Vonovia SE (VNA) Earnings Call Transcript & Summary

Good afternoon, and welcome to the conference call of Deutsche Wohnen regarding the business combination with Vonovia SE. The conference call is hosted by Mr. Philip Grosse, CFO of Deutsche Wohnen. Presentation of the call is available on Deutsche Wohnen's website in the Investor Relations section. [Operator Instructions] However, at the end of the call, you will have the opportunity to ask questions. [Operator Instructions] I'm now handing you over to Philip Grosse, CFO, to begin today's conference. Please go ahead.

Thank you. Good afternoon, and thank you very much for joining on such short notice. Sector keeps busy, keeps all of us busy. I want to take the opportunity to very briefly run you through the key terms of the transaction that has been announced yesterday evening, as you have probably seen, and the corresponding business combination we entered into with our colleagues from Vonovia. If you look at the terms of the proposed transactions, our shareholders will essentially receive a cash consideration of EUR 53.03, and that is composed of 2 elements. One is EUR 52 payment by Vonovia and on top, subject to AGM approval, you will also be a shareholder of Deutsche Wohnen entitled to the dividend payment. And if you look at the numbers that is translating into a premium versus the closing price as of Friday last week of roughly 18%, if you look at the VWAP, it's actually even 25%. And against that backdrop, certainly, by these numbers, very much towards the upper end of what has been paid in similar transactions in our sector. If I look at our 2021 FFO guidance, on a fully diluted basis, this is actually translating into an FFO yield of 2.6%. And from a fundamental perspective, the price is translating to a slight premium in comparison to our EPRA net tangible asset. So against that backdrop, with that offer, we have been able to close the gap that has for now persisted for quite some time and, I have to say, will most likely continue to persist given all the political headwinds we are facing in our industry. In terms of conditions of the offer, there's a 50% acceptance threshold, a standard market material as of change clause based on EPRA Developed Europe Index. The reminder are kind of the typical conditions you will expect and which will be detailed in the offer documents once that has been published. Looking at the offer as a Management Board and also backed by our Supervisory Board, we believe that the terms of the proposed transaction are very compelling for Deutsche Wohnen shareholders. And we, therefore, think that it's prudent to recommend the transaction to our shareholders. That has been more a technical aspect, also being backed by fairness opinions we have received by Deutsche Bank, Goldman Sachs, JPMorgan and UBS. On top of that, I think we have also been able to agree on a fairly extensive business combination agreement with Vonovia, and I think that is helpful for both Deutsche Wohnen, but also looking at the future prospects of the combined entity. Rolf Buch, as you have seen, will continue to lead the management as CEO. Michael Zahn and myself will join the Management Board of Vonovia, Michael as the Deputy CEO and I as the CFO. And as such, Michael will oversee the integration of the 2 businesses, but also asset management and a number of crucial areas. I will assume the typical role of a CFO function. While Vonovia targets some EUR 105 million of synergies, we have agreed not to have forced employee redundancies due to operational reasons until the end of 2023. I think looking at the transaction from a perspective of all stakeholders, that's a very, very important notion. You might have also seen that we, together, made a very comprehensive proposal to the state of Berlin to alleviate rent escalations and the situation we are facing, in particular, in Berlin market, and that we have made the combined proposal for -- or the combined proposal for selling a very sizable housing portfolio. On top, also made some statements as to how we look at future rent developments. That was actually very well received by politicians in Berlin, in the press conference, which the mayor of Berlin hosted, and in which Rolf Buch and Michael Zahn were also present, that was very well noted. And I think it was a tremendous important step to actually de-escalate the situation and to also secure political support for that combination of our 2 businesses. Again, I think if you look at the entire package, it's very attractive for our shareholders. And there is high deal certainty, in my view, given the structure of the transaction. We will, with that, certainly create the most significant company in the European context, the biggest residential real estate developer in Germany, which is addressing one of the key topics we are facing in many metropolitan areas here, and also an owner and operator of a sizable nursing and assisted living business. I think with that, we're well prepared to also tackle more effectively, actually, the challenges which lie ahead of us, and are, yes, working together towards reducing our carbon dioxide footprint, jointly dealing with the regulatory challenges and jointly also creating the necessary supply we need in many of the markets in Germany. So against that backdrop, I do actually look very much forward that we leave the legacy behind us and, as a new team, look forward tackling the challenges with the colleagues of Vonovia, obviously, all subject to this transaction going ahead. With that, I would already conclude my brief remarks and are very happy to take any questions you may have.

