Hello, and Welcome to the Hamborner REIT Q1 2024 Results. My name is George, and I'll be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your line should be in listen only mode. However, you will have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing star one on your telephone keypad to register your question. If your question is at any point, please press star zero and you will be connected to an operator. I'd like to hand the call over to your host today, Mr. Niclas Karoff, CEO, to begin today's conference. Please go ahead, sir. Yeah. Good morning, ladies and gentlemen, and, welcome to our presentation of the, business figures for the, first quarter of, 2024. A warm welcome also from my colleague, Christoph, who's sitting right next to me. Before we start, let me once again give you some information regarding the, transmission of this, conference. As described in our invitation to this call, we recommend that you only use, one of the dial-in options given. Either, follow the presentation live via webcast or by telephone. If you dial in via webcast and via telephone at the same time, there will be a technical delay and, please understand that you can only ask questions over the phone. But now, let's move on to the presentation. Let's start with the key figures. Although the economic environment remains challenging, we were able to continue our positive operational performance in the first quarter, generating further growth in revenue and earnings. Compared to the first quarter of 2023, income from rents increased by 3.1% to EUR 23.4 million, mainly due to additional rental income from property additions and index-based rent increases. We saw an increase in FFO of 2.6% to EUR 14 million, which corresponds to an FFO per share of EUR 0.17. NAV per share slightly up compared to year-end 2023, at EUR 10.19, positively affected by the development of rent collection during the first quarter. Overall, financial situation is remaining comfortable, with a REIT equity ratio of more than 56%, a net debt EBITDA ratio clearly below 10, and a slightly lower LTV of 42.6%, again, compared to year-end 2023. Let's now take a closer look at the rent development. As you can see, the two retail assets acquired last year contribute around EUR 1.6 million to our annualized rental revenues. As of end of March, we saw a like-for-like total rent increase of 1.9 percentage points, entirely attributable to index adjustments. Further positive effects from vacancy changes were offset by a slight decrease of rents in connection with our reletting activities. Within our core portfolio, which most recently represented approximately 96% of the total rents, we were able to increase like-for-like rents by 2.8 percentage points. In total, annualized rental income amounted to EUR 89.7 million. For the remainder of 2024, we expect further... Yeah, sorry. So going on, by the way, as already mentioned, in connection with our 2023 financial statement, our revenue figure has also been affected by a reclassification of P&L items. On the next slide, you will see that we again increased income from rents and lease by tenant prepayments for property taxes and insurance, which were previously reported under income from passed on costs. Both the 2024 and the previous year's figure was increased in an amount of around EUR 600 thousand. Total maintenance expenses decreased year-on-year to around EUR 1.2 million. Expenses still relate to regular ongoing maintenance. As part of our full-year outlook, we announced the postponement of several measures from the 2023 financial year. As a number of measures are currently being executed, or will be started within the next month, we still expect total maintenance costs of EUR 10-11 million for the current financial year. Previous years, other operating income was mainly affected by a compensation payment around EUR 800,000 for the early termination of a rental contract in the Mainz property. Now coming back to a more regular, to a regular level, the figure decreased to approximately EUR 200,000 in Q1, 2024. As a result of lower liquidity, interest income resulting from cash deposits was below the 2023 figure, but still at an attractive level of around EUR 450,000 in Q1. The decrease in interest expenses is essentially due to the repayment of our bonded loan in last year. As a result, of the total income and expenses, FFO came in with a plus of 0.6% year-on-year, at around EUR 14 million, or yeah, at around—at rounded EUR 14 million or EUR 0.17 per share. On the next slides, I would like to give you some insights into yeah, the development of our operational business. The overview of portfolio key figures does not show significant changes compared to year-end 2023. The portfolio still consists of 67 properties with a total value of EUR 1.47 billion. Total WALT remained very stable at 6.3 years as at the end of March. April vacancy rate slightly increased to 3% during the first quarter, mainly as a result of an additional vacancy in a core office property. So overall, also given the current market environment, our portfolio developed very solid during the first three months of this year. On the next slide, an overview of our tenant structure, which also shows only minor changes compared to year-end 2023. The food retailer EDEKA still leads the list of top