Dear ladies and gentlemen, welcome to the interim results 9 months 2021 analyst and investor call of Vonovia SE. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to René, who will lead you through this conference. Please go ahead. Thank you, Angela, and welcome to our 9-month 2021 earnings call. In line with tradition, your hosts today are once again CEO Rolf Buch and CFO Helene von Roeder. I assume you have all had a chance to download the presentation. In case you have not, please go to our website and you'll find it under Latest Publication. As in prior results calls, it is a pretty thick deck, but that is because it is really two parts. The first is the earnings call presentation we will be going through today, so pages 2 through 22. The second is the more general investor presentation, plus the appendix. We have combined the two into one document to use the same set for different events and situations over the next weeks. Rolf and Helene will now lead you through the first part of the slide deck, and of course, we'll be happy to answer your questions afterwards. With that, let me hand you over to Rolf. Thank you, René, and also a warm welcome from my side. Some of you might have the impression that there is a lot of rock and roll coming from Vonovia in the recent months. Transactions, the general noise you always have around election times, and other headlines have probably left the impression that some of you might think that we might not be focused enough on what really matters. While I appreciate that the market likes predictability and steadiness from a resi player, there are also two things that we should not forget. First, we are faithfully executing the very strategy that we have communicated in the IPO. We are the consolidator of the resi market, and scale matters. Second, we are able to do what we do because our organic business is stable and so strong and well managed that we have enough time to pursue opportunities when they present themselves. The 9-month result clearly shows how strong our business actually performs. We are once again raising our guidance. Vonovia standalone excluding Deutsche Wohnen for EBITDA and group FFO. I will not go into the details of the highlight page on page four, as we will address all these points on the next slides. Let me just say that our results are in line or actually slightly better than we have anticipated. The market fundamentals remain highly favorable, which should not be a surprise because we have built the business on mega trends that do not change from one quarter or even 1 year to the next. Finally, I want to emphasize once again that in our business, sustainability and stakeholder reconciliation are key and always play a meaningful role in our decision-making process. With this, over to Helene von Roeder. Thank you very much, Rolf. Let's switch to page 5. Before I start with the 9-month results, I would like to briefly remind you where we stand on the Deutsche Wohnen transaction and explain how Deutsche Wohnen is part of our numbers in this presentation. I think the status of the transaction is pretty well known. We now own 87.6% of the voting rights, which is pretty close to the maximum of 90%. Hence, there's a remaining free float of Deutsche Wohnen, and it goes without saying that in all our decisions, we will respect the rights of these minority shareholders as we exercise the control we have with the stake we own. We had communicated certain changes to the Vonovia management board that we had agreed in the BCA, and they will probably be implemented at the beginning of the next year. The integration has been kicked off and is in the hands of a very capable team that can draw from its experience of having done this already 8x before. No surprise on the synergies either, which we still expect to be EUR 105 million for EBITDA by the end of 2024. In terms of Deutsche Wohnen in our 9-month financials, Deutsche Wohnen is fully consolidated on our IFRS balance sheet as of September 30th on the basis of the anticipated acquisition method. What is important to remember, though, is that at the end of Q3, 37.6% of the shares, fully diluted, were already paid, and the purchase price for the remaining EUR 105 billion was booked as a payment obligation outside of the reported LTV. There's no earnings impact on 9-month segment EBITDA. The 9-month group FFO includes at equity contribution of EUR 25.6 million from Deutsche Wohnen, which is equivalent to 2 months of Q3 FFO at a weighted average stake of 29.8%. Until the integration of Deutsche Wohnen into Vonovia, Deutsche Wohnen will be reported as a separate segment. Please note also that the guidance on page 21 is Vonovia standalone. We wanted to show you the organic performance without the positive impacts from Deutsche Wohnen. The actual 2021 full year numbers in March next year will include Deutsche Wohnen effects, which will be Deutsche Wohnen at equity contribution for 2 months, so the EUR 25.6 million. The Q4 Deutsche Wohnen FFO 1 and transaction-related financing costs, which are equivalent to EUR 20.5 million. With that, let's go to page 6. The numbers on page 6 and next few pages on our segment results are excluding Deutsche Wohnen. As you can see, we are well on our way with all four segments showing year-on-year growth. On the basis of a basically unchanged portfolio volume, the rental segment grew by 5.2%, even though the organic rent growth was only 3.5%, which in my mind shows a bit the shortcoming of that organic rent growth number. Anyways, 5.2% growth in our largest segment helped by the total EBITDA to grow by 7.6%. Accounting for lower interest