Hello and welcome to Gecina Full Year 2023 Results Call. My name is Alicia, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. I will now hand you over to Beñat Ortega, CEO, and Nicolas Dutreuil, Deputy CEO in charge of Finance, to begin today's conference. Thank you. Good morning to all of you, and thank you for attending this 2023 earnings presentation by Gecina. You've probably seen our key figures already. We are very proud today to summarize what our teams have achieved this year in a challenging context for commercial real estate, but demonstrating the unique positioning of our company. Some key figures illustrating that: our recurring net income per share is up by 8.2% in 2023 at EUR 6.01 per share, hitting the upper range of our guidance. Our balance sheet is robust, with a broadly stable LTV close to 34% even after a serious decline in valuation, and debt is hedged at fixed growth in average for the five coming years at 92%. Our ESG leadership has been confirmed thanks to our energy efficiency plan put in place mid-2022, with energy consumption down by 10% and CO2 emissions by 20% in one year. We do expect our recurring net income to grow again in 2024 between EUR 6.35 and EUR 6.40 per share, and up again by 5.5% to 6.5%, beating here again as well the consensus. If we look at these solid results in 2023 with a strategic view, we'd like to highlight the fact that we have taken decisive initiatives to build the road for further growth ahead. One, despite muted investment markets, Gecina sold this year EUR 1.3 billion of assets above appraisal values and with an average exit yield of 2.5%. These disposals are not only accretive on cash flow, but will allow the group to fund a value-accretive pipeline in the next years. Two, despite a serious valuation decline by more than 10% in 2023, LTV is broadly stable, still around 34%, and providing agility and room for maneuver for the future. Three, our strong leasing activity with a double-digit average rental uplift and further improvement in our occupancy provide visibility for organic rental growth. And four, the strength of our financial hedging structure has been significantly improved, notably thanks to a EUR 1 billion decrease in net debt, and the pre-letting of our pipeline provides, again, visibility for our cash flow growth. Let's dig into more details of our strong performance this year. Looking at the recurring P&L in 2023, it's fair to say that we have managed to improve several drivers to cash flow growth. The 6.5% rental growth, driven by like-for-like performance and the pipeline, has been amplified by better service charges management while SG&A were kept under control despite inflation, thus leading to a 6.8% year-over-year growth. On top of that, strong hedging and disposals in 2023 kept financial expenses under control, cost of their debt remained at 1.1%, leading to a recurring net income growth by 8.2%. Let's move now to rental growth, up by 6.5%. Like-for-like growth was up by EUR 34 million. In addition, the pipeline contributed to EUR 22 million, offset by only EUR 15 million from disposals thanks to a very low 2.5% average yield. Regarding the EUR 34 million like-for-like rental growth, as anticipated, indexation played a crucial role in 2023, more than doubling the impact on cash flow achieved last year. But on top of that, very importantly, at the same time we are passing inflation in our rents, we have been able to capture uplift in rents and also improve occupancy again, resulting from strong achievements of our teams in the markets where we operate. On the Office portfolio, 2023 was particularly robust, with close to 160,000 sq m let or relet by Gecina this year. This is 60% more than in 2022. You can see on this slide few examples of deals that we have signed this year with a great rental uplift. In total, we've achieved 14% releasing spread on renewals and releasing transactions, average occupancy rate increased by 90 basis points, now close to 94%, and 100% of the pipeline for 2023 and 2024 has been secured and is now fully let or pre-let. The most emblematic transaction is obviously the full preleasing of our Mondo project to Publicis Groupe. With circa 30,000 sq m in the CBD of Paris and a long-term lease, this is the largest lease ever signed by Gecina. The project will be delivered in Q3 2024. Obviously, our teams have been very successful in designing a unique project fully aligned with today's corporate requirements at a time when location, CSR, food offer, and cutting-edge services are crucial. No need to comment that this transaction has been done in a context of strong appetites by corporates to improve talent development, creativity, and collaboration in their organizations. On the Residential side as well, our performance has been excellent. Fair to insist on the fact that this year again, our capacity to raise reversion improved again, with an average uplift in rents between former and new tenants now of around 13%, one-three. On top of these strong lifelong dynamics, rental growth has been strongly supported by a positive net contribution from the pipeline of around EUR 22 million. This contribution turned positive in 2022 and increased further in 2023 thanks to four significant project deliveries shown on the slide. In our view, the tenant list of those projects illustrates the diversity and the quality of our markets, with names like Sanofi in pharma, LVMH in luxury, BCG in consulting, or Eight Advisory in financial services. We