a long negotiation. We started the negotiations with them last year in October, but a very fruitful one. We have the feeling that [indiscernible] is completely matching. It was a very good negotiations. We have, I think, a very balanced contract with them, which is, to a large extent, copying the agreements, which we also have in place with Allianz. So we signed the final deed on the 21st of July. Deka will acquire a 50% stake in 5 project companies. It will be a joint control. So we will not consolidate them on our balance sheet, but they will ask the Allianz Joint Venture being 1 line contribution in our joint ventures. The 5 projects which originally -- the whole setup is made to make it bigger, but we agreed upon with Deka that we first start with 5 projects, and we will limit it to that to make it a little bit easier. So we started with Giessen Am alten Flughafen, our project in Laatzen; Göttingen; Magdeburg and Berlin Oberkrämer. The portfolio consists of 20 buildings, which are all delivered or under construction, and the annualized rental income of those 20 buildings will be EUR 52.9 million, once they're fully completed and delivered. The pricing has been agreed for the full joint venture. So also, the pricing for the assets, which will come in next year in March and which is foreseen in March and in September or October. The pricing has been fixed. You can calculate it yourself. It's actually a little bit more than EUR 1.1 billion, and that's the agreed gross asset value of all assets. And we have a financing facility, which has been committed, signed, which we will draw. The LTV is lower than before, but it still enables -- it's 30%. And in today's market, I think that's only good that we are prudent. It's at a very attractive pricing, the financing. It's actually a very good margin. And consequently, VGP is set to recycle more than EUR 700 million of cash from the joint venture closings, which are ahead of us. The transaction, as I already said, is foreseen to be executed in 3 closings. The biggest one, next Thursday, brings in more than EUR 450 million of net cash, and the remaining closings, as I already said, are set for the end of the first quarter and end of the third quarter of 2024, whereas we remain -- we will do all the services as we already do also for Allianz. We will do the asset management services, the property management services, et cetera. I have been told by the big brokers that the transaction forms the largest in Europe in its class here to date. And I think it sets a little bit the pricing in the market. We've seen singular transactions of single buildings, which have been maybe priced a little bit more aggressive, but this is a 50-50 joint venture going forward, and we want to be a good partner. So I think it's a nice partnership. We're very happy with it. We -- I know you're going to ask the question. If you go back once -- I know you're going to ask the question, is this it? It's going to come? I can maybe already answer it on beforehand. We have, at the same time, some work streams running on different other joint venture projects, which we are contemplating. We will -- we can't say anything more about it, but we will communicate on same like we did with Deka. We will communicate on them in the course of the second half of this year, hopefully. I'm going to give back the word to Martijn on our ESG update.

This ESG update is not meant to be complete or comprehensive in terms of everything the group does. For that, I would refer to the corporate responsibility report that we published earlier in the year. This is just to highlight a couple of the achievements and developments during the first half. One important thing is that the standing portfolio, carbon intensity, has continued to come down, benefiting from the photovoltaic rollout that we mentioned. And there, we are really making a strong effort to help our tenants switch to renewable energy, not just by the offering of photovoltaic, but also we've updated our lease agreement standards, where now there is a standard requirement to procure green electricity for the building in those instances where the tenant controls the utility contract. We're finalizing an auditor limited assurance on the latest CO2 numbers. We have also continued to progress on the EU taxonomy, and there's a number of buildings that have received compliance certification report more on that over the full year. We've published a biodiversity strategy, which is available on our website. And earlier in the year, we were recognized by Euronext for our ESG efforts and included in the list of 20 companies on the Brussels Stock Exchange with the -- demonstrating the best ESG practices. With that, I guess I'll hand it over to you, Piet, for the financial performance.

