Warehouses De Pauw SA (WDP) Earnings Call Transcript & Summary

Good afternoon, everybody, dear investors, bankers, analysts and also dear listeners from the TET and LeKo. We all welcome you. Welcome. [Foreign Language]. So this will be a session in listen-only mode, but you can ask all your questions in the chat box even during the presentation. And after the presentation, we will answer them all one by one. So if we look to our results and our projects, I see the proof of the fact that the supply chain has taken control in every business, that indeed, it is becoming the beating heart of every business. And you see that in our existing portfolio with a 99% occupancy rate, a full house and indeed, more than EUR 400 million of new projects that we signed this year. This brings us to a global amount of EUR 1 billion of new projects contracted in 2 years. And as usual, they were done with 50% of existing clients, 50% new clients and also already some years for more than 50% in the Netherlands. These investments, this package of EUR 1 billion made us say that thanks to our geographies and our sectors, we can give an upgrade to our existing growth plan from EUR 1.5 billion up to EUR 2 billion. So we can invest another EUR 500 million extra, and we can continue investing EUR 100 million per quarter, not during 5 quarters, but during the next 10 quarters so that we can arrive at a portfolio of EUR 6 billion, together -- those investments together with the revaluation of our portfolio. And it will not be a growth for growth, but a profitable growth. And by investing this amount, we will be able to let our earnings growth from EUR 1 in 2020 back to at least EUR 1.25 in '24, indeed, the moment that all the projects are executed and profitable. Like I said, the distribution centers, the e-fulfillment centers, they are now really in the heart of every business. And we also tried to give some more nonfinancial and market information about our markets and our geographies. And so here, you can see that we are investing all in very healthy markets and that we are a market leader in every market where we are active. You see stable demand and takeup everywhere and, as you know, of course, a very high growth of the online sales and prime yields coming down. But I want to concentrate a little bit on the different drivers because we see a lot of interesting drivers in our sector. Of course, first of all, there is a high demanding flexible client who is not, I would say, not asking for e-commerce, but for omnichannel strategies. Today, he wants to be delivered at home; tomorrow, in the office, in an oil station, even in a retail shop, and he wants to give back things. And in order to realize this, you need a really efficient, flexible logistic infrastructure. And we can prove this by some very nice projects we realized this year, for example, in Ghent and WDPort of Ghent. And there, we made a modern and we will construct a big box of 150,000 square meter facility for an omnichannel retailer, X2O and Overstock. And also, we published this morning another big pharmaceutical future-proof project in the Netherlands in Veghel for Alloga and Alliance Healthcare. And by the way, we made our press releases and this presentation much more interactive. I would say it's almost a full digital property tour with more than 10 movies, and I give you one of the projects that we published this morning. [Presentation]

So -- and in order to realize all of those highly sophisticated internal warehouse, our clients needs to invest in automation, and we see more and more investments in automation by our clients and by ourselves, for example, Mediq in Bleiswijk, also a pharmaceutical warehouse; and the fully automated high bay of the biggest [ jumpoff ] distribution center of the world in Belgium. And another driver is indeed the whole supply chain transformation, and that is happening a lot. People are getting more and more efficient. We also see a [ transformation ] just in time to just in case. And there, we also see examples like today, I think we're one of the most famous warehouses in the Netherlands for the moment, and most protected ones is our warehouse for Movianto in Oss where our vaccines of the Netherlands are stored and are very efficient and high-value [ med ]. And also very soon, in order to realize that different [ business ], of course, together with our clients and thus in a very sustainable way, and also sustainability drives our sector, then we have to take care of the available land, and that means to realize more about multilayer distribution centers or realizing brownfield developments like for CEVA in Den Haag. So all of those drivers, indeed, they give this possibility to grow together and with our clients in our existing markets and in our existing segments. So therefore, we can grow within everything we know. But we are not only looking and investing in our operations. We are also investing a lot in ESG. And you can see all of the different realizations of 2020. But much more important is the fact that it is all within a plan, within our road map. And we learned a lot and we're S and G the last years, but now we are prepared a lot for E, for S, G, but now we are really concentrating on E this year with our Climate Action Plan, but also we continue with less energy with our stakeholder engagement and compliance training. There seems to be a technical problem with the noise. So we'll continue now. So I was saying that our ESG actions or whether it is a plan, a road map and, let's say, we get all of the first results of our plan and we get, with MSCI and ISS, we get -- we could go higher and get extra much, but -- and we say and we are, let's say, on a perfect world to our ambitions of an A [ between ] and B prime for ISS. And if you then look into details in our activity report, and you can see that indeed, we built some things that we realized more than 500,000 square meters of new projects and that indeed, we have even more closures today than the constructions. We have more than 800,000 square meters of construction. And more important, let's say, it's not the existing potential, but we still have our EUR 100 million land bank, but you can see it's a very dynamic given. It's not a fake given. It's a very dynamic given. And indeed, therefore, we can use them for our clients. And together with the knowledge we have and the clients at the land, we can build further. For those who like the figures and want to compare all the regions, we did some classical figures about our different regions. You also see the yield of the portfolio. And there, the -- we are still very high-quality portfolio with the occupancy rates we discussed and the clients who are still there. But first, I want to give the word to Mick in order to give more explanation about the results itself.