expense and higher taxes, mostly due to sales, the group FFO grew by more than 10% in nominal terms and 8.3% on a per share basis. If we include the EUR 25.6 million at equity contribution from Deutsche Wohnen, the FFO was up 12.9% in absolute terms and 10.8% per share. Moving on to the rental segment on page 7. Our rental revenue on a largely stable portfolio increased by 3.3%. With maintenance up 4.4% and operating costs down 5.4%, the EBITDA contribution from our largest segment was up 5.2% year-on-year. The reduction in operating expense overall helped improve the EBITDA operations margin in Germany to now 79.5%. As some of our expenses are actually backloaded, the Q4 EBITDA margin may be a bit softer, but medium to longer term, we clearly see additional potential, especially now coming from the integration of Deutsche Wohnen and the realization of announced synergies. Let's go to page 8 for the operating KPIs. As Rolf said, the operating performance remains highly robust without any real surprises. Organic rent growth for the last 12 months was 3.5%. The three drivers were the market rent growth with 1.1%, modernization investments with 1.8%, and new construction with 0.6%. The vacancy rate is 10 basis points higher than Q3 last year, which is very much within the normal fluctuation range. Maintenance expenses continue to be a bit higher than last year as we remain generous with this part of our cost base to keep our assets in good condition. Finally, our rent receivables in Germany remain at all-time lows. While we had seen a small temporary increase during the COVID-19 pandemic, this has been overcompensated by now, and we are below our pre-COVID levels. With that, back to Rolf. Thank you, Helene. Similar to the rental segment, the value add segment on page 9 is a story of steady and sustainable growth. This story continues in the first 9 months. Both internal and external revenues were up year-on-year, and so was the EBITDA contribution from this segment. As expected, this growth was broad-based across the different initiatives. The contribution from our custom business was up as we increased productivity and EBITDA in spite of ongoing cost pressure on construction material and labor. The residential environment saw higher revenues and increasing EBITDA. The growing penetration in both multimedia and smart metering helped to increase the EBITDA from these businesses. Finally, we are expanding our energy generation and supply, which leads to higher EBITDA contributions as well. All in all, external revenues were up almost 12% and internal revenues close to 5%. On back of this higher of higher operating expenses in this growing business, the overall EBITDA for value add was up 5% on a year-on-year basis. Our third segment, the recurring sale, is on page 10. We continue to see strong momentum in the demand for our condo assets. While we sold 26% more units than in the prior period year, revenues and fair values were up by 43%. The fair value up step up was similar to the last year, which around 40%. On this greater volume, the EBITDA contribution from the segment was 41% higher than last year. As we said in our H1 figures, this year's recurring sales volume is a bit higher than normal as we have a small spillover from last year, and we are also making use of the high demand to dispose some more difficult to sell condos. Finally, outside the segment, year to date, we have sold 620 non-core units, plus some land as a fair value step up of more than 50%. We sell those assets for portfolio management reasons only. Put differently, they are not the strongest assets and location we have in our portfolio. Still, we got a large step up, which is a clear indication of ongoing momentum on asset prices. Thank you. Page 11 for development. Our fourth segment is a bit chunkier than the other three, so we should always expect some volatility between the quarters. The first 9 months this year saw higher volumes and gross profits than last year in development to sell. In development to hold, volumes were down, but gross profit was in line with last year. This has nothing to do with different priorities or strategic changes, but is simply a timing issue when the different projects are completed. In spite of higher operating expenses, the overall EBITDA contribution from this segment was up 16% year-over-year. Page 12 for the development pipeline is more of a reminder than an update, as the numbers here don't change much from one quarter to the next. In terms of completions, we had 7,786 units to hold and 580 to sell. Our expectation is that we will see a total of around 1,500 units to hold and 800 to sell by the end of the year. This will be slightly higher than last year, but still comparatively low as we continue to face the same challenges when it comes to building new apartments. Red tape in the preparation and construction process, slow process to obtain building permits, bottleneck in construction capacities, and of course, the not in my backyard challenge. The result of all of this is what you see on page 45 in the appendix, where we continue to see lofty goals for new constructions in Germany in the future and completion rates that do inch higher, but clearly fall short of what would be required. The sobering data of insufficient completion rates does not even include the housing for the 400,000 immigrants per year that will need to come into the country if we want to maintain our productivity as an increasing number of people do go into retirement. The fundamentals in terms of supply and demand imbalance from an owner's perspective remain very favorable, which bodes well