[Operator Instructions] The first question comes from the line of Andres Toome from Green Street Advisors.

I was just wondering, what made this deal attractive for the management and the Board of Deutsche Wohnen at this particular time? Is it more related to the political pressures that you're seeing in Berlin? Or what prompted it at this stage?

Right offer, I think. In essence, it was for us a fairly straightforward decision because it is a cash deal, which has been fully funded. It's a transaction structure, which has, as I said, in my view, no significant execution risks. And essentially, by all metrics, when I look at pricing, I consider that very attractive for our shareholders. We have seen a fairly significant recovery in our share price following the decision of the Supreme Court. So we started from the right basis, so to speak. I actually don't see in the next 6, 12 months any meaningful catalyst to share price, given all the regulatory headwinds we are facing. And against that backdrop, 18% premium versus about 25% premium versus our VWAP, and that offer also translating into essentially the slight premium versus research consensus and our EPRA net tangible assets, all in all, is, in my judgment, but that is also mirrored by my colleagues and the Management Board and also by the Supervisory Board, attractive in terms of financials. Now that is, at first, what we have to judge our decision on, from a shareholder perspective. Equally, and I hope I made that clear, I think there are, however, also tremendous opportunities for us as a combined management team to effectively tackle the challenges of our industry. I know we have a legacy and, this time around, it is certainly a very different approach, which has been taken. I have considered the negotiations we had to be very constructive, very open-minded, very, very goal-oriented. And my way, how I look at that, is that we will hopefully achieve to really combine the best of 2 worlds. I think there are excellent teams on both sides. And the challenge or the chance is that we have to put together our heads and jointly define what is best for the combined company. And I think, here, we have a lot of food ingredients.

And just coming back to the pricing, could you give a sense of what was the pricing range of negotiations for this deal as you were going through that process?

Look, I think I'm not reiterating or I'm not conveying details of negotiations by -- but we ensured that the final price was not the starting price.

Okay. And if I think about the -- just the product market kind of appetite for German residential, generally, if you were to revalue the portfolio, your EPRA NTA would probably be considerably higher for half year. Where do you think it would have landed from that kind of perspective? And do you think you'll have some money on the table?

I mean, yes, I can essentially only repeat what I also said in presenting our Q1 results. We have, as you know, the vast majority of our properties sitting in Berlin market. We have been faced for a fairly long time with the regulatory uncertainty. And I simply don't have sufficient data points as of now as to how pricing in the transaction market is developing post the decision of our Supreme Court, which is why we are also guiding for our Berlin stock for no revaluation with half year numbers. All of that having said, fundamentally, and also acknowledging what is happening in other markets in Germany outside Berlin, I would be extremely surprised if we do not see a significant revaluation uplift and respective evidence in the transaction market in the months to come.

The next question comes from the line of Thomas Neuhold from Kepler Cheuvreux.

I also would like to come back on the fairness of the offer. It's a 1% premium versus Q1 NTA. You mentioned that more valuation upgrade is still likely. Are you considering to do a revaluation of the portfolio at half year just to make sure that all investors who are undecided can make up their mind? Because I think the extended offer period will most likely end after the release of your Q2 result?

Thomas, again, I can do a revaluation of our portfolio if I have data points, which have changed vis-a-vis the last revaluation we did. And that is simply not the case for now. So my view is, as of now, there would be not any meaningful change in the remaining 5 weeks from now. So the answer is no. But again, on pricing, I mean, essentially, you have, in my judgment, always to look at different valuation metrics. And one is a fundamental view on valuation towards which you're hinting. And here, certainly, I do see prospects in future years and also for 2021. And I mean, I do personally remain very, very convinced on the attractiveness of Germany for the residential products, but, in particular, also metropolitan areas and further asset depreciation. But at the same time, what I simply have to acknowledge is that there is a kind of decoupling from fundamental valuation and stock market valuation. And our sector, unlike previous years, is trading at a discount to net tangible assets, and that is true almost for the entire sector, for the entire residential sector. And that is probably very much because of the regulatory uncertainty in an election year in Germany and what it may mean for our ability as an industry to develop rents. And against that backdrop, if I look at implied FFO yields, and I was mentioning 2.6%, that was fairly attractive. And if I see how also guidance is translating into stock price performance as it relates asset appreciation, that there is little correlation these days. It is supporting my view. So in other words, what I see is that the cash flow-oriented valuation seems to be more emphasized in capital markets than a fundamental valuation, and that I have to acknowledge also in how I judge on the transaction. But obviously, ultimately, it's each and every shareholder who has to decide once the official offers out to what extent he considers that attractive or not. I can only mirror the view we have at the Management Board, with the backing of our Supervisory Board.

