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

So good afternoon, everybody. Welcome for joining us this Friday afternoon. For Europe Friday... [Technical Difficulty]

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There was a technical problem, sorry.

When we do mute all, it's also muting us. So you have to mute yourself, and then we are on unmute. So I mentioned, I think these are indeed the results of the whole team, one country, one project or, let's say, not something special. No, it was really realized by everybody. And it started, of course, with a full house, and we have occupancy rate of 99%, which is, of course, a very, very good. So we have really a full house in the existing portfolio. And not only a full house, but everybody based also so -- and besides this, even when realizing or when finalizing around EUR 100 million per quarter, we can keep our growth, our development pipeline intact with almost EUR 600 million of developments. And so all of this, good basis, good fundamentals and a good growth, made us -- give us very well earnings per share of EUR 0.54, which is 10% better than last year. And based on that, and we can upgrade our outlook from EUR 1.07 to EUR 1.10. So we can say that this year, we think that our earnings per share can grow with 10% instead of 7%. But Mick will give you the details later why. So but indeed, a very -- yes, very well, a good start of this year, where, indeed, we are now, let's say, well start the second part of our growth plan of EUR 2 billion, up to EUR 6 billion and our long-term guidance of at least EUR 1.25. And yes, of course, we got this morning's questions, are you made an upgrade of the guidance for this year. So what are you going to do with the long-term guidance. Well, there, I can say you, people, we are just started in the second part of our growth path. But when the time is there, we will come back on it but our guidance is at least EUR 1.25 and not EUR 1.25. So I hope this is a clear answer on that question already. And of course, the drivers, they stay the same, like I explained, with the annual results. But besides our operations, there is also ESG and our brains project, the digitization road map. And so besides the operations, where we focused on with the year results, I want to give some more explanations on our other road maps. And indeed, ESG, very important, I think, and we mentioned -- that -- we mentioned that '21 would be the year of the E, the year of our climate action plan. Well, you can see we have already very nice logo now, but even that more than a logo, we are now filling it out into a real climate action plan. We work internally first on a global environmental framework. And thus, we will now realize and make it more concrete in a detailed climate action plan by next year. So there, we are fully on track to, let's say, realize the last important point of our ESG roadmap. But on the other hand, as you know, WDP is a commercial company. It's so much more than a [ friend ]. And indeed, normally, we should show this in an Investor Relations Day, but for the moment, we cannot organize them. But therefore, we want to also give you an insight on our insight projects besides the normal operations. And indeed, starting from our strategy and with -- in the focus, our client-oriented thinking, our client-based thinking, we also have to think digital with our clients. And therefore, we worked the last 2 years on our full new digital way of working in order to improve efficiency and collaboration towards our prospects and our clients. And therefore, we realized WDP Xplore and our client portal, MyWDP. And I would -- I invite you, we won't go into the details, but here, you can go into that virtual tour of our WDP standard warehouse and click through all kinds of features that we provide. It's a very professional interactive tool where you can really view, see and feel what we are offering to you as a prospect. And besides this, we also worked very hard on client portal. Indeed, it is a contact element, a global contact point between the customer and our team, which is based on a very good user experience and the customer experience, and also make, let's say, a better contact with our customers. It needed to create a better operational efficiency for the clients and for ourselves, but also it needs to be future-proof, scalable so that we can build on it further and let's say, use it also for other things in the future. You can also look at our portal here and by clicking on the logo, I invite you to look and go seeing what it's all about. Here, you see the homepage of what we do. And indeed, it gives real-time data. It gives documents, it gives warehouse insights all in order, let's say, one place where we come together with our clients in order to give a better service and a more professional view. A real one-stop shop solution, and it's all about property management, where you can also -- with an, of course, a ticketing system, if you have a problem, an overview of the invoices with also real-time energy monitoring system, documents, building passport and all the personal contacts that you have within WDP. We are, let's say, really proud of