just commented on our rental growth. In this chart, it is interesting to note that while EBITDA was growing by EUR 38 million this year, our cost base, gathering financial expenses, operating expenses, rental expenses, and taxes, only increased by around EUR 3 million, leading to strong cash flow growth in 2023 by more than 8%. We will come back on financial expenses later during this presentation. Other record achievements this year on the ESG side. For the first time this year, Gecina was ranked number one amongst 100 European REITs. We achieved also top score with other agencies, MSCI, CDP, ISS, or Sustainalytics. Have in mind that these ratings are based on our 2022 reporting, and significant further improvements have been achieved since then. Gecina decreased energy consumption and CO2 emissions, which respectively decreased by 10% and 20% this year, with an ambitious energy saving plan I commented earlier this year. Last but not least, on CSR, 100% of our portfolio is now certified. This is a strong improvement versus 2022, when 87% of our Office portfolio in operations were certified thanks to 23 new assets now certified by BREEAM in 2023. I would like to focus on the quality of these certifications. More than 80% are qualified at least at a very good score. And looking at the very best scores, excellent and outstanding, this is still 61% of our portfolio, which is classifying these two categories, something quite unique on commercial real estate globally that proves, again, the long-term commitment of Gecina on CSR. This year has been obviously animated by questions around valuation changes and potential consequences this could have or not on REITs' business models and performance. Some context on those valuations. It's actually a fact that investment markets have muted in 2023 in volumes, and that is true everywhere, even on central location where we operate. But maybe two or three comments on this topic. First, we saw a significant increase in cash inflows in real estate by occupiers. Our LVMH deal on Champs-Élysées is one of them. And they are historically not taken in the official statistics by Immostat or real estate brokers. Maybe second comment, liquidity dried up everywhere, but still we saw appetite for small assets in Paris, and we also played a role there. We commented earlier on our achievements on leasing. This was achieved in a context of structural shortage of qualitative office spaces in Paris and strong demand. As a consequence, market trends have moved differently. ERV moved up in Paris and Lille, while ERVs were flattish or down in most other locations. What are the consequences on valuation? A homogeneous yield effect, largely driven by microeconomic drivers and muted investment markets, at around -10% to -12% in 6 months and even -18% on 12 months, showing the strong adjustment in values driven by this changing paradigm. But different rental effects, being positive in the most central area, 5% in Paris City, for example, or nearly negative outside. Note, in addition, the strong resilience of our Residential portfolio was largely helped by our leasing achievements in the last two years. Consequently, NAV NTA is down to EUR 144. The decrease is mainly driven by appraisals. So clearly challenging investment markets. However, we are a bit different. Gecina achieved an exceptional score on disposals, with EUR 1.3 billion of mature assets above last appraisal values and with an exit yield of 2.5% in average. Even if we exclude the emblematic disposals of the Louis Vuitton store on Champs-Élysées, our teams have been extremely proactive and innovative to source investors for more than EUR 500 million of offices and residential assets, with a 5% premium over last appraisals and at a yield close to 3% in average. We are very proud to say that given the low yields of these disposals, they are positive on all operational and debt metrics, as being accretive on cash flow and NTA, but also enhancing LTV, net debt-to-EBITDA, and ICR, while mechanically increasing financial liquidity and hedging position of the group. The first consequence of these disposals is that we kept the LTV broadly unchanged in 2023 at a conservative low level of 34%, despite a severe valuation adjustment downward since on the market this year. We improved also our hedging position with no additional costs. As of today, our debt is fully hedged in 2024, and hedging will progressively fade year-after-year, but remaining over 90% until 2027. On average, our debt is hedged at 92% for the next five years, and a very large part of this hedging was signed before January 2022, so at very attractive conditions. Bear in mind that our current average cost of debt is 1.1% on drawn debt. The consequence is that we benefit from strong rating, A- by S&P and A3 by Moody's. Gecina maintained along a challenging year, indisputable access to all funding sources and great confidence by our financing partners. EUR 1.7 billion of opportunistic new financing have been secured this year, with bonds, bank loans, and redundant and drawn credit lines at roughly the same level of margin than pre-2022 conditions. As a result, all our bond maturities for the coming five years are covered by the EUR 4.1 billion net credit lines available, with maximum credit spreads already secured, as we can draw those lines in case bond markets are too expensive. Being solid and performing well today with a robust balance sheet gives us the opportunity to focus further on the