Hello, and welcome to Vastned half year results 2022. My name is Suzanne, 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'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand over to your host, Reinier Walta, CEO, to begin today's conference. Thank you. Thank you. Good morning, everyone, and thank you for joining our half year results call. In the first half of 2022, Vastned maintained a strong operational and financial performance with positive results. A high occupancy rate of 98.5% and a collection rate of 97.6%. The direct result increased from EUR 0.88 to EUR 0.98 per share. Positive revaluation of our portfolio by 1% resulted in an indirect result of EUR 1.32 per share versus a -EUR 1.38 last year. The indirect result includes the positive revaluation of the property portfolio, positive results on derivatives, and approximately EUR 700,000 related to an intended transaction which would have resulted in a delisting of Vastned Belgium NV. The discussions were ended due to the rapidly changing market conditions. The positive earnings per share of EUR 2.30 compare with a loss of EUR 0.50 during the same period last year. This allows for an interim dividend of EUR 0.59 per share, and it's based on a maximum payout ratio of 60% of the direct result of the first half of 2022, and that's defined in the company's dividend policy. At the same time, we have made further progress with the execution of our strategy. We have improved our tenant mix, meaning that our exposure to fashion retail decreased slightly to 45.6% down from 46% at the end of 2021. The number of FTE decreased from 32 to 30. Finally, we continued our cost control, achieving G&A savings of approximately EUR 100,000. Since the first half of 2019, we have reduced our G&A by almost 24%. On this slide, the key figures. In summary, I can just say we delivered positive results for the first half of the year. Related to this, it's important to mention that our EPRA NTA increased from EUR 41.49 per share to EUR 42.89 per share. The occupancy rate increased in all countries except for Belgium. The high occupancy rates across our portfolio reflect the high quality of our real estate which enables to keep most of our properties fully let, even in uncertain times. Leasing activity was significantly lower in the first half of 2022 than during the same period of the previous year. 19 leases were negotiated with an annual rental income of EUR 2.1 million. This compares with 54 leases during the same period last year, resulting in EUR 6.2 million in annual rental income. In the first half of 2022, this concerned only about 2.9% of the total annual rental income. Most rental contract renewals were either positive or involved a small rental decrease, except for two leases in Belgium. This mostly explains the rental change of EUR 300,000. The relatively low leasing activity during the first half of 2022 also reflects the fact that we are almost fully occupied with only a few properties seeking new tenants. A year ago, we were much busier agreeing renewals and new leases with tenants, and there was also noticeably more churn in the tenant base. A good example of an important tenant that renewed with attractive terms in the first half of the year is McDonald's, which renewed its lease contract for its location on Oude gracht in Utrecht for a maximum period of 14 years, beginning at the first of January 2022. Vastned believes that diversification is key. Currently, Vastned is seeing signs that fashion retail is in better shape than before. This could slow the shift in the tenant mix as we see demand from fashion retailers holding up better than expected. General expenditure has been reduced significantly over the past few years, decreasing by almost 24% since the first half of 2019. The first half of 2022, we remained prudent on cost and were able to deliver a G&A savings of about EUR 100,000. Vastned saw positive revaluations of 40 million in total, or 1% on our total portfolio that amounted to EUR 1,452 million at the end of the first half of 2022. This compares to a decrease of 1.6% over full year 2021 and a 0.2% increase over the second half of last year. It's too early to say where valuations are likely to go next in an environment with rising interest rates and increased economic uncertainty. On this slide, the direct result development from EUR 0.88 to EUR 0.98 per share is shown, including its major components. The like-for-like rental growth was limited. Lower debt compensated for the higher cost of debt. Net divestment reduced the direct result, as well as slightly higher income tax. A smaller amount of COVID-19 effects was a major contributor to the positive delta, as you can see from the waterfall graph on this slide. The loan-to-value remained flat at 43%. This was despite the significant final dividend payment on the 6th of May 2022. This compares to 44.1% at the end of the first half of 2021. The average interest rate increased with only 2 basis points to 1.89% from 1.87%. We are currently working on a financing plan for refinancing our credit facilities. We expect to address the refinancing of the balance sheet in the coming year, and we'll inform you when new financing arrangements are in place. We believe Vastned made good progress on its strategy execution. There is improvement in the tenant mix. The fashion exposure decreased to 45.6%. There's an increased exposure to the phygital segment, where digital and physical stores meet. The number of FTE reduced from 32 to 30, and we have continuous cost control with the G&A savings, as mentioned, of EUR 100,000 in the first half of 2022. We