Yes, understood. And my second and final question is on the disposal pipeline, these 20,000 units, you very likely will sell to municipal companies in Berlin. Can you provide some details on these portfolios?

Yes. I mean the -- we contributed the majority to that, and that is essentially forming part of our so-called nonstrategic portfolio. So it has been put up for sale anyhow, and it will certainly -- has to be at market price.

And market price is [ the last ]?

Our current is book value.

The last book value. So end of 2020 book value? Or will there be a revaluation? Or there will be no revaluation of here?

There is no midyear revaluation, as I said, but I was explicitly referring to market value. I mean, look, we have a responsibility vis-a-vis the owner of our equity. And against that backdrop, there is certainly some room to maneuver. But there's equally no room for huge discounts. That's sufficiently answering your question.

The next question comes from the line of Thomas Rothaeusler from Jefferies.

One question on rental growth, actually. You limit rent growth voluntarily to 1% or, I think, CPI also for the next 5 years, for the Berlin portfolio, which is actually well below recent dynamics. I understand short-term indication on provision for rent table and COVID as drivers for that, but 5 years is rather long term. Maybe some general thoughts on this from your side?

Sure. I mean, first of all, just for the sake of clarity, in 2021, we will essentially not implement any regular rent increases, given that we are still, yes, coming to an end, but not yet -- are not yet are at the end of the COVID-19 pandemic. But I think, also, in Q1, I was hopefully sufficiently clear that there is the need to de-escalate the situation in the housing market. And against that backdrop, we have to somewhat balance out social responsibility versus yield requirements and also the need for some rental growth. We obviously have to fund our business and necessary investments. But if you bear in mind that we have guided, going forward, to an expected like-for-like rental growth of around 3%, you can see by these numbers that regular rent increases are already in our guidance, forming part with less than a percentage point. Because we have 1.5%, 1.7% like-for-like rental growth from re-lettings, we continue to do our investments, which is adding probably some additional 50 points -- 50 basis points. So it is not so much different to what we actually see. And I have to say, with a 3% like-for-like rental growth, we can handle that, in my view, as an industry pretty well. It is sufficient to generate nice organic growth. It's sufficient to fund our needed investments. And in particular, if you look at our portfolio, which has very high rental upside, it is an embedded growth for the very long term, which is providing a very nice safety cushion to a moderate but long-term stable development.

I mean you referred to the need to de-escalate. Does this specifically outflow for Berlin? Or is it also for other locations like, let's take, Dresden?

It's a particular topic for Berlin, but also for other metropolitan areas. But for us, as Deutsche Wohnen, as of now, it is very, very much Berlin, as you know. But again, I mean, this is what, in my view, is really the big achievement of yesterday's announcement is the combination of joint forces. And the deal, we have been able to agree with some of the very leading voices in the Berlin market. And I think this is a very, very important step to de-escalate the situation because there are very supportive and encouraging notions from various political parties. And that is important because it will be another, in my view, very important step to change also the reputation we have as a sector. And I think for the wrong reasons, but our reputation, for whatever reason, is not the best one. And we have to be more clear in what we do and how we do that, and we need to ensure that we come into a dialogue with stakeholders. And that was, in fact, in my view, a very, very important step.

The next question comes from the line of Jaap Kuin from Kempen.

I think, just looking at the alternatives that you have, I guess, you decided to sell the company for cash deal, which, obviously, the 100% cash component makes things digestible or more digestible for your shareholders. But what about any alternatives that you could have pursued like, for example, stepping up asset rotation? Because now you're selling at NAV, but that you're clearly able to privatize or do block sales above gross asset valuation. So was there not a potential to extract more value for your shareholders by either partly liquidating the company yourself over either short or mid-term or even longer term?