tenants with around 13%, followed by Kaufland, REWE, OBI, and Globus. Food retailers still account for around one-third of the company's total annual rents. Office tenants, by the way, contribute with around 43% to total annual rents. In summary, our tenant structure is still very solid and reliable. On the letting side, we are also looking back at a successful first quarter 2024. We continued to benefit from tenant satisfaction reflected in a high tenant retention rate of around 90%. Yeah, and this led to a Q1 letting result of around 19,000 sq m with office spaces accounting for 74% of this figure. Concerning leasing agreements expiring during the rest of the year, yeah, necessary activities are very limited. The remaining leases up for renewal in 2024 correspond to a share of only 1.9% of total annual rents and mainly include contracts that are renewed on an annual basis. The medium and long-term lease expiry schedule has been further smoothed by the successful letting operations during the last month, including long-term lettings of several retail tenants during the autumn of last year, in 2023. Next slide, as usual, shows our current financial situation. Compared to year-end 2023, our financial liabilities have been slightly reduced to below EUR 700 million. Average interest costs remain at a very low level of 1.9%, with an average duration of 4 years. In 2024, there's only one remaining loan with an amount of around EUR 13 million, which is due for refinancing in the third quarter, and currently is in scheduled processing. LTV was positively affected by the stable earnings situation during the first quarter, and decreased to 42.6%, as at the end of March. Yeah, and in contrast, REIT equity ratio slightly increased to 56.1%.... Further relevant indicators, such as net debt to EBITDA and EBITDA interest coverage further improved year-to-date or during the first quarter and amounted to 9.5 and 5.7 respectively. Ladies and gentlemen, let me now conclude the presentation with an update on our full-year guidance. In view of the scheduled and positive operating business performance in the first three months, we are able to confirm our revenue and earnings forecast for the current financial year. We still expect income from rents and leases between EUR 91 million and EUR 92.5 million. As already mentioned, positively affected by property additions and further indexation effects. At the same time, based on our current income and expense projections, we still expect Funds From Operations in range between EUR 49 million and EUR 50.5 million. FFO development will be affected by various influences, including expected uncertainties on the letting markets and higher costs, yeah, including shifts from last year. And yeah, in light of the ongoing challenging market environment, this guidance still does not include effects from potential transactions during this year. Finally, I would like to draw your attention to our upcoming Annual General Meeting on Thursday. The agenda and proposed resolutions, including the dividend proposal of EUR 0.48 per share, as well as further information and documents are available on our website. As always, we are available for additional questions regarding the event. With this, ladies and gentlemen, yeah, I would like to end the presentation and move on to the Q&A part. Thank you very much for your attention, and we are now looking forward to your questions. Thank you very much, sir. Ladies and gentlemen, as a reminder, please press star one if you wish to ask a question. Please also ensure your mute function is not activated in order to allow your signal through to your equipment. Our first question today is coming from Thomas Neuhold of Kepler Cheuvreux. Please go ahead. Good morning. Thank you very much for the presentation. Thank you. My questions, I have three, and I suggest to take them one by one. Firstly, I was wondering if you can provide more details on the operational environment. How is the demand supply situation for your key asset classes in your core location? And also, so there was a negative like-for-like development of follow-up leases, and I was wondering if you can provide more color on this negative development. Okay. So I mean, I think in general, operating business is running pretty much stable, as you all can see from the numbers. On the demand side, we don't see major issues we are facing at the moment. Of course, what you see is that some rental contracts currently take longer concerning the phase of negotiations. That's what we observe. Second point, obviously, and this is also influenced by, or influences the first point I mentioned, are discussions around ESG measures, which step by step take a larger part of communications on the tenant side. Additional trends that I would say we observe is that, and that's my personal view, that in general, looking forward, to a certain extent, I think, the length of leases might be more under discussion, based on the fact that tenants, obviously, based on changing trends concerning fitting requirements, et cetera, maybe would tend to look for shorter leases. But this is just a general comment. It's not something that has a major impact as of today on our portfolio. In general, overall, I think, considering the overall economic situation that we are facing, I think, also