Thank you, Joost, and also welcome from my side. So when we take a look at our results for 2020, we've been able to deliver further growth in our earnings. And first, in the underlying results from our core activities in terms of evolution of the rental income, we showed a 13% year-on-year increase, which was, in fact, driven by 2 -- okay, just I'm also -- because of the quality of the sound that we take a break for 1 minute, so with above video, and then we will immediately come back with this financial part of the presentation. Apologies for any delays caused. [Technical Difficulty] So thank you for your patience, and our apologies. Technology is not helping us today. But anyhow, I will continue with the presentation. And like I was mentioning on the results, when you look at the results on our revenues, up 13% year-on-year, which was, in fact, a breakdown of like-for-like rental growth and external growth, like-for-like organic rental growth being 2.3% year-on-year, which is composed of indexation, which was plus 1.3%, but also plus 1% due to a rise in the occupancy rates, especially due to an increase in short-term demand due to a rise in inventory levels. And the remainder was driven -- and the largest chunk was driven by external grade -- external growth related to a steady stream of development completions and note that we have been delivering now for a while now over 100,000 square meters per quarter over the last couple of years, mainly in the Netherlands and Romania. And whereas we feel we would have some delays on these projects when we were in the first lockdown. Overall, the impact was quite minimal and most of the delays got recovered, thanks to our technical team and our construction partners. Now you may see some stronger rises in the operating charges. But there, I would like to add that on an underlying basis, these are increasing in line with the portfolio and revenue growth. But in 2020, we had, in the property charges, some smaller one-offs. And in the G&A expenses, we took a cost of EUR 1.5 million as we accelerated our digitization program with several internal projects, but also the development of a fully digital customer portal, which will be launched later on this year. So excluding these one-offs in the G&A, we would be looking at a stable operating margin versus 2019. And in 2021, it should revert back to its old normal and stable level. Now below the operational result, you can see that our financial expenses had an average cost of debt of 2.1% in 2020. And even more, despite the rise in gross financial debt and the strengthening of liquidities, we could manage to show even a decline in our financial expenses as we could benefit from some hedge extensions executed in 2019 at a lower rate, which had a positive contribution of EUR 4 million. But all in all, summarized, we show a 15% rise in our EPRA earnings, which, on a per-share basis, results in a plus 8% increase. As a note, the number of shares has risen not only due to the stock dividend, but also through the ABB of EUR 200 million end of 2019. And I think there, with the EUR 1 earnings per share, we are exactly in line in terms of -- compared with the initial guidance provided to you at the start of the year, pre-COVID. And then second, on the portfolio results, you can see revaluations of just below EUR 200 million. So what is the breakdown of that? I'm giving you rounded numbers. 50% is driven by around 4% revaluation in the underlying standing portfolio, mainly based on a 20 basis points downward yield shift in this existing portfolio, but which got tempered a bit because of a technical aspect because of the fact that in the Netherlands, the transfer tax rates will increase as from 2021 from 6% to 8%, and we already reflected that into our balance sheet with an impact of around EUR 40 million. And the other half of the revaluation gains has been driven by development gains on the development projects with an average uplift on development completion of around 15% to 20%. When we then take a look at the next 2 slides on our balance sheet, Page 36 and 37, there, I think a strong increase in the asset base, almost EUR 600 million, driven by EUR 400 million net investments and EUR 200 million revaluations. And -- but obviously, what is important to stress here, it's a limited amount in our balance sheet, but very, very important is to stress that the outstanding trade debt that is based on a very solid rent collection rate of 99% of rents collected over 2020 and with only EUR 1 million outstanding related to COVID-induced payment rescheduling we granted to some of the clients and which we expect to recover this year. And even looking beyond the balance sheet of the 31st of December, we can already say that for the start of 2021 for January as concerns the monthly rents and for Q1 as concerns the quarterly rents, we have by now received already 88% of these rental payments and continue -- this continues to be good and follow a regular and normal pattern. I think when we look then to the liability side of the balance sheet and the metrics, there, despite being a strong net investor, we continue to have a strong balance sheet, but above all, a