what we realized there. And I think one of the most special things is indeed also linked to our ESG road map, energy, an important element. Well, you can follow in that client portal online, your water, gas, electricity usage. Also your real usage versus the solar panels so that we can look and optimize it. So we're really interactive tool where we can -- where we try to be -- to help our clients further and go in a digital communication channel with them for the future. Besides this, there is, of course, our normal activity report. We, as always -- we bought something, not that much, but we bought some things. We bought land reserves for almost EUR 15 million. But we also executed more of our projects is indeed don't buy our own developments. You can see them all there by this presentation stays also a virtual property tool that you can visit. But we realized and we finalized in time and more than almost 200,000 square meters of projects. And indeed, like I mentioned in the beginning, we still have a full development pipeline, which even go now almost up to 900,000 square meters under development, of almost EUR 600 million of developments. And above those developments today, there is indeed our land bank. And there, I think it's really important -- the figures and the final amounts are important, but the dynamics of the file are even more important. And if you see that between the end of last year and now, we always have almost a full replenishment of the land bank. So it's not a static given -- no, it's really a positive evolution land bank -- ground, land is coming in, is used for development. And so we can keep It alive even when it's, of course, very difficult today, and we know that land become more and more scarce. This -- let's say, it's difficult, if you want to do new developments, but it has also an advantage and when land and new land becomes scarce, then the value of your existing land and your existing portfolio growth. And indeed, I think it has always been for developers an existing land bank, an existing portfolio as a long time, we see as a liability, but I think more and more, it becomes a real asset. And I would say, the first 20 years, we had to work hard to get the same revenues from that portfolio, the last day of the year, the first day of the year. But now it's becoming more and more an asset and indeed, we get -- since new land is not available or more difficult, we get more requests from our clients to adopt their buildings with a better interior design with better sustainability measures or exteriors design. And this first half, we got 3 real nice requests from existing clients in the Belgium portfolio. And indeed, it was only a CapEx of EUR 8 million, with let's say, those upgrades were small but very beautiful. Because if you look at it, we got -- or we will get, when the projects are ready, an effective rent which is 12% higher than the existing rent. Today, our ERV will even go up 13% duration. We will be able to increase the duration of those contracts with 6 years and we got a net revaluation after deduction of the CapEx of more than 25%. So indeed, the amounts are small, but I think those are small but beautiful projects. On the portfolio level, there, I think nothing changed so much. The Netherlands stays good for 50% of our portfolio, but there, nothing really changed. We got a revaluation of our portfolio, but that would also be explained by Mick, nothing new there. Also on the level of the portfolio, our warehouse is there, nothing changed. But I think a lot of you asked us the last year, I think, and WDP, why is WDP not interested or not investing in urban logistics. I always answered that we are not against urban logistics. On the contrary, but what we have, let's say, no big cities. But we have big agglomerations and there, we changed and we start from those agglomerations, and we tried to make a definition from it. And indeed, if we start from the cities in our agglomerations, and there we say that small buildings, smaller than 50,000 square meter within half an hour of the cities so that we can, let's say, taking into account traffic jam that we then still or less than 1 hour, then 50% of our portfolio is suited for urban logistics. So as 2 examples, Collect&Go Colruyt in Belgium. That is for the food e-commerce of the Colruyt group in Belgium, a food retailer and DHL parcel. And project in the Port of Amsterdam from where DHL delivers Amsterdam with all the parcels. So I think this gives you a clear answer on what we have as suited for the logistics. Occupancy rate, I mentioned it already, almost historical high, 99%. Therefore, based on -- what would I say, on a real healthy rental market, there is a real healthy demand of all kind of requests, small, big so that if something comes empty, that there is a request in order to fill them again. Even older buildings, we have had an older building that became free and that was -- there was -- we thought it would be a little bit more difficult. But even there, it went easy and we could relet it fast. On the diversification of our clients, I think there also nothing special. And then I think it's the moment now to give the word to Mick.