Okay. Thank you very much, Jan and Martijn. Indeed, I have again, prepared a slide deck on the financial performance, including our P&L, balance sheet and main cash flow movements, as well as a view in our financial position and the financial debt that we have today. Of course, a lot has been said on the previous slides, but I can only concur or confirm that everything what has been said, you will really see transparently back in our numbers. If I start with our P&L. So we had a profit for the period of EUR 34.7 million before tax of EUR 48.6 million. And there are quite some elements in play in our P&L coming to such results, which are definitely worthwhile to look into a little bit more into detail. Let me start with the net rental and renewable energy income. As you can see, that has grown 96% from EUR 17 million to EUR 33.5 million. That is, of course, because of the total lease agreements that we have signed with tenants of EUR 328 million. That is the total portfolio, EUR 136.7 million is still on our own balance sheet. As Jan has explained, EUR 53 million will already go to the JV of Deka. But as we have quite some assets on our own balance sheet today, we obviously also have more gross rental income, which was actually EUR 35 million of the EUR 38 million, and the EUR 3 million is then the renewable energy income. And from the EUR 136.7 million of lease agreements that are owned by VGP solely and which is not in joint ventures, EUR 95 million is already active. Meaning that we have EUR 35 million gross rental income now. EUR 95 million is already active, meaning we are still ramping up because we are delivering throughout the year. But of course, we will dispose some part now to the Deka joint venture. Similarly, and as Martijn has explained, our renewable energy income has also seen a 107% increase on growth from EUR 1.4 million approximately to EUR 2.9 million. So that results effectively that we have had a growth of our net rent. And we also improved our margin a little bit, but we improved it with 96% overall. On a proportional basis, Jan has also shown it on the slide before. Of course, we have more -- also more activated lease income into the JVs. So on a proportional basis, that has also increased 60%. So we are now having our 100% income of lease income of the EUR 35 million plus what is in the JVs together, which is about EUR 40 million. So it's EUR 75 million in total, and that grew 60%. And as so many lease agreements come or are being delivered and are coming in play, and we will have the analyzed effect of it, of course, we will continue growing this at a similar pace. As Jan explained, we are also becoming much more -- or we have below us, also a sort of REIT, with a lot of cash generating income. I think that sits for the net rental and renewable energy income. If you look at the joint venture management fee income, that has risen or grew about EUR 1.7 million. That goes, of course -- that's split up in 2 parts. One is, let's say, recurring asset management fee for the property, facility management and management of the JVs, which we all do, as we do for Deka, as we do with all the Allianz JVs. As those JVs have grown, because we have done transactions last year and this year, our fee also increases. And that is about EUR 1.7 million. Second element inside of it is a development management fee. So we do developments on behalf of the JV. Whatever a tenant wants to have changed in the building or whatsoever, we coordinate it. We get a fee from that. But that fee is actually similar as what it was last year at EUR 1.8 million. So the increase comes fully from the recurring part of our joint venture management and fee for the asset management of the JVs, which increased at EUR 1.7 million to EUR 10 million approximately. Then I think the -- a very interesting line or a line that requires some further comments, as I was also already introduced by Jan, is the net valuation gains on our investment properties. If you recall, over the second half of last year, this was obviously negative due to a change in valuation of the portfolio. But now we report a positive number of EUR 45.5 million. That does not mean that we did not have a devaluation of the portfolio in the first half of this year. We do not report numbers on Q1, so it's a full half year impact that we see here as well. What we see, in fact, that within this EUR 45.5 million, on a like-for-like basis on the assets that have been valued at 31st of December and on 30th of June, we have, in fact, 34 basis points of difference and we have a yield impact of approximately negative EUR 58 million. That means that there is more than EUR 100 million of positive effects that have compensated this yield change. This EUR 103 million, it is, in fact, contains for starters, the margin that we have realized on the 2 transactions that we have done with Allianz. That means Rheingold 10, that's the first transaction that we did in January, approximately EUR 115 million of gross asset value, Aurora 4, the one that we done the 1st of June, approximately EUR 253 million of gross asset value. On both of those, we realized EUR 23 million of profit versus the book value, which we had on 31st of December. That means EUR 103 million minus EUR 23 million remains EUR 80 million, positive contributions. That is our margin on our developments, which we initiated in the first half of this year. Rental growth impact higher end brings higher valuation and the alignment of the Deka valuation because the Deka assets are now valued in our balance sheet on disposal group held for sale, at the fair value that was agreed between the parties. All of that was EUR 80 million, brings us to EUR 45.5 million. Administration expenses, they are broadly in line with last year, although depreciation increased EUR 600,000 because we are depreciating our renewable energy. They are at cost on our balance sheet and the projects that have been completed, we start depreciating. And that has been offset by savings in SG&A, whereas I would say, in a number of FTEs, we are a little bit lower. I think we had 380 in the first half of last year, we have now 370 in the first half of this year. And we have the share of net profit from our joint ventures and associates. That's minus EUR 12.8 million. Again, this is basically a 50% share that we have in 6 joint ventures, 3 with Allianz, 3 development joint ventures. The 3 development joint ventures don't really have a contribution yet, because it's only land that is being zoned and being prepped for further developments. The other 3 joint ventures, obviously are fully in play. It's our first, second and third with Allianz. There, we have seen a negative revaluation of the portfolio, about 28 basis points or 1.5% of the portfolio. But operationally, the JVs have done a fantastic job. We have increased our rental income and you can see it in the supplementary note in our press release with 40%. And the profit before tax, before any revaluation in the JV, so the operational result is up 34%. So the JVs have done very well. They are now valued at an average yield of 4.98%. Other expenses are 0. We did not make any provisions for contributions to our VGP Foundation. The EUR 3 million that we spent there last year was a donation to the UN for support of the refugees as a consequence of the Russian-Ukrainian conflict. Our net financial result has improved from EUR 14 million to EUR 8.1 million. What plays there? First off, we paid -- we repaid a bond in April. So we only have interest up until April on that bond and not anymore afterwards, until 30th of June. Secondly, last year, we paid negative cash on cash that we are -- negative interest on cash that we had on hand on our bank accounts, which this year, obviously, in the changing climate of the interest rates, there is also something positive that is that we get money on our account, which basically moves from financial expense to financial income. So that brings us to profit before tax of EUR 48.6 million, and then the taxes include effective tax, but also obviously, reversals on the deferred taxes. I think we can go, therefore, to the next slide that shows a little bit the P&L into our different segments. You have the investment. It's basically what you see there is our net rental income, plus our joint financial management fee proportionally throughout the group, for the own 100% and what we have on our stake in the JVs that grew from EUR 55 million to EUR 84 million. On the development side, our EBITDA is EUR 18.1 million. We have