liquid balance sheet. Because when we look to the actual metrics on Slide 38, there, we can say we have a good LTV at 45% and, more important, an adjusted net debt-to-EBITDA at 8x, which we believe screens well in a wider European context. And here, we will continue to stick to our principle of financing the growth on a 50-50 debt-to-equity basis and having a balanced and stable capital structure. But like I mentioned, solvency is one thing, but liquidity is even more important as always. Therefore, we have now 700 -- more than EUR 700 million of undrawn credit facilities through which we can comfortably execute our committed and pre-let development pipeline and all debt maturities. So not assuming any refinancings until at least mid-2022, and that is even without the yearly basic strengthening of our equity through retained earnings and stock dividend of around EUR 100 million, so that's a recurring mechanism of already each year strengthening our equity and liquidity by EUR 100 million. And here, I would also take -- like to take a moment to highlight the increased importance of green financing, which has also broadened our access to capital and especially through financing transactions with IFC, World Bank and EBRD, in which we EDGE, and EDGE stands for an internationally recognized green certification standard developed by the World Bank. We certified the entire Romanian portfolio with this standard. And as a result of that, we could increase the overall outstanding -- or the overall contracted debt is now back -- is now 33% labeled as green financing. Moving to the next slide in terms of debt financing. I mentioned to you, we are at 2.1% average cost of funding in 2020, which will decline further towards 1.8% both organically and mechanically as the EUR 700 million raised in 2020 was at an average cost all in of 1.1%. And this will, of course, be only fully visible once it is fully put to work. On the debt maturity schedule in itself, Page 40, I think they're still well spread in time over the next 10 years. You may see, however, that contrary to other years, some long-term debt maturities in the current year, 2021, for an amount of EUR 175 million is still outstanding. And I'd say contrary to other years because we normally refinance our debt for the next year before the 31st of December. But this year, we will refinance it out of the available lines as it mainly concerns the EUR 125 million retail bond, which expires, and we are obviously happy to refinance that. It's still at 3.4%. So that is, in part, an explanation for the organic decline we still foresee in our cost of funding. Now I will skip the next 2 slides. And when we go to the outlook, I think there, as far as the outlook for 2021 is concerned, I think when we look at analyst consensus figures, it should come as no surprise that we aim for and guide for an EPRA earnings per share of EUR 1.07, a 7% year-on-year increase targeted with a similar increase envisaged for our dividend. Now it is obviously important to talk a bit about the -- or to give you some flavor on the underlying assumptions. And I think there, the main driver has not changed, and that is the impact from external growth from the development completions. Note that it's also based on solid and stable operating metrics. And there, note that the 2.3% like-for-like rental growth we achieved in 2020 is unlikely to be repeated as inflation will drop below 1%, and the occupancy rate is already at a maximum level. So much will depend in [ fine ] how the occupancy rate evolves further, and we expect it to be rather stable in the beginning of the year and then end at least at a minimum over 97%. Now this is more business as usual. I think the most striking element here in the assumptions is that we have incorporated in our guidance, there is a -- there will be a provision of EUR 4 million impact of EUR 0.02 or 2% per share related to the Dutch FBI regime. There, we refer to the extensive disclosure in our press release. But in short, the point is, to give you some background on that and the rationale for that, the point is that from the 1st of January this year, 2021, we have lost our fiscal ruling. It does not say you do not longer comply, no. It says it ends at the end of last year, and you should demonstrate, again, you fulfill the existing requirements. And whereas we believe we should, as from 2021, continue to classify as a Dutch REIT under the existing legislation, we will most likely only know for sure somewhere in the end of '22 when we file our tax return. And on top of that, the Dutch government is making a global assessment of the future of the FBI regime, of the Dutch REIT regime, for which we still see a future, especially for the listed REITs. But those 2 elements combined, the outcome and timing being today too uncertain, we also want to reflect that in our accounts this uncertainty so that we do not risk any negative surprises afterwards. So the EUR 4 million or 2% of our recurring earnings relates to the difference of not being a Dutch REIT in the Netherlands. So I think that's my part on financials and outlook. And I think, Joost, we can go back to you and start with the Q&A.