Okay. Thank you, Joost, and also welcome from my side. When we take a look at the results, we think that these are strong, like Joost mentioned, in the sense that these are broad-based, driven by all our teams and countries, and we believe that's also an important sign of strength of the business of our operations. And when we look at the trends, these are, let's say, continuation of the recent trends that is in the new high result of our core activities. The EPRA earnings, we see rental evolution of plus 12% year-on-year, of which 1.4% is like-for-like rental growth mainly due to indexation, which was at 1.1% and also plus 0.3% due to a rise year-on-year in the occupancy rate. The reversion was flat, so all contracts got rolled over at the same condition. So with constant occupancy rate, we now perfectly track at least inflation. And obviously, the remainder, the bulk of the growth was driven by external growth related to the steady stream of development completions. And just to give you an idea about the numbers, the last 18 months, we delivered more than 700,000 square meter of projects and considering the 850,000 square meter in the pipeline that provides another good visibility on income growth for the next 18 months. Now there is a special item on the other operating income and expense line. There is a one-off gain due to the future expected recovery of green certificates in Romania. It was included in the guidance, but requires some background information, of course. The essence is that on our solar parks, we were under a 4 plus 2 certificates scheme. 4 fixed certificates, 2 postponed and the revenue for the 2 postponed was never reflected in our accounts because it was on severance. But due to an amendment in the legislation, we will now be able to recover that over the next 10 years by selling these in the market as they fall free. And this has yielded a one-off gain of EUR 3.6 million in the other operating income line, and that's reflective of the net present value of the future receivable. And also next to that, for the future as of 1 January this year, these 2 additional certificates will also provide additional recurring income, which we then will see under the line income from solar with EUR 1 million in additional revenue. Next to that, operating financial expenses fully in line with the budget. There are 2 specific points which I would like to refer to, that is first in the 2 technical points actually on taxes. And as guided before, the results are drafted as we -- as if we were not an FBI or Dutch read anymore in the Netherlands due to the current uncertainties. So in the EPRA earnings, that's about EUR 1 million per quarter tax provision. And in the minorities line there in for WDP Romania, we realized a capital increase, and we now own 85% instead of 80%. So that means that 15% is used as of 1st of January this year to calculate the minorities. And note that this has nothing to do with our partner, selling or whatever, just to fund the growth and our partner stays a very committed and incentivized partners. So in terms of EPRA earnings, the result is that the plus 10% on a year-to-year basis is 3% higher versus our communicated guidance for '21, and that's mainly the result of a continued high occupancy rate, strong client payment behavior and some acquisitions, amongst which the implicit acquisition of a 5% stake in the Romanian entity. And therefore, we show plus 10% for the year. And we believe that for the half year, and we believe that we should also be able to realize that for the full year, which we were initially at plus 7, it will now be plus 10. And note that this is a guided plus 10% and the performance of 10% in the half year result. That is including 5% additional share count created in the ABB and stock dividends earlier this year. Now also, we focus on EPRA earnings and generating cash and reducing the portfolio as an instrument. But there, that's obviously, an eye-catcher in the portfolio result. We had a EUR 370 million revaluation or the equivalent of plus 8% year-to-date. And that's mainly driven by strong catch-up effect from the valuers, which reflected the 45 basis points downward yield shift to an EPRA net initial yield of 5.1% for the group. And part of that was also driven, of course, by development completions, which saw an average uplift of 25%. So that's on the results. When we go to the balance sheet, taking their look has strengthened, of course, with the ABB of EUR 200 million realized in February this year. We believe solid metrics. And then what's important to point out is the very good rent collection we achieved with a solid 99% of rents collected for the first half year. And with all COVID-induced payment reschedulings we had last year and which run a bit into this year, we can say that all these amounts have been recovered in full. And that's from the perspective of 30th of June, the balance sheet date. We have there already at this moment as we speak, we have for the July rent or for the Q3 rent, we have already received 93%. So payments continue to be good following a very good and regular pattern. And then when we look at the liability side, the balance sheet metrics there, despite being a strong net investor around EUR 100 million per quarter is what we, on average, invest. We continue to have a strong balance sheet and what manage most a liquid balance sheet. Because when we look at the metrics themselves, LTV at 39% and even to us, more important, adjusted net debt-to-EBITDA below 8x, or 7.6x, and we have a target of being around 8x. And here, we will also continue to stick to our principle of funding the growth on a 50-50 debt equity basis. And like I mentioned, yes, so much is important liquidity even more and there with the EUR 650 million of undrawn facilities, we can perfectly execute our pre-let development pipeline and all the debt maturities, even assuming not any refinancing until the end of '22. And that is excluding the effect of retained earnings and stock dividend because this year, it will be combined EUR 114 million, but you know that as we pay a dividend in Q2, the effect of that still needs to be felt. So there is more than EUR 100 million incoming cash flow in the second half of the year. So here, baseline unchanged, well-funded balance sheet and ready for further growth. And then when we take a look at the next slide, I think that's self-explanatory. Average cost of debt, 2.1%. I mentioned before in previous calls that it will decline further to 1.8% because as we strengthened last year, the liquidity significantly amended ABB. The effect of raising EUR 700 million of debt at 1.1% last year was not yet visible in the cost of debt. So therefore, it will gradually further decline towards 1.8% throughout the year. In terms of debt maturities, nothing special here, well-spread in time. And like mentioned last time, we did pay down some debt for the first time in '21. As normally, we refinance the bank debt but now also the bonds start to mature. And we then paid down the EUR 125 million retail bonds in June out of the existing credit facilities. And then as far as the outlook for '21 is concerned, as mentioned earlier, we have upgraded our guidance from EUR 1.07 to EUR 1.10 EPRA earnings per share and this is mainly an extrapolation of the performance in H1, with a -- based on a slightly higher occupancy rate, a lower expected provision for doubtful debtors. Note that we had foreseen actually sort of reserve buffer out of cautiousness in Q4 of EUR 1.5 million sort of COVID-induced cautiousness provision, but we do not expect that at present that we will use it or use it in full, considering the strong client behavior. And to your point, is that some acquisitions we realized so we believe that provides a nice picture. Just some extra color side comment on the client behavior. Clients are paying very well. So there is, at present, no need to assume that any will fall bankrupt. We do still exercise some cautiousness, as mentioned over the last couple of quarters. We do -- it's still the same picture. And most of our clients are big international companies and also active in sectors that are actually benefiting from the current crisis, sanitary crisis, and the risk is mainly in the SME segment of 4%, 5% of our portfolio, but there -- these are paying well. And if there would be an impact on the occupancy rates, we believe it will, if any, not this year it'll be limited, and it will -- the impact would be, if any, slower and more spreads in time. It's still an attention point for us internally, but it's actually running quite well. So I think that's it on my side on financing and outlook. And then I think, Joost, we can start the Q&A.