Yes. Hopefully, liquidating the company is not really an option you think we should consider. Look, I mean, first of all, we have not decided to sell the company. We have decided to recommend our shareholders to accept the offer, which is a very different notion. Ultimately, the decision is with our shareholders. And what is created by the combination of Deutsche Wohnen and Vonovia is a very big real estate company. You know that the offer is being financed initially purely with debt. And Vonovia already announced that there's a need for a big refinancing. So if I were to put myself in the shoes of investors of Deutsche Wohnen, I would argue I have the opportunity to basically sell at a premium and have the ability to reinvest in the combined entity in the context of the liquidity event, which is upcoming.

Yes. That's a clear statement, and I fully agree with that. It's just that [ I worry ] if time again shown to be able to sell above book value on a gross basis. So that makes -- and obviously, like you indicated, the capital markets haven't fully appreciated NAV growth. I agree with that. But that could also have to be -- and obviously, there's a political consideration with potentially a short period of time in which you were able to execute a deal. So am I correctly interpreting that the overriding kind of necessity to achieve a deal to de-escalate the situation to join forces also overriding the longer-term potential of crystallizing value above appraised values?

Yes. First, it was a mix of things we looked at. I mean, first of all, first and foremost, pricing needs to be right. And I think pricing, as I explained in detail, is attractive. But equally, I'm also focused to work towards a combined company, which has the ingredients to be an even better company as each company on its own, as it stands today. And I think the political deal is an important element to that. And I think the sheer size of that company also opens up a lot of opportunities. But here, I'll stop because, for now, I'm a Management Board Member of Deutsche Wohnen. So for now, I am opining on the offer, which has been presented to us. And the rest -- and how that will develop at some later stage and how to look at the strategy of the combined entity is something which the Management Board of the combined entity has to explain and present at the appropriate time.

Clear. And maybe last question, if I may, on the directed equity issue to Vonovia. Could you maybe discuss the moving parts there? The rationale?

Yes. We have changes in Germany as it relates to the real estate transfer tax. That will come into force as of the 1st of July. And it's, in my view, a law, which has been very badly structured, and that certain provisions may trigger real estate transfer tax payments if there is movement in shares. And against that backdrop, that was, in my judgment, the right approach by Vonovia to structure that topic in that they'd secure that they have, prior to the 1st of July, 10% of Deutsche Wohnen shares. And with that, this risk of that badly structured law is mitigated. And part of that is going to be that we will issue some of our treasury shares at the agreed offer price of EUR 52 to Vonovia by using our respective authorization for preemptive issuance. And for the remainder, there are some other ideas. As I understand, Vonovia has to gain [ access ] on these shares if, for whatever reason, that does not materialize. We will equally agree that we will also issue new shares at the price of EUR 52 to Vonovia in order for them to secure the entire 10%. But that's an option, and the trigger for using that option is with -- with Vonovia.

The next question comes from the line of Michiel te Paske from Morgan Stanley.

Sorry for banging on the valuation, but there seems to be a bit of a difference of opinion between the Vonovia Board on one side and then Deutsche Wohnen Board on the other side. And Vonovia, as we heard earlier today during the call, is very happy with the opportunity to buy at book value. And I think you also said something like any direct investor would have done it, yet the biggest direct investor in Berlin [ of Deutsche Wohnen ] is happy to sell at these levels. So is there just a difference in opinion about future rental growth in Berlin? Or whether the -- is the expected value growth in the first half of the year and the second half of the year? Is it all outside of Berlin, according to Vonovia? I don't know if you've discussed that with them?

Look, I mean, I think, over the past days, we are discussing pricing from different perspectives.

Sure.

And that's the natural situation you are facing when 2 parties try to find an agreement on how an asset or a company is appropriately priced. I can only comment from a Deutsche Wohnen perspective as to how I look at pricing. And I can only repeat myself that there are, for me, various angles as to how I look at pricing. And key consideration is stock market valuation, how research consensus is looking at that. It's also a fundamental valuation, but it's also a question as to how -- or how I view catalysts in the market to actually capture fundamental valuations.

Right. And you'd think, as you said -- sorry.

In the midst of all these, we have come to the conclusion that this is an offer we are essentially forced to present our shareholders.