not just for our development pipeline, but for our business overall. On to page 13 and the portfolio valuation. In previous years, we always gave you guidance by providing a range on our H2 valuation. While it was certainly our intention to do just that this year as well, our statutory auditor, KPMG, required that we reflect part of the expected H2 value growth already as of September 30th because of the price dynamics we do see in our markets. Contrary to prior years, we have a Q3 valuation result with a total value growth of EUR 1.6 billion. Of that amount, EUR 1.3 billion come from performance and yield compression, and the remaining EUR 300 million from investments. Please note that this number does not include the Q3 value growth in the Deutsche Wohnen portfolio. Based on the consolidated numbers for Deutsche Wohnen, their value grew by EUR 1 billion in the third quarter. For Q4 then, we estimate an additional value growth between EUR 1.8 billion and EUR 2.6 billion. This number also does not include any contribution from Deutsche Wohnen. Page 14. Let me provide a bit more color and context on the valuation. If we look at valuation over time, we see that 2021 is set to be even stronger than in any of the previous years, with the exception of 2016. We had seen strong performance and yield compression in each year since the peak year of 2016, but it always had been a little bit less dynamic than the previous year. At least for 2021, this trend seems to have reversed and we expect a level that is almost as high as 2016. While portfolio transactions in the market are only indirectly related to increasing values on our balance sheet because we value asset by asset, market evidence does support continued strong value growth. On the right-hand side of the page, you see five transactions from the last 12 months that we have looked at closely. In the end, there's a premium shown in the chart. While transaction D is a bit of an outlier because we understand about half of the portfolio was suitable for privatization, it still shows the premium that buyers in the direct markets are prepared to pay. As a reminder, our fair value step up for recurring sales in the first 9 months was about 40%. I understand how dynamics in the private space can differ from the listed space, but I find a disconnect between the two pretty remarkable. Let's look at page 15. The valuation, of course, has a direct impact on our NTA and NRV. These numbers now do include Deutsche Wohnen as of September 30th, 2021. However, on an extremely conservative basis for the Deutsche Wohnen portfolio, we have included 50% of their deferred taxes and 100% of their purchase cost to bring their NTA definition closer in line with ours. This is in line with EPRA guidelines, and it includes an implicit assumption that 50% of the portfolio could potentially be up for sale. Clearly, this is not the case, nor our intention. However, given we have not yet classified the Deutsche Wohnen portfolio according to our guidelines, we chose to be very conservative here. The EPRA NTA per share on that basis is EUR 70.26 and up 12% year-on-year. If we were to add back 100% of the deferred taxes, the EPRA NTA would be approximately EUR 74.5. If we were to exclude all purchase costs from the NTA to make it more comparable to the peer group, the September 30th NTA pro forma would be EUR 60.44 per share. Moving on to page 16 for the LTV. The table on the left-hand side shows the LTV as of September 30th, 2021. This includes only the Deutsche Wohnen shares paid for as of that reporting date. On the lower right-hand side, we have an included and illustrative pro forma LTV bridge to show the impact of the EUR 10.5 billion for remaining payment obligation, the approximately EUR 8 billion rights issue, the Berlin disposals, and our Q4 valuation estimate for new Vonovia, including Deutsche Wohnen, to show you how we get back into our target range. The debt structure is detailed on page 17, and it includes the Deutsche Wohnen debt that we're taking over in this transaction, and you see that it fits nicely into our smooth maturity profile. As I said in the past, the LTV alone is not a very meaningful metric all by itself. I like to look at it together with the fixed hedge debt ratio and the maturity profile and debt duration. On that basis, I think we're very well positioned as of September 30th, and more importantly, looking at it on a pro forma basis, like on the previous page. I will not spend too much time on page 18 other than emphasizing that we have plenty of headroom on all of Vonovia's bond covenants. With that, back to you, Rolf. Thank you, Helene. On page 19, we want to bring everybody on the same page because we felt that there was a bit of confusion what we have done, or better, what we have not done with regard to Aggregate and Adler. This is all about optionality. We have taken a closer look at Adler in last year. As a result of this closer look, we are convinced that we have a very good outside-in view on the Adler portfolio and the whole company. This is why we know that the portfolio and the company has a certain value. We are aware of the various risks and uncertainties, but if you take all into account, you're still left with the value of the company and the assets. That is why we seized the opportunity that has presented itself and Aggregate needed to refinance a margin loan. This is the first agreement with Aggregate. Us taking over the around EUR 250 million margin loan that has the full 26% stake in Adler as collateral. The swoop price is around EUR 8 per share. The second agreement is on the call option of up to half