Hello and welcome to the Alstria office REIT-AG results nine months 2024. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question-and-answer session. Please note this call is being recorded. Today, I am pleased to present Olivier Elamine, CEO. Please begin your meeting. Thank you very much, and welcome everybody from cloudy and rather cold Hamburg this afternoon. My name is Olivier Elamine. I'm the Chief Alstria office REIT-AG, and I'm very happy to walk you through the nine months result presentation for the company. Before we move on, just a short reminder on the disclaimer on the cautionary regarding forward-looking statement and the duty to update. Without any delay, moving into the highlight of the nine months 2024. I think it's fair to say that the operational business has developed pretty much in line with our expectation. We still have a reasonably active leasing market, which we're taking advantage of, and we had a relatively strong leasing result over the first nine months of the year, which we expect to continue going forward. From a balance sheet perspective, I'll come back to that in a minute. The EPRA NTA is down to EUR 8.90, mainly as a result of the inclusion of the deferred tax liability, and the net LTV has improved from 58.3 at the end of 2023 to around 57.1, mainly as a result of the CapEx. We have been investing in the portfolio, and obviously, I'm sure we're going to have the opportunity to discuss that in the Q&A. Our managerial shareholder group will have initiated a squeeze-out process, which we're currently in the process of preparing. If we move into the portfolio itself, there is little change to the number we have reported last time around. The average value, capital value per square meter of the portfolio still has a very reasonable price of EUR 2,930 per square meter. Our valuation yield is close to 5%. The WALT is still very much where it was at 5.3 years, and our EPRA vacancy rate is stable at around 8%. There was no transaction activity. The transaction market itself is still very much subdued in Germany, so we were doing like everybody else and had no acquisition or disposal, which means that the overall metrics at the portfolio level have remained pretty much what they used to be. Where there has been a lot of activity was on the letting, and where we have a reasonably active market, we're increasing the overall take-up within the portfolio by around a bit more than 18,000 square meters compared to the same period last year. That basically is obviously a combination of new leases and lease extension, which altogether generate income, future income for the company of around EUR 85 million. If you look at the bottom right of the slide, you would see that the average rent per square meter tends to stagnate or even go down a little bit, and just as a caution, this is mainly linked to the fact that we have more space as we have been creating some space in our refurbishment project, and therefore it's not the numerator which is going down, it's the denominator, which is explaining this kind of small stagnation at that level. Overall, the letting performance of the company is reasonably satisfying. We're still seeing a lot of demand, mainly for refurbished assets and new space. Although the average size of the leases is smaller than what it used to be, the total volume of square meters is increasing nicely, and I think we're on good track to end up the year north of the 100,000 square meters of lease-up for the year 2024. If we move into more accounting positions on the balance sheet side, the investment property has increased by 2.5%. There was no revaluation of the investment property in Q3. As you know, we don't do quarterly revaluation. This is essentially reflecting the CapEx that the company has invested in the portfolio. The net financial debt is virtually unchanged. I'll come back to that also in a minute. There was a lot of movement within the debt itself, but we've been using new debt to basically refinance existing debt. As it's our policy not to increase the debt further to where it is right now. Virtually, the net financial debt has been unchanged, and the equity is down again as the impact of the deferred tax liability that we had to book, given that we know now that we're going to exit the REIT regime at the end of this year. The overall deferred tax liability we've booked was around EUR 225 million. Like what is written on the slide, this is not net of deferred tax assets. We have another six, or round about six million deferred tax assets, so the net value would be EUR 219 million. We had to book that deferred tax liability, which basically reflects the capital gains, which is embedded. The tax that we would have to pay on the capital gain, which is embedded into the assets of the company, if we were to sell them after the point in time where we will exit the REIT regime. If we look at the profit and loss position from an FFO perspective, we're currently at EUR 0.35 per share. The FFO is down compared to where it was same period last year, which again shouldn't come as a huge surprise as we move away from the old debt, which was rather cheap, and we refinance our balance sheets. We were expecting the FFO to go down in relation to the increase of financial cost. But more importantly, on the revenue side, we're seeing an increase in revenue quarter, I mean, compared to same quarter, same time last year of around 4.6%, which again reflects good leasing traction that we had in the market and also reflects a bit of indexation. And as usual, we keep our costs pretty much under control with a decrease of around 8% of the SG&A of the company compared to where they were last year