Yes. And I think it's time for Q&A. [Operator Instructions] So Frederic Renard. Frederic, I think you are the first one.

I've got 3 questions on my side. The first question would be, can you shed light a bit about the rising raw materials that we see across the board? And is there any risk for your future margin? Any possibility you think to reach our rent to a higher rent? Then the second question would be, are you afraid that any shortage in raw materials could delay your pipeline in the coming quarters? And finally, I'm seeing that in Romania, inflation rates coming close to 4%, even higher, any impact on your operation?

First of all, is there, let's say, a problem in the cost of some materials, yes, there is. I think, mostly in steel and in isolation and it's a problem. It's a double problem, let's say, of cost, and also of delivery. But -- and there, indeed, let's say, but construction costs has always been and construction has always been a very cyclical activity. So there has been a price -- prices were down. We know how to handle that. But indeed, the risk when prices are higher, they're -- the last year, they went down and they came down in the pandemic, and now they go up. And today, they are at 10%, 15% higher than pre-corona level but -- and depending on the situation, we can -- on how the system works and how we make agreements with our tenants, we can partially count them through. But on the other hand, and it's more important the margin is still there and is still safe. Since indeed, our cost of capital also came down. So yes, there is a pressure on the yield on cost, but our margin is still there. And also, let's say, our investment values came down too. So all by all, we can live and we can handle with that. I mentioned too, the risk of delays for certain materials. But up till now, we have never been -- we have never had to delay the final postponement of a project. So it was some tension and also with our construct -- with our general contractors, but we could always find a solution and let's say, realize the projects in time. And on inflation, Mick?

On inflation, I think it's also a bit related to what Frederic also said. Frédéric, is your question for Romania, with a 4% inflation rate also linked to the construction costs and our growth and activities?

Yes. And is it possible if that would be sustainable, would it be possible to recharge also through higher rents and preserve margin?