spent EUR 347.6 million of CapEx on the developments. Side note I can make on the net valuation gains on investment properties, destined to the JVs, is that we only consider here those assets, which are in the end, destined or under an exclusivity of a JV. And in countries like Serbia, et cetera, we do not have it. So they are not included here in the development side. On the renewable energy, I think most of it has been explained already. We doubled our capacity. So we increased from EUR 1.4 million to EUR 2.9 million of gross renewable energy. It's an increase of 107%, and we are also able to show now a nice positive EBITDA with a nice EBITDA margin on this segment. And I think on the development, we can say that we see construction costs in decline, and that we see a favorable trend towards our margin in the future. On the balance sheet, what -- a few things I can highlight is the investment property went from EUR 2.4 billion to EUR 1.6 billion. It doesn't mean that we didn't do any CapEx. On the contrary, we had EUR 347.6 million acquisition cost increase on the investment property. But we obviously reclassified the Deka assets to disposal group held for sale. So there you see it grew from EUR 300 million to EUR 1.1 billion. And they are valued at our agreed pricing with Deka on the joint venture. I think on the property, plant and equipment, we have seen a EUR 20 million CapEx, as Martijn already explained in our renewables, and it's predominantly our renewables that are inside plus some office materials, but there is no material movement there. So that amounts to EUR 91 million now. The investment in joint ventures and associates, it increased. What are the main drivers there? We have done 2 transactions effectively in the first half of the year, and you contribute a certain equity towards it. That was EUR 65 million in total that we have contributed inside of those JVs. We have our share in the result of JVs, the minus 12.8%, as I explained on the previous slide, but we also received a capital repayment from one of our development joint ventures [indiscernible] it sold last year, part of its development with a good profit, and we decided to distribute it among the joint venture partners. That was EUR 3.4 million. Other noncurrent receivables, they increased. We did some financing towards -- we gave some loans towards the JVs. Mainly after the transactions were done, we have some investment loans in place. But important to mention here, I think, is in July, we have done a distribution out of our third joint venture, which is VGP Park Munich or [ EMV ]. We also sometimes refer to it. That was because we refinanced that joint venture with the bank loan. And then we did a top-up of available cash inside because it starts also generating rental income. The park has been delivered in 2022, so there we received EUR 43 million just after 30th of June. The trade and other receivables, although they decreased from EUR 122 million to EUR 78.4 million, that is actually not really considerable difference except we got some money back from the [ VAT ]. But mainly, we reclassified that's part of that asset to the current asset to disposal group held for sale because it pertains to the Deka assets. Our cash is at EUR 335 million, there is EUR 22.6 million in our disposal group held for sale, which is going into the Deka JV. So in total, we had EUR 357 million of cash available at the 30th of June. Obviously, we have -- in July, we received the EUR 43 million, as I explained from VGP Park Munich. We received EUR 7 million, which is also on our other receivables from Allianz, as a final payment for the assets that have been completed in Munich. So it's EUR 50 million. And then we will receive, of course, the proceeds from the first closing next Thursday, from the first closing with Deka, which amounts over to EUR 450 million, substantially increasing our cash on hand in VGP. If you look at the liability side and the equity sides of VGP. So the equity, EUR 2.2 billion to EUR 2.16 billion. It's very easy. We did not do any equity raises this year. So it's the net result of EUR 34.6 million and the dividend that was paid out EUR 75 million that plays overall equity. And then on the debt side, we repaid 1 bond, EUR 150 million in April. We will repay another EUR 225 million in September. And basically, that's it. I don't think there was any other -- I didn't see any major movements on our other positions, except that we reclassified what pertains to the Deka assets to liabilities held for sale. Our gearing ratio pro forma, the EUR 50 million that we received related to VGP Park Munich and the disposal of the Deka assets amounts to 31.3% or reported it's 40%, well below our covenants. And in the same reasoning, our pro forma LTV is now 49.2%. Maybe a word on the cash flow. We started the year with EUR 700 million. We ended the period now with EUR 335 million, knowing that there is EUR 22.6 million in the disposal out for sale on the Deka assets. Then you see a net cash generated from operating activities, minus EUR 22.7 million. I should say that this includes our interest payments and received interest of EUR 41 million. So basically, our operating activities, due to the fact that we have considerable rental income on our balance sheet, covers all of our admin expenses on top of, of course, with the joint venture management fee that we have. The net cash used in investing activities. So as Jan already mentioned, we had proceeds from a disposal EUR 267.9 million came out of the -- from the EUR 268 million that you see here came from the 2 transactions, Rheingold 10 and Aurora 4. We spent effectively CapEx of EUR 333.7 million directly on assets that we have on our balance sheet. The loans to JVs, they relate mainly to assets that are inside of the JV, but where we are still doing a development, and they are economically owned. So that CapEx is spent through loans given construction development loans to those JVs. And then as I explained before, we received EUR 3.4 million out of one of our development joint ventures, [indiscernible] to be specific, in the beginning of this year. On the financing activities, I think it is very straightforward, and we paid out a dividend of EUR 75 million, and we had a bond repayment in April of EUR 150 million, whereas last year, as you can see, there was a big EUR 1 billion raise, which brought us net to EUR 991 million of cash. There were no loan repayments. In fact, we do not have any bank loans anymore, except for an availability on our revolving credit facilities, which amounts to EUR 410 million, and they are fully undrawn. What does that mean in terms of our debt? So today, we have EUR 2.2 billion of debt on our own balance sheet. It has its average cost lowered, because the bonds that we are repaying this year, and it's EUR 375 million in total, EUR 150 million in April, EUR 225 million in September. They carry a higher interest percentage than what our average cost is. If we repay them, we, in fact, even lower it further. We are now at 2.3%. Once we will have repaid the bond of EUR 225 million, which is a 3.9% interest in September, we will actually lower to 2.1%. With all of the cash recycling that we have done so far this year, plus what we are -- what is coming up with Deka already, we have more than enough cash also to repay that bond and sustain on all our other commitments. And this shows a little bit maturity profile again of our debt, so I explained already EUR 225 million. So you see for the next years, we are quite soft on bond repayments with EUR 78 million and EUR 80 million. In 2026, we have EUR 200 million and then from EUR 227 million, we have the first tranche of the dual tranche bond of EUR 1 billion that was issued last year in January. So we still have an overall average debt maturity of 4.27 years. Similarly, on our key covenants, we are, I think, well below or far away from any covenants with our balance sheet. These are the levels I think we feel ourselves also comfortable with. And in terms of the LTV, I already mentioned 49.2%. But if you want to see it in the -- on the JV, so JV1 and JV2, where we are 38% LTV, whereby the covenant is only 65% and in Aurora, it's 48% where the covenant is 75%. You may ask, why is not the third JV there? Because up until 30th of June, it was not leveraged yet. That's what we did in July. Hence, we also got to EUR 43 million of distribution through a shareholder repayment in July. I think that was my last slide. So I hand it back over to Jan to wrap it up.

