Ladies and gentlemen, welcome to the PSP Swiss Property Q1- Q3 2023 results conference call. I am George, the conference call operator. I would like to remind you that all participants will be listen only mode, and the conference is being recorded. The presentation will be followed by Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Giacomo Balzarini, CEO of PSP Swiss Property. Please go ahead, sir. Yes, good morning, everybody. Welcome to our third quarter result release of PSP. As always, in the first quarter and third quarter, I really will make a very short introduction of the highlights, and I think after a few minutes, we will give back for the Q&A. I see that there's quite a large lineup. The results we report today, I think, are confirmation of a very solid operating environment. We were able to keep the top-line growth we have seen in the half-year results, with top line growing by 4.5%, backed by a very strong like-for-like growth. Reletting went a bit better than we thought for the third quarter, so we have almost no contracts open towards the year end, which gives us the confirmation to see again a vacancy rate of below 4% and confirming our EBITDA guidance. Balance sheet confirmed to be strong, with a value of below 35%. And as you have seen, we continue to operate with a very strong cost discipline with EBITDA margin above 80%. So I think all in all, as expected from our side, solid operations, the market environment, and we'll discuss it probably in the Q&A is very stable. Clearly there are challenges, but I would say all in all, we are confronted in our areas with a very strong letting market and with a healthy transactional market. With that, I would like to really hand over directly to the Q&A and then go through all, all your questions. Thank you. We will now begin the question- and- answer session. Anyone who wishes to ask a question or make a comment, may press star and one on the telephone. You will hear a tone that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question, may press star and one at this time. Our first question comes from the line of John Vuong from Kempen. Please go ahead. Good morning. Thank you for the presentation. Could you please elaborate a bit more on the like-for-like rent growth? In H1, you were guiding for a slight decrease, and now it has even accelerated. And also, perhaps, could you highlight what your expectations are for Q4, and would this momentum also continue into next year? Yes, thank you very much. On the like-for-like, as already mentioned, mid-year, 2.4 percentage points come from, inflation indexation. On top of it, we had some, successful reletting, especially in Zürich West. We had, a renewal of, of a large contract on the Hürlimann site, which clearly passed through to the full year. We have seen, for the first time, again, a turnover rent, although you know that we have a rather moderate proportional turnover rent. But on the Hürlimann side, we had, again, the turnover rent compared to the last year. Then we had some letting successes in Lausanne, which contributed to this like-for-like growth, in the CBD of Geneva, and then last but not least, also in, in two instances in, in Basel. So although, overall, this leads to this 5.2% like-for-like growth, and I would say it will probably go into the Q4. So where we will end the year end, we'll see, but I think we should be in this magnitude. For next year, I think here it depends on the indexation level. We'll know that by the end of this week, what the CPI indexation is. If you look at that, actually, it's a bit lower than what we have seen for 2023. And then we should see still positive like-for-like, but I wouldn't expect in this magnitude. I think here we can say a bit more with the result with the release of the full year results, if you don't mind. Yes. Thank you. And then one more question on the B2Binz project. I'm not sure if I pronounce it correctly. Could you indicate why this one is a project that is more challenging to let? Is it the location and also perhaps your expectations in the near term? Thank you. Pronunciation was perfect. It's the B2Binz. I think here we are very positive on, on the building per se and on the, on the micro location. Also, the development, you know, how we were able to develop it. We finished it as we planned. On the cost side, we were able even to slightly increase our expected rents. So it doesn't help much, obviously, if it's not rented. I think the difficulties or the challenges here is that we have an element of light industrial, and I think this takes a bit more time to get absorbed. Although we are in discussions with roughly 25% of the surface at the moment, the product is, is very well located. It's a, it's a very nice product, so we are not worried about letting it. It takes a bit longer than we thought. As a matter of fact, in the presentation, you have even two different letting statuses. We reported 7%, but with the leases which are out, we think that we are already at 14%. So I think here we will see letting success quarter-by-quarter, but as I said, it will take a bit longer than what we thought. But at the end, it is a very nice asset in an up, up growing area. Okay. Thank you. Very clear. That's it from my side. Thank you. Our next question comes from Ken Kagerer from ZKB. Please go ahead. Yes, good morning, everyone. I would have three short questions. The first one, with the revaluation of the two assets in Zürich, did you also look at the discount rates or the value at the discount rates? The second one, could you give us an update on the situation with Globus? And the third one, could you just tell us, what happens with the credit portfolio following the merger of UBS and Credit Suisse? Thank you very much. Thank you, Ken. As you mentioned, we had two valuation gains in third quarter. One was in the Binzring, that's the Swisscom building, and one was at Bahnhofstrasse. Just as a slight reminder, you know, as we do quarter, full- quarter reporting, we would also theoretically be in a position where we would have to do a full valuation of the portfolio. We have a waiver from the stock exchange, that we have only two value assets, where we have an evidence that based on letting successes or defaults, there is a difference of more or less CHF 5 million. This happened in these two instances. There was even a third one, the letting success in the Clime. In this instance, we then asked the valuer to review the valuation. The valuer looks obviously at the full model and comes to the conclusion, including the letting success and the judgment of the discount rates, that especially in the Binzring and in the Bahnhofstrasse, there was a surplus of more than CHF 5 million. On the Clime, there was a positive impact, but below CHF 5 million, and therefore, this is something which will go into the full valuation of the year-end. On the Globus, from our side, there's no big update. We have a lease agreement with Globus. We are fitting out or building or redeveloping the building. They are providing their contributions. We had already a lease agreement, you know, before. They were our tenant already before we started this repositioning. And then, and then, I think