at the same period. We still have an FFO margin of 41%, and again here, the decrease in the FFO margin reflects the increase in the overall financial cost, which is something we were expecting. Which leads me to my next point on the refinancing that we have been doing here today. We have been essentially active from a refinancing, so repayment of debt perspective. We have been mainly active through bond buybacks. We have bought back in total 119 million of our bonds with a program starting last year. And in the nine months of 2024, we have bought back around EUR 97 million of notionals of our bonds at an average price of 88.3%. We have been basically doing those buybacks on markets, and we usually have been solicited, actually not usually, always have been solicited by people who are interested in selling their bond. We're not actively looking for them in the market. What we have done as well in the first nine months was to extend our RCF facility to 2027. So we still have EUR 150 million of RCF available to the company and undrawn between now and 2027. If we look at the financial debt, as we've discussed previously before, the net amount is virtually unchanged. The cost of debt has increased by around 30 basis points to be currently at 2.9%, and again, that's just a reflection of the fact that we're buying back some of the bonds, but we're refinancing them with debt, which is more expensive than the bond themselves. The average debt maturity at 3.2 years also reflects our ability to extend the average maturity through different refinancing. We don't have any refinancing in 2024. The next refinancing that we have, the next major refinancing that we have is going to be the bond in 2025, which we intend right now to refinance through both cash available and mortgage loans that we're currently negotiating. I mean, just digressing here for a minute, and we had those conversations in the past. The bond market itself, so the public debt market, has rallied quite a lot in the recent months. So this is also something we're looking into to see to what extent it would be interesting at one point in time in the future for the company to go back to that market, given that the spreads have reduced quite dramatically from where they were previously. The squeeze-out, and just basically giving you a short overview, I have a sense that we're going to be discussing that in the Q&A. The squeeze-out has been asked from the majority shareholders, and we're in the process of preparing for that as required by the German legislation. The compensation itself, as you know, is determined by an expert and also reviewed by an auditor, which is a court-appointed auditor. So it's not determined by the company itself. And that process is currently running. As soon as we have the information from the majority shareholder of where this cash compensation will end up, we will communicate that. And the squeeze-out would lead to the delisting of Alstria when it's completed. This means that Alstria would exit the REIT regime on the 31st of December 2024, given that we will not be in compliance for the third year in a row in the free float covenant within the REIT law. And within that exit, there is the concept of a compensation of minority shareholders for the differences between what the company is worth as a REIT versus what it could be worth as a non-REIT. And that difference of value, that compensation amount, is determined again by an external auditor or valuer, which is nominated by the German Institute of Auditors, IDW. That's also a process which is currently running, and we would also inform the market as soon as we have information of the amount of that compensation, if any, and the way we intend to pay it off to the minority shareholders. And finally, I would just want to spend some time on the ESG, because usually this time of the year is the moment where we would publish our sustainability report. You might have noticed, if you are interested in ESG, that we have not done that yesterday evening. The reason is that we are implementing right now, maybe a year in advance of what we have a legal obligation to do, the CSRD reporting, which we intend to publish, CSRD report with our next annual report, so a year in advance. And this is a substantial endeavor in terms of time and resources. And so we have decided to kind of skip the sustainability report for this year and actually the year forward, because the CSRD component of the annual report is going to basically fulfill the same objective. Having said that, we did publish this morning or yesterday evening, we did publish all the ESG data that you would usually find within our sustainability report on the website, and they're all available if you're interested in them in the sustainability part of our website. In terms of performance on the sustainability side, as you know, this has been really at the core of what Alstria has been doing since the company was set up. We have continued to reduce both energy intensity and carbon emission in the portfolio with a reduction of electricity intensity by 6.3%, heating intensity by 5%, and carbon emission on a market-based basis by around 14%. So we keep on that track, and we are very much committed to doing all of that while keeping the company successful in its refurbishment project. If we finally, to close, look a bit ahead, the leasing market has remained strong this year, and I would expect them that they are going to remain strong still in the future. There are obviously concerns and discussion about the shape of the German economy, but so far we haven't seen that being related in the market itself. The nature of the tenants that we capture today and