Indeed, it's time for your Q&A, and we will look what you all asked. And indeed, Frederic, thank you that you mentioned that the quality of the noise of that was not that good. So first, I see a question. Indeed, can you talk a little bit about rental growth? Given the acceleration in e-commerce, do you potentially see supply/demand imbalances in the market and this higher rental growth going forward? I think there are 2 elements of rental growth. Indeed, first of all, there is inflation. Mick said that inflation will go back for the moment to 0. So there -- and having a full house already. There, let's say, rental growth will not come from that part. But we don't see any imbalances between supply and demand yet, but I think land becomes more and more scarce. And so I think land become more scarce, so more expensive. And in turn, but not in the direct term because we have a lot of long-term contracts, in the long term, there can be a little bit further rental growth, but we don't calculate on rental growth for this plan, I can say.

No, I think what we can confirm is that there is an increasing scarcity of land and that if there is one element that would be a genuine structural driver for market rental growth, then it is the scarcity of land. It is still available. It's more difficult, but that would be the real trigger in the future for structural market rental growth, and it may come, but then it will first come not across the board in the entire market, but more selectively in micro market locations where there is a real scarcity and, for example, in locations when companies need to be absolutely in that location and where there is no possibility for further expansion, for example, of that industry zone. And then looking beyond for a next plan, then we will have to see. But today, it's too early to count on it in the short term, at least. But it may build up in the next years for the future. Joost?

Yes, I think. Then next question, isn't it there is still a downward pressure on the prime yields? What is -- I think this is true. Then what is the impact of a difference of, for example, 25 basis points on the intrinsic value of WDP? I don't know if you can -- if there is a downward yield just of 25 basis points?

I will calculate it once...

What's the impact on our intrinsic value? Mick will look at that. And in the meantime, I will already answered the next question. WDP is realizing a first XXL project in the harbor of Ghent. Is this the start of more XXL projects in Belgium? Do you see a trend in the lease? Well, it's not our first XXL project. We have a lot of big boxes. XXL projects are projects above 40,000 or 50,000 square meters, and we have a lot of them in Belgium, in the Netherlands, in Romania. But indeed, it was a long time ago. However, last year, we did the Barry Callebaut project in Lokeren, which is also a big box. So let's say, are there possibilities? We see a variety of things, from very small things to very big projects. But it's not that today, there are more big boxes than others, and I don't see any more specific changes in the market.

Yes. And the impact of 20 to 25 basis points yield shift in the standing portfolio is around EUR 1 on the NAV.

Thank you, Mick. And then a question of Frederic Renard. On the extra EUR 500 million investments, how big would represent Germany? Can you comment on the competitive landscape in the country? Well, like mentioned before, Frederic, we said that, let's say, Germany is seeding for a next plan. We have not foreseen Germany, and we don't calculate for Germany for this plan. Of course, every investment is welcome, but it's not that we calculate a specific amount. We will go for it. We will continue to invest like we did our first investment this year in Bottrop, and we will launch now our projects since the land is clean. We have the building permit and we have a contractor, so we can start and we will plant our real flag with the first project. But we don't need Germany in order to realize this plan, but we'll prepare it for a next plan. Then next question, what is the discount rate applied by the experts and evaluations of the net assets?

It's close to the yields that are published, and it's close to the gross yields that we publish in our presentation per country. It's not far off. And some use -- they use 2 models. They use either a discounted cash flow model with a discount rate or an income capitalization model, but they apply the yields or discount rates are close to the gross initial yields we publish on the portfolio per country, which you can see on Slide 29 on the presentation.