based on the overall quality of our portfolio, we can still be pretty happy. Concerning rent levels, I mean, it's always a matter of individual negotiations. Mm. have tenants who try to negotiate on the rent level side, obviously influenced by what we have seen in the markets within the last 24 months concerning inflation effects. And sometimes this goes in line with proposed or intended negotiations concerning other topics around the rental contract, not all, but which has an influence on the rent level, potentially, because some topics will be combined obviously, creating kind of package package negotiations. Yeah. But this is something which we're used to anyhow. And so this also leads to the fact that the overall situation concerning utilizations is getting more complicated. But as you can see from the numbers, I think, we are still having, a very, overall, a very, reliable renting business, yeah, letting business. Mm-hmm. Thank you, understood. The next question is on investment market environment. What trends are you seeing currently in terms of demand, supply, and also regarding the devaluation of the asset class as you are in? And, if you can and want, of course, can you provide some- Uh, yeah. Situation for- Yeah, yeah, happy to just share my thoughts on this with you, Thomas. On the investment market side, honestly, I was a bit surprised. I personally would have expected, yeah, a bit stronger uplift during the first quarter. But until today, I mean, obviously we get various properties and assets offered. But concerning our target profile, we get clearly less on the table than I would have expected. Meanwhile, considering the fact that we are in a difficult market situation, meanwhile, now for quite some time. I, yeah. So it's still... Overall, it's still pretty quiet. We are very selective for obvious reasons. And concerning the price expectations, I would say, yeah, we have seen a lot of movement within the last 6-12 months. But no major changes, and no other trends that I would observe concerning in comparison to end of last year at the moment. Thank you. My last question is on the financing environment. I understand you don't have a lot to do this year, but from your discussions with banks, can you give us an indication where the spreads are moving to and what kind of spreads banks currently demand? Yeah, um- Financing. Yeah, happy to do this. I mean, on the overall, and obviously we're, yeah, we are in continuous communication with our existing or potential banking partners. And, as it has been in the past, it's very open. We still see no major roadblocks here from other point of view-from our point of view, based on our portfolio. Banks we are talking to are open concerning generally concerning doing additional or further business with us. And concerning yeah, credit costs at the moment, let's say, we're talking about depending obviously on duration, the asset covenant structure, et cetera, et cetera. So we all know the various points which have influence on it, size of the asset also, et cetera. We currently see total interest rates between 4.0% and 4.4%. This brings us in a situation where we are looking rather happy to the task ahead, because obviously we have more refinancing up in 2025 and 2026. We started here early on discussions to have always very clear view on where the market stands and keep our constant communication here with the banking partners. Thank you very much. Thank you, sir. We'll now move to Ventsi Iliev, calling from Kempen. Please go ahead. Good morning. Thank you for taking my questions. One question on like for like rent roll. So if I look at the split, there's a negative 0.7% contribution from follow-up leases. I'm assuming this is relettings and et cetera. So could you perhaps elaborate a bit more on this and whether this is representative for the portfolio in general, as in, is the portfolio over-rented? I mean, it's not so easy. First of all, good morning, and thanks for your question. You know, Ventsi, it's not always too easy to answer this, because in many cases or in some cases, similar also with concerning the impact of new lettings, same applies to those. Just one or two larger relettings can have a substantial impact on such a number. So I wouldn't see an overall trend concerning our portfolio, because it obviously depends on many influencing factors, like the individual demand for these kind of spaces. What asset class are we talking about? What history we see in this, in this, asset as well, concerning letting situation in combination with, additional measures we might are willing to take. And as I pointed out before, it's also a question of what kind of negotiation structures behind this, because, as I said before, you sometimes also have situations where we are willing, to accept, a lower lease. But, in, comparison to this or in connection with it, we get other points which are important for us, which help us also on the, on the, financial side, on the, on the operating side. So, it's a kind of mixed bag. But overall, I would say, also influenced by the history of larger rent increases because of now, meanwhile, quite a time of indexation, higher inflation. Yeah, the air is getting thinner. Yeah, I think that would be my summary here. Okay. But as a follow-up, on average, would you say that the current