of Aggregate's stake in Adler, so up to 13% of all Adler shares. The strike price here is EUR 14 per share, and it is fully at our discretion whether we exercise this call option or not. No foregone conclusion, no spontaneous acquisition of a stake, but optionality over the next 18 months while we digest the Deutsche Wohnen integration. On page 20, I would like to give you an update of our Sustainability Performance Index, SPI. As a reminder, this is our leading metric for non-financial performance, and includes six categories: CO2 reduction in our portfolio, energy efficiency of the new constructions, ratio of senior friendly apartments refurbishments, customer satisfaction, employee satisfaction, and workforce gender diversity. Our goal is to achieve a target rate of 100%, which would mean that we have reached all the targets set as across the six categories. As we already said in the half year results, we are well underway and expect an overall target achievement of 105%. This improvement is especially driven by good performance in CO2 reduction, further improvements of our customer satisfaction and increased employee satisfaction. This is back to Helene for the guidance. Finally, the 2021 Vonovia standalone guidance excluding Deutsche Wohnen on page 21. Based on our Vonovia standalone performance so far we are increasing the guidance as follows: We expect the adjusted total EBITDA to come out around the upper end of the range of EUR 2.055 billion-EUR 2.105 billion. We are increasing the group FFO guidance range to now EUR 1.520 billion-EUR 1.540 billion. This increase is driven by the positive performance across all segments, and also reflects the larger development to sell projects that we expect to close in Q4. Please note that this guidance is for Vonovia standalone without Deutsche Wohnen impact. The actual full year 2021 results will differ insofar as that they will include the at equity contribution from Deutsche Wohnen of EUR 25.6 million, the Q4 FFO of Deutsche Wohnen, and the fourth quarter interest expense for the Deutsche Wohnen transaction related debt. Now we are coming to the summary. Let me brief or summarize. Today's call is this. First, our performance remains highly robust, and the market fundamentals and long-term outlook remain favorable as evidenced by our valuation results and the outlook. I know that the Deutsche Wohnen transaction has taken up a lot of airtime over the last months. However, you can clearly see on our numbers that it has not impacted our performance. Two, we remain confident that we can continue to deliver earnings and value growth over this year and beyond, both organically and through the Deutsche Wohnen acquisition. Three, ESG focus and shareholder relations continues to be highly relevant. Most of our actions have more than just an economic dimension. You should expect us to continue to try to strike the right balance going forward. Again, this is not a conflict. We have built a business that can deliver the kind of returns that you expect from us, and still make sure that we do it in a way that treats other shareholders fairly. In the end, finding relevant solutions to ESG challenges will be rewarding in multiple ways, financially, but also beyond. Thank you. Thanks, Rolf and Helene. Angela, can you please open up the Q&A? Sure. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before the opportunity to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. We've received the first question. It is from Thomas Neuhold, Kepler Cheuvreux. Please go ahead. Your line is open. Good afternoon. Thank you very much for the presentation. Thank you. My questions. I have actually three, and I think it's the best to take them one by one. The first is on cost inflation. I was wondering if you can give us some figures in terms of what kind of material costs and what personnel cost inflation you see, and especially regarding the impact on your businesses, the development business. Is house price inflation still exceeding cost inflation? Or is there a risk that the 20%-25% development margin cannot be held in the next couple of quarters? Yes. You can probably also see it slightly, as I have mentioned in the value add segment. We see a significant cost increase. It's more than 4%, production cost, so the construction cost index. We also think that this will go on, probably even go a little bit stronger. The impact on the development margin. Can the 20 to. No, the sales price is going up even faster. Okay, understood. You can. You can see a slight impact because of course we have internally a fixed price for the services which this value add segment is providing for the rental segment, so that's why of course you will see a little bit pressure in the EBITDA on the value add segment, because they just have to respect the internal prices for the full year. This is not too meaningful. Okay. My second question is on rising interest rates. Can you give us an indication on your spot financing costs at the moment or the impact that the recent increase in interest rates could have on refinancing costs? Yeah. Okay. At the moment, our average cost is at 1.13%. The recent issuance is, I mean, you know, the 30-year, it was at 1.625%. To be perfectly honest, I mean, the rise in interest rate at this point is, if you look at it in the larger picture, still quite homeopathic. I'm not too worried. We can absorb that easily. Having said that, I'm quite happy to have done the financing as we've done because I think we sort of, like, seem to have picked the perfect low. In terms of, like, our liability side, obviously we're not coming to the market this