Hello, and welcome to the Hamborner REIT H1 2024 Results Conference Call. Please note that your lines will be on listen-only mode during the presentation and that this call is recorded. If you require assistance at any point, please press star zero on your telephone keypad, and you will be connected to an operator. I will now hand you over to your host, Mr. Niclas Karoff, CEO, to begin today's conference. Thank you. Yeah, good morning, ladies and gentlemen, and welcome to our presentation of our H1 figures for 2024. I will be joined by members of our team, including my colleagues, Sarah and Christoph. Before we start, let me once again give you some information regarding the transmission of the 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. Please understand that you can only ask questions over the phone. Let's move on to the presentation. First, as usual, an overview of the key figures for the first half year. Yeah, and still the morning market environment, we were a bit able to continue our positive operational performance in the second quarter, which led to further growth in revenue and earnings. Income from rents increased by 4.1% to EUR 46.7 million. FFO came in with a plus of 0.7% at EUR 28.3 million. Yeah, the corresponding FFO per share amounted to EUR 0.35. As a result of the dividend payment in Q2 or influenced by it, as well as selected value adjustments in the property portfolio, NAV per share and LTV took a slightly negative development. Regardless of this, the overall financial situation remains comfortable. A few more words on the rent development. As the upper overview shows, and as already mentioned on another occasion, annualized rents were positively affected by the property acquisitions last year, as well as further indexation effects. In total, annualized rental income amounted to EUR 90.5 million. As of 30th of June, based on a year-on-year comparison, total like-for-like rents have increased by 3 percentage points, mainly attributable to index adjustments and vacancy changes within our office portfolio. For the remainder of 2024, we continue to expect limited positive like-for-like rent effects. On the next slide, we will take a closer look at the earning situation. As already mentioned, income from rents and leases increased by 4.1% to EUR 46.7 million. Maintenance expenses slightly increased year-on-year to around EUR 2.8 million. Yeah, the costs 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. With reference to the status of our technical measures, we expect total maintenance costs of around EUR 10 million for the full year 2024. Concerning the other operating income, we are coming back to... We were coming back to a more regular level after previous years' number was strongly influenced by a compensation payment for the early termination of a rental contract. Interest expenses slightly declined to approximately EUR 7 million in the first six months of this year, mainly due to the repayment of our bonded loan in 2023. In addition, the downward trend in interest rates in recent months has led to lower expenses for variable financing. Interest income from cash deposits was also below the 2023 figure, but still an amount of around EUR 840,000 in the first six months of this year. On the bottom line, the result from income and expenses led to an FFO of around EUR 28.3 million, +0.7%. Moving on to the next slide, let's take a closer look at our operating business. During the last six months or during the first half of this year, our portfolio KPIs do not show major changes and developed largely stable. As there were no property transactions, our portfolio still consists of 67 office and retail properties. In contrast to last year, which has been characterized by far-reaching uncertainty regarding the value development of the properties, we have decided not to carry out a portfolio-wide external valuation. Irrespective of this and following new insights from sales and lease activities, the fair value of 5 office and retail properties has been adjusted. We saw both decreases and increase in market value, which on balance led to a slight decrease in the total portfolio value of EUR 7.8 million or 0.5%. As a result, total portfolio volume declined to EUR 1,463 million at the end of June. With 2.9% EPRA vacancy rate developed largely stable during the last month. In view of the limited letting talks with effect for the current year, we recorded a slight decline in total portfolio WAULTs to 6.1 years. However, with 7.4 and 4.5 years, the figures for the two sub-portfolios remain at a comfortable level. So overall, considering the current market conditions, we can be satisfied with the operational performance of our portfolio during the first six months of the year. On next page, you will find an update on our tenant structure, which shows only a few changes compared to the last quarters. We have recorded minor changes in the percentage shares of the individual tenants, which are mainly due to indexation effects. Within the top 10 list, only the food retailer Aldi and the City of Mainz have swapped places. Food retailers remain by far our largest tenants, which are still making up 1/3 of our annualized rents. Yeah, roughly one third. Overall, we continue to have a solid and reliable tenant base, which is also reflected in our letting results shown now on the next slide. With reference to our letting operations, we were able to maintain a high retention rate over the last month and achieved a letting result approximately on previous year's level of around 25,000 square meters. As already mentioned, and apart from continuous work on vacancy topics, open letting tasks with effect for 2024 are very limited, as we are facing a remaining letting volume of only 1.1% of total annual rents. As in the past, the remaining leases up for renewal towards the year-end, to a large part, include contracts that are renewed on an annual basis. We are quite confident to be able to complete the upcoming task in a timely manner. This slide shows our current financial