I think in these areas, where we are now also experiencing some cost price inflation in Romania. But actually, today, it's still contained, and we are still at the high development yields. I think a bigger risk than that would be -- that we have seen that now Romania also, there was a small yield shift in the Romanian portfolio. But if there is a further institutionalization of the Romanian investment market, then investment yields will come down, but development yields will come down to, and that's a bigger risk for the actual level of the development yields, then this more cyclically induced cost price inflation. So it's actually still quite contained.

Okay. Then there is also call Paul May.

Paul, go ahead.

Just a quick one from me on ability to drive rental growth in excess of indexation. You've heard from others that certainly rental growth is being pushed through reversionary potential is available in portfolios. But I get the sense with your portfolio, as you say, it's tracking indexation rather than exceeding. And I wonder whether that was a sort of conscious choice to keep tenants happy or whether it's something that you think could be a potential moving forward to drive additional rental growth in excess of indexation?

Well, first of all, all we have to fulfill our contractual commitments. There are contracts we have to fulfill them. And so let's say, like I give the example of the 3 upgrades of existing buildings, requests from existing clients even. But in the meantime, of course, we have to fulfill the contract. And so it will take time. Is there room? I think first, when market rents goes up, that becomes a gap between the rent and the ERV. And then we can go to clients when there is a break in the contract, when that goes away, then we can go to them or when they ask something. So let's say, it is the potential, yes, and we think for the first time in 20 years, there is a potential for internal growth, but it will take time. And there, we say that probably this can be one of the drivers of the next plan.

Sorry. Just a follow-up on that. On the development opportunities that you're undertaking, are you pushing for additional rental growth, as in are you kind of setting the market rents? Or are you waiting for others to set the market rents? And then for you to kind of take advantage of that? Just trying an understanding of, obviously, you've got a very strong position in the market. And arguably, you could be driving those market rents higher. I just wonder what the situation was there.

You mean on the development side?

Yes, yes. So when new development is...

But I think there, you mentioned the one thing that is actually a counterbalancing force for withholding rental growth to accelerate faster because the fact that investment yields are so low also leads to the fact that some developers can accept sometimes a very, very low development yields and very low margins, and that puts pressure on the rents too. So you have, on the one hand side, the scarcity, which is at play, which should normally then increase the gap between contractual rents and ERVs. But on the other hand, there are still developers not pushing rents higher because of the -- because at 3.5% exit yields, they can still make a nice million or 2, you see.

If rents go higher, it will be in the existing portfolio and not in the development because there you have the pressure of yields going down every day.

I only mentioned it because others are driving rents higher despite -- we basically, we have a situation where there is excess demand, limited supply. It's one of the first times that has happened in Western Europe. It's why we're seeing rents now not being renegotiated down. So rents at least keeping pace with indexation. So I appreciate there are developments out there, but as you mentioned, developments are more and more difficult to come by. So supply is actually relatively constrained. There is strong demand. I'm just wondering whether you can use your position to really drive rents forward.

More and more, we actually see 3 time frames in this. Until mid-2019, and historically, we could capture 50% of the inflation rate because on an aggregated level, we needed to give back half of the inflation. Since mid-2019, we said we will now, based on constant occupancy rates, track inflation and that's something that is visual -- visible in the figures. That will still continue, we believe, in the near term. And then you will have a third time frame when there is -- when contracts are a bit further in time and when the ERVs have moved enough versus contractual rents, then we will be able -- should be able, normally we're still cautious in that. At that moment, we should be able to drive rents higher, but it will take some time but that's -- and the first signs of that is what we are now seeing in the portfolio that we can do in a very profitable way and by rent increases, renovations in the existing portfolio. And in the past, that would not have been possible. So that's, for us, also a first sign that -- and we are gradually preparing for this and obviously, it will not come in our markets. Not broad-based all at once in all areas, but it will be first, selectively in some micro markets and for any specific company, for any specific landlord I mean, it will then come or you will be able to capture that when you have a strong market share and a strong position. And as you mentioned, when you have the land, then you have all the cards on the table. And indeed, we see that clients more and more in the past, they had more options to choose when they wanted -- when there was an end of a contract, and they were, let's say, they could still between brackets shop a bit. But now that is becoming more difficult. So we are, yes, at an inflection point, but it will take some time.