optimization of our path for growth ahead. The leasing markets on residential and offices are sound, and new trends can offer us the opportunity to even improve our business performance. Talent management is a crucial theme for corporates, and those young talents tend to concentrate in our region. We have worked to further improve our buildings to answer the increasing appetite for premium operated and service properties. Internally, we have engaged the merger of our student housing and residential teams through our leasing and digital capacities, fueled by one unique operating residential platform adapted to all types of tenants: students, young talents, middle-aged families, or corporates in all our buildings. At this stage, 220 flats have been furnished already, with no additional CapEx as we lease furniture. Twelve buildings are to be enhanced, adding coworking spaces and fitnesses for tenants, and 195 apartments could progressively be optimized in size to better match our clients' needs. On the Office segment, Gecina also launched a new approach, so to meet emerging appetite for fully equipped, service, flexible, premium workspace. We started with three full floors Avenue de l'Opéra in Paris CBD, and then two more buildings with great success so far. While actively working on our products, like I just said, we've been delivering two new projects in H1 for a total of circa 20,000 sq m, including the prime office building Boétie in Paris CBD and the residential project in Ville d'Avray. In the 12 coming months, nine projects representing 84,000 sq m and EUR 46 million of potential rents are to be delivered, including three office projects in Paris CBD, the certified Capucines and Mondo, and one in Montrouge, as I said, already fully pre-let. Next in the line will be two projects in Paris to be delivered in 2025, Marbeuf and 27 Canal. On top of that, work is in progress on three additional large projects in Paris and Lille for around 90,000 sq m in total, which are already partially vacated. Obviously, those projects will be launched when we get the permits for potential deliveries expected in 2027, with great return on CapEx, as you can see. As a conclusion, those achievements, leasing, pipeline, disposals, debt management in 2023, have paved the way for cash flow growth in 2024. Gecina, therefore, expects the recurring net income, group share, to be around between EUR 6.35 to EUR 6.4 per share, meaning a growth between 5.5% to 6.5% in 2024. Thanks for listening, and we are now available for questions you may have. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll take now our first question from Florent Laroche-Joubert from ODDO BHF. Your line is open now. Good morning. Thank you very much for this presentation, Beñat. I would have three questions. My first question, I would like to come back on the valuation of the assets. How do you analyze the current valuation of your assets now after the adjustment in H2, in particular in your offices? And do you expect still further adjustment beyond year-end 2023, or do you think that maybe we are not far from a low point? My second question will be on your appetite for further disposals in 2024 or your appetite for opportunistic acquisition in 2024. Do you see any opportunities? And my third question, what is the room that you can have at Gecina to further increase the occupancy rate, and how do you assess the appetite today of tenants in offices for 2024? Thank you. Thank you, Florian, for your questions. On valuations, I think valuations, it's a reflection of the overall market. I think we have demonstrated this year that, in fact, with that EUR 1.3 billion disposals above book values, that we were serious on valuations. So that's the first element. I think we've been able to achieve, on top of Louis Vuitton, more than EUR 500 million disposals, and they are all above book values at 3% yield. So that's a first answer to the question. Maybe the second is when we look at those yields now, they have recreated a risk premium against the sovereign bonds, especially in France, which was not the case, and not taking into account the growth potential that we have in our properties. And maybe a third element, which is I think we suffer clearly a decrease in valuation, but our LTV is still at 34%. So we have ample ways, in fact, to manage that. And that's why I was talking about agility and capacity to move, is that LTV is clearly a strength for the company, and that's why we are confident about cash flow growth. When you look at the valuation, it tends to be an issue for corporates which have high leverage, pushing them to make dilutive disposals. And I'm not sure we are in that situation. So that leads to your second question, which is about disposals. I think we have always said that we were opportunistic on disposals. So we'll continue to be the same. As you might have seen in 2023, we have been, let's say, aggressive in the prices and the yields we were asking buyers because we believe in our portfolio and we believe in our rental growth. So we'll continue to be opportunistic. Same goes for acquisition. We want to deliver growth for our shareholders, so we will be very careful. But obviously, if we see opportunities, we will look at them. And the last point, which is occupancy, since I came at Gecina, I've been always careful, in fact, to overguide occupancy. I think there is always a frictional vacancy in an office portfolio. So where we are, I think we can move around those figures, maybe