And in the same line, there is a question. What was the discount rate used for the calculation of the fair value of the assets in 1990? Did the used discount rate change in 2020? And what is the impact thereof in absolute figures?

The discount rates applied was -- the downward yield shift applied by the valuators was 20 basis points, and that was -- has an impact on the standing portfolio because it does not impact the land reserves or the projects under development, of course, that had an impact of around EUR 150 million.

So then the next question of Frederic Renard, considering the extra EUR 500 million and the cost of debt going down, both impacting positively the EPRA EPS, on a scale of 1 to 10, being 10 very prudent, how would you assess your EPRA EPS guidance of EUR 1.25 by 2024?

I would say, as consistently calculated as the track record of 20 years WDP listing.

Thank you, Mick. And next question, [ Palatoni ], [ BBP ], Goodman, David Hart Group, [ Helen ] are launching XL projects on risk in the Netherlands; WDP is not. Any plans in this way? Or why not? If you do not do, you can miss clients. Well, there, we, let's say, we invest and we take risks on the land bank with the land value. We go and we buy land. We prepare building permits. But having that, we don't go -- and we don't need any projects at risk because, indeed, we have already, like for the moment, 800,000 square meters under construction with clients. Why should we do more without clients? You need to prepare the land, and then you can do specific buildings and, let's say, adapt. It will stay multifunctional buildings, but then you are able to adapt the buildings to the needs of today and of your client. And so we think that we can make, let's say, better adapted buildings for our clients and that there is no need for projects at risk; only we need land at risk.

And I would also make the example of Nieuwegein where 1 or 2 years ago, we had some vacancy in our site, and that was next to 2 important sites of competitors of ours, which were brand-new buildings. And even though there was speculative development in the market and the clients could have gone to these buildings, the clients came to us, and it was top-notch clients, and it was bol.com. And we could secure the tenants in an existing building and attracting for an extension of the building, whereas we had 2 big sites close to us in the same industrial area. I think the most important element is that you have the lens in ownership, and that gives you an extra card in your hand in the negotiations.

Then some questions from Niko from ABN AMRO. First one, regarding the 100-megawatt peak targets in medium term, what do you currently target as the year -- for this year, by which you would go and by which you would like to achieve this?

No, it's a fair point. It's...

And then would 2023-'24 be realistic estimate? Or will it take longer to get to the 100...

Yes. No, no, it's a fair point. And just if I may start my comments by also mentioning that this -- a lot -- or a tremendous amount of work by increasing the solar footprint, we do a maximum what we can do wherever it is possible, wherever we can do it with the client, we do it in each country, but note that these are really smaller add-on investments with a lot of work attached to it, and we try to maximize it. That said, we are currently at 80-megawatt peak installed solar powers at around 90 sites. So more than 1/3 of our portfolio is covered with solar panels. And we have 10-megawatt peak in the pipeline, of which 5 will be added in Q1, another 5 in, let's say, by Q3 or the end of the year. So we will already, by the end of the year, for sure, go to 90-megawatt peak. And then from there, we have 5-megawatt peak under study in the Netherlands, which should be seen. Can we do it technically? Do we get the subsidy schemes? And is there a commercial understanding with the client? Of course, that's the most important thing. So that will already bring us closer to the 100-megawatt peak. So the 100-megawatt peak will become visible this year. But to have it this year, that will not be possible, but we expect to have it in '22. And on top of that, we are also looking at Romania, for example, whether we can do it even without subsidy schemes, without green certificates and have an investments based on grid parity, which means you are profitable -- you can be profitable without any green certificate just by selling the electricity, and that is under analysis right now. So we hope we can do it, but it's too early to tell because we are -- it's in analysis. But by '22, should be feasible.

The next question is, given the push for brownfield projects, is it realistic to assume that our current development yields of 6% and 8% -- 6% in Western Europe, 8% in Romania, that in the long run, we can push the extra costs of brownfields towards our clients? Well, Niko, there are 2 things. Indeed, there is a pressure on the yields, on the yields of the standing assets, but there's always also an impact on yields of the developments. But let's say, you ask if we can push the extra cost for brownfields towards our clients? But on the other hand, it's also can we push the extra cost of brownfields towards the seller? It's normally towards our clients, but also towards the sellers here because indeed a brownfield site has a lower value than a greenfield site. But it's not that we can, let's say, realize higher yields on brownfields. This will not be the case, also driven by the fact that, indeed, there is a general yield pressure. Third question, regarding the 75% of rents, which are already renewed in '21, at what levels are those renewed? And is this equal to the last contracts or not? Well, there, we can say, on average, that we can continue at the index level, make there -- we can say that today, in the existing portfolio, there, we don't see -- we cannot ask for higher rents, but we can keep our rents fully indexed. Next question, regarding the 88% rent collection so far for January '21, can you comment on this? And if that's the case, you expect that they were in line with the typical pattern that you have seen last year? So are they fully in line or no?