Okay. Pieter Runneboom, then you are the next one.

Yes. Apologies upfront because I want to drag on about the rental growth as well. Prologis says that they've seen that land prices in Dutch brownfields have doubled in the last year. And therefore, they expect rental growth of 10% in urban Dutch areas. What's your view on this? Is this one of the areas you were just talking about, which you can see real rental growth?

Well, like I mentioned, depending on if it's developments, existing portfolio. I think, yes, for example, we have a project in Venlo, one of those hotspots still at EUR 38 per square meter, but we have a contract of 10 years. And indeed, when that contract today, prices are at EUR 50, EUR 55 or at least EUR 50. And indeed, but yes, we have a contract, so that it will take time. But therefore, we say we are at that inflection point, but it will take time. And we have -- that's now the advantage of having long-term contracts with clients.

But you see it already also in when we have sometimes an older building or buildings needing to be a bit upgraded, that even with a minimum of CapEx, it's being released quite easily, and these are all signs that the market strong in a broad sense.

Yes. Yes, thanks. Yes, because Prologis is really, really bullish now on the Dutch rental growth. So is this something you -- are there certain areas like Tilburg or maybe [indiscernible] or Amsterdam where you think that really is this double-digit rental growth? Or is this just bragging from these guys?

Double-digit rental growth is a lot. But I think it's also depending on the philosophy. Pieter, we have always been client-focused. We also, let's say, of course, it has to be correct. But we have also a long-term relationship on different places here with, let's say, our top 20 clients, we have more -- we have them more than in one place. They are the basis of our growth. And indeed, we are not, let's say, only looking to one contract and saying you will pay 10% more or you can go out and when you have a relationship and when you are more than a [ friend ] and also a commercial company, there is a long term interest. There is a long-term relationship. And so that's also a different kind of strategy. And you know that we are there for the long term, and we will stay for the long term. Alvaro, you had a question?

Yes. Can you hear me?

Yes.

Yes.

A quick one on your portfolio value uplift. If I understand while the growth comes from the 45 [indiscernible] and also from those development gains. But I wonder what has happened with the ERPs that valuers are using? Have they grow in excess of inflation, they are flat? What assumptions valuers are taking on the side of the equation?

A bit in excess of inflation, but not something spectacular yet.

Not double-digit yet.

There, they...

But actually, you can ask it to Pieter, go to the valuators and ask to let the ERV grow double digits.

Even there, they are slow too.

Yes, even there, they are slow.

So we can assume valuers are assuming ERVs to grow below 3% or below 2%, perhaps, right?

On general, you can say that and apart from specific locations.

Okay. Well, then we have some questions in the chat. Andreas Brock, he said, how is the JV in Germany developing? Could you please also elaborate on how you might expand in Germany? Well, indeed, I think if there was one, let's say, negative, that's a big word element due to the pandemic, then it was the fact that we had, I would say, no boots on the ground locally yet in North Rhine–Westphalia Land. We were here in Belgium, Martin was -- Martin and [indiscernible], they were in Munich and we could both go on to North Rhine–Westphalia Land. So we kept contact, we started the development, but it was difficult. And you need in the beginning, you need a real contact. But on the contrary, the first thing we did at the moment, as from the moment that we could and drive again at the end of June, I've met Martin again in real life in North Rhine–Westphalia Land in Duisburg. So for a first meeting there. So yes, we are still there. We still believe in it. And we are now developing the full 40,000 square meters, but it has been taken a little bit more time, and it has been -- it was difficult during the pandemic.

And we will also invest in additional capacity to have more boots on the ground in terms of business development.

Then [ Lauren Santo ] has said, good afternoon. You have very impressive occupancy rate, but in that background low like-for-like rental evolution even when compared to with SEGRO. Any color on that prospects for the near future? I think we discussed it already a lot. And indeed, I think SEGRO, they also are there where the figures are different between the U.K., which has always been a different market and Europe. But I think for Europe, we were...

Continental Europe, it was also 1.5% or 2%.