improve a bit. Maybe it will decrease after departure of a tenant. So I think we are fine with that occupancy. What I said, and that was the example of Mondo or the pre-leasing we have seen, is clearly there is appetite for prime office assets. And I think we have a unique positioning not only on the locations, but also on the way we design, on the way we think the services. Mondo was unique in terms of food offer. It's not the classic corporate restaurant, but it was designed as a food hall, as a meeting place, as a collaborative place, living all day long. I think all those elements play a crucial role, in fact, to drive appetite for our assets. Okay. Thank you. We'll take now our next question from Thierry Cherel from Natixis. Your line is open now. Hi, everybody. Thanks for taking my question. I have a specific question on capital allocation. It's more like looking at your disposals. It looks like to be the, I would say, best assets of your portfolio. Do you consider selling the La Défense and other categorized assets within your portfolio to reduce these shaded bars in the valuation slide? And I would say the full question is also about the financing of your pipeline; pipeline is impressively delivering value. I'm just considering if 5% for the committed is high enough currently. And would the disposal be an opportunity or a way to fund it? And is the pipeline growing in the future? Thank you. Yeah. Two different questions. I think on disposals, I would not say we sold the best of the best. I would invite you to come and visit what we have sold. We sold an office building in Cergy-Pontoise. We sold a residential asset in Courbevoie. We sold another one at the end of the 13th arrondissement in Paris. So I think there has been a full diversity of what we have sold on top, obviously, of the Louis Vuitton store, which was typical. On selling La Défense, I think in a portfolio, you are always the best asset and the worst asset. I think what is key, I think, in the conversation today is to look at the quantity. The investment markets are pretty muted anyway. So the question is, how liquid is your portfolio? And I think there, we are unique, I think, with those valuation changes. Everybody can make its own judgment. But I think we are owning the most liquid portfolio of the whole REIT industry. So it gives us room for maneuver, in fact, to dispose mature assets at your yield. Coming to your second question, I think when comparing disposal and pipeline, you should envisage, in fact, the way we use the proceeds of disposals, which is investing in CapEx. And as mentioned on the two slides, in fact, the returns on CapEx are massive. And when you compare those 2.5% to 3% yields by the disposals, we are more than doubling and sometimes tripling on some projects, the return on CapEx, which is the way we use the proceeds of the disposals. So yes, the pipeline is accretive. And again, the pipeline is concentrated on the best spots. Thank you very much. Very clear. Yeah. Maybe another way to look at it is that you know that a large part of the investment cost of a project is coming from the existing value of our assets, meaning that, of course, when we are posting a drop in value of our portfolio, it means that the raw material we will use for projects tomorrow has been also impacted, meaning that the next project should have an adjusted yield and cost compared to the one that we have posted today. Okay. Thank you, Nicolas. Just one point about the rental uplift, if you don't mind. Could you give us more colors about the recent development of it? Thank you. You were mentioning the development already committed? I mean, no. Sorry. The rental uplift, how it has developed or evolved recently, because I have in mind, I mean, over 20% uplift within Paris. So this is the good side of it. And maybe the other side is out of Paris. So could you just comment and give us more colors about how it has evolved recently? Yeah, sure. As you might have seen in the valuation, which is somehow an indirect way to look at that situation, the ERV evolutions and the uplift in Paris were super strong and obviously flatish or sometimes negative. So depending on which of the leases coming to expiration, we have a different average between Paris and outside Paris, leading to a different figure. But I think overall, we have a 14% uplift in rents. And that's the way we should look at Gecina, which is a corporate. And obviously, every year, we have some expiries in locations which are more difficult. And we play a very pragmatic way. And when we need to decrease rents, we decrease rents. And therefore, you can see that through those three factors, which is uplift, but also occupancy. And we grew occupancy at group level, and we grew rents at group level also. Very clear. Thank you very much. Welcome. We currently have no more questions coming through. As a final reminder, if you would like to ask a question, please press star one now. We've got now one more question from Adam Shapton from Green Street. Your line is open now. Hi, team. Thank you, guys. Hi, team. Thanks for taking the question. Hopefully, you can hear me. Just a quick one on some of your, I guess, sort of more entrepreneurial or slightly differentiated rental income. So first is on the student housing. How material is the sort of non-student or the young worker part that you mentioned in terms of demand? And what sort of premiums can you achieve in terms of rent paid by those tenants over students? And