year, this side of the year again, and then let's see what happens next year. It doesn't feel like the market is rising too strongly at this point in time. Okay. Thank you. My last question is on the topic sustainability taxonomy. Can you give us already an indication which portion of your business activities are considered sustainable economic activities or green activities according to taxonomy? No, I think it would be a little bit too early. I think we will come out with some figures probably in the next year. To be very clear, if you see our efforts, what we are doing for sustainability is probably a meaningful figure. Okay. Thank you. The next question is from Jonathan Kownator, Goldman Sachs. Please go ahead. Your line is open. Thank you very much for taking my questions. I have four questions, if I may. The first one on revaluation gains. I think I've asked that question already. Given the fact that you're doing 40%-50% premium of your non-core assets, and you will admit on the call it's not your best assets, what does that make of the credibility of your valuations and shouldn't they be much higher than this? First question. Second question, on the rights issue, you indicated that you're keen to potentially raise up to EUR 8 billion. If you factor in the disposals in Berlin, which I don't think are factored in your valuations of Q3. If you factor in some revaluation gains for Q4, doesn't that bring LTV below 40%, i.e., below your range, potentially? Are you over-equitizing a bit in this instance? Do you have any further acquisition plans? Second question on the. Can we probably do more question by question? Because otherwise we forget. If you want. The first question actually was, what does it say that we can sell so high above what is our books? Yeah. I think it shows that we have a conservative valuation, and it shows that the momentum is still in place because, you know, as we have always explained, the valuation is later because we are using data which are older by definition. So I think this is probably a fair assumption. The market is very hungry. It is, but I apologize if I'm asking the question, but isn't your valuation supposed to be a true reflection of the market value as it's stated in the accounts? Yet consistently over the last few years, you know, you're selling assets at 40%-50% premium now. The data is no longer backward-looking. You have, like, so much data just to justify higher valuations. No? It is clear, this is asset by asset, and it's always the same. As long as asset prices are rising, we are always too late. This is well understood because we are building up on data which is actually 3 months older than what is existent. If we publish the results, it's even more. What it also shows that even if we increase the value, we are always above. I can tell you, I have the debate with my sales agent people. They are complaining every time, saying, "Now the value is higher, we cannot deliver the same margins." We have the same debate. In the end, in reality, they are delivering the same margins. I still, it's still a sign of a very hungry market. Sure. I mean, shouldn't you have a step-up of, say, 20% as opposed to, you know, 5% or, you know, 6% a quarter given the gap is, as you're pointing out, persisting and it's very, very significant. Like, shouldn't there be a catch up at some point as opposed to increasing that progressively? We are still surprised about what is really possible in the markets. Also if you see the process, if you are doing a bidding competition, they are actually getting crazy. How do the valuers take into account these comps in their assessment or your internal valuation? Because I think you're doing a valuation that is checked by CBRE. Yes. This is actually more discounted cash flow method. This is then looked for market evidence. Sure. Your exit cap rates and, you know, some of these assumptions. Yeah. This is also individual transactions, and we are looking at the whole data of all transactions. Perhaps, but the gap is. You might probably argue that we have very good salespeople. That's a good point. I'm happy for you. Again, you know, it's you know, the persisting gap means that it's not necessarily mark to market in your book. That's just what I'm trying to point out. Second question was? On the rights issue and the size. I do the rights issue. If you want to go back to the page 16, it was. We show you the bridge. There, you can see that like we've already pro forma included the disposal of the Berlin assets, which brings us just below the 45%. Trust me, we're not over-exerting with the EUR 8 billion. Hence, it's really like the disposals are already in the bridge, and we will need the 45% to sort of go below the 40%. We will need the EUR 8 billion to go through below the 45%. The other parameter we will need to look at is the net debt to EBITDA number. That's something we are also factoring in. Okay. You indicated on that bridge below 45% post the rights issue and the Berlin disposals and the Q4 valuation, but you're expecting to still be in your 40%-45% range. Are you expecting to be in the middle of that, be at the bottom of that, below that? No. Look, it's just below 45%. Yeah. Okay. It's really like a few pips below. Okay. Here's the famous Vonovia trick which René is just hinting at. If you do take the ruler, you will actually get to the exact number. Built to scale on page 16. Built to scale. Well done, René. Thanks. That's fine. Okay. I'll just ask one question. Sorry, I'm gonna cut it short for benefits of the others. On the development that we see in the political environment, are you seeing a desire from, you