Okay. To summarize, I and my team, my entire team and the VGP family, we are very confident on the outlook for the second half of 2023. Our development activities are at pace. And I tend to be prudent. So I want to keep a good eye on the pre-let ratios. But as the construction prices are in decline, it's dependent from market to market. In some markets, it's very spectacular. In others, it goes a little bit slower, but I expect all of them to follow. We will -- and we see that we can invest again with good value for money. We will start construction a little bit more. We have a couple of really very big lease agreements, pre-lets in the pipeline, which will start up in the second half of the year, combined with some other positions which we will take. We delivered on our joint ventures, not only with the Allianz Joint Venture closings, which we had foreseen for the first half of the year, but we also closed the Deka Joint Venture signed and we are closing next week, the first part of it. That will enhance our cash position with EUR 700 million. And as I already said, there is more to -- in the pipeline. And then maybe most importantly, we did a capital increase at the end of last year, on which most of the people which are in this call have subscribed and I, at that time, promised that it is really to play in on new opportunities, which we see in the market coming up. And thanks to that capital increase, and thanks to the negotiations on the joint ventures. We actually have been working on, it's been a very busy first 6 months for us, and it's been a very positively busy 6 months for us because we have been really working day and night on acquiring some strategic land acquisitions, which will position us for continuous growth in the future. And the contrary of what we saw last year, where I couldn't make the numbers work at all, these acquisitions are at normal valuations, I would say, valuations, which we can really do something, and which we believe will lead to what we love to do the most, really very beautiful new developments in the near future. So that's a bit it from our side for the presentation. I guess we -- to be -- you will have some questions, and we are here to answer them. Thank you very much.