Yes. I know, and I appreciate that. And I understand that. It's just that there seems to be such a vast array of difference of opinions here and also for your new employer. That's going to be interesting how to look at it. Because, again, Vonovia, apparently, already sees further value increase -- appreciation, sorry, in the second half of the year as well on top of the 6% to 8% or 8 to 10 -- sorry, 8% to 10%, I think they've predicted for the first half. And I -- for me, it's very difficult to square these 2 opinions because, basically, you're operating in the same markets. You, on the one hand, said there's no transactional evidence to support further value growth in the first half of the year. But apparently, other market participants, and to quote Vonovia again, any direct investor does see those value increases. So for me, I'm just a bit puzzled with the outlook on values. That's it.

No, but hopefully, you didn't get me wrong. I mean, first of all, my notion, obviously, each shareholder has to form its own view as to how he looks at a fair valuation. And I'm certainly not in disagreement that I have a very positive outlook on fundamental valuation for Berlin markets. I was only saying that, for now, I don't see the transactional evidence. But I hopefully was also clearly in saying that we have seen that transactional evidence in many other markets, not in Berlin, because of the regulatory uncertainty, which we had for long. Now that has gone away, it is, in fact, my clear expectation that we will see some catching up, some recovery. So the notion of value uplift in the second half of 2021 is certainly matching my expectation. But the other question is, and that is for you guys to opine on, how is that translating into stock market valuation? And is stock market currently looking at NAVs? Is it currently looking at yields? Is there a decoupling?

Okay. That's fair enough.

I think, with all the regulatory headwinds we have, it's the likelihood that, at least in the shorter term, there is a decoupling from NTAs or NAVs.

Right. Okay. Fair enough.

In the medium to longer term, hopefully, that will disappear at some stage. Because I think it is, at least for me, not logical, that the transaction market is offering different prices to the stock market.

Your next question comes from the line of Jonathan Jackson from Patronus.

Can I just ask whether there was ever an option for Deutsche Wohnen shareholders to receive consideration in Vonovia shares so that the upside -- so that we could share in the upside long term of Vonovia?

That is not the way how Vonovia has structured that, so the answer is no. However, as I said, there is the need, on the side of Vonovia, to refinance the equity -- to refinance the bridge with the rights issue. And I think in the recycling of the subscription rights, there should be also the opportunity for a reinvestment, but obviously subject to market developments.

Your next question comes from the line of Simon Stippig from Warburg Research.

The first question would be in regard to, again, revaluation. I just see that in your presentation, Q1 '21 presentation, that you're still showing asking prices at a 21% premium to your book value, selling book value. And just, specifically, what would be your best guess in crystallizing that value actually over years, 3 years, 5 years, 6 years? And just because I believe that share prices, in the longer term, follow fundamental values. So it would be interesting, even though you have traded at a discount to NAV, literally, the last 4, 5 years, and smaller or larger, but could you give me your best guess about that?

But this is really a bit crystal ball-looking, I mean, for Berlin stock, which is making up the majority of our holdings. We see in the institutionalized market, based on more recent transactions, price points in between EUR 3,000, EUR 3, 500. I think I was clear in my expectation how I think things should develop. If I look at it from a different perspective, which is simply looking at market rent levels, which we currently don't have, but which we should achieve in the longer run, and compare that to current bond yields, we are at reversionary yields of, yes, around 4.5%. And that is essentially the implied risk premium for the residential real estate sector, which, I think, has been -- yes, has proven to be very robust and which is, in my judgment, certainly above the risk premium I would typically expect for our sector. And that's kind of a very high-level guidance towards what levels the sector could move towards.

Okay. And just maybe a second question in regards to your development pipeline just in your subsidiary Quarterback. Is it -- you're showing -- on Page 60 of the Q1 '21 presentation, you're showing your total investment cost, and I assume that is including land prices of between 20% to 30% a share. Do you actually apply a modular construction within Quarterback?

Modular construction is not applied in Quarterback or the projects we developed for our -- on our own balance sheet.

Okay. Great. That's clear. And then maybe just last one. I just wonder about de-escalation in regards to regulation and just political risk and also, for example, expropriation initiative, et cetera. But I just wondered is it really a derisking or de-escalation, just considering the September elections and potential coalition where certain parties will have greater influence?