know, the current parties that are discussing, to relieve some of these bottlenecks, and do you think they can really have a meaningful impact on that? Or would you expect these bottlenecks to persist for a number of years? Thank you. I think we have the best chance now to get rid of some of the bottlenecks that we had in the last 20 years, because this is a government which has an ambition to change to build Germany new. The debate about building construction restrictions is not only a debate about housing, but also about renewable energy. It's the same rules that prevent for energy transportation networks and is for housing. I think together with the energy industry we are looking forward of change of regulations. Having said this, there's still a second bottleneck, which is the people in the construction permission departments, and this will not easily be solved. Yes, we will have a government which is understanding that we have to change something. It will make some things easier, but there is no assumption that in the year 2022, automatically all the bottlenecks are gone and we are doubling our development revenues or EBITDA. This will be a longer term story. I think there is a positive perspective for this on the longer term perspective. Having said this, before, I think Helene mentioned it, the problems of imbalance between supply and demand will become much bigger. I think we are just starting to realize in Germany that if we get immigration, this will be a much bigger problem than we see today. Probably some politicians might have the illusion that a new construction rate of 350,000 units per year is enough. I can tell them this will not be sufficient at all. We are seeing bigger imbalance between supply and demand challenges in the future than we have seen in the last years. Some of the politicians think they hope they have seen the worst. It's unfortunately not true. Okay, fair enough. Thanks. The next question is from Rob Jones, Exane. Please go ahead. Your line is now open. Great. Thanks. Yeah, I've got three or four questions in total. So one is in terms of the EUR 8 billion or circa EUR 8 billion equity raise, and specifically around timing. I think you mentioned it was subject to market conditions, kind of could be as early as the second half of November. Given that obviously the mechanics of the rights issue is it doesn't really matter what price you raise at because an investor can, if they don't subscribe, either sell their rights to the market, et cetera, why does it matter around timing? Or is there a concern from your side that given the quantum of the raise that you're looking to undertake, an unfavorable market environment might lead you or might result in a situation where you aren't able to raise that kind of quantity of capital? I'm just trying to understand what you mean around kind of the concern or risks in relation to market conditions. Well, first of all, thank you very much for explaining the technicalities. We actually are loving it. No, in all seriousness, I mean, market conditions, of course, you look at a capital raise and you decide when to do it, but of course we have to go through many technical elements of this. So you're totally right. We can, as soon as we believe that the market is open and can observe the rights issue, we will anticipate whether we want to do it or not. I think that's the way we do it. Yeah. Of course, we have to do the prospectus, in order to finalize that. Yeah, of course. Understood. The second one was with regards to Adler. Obviously, as you said, you've got the call option for half of Aggregate stake. What's the kind of price that you paid for that option? Or is the option in lieu of the interest that you would normally receive on the loan, the EUR 250 million loan? Or does the loan have an interest rate ascribed to it? The loan has the same interest rate as it had before because we just took it over. Okay. The option is free. The option is free. Why did they agree to the option? Was the option a condition of the loan? If you are in a situation that at 8:00 P.M. you discover that you have to pay EUR 250 million on the next day, you probably don't have too many options left. Fine. Linked to that, Rolf, 'cause luckily I'm not in a position at APM where I've suddenly owe someone EUR 250 million. How do you call them and say, we've got some spec shareholders capital, and we think we can help you out, it's also mutually beneficial for our shareholders? Or do they contact you? I'm just trying to understand the realities of how that conversation comes about. No, I think you know, we take the obligation, even if we are in the moment busy with the Deutsche Wohnen transaction, you know that we are looking on all assets in the market. Of course, we were closely looking a year ago on Adler. Yeah. Where we find that there was probably not a possibility to transact for a price which was appropriate. Sure. Of course we knew the company very well and we have contact with Aggregate since then or even before. Okay. I think it was public that they have an issue, huh? Sure. Not a surprise. You probably sometimes asking what is happening here, then you are coming to discussions. Fine. Okay. You knew Aggregate before. That's understood. Then the final question from me, which is an easy one, probably. No, to be very clear, we would not have done this if we would not have a clear view and detailed view on Aggregate, on Adler as a whole, including all the transaction, including all the reports, including everything. There was nothing new in this famous report for us. We all know it. There is issues, and you can probably p