the people who are trying to move, the company who are trying to move from one office to another are doing it because they're adjusting their organization to the new way of work, because sometimes they're trying to save cost and reduce space. But what was important for us is not necessarily why people are moving, but the fact that they are moving. What we require is to have liquidity in the market, and we expect the liquidity in the market to remain strong and the letting market to remain strong in the foreseeable future. On the investment market, we do not expect that we're going to see a lot of activity in 2024. I think we've been pretty constant about that. We don't think that 2024 is an active year, and I think we've been proving right. However, we do see some green shoots for 2025, which we see more as a transition year, and then hopefully more normalization 2026 and going forward. And this is how our overall corporate planning is working. From a company perspective, as you know, we don't necessarily need so much investment activities. We have a lot of work to do on the portfolio itself. Our refurbishment pipeline is still funded for the full year of 2025, and so we are going to continue to work on the portfolio to try to refurbish the asset as much as possible and play our role as a transition agent and offer tenants the asset they're looking for, so that's it on my side, and I'm looking forward to our conversation. Operator, I think we can go into the Q&A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Pranava Boyidapu from Barclays. Your line is now open. Thank you, and thank you for the presentation today. The first question I have is about the debt and tax liabilities. I think you have booked, as you mentioned, this is the first time you've booked it at EUR 225 million, and I think you've mentioned in the last quarter with an estimate of around EUR 370. So I was wondering what the differential between these two numbers is. And the second question that I had was considering that your first bond maturity is within the next 12 months and it's more than EUR 300 million. Have you already started talking to other, well, secured lenders and how you might be able to address that? Yeah. So you're right. We did provide an estimate actually in our half-year report about the deferred tax liability, which we disclose as contingent liability. The difference between now and then is that we have actually refined the average tax rate. I don't want to go into the technicalities, but depending on what kind of asset you sell, the timing at which you sell it, etc., there are different tax rates which would apply. So the number you were hinting to was basically assuming that you would pay the maximum tax rate everywhere. And now we have been able to refine that and get a much more granularity on the tax rate on an asset-by-asset basis. And so the result is more at the lower end of the range that we have provided at the time, which I hope is good news. The next question, which was on the secured debt. Yeah. On the refinancing, I think so the answer is yes, we are working. We currently have around EUR 160 million of loan that we're discussing actually in advanced conversation. So we are obviously working on refinancing and putting together the funds for the refinancing of the bond. I think as we consistently said, we will be refinancing those bonds through the mortgage market, and that's something we are still confident that we're going to be able to achieve, bearing in mind that we still have currently the EUR 200 million revolving credit facility. So if we were to secure those EUR 160 million of loans, which we're hoping to close before year-end, we would be basically covering for the entire refinancing need. Having said that, as I hinted to during the call, we're also considering other alternatives and potentially looking at the opportunity to look at issuing a new bond and doing some kind of liability management following that. But this is a bit too early probably to go into more details. Thank you. And just one more quick question, if you don't mind. I think you've mentioned that you bought back around EUR 97 million this year, but that was all broadly in H1. Is my understanding correct that there were no bond buybacks in the last quarter? Yes. So we always, I mean, the thing what we have been doing is whenever we raise new debt, we use the proceeds of this debt to basically repay existing debt. And the way we did it in early 2024, given that we were a long way from the refinancing of the 2025 bond, the way we did it is we use the proceeds of the debt we raised in early 2024 to basically buy back those bonds. And we stopped the buyback activity when we basically invested the entire amount of debt that we have raised. So that's basically the main driver with our activities. Now, if we were to redo something similar, we would be prioritizing the 2025 bond over the other ones. But at the price where it's trading today, I think the way we're looking at it, we're kind of better off waiting for the maturity date and just repaying it at that moment in time. Understood. Thank you. As a reminder, if you have a question, please press star one on your telephone keypad. There are no further questions at this time. I will now turn the call back to Olivier Elamine, CEO. Please continue. Well, thank you very much for your interest in the company, and thank you very much for joining us today. We appreciate you taking the time, and we're looking forward to speaking to you again for the full year result, which is going to be sometime early next year. Thank you. Have a good afternoon. Bye-bye. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.