Operator, we can open the line for questions.

[Operator Instructions] The first question comes from the line of Frederic Renard from Kepler Cheuvreux.

Can you hear me?

Yes, we can.

So only one question. So my question would be on the LTV proportionate. You will receive massive cash injection of EUR 450 million next week in Q3. I would have expected actually a bigger effect pro forma on the LTV proportionate. And my question would be for you, what would be your expectation going forward on that metric? What is your ambition in terms of lowering that metric?

Maybe on the first part. Technically, the calculation takes into account the gearing ratio that we have now or the LTV that we have now, and then we take into account the cash that we really secured, meaning the EUR 50 million that I explained from Munich, as well as the cash in that we received from Deka. You also have to take into account, obviously, that you have to book out the whole Deka assets. So there might be some play. But otherwise contact me once separately, Frederic, and I can see how I make the reconciliation for you. Going forward, I think we continue to monitor to be along the lines where we are today, with Deka that we recover. And then if I look at what we have, and you can find this in our notes, what our commitments are on our land bank and developments that are to come on development. For instance, it's EUR 280 million, but it's not all to be paid this year. Quite substantially, there will also be some progress over the next year. And what we will start up in the remainder of this year, the final cash out of that, it usually comes really more at the end of the developments rather than at the beginning. So I think we can confidently say that we can repay the bond with the cash on hand that we have today, and monitor very well what the current situation is and continue to explore that to the remainder of the second half or to the end of the year.

Okay. I will contact you after the...

Yes. No problem, Frederic.

Next question comes from the line of Pieter Runneboom at Van Lanschot Kempen.

So on the development starts, it was now only around 200,000 square meters. You expect that you can increase this number again as I understand from this call. Could you maybe -- is it possible to give a guidance for maybe second half or also the years thereafter? And what kind of numbers of project starts you are targeting?

Well, it's all going to depend on a number of parameters, which we are really looking at. It's a decline of the construction price in certain markets, it's the number of pre-lets, which we are currently at and which we want to keep high, it's the development of the demand in the market, of course. But to give you a little bit a number, we think that we will do in the second half, slightly more than in the first half. So we think that it will be around 300,000 square meters, which we actually will or have to start up because they are, for a big part, already pre-let today. So that's roughly the guidance and it will be less or more in function of how we see the market evaluate, but we're very positive on the market principles that they are becoming better as we speak. Does that answer your question?