are optimizing our portfolio. There were some small divestments in the Netherlands in the first half and the purchase in Rotterdam Zuidplein post the balance sheet date. There are currently no other developments in this, on this site. Given the continued uncertainty in the market, we will continue to focus on operational excellence in the second half of the year. However, we would like to remind you that in most cases, when we divest properties, it's above book value. During the past three and a half years, we have divested 34 non-strategic assets for a total of EUR 43.6 million, which is 6.8% above book value. The transactions in the first half of 2022, all in the Netherlands and total EUR 800,000 in value, were divested for 18.6% above book value. Sustainability is important to Vastned as we aim to create long-term value for our stakeholders. Vastned continues to invest in properties situated in historic city centers. In this way, we contribute to the preservation, lifespan, and its recognition of the cultural heritage of historic city centers. Increasing housing stock within historic city centers is another key aim. By converting empty space above shops into residential units, city centers are becoming livelier after closing time while housing stock increases. Our investments in inner-city apartments also aim to improve energy labels, raising them to A or higher. However, given the strong increase in construction costs and shortage of building capacity in the market currently, we are cautious when entering into new developments. We only realized three renovations in the first half of the year, and we expect to complete five apartments in the second half. With respect to the outlook, we will approach the second half of the year cautiously due to the present economic situation. Barring unforeseen circumstances, Vastned reiterates its expected direct full year 2022 results of between EUR 1.95 - EUR 2.05 per share. Vastned's focus is firmly on maintaining excellent operational performance and executing its strategy. Vastned will pay an interim dividend of EUR 0.59 per share in line with the dividend policy. This interim dividend is equal to 60% of the direct result in the first half of 2022. I would like to thank you for the attention, and we would like now to go to Q&A. As a reminder, if you'd like to ask a question on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. Please ensure your line remains unmuted locally. I will then speak to you individually, take your full name and introduce you to the call. Question has been submitted. Please stand by while I retrieve the first caller's details. Operator, are there any questions? The first question comes from Steven Boumans, from ABN ODDO. Please go ahead. Hi. Good morning, and thank you for the presentation, and I think the good results. Thank you. I have several questions. First, to what extent do you expect to price through inflation to tenants, and what can we expect for renewals going forward? I think that's a double question. I think first on the indexation. The indexation is what we have agreed with our tenants. So far, we just in every country we take the numbers we agreed on, and we put that forward. There's nothing that deviates there from the contracts we have negotiated with our tenants. Currently all indexation is passed on to the tenants. The second question that is on what do we think with contract renewals? That's a little bit more, I think, difficult to answer. We are constantly discussing with all our tenants, and we are looking at the contracts. We have still some contracts which are over market, and so there will be discussions and typically we are able to get market rents from our units. That's where we are at the moment. Does that answer your question, Steven? Okay. It does. You also say then, because we saw bigger negative renewals due to the two Belgian tenants, that should be an exception then. Both of those units were over-rented, and we set them back to ERV, so they're at market rent. But yeah, we had to take a little hit there. Okay, clear. If I may ask also a question on valuations. Could you? Yeah. Please break that down between ERVs and yield movements? If we look at our valuations, it's mostly a small shift in yields. ERVs are flat, mostly flat in that. It's more yield movement than a ERV movement. Okay, clear. The last one, then at least we have room to others. Could you please comment on the differences that you see in footfall rents and valuations for the main clusters that you have? Can you repeat that? I didn't hear that. Oh, sorry. Could you please comment on the differences that you see in footfall rents and valuations for your main clusters, so Kalverstraat, Zuidas, Le Marais, Utrecht, Paris, maybe Bordeaux? What we see and what we have seen in the last half year, that there's a lot of footfall in the streets. People wanted to be in those inner cities, so it's busy in the streets. We can also see that. We had some increased ask from tenants, and we also were able to rent out on those spots. It differs a little bit per street. I think in most of the streets we have seen footfalls coming back and also have seen the turnovers for our clients were good. Okay. Do you see some weaker clusters within your portfolio? Or is it all comparably strong? No, not really. Because, of course, we still have some smaller cities which is difficult, that we don't have all the information on that. But especially on our bigger clusters, we see there's good footfall and that people are back in the streets. Of course, that's why we are a bit cautious. It's also, is it still going to be