then a similar question on serviced offices or that provision that you have. What sort of premiums over conventional headline rents are you able to achieve where you're sort of installing those types of spaces? Yeah, sure. Thank you for your questions. Thank you for your questions. On student housing, as you know, the occupancy in student housing is generally lower than what we were experiencing on the rest of our residences. Sorry, someone is not muted. So we took the and we learned from sometimes the competitors or what is done elsewhere in the world. And we saw that there was, in fact, the young adults, so people starting their jobs, are former students. And we were losing occupancy mainly April to July when those people started to work. So we have enlarged, in fact, our leasing, in fact, to those young adults. Pretty recently, we started late last year, still some percentages. So it's a pretty small number. But we will try, in fact, to grow occupancy at first by compensating the departure of some students during summer by young adults or trainees during that period of time. So that's our first step. And second, we'll see if we can drive some additional rents from those people which have, let's say, more financial capacity to pay rents on those assets. But for the time being, we are more working on improving occupancy on student housing and still in progress. On offices, in fact, it's the same. We try to learn from other geographies, especially London. And we saw clearly an appetite for super-prime, super-serviced offices. And that's why we tested that idea on the best of what we have, which is Avenue de l'Opéra, t ypically. And we fully serviced, furnished, equipped, partitioned, in fact, three floors there. The uplift in rents, compared to if you deduct all service charges, cost of the services, the cost of partitioning, and so on, we are reaching uplift between 20% and 30% compared to the, let's say, rent-as-is situation. Still in testing mode. It's proving successful, but we are deploying that on more floors. It's small floors. A nd by the way, it's really to address typically small private equity funds or head offices of companies which are maybe on the countryside in France and looking for super-prime. So it's a test. So far, it's proving successful. Okay. Just to be clear, that premium is after all your operational costs of delivering. That sounds like a sort of fully fitted, fully managed service. Is that right? Yeah. It's the net rent against the yearly. Okay. Great. Just one more quick question. Typically, how long are those occupied signing for, for that kind of space? Sorry? Just how? Yeah, exactly. Basically, the same duration as leases of that size in Paris, like three years. In France, those small surfaces are rent on three, six, nine leases. It's not really different, I would say, between two and three years, depending on the guy. So not really different. Not like a short. Have in mind that the 8.4-year average firm duration at Gecina that we signed is composed most of the time by nine- or 12-year leases on the large surfaces and those three- or six-year firms on those smaller premises. [crosstalk]. Okay. Thank you. That leads to 8.4 this year average. Okay. Got it. Thank you. Welcome. We'll take now our next question from Alex Kolsteren from Van Lanschot Kempen. Your line is open now. Hi. Good morning, team. Thank you for taking the question. I have one on the 2024 guidance. I was wondering what sort of assumptions you have flowing into that. So for example, regarding like-for-like rental growth, do you exclude any disposals into the numbers? And also, to what extent will developments of existing assets affect the rents for 2024? Thanks. You have mentioned the key metrics behind the guidance. We don't aim at itemizing too much our guidances, but obviously, indexation will play a role. Uplift in rents from the transaction we achieved this year will play a role. We are delivering two, three large projects in the second half of this year. So obviously, we drive the rents up for the positive contribution from the pipeline. We are talking about Mondo. We are talking about 35 Capucines more, which are fully let already. And disposals, as you saw, have a pretty minimal impact on cash flow because it's relatively close to the marginal cost of debt. So we have not taken a specific assumption on that. Again, like I said earlier on this call, we are super opportunistic. So nothing specific to mention on that. Maybe one specificity regarding Gecina, which is linked to a financing structure, which is when you look at our guidance, of course, one of the key metrics could have been the impact of the increase of the interest rate, sorry, on our cost of debt, which, as you have seen, thanks to the level of hedging that we have, should not impact our cost of debt for next year. Okay. Okay. Clear. Thank you. Which sounds pretty easy. We take now our next— In the universe so far, we have been looking at the guidances of most of our colleagues. Interest rates are eating severely guidances, which is not our case, thanks to one, hedging, and second, the net debt reduction that we achieved last year. I'll take now the next question from Bruno Duclos from Invest Securities. Your line is open now. Hi. Thank you for taking my question. Could you give us more color on the experience initiative that you mentioned in the press release in terms of CapEx and extra revenues? Yeah. Thank you for the question. I like that one. There is