situation. Due to limited financing activities in the last month, our financial liabilities only changed slightly and have been reduced to EUR 692 million. As a further positive effect, the average interest costs remain at a very low level of 1.9%. For the remaining expiring loan in 2024, amounting to approximately EUR 13 million, which is due at the end of Q3, negotiations are well advanced. As already indicated, LTV was negatively affected by the dividend payment and the value adjustments within the portfolio, and increased to 45.1% as at the end of June. REIT equity ratio was at a lower but still solid level at 54.1%. Net debt to EBITDA and EBITDA, interest coverage, also remained on a comfortable level and amounted to 9.8 and 5.6, respectively. Yeah, ladies and gentlemen, as usual for our H1 presentation, let me now conclude with our outlook. Based on the continued positive operating performance, we see ourselves in a position to confirm our full year forecast. For the current financial year, we still expect income from rents and leases between EUR 91 million and EUR 92.5 million. Positively affected by last year's property additions and further indexation effects. Concerning Funds From Operations and based on our current income and expense projections, we still expect to end up in a range between EUR 49 million and EUR 50.5 million. The FFO development will be affected by a couple of main factors, which you'll find outlined on the right-hand side of the slide. Let me point out again that this guidance does not include effects from potential transactions during the remainder of the year. In this context, we are currently concentrated on selected activities on the sales side. With this, ladies and gentlemen, we are at the end of the presentation, and move on to our Q&A part. Thank you very much for your attention and yeah, we are looking forward to your questions. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one now on your telephone keypad, and to withdraw your question, please press star two. The first question comes from the line of Andre Remke, calling from Baader Bank. Please go ahead. Yeah, good morning to all of you. Good morning, Niclas. A couple of questions from my side, please. First, starting with the maintenance expenses, you expect, again, higher number for the second half. Are these measures already, let's say, contracted or some kind of fixed? I'm asking because we saw several times in the past, measures were postponed, and expenses at the end of the year were then lower than anticipated. Could you give us a feeling, how likely is an execution really for the remainder of the year? This is the first question, please. Yeah, Andre, thanks for your question. So, I mean, actually, it's, it's- as you know, the maintenance consists of various numerous individual tasks, and so it's a combination finally. Yeah, various things are in preparation and have been given to service providers, and were supporting us, and others are still under planning. So it's a combination of everything. I mean, so far it's a blending, yeah. But as of today, we feel, yeah, and that's what we have integrated in our forecast, obviously, that we assume a total volume of around EUR 10 million until the end of the year. Okay. And there were no further postponements in the first half, so this is on plan? I mean, at least nothing substantial that I could talk about at the moment. I mean, as I said, we are talking about numerous individual tasks, from smaller tasks to larger tasks, mainly smaller tasks here on the maintenance side. But yeah, and we have updated our forecast based on a detailed internal analysis, obviously, with our technical department, and therefore, that's the number we can give at the moment. Okay, perfect. Thank you. Then the second question, could you provide us with an update on your disposal plans? In the last call, you mentioned a potential volume of, if I remember correctly, EUR 50 million. Is this still a possible amount? And how are discussions with potential buyers progressing at the moment? I mean, based on today's assumptions here internally, we would say the range of potential sales would be between, for the full year, between EUR 25 million and EUR 75 million, just as a ballpark figure. Yeah, and considering the progress, I mean, it's a range also here concerning this topic. Meaning, starting from early on market sounding phase until transaction, where we have made more progress are in the middle of yeah more detailed analysis on the other side. Okay. Concerning the FFO effects, I'm sorry, as of today, we would expect, I mean, obviously, depending on where we end up concerning the final numbers, but in general, we would expect rather a lower, and so no substantial impact on our FFO results for this year. Okay. I mean, if you look at the calendar, yeah, we are in August right now, so I mean, yeah, and as I said, we are in different stages concerning the transaction, so, or concerning the individual assets. So, we do not expect major impact here on the FFOs. Okay. Then on your refinancing schedule for the next year, would it be reasonable to become already active this year, in terms of cost for them, or what is your intention from today's perspective? ... if you mean being active, you mean securing the financing as of... Exactly. Okay, understood. I mean, first of all, maybe to say stress this point, I mean, obviously we have yeah we decided very early on to go into discussions with potential financing partners here. And so we started the talks or already quite a while ago. And coming back to your question, I mean, this obviously depends on further, on our view and further development on the interest side. I mean, always also here, mixture of balancing. We don't want to be too early not to not to yeah or to save additional otherwise additional financing costs, which would be unnecessary. On the other hand, we don't want to be too late to come into any kind of risk here. So, and balancing it out altogether, but we still feel very comfortable, also concerning the