whatever, whatever is rumored around it is not really super material to us. First of all, it's a relatively small lease agreement overall, and it's in the best spot, frequency-wise, in our portfolio. So I think here, we are in a better position. And with the combination of UBS and Credit Suisse, I think here we were in a position to, even increase the exposure due to the fact that we have implemented our green finance concept on the bond side and the loan side. So what you would have maybe in such an instance, expect that, a combination could reduce the exposure. I think the whole green finance concept, in our hands, helped us to even further foster the relationship with the combined entity. Thank you very much. Thank you. Our next question comes from Frisch Holger, from Zürcher Kantonalbank. Please go ahead. Yes, good morning. Just one question from my side. You already guided for the positive contribution with respect to the release of deferred taxes for this year. Could you already give an indication what you expect here in 2024?1 In 2024, there will be a rather small contribution in the magnitude of CHF 5 million-CHF 10 million, will be, guess the contribution. We'll have continuously positive contributions going forward, but the biggest contribution was driven in 2023. Great. Thank you. Thank you. As a reminder, if you wish to register for a question, you may press star and one. Our next question comes from Andreas von Arx, from Baader Helvea. Please go ahead. Yeah, good morning. You mentioned, I think, as well, challenging environment for secondary locations. If I look at your portfolio, and if we exclude Zürich and Geneva, you know, I would point out to—l et's say, if I look at buildings with around 10,000 sq ft of office space, we have around 10 of those BL, three in Lausanne, a couple in Liebefeld, Carouge, three in Basel, and one in Bern. Is I get to around 15% of the total portfolio. Would you agree that, you know, number makes sense and that's the highest risk area? Is there any— you know, of these locations that you see as a specific risk. So here, Aarbergstrasse in Biel, Sévelin and Saint-François in Lausanne, Sébeillon in Lausanne, Carouge, as I mentioned, Liebefeld, Arlesheimerstrasse, Dornacherstrasse, Peter-Merian-Strasse, and Grosspeterstrasse. That's my first question. I agree with you on the size. I think they make roughly 10%-15%. I would disagree on the risk. Aarbergstrasse, whenever we had vacancies, we were able to let it. It's basically a fully let building. Sévelin, we are in discussion with the city to further develop that area. We have a parking spot with a project. We have interested parties. Clearly, it's very situation 10-15 years ago, but it's for us, a potential, not a risk. Saint-François, I have to say, it's prime CBD, so I don't know how you honestly can say this is outside. If you look what happens in Acacias with the development, the new development of Pictet, I think that's an area where I would say clearly it's a bit larger surface, but we are pretty much positioned. And then Grosspeterstrasse, it's next to the main station of Basel, so it's not B-location. So if I would take your argument of the B-locations, I really would look at the Zürich North, the Wollishofen area, where we are—I would say we have an issue with regard to vacancy rate. However, meanwhile, we are on a potential level because we are trying to reposition that area through a rezoning. So I start seeing it more as a potential, as a risk. And then we have, I would say, if I look at the portfolio in Rüschlikon, a little surface where we see this is something we have difficulties, but honestly, not the areas you mentioned. So they are not prime. But if you look Aarbergstrasse, it's at the main station of Biel, and we have excellent tenants there, especially also university, the hospital, which they are in for the long term. So I would tend to disagree. Okay. Then could you provide an update on Pfingstweidstrasse? Thank you. I mean, with, you know, what's with the tenants and planning, if there's any modernization planned. If you refer to the Pfingstweidstrasse, the Westpark we bought, there's no re-modernization in place. This building is basically new. We had a little vacancy rate of 3% when we bought it. We are in the reletting. We have very strong interest from a variety of tenants. There is a tenant which we knew on the underwriting that they might move out. We are basically in discussion for the full surface to be relet, so we are very confident on the reletting of the potential expire or the expiring leases. As I mentioned, there's no CapEx to be put in in the short, medium term. So for us, this is one of the top line contributor of this year and will be also one of the like-for-like contributors then, the year after, so. We talk about, you know, rents based on what we underwrote or even slightly higher. I think that's for us, no CapEx. It's not. But we have never mentioned also that we would have CapEx there. Okay, and, last question. Last week, Mr. Jordan from Central Bank again said that the Swiss real estate market is clearly overvalued. He specifically pointed also to the residential segment. Is that the view that you share, and in case not, why not? And that would be it from my side. Thank you. Thank you, Andreas. I think, I think on the valuation, if we look at the, at the driver of the valuation, which are cash flows, we see, and we heard also from this part last year or two weeks ago on their reports, that on the areas where we are located, there's a very healthy rental market. So I think cash flow-wise, I think this is supporting the valuations. Secondly, if you look at the demand, supply, line, clearly there's limited supply coming in the market. So I think also that end should help with a healthy demand. And thirdly, if we look at the transactional evidence, on some recent transaction, also from that end, we see some supporting elements. So at the end, the value is driven by the judgment of the valuation company. So we don't see, at the moment, a situation as you would describe, as overvalued. But I think here we have seen a very slight correction mid-year. If you would ask me towards end of the year, I would say a slightly yield shift of a few basis points, that's what I would guess, but I don't see value corrections at the moment. Then what the president of the National Bank says, I think he's in a different position, and he has perhaps also a different view and talking line in general towards the sector. But what we see from a pure valuation, transactions, and as I said, it's the responsibility of the valuer, we see a healthy underlying driving elements. Once again, if you wish to register for a question, you may press star and one. There are no more questions at this time. Mr. Balzarini, let me back over to you for any closing comments. Well, thank you very much to everybody for attending this call. As you know, if there are any follow-up questions, please reach out. We wish you a merry Christmas, one and a half months in advance, but I think it's the last time we hopefully speak this year. Otherwise, we have a major event. All the best, and talk soon. Bye-bye. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.