no CapEx because the idea behind experiences is to increase, in fact, the capacities and the revenue generation capacities of our buildings. So typically, if you take an example, we have a series of rooftops on top of our buildings, which are common parts. And we have started, in fact, to create a new ambiance by leasing them for, let's say, pop-up activities, events at night, not disturbing, obviously, our office tenants. So we do that in summer. We do that at night or weekends. But it's generating roughly EUR 1 million this year. And the second is when we have projects where we can cover the building, so generating advertising revenues. We will not cover all of buildings, but obviously, the ones which are under work, we can make some money there. So that's a bit the idea. And so that's in terms of revenue production. If we look at the different way, in fact, what we try to achieve also is to we talked about liveliness and the importance of having a lively building. And promoting that idea and driving a bit our tenants sometimes it's our tenants which are asking for that. We try to create a different view of the office building, which is sometimes a bit boring, by organizing those kind of events. So we have a small team internally, and we have external partners, in fact, that provide a bit more liveliness to our buildings on moments which are more quiet. Yeah. Thank you. There is no revenues involved for the tenant of the building? It's open to all kinds of tenants. So if a tenant wants to use our platform, he is more than welcome. Okay. My second question is regarding indexation. So basic one, what indexation are you expecting for 2024 for offices? And the second question is, which indexation is taken into account in the appraisals for 2025? I don't have the indexation for 2025 in my mind. But for 2023, have in mind that ILAT, which is the main index. The main index is at roughly 6%, so still pretty high. So obviously, it should drive, in fact, the rents up next year, again, with a lag effect like you saw in 2022 and 2023. And someone told me that indexation is planned at 2% in 2025. So I have the answer now. Okay. Yeah. Okay. Thank you. In the appraisals, huh? Yeah. Yeah. Yeah. Thank you. We'll take now our next question from Thomas Rothaeusler from Deutsche Bank AG. Your line is open now. Hi. Morning, everybody. Actually, one question. You referred to your balance sheet providing opportunistic financial headroom. How would you actually quantify this? And could you provide more color on any acquisition opportunities? Yeah. What we said was we have agility and capacity, in fact, to opportunity sales disposals or acquisition opportunities. So far, we have not seen anything which is really attractive or more attractive than what we can do on our current portfolio. That was why I was mentioning the three projects on which we are working that should drive better returns than buying assets for the time being. We are, like always, we have been super active in sourcing investors to buy our assets. We have the same energy to look for potential accretive acquisition. But so far, nothing really specific. We currently have no more questions on the phone. If you would like to ask a question, please press star one now. As we don't have more questions coming through the phone, we can take now the webcast questions. Yes. We have a question from Allison Sun. Can you give us a breakdown on 2024 EPS growth? What's the index impact, financing cost, disposal, etc.? That we already answered, Allison. Yeah. Allison, on guidance. Yeah. Yeah. And Alison, you can find so for the current years on page 16. And then you can find elements on the guidance otherwise for 2024. Inna Maslova, considering the significant outward yield shift on your portfolio, the profitability of the office development pipeline has declined. At what yield and cost level will you be looking to commence new developments going forward? Again, two ways to look at return on development. The one is return on CapEx. And I think we've shown on the different slides that we have a great return on CapEx from 6% to 8%. So compared to the way we have financed it, it's super accretive. The other way is to look at the total cost, including the property valuations plus the CapEx. And obviously, rents are up and property valuations are down. So it's driving long-term and for the next ones, yields up. So I think on both ways, thanks to those great rental appetites that we see in our markets, we are still super positive on them. Benjamin Legrand, you have kept your dividend flat this year despite growing recurring net income. How about next year? Do you see any growing dividend considering your confidence regarding further growth? Yeah. Sure. Like I mentioned, the group has kept the dividend flat while cash flow was decreasing with a payout around 100% in, I think, 2020 or 2021. So we are growing the cash flow. And we want to recreate a decent payout. But as you can see, we are now at 88%. Cash flow will increase again next year. And we will revise it next year. But we take a cautious approach on balance sheet, as you can see, in fact, to better sales opportunities and be agile. So I think that dividend is in the same way, in the same perspective. So we are happy to keep it and pay it in cash. Again, when we look at the landscape of REITs a bit everywhere, cash payments in full with a good payout, in my view, is showing clearly confidence for the future. Benjamin Legrand Kepler, so question is