portfolio levels are in line with market levels? I would say on the overall, on the office side, we feel to be rather on market level. Concerning the retail portfolio, this includes a slight over rent across the total retail portfolio. Okay, thank you. No further questions from my side. Thanks. Great. Thank you, Mr. Iliev. Our next question will be coming from Andre Remke, calling from Baader Bank. Please go ahead. Yeah, good morning, and thanks for the presentation. A couple of questions from my side. Starting off with the vacancy, it's up by 30 basis points, driven mainly, as you mentioned, by one office property. What should we expect for the next quarters? A further step-by-step increase, is that the right assumption? This is the first question, please. Yeah. Yeah, obviously, it's quite difficult at the moment for us to predict here. I would say, I mean, the overall stability of the portfolio we don't see why this shouldn't stay in place here, clearly. But we have. If you consider the fact that we have limited letting task ahead for the remainder of the year, as I pointed out, as of today, we wouldn't expect larger shifts here at the moment. But still, I mean, some impact the remaining letting activities might have. Yeah, but overall, we still feel comfortable coming anyhow from a... I mean, if you consider the overall situation of the market, I think still from a very low level in the past. I think that's also fair to take into consideration that the numbers we came from within the last two years were, or the last years were, were anyhow, very, very low on the vacancy side. Okay. Then the second question, on the LTV, this increase, or will increase after the dividend payment this month. And if there is, would be a further devaluation this year, on the office side, probably, the LTV might get even higher. So it brings me to the question, how do you think about disposals? Do you have a disposal pipeline, and, and what type of assets could it be? Yeah. Yeah, I mean, as you fairly pointed, clearly, rightly pointed out, sorry. Rightly pointed out, the dividends will have an impact on our LTV. Concerning disposals, I mean, just, yeah, just to point this out again, I mean, we see ourselves as an active portfolio manager, and this obviously includes a continuous rotation within the portfolio. We have, yeah, you have seen, concerning Hamburg, a very limited transaction activity last year. Looking forward, we would expect slightly higher activity this year. We have earmarked, yeah, a lower number, a handful of assets here, for potential disposal this year. And also hope that during the remainder of the year, the situation on the offer side, which I described before, will be better than what we see at the moment in the market. Yeah, and concerning potential disposal, we are talking here about a volume of approximately around EUR 50 million, maybe a bit higher. Okay, that's on the disposal side. And what you mentioned before, getting more offers, that means that you're also more activities on the acquisition side. Did I get it right? Yeah, I mean, as I said, based on a portfolio rotation and just to, I mean, just to stress one point, I mean, disposals, we are very, let's say, very cautious, and we don't see any substantial pressure here. So obviously, the disposals will, yeah, we intend to realize them only in case of, as we think, attractive offers, I mean, obviously. And then, transforming and using the proceeds from these disposals then also for our potential acquisitions. Yes. On a timeline, if the prerequisite for acquisitions would be disposals, is it right to say it in such an easy way? ... Yeah, I mean, we would take, I mean, obviously, you can't - we try to balance it out, it all - I mean, they're all connected to each other. If we don't, if you don't see any disposals from us, you shouldn't expect any substantial acquisitions. And we obviously try to, yeah, to smoothen the timing so that it works out well, because what we do not intend or what we do not want to do is, we, yeah, let's put it this way, we obviously keep our LTV profile, yeah, we are sensitive on our LTV profile. So therefore, part of a rotation process. Yeah. I mean, micro timing is especially in this market quite difficult to expect or to see ahead. But I mean, as we have done it in the past, we will look for what the market provides as opportunities, and then we will see how this works out together with our disposal plan. Okay, perfect. Thanks. A very last question. Your cash position increased year to date EUR 20 million stems from a new loan. Was it a new loan or a higher amount in an existing loan, and what are the terms on this loan? So it was a combination of both, actually. So we took on an additional loan and we also increased. But please understand that we don't give any details on an individual contract basis here. Yeah. Is this similar to the number you mentioned before, 4%-4.4%, or it's quite lower? Yeah. Yeah, but that you can—I mean, obviously, it depends on the micro timing that's behind it. But we are... Let's put it this way, we, we felt very, we felt quite happy with what we achieved here. Okay, perfect. That's from my side. Thank you. Thanks. Thank you very much, Andre Remke. Ladies and gentlemen, as a final reminder, if you have any questions or follow-up