Yes, yes, yes, because we have in-house, we have obviously a more granular level of looking at it. And we -- when you put the payment behavior throughout the years, even on a daily basis, over each other year-per-year, we just have really the same payment behavior as in other years. And you have always the biggest chunk of clients pays very well. Sometimes with big clients, there is some delay because you need to have a purchase order or whatever. And then you have, in each portfolio, a couple of percent of clients you need to chase every time. So that payment behavior is fully in line with the last couple of years.

And then a question from [ Mike Slater ]. Can you please remind me if the 50-50 funding assumption for the pipeline uses a constant share price over the period 2020-'23? If so, can you please share what price they have been assumed in our EPS forecast of EUR 1.25? Well, I think we stay with the principle of the 50-50.

Yes, yes, the same principle, and we use the share price at the end of the year in our budgets and in our forecast. That's the most sensible thing to do.

Then Pieter Runneboom, 3 months ago, 5% of the tenants was at an increased bankruptcy risk. What is the current number today? And will this impact the vacancy numbers of '21?

I think the analysis that we provided to you in a very transparent way in Q1 last year is still valid. And then we came to the conclusion that when you look at the sectors that have -- that are, let's say, more challenging, our nonfood retail, automotive, some parts of industrial and wholesale. But when you look at these type of clients in our client portfolio, most of these clients are really big international companies. So when -- and you also need to combine these data with which clients have a strong negative business impact of COVID-19 and which are then also in a precarious or more difficult financial situation. And those 2 elements combined make us say that, and that is still the case, that 4% to 5% of our clients, namely the SME segment within those challenging sectors, are more vulnerable to a bankruptcy. Today -- to date, one client, 10,000 square meter building, went bankrupt in August last year, but that was the only one, and it got taken over the same day. For now, all the clients that are on these lists are paying very well, so we cannot foresee or predict that. We don't have this crystal ball. But how do we cope with that in our forecast? In our forecast, what you see in the occupancy rate, that is business as usual. However, we need to also take a cautious stance in the short term because of the wider economic follow-up impact still expected from the pandemic. And there, in our guidance, in the EUR 1.07, what we use, as every year, is that have used the usual 30 basis points default rates, which we have had historically. Plus on top of that, we have a EUR 1.5 million provision foreseen on top of that for doubtful debtors, COVID-19-related, without being able to pinpoint them individually today as all of these companies are still paying, but then you know how we -- which approach we have taken in drafting the guidance.

Yes. Then next question, when should we expect a new capital increase, except stock dividend?

I think there, we have always said that we grow on a 50-50 debt/equity basis and that we -- and that's something we will continue to do. So we will continue to match the investment rhythm with synchronized debt and equity issuance. That said, for the investments realized until -- identified until today, so the EUR 1 billion investments, up from -- of which still a large part is to accrue in our balance sheet, we are perfectly back-to-back with 50-50 debt/equity. We have the balance sheet capacity to execute it, and we have the liquidity. And it's a simple back-of-the-envelope calculation. In 2019, 2020 and 2021, we will, on average, have each year, EUR 100 million of retained earnings, and scrip dividend is EUR 300 million, plus EUR 200 million from the ABB in 2019 is EUR 500 million of equity raised already against the EUR 1 billion. So that's perfectly matched. But for the remainder of the growth plan, we will obviously continue to adapt -- to apply that same principle.

And then I think it's -- we answered that question already. The next one, for your leases that expire and renewed, how much do you revise rent upwards? Well, there, we can say that on average, we could stay at the same index levels. But for the moment, we cannot revise the rents upwards. The next question, what about the acceleration in the congestion of traffic in the golden triangle? What percentage represent earnings and fair values in this zone? So I think then the question is that the golden triangle, then I think it's about Belgium, about Ghent-Antwerp-Brussels region. There, yes, it's only a part of our -- I think Belgium is 35% and then the golden triangle, Mick, 15% on average.