about the valuations. If the appraisals have considered the transaction that we have achieved around 3% not considering LVMH buildings. Sure. It's a bit frustrating. But that's the way the market looks at it. I think if we look at it positively, some transactions have occurred around those deals, 4%, which is, in fact, close to what we have in our appraisal books if you take also reversion. And it gives a bit of view on maybe less muted market in the future. So I'm looking at it positively. We are not obliged, in fact, not to perform and overperform. So I think that's what we have done. And we'll try to continue. So those 3% yield transactions or below because it's on average. So a series of deals were done below 3%. And even some that have been signed in December. So a bit frustrating, but we are very pragmatic. And we will continue to be so. Term vacancy assumptions to value your property portfolio, I think we will deep dive into that question and answer you separately. I think what is in the appraisals, it's a view that we have a cash flow growth. So there is an implication on occupancy, but we will have to check exactly the details. Yeah. Because in fact, it's not the Gecina assumption that carries the appraisal assumptions. And what they are doing, it's a building-by-building and even lease-by-lease approach, considering what are the statistics that the tenants stay or leave at the end of the lease and how long it will take to release the asset depending on its location. So that's the reason why there is not one single figure to look at, but it's a little bit more complicated. I'm not sure that assumptions are very different from what we are seeing today in the market or portfolio. We currently have a question on the phone if we can be connected. Yes. I will take the question from Stéphanie Dossmann from Jefferies. Your line is open now. Yes. Hello, everyone. I just wanted to follow up on valuation. And actually, the tone has been evolving quite a lot since Q3. And yields are expanding still on the office market, clearly. And we see clearly that the yield impact was a bit harsh. I was just wondering, and I know it's difficult to answer this question, but what would be in your view a normalized rent yield, I would say, yield on the CBD office market currently? Because we are seeing, as you know, great transaction on your trophy asset, but others' transaction in the market were closer to 4% or 4.2%, let's say. And the real estate brokers are closer to 4.5%. So I was just wondering what's your view on that and if you have any. Thank you. Yeah. Sure. In fact, you have always a bias in the views of the different players of the market. So our view is that the consensus, which is shown by the appraisals, is that yields have shifted up. We continue and except one flagship, which is obvious, which is the Vuitton store, the old assets were more classic buildings. So I will not say that what we have done was on exceptional assets. We have not sold anyone on Avenue Montaigne or Avenue de l'Opéra or Boulevard des Capucines or Rue de la Boétie or those assets. We have sold stuff on the streets that you even don't know if you don't live in Paris. Brokers are pushing the rates up in their views in order to accelerate the investment market, the real estate brokers. We saw some transactions significantly below what they say. So I think it's still complex to predict. That's why I was cautious in H1, cautious in Q3, still cautious for those annual results. It looks like the margin, the risk premium is constituted again. And again, there is still a significant reversion there. So that answers a question of Pierre-Emmanuel on how do you reconcile your 4.1% yield to the current 4.5% yield observed on the market. One, I think 4.5% is not observed. I have a list of transactions that was done below. And second is you need to take into account reversion there. If you have an asset that you signed a lease five years ago, you have a significant reversion embedded. And obviously, those yields are applicable to prime rents, which have increased in the meantime. So obviously, on the large portfolio with all kinds of expiries, you have an average yield, initial yield, which might differ slightly from the general consensus. But I think valuators have done a significant adjustment in valuation, a good job. They have tried to give a fair view of what we own and somehow not really taking into account our competitive advantages as a large REIT. But that's more market consensus. Yeah. But again, the question is, I see a lot of questions on valuation. The question is, so what? I think there are no dilutive divestment by Gecina to be expected. We have an accretive pipeline that we can finance through our loyalty. We still have reversion and indexation embedded driving our cash flow up for 2024. I understand all the questions, but I think we are in a very sound situation and very happy with our achievements this year. I'm very proud from the job that has been done by our teams, leasing, investment, development, debt management. I think we've done a great job. We currently have no more questions coming through. As a final reminder, if you would like to ask a question, please press star one now. As we don't have further questions, I will hand you back to Beñat to conclude today's conference. Thank you. Thank you all for listening to this call, attending this presentation. See you soon. Thank you. Thank you for joining today's call. You may now disconnect. Thank you.