ut a price tag on every one of these issues. Yeah. In the end, if you deduct all these price tags, you are coming still to remaining value. This is why we took the opportunity. Yeah. Understood. The final one, just on recurring sales. Obviously, as you said, it's been a strong year due to the spillover effect from last year, taking faster, strong market, sell weak assets. I'm expecting for FY 2022 that we see a step down in recurring sales from the very tough FY 2021 or likely tough FY 2021 comp. Can you give any indication in terms of how much that step down to FY 2022 might be? Or should we think about it more similar to, say, the FY 2021 outturn in terms of those recurring sales and the No, I think we are not. What it looks like? We are not giving you a guidance for 2022. Assuming that we are bigger, assuming that there's also portfolios in Deutsche Wohnen, assuming that Sure. The market is going on. I would not be too pessimistic. Fine. Okay. Very clear. Thanks very much, team. The next question is from Thomas Rothaeusler, Deutsche Bank. Please go ahead. Your line is now open. Yeah. Good afternoon, everybody. Just a couple of questions on politics. I mean, we have heard hardly anything from the coalition negotiation so far, which I guess can be seen as a signal that talks run smoothly. Just wondering if you've heard anything from the negotiations lately? To be very clear, the rule is that everybody who talks will be fired. If I'm now telling you what is happening there, this would be probably the issue. It's too early. They are really disciplined, which is a good sign because this gives a good flavor for the future government, because being disciplined in this negotiation is just an achievement. Yeah. I think if you look on their programs, if you talk to the people, they probably don't tell you exactly where the point is that they discuss. I think we have three main topics which are relevant for Vonovia, and the fourth topic, which is not relevant for the Vonovia, but for private landlords. I think first to the private landlords, there is a rule that if you need to partner yourself, you can get the tenant out. This is misused. I expect something that they will work to get rid of this misuse. Which is not an issue for us because we are not concerned. The other three points is, I think what the whole old Mietspiegel system is probably coming in the long term to an end. Because if you are using the Mietspiegel and then putting additional caps and Mietpreisbremse and all these things on top of it, you are actually killing the system and making it very complex. I think that at least the politicians have understood that a model like in Sweden, where more or less the basic rent increase is more or less linked to inflation, is becoming more popular. At least if you see the remarks from different politicians being part of the new government, I think they all have a sympathy for linking the normal bread and butter rental cost to inflation. I don't know where they end up in the negotiation, but this is something which is probably important. The second element is the new construction. I think it was covered by a previous question. They all knew that they have to push new construction. It will be a difficult topic. I expect that there will be emphasis on the regulatory rules. What you have to aspect, the process has to become faster. But as I said, this has probably not immediate impact because the shortage in labor. The third element is the whole modernization piece. You know, there's enormous pressure on the modernization space. I think it is accepted by everybody that there needs to be time to redo the whole subsidy system, to find also ways where we probably can put energy, the net cold rent and electricity together. This gives, of course, a great opportunity for bigger landlords. The question is, of course, how can smaller landlord handle this? These type of I think we will see something which will help to get modernization better than today. Mm. These are the three topics. I'm sorry, I don't know exactly what they are talking about because they are really disciplined. If you talk to the people, I think these are the topics they are discussing. Do you think there's a chance for them to get the nonprofit housing schemes back? Yes. It might be a chance, which is fine for us, because it is one thing is clear, every companies have to be treated the same way. I don't care if there's nonprofit housing companies. This will be just the question, who will pay for this? Because they need finance. Okay. Another question is actually on CapEx returns and rent growth prospects. I mean, considering increasing investments on carbon reduction in the coming, let's say, years. I mean, what is your general expectation on future returns or yields you will make on these investments? It's very simple. To make it happen, we need 8%. Mm. If we don't get the 8%, then it will not happen. This is for Vonovia. Probably a private landlord need probably 10%. Okay. What relevance do you think subsidies will have to get to the 8%? Yeah. The whole question is, you are saying you cannot force people to invest. Either you get the investment you need, and you get it either by subsidies or by higher rents. It's very simple. The point, I think, is where we are trying to put some more help in is, if you include electricity and heating, we can make it more digestible for the tenants. To be very brutal, we are taking margins away from electricity companies to finance the modernization. Okay. Just the last one on the Deutsche Wohnen transaction, and post-deal leverage. I mean, Helene, I think you mentioned that