Yes.

The next question comes from the line of Wim Lewi from KBCS.

I just have a follow-up on the previous question on the new starts. If I calculate just back of the envelope, also based on the information that Piet gave on the unrealized gains and how we can reconcile that, I end up with something around EUR 300 a square meter of development gains coming from these new starts. Can you comment on that? Is that in the ballpark? And maybe, just what's underlying there? Because obviously, if there are different regions that you start, if you start EUR 300, which is more towards the east of Europe, it will be lower. So the 300,000, you just mentioned as new starts, any color on that and how we can translate it to potential development gains?

Wim, I understand that you are trying to create a crystal ball so that you can count -- you can calculate our future profits. But it's really -- it's the EUR 300 is not a lot number for me. It doesn't sound out, but it's very different from country to country. And it's going to be a mix. We are -- and as I said, I look at the European market as 1 big market. I have no preferences in geography, I'm really looking pragmatic at what is the valuation today? Where are we with our valuations, what yield do I need to achieve to be -- to make what profit and where do I best spend our money? And it's -- the land bank allows us to be at roughly 1/3 of the cost. That is where we are. The construction price, it should be roughly 1/3 of the cost, and the rest should be a margin. So if the sales price would be around -- if the valuation price would be around EUR 1,000 per square meter, you would end up with roughly EUR 300 -- EUR 350 per square meter of profit, yes. But it's going to be dependent. It's going to be a mix of -- in some jurisdictions more and in other a little bit less, and the ballpoint we'll be around that number, I think.

Just as a very small follow-on. Can you say where you see the best opportunities now to where you are closest to getting that 80% pre-let level for new start?

In all markets, we have some very big things in the pipeline in Portugal, in Spain. In Italy, we actually signed a couple of pre-lets and we have a couple more. Our first big pre-let in France, and I think it's a really nice one. There is a couple of things in Germany sitting in the pipeline. And then we have signed and we have a lot of demand in Eastern Europe. So as I -- as you could see from the numbers, Romania is doing very well. Hungary is actually doing very well, surprisingly, and it's gone down. Austria, we have a lot of demand. The Czech Republic, we have a lot of demand, but we don't have a huge land bank anymore. That's also one of our focuses. So I'm confident, I can say, that we are going to be able to deliver on all the markets, whether all the markets will deliver the same margin, that's another question, but it will depend really on -- we want to put our land back at work as soon as possible so that it is not something which sits there as debt capital, but that it becomes something which is cash generating, and we're going to do our very best and yes, there is really quite some demand in the market still. And I find that we have a very good position, because when the construction prices are coming down as they are, and we really are -- in some markets, we are 25% below budget now. So that's a considerable reduction of the construction price vis-a-vis last year. And I have -- and my competition has built it and has got a lot of stock. There is quite some -- have a lot of stock available, which they have built for considerable higher prices. It's going to enable me to be very aggressive on the market. And that's, I think, a nice position to be in. So we're looking forward to the future.

The next question comes from the line of Inna Maslova from Degroof Petercam.

Just one question on my side regarding the ERVs on both owned portfolio and the joint venture portfolio. You commented on the adjustments in terms of yields that has been taken into account. Could you give us some color on what is taking in terms of ERV growth in the assumptions of the values over the past 6 months?

That is -- the numbers I have given is the weighted average yield. That is, we have a fair value valuation of our evaluator, and we compare it to the rental income that we have -- effectively have on that assets, whatever it is -- building park, whatever it is. Meaning, if I say, for instance, in the JVs, you have a certain devaluation, it was for a large extent, compensated by a rental impact, then I'm not speaking about an ERV, that I'm really speaking about the indexation on our portfolio and the rental growth that we have had in our portfolio. In terms of future rental growth, what we see as a potential, I think, Jan, maybe you shared a little bit of info on that in the presentation. Maybe you can repeat it.

So we have no ERV adaptation in our valuations. It's really the index strength, which has been used and which has been shown. We have not gone out from projected growth in the future, because I am also not a believer that it can keep on growing at the pace it did. We still see for some regions that there is really a lot of demand and that there is a drive. But in my head, with the construction prices coming down, with demand softening, there is every market does that the market big price. I don't think that there is going to be a lot of room for further rental price increase in the market. And I think our assets are very well let. The bulk of it has been developed in the years before the big rise in the lease price, and it is also valued with that lease price, not with an ERV. So yes, that's, I think, a good answer on your question.