the case, of course, after the summer in the rest of the half year. That's why we are a little bit cautious. But so far we have seen good footfalls in the streets where we're active, and especially in the most important clusters. Okay, clear. Thank you so much. We currently have no questions coming through. As a final reminder, if you'd like to ask a question, please press star one. Second question has been submitted. Please stand by while I retrieve the second person's question. The second question comes from Romain Kumps. Please, from Kepler, please go ahead. Yes, good morning, all. Just one question on my side. I think you commented on the fashion and I think that's a bit related to your strategy. Yeah. You said that the fashion is doing a bit better than you maybe expected last year. Does that change a bit your long-term strategy? I mean, where is the strategy today? To still divest a bit of those fashion, or are you changing every six months? What is the strategy on the really longer term? I think our strategy has not changed on that, Romain. We are still focusing on the long term to reduce fashion and have a better diversification in our tenants. That could go a little bit slower. If you see there is more ask from fashion retailers. In the end, we are trying to find the best retailers that fit in our stores. That's the way we look at that. It has not changed our strategy. We will focus on diversification and have a more diverse tenant mix. Yep. Okay. Maybe just a second quick question. Yeah. I think it's the first time in some years that you have actually bought something in this half. Could you maybe walk us through the process of this new investment? Yeah. This is a small investment in a cluster in Rotterdam, where we own already some other assets. We could add this to our cluster. It was a good opportunity we could take at this moment, so we thought it's a small investment, it fits with the other investments. It's in Zuidplein. It's leased for quite a long time in a spot in Rotterdam where it's busy, and it's the only retail, the retail part or how do you call it, more renowned in shopping center in Rotterdam, so in an urban environment, which really works. That's why we thought, "Okay, let's expand our cluster with this opportunity that came on our path. Yep. Okay. All right. Maybe just one that comes right to my mind. Yeah. On Vastned Belgium. You just mentioned, I think Vastned Belgium mentioned the same word, saying the market conditions are rapidly changing market conditions. Is that the market conditions, the public market or is that the real estate markets? Is that the fashion industry related to the real estate markets or– It's more the uncertainties. When we started having discussions and looking into it, the world looked a bit more stable then. Quickly, a lot of things changed. It's more the uncertainties in the total market, macroeconomic, that we at a certain moment, the discussion stopped and said, "Okay, we're not pursuing this." It's more the uncertain outlook. Yeah. 'Cause it's also been one of the weakest region if I look at, like-for-like, or valuation. Well, how would that change if that goes a bit better, then you would start to buy it again or what's the process? This process has stopped. Currently, if something else would happen, we would, of course, come back to the markets to that. Currently, the only thing I can say is this project has been stopped. Okay. All right. Many thanks, Reinier. Thank you. The next question comes from Herman van der Loos from Degroof Petercam. Please go ahead. Yes. Good morning, everyone. Can you hear me? Yep. Yep. Absolutely. Rene, thank you for the presentation. Thank you for taking my questions. I won't ask the same of yesterday, yeah. First of all, like-for-like indexation was very low. Do you expect more indexation for the second half? And what kind of indexation are you budgeting in your guidance? That's my first question. Then on the same like-for-like, is it possible to have a split between the better occupancy and pure indexation? Then, this question indeed comes from yesterday also. What are the attitudes of tenants? Are some tenants, especially in France, I was thinking especially about France, crying for getting some efforts on indexation or are just used applying full indexation then that's it because it's on the contract? So last– Herman. Yep. Shall we start with your first question? Because otherwise I'll lose all your questions. Okay. No problem. Yep. They go quite fast. Okay, no problem. Yep. I think your first question was around indexation, yeah? Yep. If you look at the last half year, we saw, of course, the inflation going quite quickly in the last couple of months, especially the last couple of months of the first half year. We have put forward all the indexation and passed that to the tenants so that it has already some limited effect at the moment, but of course, it will have more effect going forward. Also, in the next couple of months, if inflation stays at these levels, yeah, we will pass that through to the tenants. How we work in our forecast is we, of course, we look at what the indexation numbers are, and that's what we take into account. Of course, we make some scenarios around that, like everybody does that. Which exact numbers we use, I don't have that on the top of my head now. I don't think it's also necessary to disclose that. I think what we take into account is indexation and then as we do with everything in a cautious way. That was your first question, I think. Yes. Second question. Are there some tenants already where you know the retailers like to cry a