It's a bit higher.

It's a bit higher? But...

Those parts in Belgium is to that market, but Belgium is 32% of the entire portfolio and, let's say, 2/3 of Belgian markets, so 20%. 20%.

Yes. Next question from Pieter Runneboom also. What is the geographic split for the new growth plan? And what is Germany's position in this growth plan? Like I mentioned, Pieter, in the beginning, we said 1/3, 1/3, 1/3 for Belgium, the Netherlands, Romania. We have seen that the last years, the Netherlands is doing more and is doing even more than 50%. Let's say that we think that we can stay -- grow in the same rhythm in each country, so around 50% in the Netherlands, 25% in Belgium and 25% in Romania. And let's say, we will welcome all the projects in Germany, but we don't calculate on Germany for this growth plan. Next question from Pieter. Would you be willing to do more speculative developments as your current high occupancy rate does not allow to take more risk? Well, let's say, are we willing to do more speculative? Then I would say, are we willing to do more speculative land acquisition? Yes. If we can do more, we will -- we should buy -- we should like to buy more land. But for the moment, we don't feel the need, and our clients are not asking us for doing more speculative developments. So for the moment, indeed, we don't see it. And yes, we can still play with our clients within the portfolio even when we have almost a full occupancy rate. [ Inah ], it's also a question, on the back of the question on rental growth, could you please talk about the specificities of multi-level developments, materials, permits and how it impacts projects' CapEx? Well, those are, of course, those multi-level projects are very complex projects. They are complex technically. How do we have to construct them? It's much more difficult than only a one-layer building. But also to get your permits, they go higher. It's not easy for, let's say, everybody who is living around. So it's more complex on every detail from you need a good land, permits, technical way to build it and, indeed, the CapEx too. Yes, it's -- let's say, if you build 2 levels, then you can say, a normal building has EUR 500 million -- is EUR 500 per square meter. So to double this, then you need twice EUR 500, but of course, you need a more stable building and it costs more. So you need -- a double layer costs more than the same square meters on ground level. And therefore, you need, indeed, very high land prices. But on [ Veghel ], the land is scarce and the land is very costly, then you can -- then it's profitable and then you can realize a multilayer building. But it's not an easy question on profitability, and you cannot -- you can realize it technically everywhere, but it's not profitable everywhere yet. Next question. Could you please make a comment on the Netherlands market? And what are you experienced here lately? There were some articles on the U.S. -- on the U.K. press saying that Dutch warehouses are receiving plenty of requests from British companies after Brexit as they start suffering from delays in the ports, higher shipping costs and some certain higher VAT. Well, there, we can say that, let's say, the Brexit is not new. Brexit was foreseen. And indeed, we have seen, while before, it was one area, and let's say, there were goods distributed from the U.K. to the EU and from the EU that included the U.K., and today, you have decoupling. You have, let's say -- they are, let's say, getting separately the U.K. is distributed from the U.K. And there, you see some temporarily extra stocks now because a lot of people expected a lot of problems in the beginning. And you see on the other side, let's say, the European distribution without the U.K. So I would say, we lost products that were stopped here and that are now stopped in the U.K., and the U.K. lost products, the products for the EU. So -- but I -- let's say, they are compensating each other, and we don't see a really higher demand here or not fundamentally, probably only some temporarily higher demand in the ports. Then next question, could you please make a comment on -- that's Francesca, I think, that's -- you put -- it was from Francesca from ING, and it's the same question. Then given the market strength, could there be an opportunity to sell some of the Class B warehouses? Well, therefore, let's say, we don't sell them because there are opportunities and redevelopments for tomorrow. As long as a piece of land and logistic future, we keep it, and we keep the building alive. We make it better. We redevelop them. It's only when, let's say, a land on a certain project is getting other destinations, residential, retail, offices, at that moment, we sell them. But let's say, we don't sell good pieces of land to our competitors in order that they can do developments on that.

And also, I would add that not every client needs a top-notch building and can afford to pay a very high price and needs a maximum free heights. So these are typically sometimes older or sometimes lower buildings in free height, which have a perfect function in the logistics market and can actually still perform quite well. And if -- like Joost mentions, ultimately, you can also consider them as deferred development potential.