The next question comes from the line of Marios Pastou from Societe Generale.

A bit of a follow-up actually on the LTV topic. I see your pro forma includes the closing to come next week now. I just wondered if you could also update us on your expectation for pro forma LTV, with the finalization of the remaining properties to Deka, considering additional proceeds for CapEx to come to complete the properties and also the debt applied at the LTV level -- I'm sorry, at the JV level would be helpful.

That's already quite a long-term look that we have because once we will have completed the Deka, we are talking about Q3 2024. By then -- I mean we are looking at one thing. We're looking at broadening our joint venture model further. We are looking at -- and we are a developer. It can be that we do approximately 300,000 square meters. It can be that the next year, we do another 500,000 or more or less. It depends always on the market circumstances. So it's not so easy to give such a long-term guidance. There are a lot of things in play. Obviously, I have a number in mind, and we have a business plan in running. But there are many factors in play, that's substantiated or nuanced such an answer to that question. But I'd rather answer or what I'd rather say is that we like to remain within the levels that we are today. I don't think we are cowboys. We are always prudent on what we do. We are prudent on our pre-let. We are prudent on the visibility on the cash on hand and where do we get to. I think that you can see from all of our previous publications of our numbers as well.

And maybe just to add something. For what we have now in plan with the acquisitions we have planned, the repayment of the bond, the proceeds which are coming in because it's not only the JV, it's also the distributions, which we are going to have in the second half year out of our rental income, et cetera. That's another -- there is another large amount coming inside. There is more closings planned already for the beginning of next year, besides the one with Deka. We are really monitoring on a day-to-day basis. It's going to be very dependent on how the market is going to evaluate. And even if we -- what we have in plan -- what we have in our business plan today, we are completely able to run as far as we can reasonably see our CapEx and our developments within the ratios where we are today. That's what we want to remain.

Very clear. If I may, just a follow-up, maybe put it slightly differently, and I'm clearly I'm aware, but there's more proceeds to flow in business, it's very tricky to give a view in terms of where things go. But as this is a fixed-price deal, and you probably -- you know obviously, the amount of CapEx that's needed to complete that before the properties can transfer over. Are you able to comment whether your LTV pro forma will stay flat at today's level or if there's a further benefit to come from the debt transaction even if it's just high level?

To complete Deka assets, we need approximately EUR 90 million, from now until the Q3 of next year. That is foreseen also in our numbers currently. And on the other topic, I think we can only reiterate what we have said before. We have our joint venture model, in which we recycle our cash once we have a completed asset. We try to bring it into a JV, and we substantially, if not all, recover all our cash invested inside of that asset. It's the model that we have. It's the model that works very well for us, whereby we are remaining in control of the asset, whereby we have the asset management fee that we have plus our share in, let's say, the cash flow inside of those JVs. And that allows us to fuel our development pipeline, wherever it's needed. And if you model this in the short or in the mid or in the long term, you remain on very healthy levels, knowing that, of course, your cash buffer, which is being generated by the rental income always increases. We have now EUR 328 million of rental income, which is only catching up. You see last year, we developed 1 million square meters, and we have 4.6 million square meters of finished buildings. And this year, again, we delivered already in the first half, 317,000 square meters. So this always comes into it in play as well. But I think on the long-term projections of our LTV or gearing ratio, I think we are comfortable in the levels that we are now. Lower, we will, of course, be more comfortable, but we are where we want to be.

Yes. And on the joint ventures, which we are currently discussing, the LTVs are going to be in a similar range, lower than it was with Allianz in the range of between 30% up to maximum 35% or 40% LTV going forward. So that should help also.

Next question comes from the line of Saravana Bala from RBC.

So I appreciate Western markets such as Germany, France, et cetera, still very strong markets and lower risk, but if occupied demand is growing so much in Eastern Europe, and I would assume yield on cost is also higher in those countries for developments. Is there a reason why you aren't considering expanding faster there? Is the pre-debt you can achieve there? Or is it just the current needs of the land bank [indiscernible]?

If I understand it well, you're asking why we are not going faster in Eastern Europe, yes?

Yes, correct.