fact that a major part of the refinancing for 2025 is going to happen later during the year, clearly, and not in the early part of the year. Yeah, so this gives us additional time here and, but I can say from today's perspective, I think we're on a good track here, and feel comfortable with concerning the refinancing topics here for next year. What are current terms, if you would agree right now? On the financing, I mean, let's say we're—I mean, obviously, we as usually are, depending on duration and what kind of assets you have and other factors. But I would say if we talk about typical medium-term financing on a secured base, let's say a range between 3.6% and 4%, that's something, the range 3.5%-4%, rather on the upper side. Okay, thank you very much. The very last question on your portfolio valuation. You stated that you had value adjustment for five properties. Does this refer mostly to potential disposal properties? And would it be fair to transfer those indications also to the remainder of the portfolio, the overall portfolio? What are your expectation here, also going into the second half of the year, any need for further value adjustments outside of the five properties? Now, for these properties, we did the valuation here at midterm based on very specific additional information that we had. So we don't see that this is representative for the entire portfolio here, clearly. Yeah. I mean, that's why we, as I pointed out, we decided that we don't make an update valuation for the entire portfolio. Yeah, so these are. Do you believe from today's perspective to have a stable valuation during the year? I mean, from today's perspective, I think I don't make any predictions here. I mean, maybe let me stress again, also, I think concerning the individual changes in valuation for these couple of assets here. It was a combination of valuation decrease, but as well of valuation uplift. Yeah, so it was also a combination here. But concerning the end of the year, it's tough to say from today's perspective. Yeah. I mean, no predictions here, at this point in time from my side. Okay, fair enough. Thank you for just a try. Okay. Oh, absolutely. The next question comes from the line of [audio distortion], calling from Kempen. Please go ahead. Hi, good morning. Thank you for taking my questions. My first one would be on the investment market. Do you notice that the investment market is opening compared to, let's say, six months ago? Okay. Yeah, concerning the investment market, to my—I mean, my view is based on what I hear from the colleagues and also what I see in the market, that less has changed than I personally would have expected at the beginning of the year. So my personal expectation would have been that we would get more deal flow, meaning more offers. I mean, let me stress the fact it's not that we don't get any offers on the table. There are lots of always offers, but considering assets which fit from our perspective to our investment profile, and it's still quite slow. It's still quite slow. And yeah, so I don't know. We have to be patient here. Yeah. Yeah. Is that because sellers are perhaps still too slow on adjusting their expectations? And just in general, could you give a number for a yield level at which sellers are willing to sell? Because this, I mean, if you, if you consider our strategy, and you see that it is ranging from core to manage- to- core properties, which obviously have employ different risk return profile. And considering that we are on the office and the retail side, that is quite a spread. And therefore you don't have these one or two numbers, which it would be misleading from my point of view to give any kind of numbers to you. But what I think it's not only the price expectation topic. I would assume that there are also other reasons next to it, which cause more delay on on the concerning the yeah, until more product comes to the market. I mean, just if you can think about all the topics around ESG and preparing data, et cetera. So if you want to bring an asset to the market in this market environment, I would assume that sellers will have a very strong interest to provide, or be even more interested to provide an asset with all information necessary for potential buyers. And this sometimes takes all, also more time and other factors which might have an impact on this. But, yeah, it's just a guess from my side. All right. And then last one, on maintenance. Mm-hmm. As you mentioned, you have quite a bit scheduled for H2, but do you see any potential spillover into 2025? I mean, not as of today, meaning substantially, but based on the experience we have made, I mean, I have no measure right now. I mean, we can't avoid this finally, if I look backwards, last year and I think also the year before, because we still are facing a situation where, on the concerning service providers, for instance, it's not always so easy to calculate when they are available. Second, another influencing factor obviously is when, if you need certain permissions to do something, if you don't get them as planned, concerning your timing, you might have another delay. Obviously, the further you go into the year, and get to the year end, you can come into a situation where you have certain measures which you have to postpone, and where it's too late to have other measures which originally were scheduled for next year, to move them forward. Yeah. But as of today, that's, it's okay for us, and we have another factor maybe, to make the picture a bit more complete. If you think about tenant incentives, for instance, for fit outs, this obviously is also dependent in various cases on the timing on the tenant side. So, where we can make our own schedule, but if the tenants need longer for certain measures or decisions or whatever, this also can cause some delay on the timing side. But yeah, I mean, having said this, we did our math here for our updated forecast with our technical colleagues, and that's the best guess we can give at the moment. All right. Very clear. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. The next question comes from the line of Thomas Lehleiter, calling from Kepler Cheuvreux. Please go ahead. Good morning. Thank you for the presentation, taking my questions. There's only one left, and this is regarding the letting market. Obviously, you don't have a lot of letting to do in the next couple of months, and you achieved quite a strong indexation in the last half year, I would say. I was just wondering, given the slowdown of the German economy, what do you expect in terms of how occupancy rates and letting rents might develop next year, particularly in the more volatile office segment? Thank you, Thomas. Well, generally, we are right, very comfortable with our current vacancy rate. And in terms of vacancy, where we have, yeah, some action points, we see that it takes longer to release vacant areas, and it takes longer to negotiate with tenant on conditions. And this is not only about rental level, it's also about the extension of leases and tenant fit out and vacancy period, et cetera, so rent-free period. But generally, we are still comfortable with the properties we have within our portfolio. We have some to-dos for this year. We have 1.1% vacancies to release. For the next year, we already started in a very early stage to poach the market and to, yeah, find new tenants for our properties. Thanks a lot. We currently have no question coming through. So as a final reminder, if you'd like to ask a question, please press star one now. The next question comes from the line of Dr. Norbert Kalliwoda, calling from Kalliwoda Research. Please go ahead. Yes, thank you so much for taking my questions. Hello. Just the cost of debt. So you mentioned it is 1.9%. So how do you see it in the next quarters? Will it be unchanged, or might it maybe decrease a little bit, or increase? And the second question would be- ... regarding your sustainability efforts, or can you give us some insight what you are planning next? Thank you so much. I mean, concerning the average cost of debt on our side, considering the fact that we have no substantial refinancing in the upcoming months, apart from this, apart from the volume that you see here in our overview, which obviously is limited. I think I wouldn't expect substantial increase on the average interest cost side. However, looking forward into 2025 and then onto 2026, based on the fact that we have much more to do on the refinancing side here. As of today, based on today's interest level, obviously, we will expect an increase. and, on the other hand, as I pointed out in 2025, I mentioned it before, a major part of the refinancing to do will be later in the year, so that the effect in 2025 also, this would go into the other direction. But clearly for 2025 and 2026, as of today, we would expect a more substantial increase of average interest costs. Mm-hmm. Okay, thank you. Concerning ESG, I mean, we have made our schedule for the year based on our decarbonization strategy, which just as a reminder, maybe we published in the first half of the year. Obviously we have various measures underlining here for the year. Maybe also as a reminder, as part of our decarbonization strategy, we also published our expectations on the investment side for the year 2024, as well as 2025 and 2026. Obviously these are cost indications here that we have here for next year. But we said that we try to provide as much visibility here on this topic. Yeah, we are working on this. For this year, we have quite some, yeah, some investments on the maintenance side as well as on the CapEx side, which are reserved only for direct ESG impact. However, if you compare it, it's clearly more on the CapEx side that we see, yeah? Mm-hmm. Mm-hmm. Overall, I think we feel being on track here. Mm-hmm. As of today. But to be fair, I think it's a learning curve for us as well. Mm-hmm. So I would expect that, together with the results for 2024, once we have made our first experiences here, also by dividing into different buckets, as we, as we described it here within our presentation, together with the decarbonization strategy, it will be much easier for us then to go into more detail, concerning our execution. Thank you so much. Thank you. The next question comes from the line of Philipp Kaiser, calling from Warburg Research. Please go ahead. Yeah, thanks a lot. Thanks for the presentation and taking my questions. Just one quick question from my side with regards to the potential investment volume. So I'm assuming a recovery on the transaction market and considering the current financial situation, meaning the current LTV level and the huge discount to NAV, what would be the potential volume you could invest to secure further growth? Any insight would be very helpful and appreciated. Yeah, I mean, I don't wanna here come down to a, to an yeah number, but what I can say is, I mean, as pointed out, we are focusing currently on our sales activities rather as part of our rotation program. But rotation means for us that first we want to have more visibility how the sales activities run, and then see on a cautious basis based on the results there if there would be room for additional activity on the acquisition side. Nevertheless, as of today and current phasing and taking into consideration our current balance sheet structure and the view we have, I wouldn't assume here. I mean, clear focus on sales activities within the rotation, and not the acquisition activity. This doesn't rule out any acquisition in the future, but the clear focus on the sales activities, because we don't wanna stress our KPIs here unnecessarily. Okay, thanks. Fully understood. Thanks a lot. All from my side. Well, there are no further questions, so I will hand you back to your host to conclude today's conference. Thank you. Yeah, and thank you very much for your participation and the questions towards our team and myself. And then hope to see and talk to you soon, and have a good remaining week from our side. Thank you very much. Thank you for joining today's call. You may now disconnect.