Look, I mean, just forget about the expropriation campaign, this is just noise, full stop. It will not happen. It will never happen. And I think -- and you see that by reading through the programs of -- or the manifestos of the various political parties in an election year, there are a number of ideas on the rental market. There's a lot of noise as to what needs to happen and whatnot. I think, ultimately, you have to acknowledge that what you promise is not ultimately what you achieve. It's building up a position to negotiate a coalition agreement in whatever form that will emerge post election in September. And it has to be translated ultimately in politics, which work. What I think, though, is important that we are not any longer tackling this situation as this is the position of politicians, this is the position of tenants, this is the position of landlords. But that we come together, that we speak and that we find joint solutions, which work for all stakeholders. And that is less about which political party will emerge or what coalition will emerge. This is a very principal topic. And I think, as a sector, we are making very important steps in that direction. And for me, I have to say it was a very notable outcome to see the mayor of Berlin and also the Green party, by the way, is supporting that approach. On the hand, we have given to politicians in Berlin as to how the sector can help to solve issues and to ensure that the concerns tenants have are appropriately addressed. And that, in my view, is the key point.

Yes. Okay. Agreed. And just maybe one last one. In regards to your nursing and assisted living segment, were there any -- or was there any discussion within your negotiations that would consider nursing and assisted living core to a future combined entity?

It's a very, very interesting business for us, and it's a business which will be within the responsibility of Michael Zahn, if shareholders, with the majority, are accepting the proposal Vonovia has made. So that is hopefully answering your question.

The next question comes from the line of Tom Carstairs from Commerzbank.

Yes, I'm sure you'll appreciate this call on valuation, a question on valuation side of things. I hear what you're saying on the share price premium argument concerns about the rent growth, but if we're looking at this transaction from the other valuation metrics, your Berlin portfolio is valued at around EUR 2,850 per square meter. Your own presentation points to 15% upside to CBRE's asking prices. And I appreciate you haven't committed to revaluation gains on your portfolio, but you have stated that you're expecting increases in property valuations. So I'm just looking at it from the fair value per square meter perspective and not discount to asking prices in Berlin. I'm struggling to see the attraction in that respect.

I risk repeating myself. It's --there's 2 angles, full stop, yes? I mean, I don't disagree on the prospects of Berlin market. I don't disagree that I do see or do expect valuation uplifts coming through in the second half of this year, but that simply has to recognize that our stock pre-announcement is at EUR 40, EUR 45 and our EPRA NTA is at EUR 52. It's at a significant discount. So stock market is not reflecting that. And for that very reason, I think I cannot depose that opportunity to our shareholders. And that is why we are presenting that opportunity to shareholders to form a decision on.

We currently have no questions in the queue. [Operator Instructions] The next question comes from the line of Peter Papadakos from Green Street.

Just 2 quick questions. Obviously, you've been happy to run Deutsche Wohnen with a little bit more lower leverage, a little bit safer capital structure. When you were discussing with Helene and the Vonovia crew, what's your thoughts on capital structure for going forward? Are you going to take a similar view to Deutsche Wohnen? Or is it going to be different? Is it going to be more consistent with Vonovia look back? That's one. And then the second one, as much as you can answer, you're probably and obviously a Deutsche Wohnen shareholder, will you be a Vonovia shareholder day 1? Or will you just build your shareholding in Vonovia by [ outage ] over the long term?

I mean, on the first point, I have to defer actually to the colleagues of Vonovia. I have judged the situation from perspective of Deutsche Wohnen. But it may change at some point in time, and then you will hear statements from my end, but not for now. And for me, at Deutsche Wohnen, it was important that I have certainty that the cash offer is fully funded, which it is, by a fully committed bridge. And for me, it was important to have certainty, that also change-of-control situations, which may be triggered, are adequately addressed, which is the case and which is embedded in the bridge, which has been put in place. And on shares, I mean, we have committed, as Management Board of Deutsche Wohnen, to tender our shares at the offer price, which we will do. If the offer is successful, and part of us will join the Management Board of Vonovia, I think there's also some share ownership guidelines. So I have to see what is presented, what is needed. But typically, and that's only a personal notion, I like, if I have, personally, also some skin in the game for the business I'm responsible.

[Operator Instructions]

There doesn't seem to be the case. Thank you very much for your short availability -- or your availability on short notice. And thank you very much. Have a great evening.

Thank you for joining today's conference call. The next regular call of Deutsche Wohnen will be the H1 earnings call on the 13th of August, 2021. For any questions in the meantime, please feel free to contact the IR team. Have a good day, and goodbye. You may now replace your handsets.