Yes. No. Well, that's a misunderstanding, I think. We -- there is nothing which holds us back from expanding quicker in Eastern Europe. We have a big land bank there. In some countries, in other not. And we are -- so the Czech Republic is one where we are actively very much looking inside. But as I told you, I am looking at it from a very pragmatic point of view towards the whole of Europe. And in the Czech Republic, I find the land prices, in my opinion, are still far too high and the opportunities are not yet there where they should be, so that we could say, okay, we go on a buying frenzy and we buy something in the Czech Republic. On the contrary, on the other side, in Hungary and Romania, we have a big land bank, and we are fully deploying it now. We're growing very fast. We signed -- if you look at the presentation, we've signed the majority of our leasing income, which we signed up in the first half, actually comes out of the Eastern European countries. So there is no -- we don't -- in my head, there is no division between -- there is no major or less, good markets. Everybody is equal. And we look at opportunities. We look at them from a point of view of pragmatic of where are our best margins, where is the longest secure income certified, what is the best tenants profiles, that's the mix we are looking at, and that's what drives us to make an investment decision. And there is no split between East and West, one country or another country. Of course, we sometimes think about the political risks, but at the moment, the European Union for us and even -- and the 1 country which we are outside Serbia, it's all 1 market, and we are very confident to invest in each and any country where we are today.

Yes. No, I appreciate it. That's the case, but perhaps you'd even more clear, but it was mainly about where you're focusing on expanding your land bank. Your priority is Germany and Denmark and the fact that more than 60% of your new leases in Eastern Europe is an example of why -- example of the question of why you're not expanding that but maybe prioritizing Eastern Europe given...

Maybe to -- it's just because the land bank in Eastern Europe is a lot bigger today that we are able to grow faster. So we really need to focus back on Western Europe. That's why we have the focus on Germany, France, Denmark to be able to grow there again a little bit faster. It's -- it's just -- it's also -- it becomes -- it also because our land bank is more oriented towards Eastern Europe today. So that's why we are focusing more on Germany, France for the new land acquisitions. In Eastern Europe, we can still grow substantially on our land bank.

The next question that comes from the line of Gerardo Ibáñez Herrero from ABN AMRO ODDO BHF.

I think you partly answered it earlier in terms of new developments. So this year, you were initially guiding somewhere between 400,000 to 600,000 new developments, delivered yearly. Now we must look a bit more bullish with over 700,000 square meters into 2023. What can we expect for the coming years? And if you can give any color there.

I think the numbers don't add up what you said. So we said between 400,000 and 600,000. We started up a little bit more than 200,000 in the first half, and we said we're going to start up around 300,000, maybe a little bit more in the second half. So to me, that's between 500,000 and 600,000, which is in line with what we said before, and which I think going forward, it's always depending on the market conditions, but that's where -- that's the level I feel now comfortable in this year. And we'll see what the market does. I mean, I don't want to make any predictions going forward. I think we should minimum be able to stay in that development range. But it's all dependent on the market and the market evolution on demand. I don't want to end up with huge development speculatively and then speculating about the value of them also. So we really want to go on and spend our money wisely, prudently as a good house father does, and we will take it as it comes, and we will see what the market does.

Okay. And one additional question. Could you also maybe give us some color on the yield on cost for the different geographies? And if you have seen any different trends across the different countries?

Yield on cost is -- it depends on a lot of parameters, of course. Our land bank is very well -- we bought it really well. Our land bank is sitting at a cost, I think, in total, an average of EUR 80. So our yield on cost with declining construction prices and relatively stable or even still growing in some regions, rental prices has to come up. We gave some guidance in the past. We see now that in Eastern Europe, we are able to go above 9%, above 10% in some cases in Western Europe, but we are not so much focused on the yield on cost. We're really focused on our margins, which we make on our projects. So it's the yield on cost versus the actual valuation of the market, and then we look at where our margins are the biggest. So I don't think I can say a lot more to it than that. Yes. I hope we answered your questions. If there is anything else because we're running out of time, you know where to find us. We are very happy to do a one-on-one with you if you have any more additional questions. I would like to thank you all for listening to our broadcast. I hope you like the format with something which we will continue to do in the future. Thank you. As I said, we are very confident on the second half year. Let's see what the future brings. And I'm looking forward -- we are all looking forward to see you soon. Thank you.

Thank you very much.

Bye-bye.