questions, please do press star one at this time. We'll now move to Philipp Kaiser, calling from Warburg Research. Please go ahead. Thanks for taking my question, just a couple of one. I'm starting with the obvious one, the sound start to the year, with regards to rental income and FFO, you are above the run rate for your full year guidance. I mean, you already mentioned that probably, higher maintenance expenses as well as personal expenses will burden FFO, in the course of the year. But what's your assumptions for the top line? So for now, I think you need to do it over EUR 1 billion on the top line to be at the upper end of your guidance. Is it an increase in vacancy, or what's the driver behind here, or your assumption for the next quarters, would be the first one? Yeah, as you said, it might, we might see some influence on the vacancy side, and additional, obviously, a question of where the final rent levels will end up. Because obviously we have, we are still in an inflationary environment. So we still should see some effects from here. Yeah, but that's our expectation of. Okay, but there's nothing you can really point out that you expect to increase vacancy in one particular asset, and that's the reason why rental income will decrease in the next quarters? Yeah, as pointed out, we have one asset within our portfolio which has a larger impact. Mm-hmm. But apart from this, as of today, I don't see this plays across the portfolio in various assets, these topics. Yeah, I mean, meaning which have an influence, but to a minor degree, but it's the sum of all of them finally. Yeah. Okay, perfect. Thanks. And then my next question with regards to the maintenance expense, so we, yeah, expect an increase for the next three quarters. Could you shed some light on how much of the expected maintenance work is already fixed for this year, or is the most of it still just kind of planned, and depends on the, yeah, the availability of craftsmen. Could you shed some light on that? Yeah, I mean, I think if you look backwards, concerning our maintenance development, I think you should see that during the first couple of months, it's not... Let's put it this way, it's not unusual that you're a little bit behind, based if you put a flat line below it, yeah, or try to- Mm. -to divide it across the year. So therefore, we still think that we are in a mode where we expect between EUR 10 million and EUR 11 million, as pointed out at the beginning. And yeah, I mean, obviously, various measures have been commissioned or have been set in place and now, but it's sometimes a delay. Yeah, I mean, you start with a project, you try to get the service providers to prepare the construction, and until you finally end up with getting the bill, sometimes there's quite a time lag between those. So we still feel being on track as of today. That's what we hear from our technical department. Yeah, and yeah, that's what I can say at the moment. Okay. That's why I'm trying to get a feeling that you already postponed or shifted many expenses from last year to this year, and today you get a feeling that could happen already also this year, but you are on track. Okay. So, my last question with regards to the LTV, and Andre already pointed it out, they might go up until the end of the year. Is there a certain LTV level where you still feel comfortable with regard to recovery into the extra market and lucrative assets may come to the market? And how high could this number go and you still feel comfortable? Yeah. I mean, if we look, if you talk to us in the past, we, and we have seen this question, obviously, we typically answer, without providing any official or any formal guidance here, that we feel comfortable in a range, typically, between 40% and 45%. Now, I mean, we are cautious on LTV, as I mentioned before, in connection with the topic of transactions. And I mean, obviously, we could have grown faster in the last couple of years, but we early on decided not to stress the LTV profile here too much, and that's how we're going to move forward. I mean, we have—you have these effects during the year, like, especially with the dividend we talked about. But let's say, looking ahead to the end of the year or next year, generally, we still think that we have a good LTV profile ahead of us. As of today, obviously, depending on where values are going, I mean, that's obviously a major question. But there's not a fixed number that we say which is causing us here any projections that are causing us any headache. Yeah, and even if we would touch the 45% and be a bit upward or a bit higher than this, still this is a number where we would feel comfortable. Okay, perfect. Thanks a lot for that detailed answer. That was all from my side. Thanks a lot. Thank you much, Mr. Kaiser. As we do not appear to have any further questions at this time, I'm going to call back host, Mr. Karoff, for any additional or closing remarks. Thank you. Yeah. Thank you very much for participating and also for the questions. Should you have any further requests for information or questions, please get in touch with us. Apart from this, thanks again for participating, and have a good remainder of the week. Thanks. Thank you very much, sir. This will conclude today's presentation. You may now disconnect. We wish you a very good day, and goodbye.