lot and in Holland there were some noises in the press. I was especially thinking about France, where support measures are now ending. Are there tenants in some of your locations that are asking for rebates on indexation or softer indexation or Herman, what happens is that you have discussions with our tenants, and of course, we talk about indexation, but so far we have been able to pass it through the tenants, and we keep doing that. If there are questions or complaints, we discuss that, like we do with every tenant, in a normal way. That's, I think, the way it works. Of course, you have seen in the press, let's be honest about that, the tenants think the indexation is too high, but that's their opinion and we just pass it on. Okay. That's what we agree with them. I have a question on portfolio expansion. Yeah. You mentioned several times in your press release that you are going to focus on operational excellence. I can appreciate that. Does that mean that you are going to put aside a bit portfolio expansion? For years, there have been no portfolio expansion. Do you think it's going to change this year? Then a technical question. What about the yield on the last acquisition? The small acquisition in... Is it possible to have an idea of the yield? Just to have an idea on the market, not to be in– Let's start with the last question. The yield is higher than what you normally expect from us, also in that area. It's not the typical yield we used in the past. It's way higher than that. I'm not gonna give you the yield as we never do that. You know that, Herman, we didn't do that in the past. I tried. It's significantly higher. Let's put it like that. That's also why we saw this as a nice opportunity with this cluster, where we bought it. Your first question was about. Yeah, portfolio expansion for the coming years. Oh, yeah. I think the last couple of years, of course, we're in the middle of the COVID. We didn't see that as the good period to look into that. This year, and with all the uncertainties, we have looked at the files when we bought something small. For the second half we said, "Let's be really cautious." If something would be there, would really fit, and would be at a really good price, you can always look at it. I think at the end, we are going to be really critical on new investments. It's more that we focus on keeping the portfolio occupied, getting all the rent paid, and then, let's first see how this year is gonna end. Okay, clear. Okay. Thank you very much for this. Thank you. Thank you, Herman. The next question comes from Ventsi Iliev from Kempen. Please go ahead. Good morning, and thank you for– Good morning. The presentation. Could you provide some color on the reletting spreads, excluding those two oriented assets? What do you mean? Because I think what we mentioned already is that that's sometimes a little bit lower, sometimes a little bit higher than the old rents, but it's all around market rent. That's not a big deviation. Really the EUR 300,000 is coming almost from those two contracts. The rest is around ERV. That's not a lot of difference. Yeah. How does that compare to previous rents? No. Around previous rents also because you can also see that we have two contracts where we got a negative while the other contracts are around zero. Okay. Thank you. On that acquisition, as you said, you won't share the yield, but it is higher than what we would expect. Do you believe this is where yields are going, or is this more of a one-off? It's a one-off, and I think also specific for that location. Okay. Thank you. There are no further questions, so I will hand back to your host to conclude today's conference. Sorry, we do have one more question that just came through now. Yeah. It comes from Steven Boumans from ABN ODDO. Please go ahead. Hi. Thank you for taking a second question because Yeah. Some questions were not answered. One of them is on the cost of debt. You mentioned the big refinancing. Could you please comment on the current discussions that you have a range of where the cost of debt could be going for the next years? I think for the coming years, the cost of debt will not be a lot of change. Yeah. Because we have the most of our debt fixed till 2024. We are, of course, in discussions with our lenders, and we are working on a financing plan. As mentioned, the moment we have some news on that, we will of course share that with the market. That's one of our priorities for the coming year, to really focus on the refinancing, to ensure that is all gonna be done. Okay. Could you provide some idea of where the cost of debt of new facilities is ranging? No, not at this moment. I think that's also gonna depend on when we really have those discussions, and that's a little bit further in the future. Currently, I don't have a view on that. Okay, clear. Last question on Vastned Belgium. If you would potentially delist it, could you help me again, what the cost reductions could be from the delisting? Sorry? Sorry. If in case you would delist Vastned Belgium. I think. What are the associated costs that you can reduce? This is from the top of my head, I think we should be able to save about EUR 500,000 in G&A. Okay. Clear. That's it. Thank you. Thank you. As a final reminder, if you'd like to ask a question, please press star one now. There are no further questions. I will hand back to your host. I would like to thank everyone for their time. If there are any other questions, you can always give a call to Simon Teeuwes, who's available today also to take any other questions. Thank you. Thank you for joining today's call. You may now disconnect.