you also look at net debt to EBITDA. What is the maximum you want to get to here? Look, we obviously have made certain commitments to the rating agencies. At this point in time, I continue not to have a firm number, and hence, please bear with me if I don't want to announce it. I do have sort of ranges in mind where I want to get into. At this point in time, we should be with the plans we have, we should be okay. I'm watching the number. Okay. Thank you. The next question is from Pieter Runneboom, Kempen. Please go ahead, your line is open. Hi. Thanks for taking my question. First question is regarding the Adler option. Would you also feel comfortable to acquire 100% of Adler? It's early to be really clear, and I think this is. I'm not looking on Adler. This was an option which was actually free, a free charge option, so it would have been a mistake not to do it. We are focusing on other things. We have 18 months. Ask me in next summer, 2022, and then we can probably discuss it. At the moment, it's a non-topic. We only put it in the slide because there were so many questions, which was, I think, most probably related to the fact that there was a lot of press rumor. There was a lot of bidding, a lot of short sellers and all of these people, they were all getting nervous. That there was a lot of rumor. Adler is for me, a non-issue. Okay. Very clear. Thanks. Regarding the rights issue, have you also considered to do additional disposals instead of a rights issue of circa EUR 8 billion? It's always an option and you can see the mechanics that actually we will come up with an answer for this. We have a clear view, which is that it's an option, but it's probably not the most preferable option in the view of our shareholders. We are optimizing here total shareholder return, which is value growth and FFO growth. Very clear. Thanks. The next question is from Pranava Boyidapu from Barclays. The line is now open. Please go ahead. Thank you for taking my question. I wanted to ask you a bit more on the LTV. You've included Berlin disposals. I was wondering if there were any other disposals related to Deutsche Wohnen that you had in mind. A second question, sorry to keep going back, is on the Aggregate Holdings loan. I didn't quite understand the increase and decrease of the option itself, but am I correct in understanding that you've been in discussions with Aggregate Holdings around pushing Adler to do a capital raise at some point? Yes. Actually it's in addition to the option of 13%, there's a best effort clause of Aggregate to make a capital increase for Adler for us up to 10%. This would then actually give us an option of 23% of Adler. To be also very clear, we would never buy only a few Adler shares. If we would next year decide to use this option, it of course would be a clear way to get control on the whole Adler. Be also very clear. This is not the discussion of today. We will discuss this in the next year after Deutsche Wohnen is integrated. Then to answer on the disposal question, I mean, if you go back to our initial announcement presentation, you will see that we have announced a number of potential disposals that we could be doing and could consider. I think it's fair to say this is moving pieces and moving parts. As Rolf Buch said, it's like we're optimizing to total shareholder value in line with us thinking about LTV and rating agency requirements. Bear with us a bit. We're sort of like puzzling still. Thank you. We have a follow-up question from Rob Jones, Exane. Please go ahead. Your line is now open. Thanks. Yeah. Apologies. I know I should know the answers already. If you wanted to buy more Deutsche Wohnen stock on the market, are you allowed to do that or not? Theoretically we are allowed to, but we are not well advised because if we are coming above 90, we have a serious issue. Okay. You could buy up to 90 if someone offers you stock, you know, at like below EUR 53, then you could buy. To be very clear, the story is over. We have got the shares that we have. We don't need any more shares. It's the cheapest equity capital we can have. Yeah. Just to be clear, if. We are thankful to all other minority shareholders to be a rat blocker. Okay, fine. But obviously there's still a couple of more percentage points of Deutsche Wohnen that you could acquire, and still remain below 90%. If someone calls you up and says, "I've got 2% of Deutsche Wohnen, do you wanna buy it at EUR 46 rather than EUR 53?" You're not saying no, right? You would consider it. Most likely we would say no, but again, it's like it's all about optimizing shareholder value for Vonovia shareholders and hence, that's the lens we will assess such a transaction through. Fine. Okay. To repeat, we know in every one of our assets that we have minority shareholders because of the real estate transfer tax law in Germany. Yeah. We know how to handle minority shareholders. We all handle them fairly and adequately, at arm's length. This will be the same as Deutsche Wohnen. Yeah, of course. Very clear. Thank you very much. Thank you. There are no further questions at this time. As a reminder, to ask a question, please press zero and one on your telephone keypad now. We haven't received any further questions. I hand back to the speakers. All right. Thank you, Angela, and thanks everyone for joining. If there are more questions after this call or down the road, please do let me or the team know. Also any comments you may have. We're certainly looking forward to staying in touch. That's it from us for today. Stay happy and healthy, everyone, and have a great day. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.