Yes, it was on Continental Europe, it was the same figures. So I think there, it's the same. And I think for the rest, I think we have given color on our vision of rental growth. Then the next question is from [ Bruno ]. Do I have to assume a delay in the developments of the WDP portfolio in Germany, the biggest European market? If yes, what is the reason besides Gelsenkirchen? Are there other project developments in consideration? Well, I've mentioned it of course, it's Gelsenkirchen is the first one, not the last one. On the contrary, we will continue. But when you want to grow, when you want to see land and see people that if you have no local boots yet, you cannot start-up a company from elsewhere. But let's say, as from now, we can restart it. And I think that these are all the questions. Do I have got -- there is Frédéric, Frederic Renard, you still have a question?

Yes, a very last one on ESG. What can we expect regarding your environmental policy? As SEGRO, announced that they would like to be net carbon zero by 2030. Is it something that we could consider for WDP by 2030?

Who mentioned that?

SEGRO?

SEGRO.

But it is their own activities?

The whole point is...

Yes, and Scope 3 as well. Yes.

And then that was realized.

Sorry?

Yes. What our approach has been that we should first measure it because otherwise, it would not be credible not to use data. And I think we are one of the first companies and I leave it up to you to be the judge of that because you follow all these companies, but I think we are one of the only or first companies throughout the Europe that has installed a full digital, real-time monitoring tool across the portfolio. So we waited to do that first, it took us more than 2 years and now we have that. We built the client portal so that we can make all these data and all other types of documents info available to the client. And now we can liaise with our clients and to measure, monitor, analyze and optimize the energy usage, utilities consumption with our clients. And using those data as a basis to build a credible climate action plan that is based on data. And that is the sequence of things how we saw it rather than going the other way around and starts from, in our view, with theoretical things. And we cannot comment on what competitors are doing. Every company is trying to have this own approach. It's complex. It's difficult. But what we can say is that within there, or -- that is the reason why we took that approach. And within this context, we will -- what will matter the most is that we have a good plan on decarbonization because it needs to follow EU 2050 plans. Energy will be more, let's say, as an opportunity because there, a lot can be done in our sector, we believe. And also the green financing aspect will also be important. So to give you some color on this, it will be along these access that we will draft a climate action plan as a sort of actionable business plan with a long-term view and strategy behind it, and the goal is to finalize it with our teams and some support from concerns by the end of the year and come back to you early into the next year with a concrete plan.

Now next question [indiscernible]

Yes. I have small question on the financing by the Belgian banks to some extent. I've been digging a little bit in their numbers recently, and it seems that their real estate financing to professional players, so the REITs and the developers is reaching a relatively high level that was mentioned by the National Bank. Is there another risk that just like for the personal financing of houses that Belgian banks will refrain somehow in the next months and that you will have to -- you're already financing through other means, but could that have an impact on your cost of debt?

No, we believe not because we also already took that approach. And that view you just mentioned, we already said that 5 years ago that the Belgian branch network of Belgian institutional network and banks network was becoming full with exposure to Belgian REITs because it's a very successful sector with a lot of nice growth companies needing a lot of financing and the Belgian banks, they still support WDP for the long term. They have all confirmed that. But we also took the approach that we already more than 5 years ago that we do not want to be dependent only on the Belgian home market. We should never forget the basis we have here in our home market with the support of the banks, the institutions and the Belgian retail investor, which we appreciate very strongly. But as on the equity side, also on the debt side, we have diversified a lot. And we have, say, that's always -- the philosophy is that in the debts, next to diversification of instruments like type of instruments, bonds, retail bonds, bank financing, USPP, green financing, what's even more important is the type of debt investors and geography. And that's already going on for years. So we have as the balance sheet has grown, that has proven itself that is really having a good influence on -- a positive inference on your capacity to raise liquidity and also to improve your marginal cost of funding. So no issue at all.

So next question, I don't see any hands for the moment. We go to the chat. I see no new chat questions, no hand raisings. So then I would say, the last one, nobody -- any question anymore? No hand raisings, no chats. I look besides if I forgot nothing. And I think everybody wants to go in weekend in Europe. It's 4 o'clock, just in time and for the state, you can start your day. And then I think we wish you all the best. For those who went already on holidays, a good start. And for those who goes on holiday now, have a good holiday. Enjoy your holidays, and we hope to see you all back in September. So have a nice weekend. Bye-bye.

Bye.