And then the next question of Marc Eeckhout from Puilaetco. Now that land is getting scarcer, is it an option to do more redevelopments of existing sites or to buy less qualitative sites in order to redevelop them? Well, like I mentioned, Marc, of course, we do our redevelopments. But sometimes, a client is happy in his existing building, and then we don't need to do it. We do everything in function of our clients. If our clients are pleased, they can stay. If they ask us to do a redevelopment to make the buildings better, of course, we'll do it too, or if he leaves and then we see a function of opportunities if we have to redevelop a certain area or if we have to redevelop it completely or not. And of course, if we can buy, we buy everything with a logistic future. And indeed, that can be top quality, but also less quality sites that we can redevelop. Then next question, about the investment ambitions, could you please tell us where you will do them? Well, I think we answered that question already. We will do them, let's say, everywhere in our existing regions. We don't need to go to new regions. And for us, let's say, it doesn't matter where we do them. We like just to do good projects in our existing regions with our existing clients. Next question. The focus from a geographical point of view, what markets are you going to giving priority? From Francesca from ING. Well, I mentioned it all, we stay in our geographies. We don't need to go further. We don't need to take new risks. We can stay where we are, thanks to all the drivers that I explained to you in the presentation.

But we are, let's say, also investing right now like in Germany to become a driver for a next plan, but it's not required for this plan.

And then there is a question about yield compression in Romania, Mick. Romania did not see yield compression, the same like the other markets since 2018. And do you see potential for yield compression starting there as well? Yes, indeed, there has been no yield compression yet. But let's say, that market is also maturing very fast. And indeed, somewhere in summertime, somewhere in the future, there will be also yield compression in Romania.

Yes. And I think with that, the market -- that is also because of the situation in the market or the market dynamics that the market is being characterized by a couple of big players like WDP, which are developer and end investors. And therefore, the market has been really built up over the last couple of years. And the market is in fixed hands. But we also assume that once the market gets even bigger further from here and that at some point in time when some assets with the sizable -- for a sizable ticket come to the market, that you will see establish a real investment market, which is not the case today and which due to this illiquidity, you don't see any yield shift until today.

Then almost the last question is about urban logistics. Do you see demand coming through? And how will WDP respond to this? Well, I would say, of course, what is urban logistic? What is the last mile? I think we, in our regions, we don't have big cities, so there is no real city logistics. We have big agglomerations. So we think more in terms of agglo logistics, agglomeration logistics. But indeed, in our agglomerations, we can help our clients with small buildings with -- we see some -- but if you are somewhere like mentioned in the golden triangle, with a small building, you can deliver the whole Belgian area or in Bleiswijk, for example, you can deliver the whole of the Randstad. And for us, urban logistics, it's more an operational issue or an opportunity than really a building opportunity. But we are open for it. We do it. We do everything within our regions from very small to very big projects. And then a last question of Niko from ABN. And he said, for modeling purposes, if new delay of developments, et cetera, become a larger part of the pipeline and given that they make more often and longer than a year to make, is it possible to get better breakdown of CapEx spend on projects? And what is left to spend in the coming quarters?

I think there, we stick to our principle that we give -- or to what we do today in the sense that for the pipeline in execution, we give the individual budget per project, the delivery date, I think, yes, you can triangulate then the CapEx throughout the next quarters. And in general, we also provide the cost to come of the existing pipeline in execution. And considering the time lines on each individual project, you should be able to work that backward to the total amount so that you can have it for individual purposes. And if any doubt, we are always available by phone to walk you through the individual questions.

I would say about -- if it's really about modeling purposes, you can always phone directly with Mick. So this was the last question. So if I see no questions coming anymore, I would say thank you all for listening even when the quality of -- was not always perfect. We hope that our presentation was clear. And indeed, I would say, I think the pandemic for us, as humans, we had to make a standstill during the lockdowns. But our society and the underlying trends, they were accelerated by this pandemic, and I think they accelerated for at least 5 years. And so we will help, and we are ready to help our clients further to prepare the future post-COVID. And as a last point, I would say, don't forget that the darkest hour of the night is the hour before dawn. So don't give up, stay healthy and have a nice weekend. Thank you all.

Thank you.